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The Spoon

Daily news and analysis about the food tech revolution

Coronavirus

The Spoon team is working hard to bring you the latest on the impact of COVID-19. Bookmark this page for our full archive on the pandemic and how the food industry is embracing innovation to fight back.

On April 6th, The Spoon had a full day virtual summit on COVID-19 strategies for food & restaurants. You can watch all the sessions from our virtual strategy summit here.

You can also check out this COVID-19 resource page for food and restaurant industry.

Coronavirus is ‘a Wakeup Call’ for Restaurants When It Comes to Their Customer Data

Of all the tidbits of advice and information to come up in conversation with restaurants over the last few weeks, “communicate with your customers” is across the board the most popular mantra uttered.

There’s just one problem. In a restaurant industry currently powered by off-premises orders largely fulfilled by third-party services like Grubhub and DoorDash, restaurants can’t communicate directly with their customers because they have no data on who those people actually are.

One restaurant tech cofounder and CEO — namely Scott Absher of ShiftPixy — believes now is the time for restaurants to rethink the way their approach to customer data. Among other things, the crisis stemming from the novel coronavirus should be a wakeup call for these folks about how they treat their customer data — and how willingly they part with it.

Recently over the phone, he noted restaurants should “own those relationships” with customers and that “they need to rethink how they’re connecting digitally with their customers.”

Say a restaurant wants to promote pickup orders, which unlike third-party delivery can actually make restaurants a little money right now. Said restaurant might even offer some special deals or promotions for customers who order through the businesses own mobile app and opt to pick up the order. Trouble is, if the restaurant has left most of its off-premises management to Grubhub, it won’t have a way of communicating those deals in the first place. Customers may not even know the restaurant has its own mobile app that’s an alternative to Grubhub. 

Absher, who spends a lot of time talking to restaurants and has of late heard “some really frightened conversations,” believes now is the time to rethink both the concept of restaurant tech and the role customer data plays within it.

He calls this “destiny technology.” Websites and mobile apps are real estate customers visit just as they would a brick-and-mortar location. They will form opinions about their overall experience and share those opinions with others, and a restaurant should have access to that feedback much as they would have had to a comment card in the ‘80s.

“This is your new frontier,” Absher says. “It’s just as important as [physical] location is.” 

ShiftPixy has some skin in this game. Outside of being a platform for restaurants to find on-demand workers to fill shifts and combat turnover, the company also helps restaurants get up and running with delivery. Its own architecture runs behind the scenes of a restaurant’s in-house mobile app, which means instead of relying on Grubhub et al for delivery, restaurants can pay ShiftPixy a flat fee to manage the technical logistics of delivery orders and provide drivers. More important, because orders go through a restaurant’s own app, those businesses are keeping their own data.

The debate over who should own restaurant customer data isn’t new; COVID-19 just intensified it.

Right now, of course, many restaurants are just struggling to keep their doors open in some capacity. But with every new story that suggests an abuse of power on the part of third-party delivery companies, the question of who gets to own restaurant customer data (including menu prices, in some cases) becomes ever more important. And with mobile orders expected to proliferate in the post-pandemic restaurant industry, expect an uptick in solutions that promote native restaurant apps and offer businesses more control over their own data.

From Michigan to Korea, Robots Keep Food Rolling When People Can’t

Prior to this pandemic, the big ethical questions surrounding food robotics and automation was their impact on loss of human jobs. But as COVID-19 has forced us to social distance and rethink our regular activities, replacing humans with robots for food delivery seems like a more ethical choice. Robots, after all, don’t need face masks, can be placed in frontline situations and won’t accidentally cough on your groceries.

As it’s done with many other aspects of the meal journey, the coronavirus is accelerating the adoption of certain types of food tech — like robots — that otherwise would have come to market on a much longer timeline.

The Detroit News posted a story yesterday about the increased demand for Refraction’s delivery robots in Michigan. Refraction makes the rugged, three-wheeled, self-driving REV-1 delivery bot. It’s bigger than Starship’s cooler-sized robots, yet not as big as Nuro’s self-driving pod vehicles.

At the end of last year, Refraction kicked off a beta program to deliver takeout meals from four different Ann Arbor restaurants. The Detroit News reports that Refraction now has more than 400 restaurant partners and the company’s fleet of five robots is running at capacity. Refraction is also working to get into grocery delivery.

The robots are cleaned between deliveries, and Refraction has added UV lights to the interior of the robot to further sanitize the cargo compartment. The robot is also contactless as consumers use their phone to unlock and open the robot to retrieve their food.

Refraction’s robots also, obviously, reduce human-to-human contact for people receiving food while sheltering in place. Our country may regain a certain amount of freedom to move in the coming months, but we’ve had a pretty healthy fear of other people pumped into us for the past couple of months. Robots may be more welcome once we’re past this.

