The two companies announced the agreement Wednesday, but did not disclose terms of the transaction. The deal is expected to close next year. FreshDirect will retain its name and continue to operate out of New York City, where it was launched in 2002.
The agreement comes at a moment when the pandemic has reshaped the grocery industry.
Shopping for groceries online had been slower to develop in the United States than buying electronics, clothing and other goods, but the coronavirus has prompted a surge of new customers with shoppers looking to limit their trips to physical stores.
Brick-and-mortar grocers and online delivery services have strained to keep pace with demand, leading to canceled orders and lengthy delays for customers.
FreshDirect was not staffed to handle the flood of orders from existing customers and shoppers when the pandemic first hit, CEO David McInerney told CNN Business in an interview last month.
“The barriers to online grocery got absolutely obliterated” in March, he said. “We couldn’t take” the surge in demand. The company’s systems were overwhelmed because people were buying two and three times as much per order as they typically did, buying for a longer period of time than usual and ordering for friends and relatives.
Fresh Direct has planned for a busy winter with coronavirus cases on the rise. It secured holiday items, such as canned pumpkin, baking supplies, and spices earlier than usual this year and is storing greater quantities of them in warehouses.
“We’re expecting a really, really busy winter, and it’s going to be filled with a lot of first time customers getting acclimated to online food buying,” McInerney said last month. “The colder weather is just going to push that along.”