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The Spoon

Daily news and analysis about the food tech revolution

Future of Grocery

Alt-Meat, Fancy Wines, and Chili’s: Black Friday/Cyber Monday Direct-to-Consumer Deals

So far, 2020 has been the year of the direct-to-consumer boom when it comes to food and beverage products, with major CPGs, restaurants, plant-based meat companies, and others setting up their own e-commerce sites to better serve homebound customers.

It follows, then, that this year’s enormous crop of Black Friday/Cyber Monday deals is chock full of offers from these companies’ sites, along with deals for meals, booze, and even groceries. And since we’re all stuck at home this year and going out to shop on Friday seems like a terrible idea as far as the pandemic is concerned, here’s a rundown of some of our favorite e-commerce food and bev deals happening over the next few days.

All Beyond Meat products on the company’s newly launched direct-to-consumer e-commerce store will be 20 percent off from 6 a.m. EST to 11:59 p.m. PST on Cyber Monday, Nov. 30. Bonus: if you’re one of the first 500 orders, you get a free Beyond Meat apron.

DoorDash just launched a gifting feature on its app that lets users send a food gift to another person. From now through Black Friday, Nov. 27, every customer that gives a gift of $20 or more gets $10 off their next order on DoorDash or Caviar.

Meat subscription service Crowd Cow is offering 20 percent off on a variety of meats and fish you can order via the Crowd Cow website. At the moment, there’s a healthy variety of shrimp, crap, steak, ground beef, cod, halibut and more available, and the company is adding new items to the sale every day. 

If you’re curious about testing out a meal kit, now might be the time to do so. A number of services are offering Black Friday/Cyber Monday deals this year. A couple notables are HelloFresh, which will give you $90 off your first five boxes, and Hungryroot, which will will offer 30 percent off your first delivery of $99 and throw in a free pack of almond chickpea cookie dough.

For all you winos, plenty of online retailers and subscription services are offering deals on vino. First-time buyers on Winc get 50 percent off their first order. Usual wines has a 21 percent discount going on orders of 12 bottles or more. Vinebox, meanwhile, is offering a 20 percent discount off its 12 Nights of Wine package through Nov. 30.

BonBowl, which makes an induction cooktop and accompanying bowl, is running a $50 off sale on Black Friday for orders placed via the BonBowl website. If you need further convincing this is a good purchase, check my full review of the device.

Finally, restaurants, especially chains, are always offering deals, and Black Friday/Cyber Monday is no exception. The folks at Delish have a solid rundown of these deals, which include chains like Peet’s Coffee, McAlister’s Deli, and, of course, Chili’s. Because it’s not a holiday if Chili’s isn’t somehow involved.

Swedish Grocery Delivery Service Vembla Raises 6M SEK

Vembla, a Swedish delivery service for groceries and other goods, told The Spoon via email today that it has raised 6 million Swedish Krona (~$704,000 USD) from angel investors including Tuomas Kukkonen (FMCG entrepreneur in Finland), Michael Wolf (ex CEO of Swedbank), Manfred Aronsson (ex. CEO Discovery Networks).

Similar to Instacart here in the U.S., Vembla is an app that partners with local grocery stores in Sweden. Customers shop at stores on the Vembla app, while Vembla “shoppers” go in and pick up the order and deliver it. The startup promises to deliver orders in an hour.

According to the press announcement that Vembla sent, online grocery shopping in Sweden hit 5 percent of total sales in 2020, up from 2 percent in 2019. That growth is projected to continue to hit nearly 7 percent of total sales in 2022 (Source: Industry reports, DI, Nordea).

We aren’t that well versed in the Scandinavian grocery market, but it stands to reason that the COVID-19 pandemic would have a similar effect in Sweden as it has here in the U.S. Even though Sweden has been more lax in its approach to tackling the virus.

Domestically, the pandemic pushed online grocery shopping to record heights this year. Over the next five years, online grocery shopping is projected to take up 21.5 percent of all grocery sales in the U.S.

The bigger question for pure delivery plays like Vembla and Instacart is how long retailers will rely on them. Right now, third-party delivery services can help with the crush of new customers. But over the long haul, will retailers want to keep handing over the customer relationship to an outside delivery service, or do more investment to bring delivery in-house?

Autonomous Middle-Mile Company Gatik Raises $25M

Autonomous vehicle startup Gatik announced today that it has raised a $25 million Series A round of funding. The round was co-led by Wittington Ventures and Innovation Endeavors with participation from FM Capital and Intact Ventures, as well as existing investors Dynamo Ventures, Fontinalis Partners, AngelPad and others. This brings the total amount raised by Gatik to $29.5 million.

