Grocery shopping over the Net looked like an idea that got buried in the dot-com rubble. Nothing seemed to prove that more than the collapse of Webvan, the Foster City (Calif.) upstart that raised $1 billion only to shut down in July, 2001.
Now, however, Joe Fedele is rekindling hopes that people across the country will be able to stock their refrigerators without darkening a grocery's doors. Armed with $100 million, Fedele, 50, launched FreshDirect in Manhattan last September. Next up is expanding into the outer boroughs and, within three to five years, opening operations in Atlanta, Boston, and Chicago.
He says business is booming. While the private company's finances aren't publicly available, Fedele says FreshDirect is on track to take in $90 million in revenues this year and post a profit in four to five months. The early success is due partly to Fedele's expertise as a former co-owner of Fairway Uptown, a low-cost, high-end grocery. FreshDirect also deals directly with producers and makes much of its food to order, allowing it to undercut rivals by up to 25%. "We took the Dell model and brought it to the grocery business," Fedele says. Nothing like learning from the success -- and mistakes -- of others.