These robotic advantages could also be applied beyond restaurant delivery and into restaurants themselves. The Korea Times reports that this week Woowa Bros. announced it would offer free rentals of its “Dilly” server robot to 50 restaurants in Korea for two months starting in mid-April.

The Dilly is an autonomous robot with a series of racks meant to work the front of house, delivering food from the kitchen to tables and bringing empty plates back.

Woowa Bros. launched the Dilly server program back in November and charged roughly $773 a month (with a two-year contract) for the robot. The Korea Times writes that 164 restaurants applied for the program, and currently Woowa has 23 robots operating in 16 restaurants across Korea.

It’s entirely likely that we’ll see more server robots in restaurants here in the U.S. as well. Though coronavirus has permanently shuttered at least 3 percent of restaurants across the nation, there’s already talk of what restaurants will look like when dine-in rooms re-open. Expect fewer people, disposable menus, and possibly servers wearing masks.

One has to wonder what people will prefer interacting with: a server wearing a mask or a robot? To be fair, a lot more of us will probably be wearing masks in public in the near future, but the cold, sterility of a robot may be more appealing to nervous people just starting to come out from sheltering in place.

Refraction and Woowa aren’t the only examples of robots gaining more popularity. Starship recently expanded the use of its food delivery robots beyond college campuses and onto city streets in Arizona and around Washington DC. And Nuro just got the greenlight to test its autonomous delivery vehicles on public streets in California.

But it’s not just the consumer end of the robotic equation that we should be thinking about. While robots may help reduce human-to-human contact when accepting your food, they also relieve some of the new dangers of being a delivery person. Let’s face it, delivery people have worked hard during this outbreak and have often gotten the short end of the gig economy stick. Ideally the food industry can use any savings from automation to help fund new job opportunities for humans.

The ethical questions surrounding the availability of human jobs in an increasingly automated world will remain and need to be addressed in a thoughtful manner after this virus recedes. But in the shorter term, robots may help reduce transmission of a deadly virus and perhaps ease a little bit of anxiety around getting our food delivered.

Chick-fil-A Goes Cashless in Some States, Raises Questions About the Model

Chick-fil-A restaurants in Florida, Indiana, Georgia, Virginia, and Maryland have pivoted to a cashless business model, according to Restaurant Dive. The switch is an effort to stop the spread of coronavirus as Chick-fil-A continues to operate takeout, delivery, and drive-thru and dining rooms remain shuttered.

The move also reignites the debate around cashless business models. On the one hand, an all-digital payment model makes for more precise accounting and safer places to work (you can’t rob a handheld scanner like you can a til.) The other side of the argument is that cashless models discriminate against the millions of underbanked and unbanked individuals who may not have a checking account and need to use cash for their transactions. Some places have outright banned the model, among them NYC, Philadelphia, and the entire state of New Jersey.

That was pre-pandemic, though. In recent weeks, other restaurants besides Chick-fil-A have also moved to cashless models in response to COVID-19, including the Castellucci Hospitality Group, which operates several restaurants in the Atlanta, GA area, and the Tender Greens chain.

Prior to the pandemic, the argument over cashless business seemed fairly cut and dry: the benefits of the model (speed, convenience) didn’t outweigh the downsides (classism).

But no one needs a crystal ball to understand that this global health crisis we’re in will permanently change many of our shopping and eating habits away from the house. Even when restaurant dining rooms open again, it’s likely that tables will be spaced much farther apart, cleaning and sanitizing standards will be twice as rigorous (and they were already pretty rigorous), and large restaurant chains will implement other ways of convincing customers they can order safely. Contactless delivery is already here to stay. It’s not difficult to imagine cashless payments will also stick around in some states — though perhaps not without great debate.

Of course, swiping a debit card or paying with a mobile phone won’t ensure a completely germ-free experience, which is why we may see a lot more chains pushing harder for customers to use their mobile apps. On Chick-fil-A’s website, for example, customers are “encouraged to utilize mobile ordering and mobile payment through the Chick-fil-A app.” We may also see brands start to funnel more money into more robust mobile platforms that reward customers for ordering and paying through the app, much like Starbucks does.

None of that solves the fundamental problem with cashless payments, and not even a global pandemic will magically make it possible for millions of people to get bank accounts. Even so, the current situation we’re in may shift the weight of this particular debate in the coming months, for better and for worse. 

Can’t Find Yeast? This Geneticist Says There’s a Solution Hiding in Your Cupboard

Obviously, Americans are baking a lot of bread right now. Don’t believe me? Just look at the aisles of your local grocery store — nary a packet of yeast to be seen.

According to NPR, sales of baking yeast were up 647 percent during the week ending in March 21, and 456 percent the week following. But if you can’t find those elusive packets to make your loaves/waffles/focaccia rise, don’t despair! One geneticist has a solution.

