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The Spoon

Daily news and analysis about the food tech revolution

Chris Albrecht

Red Sea Farms Raises $10M to Grow Crops in Saltwater

Red Sea Farms, a Saudi Arabia-based startup developing technology to grow crops in saltwater, announced today that it has raised $10 million in funding. According to a press announcement, the round was led by a group of Saudi and UAE investors including the Aramco entrepreneurship arm Wa’ed, the non-profit foundation Future Investment Initiative Institute, KAUST and Global Ventures, a UAE venture capital group.

Red Sea Farms is based out of King Abdullah University for Science & Technology (KAUST) in Saudi Arabia. We just covered Red Sea Farms a couple weeks back, writing:

In a nutshell, Red Sea Farms is able to either irrigate land crops with saltwater or grow crops hydroponically using a mixture of 90 percent saltwater and 10 percent fresh water. Right now the company is growing tomatoes through a combination of plant selection, breeding and grafting (but not genetically modifying) in such a way that developed root stocks that can grow in saltwater.

Red Sea Farms is currently applying its technology to both indoor and outdoor trials in Saudi Arabia and Egypt, and sells its own brand of tomatoes in markets in Saudi Arabia.

The work Red Sea Farms is doing could create entirely new agricultural possibilities around the world. Countries with abundant coastline and not as much fresh water could become more food independent.

In addition to growing crops in seawater, Red Sea Farms has also developed technology that uses seawater instead of freshwater in evaporative cooling systems to maintain proper temperatures inside greenhouses.

Red Sea Farms said it will use its new funding to build and retrofit more than six hectares of commercial farming in Central and Western Saudi Arabia.

Grabango Raises $39M Series B Funding for Cashierless Checkout

Cashierless checkout startup Grabango announced today that it has raised a $39 million Series B round of funding. The round was led by Commerce Ventures with participation from Founders Fund, Unilever Ventures, Honeywell Ventures, and WIND Ventures. This brings the total amount of funding raised by the company to $71.2 million.

Grabango retrofits stores with overhead cameras and artificial intelligence to automatically keep track of what customers take and put in their baskets. Users download the Grabango app and shop as they normally would, and when it comes time to checkout, users scan a QR code generated by the app at a Grabango checkout kiosk and get charged automatically.

Cashierless checkout is gaining a ton of momentum in 2021. Startups across the globe are emerging with their own takes on the cashierless checkout space. Grabango, Zippin and Amazon all retrofit stores with cameras to keep track of purchases, while companies like Caper and Veeve use smart shopping carts. In addition to new funding, deals between cashierless checkout companies and retailers are moving from private pilots to public announcements. AiFi is working with Wundermart, for example and Caper’s smart carts are being used by Kroger.

The COVID pandemic accelerated much of the interest in cashierless checkout as retailers are now looking for ways to reduce human-to-human interactions in stores. Cashierless checkout means that one cashier doesn’t become a vector of transmission among many different people, and the technology keeps people from congregating together in lines. This technology is still new however, so even though the pandemic is receding, implementation of these systems, especially by large retailers, will still take time to evaluate and roll out.

Grabango’s system is already in use by Giant Eagle’s GetGo market in Pittsburgh, Pennsylvania, and earlier this year Grabango released some stats on how it was being used. Some findings from that internal survey include:

  • 50 percent of users were 45 or older
  • More than 80 percent of visits were repeat visits
  • Shoppers spent 1.3 seconds checking out during peak hours
  • Refund requests were less than 0.03 percent of total volume, indicating high revenue accuracy

In today’s press announcement, Grabango said that its new funding coincides with additional store deployments with current and new customers in 2021. The company said it has signed five retail partners, including a global top-10 grocer, and multi-store deployments are underway at several of them.

South Korea: Seawith Uses Algae for Serum and Scaffolding in Cultured Meat

It’s been a banner year so far for cultured meat. In addition to all of the funding that’s been flowing into the space since the start of 2021, there is also a growing number of startups from around the world attacking the issues of creating cell-based meat in unique ways.