Unlike other players in the self-driving delivery space, the Palo Alto, California-based Gatik is focused on the middle-mile — that is, the intra-location routes for a business, for example warehouse to store, store to store, etc.

The advantage of this, from a self-driving vehicle perspective, is that these middle-mile routes are fixed and repeated. This reduces the amount of “thinking” that a self-driving vehicle has to do as it carries goods around because it’s not encountering as many new scenarios. These fixed routes can also help put regulators creating laws around self-driving vehicles more at ease because of their limited scope and reach.

From a business’ perspective, like a grocer, a fleet of autonomous middle-mile vehicles could run all day, every day, ensuring that locations are always fully stocked. In its press announcement, Gatik said that its autonomous vehicles are operating up to seven days a week, 12 hours a day, on single routes up to 300 miles.

Along with its funding announcement, Gatik today also announced that Canada’s Loblaw grocery chain will deploy a fleet of five Gatik vehicles for middle mile delivery in Toronto starting in January 2021. Gatik’s cargo trucks feature temperature control, so they can be used for the transport of cold and frozen foods as well.

In the Loblaw press announcement, Gatik said that its autonomous vehicles will run between automated picking facilities and retail stores, and allows for inventory pooling across multiple location, as well as contactless delivery.

November has been a busy month for autonomous delivery. Last week Walmart announced a partnership with Cruise for self-driving grocery delivery. Nuro announced it had raised another $500 million for its self-driving pod vehicle solution. Part of the reason for all of this is the COVID-19 pandemic, which has accelerated interest in contactless delivery options to reduce human-to-human interaction.

Gatik has previously worked with Walmart, and says it has conducted 30,000 autonomous orders for multiple Fortune 500 customers across North America.  

CORRECTION: An earlier version of this post said Gatik raised $22.5 million. We regret the error.

Ahold Delhaize Buys Majority Stake in FreshDirect

Dutch grocer Ahold Delhaize announced yesterday that it has bought an 80 percent stake in New York-based online grocer FreshDirect. Private equity firm Centerbridge Partners bought the remaining 20 percent. Terms of the deal were not disclosed.

FreshDirect will continue to operate as an independent unit and under its own brand name. The company will join other Ahold Delhaize brands that include Stop & Shop and Giant Foods.

The purchase of FreshDirect comes on the heels of what has been a pandemic-induced record year for online grocery sales. New York City, one of FreshDirect’s main service areas, was hit particularly hard in the early stages of the pandemic, pushing the company’s delivery capacity to the brink. With the U.S. entering its third wave with the virus, having the massive infrastructure and resources of Ahold Delhaize could help FreshDirect weather any coming storm.

The combination of Fresh Direct and Ahold Delhaize also has a tech-forward angle. In addition to being an online-only grocer, FreshDirect also recently opened up a robot-powered fulfillment center in the Washington, D.C. area. For it’s part, Ahold Delhaize has experimented with automated micro-fulfillment centers, in-store robots, and small, cashierless nano-retail environments.

With the FreshDirect acquisition, Ahold Delhaize is also bolstering its capabilities to better fend off competition from the giant players in the grocery space. Walmart has made aggressive grocery delivery moves through its Walmart+ subscription service as well as a partnership with Instacart (and experimenting with self-driving delivery cars). And Amazon, which was once online only, has made moves into the physical space with its Go Grocery and Fresh stores.

With online grocery projected to become 21.5 percent of total grocery sales by 2025, expect these types of salvos between supermarkets to continue into the next year.

Afresh Raises Another $13M to Help Grocers Manage Produce Inventory

Afresh announced today it has raised $13 million in new funding for its grocery retail management platform. The round, which is a Series A extension, was led by Food Retail Ventures with participation from existing investors Innovation Endeavors, Maersk Growth, and BaselineVentures. This brings Afresh’s total funding to $32.8 million.

San Francisco-based Afresh’s technology uses machine learning to analyze customer buying data for fresh produce and help grocery retailers forecast demand, which is harder to predict when it comes to perishable foods like fruits, vegetables, and breads. Grocery stores must order enough to meet customer demand, but not so much they are throwing out excessive amounts of unsold items and wasting both food and money in the process. Afresh’s technology helps grocery retailers forecast more precisely and order accordingly.

