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The Spoon

Daily news and analysis about the food tech revolution

Allen Weiner

Former Uber CEO Lands in the Cloud Kitchen Market

Former Uber CEO Travis Kalanick is playing a new game modeled after those HGTV shows, where teams of fortune hunters turn distressed properties into quick-sell gems. In the case of the newly formed City Storage Systems, the narrative differs in that these down-and-out chunks of real estates are empty or neglected strip malls and parking lots, and the endgame is to create an assembly line of cloud kitchens.

In fact, this new company is built upon the ashes of a firm called CloudKitchen which specialized working with food entrepreneurs in the infrastructure end of the food business. CloudKitchen offered a range of services including shared-kitchen facilities, delivery services, and even marketing help. City Storage Systems aims to repurpose a nationwide inventory of non-performing real estate into kitchen facilities primarily for restaurants and other such establishments that want to focus on food and forgo the headaches associated with running a restaurant.

The company’s new website says, “We provide infrastructure and software that enables food operators to open delivery-only locations with minimal capital expenditure and time.” But clearly, it is more than that. Kalanick also has a venture fund, 10100, which will be a position to invest in those restaurants and related businesses that are successful tenants in real estate properties his company manages.

According to a story in ReCode, the former Uber CEO is investing $150 million into City Storage Systems, which is based in Los Angeles. He is joined by other Silicon Valley investors as well as former Earthlink (an original ISP) founder Sky Dayton.

While City Storage System is not necessarily a game changer, its entry into the market forces observers to closely examine the zeitgeist surrounding new models for restaurants in their various forms. To his credit, Kalanick is taking a tried-and-true real estate practice of targeted leasing and subleasing distressed properties. While most of these efforts are done seasonally—such as doing temporary rentals to costume businesses at Halloween—City Storage System is looking at a big picture which more resembles an incubator than a short-term revenue generator.

This zeitgeist leads to a crazy quilt of overlapping help-the-cook concepts aimed at providing one, or more, crucial parts of the value chain with a clear emphasis on the supply side of the food business. For example, City Storage is not alone in the cloud kitchen business (although they are shooting for massive scale) and will go toe-to-toe with the adjacent sector of shared commercial kitchens. These shared kitchens fall into many subcategories. These may include those looking for commercial space for their cottage food businesses. Or it could appeal to startups who find the shared model appealing, offering add-on services such as possible funding and assistance with marketing and legal matters.

While it is apparently a myth that most restaurants fail in their first year, the restaurant business is not for those wanting to make a financial killing. Because the cost to open a traditional restaurant is about $3,000 per seat, there is a flood of accomplished chefs, newbies, and wannabes taking the lean startup approach to feeding the public for profit. It also is one of the reasons there are about 4,000 food trucks in the U.S., with an annual growth rate of about 8%.  And, as you can infer, it also is the force behind the growth in shared, ghost and other variants of food prep ideas.

All of these options push the important element of demand to the back of the bus. And, those in the demand part of the equation—aka consumers—are faced with a dizzying array of options come meal time. Do I A) order groceries from the store and cook from a recipe I find on the web? B) Open the meal kit that arrived and assembles the ingredients for tonight’s meal? C) Fire up an app and order from a food delivery service D) Go out to eat? Or… there just aren’t enough letters in the alphabet to chronicle the choices. Anyone who professes to have his or her finger on the pulse of dining habits of consumers is fooling him or herself and/or investors. One survey says millennials eat out five times a week. Others say the opposite.

As with many sectors heavily influenced by technology, the food infrastructure business has no clear direction or bottom line. It is a time of experimentation, placing bets on the roulette wheel and ensuring your business plan has multiple pivot points. The good news for consumers is the number of mealtime options is unlikely to slow down anytime soon. If you have a hankering for Ethiopian food at midnight—it’s likely a click away.

Walmart Believes Its New Freshness Technology Can Reduce Food Waste

 

A crucial area for technology in the food world’s battle against waste zooms in on the ability to track the freshness of produce as it travels from farm to wholesaler to retailer to table. Keeping perishables out of the landfill requires more than a passing squeeze of a tomato or thumping of a watermelon to determine its degree of ripeness. Systems must be able to measure the varying conditions that impact spoilage and apply those standards to everything from apples to zucchini.