The latest such startup to come to our attention is South Korea’s Seawith, which is leveraging algae to differentiate itself from other cultured meat players. The company uses algae to replace the fetal bovine serum (FBS) that has historically been used as a growth medium for cells. FBS is expensive and controversial, so most cell-based meat startups we cover are developing technologies that don’t require it. But Seawith is also using algae as a scaffolding to grow meat, which the company says yields thicker “cuts” of meat.

Following is a brief Q&A conducted via email with Heejae Lee, CTO of Seawith, who provides a little more insight into the company and what it is creating. Answers have been lightly edited for clarity.

1.) What makes Seawith different from other cell-based meat companies?
Seawith has the distinction of making the world’s first perfect steak at a price similar to slaughter meat. Based on algae engineering technology, it has replaced most of the bovine serum, which accounts for more than 90 percent of the cost of culturing meat, and the cell culture scaffold technology can make cultured meat thicker than 1cm.

2.) What makes algae so useful in creating cell-based meat?
The key principle of cultured meat is that one muscle cell takes nutrients and synthesizes them to make large meat. Algae is rich enough to be used as a nutritional supplement, which allows efficient cell culture by supplying it to cells. Also, algae are one of the most abundant resources on Earth, and they have the advantage of being cheap and available everywhere because they can grow anywhere with water and sunlight.

3.) Where are you at with your product right now?
We just finished our research and held a cultured meat tasting event. Cultured meat made with Korean bovine cells was evaluated well by attendees, who said it had the taste and aroma of beef, and the texture of meat could be seen. Currently, it is a muscle-only culture, but we are preparing various features such as taste of fat cells. We are preparing to get permission to produce enough to supply large quantities of products to restaurants by 2023.

4.) What types of cell-based meat will you be creating?
Seawith is making beef steak. There are many different types of meat, but the reason why we are making
difficult steaks is that only the technology we have can implement them. After perfecting the texture of muscle tissue, we plan to develop various meat products such as chicken, pig, and fish as well as meat products and animal feed.

5.) What is your timeline to bring your product to market?
We are currently discussing with the Ministry of Food and Drug Safety to make a trial sale in Korea with the aim of
launching a restaurant at the end of 2022. To this end, we are planning an urban cultured meat factory and will introduce a minimum production model by 2021. From 2023, we are preparing for local tasting event and product launch in different locations such as North America and Singapore.

Hungryroot Raises $40M Series C for its Predictive Grocery Service

Hungryroot, which uses artificial intelligence (AI) to power its personalized online grocery service, announced today that it has raised a $40 million Series C round of funding led by the Growth Fund of L Catterton. This brings the total amount of funding raised by Hungryroot to $75.4 million.

Hungryroot is a little different from other online grocers in that it uses machine learning and predictive modeling to fill a customer’s cart. When customers first use Hungryroot, they take a quiz to tell the service their food and taste preferences. Hungryroot then runs that data through its algorithms to pre-fill the online cart with groceries and recipes it thinks the customer will like. Customers, however are free to remove and add items a la carte. Items are boxed up and shipped to the customer, starting at $59 per delivery.

It’s been a big funding year for grocery related startups, as just about any company related to getting you food has picked up fresh capital this year. Other mail-order grocery services that have received funding this year include Misfits Market ($200M), Imperfect Produce ($110M), and Weee! ($310M).

A big reason for this rash of funding, of course, is that the pandemic pushed people into online grocery shopping and that behavior appears to be sticking with consumers. Coresight Research reported that more than one-third of online grocery shoppers don’t plan on changing up their online grocery shopping habits once the pandemic ends. And according to Brick Meets Click, U.S. online grocery sales in April of this year were $8.4 billion, up from $7.2 billion year-over-year.

