Misfits Market thinks it has found a unique way to tackle the difficult business that is online grocery.

The company, which acquired Imperfect Foods over a year ago, has a pretty simple premise. It partners with farms and brands, and sells products that otherwise wouldn't hit major retail shelves. The name of the game for this type of business is scale, which is something COO Corey Farrell is constantly thinking about. But the ethos behind Misfits is sustainability.

"We wanted to be able to offer the consumer more complete shopping experience, to help us ultimately reduce more food waste," Farrell said on this week's Modern Retail Podcast.

The Imperfect acquisition has helped with growth. With the two companies combined, Misfits has a large presence on both coasts, and is growing both its first-party and third-party fulfillment. With this comes other areas of expansion -- namely, private label.

Misfits does not bill itself as a competitor to Walmart. "Our assortment is limited," Farrell said. Right now, it sells around 700 items, compared to the over 20,000 most grocery stores contain. But, by working with the right partners and being able to create new private-label products that wouldn't otherwise be sold, Misfits is generating new revenue streams. Farrell pointed to a product Misfits sells that consists of broken pretzels that would otherwise be thrown away, which are dipped in chocolate.

"That's an example of part of what we're trying to do with our private-label assortment that's very aligned with our mission," he said.

Ultimately, the idea is to grow Misfits so that it's available in the entire country and continue to work with companies that want to offload otherwise unsellable products.

"As we expand our assortment. We want to make the shopping experience more seamless for consumers," he said.

Get more from Modern Retail with the daily newsletter, sent out each weekday morning. Visit modernretail.co/newsletters to sign up.