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The Spoon

Daily news and analysis about the food tech revolution

Future of Grocery

Amazon Expands Online SNAP EBT Purchasing to 36 States

Amazon announced today that online grocery shopping for people who rely on the Supplemental Nutrition Assistance Program (SNAP) is now available in 36 U.S. states and the District of Columbia.

Toward the end of May, the USDA had announced that it was expanding the online SNAP purchasing program to 36 states, which it said would cover 90 percent of SNAP participants. In addition to wider availability, the USDA press release said, “Soon more SNAP authorized retailers, under multiple store banners, will be accepting SNAP benefits online.”

Amazon seems to be first out of the gate to announce its participation. In a press release, Amazon wrote:

SNAP recipients in Alabama, Arizona, California, Connecticut, Colorado, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming can now use their benefits to shop for groceries on Amazon and other participating retailers.

We checked Walmart’s website to see how broad its acceptance of SNAP is across the U.S., but only found an update from the company in April listing just 19 states plus D.C. We have reached out to Walmart for more information. UPDATE: A spokesperson for Walmart said that it accepts online SNAP payments in 36 states plus D.C..

In April of this year, Kroger launched its own program to accept online SNAP payments at 2,000 of its grocery pickup locations.

In addition to bringing out more digital and food equity, the expanded ability of SNAP participants to purchase groceries online is coming at a critical time. The COVID-19 pandemic has caused massive unemployment and loss of income, and created new exposure risks for people to physically go into a grocery store. The ability for those in need to purchase groceries online and get them delivered can help with both of those things.

Dumpling Raises $6.5M Series A for Grocery Delivery Platform

Dumpling, an online platform that allows people to start their own grocery shopping and delivery business, announced today that it has raised $6.5 million in Series A funding. The round was led by Forerunner Ventures, with participation from Floodgate and Fuel Capital. This brings the total amount raised by the company to $10 million.

Unlike Instacart, which is a grocery delivery company that directs independent contractors, Dumpling is a platform for individuals to start their own grocery shopping and delivery business. These business owners, as Dumpling refers to them, set their own pricing and delivery areas, and develop their own clientele. Dumpling provides not only the technical and payment infrastructure for its shoppers, but also coaching on how to build and market their businesses.

I spoke with Dumpling Co-Founders and Co-CEOs Joel Shapiro and Nate D’Anna by phone this week. According to them, this approach means more empowerment and money for its business owners, and more choice for the end customer. Shapiro and D’Anna said that Dumpling shoppers earn $33 per delivery (and that’s a pre-pandemic number, which has since gone up given record setting grocery e-commerce).

Additionally, because Dumpling is not affiliated with any one grocery store, Dumpling shoppers are able to shop at multiple stores for a single order, so a person could get their favorite snack from Trader Joe’s and a six-pack of Coke from Safeway delivered at the same time from the same person.

The system isn’t perfectly efficient yet. Dumpling is not plugged directly into the inventories of store. So instead of tapping on items in an app, a customer may need to write out actual lists or send photos of the products they are looking for.

Dumpling makes its money by charging a 5 percent fee per order, which the business owner can pay or pass on to the customer, as well as a set monthly fee or $5 per transaction to the business owner to be on the platform.

Today’s funding announcement comes on the heels of grocery delivery giant Instacart raising $225 million last week. While Instacart has raised $2 billion so far, Dumpling’s more hands-off, DIY approach to its shoppers could keep it competitive because it pushes the marketing and business building on to its shopper network. Plus, at least so far, Dumpling hasn’t run into the same labor issues that Instacart seems to run afoul of.

Dumpling’s funding is also coming at a time when states are re-opening and people are starting to go back into grocery stores. How much people retain their online grocery shopping habits remains to be seen, but it appears that the peak for online grocery shopping may have passed (at least for now).

There are currently 2,000 Dumpling business owners operating in all 50 states. The company said that it will use its new funding to develop tools that allow its business owners to shop and build out their individual businesses more efficiently.

Sales Through Grass Roots’ D2C Meat Marketplace are up 400 Percent Over Last Year

One of the many ways COVID-19 has impacted the meal journey this year is how we get our meat. The pandemic illustrated the shortcomings of our over-consolidated supply chain and the inequalities experienced by the people working in industrial meat-processing facilities.