In its press announcement today, Hungryroot said that it has been profitable since the beginning of 2020 and is on track to reach $175 million in revenue this year. The company also forecasts more than $300 million in revenue in 2022. The company said that it will use its new funding to increase the number of groceries it carries, recipes offered and will invest in automation technology.

Speedy Grocery Delivery. Big Money. Flink and Getir Each Raise Big Rounds of Funding

Just when you thought investment in the European grocery delivery space couldn’t get any frothier, both Flink and Getir announced massive rounds of new funding today. Germany-based Flink raised a $240 million Series A round, while Turkey’s Getir announced that it has raised $550 million.

Both companies operate dark stores that are set up in city neighborhoods and carry limited inventory. Because of where these hubs are located and the tight delivery radius, customers can receive their order within minutes of placing it. The entire space has been white hot since the start of the year with a number of players launching and getting funded.

Flink, for instance, just launched six months ago, and announced in March that it had raised $52 million. Reuters reports that its new funding round announced today was led by Prosus, BOND and Mubadala Capital. Flink already operates 50 dark stores that already reach more than 3 million customers, and the company says it it opening up a new store every two days.

In addition to its big funding haul, Flink also said that it has partnered with the German supermarket chain Rewe group. According to TechCrunch, the deal will make Flink Rewe’s preferred partner for smaller grocery deliveries. This will be interesting to watch because part of the appeal of the smaller dark store is that they are small. That makes it faster to assemble an order and get it out the door. Will Rewe set up a special mini-section within its stores for Flink, or will Flink delivery people just need to sprint through existing Rewe supermarkets in order to get deliveries out on time?

Flink’s $240 million seems quaint compared with the money Getir has raised. The $550 million the company announced today follows the $300 million it raised in March of this year. The Financial Times writes that Getir, which only just expanded outside of Turkey this past January, is now valued at $7.5 billion. Getir CEO, Nazım Salur, told the FT that his company raised all this money this year is that Getir plans to expand to the U.S. this year rather than later. CNBC reports that Silver Lake, Mubadala, Sequoia and Tiger Global all participated in the round.

While Getir won’t find as much competition here in the U.S., the speedy grocery delivery space is starting to get busy, especially in New York City. Fridge No More, JOKR and Gorillas now all operate in various part of the Big Apple. And speaking of Gorillas, Sifted writes that the German delivery company, which just raised $290 million in March is looking at a secondary share sale in the hopes of raising another $1 billion.

As I’ve written before, while 10-minute grocery delivery is still new, it is poised to change our very relationship with food shopping. If these services take off, it could make grocery shopping more like a utility that you turn on whenever you need something, as often as you need it. These companies still have to prove they can scale and make money when people order just one avocado. Flink, Getir and all these startups may feel like Kozmo.com 2.0 to those old enough to remember, but as I wrote today, I don’t think that’s the case.

I do, however, think we’ll see more funding news, especially for new speedy delivery startups here in the U.S.

Why 10-Minute Grocery Startups Are Not the Next Kozmo.com

Spoon readers of a certain age will undoubtedly remember Kozmo.com, the turn-of-the-century online service that would deliver snacks, magazines, DVDs and more to you in under an hour. Have a hankering for some Ben & Jerry’s while watching Gladiator? Kozmo would whisk both over to you with no delivery fee. It was glorious.

It was also short-lived. Because you could basically order a Snicker’s bar for delivery and Kozmo didn’t charge you for the convenience, it soon burned through all of its $250 million in venture capital and went out of business.

For those who lived through it, you might be tempted to think that the new wave of hyperlocal, dark grocery stores promising delivery of goods in as little as ten minutes is just Kozmo 2.0 — but you’d be wrong. Much has changed since Kozmo’s brief heyday, and those changes could usher in an entirely new way of thinking about how we get our groceries.