Walmart made recent headlines with the announcement of its Eden technology—a suite of apps that can determine a product’s freshness from farm to shelf. Developed via a company-wide hackathon, the algorithm uses FDA standards alongside a baseline of more than 1 million images. While not offering specifics, Walmart says the resulting technology is easy enough to be used by its associates to keep its shelves free of spoilage. Presumably, Eden is best applied as produce leaves its warehouses.  As an example, the company explains that a lot of soon-to-ripen bananas headed for store 500 miles away can be diverted to a closer Walmart thus eliminating potential waste.

Parvez Musani, VP of supply chain technology at Walmart says Eden will help the company reach its goal of removing $2 billion in waste over the next five years. Some 43 distribution centers already have the technology in place and have already saved the Bentonville, Ark.-based company an estimated $86 million.

While Walmart’s approach has a noble goal, an image-based algorithm (as described in the company’s blog) may be open to individual interpretation. One man’s rotten tomato is another’s recipe for gazpacho. Using machine learning suggests that such a system is a continual work in progress as opposed to sensor-based technology which is not only more accurate but more easily accessed by all parties from farm to grocery supercenter.

One such provider of sensor-based freshness information is Altamonte Springs, FL.-based FreshSurety. According to its website, FreshSurety, uses inexpensive, disposable sensors that measure and report temperature, moisture and metabolite data using a proprietary wireless communication system connected to the internet. This information is converted to carton-level product freshness and shelf life assessments essential for effective quality-based purchasing, logistics and merchandising decisions.

FreshSurety is not alone in offering what appears to be a more advanced technological approach to product freshness. Silicon Valley-based Zest Labs offers Zest Fresh, a sensor-based logistics system to measure produce freshness. Zest Fresh assigns each pallet of produce an individual code that marks product type and data related to its exposure to the elements which would impact its spoilage. That information is uploaded to the company’s proprietary cloud where the data can presumably be tracked by anyone in the value chain from farm to distributor.

Zest Labs is basing its revenue on the savings it can offer its customers. CEO Peter Mehring told Fast Company that retailers and farmers pay his company 10% of the value of the waste they avoid by using the Zest Fresh platform. Mehring adds that his company aims to reduce a retailer’s waste by at least 50% with that savings going to his bottom line.

Samsung Adds Food Image Recognition To Bixby Through Calorie Mama API

Search has come a long way since the earliest algorithms deployed by Google, Lycos, and Inktomi. After conquering basic and complex queries, search engines set their sites on images, video, and audio as frontiers that required new ways of looking at metadata to provide consumers with useful results.

Image recognition has been a focus of developers wanting to add value to the basic ability to capture and identify a picture of a peach or a fast food meal at Wendy’s. The key, as exemplified by companies such as Palo Alto-based Azumio, is to link image recognition to valuable datasets. For Azumio’s Calorie Mama AI-powered platform, the company offers an API available for third-party developers as well as a consumer download which allows users to track nutrition intake.

While Azumio faces competition from Google and Pinterest, a new partnership with Samsung may allow the folks behind Calorie Mama to separate itself from the pack. Samsung has announced a working relationship with Azumio to adds its Calorie Mama technology to Bixby, the South Korean giant’s AI personal assistant platform. Calorie Mama will be baked into the new Galaxy S9 and S9+ enabling users to obtain instant nutritional information about the food they eat.

“Our vision for the Calorie Mama API is to provide the best food image recognition technology to our partners,” Tom Xu, co-founder of Azumio said in a press release, “and to simplify nutrition tracking and food discovery for healthy living to their customers.”

While this announcement is a nice to have for Samsung smart device users, the true value goes far beyond the basic ability to count calories and set nutrition goals. Azumio’s work primarily is focused in areas related to health in such areas as diabetes and sleep disorders. The company’s Argus platform offers activity and diet tracking along with a social network focused on health and fitness. Argus powers its suite of applications such as Instant Heart Rate, Sleep Time, Fitness Buddy and Glucose Buddy.  The endgame of connecting food recognition with health-related applications, focusing on those in which diet management is essential, is where the real power lies.