If there is a “fortunately” to be found at all with the pandemic, it’s that it has come at a time where there are more options than ever for people to buy meat directly from small farms.

Grass Roots Farmers Cooperative is one of those options. Founded in 2014, Grass Roots offers an online market where consumers can buy meat that comes from small farms. Based in Arkansas, Grass Roots mainly works with farms in the southern region of the U.S., but ships directly to the lower 48 states.

I spoke with Grass Roots Founder and CEO Cody Hopkins by phone this week, and he told me that business has been up 400 percent year-over-year for the company, which now has 25,000 customers and is on track to do $7 – $10 million in sales this year.

Part and parcel with consumers looking for new ways to purchase traditional meat is an increased desire for transparency in the supply chain that gets that meat to their door. To that end, Grass Roots has taken the extra step of integrating blockchain into its supply chain, so it’s products are tracked from the farm to the table.

Grass Roots is among a number of companies, including Butcher Box and Crowd Cow, offering online marketplaces for people to buy craft meat. The bigger question for companies like Grass Roots et. al. is whether its COVID-driven boom will last after the pandemic recedes (though the coronavirus certainly doesn’t appear to be abating anytime soon). Will people still want to buy online or avoid industrial farming when they can return to the grocery store?

Speaking for myself, I recently switched to mail order meat for staples like chicken and seafood, and the whole process has proven to be extremely convenient and price competitive with my local grocer. For me, mail order meats has actually transitioned into permanent behavior.

Farm-to-Phone App CropSwap Launches Subscription Box Service

Thanks to the pandemic, we’ve seen a surge in online grocery shopping and a rising demand from consumers to know more about where their food comes from than they’d traditionally get from a big-box grocery retailer. At the same time, local farmers are struggling to make up revenue lost during shelter-in-place mandates that closed restaurants and farmers markets.

All of that makes it an apt time for CropSwap, an app that connects customers with local farmers and food growers, to launch a new subscription service. Today, the Los Angeles-based startup announced CropBox, its direct-to-consumers subscription service through which customers receive boxes of produce, seeds, and other items from nearby farmers.

CropSwap bills itself “the Instacart for local produce.” Launched in April — smack in the middle of the pandemic — the app was originally developed to cut down on the food waste that happens along the supply chain between farms and consumers. Customers can browse items, view inventory in real time, and communicate directly with farmers.

The addition of the CropBox means customers can also now sign up to receive curated boxes of produce, seeds, honey, and other items from local farmers. Based on their location, users can choose from several types of boxes as well as set the quantity of the box and how often they want to receive one (e.g., weekly, monthly).

Right now, CropBoxes available to consumers in NYC, Hawaii, LA, and Miami, FL. 

CropSwap, and now CropBox with it, join a growing number of companies trying to connect more consumers with local farmers, from bean marketplaces to online flour sellers. And in April, CSA deliveries were up 405 percent, according to data from Foursquare.

The big question right now is whether this increased demand for local produce will survive past the pandemic. For the sake of local farmers and food growers and their businesses, let’s hope so.

Irish Grocery Startup Buymie Raises €5.8M, Expands Into UK

Buymie, a grocery delivery company based in Dublin, Ireland, announced today that it has raised €5.8 million (~$6.53 USD) in new funding. The round was led by Wheatsheaf Group, the food and agriculture investment arm of the Grosvenor Estate, with participation from existing backers Act Venture Capital, Sure Valley Ventures, Haatch Ventures, and HBAN.

This is the second funding announcement from Buymie in as many months. This new cash appears to be an add-on to the €2.2M (~$2.39M USD) Series A round the company started in April of this year. This brings the total amount of funding for Buymie to €10.6M (~$11.93M USD).

As we wrote back in April, Buymie is analogous to Instacart here in the U.S. Customers order through the app and Buymie shoppers go into stores like Lidl and Tesco to pick items out and make home deliveries.

Right now, demand for grocery delivery is skyrocketing because of the coronavirus pandemic. In April, Buymie told the Irish Times that it was experiencing 39 percent month-over-month growth and had seen a 300 percent increase in app downloads.