Sudeep Agarwala, a geneticist specializing in yeast for biotech company Gingko Bioworks (the parent company of alternative protein company Motif Foodworks), posted a tweet at the end of March that made a pretty bold claim:

If you’re an adamant baker, you likely know where Agarwala, is going. In the tweet thread he goes on to describe how to make your own sourdough starter using dried fruit (which is covered in natural yeast!), water, and flour. If you follow the instructions correctly you should be able to have your own burbling sourdough starter in two days.

For those of us who have been on Instagram lately, the fact that you can make sourdough starters at home is not exactly ground-breaking news. You likely know someone right now who is giving you updates on their starter’s progress — maybe you’ve even got one going yourself! Agarwala’s tweet also gives tips on how to experiment by adding wine or beer to tweak your starter’s flavor profile, or incorporating breadcrumbs to keep the starter fed when you can’t find flour.

What was more surprising from Agarwala’s tweet — and our subsequent phone conversation — was his broader take on bread’s role in the current pandemic.

“Yeast is technology, flour is culture,” Agarwala told me, as things turned anthropological on our call. “I can tell you the technology, but the actual cultural reasons being all of this… that’s a much bigger question.” His take? We’re baking so much bread because it’s familiar and comforting; “bread returns us to our childhood.”

Well, at least some of us. Agarwala did note that the fact that everyone in the U.S. seems to be using their fermentation skills to create bread right now is, well, a little basic. “There are plenty of other things that can be fermented — lentils, oats, rice,” he said.

Maybe as the rising mania around homemade bread starts to overproof and fall, we’ll see consumers begin to experiment making fermented comfort foods from different regions around the world. The next hot “it” food flooding your Instagram could be Indian dosas, thin pancakes made of fermented lentils and rice, or injera, the spongy Ethiopian flatbread made from teff flour. “Now is the time for all the multiculturalism we’ve been harvesting to take precedence,” Agarwala told me. “It’s exciting.”

Bonus? These dishes don’t require flour — another sought-after ingredient that’s nearly impossible to track down at your local grocery store.

As Coronavirus Fuels Interest in Food Sovereignty, Will Smart Gardens Finally Have Their Moment?

As someone interested in consumer behavior, I have to admit a pandemic makes for a compelling case study in how people will react when our normally stable food system gets a shock.

The panic buying. The embrace of processed food. The baking of bread. It’s all fascinating and provides a small glimpse into how consumers could behave when they believe, perhaps for the first time in their lives, that the relative ease with which they’ve had access to food is threatened.

All of which brings to the forefront a larger conversation about food sovereignty. Food sovereignty is something governments and interest groups debate all the time, such as when island countries like Japan worry (rightly) about over-reliance on imports or a lack of native agricultural production.

Consumers, however, usually don’t speak in the language of food sovereignty. That might soon change.

As the coronavirus has forced all of us to think more about our food supply, some consumers have gone beyond just buying a little extra food to store away. Now they are thinking about how we could ensure access to food independent of breakdowns in the system.

While that doesn’t mean we’re all going to buy lots of land and start a farm, it does mean more people than ever are looking into how to grow their own food at home.

That could mean something like raising chickens. According to Google Trends, interest in the topic has shot to an all time high.

More likely though, the notion of food independence for most consumers will mean starting a garden. Interest in starting home gardens has, like raising chickens, jumped to unprecedented levels. Seed sellers across the country are telling new customers they can’t take new orders. Meanwhile, gardening classes are on the rise. One virtual Master Gardener series from Oregon Stage saw registrations jump 12,000 percent over the previous spring.

So while a Victory Garden-esque resurgence in home gardens may be sprouting across the country, unlike those World War II-era home gardeners, we have access to technology can help us grow food nowadays.

The question is will consumers choose to use it?

In pre-pandemic times, the answer of whether consumers embrace tech-powered gardening is mostly a no. Wi-Fi powered home watering systems for the backyard have largely flopped, while smart in-home grow systems have been around for a while but have had mixed success.

That could change with a pandemic.

I decided to check with both AeroGrow (maker of the AeroGarden) and Click & Grow, the two leading smart garden brands, to see how business is going since COVID-19 took hold.

According to AeroGrow CEO J. Michael Wolfe, there’s has been a surge in interest since mid-March across all of their sales channels.

“Inventories are running low,” Wolfe told me via email. “We have raced to spin up the supply chain in Asia (and they were relatively fast to get back up to capacity), but we have surged so much that the supply we had on hand was not able to keep up with demand.”

Click & Grow spokesperson Martin Laidla told me that the increase in demand has been “substantial.”

“So far, we’ve seen a staggering twofold increase in demand for our products in all markets,” said Laidla.

The AeroGarden Farm (Image Credit: AeroGrow)

Smaller smart garden manufacturers are also seeing surging interest. Ava Technologies, which began with a crowdfund campaign for its Byte herb garden, has accelerated a second batch of manufacturing to take advantage of increased interest. According to Ava CEO Valerie Song, visits to the company’s preorder page is up over 1,300 percent versus just a month ago.