Before we get into the why speedy grocery delivery might work this time around, let’s recap which startups are doing it. Europe has grabbed a bunch of headlines throughout the year so far with companies like Weezy, Jiffy, Gorillas, Getir and Glovo all pulling in substantial amounts of funding. Here in the U.S. Gopuff raised $1.5 billion and bought BevMo to operate its half-hour delivery services. DoorDash has its own line of DashMart stores that are steadily opening in different cities. New York City boasts three different speedy grocery delivery services from Fridge No More, Gorillas and JOKR, the latter of which just launched this week. And finally, Food Rocket took off last week in San Francisco.

All of these startups basically work the same way. They open up small, dark stores deep in heavily populated city neighborhoods. Each store carries a limited number of SKUs — with inventory customized to the neighborhood they are in — and have a very limited delivery radius. When an order comes in, it’s processed and, because the customer is not that far from the store, food can be delivered quickly on foot or scooter (no need for a full-sized car that has to navigate traffic and finding parking).

For many of these services, there is no minimum order and no delivery fee. OK, that part does sound very Kozmo like. But here’s why I don’t think these speedy delivery startups will suffer the same fate.

1.) Improved Technology. It’s been 20 years since Kozmo crashed and burned. In that time we’ve seen the rise of cloud computing, data science, machine learning, mobile technology… basically everything about technology is bigger, better, faster, stronger now. This means that delivery routes can be optimized, inventories can be better managed and there is just greater operational insight to unearth efficiencies that would have remained hidden two decades ago.

2.) Strict Boundaries. These startups aren’t trying to deliver everything, just the stuff people in the neighborhood want most often. Yes, people will still order one pint of ice cream, but the stores won’t stock every brand of ice cream, nor will they carry DVDs and magazines. Additionally, each store will have a small, defined delivery area so fulfillment can be accomplished quickly by scooter or e-bike. Faster deliveries should equate to the ability to make more deliveries per hour. Limited delivery zones also means that startups will need to be cognizant of equity issues, and make sure everyone gets to participate in this new grocery paradigm — not just the rich folks.

3.) Consumer Behavior. As I have written ad nauseaum over the past year, the pandemic forced large swaths of people into online grocery shopping. Food retailers saw their online business jump an average of 300 percent in the first months of the pandemic. After months of social distancing and lockdowns, that online behavior has remained sticky with consumers. Grocery e-commerce sales for pickup and delivery were $6.6 billion in April 2021, up from $4.0 billion in April 2020.

4.) It’s On-Demand. We now live in a world where people expect just about everything on-demand. Movies, music, even restaurant meals can all be ordered with a few taps of your mobile phone. Though the speedy delivery category is new, it’s easy to see how alluring it will be to have groceries be more like a utility that show up whenever you need them. The co-founder of JOKR told me last week that its customers first use the service because they forgot something, but those customers come back and subsequent basket sizes are bigger and aren’t just last-minute items. That data is anecdotal and early on, obviously, but it’s not hard to see people getting hooked on the convenience.

Now, this doesn’t mean that all of these speedy grocery players jumping into the space are going to succeed. Far from it. Many will fail, and that’s okay in the grand scheme of things — failure happens to a lot of startups across pretty much every industry.

Kozmo’s failure may have been a better cautionary tale than a business, but hopefully this cohort of speedy startups can learn from its mistakes.

Image via MeaTech 3D.

More Headlines

MeaTech 3D Files a Patent for Printing More Cultivated Meat – The company uses bio-inks to form cell types like muscle and fat, and scaffolding material, which provides structural support cells can adhere to as they grow and mature into an whole cut of cultured meat.

McDonald’s Testing AI-Powered Drive-Thrus in Chicago – The tech is currently being used in ten locations and reportedly has an order accuracy rate of 85 percent.

Alternative Meat Start-up Hooray Foods Raises $2M in Seed Round – The startup’s only product right now is plant-based bacon, which uses a fat encapsulation process, to provide a juicer texture to its alternative meat.

