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The Spoon

Daily news and analysis about the food tech revolution

Future of Grocery

Ocado Buys Kindred Systems and Haddington Dynamics for a Total of $287M

British grocer Ocado announced yesterday that it is bolstering its robotics capabilities with the acquisitions of North American companies Kindred Systems and Haddington Dynamics for a total of $287 million.

Kindred Systems is an AI company that develops piece-picking robots with computer vision and motion control. The technology uses deep reinforcement learning to help robots better handle the variety and types of items found in grocery. Haddington Dynamics builds “highly dextrous” robotic arms that can be 3D-printed and are subsequently low cost.

According to an Ocado presentation on the deal, the company spent $262 million in cash on Kindred and $25 million in cash and stock on Haddington. Both deals are expected to close in 2020.

Putting an obvious two and two together, with these purchases, Ocado is getting a smarter, more advanced system for picking groceries that the company can deploy at its automated smart warehouses.

In a broader sense, these deals come against the backdrop of the global pandemic, which pushed people to record amounts of online grocery shopping this year. While sales have come down from those record highs earlier this year, online grocery is still projected to make up 21.5 percent of total grocery sales by 2025, hitting $250 billion.

All of those orders will need to be fulfilled, and the speed at which orders can be processed and delivered to/picked up by consumers could determine the retail winners and losers in the new grocery landscape.

In a more specific sense, Kroger, which is an investor in Ocado, is using Ocado’s technology to build out automated fulfillment warehouses across the U.S. The first of those warehouses is set to open early next year. The ability to set up smarter robotic systems more quickly could translate into opening up those warehouses sooner.

Ocado isn’t the only robotic grocery fulfillment solution coming online. Takeoff Technologies, which builds micro-fulfillment centers in the backs of existing stores is expanding its relationship with Albertsons. And FreshDirect is using Fabric’s automated fulfillment system in the D.C. area.

With the pandemic still going strong coupled with the colder winter months upon us here in the northern hemisphere, there’s a good chance the online grocery shopping sales will crop back up as people avoid going outside. After eight months of pandemic living, the question will be how much has grocery e-commerce become a new everyday habit. If so, the robots will be ready.

Food Tech News: Tik Tok Creator’s Menu and Biodegradable Bacardi Bottles

Happy Halloween! This year’s holiday will certainly look different, but I know I will be checking out the full moon, making my own chocolate peanut butter cups, and watching The Shining. Maybe you can find joy in creating a candy chute or developing your own candy delivering robot for trick-or-treaters. Or, you can spend some time catching up on food tech news like Tik Tok’s new food menu, biodegradable Bacardi bottles, Whole Foods’ predictions for new food trends, and adaptogen coffee pods.

Tik Tok partners with Postmates for “Creator’s Menu”

Tik Tok has skyrocketed in popularity amongst millennials this year, with the majority of its users between the ages of 16-24. To capitalize on this demographic, Tik Tok partnered with Postmates to create a menu of this year’s most popular food trends that millennials are salivating over. Available from October 28 to November 22, local restaurants in Los Angeles will be serving up their versions of whipped coffee, cloud bread, pancake cereal, and a bento box. These are the food trends on Tik Tok that have reached between 259 million to 3 billion hashtags. With the whipped coffee going for $7.50 and the bento box $20, this is a price only a millennial could justify.

Photo from Bacardi

Biodegradable Bacardi Bottles

Bacardi has started using bottles that look exactly like regular plastic, except for the fact that these bottles are apparently able to break down in the trash, both outside and in the ocean. The material used to make the bottle is called polyhydroxyalkanoate (PHA), and its main component is canola oil. Danimer Scientific, which makes this material, feeds canola oil (which contains carbon dioxide that was stored in the plant) to bacteria. The bacteria then turns this into PHA, which is extracted to make plastic-like products. Companies like Nestlé and PepsiCo are also using this material for packaging.