Samsung and Azumio’s combined efforts began in 2013 when the Argus platform was offered in Samsung’s Gear line of devices. Samsung continues to work on its own proprietary health and fitness apps, but those have not been offered to consumers outside of Korea. The value of adding Calorie Mama to Bixby could show great promise. For example, a cook wanting to create a healthy meal could ask Bixby to recommend a substitute for a high-fat ingredient by tapping into its database of image data.

Pinterest—which is preparing for a possible IPO—will undoubtedly rise to the challenge to go beyond its image recognition work with Google (called Lens) which allows users to find recipe pins based on captured pictures. Pinterest recently has hired a new head of computer vision, Chuck Rosenberg, a 14-year Google veteran. Given the primary task of computer vision technology is to analyze images and tie those results to associated data, Pinterest is on an accelerated path in this space. Unlike Samsung, working in a somewhat closed ecosystem, Pinterest will make its application available to all takers.

France Offers Model On Cutting Food Waste

The idea of not only ending food waste but also putting those goods into the hands of those in need is a great idea on paper. In many cases, however, the devil is in the details of how to get near-expired perishables from there to there.

France has gone beyond the traditional approach in which NGOs and food banks create informal links with local grocery stores, supermarket chains and produce wholesalers. In 2016, the country enacted a law that prohibits grocery stores from throwing away edible food. Essential to implementing that law is Banques Alimentaires a network of food banks that help feed more than 5,000 charities.

“There was one food manufacturer that was not authorized to donate the sandwiches it made for a particular supermarket brand. But now, we get 30,000 sandwiches a month from them — sandwiches that used to be thrown away,” Jacques Bailet, head of Banques Alimentaires told NPR in an interview.

What works in France, though, might be difficult to put in practice in the United States. Or at least so says Jonathan Bloom, the author of American Wasteland. Bloom, a journalist who is an expert in issues related to food waste, believes the current political climate in the U.S., where businesses are seeking less government interference, makes the French law close to a non-starter in a nation where its citizens waste more than 200 billion pounds of food per year.

“The French version is quite socialist, but I would say in a great way because you’re providing a way where they [supermarkets] have to do the beneficial things not only for the environment but from an ethical standpoint of getting healthy food to those who need it and minimizing some of the harmful greenhouse gas emissions that come when food ends up in a landfill,” Bloom told NPR.

Members of the French Parliament that drafted the law believe cutting down, if not eliminating food waste, should be a governmental issue akin to rules such as forcing drivers to wear seatbelts. Connecting grocery stores and supermarkets to those in need has also developed many startups that assist in the logistics of transportation and inventory management.

Close to home, a Canadian startup, Flashfood, has developed an app that allows supermarkets to take photos of perishable items that were headed to the landfill (or worse) and offered those goods to consumers at a discounted rate. Already going strong in Vancouver, B.C., and in selected locations in Ontario, CEO and founder Josh Domingues is proud of the fact Flashfood has diverted over 5,500 meals from landfill and into the homes of happy shoppers.

These actions should make observers of the future of food wonder: how a nation that can create every sort of lab-grown clean meat product and myriad meal kits suited for every taste fail to come up with powerful solutions that could make a dent in our nation’s food waste which is enough to fill the Rose Bowl. Are our priorities slightly out of whack?

What We Can Learn from H-E-B’s Acquisition of Favor Delivery

San Antonio-based H-E-B, the largest grocery chain in Texas with more than 400 stores, has acquired Austin-based Favor Delivery, a service that provides a wide-ranging menu of consumer-facing food delivery services. With so much noise in the grocery/restaurant-to-table market, why is this move such a big deal?

Privately-held H-E-B, which includes upscale Central Market among its brands, is a major player in three of the nation’s 10 largest metro areas—Dallas, Houston and San Antonio. Toss in Austin, the current headquarters of rival Whole Foods, and you have a powerhouse whose decisions in all things food have a major impact on more than six million shoppers.

Despite what it says in its PR missives, H-E-B has taken relatively small and deliberate steps into the future with curbside pickup and delivery options with Instacart and Shipt. Favor’s 50,000 contract drivers give the regional grocery giant an army of delivery agents. H-E-B’s COO Martin Otto says his company and Favor have similar working cultures, making the purchase an ideal combo.

“We see a unique opportunity with this partnership to support and accelerate each other’s growth through the sharing of experience, insight, and resources,” Otto said in an announcement.

