Dive Brief:
- Misfits Market announced Thursday that it has started supplying e-commerce fulfillment services to companies that sell perishable products directly to consumers.
- The online grocer is tapping assets including its five temperature-controlled warehouses and in-house delivery network to provide the service, known as Fulfilled by Misfits.
- Misfits is positioning its logistics capabilities as a way to drive growth following its decision last year to downsize its distribution network.
Dive Insight:
With its new service, Misfits Market is looking to use its expertise in delivery and keeping perishables from going to waste to help other retailers squeeze costs out of their supply chains.
The e-grocer, which specializes in selling unappealing produce that might otherwise wind up in landfills, is positioning Fulfilled by Misfits as a way for its clients to avoid the complexities associated with managing inventory and getting it to shoppers. Misfits will store, pick, pack, fulfill and deliver products nationwide for its clients, the company said in a press release.
The company said it saw an opportunity to help other businesses save time and money by offering them a package of logistics services as an alternative to having to “cobble together a DIY approach that’s costly and incredibly time- and resource-intensive.”
Misfits said it will handle deliveries through its own delivery network and partnerships with other third-party shipping companies. Misfits gained considerable distribution capabilities, including a fleet of more than 450 delivery vans, through its purchase in late 2022 of e-grocer Imperfect Foods.
Misfits saw the combination as a way to build scale and gain more control over delivery schedules and customer service, Abhi Ramesh, founder and CEO of Misfits Market, said at the time the company disclosed the acquisition.
But following its combination with Imperfect Foods, Misfits concluded that it needed to slim down. The company closed three fulfillment facilities and laid off about 650 workers in early 2023 as it sought to improve its services to shoppers and cut costs.
Misfits is opening up a new business stream at a time when online grocers are struggling as consumers have returned en masse to in-store shopping. According to consulting firm Brick Meets Click, annual sales in the ship-to-home e-grocery space dropped from more than $21 billion in 2021 to just over $16 billion last year.
Misfits said it has already signed several direct-to-consumer retailers up for its new service, including dog food delivery service Spot & Tango, coffee specialist Cometeer and Little Spoon, which sells foods for children.
