What a difference five years makes.
On July 11, 2002, FreshDirect, an online grocery business with an emphasis on deliveries, opened its 300,000 square-foot facility in Long Island City making fewer than 20 deliveries.
When it celebrated its fifth anniversary this year, executives expect to deliver between 5,500 and 6,500 orders on its way towards the 40,000 orders per week the company has been averaging recently.
“I am continually humbled by the passion of our customers for our business,” said FreshDirect CEO Steve Michaelson, who has been with the company for three years and took over as CEO on January 1 of this year.
FreshDirect’s concept was innovative when it debuted because the company only uses the facility as a production plant - not a typical supermarket where customers come in to buy food.
Instead, FreshDirect uses its web site to for customers to place their orders and set up delivery, which allows the company to maintain different temperature environments for each type of food ensuring maximum quality and freshness.
Currently, FreshDirect accepts orders from customers in parts of Manhattan, Queens, Brooklyn, the Bronx, Westchester and even parts of New Jersey and Long Island, with 80 percent of its orders coming from Manhattan and 5 percent from Queens.
Typically, customers log onto the web site, place their orders and schedule a delivery time within a two-hour window either on the next day or sometime during the week.
“The service that we provide saves our customers time,” Michaelson said. FreshDirect utilizes a fleet of 140 delivery trucks and employs 400 people in its transportation department, which accounts for roughly 22 percent of its total employees.
Michaelson said that the company delivers its orders on time 97.5 percent of the time, and has increased its deliveries to include more than just grocery items. During the past few years, FreshDirect has turned some of its attention to preparing full meals at its Long Island City facility and delivering those items to its customers.
“We have gotten better and better at slicing and dicing and preparing foods for our customers,” Michaelson said.
FreshDirect reported more than $200 million in sales last year. Michaelson believes that the facility has the capability to produce 50 percent more, but it will take several years to get there. He declined to answer questions on the company’s profits or losses.
In addition, FreshDirect continues to evaluate proposals to expand their deliveries within the Metropolitan area with Jackson Heights being the most recent. However, don’t expect expansion to other parts of the United States to happen any time soon.
“Someday down the road we think there is room for FreshDirect in many markets,” Michaelson said. “[But], there is so much demand here for us to keep up with.”
In fact, Michaelson cited keeping up with customer demand as the biggest challenge the company has faced over the years, but Dana Smith, Director of Marketing for FreshDirect, who is one of 60 employees that has been with the company since the beginning, believes the company has met the challenge.
“We are extremely proud,” Smith said. “We all had very high hopes when we started out. But, not knowing [how it would go] and seeing how others have failed in the industry, knowing that you made it is extremely satisfying.”
Editor’s Note: In order to see if FreshDirect delivers to your neighborhood in Queens log onto their web site and enter your zip code. Customers that live outside the delivery area can place an order and arrange to pick up the delivery at the Long Island City plant.