Right now there is a major need for this level of precision when it comes to grocery inventory. Panic-buying sprees at the beginning of the pandemic underscored some of the supply-and-demand shortcomings with grocery inventory systems. Afresh CEO Matt Schwartz told The Spoon earlier this year that “COVID was a test case” for the company’s overall structure. “Ultimately, we’re building the system for edge cases and supply interruptions,” he said.

At the same time, the world’s 1.3-billion-ton food waste problem grows more urgent each year. In the U.S. 40 percent of that waste happens in consumer-facing businesses like grocery stores and restaurants. In addition to helping grocers better manage supply and demand, Afresh’s platform can also help them cut the amount of waste they throw out (and save more money). 

The pandemic, the record levels of online grocery shopping, and the food waste problem are collectively making inventory optimization a big business for the grocery sector. Afresh’s funding comes the same week Farmstead, another AI-powered platform, raised $7.9 million. Crisp, based in NYC, offers retailers a similar platform.

Afresh’s latest funding round follows another Series A follow-on from July, that one for $12 million. The company said today it will expand its product to new markets and add new features in the coming months.   

Farmstead Raises $7.9M to Expand it Online Grocery Business

Online grocer Farmstead announced today that it has raised a $7.9 million Series A round of funding. The new financing was led by Aidenlair Capital with participation from Y Combinator, Gelt VC, Duro, Maple VC, Heron Rock, 19 York, Red Dog Capital and others. This brings the total amount raised by Farmstead to $14.5 million.

According to the press announcement, the new funding will go towards Farmstead’s national expansion. The San Francisco Bay Area-based company recently added its first service areas outside of California by expanding to Charlotte and Raleigh-Durham, North Carolina.

Farmstead is a pioneer in the so-called dark grocery store space, eschewing a physical store that customers shop in for a delivery-only experience. The company makes use of data and AI to create a just-enough inventory system. The company’s goal is to have the right amount of stock to avoid product outages, but not so much that they are left with unsold inventory.

To help other grocers transition to this type of e-commerce-forward model, Farmstead launched its Grocery OS in September of this year, which, the company says is already being used by a “top 3 U.S. grocer.” As we wrote at the time of that announcement:

Farmstead’s pitch is that Grocery OS can help traditional grocers migrate from physical stores to online, working up through dark stores and into warehouse-only formats. In doing so, Farmstead says Grocery OS will also provide more delivery capacity and get retailers more e-commerce revenue.

Farmstead’s expansion comes on the heels of record online grocery shopping, thanks to the pandemic. Grocery e-commerce is projected to be 21.5 percent of total grocery sales by 2025, hitting $250 billion. Farmstead has seen its own business increase dramatically this year. When we last checked in with the company in September, it had experienced 6x revenue growth over a four month period and grew its team by 3x, moving into a 17,000 sq. ft. warehouse facility.

Of course, Farmstead will need this bolstered warchest as established retail giants make their own moves to grab more grocery dollars. Amazon has opened up its own dark store as well as its own chain of supermarkets that will facilitate delivery, and also added an in-garage grocery delivery option in select cities. Grocery giant Walmart has added Instacart for delivery, launched its own Walmart+ subscription service which includes grocery delivery, and even started experimenting with grocery delivery by drone and autonomous car.

Amazon to Start Delivering Groceries Direct to Your Garage

Amazon announced today that it will start delivering groceries directly to the inside of people’s garages as part of its expanding Key service.

Amazon’s Key In-Garage Delivery service allows Prime members with a myQ smart garage door opener to receive packages inside their garage when they aren’t at home. With grocery, that program will now include food in addition to packages.

The expansion of in-garage grocery delivery shouldn’t come as a surprise. Amazon has been making big moves into grocery over the past year. In October of 2019, the company made grocery delivery free for its Prime members. Then it opened two Go grocery stores in Seattle earlier this year before opening three Amazon Fresh supermarkets in Southern California.

Amazon is making all of these moves because online grocery is poised to become big business. The pandemic spurred record amounts of grocery e-commerce earlier this summer. More importantly, online grocery shopping is projected to be 21.5 percent of total grocery sales by 2025.

As such, giant retailers are all battling each other for your grocery buck. Walmart, for instance, has partnered with Instacart and launched its own Walmart+ service to rival Amazon Prime.

Both Amazon and Walmart had competing in-home delivery options at one point that allowed delivery drivers into your house while you’re out. But letting strangers into your garage when you’re away is probably more palatable than letting them into your kitchen. Placing groceries in your garage also means food won’t sit on your porch waiting to be either stolen or (less) damaged by the sun or other elements.