Chile’s NotCo Nabs Investment From Danny Meyer-Affiliated Growth Equity Fund – The company says the investment will help it further expand in the U.S. and launch new products in the Latin America market

McDonald’s Testing AI-Powered Drive-Thrus in Chicago

McDonald’s has started testing out drive-thrus that use artificial intelligence systems, rather than humans, to take orders. CNBC reported yesterday that the new automated drive-thrus are in use at 10 Chicago McDonald’s locations.

The new system is based on the voice platform built by Apprente, which McDonald’s acquired in 2019. According to McDonald’s, restaurants using the system are seeing an 85 percent order accuracy rate, with only about one-fifth of orders requiring human intervention.

AI-powered drive-thrus can reduce customer wait times and allow restaurants to shift its in-store workforce. A computer that understands natural language is always on and available to take orders. It could also be tied in with other automated systems that know a customer’s purchasing history to automatically make recommendations. With improved understanding accuracy, a restaurant would no longer need a dedicated person to take (or confirm) a drive-thru order, allowing more people to do more customer service or expedite orders.

McDonald’s CEO Chris Kempczinski told Alliance Bernstein’s Strategic Decisions conference that a big issue ahead for the AI-powered drive-thru is scaling. CNBC reports Kempczinski as saying “Now there’s a big leap from going to 10 restaurants in Chicago to 14,000 restaurants across the U.S., with an infinite number of promo permutations, menu permutations, dialect permutations, weather — and on and on and on.”

The Apprente acquisition appears to be working out better than Dynamic Yield, which McDonald’s also acquired in 2019. Dynamic Yield generated automated menu recommendations based on factors like weather, and was supposed to be integrated into self-service kiosks and drive-thrus as well. However, this tech didn’t yield the results McDonald’s was looking for and in March of this year The Wall Street Journal reported McDonald’s was looking to sell part of Dynamic Yield.

While McDonald’s Apprente acquisition may have pre-dated the pandemic, last year certainly accelerated the need for enhanced drive-thru technology as dining rooms were forced to shut down. In a February 2021 survey, BlueDot reported that 91 percent of respondents said they had visited drive-thrus the previous month and that long wait times were a “dealbreaker.” Most major QSRs have been doubling down on their drive-thru capabilities to meet this demand, adding capacity and building restaurants around takeout rather than dine-in.

In addition to adding AI assistants, McDonald’s has previously said that it will add other features to its drive-thru such as express lanes for digital orders and conveyor belts to carry food out to customers.

Kempczinski also told the conference that McDonald’s is also exploring ways to automate parts of the kitchen such as the grill or fryer. However he said any such move in the back of the house is still a more than five years out as the technology is too expensive right now.

JOKR Joins the Speedy Grocery Delivery Fray in NYC

We are just about halfway through the year and the emerging food tech trend so far in 2021 is definitely fast grocery delivery from dark stores. New York City, which already has Fridge No More and Gorillas, can now add JOKR, which launched today, to its roster of super fast on-demand grocery delivery service.

JOKR’s service may sound familiar to avid Spoon readers. The startup operates a number of delivery-only grocery store hubs scattered across New York City. These smaller stores don’t carry as many items as a full-on supermarket, and only have a delivery radius of about a mile. Once an order is placed, JOKR fulfills and delivers it to the customer in under 15 minutes. There is no minimum order, no delivery fee and all delivery people are employees of the company.

Unlike rivals Fridge No More and Gorillas, however, JOKR isn’t just operating in Brooklyn neighborhoods. The company’s current delivery zones include most of Manhattan below 35th street, Williamsburg, and Long Island City, and Queens. More neighborhoods will be added in the coming weeks, and Zach Dennett, Co-Founder of JOKR told me by phone last week that the company will be expanding to Boston “very soon.”