Here are some interesting takeaways from the H-E-B deal with Favor:

  • Amazon will have its work cut out to be a major player in the fastest-growing state in the nation. Not only does H-E-B have a market share lead over Whole Foods in major Texas cities, but Wal-Mart’s grocery business is stronger than Amazon’s grocery division. Technology alone will not allow the Seattle-based giant to leapfrog two entrenched players.
  • Beyond Amazon/Whole Foods, as H-E-B begins its slow march into the 21st digital century, its new channels to the consumer for groceries and prepared foods will have a chilling effect on domestic and international competitors wanting to enter the Texas market.
  • As far as Instacart goes, with $200 million new cash in its pocket, and a deal with Albertsons, what happens to its existing relationships with H-E-B and Whole Foods (which recently launched its own delivery service)? The smart money says that the San Francisco-based delivery service will look at other opportunities in the value chain beyond groceries. It would make sense for the growing number of ghost kitchens to partner with Instacart as the popular delivery company. This would work to leverage Instacart’s infrastructure in terms of drivers and likely some detailed data on customer behavior.

H-E-B will not be alone as a bellwether for future trends. More attention must be paid to chains such as Wegmans, Publix, and Harris-Teeter. These companies have intimate knowledge of their customer base and brand loyalty. These factors, more than any tech strategy, are the key to future success.

Uber Eats’ Move Adds to a Noisy, Competitive Delivery Market.

The food delivery business has suddenly shifted from being about consumer convenience to a battle of market competitors more focused on profits and flattening the value chain than providing options. An industry focused on giving hungry consumers the opportunity to select from a wide array of dinner-time choices has morphed into pizza delivery 2.0 and that’s, at best, boring. Simply said, the home chef faces a lot of cacophonies when it comes to grocery delivery, meal kits, and restaurant fare (home and away).

Profits are a good thing, especially for public companies or ones with an eye on expansion or acquisition. However, what we find in recent announcements is a change from the initial concept of turning a fleet of rideshare drivers into a virtual extension of a city’s best restaurants.  When Uber Eats acquires Ando, a “dark kitchen,” its fare likely will become the focus of its New York delivery options.  The king of all rideshare firms thus sends a signal to its customers that Ando’s bibimbap and fried chicken will be tonight’s special every night. The food delivery business is heading for a 180-turn, moving from delighted consumers (as we see in the GrubHub ads) to one of supplier vertical consolidation.

“We are committed to investing in technology that helps consumers, delivery and restaurant partners alike,” Jason Droege, Head of Uber Everything told TechCrunch. “Ando’s insights will help our restaurant technology team as we work with our restaurant partners to grow their business.”

None of this is to say that Uber Eats is wrong or alone in seeking ways to increase its bottom line. Others such as Deliveroo and Amazon are connecting pieces of the value chain—that is owning the food prep and delivery segments of the business—to streamline its operations. And, from a business 101 perspective, it is a sound idea if the founding principle of consumer choice remains intact.

Even with innovations, such as robotic delivery and ordering food based on your specific health DNA, this is an industry headed for a major reckoning. Why? Here are a few good reasons:

  1. The barrier to entry is low. Take Evansville 2 Go for example. A local man in Evansville, Ill., has built a food delivery service for his local community by hiring some drivers and connecting with a handful of local restaurants. There are many similar examples taking place around the country where entrepreneurs in markets too small for the “big guys” to tackle are building simple versions of GrubHub, Uber Eats, and Amazon Restaurant delivery. As pizza parlors as far back as the ‘60s (that’s the 1960s) knew, all it takes to deliver a fresh pie is a telephone and a trustworthy person with a car.
  2. Dark kitchens are a weak link in the restaurant delivery business. When a customer looks at his or her menu options for food, what is the more likely choice—an establishment at which they have had a memorable meal or one that may be run by a celebrity chef but lacks the cache of a local favorite?
  3. Competition for the consumer dollar. The average American dines out a bit more than four days a week. That leaves three days for restaurant delivery and home meal kits (of all varieties) to battle it out for the consumer dollar. Given dining out often costs more than these two alternatives, there’s not a lot left in an individual or family’s food budget after those four out-of-home meals.

For those who believe that millennials will drive the restaurants delivery business, here’s some interesting news from economists at Bank of America Merrill Lynch. Millennials are losing their taste for restaurant dining.  Spending at restaurants went down more than seven percent since 2015.

