Illinois-based Peapod serves customers in 24 markets across a dozen states including Connecticut, Illinois (the Greater Chicago area), Indiana, Maryland (Baltimore), Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Virginia, Wisconsin, as well as the District of Columbia.

Strategy

Now that high-speed Internet service is available virtually everywhere in America, Peapod's customer base has picked up steam to include more than 350,000 customers annually. The average 60-item Peapod order rings up about $155. Peapod is expanding its geographic reach and adding alternatives to home delivery. The online grocery shopping service entered the market served by Giant Carlisle (expanding its reach in Maryland, Pennsylvania, and northern Virginia) in 2012. It is also adding in-store pickup for online orders at Giant and Stop & Shop stores in nine states and the District of Columbia.

While Peapod has operations in a dozen states, the online peddler of groceries is going after a territory that rival Fresh Direct has called its own for almost a decade. Peapod entered the Manhattan home-delivery market in 2011; eventually it will be supported by some 20 trucks that will transport groceries to Manhattan from a Stop & Shop store in Mount Vernon, New York. Alongside Fresh Direct and Peapod, Manhattanites have access to corner bodegas and Whole Foods markets for delivery of fresh foods.

While not an immediate threat to Peapod's operations along the East Coast and in the Midwest, Internet giant Amazon.com has begun testing its own online grocery ordering and delivery service, AmazonFresh, in Seattle. It's looking to expand the service to other West Coast markets and, given Amazon's vast resources and ambition, it may someday become a direct competitor of Peapod.

Not relying solely on home clients, Peapod has catered to a niche delivery segment since 2007 to lessen its reliance on residents. To this end, it opened a facility in the Boston area devoted to businesses, non-profit organizations, and schools.

Company Background

Founded by brothers Andrew (president) and Thomas (CTO) Parkinson in 1989, Peapod is one of the few survivors of the once-crowded online grocery-delivery market.