Speedy grocery delivery has exploded over the past six months around the globe. In Europe, services like Weezy, Glovo, and Getir have all raised money to expand their services. Here in the U.S., Gopuff raised $1.5 billion for its half hour delivery, 24 hours a day, and in San Francisco, Food Rocket launched its delivery in San Francisco last week.

I asked Dennett why he thought this new market category was erupting so quickly. “The pandemic has accelerated customers’ learning to shop for groceries online,” he said, “as soon as they’ve gotten to experience 15 minute delivery? That’s what they want.” Dennett also said that the pandemic caused a depression in commercial real estate, so companies are able to lease store locations much more cheaply than before.

During JOKR’s beta right now, Dennett said that a typical customers first uses JOKR because they forgot something (Think: milk, eggs, etc.). Once they use the service, however, Dennett said those customers then transition into more traditional grocery shopping, increasing their basket size.

The big challenge for JOKR, according to Dennett, is inventory management. “We have this very interesting problem,” Dennett said, “We have to achieve every customer need in the fewest SKUs possible,” because the stores themselves are not that big. Plus, the inventory for each neighborhood is different, which means JOKR has to cover a lot of bases in an efficient manner. “We have to have a pasta that you’re happy with,” Dennett said, “Are you brand loyal, are you shape loyal? Are you interested in gluten-free or kosher?”

The bigger question for JOKR and all of these services now is whether customers will change up their grocery habits and switch over to speedy delivery.

Alternative Protein Companies Shouldn’t Ignore the JBS Hack

The ransomware attack that shut down meatpacking giant JBS this week should be a wake up call for every startup developing alternative proteins. The big lesson here is that food companies aren’t immune from online threats. Even if your startup is still in the lab, cybersecurity needs to be part of your product roadmap right now.

To be clear, there is still a lot we don’t know about the JBS hack. Was JBS specifically targeted, or did hackers just stumble across a security vulnerability? How did the hackers get in? What systems at JBS were affected? While JBS says most of its plants would be back up and running today, will there be long-lasting effects?

Here’s what we do know. JBS is a food company. It doesn’t deal with national security (as far as we know), doesn’t provide immediate critical infrastructure needs like the Colonial pipeline hack last month. The JBS attack was bad enough to halt production and shut down all JBS facilities across the U.S., with the potential to drive up food prices at retail and restaurants if it doesn’t get fixed quickly. If hackers now think food companies are soft targets, we could certainly see similar attacks against a number of different producers around the world.

Because the entire alternative protein category is so young, startups working in the space might think they can fly under a hacker’s radar. Plant-based meat only became widely available at retail just last year, and cell-based meat is mostly still in the pilot phase. Companies could be tempted to focus solely on their product and kick the IT security can down the road.

Plant-based food companies, for example, don’t generate nearly as much revenue as their animal processing counterparts, so they just can’t pay as much in ransom. The retail market for the entire plant-based foods category, which includes plant-based meat, dairy, etc., is now worth $7 billion, according to the Good Food Institute. To compare, animal meat grocery sales in the U.S. in hit $82.5 billion in 2020.

But sales of plant-based foods are on the rise. U.S. sales of plant-based meat grew by more than $430 million last year to reach $1.4 billion. If these trends hold and plant-based companies generate substantially more revenue, they too will become more attractive to ransomware attackers. Beyond Meat and Impossible Foods, two of the biggest plant-based meat players, could become ripe targets if they become more central to our collective diets.

Cell-based meat companies in particular should take heed. Even though cell-based meat is only for sale from one company (Eat Just) in one country (Singapore), cultured food companies have even more reason to worry about hackers. Cell-based meat is grown in bioreactors, which are controlled by some type of networked computer to adjust nutrient baths, monitor growth, etc. Could hackers then hijack the meat being grown? Could they do so and go unnoticed? There are a lot of drawbacks to using animals as meat, but a hacker cannot take over a cow. Cell-based protein on the other hand, still needs to be approved for sale around the world and win over customers who might be wary of eating lab-grown meat. Any major hack to cell-based meat companies could stop the sector’s growth before it even truly begins.

