Dive Brief:

• Door to Door Organics abruptly closed down last Friday after twenty years in business, according to a company blog post. Customers were given no advance notice, and Door to Door said in the post that it would be unable to fulfill Thanksgiving orders many had placed.
• “It’s hard to point to one thing that led us to this conclusion,” the company wrote in a blog post. “Ultimately timing of recent events in our industry and the impact that had on our funding prospects were not in our favor with the ultimate result being no path forward.”
• The company launched in 1997 as a produce box delivery company operating out of a garage in Bucks County, Pennsylvania. In 2016, the company merged with Relay Foods, and less than two months ago it introduced a new recipe-building tool on its site. In its twenty years, Door to Door Organics has made nearly 3 million deliveries.

Dive Insight:

As one of the pioneering companies in grocery e-commerce, Door to Door Organics kept its early foothold by focusing on serving a core group of loyal customers. The company was never a major player in the industry, serving 63 markets in 18 states following its 2016 merger with Relay Foods. But it had a reputation for being a solid operator.

So its closing comes as a surprise. In March, the company hired FreshDirect veteran Mike Demko as its CEO, who focused on shoring up loyalty in an increasingly competitive market. In September, Door to Door Organics launched a meal planning tool that offered recipe suggestions based on the items shoppers add to their carts. In a recent interview with FoodNavigator, Demko emphasized Door to Door’s quality and customer service as attributes that distinguished the company from the competition.

But that competition has grown fierce in recent years. Not only has Door to Door Organics had to contend with Peapod, FreshDirect and AmazonFresh — it’s had to face the rise of meal kits and brick-and-mortar grocers adding e-commerce services through Instacart, Shipt and other providers. When going up against companies that deliver goods faster and cheaper, service and quality struggle to win out.

Amazon’s acquisition of Whole Foods, which Demko referred to as a “huge wake up call,” was also putting pressure on Door to Door Organics.

It’s no secret, too, that delivering fresh groceries is economically challenging. Door to Door Organics operated four distribution centers that could quickly pick, pack and distribute orders. But these facilities are expensive to run. To stay afloat, much less turn a profit, companies have to operate very efficiently, steadily acquire new customers and convince existing customers to build bigger baskets.

Even strong players have struggled against these headwinds. Ahold Delhaize’s Peapod has seen tepid sales growth of late, company officials noted during their most recent earnings report. And Amazon, the logistics and efficiency guru, recently discontinued its Fresh service in markets throughout the country.