The strong demand makes sense. After all, smart gardens take up a small footprint and can grow greens at a pretty fast clip due to a fine-tuned grow environment of high-intensity light, automated watering and nutrients.

But these high-tech indoor grow systems have a few drawbacks, the first of which is price. While low-end AeroGardens start roughly below $50, the bigger systems that can grow a substantial amount of produce start at around $240. The AeroGarden Farm, which allows for 24 “pods” of seeds to be planted simultaneously, start at close to $600.

The second problem, which is directly related to price of the system, is yield. While lower-priced smaller systems from Click & Grow and AeroGarden look good on a kitchen counter and can pump out herbs, that’s mainly it. To actually grow veggies in enough volume to feed you let alone a family, you have to look a higher-end system like the AeroGarden Farm.

But despite the higher price tags of higher yield systems, consumers still seem interested. AeroGarden’s higher yield systems like the Bounty and the Farm are sold out on Amazon and Home Depot, and the AeroGarden has even stopped selling the Farm on their own site as they’ve run out of inventory.

“The Farm sold out in early March,” said AeroGrow’s Wolfe. “We won’t have replenishment for a few more weeks. I expect that we’ll sell out of the replenishment inventory that arrives in a matter of days — and then more will arrive in June.”

So while smart garden systems might not be for everyone, it appears that the arrival of a pandemic might actually push these systems more into the mainstream.

One thing I’m curious about is how this increased demand plays out in the longer term. I could envision a post-pandemic world where, in a more normalized economic situation, new homes come with an option for a home grow system built into the kitchen. Some master planned communities could make vertical farming a big part of the sales pitch.

At CES and KBIS, I counted four major appliance brands who had smart garden grow systems in development, and I could see those plans accelerating and even more brands jumping into the grow system fray.

As for now, if you want your own high-yield smart farm system, you’ll need to get in line. Of course, if you have a yard and you’re the adventurous type, you can always buy a robotic farm for the back yard.

ID on the Glass, Please. The New Normal of Walmart Grocery Pickup

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Though I wasn’t even going into the store during my grocery pickup from Walmart this week, I still wrapped myself in a facemask and gloves. Mainly because I was buying alcohol, and last time I did so from Walmart, I had to talk directly with a worker in a situation that was way closer than six feet, and I had to sign for the booze with my finger on a device that presumably had been touched by a ton of other people that day.

But it turns out that a lot has changed in the past few weeks and, at least at my store, Walmart was being more aggressive about safety than even I was. Gone was the tablet to sign; instead the pickup worker asked me to stay in my car, roll up my window and press my ID up against the glass.

Additionally, I saw someone, who I presume was a supervisor, shout out to a customer and worker that they were too close and needed to stay six feet apart.

I can’t speak for the working conditions inside or more broadly — Walmart doesn’t have the best reputation for the way it treats its workers — but from a grocery pickup standpoint, my Walmart is taking COVID-19 very seriously.

There were more changes that I noticed on this trip. Walmart added a bunch of new pickup spots as well. They, like every other grocer, are grappling with ways to keep up with the surge in online grocery shopping. Walmart reportedly saw a record number of downloads for its grocery app over the weekend, surpassing Amazon.

While Walmart scrambles to keep up with safety protocols and meeting demand, there are some signs it’s struggling. I had issues with the app this week, both ordering and coordinating pickup. Like, big issues that even re-installs wouldn’t save. This was confirmed on two separate calls with Walmart customer service, both of whom said there were widespread problems with the app.

Walmart isn’t the only grocer struggling as it tries to meet demand. Amazon announced yesterday that new Amazon Fresh and Whole Foods customers have to wait to be invited before getting deliveries. And ShopRite is putting online customers into a virtual waiting room before they can shop.

Accelerated is almost too soft a word for what COVID-19 has done to grocery e-commerce. With 31 percent of US households using online grocery as of last month, compared with 13 percent in August, retailers experienced a year’s worth of growth in a matter of weeks. Problems in the supply chain and logistics were bound to arise.

Thankfully, the hiccups I’ve encountered have been minor and few. Since I live in a more rural area, grocery delivery is hard to come by, and Walmart pickup has been a godsend for my family. I appreciate those workers still showing up everyday and stocking my trunk. I wish there was an option to tip them, but hopefully they can see my sincere appreciation through the driver’s side window.

Can a Software Upgrade Save Food 3D Printing?

3D printing food has long held the promise of unlocking sci-fi-like benefits for society. Think of a machine teleporting sushi or creating highly customized food on the spot made just for you.