Starting today, Amazon’s in-garage grocery delivery is available to Prime members ordering from Whole Foods or Amazon Fresh in select areas of Chicago, Dallas, Los Angeles, San Francisco and Seattle.

Walmart to Test Autonomous Grocery Delivery With Cruise’s Electric Cars

Walmart announced today that it is hooking up with self-driving electric car company Cruise to experiment with autonomous grocery delivery. The two will pilot a program in Scottsdale, Arizona starting early next year.

The corporate blog post announcing the partnership was light on details, so we don’t know how many stores in the Scottsdale area will be participating, where the service areas will be or how big the fleet of self-driving vehicles will be.

This isn’t Walmart’s first ride with self-driving delivery vehicles. In the summer of 2018, Walmart partnered with Waymo in a small pilot to autonomously chauffeur people from their homes to Walmarts to pick up their orders. The goal of that pilot was to learn more about curbside pick up. In 2019, Walmart worked with autonomous van company Gitik for deliveries along the “middle mile” between its stores. And at the end of 2019, Walmart announced it was using Nuro’s self-driving pod vehicles for grocery delivery in Houston, Texas.

This time around, Walmart’s pitch is less about self-driving and more about the environment, as Cruise’s vehicles are all 100 percent electric. Should this pilot prove successful, it will align with Walmart’s stated goal of achieving zero emissions across all its operations by 2040, including the electrification of all of its vehicles.

Walmart and other retailers will need to offer all the delivery options they can in the coming years. Online grocery is projected to hit 21.5 percent of total grocery sales by 2025, which means grocers will need to boost their capacity for increased delivery. Walmart is already among those leading that charge with two-hour delivery as well as it’s Walmart+ delivery service, which gives members free unlimited delivery. The company has even enlisted Instacart for help with same day grocery delivery.

Full-sized self-driving vehicles still have a lot of regulatory hurdles to overcome, but kudos to Walmart for helping push the technology forward (while getting food to our doors).

Self Point and Tortoise Team Up to Offer Grocers a Robot Delivery Option

Self Point and Tortoise announced today that they have partnered up to make same-day robot delivery available to local grocers.

Self Point makes digital commerce software that allows grocery retailers to build their own websites that integrate point of sale, inventory management and order fulfillment. Tortoise makes a teleoperated electric cart built for transporting heavy loads like groceries. With the Tortoise integration, Self Point’s grocery customers can add robots as a delivery option on orders.

You can check out a video of the Tortoise in operation here:

Tortoise Cart TikTok

Tortoise sets itself apart from other players in the last mile robotic delivery space such as Starship, Refraction and Nuro in a couple of ways. First Tortoise is proudly not autonomous. All Tortoise robots are teleoperated remotely by human drivers. By taking this approach, Tortoise believes it can get to market faster by avoiding some of the hesitations some local governments have with the safety self-driving robots on city sidewalks.

Tortoise is also not positioning itself as an on-demand delivery service. Tortoise is not meant to get you groceries in under a half hour. It’s meant to be scheduled ahead of time. Though it does appear that with Self Point, Tortoise robots will be available same day.

The Self Point + Tortoise partnership is certainly coming at the right time. Earlier this year, the pandemic pushed online grocery shopping sales, and by extension grocery delivery, to record-shattering new heights. Though those numbers have come down in recent months, grocery e-commerce is expected to represent 21.5 percent of total grocery by 2025.

As such we’ll see more grocers going online and needing more options for order fulfillment. Walmart has been doing automated grocery deliveries with Nuro in Houston, TX. Refraction has been doing grocery delivery in Ann Arbor, MI, and in Modesto, CA. And Save Mart is using a fleet of 30 Starship robots to make deliveries.

The robotic delivery market is definitely heating up, and it’s not to hard to imagine through deals like the one with Self Point, Tortoise could arrive in a bunch of neighborhoods rather quickly.

Nuro Raises $500M for its Autonomous Delivery Vehicles

Nuro announced today that it has raised a $500 million Series C round of funding. The round was led by funds and accounts advised by T. Rowe Price Associates, with participation from new investors that include Fidelity Management & Research Company, and Baillie Gifford, as well as participation from existing investors SoftBank Vision Fund 1 and Greylock. This brings the total amount raised by Nuro to $1.5 billion.

Nuro makes pod-like, self-driving, low-speed cargo delivery vehicles. Nuro’s R2 vehicle is roughly half the size of a regular car, is autonomous (there is literally no place for a driver to sit) and travels at 25 mph.