Whole Food predicts food trends of 2021

Whole Foods released its annual food predictions for the upcoming year, and it should come as no surprise that plant-based foods are a trend that is predicted to continue on an upward trajectory next year. Healthy baby food, chickpea-based foods, vegetable jerky, and upcycled foods are some on the list. Out of all the predictions made, my personal favorite is alcoholic kombucha.

Adaptogenic, compostable coffee pods from Hong Kong

Hong Kong-based Beams Coffee combines the trends of gourmet coffee and adaptogens in its compostable pods. Adaptogens are plants and herbs that are supposed to help the body combat stressors, and Beams Coffee uses medicinal mushrooms like Cordyceps, Lion’s mane, Reishi, and Tremella. These mushrooms are paired with specialty coffee from Sydney and Melbourne and come in pods that are 95 percent sugarcane-based. The coffee pods are available in four varieties including beauty, mind, energy, and immunity, and are compatible with the Nespresso maker.

Forager Partners With Roche Bros. To Make Local Food More Accessible

Forager, a procurement platform for sourcing local food, announced its partnership with Massachusetts-based Roche Bros. grocery store this week. Over 20 Roche Bros. and its subsidiaries in the Boston Metro area will be implementing Forager’s platform.

Forager forms relationships with local farmers, ranchers, fishers, and artisanal producers, and then streamlines the process of getting their products into stores. Local producers can update their inventory on a phone, and buyers from grocery stores can instantly see the price and amount of these items. Through the Forager program, local food and products go straight from the farm to the grocery store, rather than to a warehouse before heading off to the grocery store.

I spoke with Forager Founder, David Stone, this week about this recent partnership and Forager’s mission. Stone said that his company prefers focusing on partnering with smaller, independent grocery stores over the big players in the grocery game like Walmart or Amazon. By connecting smaller grocery stores with more local producers, this gives smaller stores a chance to compete with larger retailers and providers by attracting consumers that are specifically looking for local produce.

The demand for local produce surged at the beginning of the pandemic, and although it is unclear if this trend is still on an upward trajectory, companies have responded to it. Besides Forager, other companies have made an effort to connect consumers to local goods. Grubmarket raised $20 million in funding earlier this month for its virtual farmer’s market platform. This summer, Chipotle also launched a virtual farmer’s market so consumers can have access to local cheese, meat, and produce from its suppliers.

The Forager platform is currently being used in about 30 grocery stores in nine different states. The company is in discussion with about 10 other grocery stores for new potential partnerships.

Uber Expands Grocery Delivery to Manhattan

Uber is expanding its nascent grocery delivery program into New York City, The New York Post reported this morning with confirmation from Uber.

According to the Post:

New Yorkers who open the Uber or Uber Eats apps will now see a grocery shopping tab, which will use their delivery address to show them what participating shops are available to them. In addition to chains like Gristedes, D’Agostino’s and Westside Market, the app will also be able to send couriers to smaller shops like Sullivan Street Bakery and Dickson’s Farmstand Meats in Chelsea.

Uber has been slowly but steadily adding grocery delivery to its Uber Eats business around the world over the past year. In October 2019, Uber announced it was acquiring a majority stake in Cornershop, a grocery delivery service that covers Central and South America. Earlier this year, Uber entered into a number of grocery delivery partnerships in France, Spain and Brazil. Uber’s grocery ambitions hit the U.S. in July of this year, when Cornershop started delivering groceries in Miami, FL and Dallas, TX.

Online grocery shopping and delivery has seen record numbers this year, thanks to the pandemic. And though the numbers came down from their record highs earlier this summer, the pandemic is surging once again throughout the country as we head into winter and the holidays. This resurgence plus cold and flu season could see those grocery e-commerce numbers tick back up again.

As grim as the thought is, the pandemic’s gaining strength could explain why Uber hopped over most of the East Coast to provide delivery service to New York. During the early days of the pandemic, as grocery stores there struggled to keep up with acute demand for grocery delivery. If COVID hits New York again with any severity, the city will definitely need as many grocery delivery options as it can take.