But 3D food printing has stalled in recent years, and as Spoon Founder Mike Wolf reported this week, the answer to kickstarting it might be better software, writing:

[Marine Coré] Baillais, the founder of a French 3D food printing consultancy called The Digital Patisserie (La Pâtisserie Numérique), told me that the reason general purpose 3D printing software doesn’t work well is it’s designed to print with \materials like plastic filament, not food paste. This usually leads to less than optimal results because a food paste has unique characteristics that make it much different than filament.

It’s actually a pretty cool idea and you should check out his full story for more details (plus, Notre Dame inspired food printing).

During a Pandemic, Don’t Be a Pandummy

This should go without saying, but if there was ever a time to be kind and generous with one another, it’s during a deadly pandemic that is killing hundreds of thousands of people and destroying economies.

So we were a little disappointed when reading stories about customers tip-baiting Instacart shoppers; promising a big tip for grocery delivery only to remove it once the job is done. That is (*#$@$^ evil. Don’t do that.

Third-party delivery services, which had some sketchy business practices even during better times, got a bit of a slap on the wrist from the city of San Francisco this week. Mayor London Breed ordered a temporary cap of 15 percent on delivery fees third-party services can charge restaurants during the shelter in place. One would wish that a new rule wasn’t necessary for something like that, but… here we are.

We understand times are difficult, to say the least. Be kind where you can. It makes a difference.

This is the online version of our weekly food tech newsletter. If you would like to get The Spoon in your inbox, subscribe here.

Will Fear of Grocery Contamination Boost Sales of CSAs and Specialized E-Grocers?

I knew it was going to be a great day when I opened up my Twitter feed morning and immediately saw a CNN story about a woman who was arrested for licking $1,800 worth of merchandise at a Safeway store in California. She was purportedly licking jewelry, not food, but there have been multiple other instances of people coughing on and contaminating aisles of food in grocery stores around the country. These stories are heightening our already heightened fears around grocery shopping — and the risk it poses during the coronavirus pandemic.

Those are just stories of people who are contaminating food on purpose. Goods in supermarkets are handled not just by employees but also by perhaps dozens of other shoppers before they make it to your grocery cart. That’s one of the reasons we’re seeing a spike in online grocery delivery sales as well as curbside pickup — contactless delivery programs cut down on the literal touchpoints before food even reaches your home, hopefully lessening the risk of contamination.

All this contamination-mania makes me think that COVID-19 will not only transform how we shop for groceries, but also where we shop for them.

One avenue that could see growth as people take steps to avoid contamination is smaller, more specialized online grocers. These operations, which focus on a more selective array of products, are already seeing a spike in demand. Services like bean marketplace Rancho Gordo and online flour purveyor Maine Grains are selling out or having to delay shipments due to sudden increases in shoppers. Localized grocery delivery services, like Farmstead and SPUD.ca, are also extending delivery hours, waitlisting customers and hiring new staff to try and keep up with the new demand.

Peter van Stolk, CEO of SPUD.ca, told me that one reason these smaller operations are seeing such an increase in demand is that they can “feel safer” than the big box stores.

The key word is “feel.” He noted that, regardless, “the supply chain is the supply chain” — if you buy a box of Annie’s Mac & Cheese from Amazon Fresh or a local e-commerce site, both had to go through the same number of steps (warehouse, distribution center, etc.) to get to the retailer.

SPUD.ca goes to great lengths to ensure the safety of their warehouses — locked doors, gloves and masks, etc. — but Amazon has the same safety measures in place. So if you’re buying foods from established brands, they’ll likely have gone through quite a few (hopefully gloved) hands to reach you, regardless of which store you purchase from.

One thing you can control is whether you purchase from e-commerce services that ship directly from warehouses or from grocery stores. Instacart, for example, uses Shoppers to pick up your groceries from a physical store, meaning all the goods they’re getting are open to contamination from regular old shoppers. Walmart operates in a similar manner, for both delivery and curbside pickup. Services like Amazon Fresh (and Whole Foods), Farmstead, or SPUD.ca, however, fulfill your online orders directly from their warehouses, where all the handlers have to adhere to safety protocol.

Fear over grocery contamination could be one reason that we’re seeing an increase in sales is Community Supported Agriculture (CSAs). Food purchased through CSAs often go through significantly fewer hands than food purchase from large grocery chains, which typically travel through warehouses, distribution trucks and more before ending up on your doorstep. The number of touchpoints varies farmer to farmer, but Simon Huntley, CEO of online farm share platform Harvie, told me over the phone that “people have this perception that if they buy from a local farm or retailer there are less hands on their food.”

There are other benefits to buying food sourced nearby, specifically when it comes to produce. Executive Director of ReFed Dana Gunders also noted via email that “another upside to buying local or from a CSA is that the product is typically fresher, so can last longer (thus accommodates less frequent shopping).”

Obviously, even smaller, more localized e-commerce stores are not guaranteed to be COVID-free. As Huntley admitted: “I don’t know if we can prove that it is safe to buy from a local retailer.” They’re also often more expensive, so they won’t be a feasible retail channel for all budgets. And since many of the stores are more specialized or feature a smaller range of products, you’ll still have to turn to your local grocery store (or e-commerce store, or bodega) to get some essentials, like trash bags and hand soap.

