FreshDirect beat Amazon to the grocery-delivery business by years. Take a look inside its sprawling warehouse.

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FreshDirect beat Amazon to the grocery-delivery business by years. Take a look inside its sprawling warehouse.

fresh direct tour

Áine Cain / Business Insider

FreshDirect's "food hive" features an intricate sorting system.

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  • FreshDirect, the online grocery service, operates a massive "food hive" in the South Bronx of New York City.
  • This base incorporates both the company's corporate headquarters and a bustling distribution center.
  • I toured the facility, which features an intricate sorting system and highly sensitive temperature controls to keep the produce as fresh as possible.

FreshDirect's Bronx base isn't your average corporate headquarters. It's what a lot of executives at the online grocer call a "food hive," built specifically to facilitate the company's mission of quickly delivering fresh food to consumers.

'We've built what we think is the perfect food hive," CEO David McInerney told Business Insider. "We've got the infrastructure in place now, to grow."

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Founded in 1999, FreshDirect currently offers next-day delivery of food to New York City, parts of its surrounding counties, Philadelphia, and Washington, DC. That's over a decade before Amazon began flirting with the grocery business, and before retailers like Walmart and Target began adopting a more omnichannel approach.

Read more: An Uber Eats executive reveals the company's surprising strategy for moving beyond taxi rides

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The company partners with local "food partners" to work out the shortest supply chain possible, and it employs other tricks in its distribution center to keep its groceries as fresh as possible.

I went on two tours around FreshDirect's "food hive" a few months ago. One took me behind the scenes, into the inner workings of the company's distribution center. And one, guided by McInerney, showcased the corporate office and FreshDirect's foodie culture.

Here's a look inside FreshDirect's Bronx base:

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You've probably seen FreshDirect's trucks zipping around New York City. The company is based out of a sprawling South Bronx campus.

You've probably seen FreshDirect's trucks zipping around New York City. The company is based out of a sprawling South Bronx campus.

I swung by the headquarters on a brisk day in late March.

I swung by the headquarters on a brisk day in late March.
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The food delivery business moved to this 400,000-square-foot facility from its original base in Long Island City, Queens, in 2018.

The food delivery business moved to this 400,000-square-foot facility from its original base in Long Island City, Queens, in 2018.

A few minutes into my visit, CEO David McInerney dropped by to offer me some tangerines. Then, I embarked on my tour. The office is spacious, with an industrial feel ...

A few minutes into my visit, CEO David McInerney dropped by to offer me some tangerines. Then, I embarked on my tour. The office is spacious, with an industrial feel ...
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... a whole swath of greenery in the lobby ...

... a whole swath of greenery in the lobby ...

... not to mention wide windows with a view of the Bronx Kill strait, which flows into the Harlem River.

... not to mention wide windows with a view of the Bronx Kill strait, which flows into the Harlem River.
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But this isn't just FreshDirect's corporate headquarters.

But this isn't just FreshDirect's corporate headquarters.

It's also the company's distribution hub for all of New York City.

It's also the company's distribution hub for all of New York City.
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I met up with Chief Merchant Officer Scott Crawford and operations SVP Timothy Knoll to take a behind-the-scenes tour of what they call the "food hive."

I met up with Chief Merchant Officer Scott Crawford and operations SVP Timothy Knoll to take a behind-the-scenes tour of what they call the "food hive."

When you first walk into the warehouse portion of FreshDirect's base, there appears to be neither rhyme nor reason to how anything's organized.

When you first walk into the warehouse portion of FreshDirect's base, there appears to be neither rhyme nor reason to how anything's organized.
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It's a labyrinth space filled with conveyor belts, stacks of boxes, and employees in yellow vests.

It's a labyrinth space filled with conveyor belts, stacks of boxes, and employees in yellow vests.

But Crawford and Knoll explained that there's a method to the madness.

But Crawford and Knoll explained that there's a method to the madness.
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The goods aren't organized by category, to prevent bottle-necking around popular orders.

The goods aren't organized by category, to prevent bottle-necking around popular orders.

Instead, they're divided up around the space and assigned a specific code.

Instead, they're divided up around the space and assigned a specific code.
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Employees' scanners tell them which products to grab throughout the process.

Employees' scanners tell them which products to grab throughout the process.

I was also struck by the distribution center's massive wall of products, which are accessible via a mechanical lift.

I was also struck by the distribution center's massive wall of products, which are accessible via a mechanical lift.
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The thing looked like something out of a retail-themed reboot of "Game of Thrones."

The thing looked like something out of a retail-themed reboot of "Game of Thrones."

One of the most striking things about the distribution center is FreshDirect's focus on keeping produce fresh.