But equally as important as its technology is Nuro’s work around getting regulatory approvals for deliveries. Self-driving vehicles are new, and all levels of government are coming to grips with how to regulate the concept to ensure safety on public streets. In February of this year, Nuro got approvals from the federal government to drive on public roads. This was followed up in April when the state of California gave Nuro the green light to run on its public roads.

Nuro has also done a number of tests over the past couple of years, delivering food for Kroger and Walmart as well as Domino’s.

At the end of October, Nuro revealed that it had been running fully autonomous tests, meaning no drivers and no chase cars, successfully over the previous few months in Houston, TX, Phoenix, AZ and Mountain View, CA. You can see a video of the R2 in action here:

Nuro’s technology is certainly coming to market at the right time. The global pandemic has more people staying at home and thereby ordering more restaurant meals and groceries for delivery. Nuro’s vehicle can carry a full load of groceries directly to a customer’s curbside around the clock. The autonomous nature of the Nuro also means that delivery is contactless, an important feature as people look to reduce human-to-human contact in order to stem the transmission of the virus.

Nuro isn’t alone in the autonomous last-mile delivery space. Other players range from the small cooler-sized robots of Starship to the larger three-wheeled REV-1 from Refraction to the cargo vans of Udelv.

In other words, autonomous delivery is coming, and Nuro now has more money to assert its place when it arrives.

Video: Chowbotics’ Sally Makes Salads at Coborn’s Marketplace

As you are well aware, the way we get our food has undergone dramatic changes during this pandemic.

One of the more visible changes we’ve seen is the removal of buffet-style services like salad bars in grocery stores. The thought of trays of lettuce and mushrooms and bacon bits just sitting in the open for lots of people to pick through (and worse) is no longer appetizing, to say the least.

What is slowly starting to replace some of those grocery salad bars is robots. Specifically Chowbotics’ Sally robot. The company recently signed a licensing deal with Saladworks , which will put Sallys in grocery stores. And just last month Chowbotics introduced new features that enabled contactless ordering, as well as a video screen that displays dynamic video advertising, which will make its robot more attractive to potential retailers.

Thanks to a promotional video from Apex Commercial Kitchen posted to Linkedin (see below), we can now take a look at what Chowbotics robots look like in the grocery store. Yes, this video is a little commerical-y and doesn’t provide much detail, but it shows what Sallys look like in the real world, and oh yeah, also is a bit of an announcement that Sallys are being deployed to at least one Coborn’s market.

During different conversations with the company throughout the year, Chowbotics has told us that it has seen increased interest from grocery retailers looking to replace their salad bars. We’re starting to see that interest turn into actual installations. In addition to Sally at the supermarket, Blendid’s smoothie-making robot recently debuted at a Walmart in Fremont, CA.

As retailers (and shoppers) still deal with the ongoing ramifications of the pandemic, we can expect to see more robot deals like Chowbotics and Blendid in the coming months. For more on the automated vending space, check out The Great Vending Reinvention: The Spoon’s Smart Vending Machine Market Report I did for Spoon Plus earlier this year.

GoPuff Acquires BevMo for $350 Million

Delivery startup, goPuff announced today that it is acquiring booze retailer BevMo for $350 million. Bloomberg was first to report the story earlier today, with goPuff sending out press release confirming the news later this morning.

GoPuff is a delivery service that has a network of more than 200 micro-fulfillment centers serving more than 500 U.S. cities. The service is available 24 hours a day to deliver everyday goods like groceries, baby and pet products and booze within 30 minutes. Each delivery carries a $1.95 delivery fee ($10.95 order minimum), and there is a subscription option for $5.95 a month.

With the acquisition, goPuff will get an accelerated entrance into the California. BevMo has 161 stores throughout California, Arizona and Washington state. Not only does this give goPuff access to the “millions” of BevMo customers, but all those BevMo buildings can serve as fulfillment centers to deliver bottles of wine and baby bottles.

GoPuff raised $380 million in new funding last month and has raised a total of $1.2 billion. It’s deep pockets and purchase of BevMo continue the accelerated evolution of convenience store delivery we’ve seen during the pandemic.

DoorDash and Instacart both offer delivery from convenience stores now. DoorDash even took things a step further with the creation of its own chain of dark convenience stores from which the company operates delivery services.

GoPuff is also part of the burgeoning micro-fulfillment trend, which forsakes huge, centralized warehouses in favor of smaller, neighborhood facilities that don’t house as many items. Grocery retailers H-E-B and Albertsons have both announced micro-fulfillment centers to process online orders.

According to today’s press announcement, goPuff’s acquisition of BevMo is expected to close within 30 days.