Misfits Market made a name for itself selling misshapen, or ugly, produce, but packaged foods have been part of the business model since nearly the beginning of the online grocer’s 2018 launch.
The Hanover, Md.-based online market offers food products at a steep discount that are safe to eat but unable to be sold at a traditional retailer, and as it reaches its eight-year anniversary this fall, the company continues innovating to find new revenue sources.
Non-produce packaged goods make up about 50-60% of most online orders, while ugly produce makes up the remainder, said Misfits Founder and CEO Abhi Ramesh during a keynote question-and-answer session at Groceryshop 2026.
The company has further expanded through its own private label line of products in 2022, Odds & Ends, and its business-to-business product fulfillment service, Fulfilled by Misfits, launched in 2024.
Misfits’ early entry into CPG
About a year and a half after starting Misfits, Ramesh said the company began seeing opportunities in CPG.
“We started to get inbound requests from CPG brands that were not produce,” he explained. “I think our first [non-produce] product was … salad dressing.”
The salad dressing manufacturer had about 50,000 units that were going to expire in 180 days, and traditional grocers were not willing to take on the risk, he said.
“But 180 days, if you’re an e-commerce platform, is plenty of time,” Ramesh recalled. “I could go put that on my site tomorrow, sell it and the end consumer still has six months.”
The gamble of buying 50,000 units paid off, as the entire order sold out in 30 minutes, Ramesh said.
Label changes a boon
It’s not always expiring products that end up in Misfits Market warehouses. The company also scoops up products that have outdated marketing and logos, according to Ramesh.
“On the non-produce side, there are still a ton of inefficiencies that we’re tapping into,” he said.
Ramesh provided no specific names, but noted that a “very well-known sparkling water brand” sold Misfits a large order of canned water about a year and a half ago after changing the can size slightly.
“There’s a huge excess supply of the old-packaging can size that they didn’t want to send to retail channels,” he explained. “We ended up being the outlet for that, so there’s a ton of these types of opportunities in the non-produce side.”
Fulfilling a logistics need
The company continues to strengthen itself through new income streams with the 2024 launch of its B2B fulfillment business.
Ramesh said the business has grown 50-fold since its debut. “The insight for us was that our most important asset at Misfits is the perishable infrastructure,” he said. “It’s the fact that we have close to 750,000 square feet nationwide of refrigerated, frozen combination warehouse space.”
Describing it as one of the more sophisticated perishable supply chain networks in the country, Ramesh said the business has become a core source of revenue for the company.
It also creates synergies between Misfits and the companies it serves. “We leveraged a lot of the same suppliers,” he said. “We are using the same trucks, and so fewer trucks are on the road, which is less emissions and it’s better for the environment, so it’s become a really important expansion factor for us.”
Misfits’ direct-to-consumer grocery business and its fulfillment business both provide “nine figures of revenue each,” for the company and still growing, Ramesh said.