Uber isn’t the only third-party delivery company getting into groceries, however. DoorDash launched its own on-demand grocery delivery program in August of this year. And, of course, there is Instacart, which raised another $200 million this month (and is suing Uber over Cornershop’s grocery listing) to help solidify its lead in grocery delivery.

Of course, with the ride hailing market depressed by the global pandemic, Uber is more reliant than ever on its Eats business. Growing its grocery business should help Eats grow its much-needed revenues.

SNAP Participants Can Now Use Benefits to Pay for Grocery Delivery with Instacart

Instacart announced today that it has partnered with grocery retailer ALDI to allow those on Supplemental Nutrition Assistance Program (SNAP) to use their Electronic Benefits Transfer card to pay for and get groceries delivered.

The pilot program is launching first in Georgia where, according to Instacart’s announcement, 12.5 percent of the population is impacted by food insecurity, disproportionately affecting communities of color. The program will begin with 60 ALDI stores in Georgia before a planned expansion to more than 570 stores across Illinois, California, Florida, Pennsylvania in the coming months.

SNAP participants will be able to shop from ALDI through Instacart’s website or mobile app. When creating a profile, they can enter their EBT card information and a payment method, which will cover the cost of SNAP-approved food items. Taxes, tips and fees cannot be paid for with the EBT, so a second form of payment will also be needed. Once all that is set up, SNAP participants can shop for items and schedule their grocery delivery.

Online grocery shopping took off during the pandemic, as people were concerned about venturing into public places like grocery stores. Those fears have subsided somewhat, but grocery e-commerce is still projected to hit $250 billion in sales by 2025.

Instacart’s partnership with ALDI is the latest effort to bring more equity to the online grocery world. Low income communities are often food desserts that lack access to fresh food. The ability to shop online and have groceries delivered is one way to help those impacted by food insecurity eat more healthily. For the past couple of years, the startup All_EBT has been using Facebook Messenger and virtual Visa cards to allow SNAP participants to shop online. And both Amazon and Walmart have expanded their EBT online grocery shopping to more states.

The only downside to Instacart’s program is that it still requires SNAP participants to pay for taxes, fees and tips. Those three items alone can add up and that seems like it might be a barrier to get more people to use the program. While the EBT card couldn’t be used to cover these costs, it’s a little disappointing that Instacart, which has raised $2.4 billion, isn’t doing more to supplement them for the end user. It seems like Instart’s gig workers who do the actual packing and delivery, might skip jobs that don’t offer a healthy tip, especially since the pandemic has yet to subside in this country.

Simbe Robotics Announces New Tally 3.0 Shelf-Scanning Robot

Simbe Robotics today announced the Tally 3.0, the company’s latest generation of inventory management robot that now features better optical capabilities and more computing power on the edge.

Simbe’s Tally is an autonomous robot that wanders grocery store aisles to monitor product levels and detect misplaced items. By automating this task with robots, Simbe says stores get a more accurate, closer-to-real time snapshot of on-shelf inventory to make more informed stocking decisions.

Improvements to the Tally include added Intel RealSense depth and RGB cameras to help the robot “see” more products on shelves and stacked in coolers. The new camera system can read data from up to 30 inches away, which, according to the press announcement, brings the robot’s recognition accuracy to almost 99 percent without needing to slow down.

The Tally 3.0 has also pushed its computer vision and AI algorithms to the device itself. By running this additional processing on the edge, the new Tally can capture and provide data to store managers more quickly without needing to send as much information to Simbe’s cloud platform. This can be especially helpful for stores that may not have a lot of internet bandwidth at their location.

Simbe claims that its Tally detects up to 10x more out-of-stock items than manual audits, and averages a 20 percent reduction in out-of-stock items at the store level.