“It stands out as a bit unusual how soft restaurant spending has been considering where we are in the business cycle,” Michelle Meyer, head of U.S. economics at BofA Merrill Lynch told CNBC. “The consumer should be spending more on a broad range of items. But we’ve seen restaurants slowing more akin to a recessionary environment.”

Take heart—pizza delivery isn’t going anywhere.

No End in Sight for Innovation in the World of Food Delivery

Commerce’s path, from mall-based retail foot traffic to the ‘90s bloated iteration of digital shopping leading to Amazon’s far-reaching store-to-door tentacles, may appear to have taken a circumventurous route. The exact opposite is true. From the early days of the web to today’s AI/VR-powered shop-on-voice command, the value proposition remains the same—convenience.

The major change from clunky versions of e/t/m/d-commerce (electronic, TV, mobile, digital) to a more transparent experience results from a focus on partnerships and a more realistic view of the value chain. Amazon, as an example, understands that it cannot alone drive the future of purchasing goods and services; the Seattle-based giant has amassed an array of teammates from grocery chains to CPG manufacturers to department stores with Alexa-powered kiosks. There was a time, not so long ago, when Apple, Amazon, Google, and Apple wanted to own every building block from manufacturing to consumer products. Time and a lot of failed experiments had led to more realistic aspirations in the world of commerce.

Grocery delivery is a case in point. Early 2018 points to some dramatic changes in the world of home shopping. Players in the space—big and small–are breaking the meal journey down to micro inflection points to hit consumers when they are taking actions (or inactions, as the case may be) where ordering fresh food and pantry staples are likely to take place. For example, the term “shoppable recipes” is especially buzzy as it refers to turning the passive act of reading a recipe into an actionable event. Companies such as Chicory, Fexy, Serious Eats, Amazon, and Kroeger are using technology to allow home cooks to order ingredients in real time for a given recipe while scanning the step-by-step process of making tonight’s dinner.

Another key inflection point in the meal journey is the delivery process with a focus on the delivery of groceries (and other items) to residences when no one is home to accept packages. Amazon’s 2017 announcement of its Amazon Key at-home product/service raised significant skepticism but “homeowner not present” delivery services are gaining traction in the new year. With an understanding that in successful partnerships each party does what it’s best at, lock maker August (owner by lock giant Assa Alboy) is expanding its August Access delivery service which allows delivery to homes where the owner is away. Teaming up with Deliv, a UPS-backed delivery startup, grocers (using the Deliv Fresh service) and other retailers can securely open the front door of a home to drop off a package.

“Through this unique partnership, we are bringing a bit of magic to the shopping experience,” said Daphne Carmeli, CEO of Deliv, in a statement. “Deliv provides the last mile fulfillment solution for a broad retailer network across the country while August Home supplies the technology to take the final step into the home for a totally seamless experience, start to finish.”

Other early stage opportunities in the meal journey take a series of inflection points and bundle them into a single solution. Tovala, a Kickstarter-funded manufacturer of smart ovens, tackles the chore of meal prep and the hassle of buying/ordering groceries by selling prepackaged meals that are geared to work with their appliances. A frozen meal’s barcode is scanned into the Tovala and the oven takes care of the rest.

All of these developments take us back to the value proposition of convenience as it relates to the meal journey. Consumers want to save time and have the ingredients for tonight’s dinner (or the dinner itself) magically arrive at the door (even when they are not home) but at what cost.  And who bears that cost? And how much are today’s busy millennials willing to spend? In the ultra-competitive grocery world Albertson, Kroger, Whole Foods/Amazon, Sprouts, and others may be willing to absorb the cost of home delivery just to win market share. On the other hand, if you buy a meal kit or want a hot meal delivered to your door, the cost hits your pocketbook with a premium for the convenience. For consumers engaged in the ever-changing meal journey, the cost-convenience continuum is at its earliest stage. Like the halcyon days of premium channels on cable, subscribers loaded up on Showtime, HBO, Cinemax and a few others only to be hit with the budget–blowing cable bills. In a world where the click of a mouse or a few kind words to Alexa can bring Peking Duck to your front door, or your 10th week of a meal kit service, everything is fine and dandy until your credit card bill arrives.