Back then, the company’s services were available to 490,000 households in the greater Dublin area. As part of today’s announcement emailed to The Spoon, Buymie said that it has just launched in the Bristol metropolitan area of the UK, the company’s first such expansion outside of Ireland. With its new funding, Buymie says that it will continue rapid growth to new markets both in Ireland and the UK.

Buymie’s fundraise comes just days after Instacart announced it had raised an addition $225 million to keep up with demand for grocery delivery here in the U.S. It appears that investors, at least, aren’t worried about demand dropping off too precipitously as lockdown restrictions start to ease.

Instacart Raises $225M Amid Surge in Grocery E-Commerce

Grocery delivery service Instacart announced today that it has raised a $225 million as part of a new funding round. DST Global and General Catalyst led the round with participation from existing investor D1 Capital Partners. This brings the total amount of funding raised by the company to $2.1 billion (with a b), and the company says it’s new funding brings its valuation to $13.7 billion.

Instacart’s new funding comes during a time of record-setting online grocery shopping spurred on by the COVID-19 pandemic and subsequent sheltering in place orders.

Instacart has had to make all sorts of sudden changes to its business on the fly as it tries to scale and keep up with demand for its delivery service. The company is bolstering the ranks of its gig shoppers to 750,000 and added new features like order ahead to try and ease congestion.

But it hasn’t all be smooth sailing. Instacart has been criticized over the treatment of its gig workers both during this pandemic and before. Instacart Shoppers have actually gone on strike multiple times to protest their working condition. As TechCrunch reports, the company has also spent $10 million to try and keep its Shoppers classified as contractors rather than as employees, which would cost the company more. TechCrunch also points out criticism Instacart has received over its public response to social injustice and the Black Lives Matter movement, which spoke in vague terms about supporting internal teams.

The larger, more existential question for Instacart right now is how much of this surge in online grocery shopping is permanent? The U.S. is just now starting to emerge from quarantine and there is some indication that people still prefer to shop for their groceries in person at the store. As a consequence, will Instacart be able to live up to its valuation hype once this pandemic recedes? There are now 225 million new reasons to find out.

Instacart Released a Feature to Battle Tip-Baiting

As if a braving stores during a global pandemic wasn’t enough for Instacart’s Shoppers (the gig workers who actually go into the grocery stores and make the deliveries), they’ve also had to deal with tip-baiting. Tip-baiting is when a customer entices a Shopper with the promise of a big tip, only to rescind that tip once the delivery is made. It’s a tactic some customers would use during especially busy times to get their delivery faster.

Disgusting, right?

On Friday, Instacart launched a new feature to help combat tip-baiting. TechCrunch writes that users who remove their tip after the delivery must provide feedback as to why it’s being changed. Users also now have only 24 hours to change a tip, down from the previous three-day window. (Ed. note: why did they allow a three day window in the first place?) Additionally, repeat tip removers will have their accounts deactivated.

Instacart said that tip-baiting wasn’t rampant and represented less than .5 percent of orders.

The move is the latest in a string of changes Instacart has had to make on the fly during this pandemic. The grocery delivery startup was thrust into the limelight over the past months, becoming an essential service as lockdowns and general fear of COVID-19 prevented people from going to the grocery store.

The record-setting, sudden influx of online grocery shoppers meant big changes for Instacart, including boosting the size of it network to 750,000 Shoppers, adding new grocery order features, and providing more health and safety measures for its Shoppers. There’s also been backlash from its Shoppers, many of which went on strike over the inadequacy of those health and safety measures, as well as the company’s default tipping policy.

As states start to re-open, questions remain about if and how people will return to the grocery store. The online grocery shopping boom will most likely come to an end this summer and from there will pivot to see how many e-commerce curious remain once the in-person option is once again available.

In the meantime, tip your Instacart, and every delivery driver, generously!

Kroger to Build Three Robot-Powered Fulfillment Centers in the Pac. Northwest, Great Lakes and West Regions

Kroger announced today that it will be building robot-powered fulfillment centers in the Pacific Northwest, Great Lakes and West regions of the U.S. This expansion marks the first such robot warehouses to be situated on the west coast.