Brad Bogolea, Simbe Robotics Co-Founder and CEO,told me by phone earlier this month that his company saw a massive uptick in interest around August and September, spurred in part by the COVID-19 pandemic and subsequent panic buying outages. As Bogolea explained to me during an interview in August, stores experienced those outages because of bad supply chain data. As we wrote then:

The bad supply chain data, according to Bogolea, is a result of the manual inventory checks that stores currently carry out. If robots are used, shelf inventory count is more accurate and up to the minute (basically) because the robots can run multiple shelf audits throughout the day. More accurate data means that stores can respond faster when there is a sudden run on particular products to speed up replenishment.

While Bogolea obviously has a horse in this particular race, we’ve definitely seen broader adoption of robots to help maintain retail inventories. Bossa Nova’s shelf-scanning robot is being deployed to 1,000 Walmart locations, and Badger Technologies’ robot is being used at Woodman’s Markets across the Midwest.

Schnucks Markets recently announced that it expanding the use of Simbe’s Tally to 62 of its locations, and Giant Eagle is trialing Tally as well. Simbe offers the Tally for a monthly subscription costing between $2,000 and $4,000 a month per store, depending on the number of stores. Though when I spoke to Bogolea this month, he said that through better sensor technology and improved manufacturing, the company is continuing to bring that cost down.

Chowbotics Adds Contactless Features and New Menu Items to Its Salad Robot

In this time of COVID, vending machines are fast becoming a great option for contactless meals. Well, mostly contactless. While the machines are using advanced robotics to make high-end food, many still require users to touch the same screen to place their order — a no-no in today’s hyper hygienic world.

When I talked with Chowbotics for The Great Vending Reinvention: The Spoon’s Smart Vending Machine Market Report earlier this year, the company knew that this limitation was an issue and was fast-tracking a solution, which is finally here.

Yesterday, Chowbotics announced some new features for its fresh food robot, Sally. Included in the updates are contactless ordering, new menu items and dynamic video advertising, according to an email sent to The Spoon.

Sally’s new contactless ordering feature lets consumers order their meals ahead of time through a new, proprietary app. Customers place their order through the app with their nearest Sally. Upon arrival at the machine, a special QR code generate by the app is scanned and the meal is made and dispensed. (The press release did not mention any new contactless payment features.)

Chowbotics also continues to expand Sally’s menu beyond salads with new options. The company today also announced that has added new chef-designed meal items including Thai noodle salad, Poke, and even a smoked brisket bowl.

Finally, Chowbotics also added new video screen to its robot, which means that operators can insert dynamic ads depending on what they want to promote. For example, the screen could display breakfast bowls in the morning and a BBQ bowl in the evening.

Since the pandemic has forced the closure of buffet-style food options like salad bars, Chowbotics and other vending companies have reporting an uptick in interest from grocery retailers. With expanded menu options, the ability to make meals around the clock and custom upsell and marketing messages throughout the day, retailers may not want to go back to staid salad bars.

UPDATE: A previous version of this article incorrectly stated that the video advertising would be on the touchscreen.

Albertsons Pilots Temperature-Controlled Lockers to Expand Pickup Options

Albertsons announced today that it will pilot temperature-controlled lockers as an added pickup option for its grocery customers.

The lockers, delivered by Bell and Howell, are modular, can be installed either inside or outside and feature dynamic temperature control to accommodate various items placed in them. Customers will see this new “PickUp” option from participating stores when they shop via Albertsons website or mobile app. Customers placing an order will receive a unique code they use to unlock the self-serve locker.

Grocery retailers could soon be facing a double whammy of demand, given the continued use of e-commerce, thanks to the pandemic (and flu season!) and the impeding holidays. During the early days of the pandemic, we saw the strain as retailers couldn’t keep up with demand for grocery delivery. Though those systems seem to have improved, grocers like Walmart and Target have vastly expanded curbside pickup options to provide more flexibility for customers. Adding self-serve lockers gives customers even more options for getting their food while relieving increased demand pressure placed on the grocers.