All of this may sound alarmist, but alarms should be going off for these nascent alternative protein companies. Build in the proper security now while you are still developing your overall corporate roadmap so you don’t have to deal with hackers derailing your entire business down the road.

Shef Raises $20M for Home Cooked Meal Delivery

Shef, a startup that enables home cooks to sell their food for delivery, announced today that it has raised a $20 million Series A round of funding. The round was led by Andreessen Horowitz with participation from Craft Ventures, Y Combinator, Pioneer Fund, M13 and a bunch of celebrities including Padma Lakshmi, Tiffany Haddish, Katy Perry, Orlando Bloom, chef Aarón Sánchez and NBA player Andre Iguodala. This brings the total amount raised by Shef to $28.8 million.

Currently available in seven markets, including the San Francisco Bay Area, New York, Seattle, Chicago, Houston, and Austin, Shef’s online platform is a marketplace of independent cooks and chefs who either make meals out of their home or in a commercial kitchen. Shef has a rigorous application process that includes a food safety exam, food quality assessment, as well as standard sanitation practices such as hairnets and gloves.

Customers plug in their zip code on Shef’s website to peruse cuisine and cook options available in their area. Shef, however, doesn’t facilitate on-demand, hot food delivery. Meals must be ordered two days in advance and arrive cold for people to re-heat at home, so the service is more akin to a meal planning-type service. Since the cooks on Shef’s platform aren’t professional restauranteurs, this type of advanced ordering system allows them to better prepare inventories and schedules, rather than trying to anticipate demand on any given night. The advanced ordering also makes it easier for Shef to facilitate deliveries.

The legality of selling home cooked meals is still a bit of a grey area from state to state. In 2018, California signed AB-626 into law, making it legal to start a home-based food business in the state. Alvin Salehi, co-founder and co-CEO at Shef told me by video chat last week that there were 44 home cooking bills introduced during the last legistlative session across 29 different states. As part of today’s news, Shef also announced that it has hired Danielle Merida as its general counsel to collaborate with policy makers and advocate for the expansion of home cooking laws across the US.

The home cooking space has been relatively quiet since DishDivvy launched its service in California in 2018, but perhaps the pandemic will shift activity in the sector. The allure of the side hustle plus a reluctance to go back to an office could spur a wave of would-be cooking entrepreneurs to make meals out of their kitchen. Salehi said that the waitlist to be a cook on Shef swelled to more than 12,000 people.

Shef says that more than 85 percent of the cooks on its platform identify as a person of color. With its new funding, Shef will expand both the number of cooks on its platform, as well as the number of cities it serves.

Report: Instacart Looking to Add Automated Grocery Fulfillment

According to a story out in Bloomberg today, Instacart is looking to create automated fulfillment centers, which would use robots to assemble grocery orders. These fulfillment centers would either be standalone or attached to an existing grocery store.

From the Bloomberg story:

Under one proposal, Instacart would create a network of stand-alone fulfillment centers that would handle more than 3,500 orders a day with more than 100,000 units sold, according to documents reviewed by Bloomberg. More than 700 robots and about 160 people would do the work, with the machines fetching most of the items and workers gathering fresh and perishable food. The installation would cost $20 million, with annual maintenance costs of $380,000 a year. A second option is a smaller 25,000-square foot attached to a store that would handle more than 700 orders a day totaling 22,000 items. It would have more than 150 robots, 40 workers and would cost $6.5 million to set up and $270,000 a year to maintain, according to the documents.

The reason for this automation plan is simple: speed. Speed of order fulfillment is becoming more critical to a grocery retailer’s success than ever. The pandemic forced a lot of people into trying online grocery shopping last year, and while overall grocery e-commerce numbers have dipped since the record highs of 2020, the habit appears to be sticking with people. Brick Meets Click data showed that online grocery sales for pickup or delivery were $6.6 billion in April of this year. That’s down from the $7.1 billion in grocery e-commerce sales in March of this year, but up from $5.3 billion in April 2020.