But in a time when we’re trying to be as cautious as possible and also support local businesses, trust is more important than ever. With that in mind, COVID-19 could set up smaller, specialized grocery delivery services for a boom — one that could linger even after the pandemic passes.

COVID-19 Summit: The Question That Keeps Online Grocers Up at Night

It’s no secret that as the pandemic rages on, more and more consumers are ordering groceries online. But as with everything else right now, circumstances and protocols seem to change minute by minute. As Peter van Stolk, CEO of Canadian sustainable e-commerce grocery store SPUD.ca, put it during our virtual COVID-19 summit last week: “The ground is moving under our feet everyday.”

That sentiment seems to be especially true of grocery. We know that we’re relying on grocery — and grocery delivery — more than ever before to keep ourselves fed while social distancing. But how are grocery stores reinventing themselves to stay relevant, safe, and profitable?

That’s exactly what van Stolk discussed with Phil Lempert of Supermarket Guru at last week’s virtual summit. To keep up with this fresh demand and new safety protocols, grocery retailers — both online and brick & mortar — are having to institute new protocols and readapt their current business models.

One big change that SPUD.ca has been tackling is staffing. Van Stolk said that in the two-week period after the coronavirus pandemic hit, the company’s inbound employee applications skyrocketed from 200 to 10,000. Of the people they hired, SPUD.ca had to figure out best practices to keep the workers (not to mention shoppers) safe, including allowing employees to don personal protective equipment (PPE) if they so choose.

To that end, Lempert asked van Stolk about the question that’s keeping him (and presumably other grocery owners) up at night: How can grocery stores absorb additional costs from PPE for grocery workers, bonus payments, and paid sick leave, and still stay profitable?

For SPUD.ca, the answer was simple: start charging handling fees. In the interview, van Stolk said that SPUD.ca had originally stated that it would never charge delivery fees for their online orders. However, as with so many things during the pandemic, van Stolk said that has now changed. SPUD.ca will now charge customers a handling fee for grocery deliveries which is around $6. The company breaks down the fee to show where all the money will go: packaging, labor, sanitization, etc.  

SPUD.ca has had to make other compromises to keep their shoppers safe during the pandemic. Previously, one of the retailer’s main selling points was its emphasis on sustainability: it delivered food in returnable totes which it would later pick up, used reusable cups, etc. For now, the company has had to halt those initiatives to reduce the risk of contamination. “There’s a stop right now on that process,” van Stolk said. “People are focused on safety.”

SPUD.ca is a smaller retailer that only serves the Vancouver and surrounding regions of Canada, so it’s obviously not going through the exact same challenges as, say, giants like Walmart or Amazon which have to coordinate shipments around the globe. However, some problems are universal to the grocery industry right now, including safety, staffing, stocking, and the threat of impending price hikes for certain foods. I’m sure many retailers, large and small, will have sleepless nights as they try to figure out how to navigate this new normal for grocery.

You can watch the full video of the fireside chat below, and check out the other videos from the virtual conference here.

The Spoon COVID-19 Summit: How the Grocery World is Evolving During the COVID-19 Pandemic

San Francisco Places Emergency Caps on Third-Party Delivery Commission Fees

San Francisco Mayor London Breed issued an emergency order at the end of last week to put temporary caps the delivery fees that third-party services charge restaurants. The order is effective now and dictates that delivery services must cap these commission fees at 15 percent if they want to continue doing business in San Francisco as the city shelters in place.

The point of the order is to help restaurants as they struggle to stay alive during state-mandated dining room closures. Many have turned to delivery and take-out models to try and make up at least some of their lost sales, which for most businesses means partnering with third-party services like Grubhub and Uber Eats. However, those services charge as much as 30 percent per transaction in commission fees.

“We’ve listened to our restaurants and the struggles they’re facing during this unprecedented time,” Supervisor Ahsha Safaí said in the official announcement about the order. “The high commission fees being charged to our businesses remains unchanged and that cannot continue as every dollar can mean staying open or laying- off more staff.”

Of the major third-party delivery companies, some have already made moves to address high commission fees. Postmates is temporarily waiving those fees for new merchant partners operating small businesses in San Francisco. And last week, DoorDash, which owns Caviar, said it would cut commission fees by 50 percent for restaurants with five or fewer locations in the U.S., Canada, and Australia. 

In a move that should surprise no one at this point, Grubhub is opposing the order — and urging its customers to do the same. As Eater SF noted, the Chicago-based service claims caps on commission fees will increase customer fees by $5–$10 and “immediately cripple delivery orders, outweighing any potential benefits when takeout is the only option restaurants have to stay open.”