Delivery lockers like the ones Albertsons is installing are starting to become a trend. The winner of last week’s Smart Kitchen Summit Startup Showcase was Minnow Technologies, which makes IoT-enabled food delivery lockers for places like offices, residential buildings and restaurants.

Amazon pioneered the pickup locker, many of which were at grocery stores, ironically. Though those were for general Amazon packages, it wouldn’t be a surprise to see Amazon adding similar temperature-controlled pickup lockers at its new chain of Amazon Fresh and Go Grocery stores.

The first Albertsons PickUp lockers will be installed at select Jewel-Osco locations in Chicago, with more coming to San Francisco Bay Area Safeways later this year.

Alibaba Spends $3.6 Billion for Controlling Stake in Chinese Supermarket Sun Art

Alibaba announced yesterday that it is shelling out $3.6 billion for a controlling stake in Chinese grocery store chain Sun Art. The investment will increase Alibaba’s stake in Sun Art to 72 percent.

The deal ups Alibaba’s existing stake (from 36 percent), and reinforces how the grocery sector is hot around the globe. As TechCrunch reported:

All of Sun Art’s 484 physical retail locations in China are now integrated into Alibaba’s Taoxianda and Tmall Supermarket platforms for groceries, as well as Ele.me and Cainiao, its on-demand food demand delivery app and logistics businesses, respectively. For customers, this means faster deliveries and larger selections, while giving Alibaba more sources of data it can use to improve its supply chain and business operations.

As they are both online retail giants, Alibaba and Amazon are often compared with one another, and it appears that the comparisons won’t end with grocery. Amazon, which purchased Whole Foods back in 2017, is also rolling out its own branded markets packed with technology meant to speed up the grocery shopping process — and gather more data as you shop to make it even faster.

As noted, the grocery sector overall has garnered a ton of interest since the pandemic. Online grocery shopping is projected to continue to grow to hit $250 billion in sales by 20205. Grocery delivery service, Instacart, has raised a ton of money and swelled its grocery gig worker “Shopper” ranks. Shipt has grown its delivery worker ranks as well in anticipation of the coming holidays. And third party delivery services like DoorDash and Uber Eats are expanding from restaurants into the grocery category.

With coronavirus cases back on the rise both in the U.S. and in Europe, it’s a safe bet that the spotlight on grocery won’t be going out any time soon.

Qualcomm Ventures Invests in AiFi for Autonomous Retail

AiFi, a startup that makes cashierless, autonomous retail environments, announced today that it has raised a new round of funding from new investors Qualcomm Ventures and Plum Alley as well as existing investors such as Cervin Ventures and TransLink Capital.

The amount of new funding was not disclosed, but the AiFi press announcement said the total amount raised by the company was now $30 million. As of last Friday, Crunchbase had AiFi’s funding at $15 million and listed Qualcomm Ventures as an investor for an undisclosed sum from back in August. So if we’re reading this correctly, it appears that the new round is $15 million.

But equally interesting as the funding is the investor, Qualcomm Ventures, the venture arm of mobile technology giant Qualcomm. The canned quote from Qualcomm in the press release said

“As intelligence continues to move from the cloud to the wireless edge and demand for contactless shopping grows, we are excited to be investing in AiFi,” said Carlos Kokron, VP Qualcomm Technologies, Inc. and Managing Director, Americas at Qualcomm Ventures. “We were very impressed with AiFi’s innovative edge-computing solutions and look forward to their technology helping accelerate the deployment of 5G.”

That a Qualcomm entity would invest in AiFi isn’t too surprising. AiFi’s stores rely on a lot of wireless technology, and the startup’s pitch is that it creates a faster retail experience by producing shopping receipts in real time. But Qualcomm is also moving more into computer vision, which is a cornerstone of cashierless checkout. In July, Qualcomm announced a chip cluster that adds machine learning and AI to mid-tier cameras. So investing in a company that gets that tech into more locations makes sense.