All those online grocery orders need to be picked and packed before they get to the customer. Instacart’s current solution is to have human gig workers (Instacart’s “Shoppers”) do this. But a robotic fulfillment center can assemble a grocery order in minutes, which is much faster than a person wandering the aisles looking for particular brands of peanut butter and loaves of bread.

This need for speed is why so many existing grocery retailers are investing in automated fulfillment. Kroger recently opened up the first of its standalone, automated Customer Fulfillment Centers powered by Ocado’s robotic technology. And both Walmart and Albertsons are expanding their use of automated fulfillment centers as well.

Instacart is obviously feeling the time crunch. Earlier this month, it launched a 30-minute delivery service of its own, but that service is only available in 15 cities right now. But Instacart faces pressure from a new wave of delivery-only startups vying for your speedy delivery dollar. Gopuff averages half-hour delivery times and operates 24 hours a day. And startups like Fridge No More and Gorillas offer delivery with no minimum order in just 10 – 15 minutes. No wonder Instacart is eyeballing automating some of its processes.

Of course, any talk of automation immediately brings up the question of jobs and who will get replaced. It’s a big, ongoing discussion around the push and pull of innovation, equality and what kind of society we want to create. In the case of Instacart, it’s a natural question to ask as the company swelled its gig shopper ranks to more than 500,000 shoppers during the height of the pandemic last year. What happens to all of those people when the robots come in?

We reached out to Instacart for comment on the Bloomberg story and received the following emailed statement:

We’re constantly exploring new tools and technologies that support the needs of the 600 retailers we partner with and further enable their businesses to grow and scale over the long-term. Shoppers are and will continue to be central to Instacart and our service, and any suggestion otherwise is wholly inaccurate.

Bloomberg writes that Instacart hasn’t signed on any retail partners for its automated fulfillment plans as of yet, and as of right now any speculation around Instacart’s automation plans is just that, speculation. Instacart is undoubtedly exploring a number of different technological options as it marches towards its inevitable IPO, and those plans will most likely include robots of some kind.

South Korea: Shinhwa Food Group to Use Woowa Bros. Dilly Plate Server Robots

The Shinhwa Food Group will be rolling out server robots at its restaurants brands in South Korea thanks to a new deal with Woowa Brothers. Aju Business Daily reported yesterday that Shinhwa has agreed to gradually introduce roughly 100 “Dilly Plate” server robots at its restaurants by the end of this year.

Dilly Plates are basically self-driving racks of trays that shuttle plates of food and empty dishes back and forth from a restaurant’s kitchen to its tables. The robots are equipped with sensors and smarts to do things like avoid obstacles and other people. Woowa debuted its first Dilly Plate (made by Bear Robotics, shown in the picture above) at a Seoul Pizza Hut back in 2018. According to the Aju Business Daily, Woowa now has five different Dilly Plate models that are deployed across 305 restaurants in South Korea. Woowa’s deal with Shinhwa is the biggest deployment agreement so far.

Interest in food robotics has accelerated since the pandemic last year. The use of a robot such as the Dilly Plate can reduce the amount of human-to-human contact in a restaurant by removing a human from the equation. Robots can also alleviate some of the hard work associated with being server by carrying heavy loads back and forth continuously without needing a break.

Woowa Brothers has been working on a number of different food robot-related initiatives. The company launched its food delivery robot program last year, and is even working with companies like Hyundai that allow those delivery robots to do things like autonomously access buildings and ride elevators. Additionally, Woowa worked with South Korean electronics giant LG and the Korea Institute for Robot Industry Advancement to develop its server bots.

A Woowa Brothers rep told Aju Business Daily that server robots are just the beginning of the company’s automation ambitions. Other plans include developing cooking robots and packaging robots that use artificial intelligence.