The trouble with that logic is that it seems to assume delivery and takeout will actually save restaurants during this time, which is far from certain. Transactions for full-service restaurants — many of which have quickly had to pivot to an off-premises model — have dropped 79 percent, according to NPD Group. Even after the switch to off-premises, restaurants are struggling to ensure smooth, safe operations. Others are simply shutting down temporarily, citing health concerns for their workers. Still others are closing their doors permanently, already unable to weather the storm. 

San Francisco’s emergency order to cap commission fees seems aimed at trying to ensure more restaurants won’t have to permanently go under during shelter-in-place orders. And actually, while SF may be the first city to actually pass such an order, it’s not the first to consider it. In August of 2019, the New York State Liquor Authority (NYSLA) proposed adding a 10 percent cap on the commissions that full-service restaurants pay delivery services.

At the time, I wrote that a measure like that passing could have a ripple effect on other cities around the U.S. The same is true of San Francisco’s emergency order. As more time passes and more data surfaces about how dire circumstances are for most restaurants, other major cities — Seattle, Los Angeles, NYC — could be motivated to put similar measures in place. They won’t necessarily turn delivery into a thriving business for all, but they might lessen some of the damage these commission fees are wrecking on an already damaged industry.

Soylent Relaunches in Canada as Meal-in-a-Bottle Sales Fuel Up

Starting today, Soylent’s meal-in-a-bottle drinks and powder will again be available for delivery to Canadian consumers, according to a press release sent to The Spoon.

This comes after the more than two-year hiatus in Soylent sales in the Great White North. In the fall of 2017, Soylent had to halt Canadian distribution of its products after, as it wrote in the press release, there were “challenges with certain Canadian government filings.” Chiefly, it did not meet Canadian food inspectors’ standards of what constitutes a meal replacement.

Almost three years later Soylent has finally caught up on the proper regulatory paperwork and is returning north of the border. The company will relaunch in Canada with a more limited lineup, including three beverage flavors and two powders flavors. The product will initially be available only online through Soylent’s website.

Now is an ideal time for Soylent to expand its sales footprint. The aforementioned press release noted that the company’s return to Canada “comes at a time when many people are looking for shelf-stable, nutritious products that can be delivered directly to their homes.” In short, a pandemic — when people are panic shopping and anxious about having enough food that won’t go bad quickly — is actually kind of a perfect situation for meal replacement drinks like Soylent.

Jamie Sullivan, Director of Sustainability and Corporate Affairs for Soylent, told me over email that the company had seen “ebbs and flows” with their online sales that “seem to be aligned with the demand and worry about access to meals, groceries, and nutrition during this time.” She also noted that most of the company’s sales right now are coming from D2C channels — unsurprising, considering the rise in food delivery and grocery e-commerce as people shelter in place.

Soylent isn’t the only meal-replacement drink that’s navigating shifts in demand during the pandemic. James McMaster, the CEO of Huel, another complete nutrition company, told me that sales of their meal beverage have been “unprecedented.” He pointed out that Huel’s long shelf life (12 months), D2C sales channel, and low price point ($1.90 a meal) are all contributing to its popularity as we enter a time where people want to stay in more, shop less, and, with a recession looming, save money.

Meal replacement drinks could do more than just serve as back-up consumer nutrition for the pandemic. Sullivan also told me that Soylent is making donations to food banks. Thus far Soylent has donated more than 500,000 Soylent meals.

Normally I’d shy away from including blatant PR-y announcements like this in a piece. However, food banks are currently in desperate need of nutritious food, and meal replacements could actually be a viable solution to help pad nutrition gaps in donations. As well as in your pantry.

Popapp Data Gives Snapshot of COVID-19’s Impact on Latin American Restaurants

Because we are based in the US, we have plenty of data about how the COVID-19 outbreak is decimating the restaurant business here. And while we have a general sense about how restaurants are faring in other parts of the world (bad), we haven’t seen a lot of numbers.

But thanks to Jorge Corona Gutierrez, we have a small glimpse into the impact of the global pandemic across Latin America countries like Argentina, Chile, Perú and Mexico.

Gutierrez is the Founder and CEO of Popapp, a restaurant software startup that helps manage delivery for small to medium-sized restaurants. He pulled together data from Popapp’s 300 customers to provide a snapshot of how COVID-19 has impacted the restaurant business across Latin America. From that report, Gutierrez says:

  • As of March 1 of this year, Popapp had 336 active point of sale (POS) per day. By April 6, that number had dropped to 59 active POS per day, representing an 82 percent churn.
  • During the first week of March, the average cumulative sales per day of Popapp’s customers was roughly $117,000 (USD) per day. During the first week of April, that number dropped to $25,000, an 84 percent loss in revenue.

Obviously this is a small snapshot of the overall state of the restaurant industry in Latin America, but it does give us some numbers to get a sense of the problems there.

