It’s been five months since Ahold Delhaize acquired a majority stake in online perishables-driven grocer FreshDirect and on May 5, the Dutch retailer announced a change of leadership. David McInerney, who joined the New York City-based e-commerce grocer in 2001 and has been chief executive of FreshDirect since 2018, has stepped down. He is being replaced on an interim basis by Farhan Siddiqi, Ahold Delhaize’s chief digital officer. McInerney will continue to serve as an advisor until the end of October. The big international retailer said it will initiate a search to find a permanent CEO.
FreshDirect was founded in 1999 by Joe Fedele, Jason Ackerman and McInerney. Fedele served as CEO from 2002 until 2004 and was succeeded by Jason Ackerman, who resigned from the merchant in 2018 when McInerney, a former chef, took the helm.
“FreshDirect has been an amazing, life-changing, 20-year adventure for me,” said McInerney. “I have been so fortunate to have worked alongside an incredible team of talented, dedicated people who all share the same passion for our mission – to make great fresh food easy to get. Our amazing farmers, ranchers and fishermen have inspired me every day as partners, teachers, and true friends. With the commitment and support of Frans (Muller, Ahold Delhaize CEO), Farhan, and the entire Ahold Delhaize team, FreshDirect is in excellent hands and well positioned for continued success.”
Siddiqi, who joined Ahold Delhaize from McDonald’s Corp. in 2019, noted, “On behalf of Ahold Delhaize, I want to thank David for his dedication and leadership over the past two decades. As co-founder, David has been instrumental in establishing FreshDirect’s philosophy in bringing the best fresh and high-quality products to people’s doorsteps in the Tri-state area. We will ensure a smooth transition and honor FreshDirect’s unique customer-focused and food-centric culture and deep connection with its suppliers. FreshDirect’s customers will continue to enjoy the high-quality fresh food, great tasting products and stellar service for which FreshDirect is known.”
Ahold Delhaize (80 percent ownership) and private equity firm Centerbridge Partners (20 percent) announced last November that it had agreed to acquire FreshDirect for what was later revealed to be $408 million. Annual estimated sales for FreshDirect are believed to be approximately $700 million.
At the time of the announcement, Muller said, “FreshDirect is a leading local brand in the fast-growing online grocery sector in the New York City metro area, one of the most important ecommerce food markets in the United States. With its unparalleled quality of fresh food, exceptional brand recognition, and dedicated people, it has generated remarkable customer loyalty. This acquisition further propels our omni-channel evolution. It is a great addition and fit for our portfolio of leading local brands. The deal allows us to reach additional customers in the New York trade area and therefore will add incremental sales to the business. It further enables us to address customers’ growing preference for convenient ways to shop. Finally, we are excited to have Centerbridge alongside of us in this venture and believe our combined focus, expertise, and scale will help us maximize the success of FreshDirect going forward.”
The deal was consummated and approved in less than two months and a new structure was set in place with seven directors – five from Ahold Delhaize including Muller, McInerney and Siddiqi – and two from Centerbridge.
Other directors have not yet been publicly revealed, and one source told us that board members may be rotated over the next three years while Ahold Delhaize learns more about how a pure-play grocery delivery firm like FreshDirect best fits into the chain’s expanding omnichannel direction.
In 2018, FreshDirect relocated its corporate headquarters and its primary distribution center from Long Island City (Queens) to a new 400,000 square foot automated depot in the Bronx. The company now services parts of seven states including New York, New Jersey, Connecticut, Pennsylvania, Delaware, Maryland and Virginia in addition to the District of Columbia. The e-merchant also operates a smaller distribution center in Prince George’s County, MD.
Fresh food sales account for more than 60 percent of its volume.