Fresh Direct’s fresh approach to expansion planning

If Fresh Direct ever has any plans to grow nationally beyond the web grocer’s core New York City market, it’s likely to follow the Starbucks business model.

For now, Fresh Direct, with annual sales of about $125 million and about 200,000 total customers, has ambitious plans to grow its current base of business in New York City, a $24 billion annual food service market. For instance, Fresh Direct will soon start offering catering, corporate office delivery and some national shipments of its more than 8,000 SKUs, says John Boris, the company’s marketing vice president.

But Fresh Direct CEO Dean Furbush, who also doubles as the company’s chief financial officer, isn’t ruling out the possibility of one day expanding into other markets, providing the web grocer, like Starbucks, does so with a winning business plan.

Starbucks Corp. was a regional food retailer in Seattle for nearly 20 years before exploding onto the national and international coffee house market with more than 8,000 coffee shops in more than 30 countries and annual sales of $4 billion.

“We are going to stay in our market and perfect what we do best—offering fresh products at very competitive prices,” says Furbush. “We will eventually grow in other dimensions, but we’re very systematic and for now we are concentrating on gaining new customers in our current zone.” Furbush says if Fresh Direct succeeds over the long term, it will have most likely developed a model for national expansion.

“In terms of both challenges and rewards, there is no food market like New York,” Furbush says. “For us it’s the best place to be right now.”