Even amidst this gloom, however, Gutierrez points out some optimism. That 59 active POS number above is actually an improvement over the nadir for the company over the past month, when there were just 43 active POS systems per day. And Gutierrez says that his company has been steadily adding more customers suggesting that more restaurants are pivoting to delivery.

The data from Gutierrez’s report does illustrate that this is a truly global pandemic that is hitting the restaurant industry particularly hard around the world.

In a Time of Broken Norms, Restaurants Experiment to Stay Intact

So earlier this week I was chatting with a food industry colleague who pointed out the sheer amount of opportunity food businesses have right now to experiment with existing norms. At the moment, breaking those norms feels less risky because in many cases we can’t do things the old way.

No one knows this better right now than restaurants. Dining rooms are closed and once they reopen they won’t look the same. Shifting to a delivery-takeout model is a necessity, but it may not make up for all the lost sales. And lately, restaurants are going far outside their normal territory for ways to survive the double whammy of a global pandemic and an industry on the brink of meltdown.  

Selling groceries is one way.

Case in point: Subway this week announced Subway Grocery, a site where you can buy pantry staples straight out of the Subway supply chain. Think foot-long bread loaves, frozen soup, bagged lettuce, and bulk amounts of bacon. The move is a way to get consumers goods that might not actually be in the grocery stores right now (thanks, panic shopping). More importantly, it lets the chain supplement its to-go format while dining rooms stay closed due to coronavirus.

Panera quickly followed that news with a similar concept, Panera Grocery. Customers can order grocery items like breads, produce, and dairy items straight from Panera’s supply chain and via the Panera app or through Grubhub. Like any Panera meal, the goods get delivered to customers’ houses.

And in NYC, just salad launched Just Grocery, which says it will deliver household staples — from produce to paper towels — in 90 minutes or less to Manhattan residents. The company also launched a meal kit service of items from its own menu, which customers can also order from the Just Grocery site.

If I were a betting woman, I’d say more of these initiatives are to come. Right now, big chains like the ones above as well as smaller restaurant businesses (see below) have no choice but to adapt their businesses to new formats so they can add incremental revenue to severely declining sales Plus, I imagine prepping grocery and meal kit orders is another way to keep employees occupied in the process, not to mention save on food waste costs.

But what about when dining rooms open again? Will restaurants need an additional grocery business?

I’ll go on a limb here and say yes, and that at least some of these initiatives will be in place for a while. The reason is that once dining rooms re-open, they’re not going to resemble their former selves. I’m just going off my own speculation here, but I foresee the days of cramped tables close together and family-style seating as a thing of the past. Restaurants dining rooms will have way less capacity, and more than a few people will be wary of going out to eat.

That makes the additional revenue from grocery businesses an attractive long-term play for many of these chains.

Small Restaurants Turn to Big Grocery

Other restaurants are turning to grocery stores themselves, not to sell pantry staples but to get their own meals in the hands of customers at a time when eating out isn’t an option. Texas chain H-E-B launched a pilot program to carry ready-made meals from restaurants in 29 of its stores. For the program, the chain has partnered with local restaurants, some of which have been able to bring back furloughed employees thanks to the extra work (and presumably money). 

And in some cases, grocery stores are actually doing the hiring themselves. When Greensboro, NC-based chain The Fresh Market realized it didn’t have enough staff to keep up with the demand for groceries as well as the chain’s deli counter, it reached out to Darden Restaurants to hire out-of-work employees from the company’s restaurants (Olive Garden, Longhorn Steakhouse).

The sharing of employees seems more of a stop-gap measure than long-term employment solution for many individuals, particularly those building a career in the restaurant industry. Selling restaurant food in stores, however, might stick around. Like I said above, there’s a pretty good chance restaurants won’t be operating at their old capacity once dining rooms reopen, which means other sources of revenue — even incremental revenue — will be a necessary staple for some time to come.

DoorDash Slashes Restaurant Commission Fees By 50%

Of late, I’ve approached most news from third-party delivery aggregators with more than a little skepticism along with the question: Is this really helping restaurants?

DoorDash announced it is reducing commission fees for “local” restaurants by 50 percent, from April 13 through the end of May. “This is not a deferral of fees, nor will merchants be asked to pay anything back,” the company said.

Third-party delivery companies are getting an increasing amount of flack for those commission fees, which can go as high as 30 percent per transaction. Cutting back those fees would obviously help restaurants during this time.

What I’d like to know is, when will the other shoe drop? More and more, the major third-party delivery companies are seen as predatory entities that are astoundingly out of touch with the daily realities of running a restaurant. Is this news from DoorDash an about-face for the company or is the other shoe dangling in the air right now? Maybe it’s hidden fees or getting locked into a contract. Maybe it’s none of those things, though that feels too optimistic an idea in a discussion about third-party delivery.

I’ll be having a third latté and digging into the fine print, so more on this to come.

Keep on truckin’,

Jenn

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