One of the most striking things about the distribution center is FreshDirect's focus on keeping produce fresh.
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Crawford and Knoll said that different perishables require different temperatures in order to stay fresh. The perfect temperature for a tomato isn't the same as the perfect temperature for a banana, for instance.

Crawford and Knoll said that different perishables require different temperatures in order to stay fresh. The perfect temperature for a tomato isn't the same as the perfect temperature for a banana, for instance.

The distribution center relies on an intricate and specific set of temperature controls to keep different spaces — sometimes within the same room — at different temperatures.

The distribution center relies on an intricate and specific set of temperature controls to keep different spaces — sometimes within the same room — at different temperatures.
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The FreshDirect executives said this gives them a distinct advantage over brick-and-mortar grocers that must keep their stores "human-friendly, instead of food-friendly" when it comes to the thermostat.

The FreshDirect executives said this gives them a distinct advantage over brick-and-mortar grocers that must keep their stores "human-friendly, instead of food-friendly" when it comes to the thermostat.

After the tour of the distribution center wrapped, I went to visit with McInerney in his office. The space is covered with photographs of his trips to meet with FreshDirect's suppliers, from expeditions on the Atlantic to visits to farms in Upstate New York.

After the tour of the distribution center wrapped, I went to visit with McInerney in his office. The space is covered with photographs of his trips to meet with FreshDirect's suppliers, from expeditions on the Atlantic to visits to farms in Upstate New York.
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McInerney started out his career as a chef. He said that he was often struck by the difference in food quality between the high-end restaurants where he worked and the average grocer.

McInerney started out his career as a chef. He said that he was often struck by the difference in food quality between the high-end restaurants where he worked and the average grocer.

He said that FreshDirect's mission is to "disrupt what is a really conventional supply chain" in the grocery business, in order to "find even better food" and "manage that food to really maintain the quality from the farm, into this facility, and directly into our customers' house."

He said that FreshDirect's mission is to "disrupt what is a really conventional supply chain" in the grocery business, in order to "find even better food" and "manage that food to really maintain the quality from the farm, into this facility, and directly into our customers' house."
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But McInerney said he's not worried about online retail giants like Amazon jumping into the grocery delivery business, namely because FreshDirect has "years of trial-and-error" under its belt.

But McInerney said he's not worried about online retail giants like Amazon jumping into the grocery delivery business, namely because FreshDirect has "years of trial-and-error" under its belt.

"We talk every day internally about our biggest competition," he said. "The biggest competition is ourselves. We really believe that if we execute on what we promise every day, that's what we need to focus on, as opposed to what anybody else is doing on the outside."

Next, McInerney took me on a second tour, this time to look around FreshDirect's offices and get a better sense of the company's food-oriented culture.

Next, McInerney took me on a second tour, this time to look around FreshDirect's offices and get a better sense of the company's food-oriented culture.
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The space features five different cutting kitchens, where McInerney said it's not unusual to find employees cooking up ribs or preparing chicken sausages at 6 a.m. "We tend to attract people that are equally like-minded and interested in food, and it sort of permeates all the corners within the organization," the CEO said.

The space features five different cutting kitchens, where McInerney said it's not unusual to find employees cooking up ribs or preparing chicken sausages at 6 a.m. "We tend to attract people that are equally like-minded and interested in food, and it sort of permeates all the corners within the organization," the CEO said.

We got to visit one such kitchen, where an employee named Doug was stirring up some vegetable stock to use with some "amazing rice" a supplier from New Jersey had sent him.

We got to visit one such kitchen, where an employee named Doug was stirring up some vegetable stock to use with some "amazing rice" a supplier from New Jersey had sent him.
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One of the nicest perks of the office is the abundance of food. The executives described gaining the "FreshDirect 15" upon coming to work for the food delivery company.

One of the nicest perks of the office is the abundance of food. The executives described gaining the "FreshDirect 15" upon coming to work for the food delivery company.

We swung by the test kitchens to sample a few mini frosted brownies. McInerney said that at some company-wide events, the executives will get together and whip up treats for their employees.

We swung by the test kitchens to sample a few mini frosted brownies. McInerney said that at some company-wide events, the executives will get together and whip up treats for their employees.
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"There's nothing that will force a management team to work together better than to have 500 people on line that need to be fed in half an hour," the CEO said. "And it's management saying, 'Here, I'm in essence working for you today to try to make you happy, and I appreciate you.'"

"There's nothing that will force a management team to work together better than to have 500 people on line that need to be fed in half an hour," the CEO said. "And it's management saying, 'Here, I'm in essence working for you today to try to make you happy, and I appreciate you.'"
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