Yes, life sure was convenient—but at what cost?

Myxx Brings Shoppable Recipes To Krogers

Why bother knocking on your neighbor’s door to borrow that cup of sugar you need to complete your batch of chocolate chip cookies when you can order sweetener, flour or even tasty morsels of cocoa right from your recipe. That is a) if your recipe is online and b) if you are taking advantage of a new technological wonder, shoppable recipes.

A shoppable recipe allows the home cook to click on a “buy” button alongside the list of ingredients in each recipe and add those to a shopping cart. Depending on the vendor and its partners, that list can be sent to a virtual grocery cart which is then sent to a supermarket where the items are assembled and delivered to the consumer. In cases where the store is part of the August Access program, those goods can be placed inside your home if you are not around.

As with any emerging application of technology, the shoppable recipe concept is being approached from many different angles. As you might expect, Amazon has been on this idea for several years, filing a patent in 2015 for “automatic item selection and ordering based on recipe.” In Nov. 2017, the Seattle retailing giant teamed up with Fexy, a content aggregator which has Roadfood and Serious Eats under its umbrella. Weeks later, Amazon partnered up with Allrecipes to integrate Amazon Fresh shopping into some of the online recipe goliath’s recipes.

This brings us to Myxx, which uses a proprietary algorithm to convert individual recipes into shopping lists that can be taken to a partner store and morph into an aisle-by-aisle selection guide, a deliverable bundle of goods or a curbside pickup box (or bag as the case may be). CPG companies and retailers can promote specific products (no doubt for some promotional fee) with a key differentiator for Myxx being its ability to adapt its more than 50,000 recipes to suit special dietary needs such as gluten-free, low carb, vegetarian, paleo, and low sugar. The application also can filter out recipes that include soy, peanut or lactose.

Last week Myxx announced a partnership with Kroger’s to bring their shoppable recipe platform to Kroger’s and Harris Teeter stores (at the time of announcement, the company indicated their platform is available today to Krogers customers in 17 states with more to follow). The company has a clear roadmap for its future and one area it knows is should approach is that of coupons. “Coupons are not currently a feature in the Myxx platform, however, we are developing the ability to offer promotional discounts to users based on certain brand selection and users’ actions,” a company spokesperson said. “This is exciting for both brands and retailers as it provides a new incentive channel based on user engagement but also helps minimize the effort involved in the coupon redemption process.  Today, print and digital coupons can be used at the point of transaction – either at the store or via their loyalty card.”

It will take a powerful vision and understanding of consumer behavior to win in this shoppable recipe game, especially with Amazon holding a powerful position. In addition to Myxx, others such as Chicory, Whisk, and Avocando all are looking to grab market share in this nascent space.

The link between content and commerce is a holy grail that has been elusive. T-commerce, that is buying products that are shown during an on-air TV show, has yet to take off (the technology is tough) and scanning embedded ads in print have had limited success. Capturing the hot lead is a mantra taught to salespeople the first day on the job; how it translates to big success in the tech world remains a mystery.

Peapod Hopes Its Chat-to-Cart Feature Boosts Its Bottom Line

The grocery delivery space is moving far beyond the task of bringing fresh kale and imported cheese to your doorstep. Merely offering the luxury and convenience of avoiding crowded grocery aisles is no longer enough to woo time-starved consumer, who now has myriad choices when it comes to selecting a personal supermarket shopper.

If it’s tech inspired bells and whistles you want, Peapod, a 28-year veteran of the grocery delivery wars, is attempting to boost its sagging growth by adding a new text-to-order tool. Dubbed “Chat to Cart,” consumers can create lists on their phone via text (not to mention voice-to-text or emojis) and send them over to Peapod for fulfillment. The new feature was developed by Chicago-based online shopping tools developer, StorePower.

To use the service, customers text the toll-free number, 1-833-TXT-PPOD and provide a list of products by name or by emoji symbol. The service includes an option to share the shopping list among family members who can add products to the order. After an initial order, or once the number is saved, orders can be placed via Siri or Google Assistant.

“At Peapod, we have always been committed to being the ultimate convenience for our customers,” said Cat De Merode, Peapod’s VP of product in a company release. “The Chat-to-Cart platform was designed for the busy shopper that relies on their mobile device whether at home or on the go. Now, instead of texting a family member to pick up an extra gallon of milk, you can text Peapod and let us do the work. The texting functionality complements the Peapod mobile app and desktop website for one seamless ordering process.”