In addition to retrofitting existing stores, AiFi makes self-contained, autonomous, shipping container-sized nano-stores. The company says it will be deploying them to 330 locations around the world in 2021, and that it has partnerships with a number of top grocers across the U.S., Europe and Australia.

The pandemic has spurred interest in contactless technologies such as cashierless checkout. Caper just announced a countertop cashierless system for convenience stores. Grabango publicly launched its integration with Giant Eagle’s GetGo Market. Mastercard launched a cashierless checkout partnership with Accel Robotics. And AWM is powering a new cashierless market for a California apartment building.

For its part, AiFi said it will use the new funding to continue to develop its technology.

Trax Launches its Computer Vision-Based Inventory System in the U.S.

Singapore-based Trax announced earlier this week that it has officially launched its Retail Watch computer vision-based inventory management system for grocers here in the U.S.

As we’ve covered previously, Trax retrofits stores with customized camera modules on ceilings and on shelves. These cameras snap a picture of the store’s inventory every hour and send those pics to Trax’s cloud, which uses machine learning to analyze each image to see which products are empty and if any products have been misplaced or mis-priced. A report is then sent to store management, who can then dispatch associates to re-stock and replace items.

According to this week’s U.S. announcement], the company has added autonomous robots to its tech stack, but didn’t specify their use or prominence in the overall offering.

A Trax rep told me last year that stores using its system saw a 1 percent bump in sales through improved item stocking. That 1 percent may not sound like much, but it adds up if used across multiple locations for a single retail chain. Plus, 1 percent promises to just come from better workflow of existing practices (inventory management), not adding new ones.

In addition to retailers, Trax’ also counts CPG companies among its customers. For CPG companies, Trax is more of an auditing tool to monitor shelf presence at stores to ensure they are getting what they paid for.

While keeping a close eye on store shelves may not sound sexy, it is becoming an increasingly competitive field. Walmart has developed its own computer vision-based inventory tool. And Bossa Nova, Simbe Robotics and Badger Technologies all make shelf-scanning robots.

For retailers, having more up-to-date inventory data can translate into more revenue. For consumers, it can mean fewer product outages should shocks to the system like pandemic panic buying occur again.

SKS 2020: Shipt CEO Says Company Not Interested in Robots

Shipt’s CEO, Kelly Caruso told audiences at the Smart Kitchen Summit today that her company is not interested in implementing robot or drone technology.

“Shipt will use technology in order drive efficiency,” Caruso said, “But that technology will be more in line with machine learning, AI and VR,” as opposed to something like drone.

Caruso continued by saying that Shipt, which is an independent unit of Target, was not going to replace their human shoppers (the gig workers who go into stores and make the deliveries). “They are critical to our success,” Caruso said.

That Shipt is focused on its human workforce is not that surprising, given that just last week the company announced it was adding an additional 100,000 shoppers to its ranks in time for the holidays. The additional headcount will bring the total number of Shipt Shoppers to 300,000.

It’s also not too surprising that Shipt will rely more on people than robots, at least for right now. While the pandemic has accelerated the desire for contactless technologies, autonomous delivery robots like those from Nuro and Starship are still in their infancy. There also remain a number of regulatory and technological hurdles that need to be overcome.

What we should keep an eye on is whether Shipt’s parent company, Target, adopts some sort of robot-powered automation to fulfill e-commerce orders. Target is a bit different from other grocery retailers because it sells so much more than foods. In other words, a micro-fulifllment center using totes and rails in the backroom of a Target can’t exactly grab a bunch of bananas and a patio furniture set.

Having said that, Shipt works with a number of different retailers, grocery and otherwise. As grocery e-commerce continues to grow into a projected $250 billion sector, both retailers and Shipt will adapt to serve customers’ evolving needs.