While digitally based grocery shopping makes up only 3.8% of the grocery retailing market, researchers see a bright future.  Packaged Facts, based in Rockville, MD., believes online grocery sales will go grow from a CAGR of more than 27% over the next five years. By 2022, the company says online sales of grocery items may be worth as much as $42 billion annually.

Peapod’s owner, Dutch-based Ahold Delhaize would like the digital delivery service to contribute more to its overall bottom line. In its most recent quarter, Ahold’s ecommerce revenue was up 20% but Peapod grew in the single digits. Company officials claim its various supermarkets, such as Food Lion, have not successfully integrated Peapod into their services.

Putting aside specialty delivery services such as Farmstead, players in the online grocery/delivery market are running low on competitive factors. Advances such as Walmart’s partnering with Google Home to gain access to their voice-enabled assistants does precious little to create any distinction among the Peapods, Instacarts and Shipts of the world (not to mention store-branded delivery services). Blurring the lines even further is the growing overlap between grocery and restaurant delivery with such all-purpose digitally powered, food-to-home services as Postmates promising speedy grocery services in New York.

That $42 billion revenue figure for grocery delivery sounds like a hefty prize, but the question remains—how much will go to the one-two punch of Amazon/Whole Foods and how many remaining companies will be spending millions to grab minor slivers of market share.

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When Is a Food Truck Not a Food Truck—But Something Better?

 ClusterTruck offers a visionary approach to food delivery, despite its somewhat misleading name. Located at the intersection of virtual restaurants, just-in-time ordering, home delivery and fleet management, the Indianapolis-based company recently has added Kansas City to its growing roster of markets served.

With ClusterTruck, it’s all about synchronization. Food, from an extensive menu, is prepared in a commissary-like kitchen in each of its now six locations. Orders, via a dedicated app or via the company website, are only offered within zones in each city where meals can be delivered to a customer’s curb within a reasonable time frame to ensure freshness. The twist, compared to other food delivery options, is that an individual order is not started until a driver can be located. For those who live outside a designated zone, a customer can place their food request and meet a driver within the delivery area.

“Having come from a deep technology background, we approached the growing problem of unsatisfied food delivery customers from a software perspective,” ClusterTruck Inc. CEO Chris Baggott, who co-founded digital marketing software company ExactTarget, said in a release. “We believe hungry people should never have to choose between the convenience of fast delivery, the food quality they’d get at a sit-down restaurant and the personality of street food, so we created a service that offers all of the above.”

Essential to ClusterTruck’s success is the specially designed kitchens where the food is prepared. Large digital displays cue chefs when to begin meal preparation, based on not only finding a driver but calculating the time it will take the vehicle to reach the meal prep location. According to company information, Baggott hand-coded the software to ensure accuracy for this crucial step.

Baggott also has his hands in the process far beyond prep and delivery. The ClusterTruck CEO owns a farm where animals used for much of the company’s menu are sourced, in a pasture-raised and antibiotic-free environment. With increasing demand, Baggott is contracting with other farms who are willing to raise their cows and pigs to ClusterTruck’s specifications.

ClusterTruck’s delivery fleet is made up of drivers who also may work for other services such as Uber, Lyft or Postmates. One of the company’s big selling points to recruit new drivers is that ClusterTruck provides only curbside delivery, all of which eliminates the hassle of parking, apartment building codes or elevators. Also, the company says it pays its drivers daily, rather than weekly or monthly, as is common with other food delivery services.

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“WeWork” for Food Entrepreneurs Gets Financial Shot in the Arm

Budding butchers, bakers, and (edible) candlestick makers have another innovative option to provide the vital tools, training, and resources to facilitate movement from startup home food entrepreneurs to the realization of their goals of commercial success.

New York-based Pilotworks (formerly FoodWorks), billed as a “WeWork for food startups,” has received $13 million in expansion capital from Acre Venture Partners, a fund backed by Campbell’s Soup, along with TechStars, a funding and mentoring program. The money will be used for expansion to markets, such as Chicago and Dallas, along with the development of the necessary properties, culinary infrastructure, and staffing.

A company press release reveals the company was founded in 2016 and has since helped more than 250 food and beverage startups get off the ground. Pilotworks says that more than 70% of the businesses it has worked with are women or minority-owned.

“We’re very excited to add so many great strategic partners and continue our work of empowering anyone to start a food business successfully. We will be adding new units: Newark just opened, and Chicago and Dallas are slated to open in December alongside our existing kitchens in Brooklyn, Portland, and Providence, as well as furthering our presence in New York City. We are also excited to continue expanding our services and offerings across the entire food stack,” said Pilotworks CEO and co-founder Nick Devane.

The company’s website says it offers a full range of services that go beyond a mere stove and fridge. Everything from garbage and linen service, to assistance with branding and web design, is available to its members. Companies such as Aida Eats, Mac & Son, BOONBOX, Dank, and Crown Jewel Beverages are veterans of Pilotworks programs.

While the association with WeWork is fine for general identification purposes, it fails to capture the essence of what makes the boom in community commercial kitchens a hot commodity. Pilotworks enters a crowded space that spans options from highly regarded Food Corridor—a community and network of commercial kitchens that offers similar services to Pilotworks in a more federated manner—to individual shared-use kitchen incubators such as Capital Kitchens in Austin. The website Culinary Incubator offers a database and list of 725 shared-use kitchens in the United States.

What looms as a difference-maker for Pilotworks is its association with Campbell’s Soup. The New Jersey-based food and beverage giant could use this network of startup kitchens to find the next great idea to bring in house and take to the global market. That said, Tyson Foods, General Foods, and others also are operating accelerators with the same endgame in mind.

Worth noting is the startup goldrush led by Pilotworks and other similar endeavors focused on major markets that are either population centers (New York, Dallas, Chicago) or food meccas (Portland, Providence). A tour of any farmers market in smaller cities would prove there are some great food-next ideas worth nurturing outside marquee locations.

Bringing Bean to Bar to the Home Food Factory

“Bean to bar” is among the lesser-known, but still popular, phrases in the foodie lexicon. For most, it’s the equivalent of an exquisite, controlled farm-to-table production process in the chocolate world. In that specific application of the term, it follows the cocoa bean from the farm. The bean starts with drying. After it is shelled, the inside nib is taken to a lab-like kitchen where those inner goodies are mixed with raw cocoa butter and sugar to make sumptuous craft chocolates.

For others, “bean to bar” is a come-hither headline that leads the inquisitive culinary explorer to a class where the hands-on experience of making (and later eating) chocolate is a multi-hour learning session. In such workshops from New York to the southern regions of Peru, the do’s and don’ts of chocolate making are explored, including how to carefully remove the outer part of the cocoa bean and devise the formula/ratio of bean to sugar and cocoa butter to suit individual tastes. Hence, when you see a chocolate bar in your local gourmet shop that says 70%, it means it’s 70% cocoa bean with the remaining 30% made up of sugar and cocoa butter.

In the bean to bar workshop, the class hits the pause button before actual production. The process of making artisan chocolate—be it a small batch for a class of 20 students, or for a large order—is a lengthy one that tempers the ingredients in a melangeur or similar commercial machine. Those in the workshop are given silicone molds, perfectly melted chocolate, and mix-ins to allow each student to create his or her final artistry.

With an emphasis on growing veggies at indoors, brewing your own beer, distilling booze and other home food factories, making your own chocolates appears to be lagging. With shrinking global supply chains, there certainly is a wide range of choices when it comes to cocoa beans, cocoa butter and sugars of every vintage (raw, refined, organic, etc.…) The issue is the lack of popularly-priced home chocolate tempering appliances. Smaller versions of a traditional melangeur run more than $350 with industrial-sized models running well over $1,000.

Following the model of such entrepreneurs as PicoBrew make sense for the home craft chocolate market. Any easy-to-use machine where the ingredients come in “kits” would be an idea for the novice chocolatier. Brands such as Nestle, Hershey, Ghirardelli and others could create kits (bean, cocoa butter, sugar) that carry their signature flavor and communities of chocoholics could share their magic recipes.

The global chocolate market is work more than $98 billion, so there’ s little fear the home market will cause the Belgian economy to suffer. As a foodtech trend, the home chocolate market appears to be a large, untapped opportunity.