These smart warehouses use technology from U.K. grocer Ocado to automate the process of online grocery order fulfillment. Kroger is taking a centralized approach to such fulfillment, building out 20 robot centers in various locations across the U.S. to serve as hubs for customer delivery.

Other retailers are taking a more localized approach to automated order logistics, choosing instead to build out micro fulfillment centers in the backs of existing neighborhood supermarkets. Albertsons and Ahold Delhaize both have partnerships with Takeoff Technologies to build these types of centers, while Walmart is using Alert Innovation for a similar experiment.

The speed of online grocery order fulfillment has definitely become more of a priority during this pandemic. Quarantining has driven record online grocery sales over the past few months, but retailers were ill equipped to handle the deluge of new orders. The result has been out of stock items and massive delays in delivery windows.

The question, however, is, will those online grocery shoppers remain after the pandemic recedes. Companies like Kroger and Albertsons are making big investments in automated fulfillment, but once we get back to “normal,” which definitely won’t be the old normal, will people want to go back into the grocery store to pick out their own food?

Kroger’s march towards automation predates the pandemic by a long shot, so current fluctuations driven by the coronavirus probably aren’t driving too much of its implementation. Besides, the first of Kroger’s robot warehouses isn’t even scheduled to open until early 2021, so there is time for grocers and shoppers to figure out any new preferences to grocery shopping.

COVID Could Usher in a New Trend: Frozen Food as Medicine

It seems that Americans are turning to frozen food during the coronavirus pandemic. Last month, the American Frozen Food Institute (AFFI) reported that sales of frozen food jumped 94 percent in March of 2020 compared to a year before, and continued to rise by 30 percent in April.

Granted, considering the source it’s best to take the report’s numbers with a grain of salt. But this growth actually makes a lot of sense. Frozen food keeps for a long time. Americans are wary of grocery stores and worried about feeding their families, so it follows that they’d stock up on staples that can last for months and be ready when needed.

Curious to see if this was an opportunity for more curated frozen meals, this week I spoke to Christine Day, CEO of healthy frozen meal company Performance Kitchen, about how COVID has affected their sales.

“Every week the volume is picking up,” Day told me. While they had to halt their business with Delta Airlines, for whom they provided some meals for first-class passengers, she said that their online business is up over 200 percent.

Day said that when the pandemic first hit, consumers were stocking up with lots of bulk food. Then there was a phase of over-indulgence: there was “a lot of lasagnas,” she said. Now, Day thinks we’re at a phase when consumers are shifting away from bulk and comfort food to seek out healthier choices.

At the same time, consumers are still looking for convenience. Meal kits can offer that to some degree, but they require preparation and also have a relatively short lifespan in terms of how long it takes for the food to go bad. Frozen meals offer more flexibility. “When you buy a frozen meal you have a choice if your plans change,” said Day.

Performance Kitchen has two branches: Performance Kitchen and Performance Crafted (formerly called Eat Local). Both focus on providing nutritionally balanced frozen meals for specific dietary needs: keto, maternity, vegan, etc. Performance Kitchen makes wholesale meals for sale in 10,000 grocery stores nationally and online. Performance Kitchen Crafted, on the other hand, is a physical store where consumers can come and shop for branded frozen meals. It has six brick and mortar locations in Seattle.

Since COVID has forced those stores to shut their doors, Day said that Eat Local has pivoted to D2C sales and curbside pickup. Before the pandemic they only delivered to the West Coast, but they rolled out national shipping three weeks ago.

Performance Kitchen is not only positioned to tap into the rise in frozen food demand, but also new interest in a burgeoning trend: food as medicine. “People are really focused on immunity health, recognizing that issues like diabetes, hypertension, etc. increase our risk,” Day said. She credited this focus with one of the reasons they were seeing so many more sales during the COVID pandemic.

What’s remains to be seen is if the success of frozen meals, specifically those offering a food as medicine angle, will continue post-coronavirus.

With $6.6B in Sales, Online Grocery Hit Another Record in May

The global pandemic and subsequent lockdowns around the country spurred another record month for online grocery shopping. According to a results from a new Brick Meets Click/Mercatus Grocery Survey released today, online grocery sales hit $6.6 billion in May, up 24 percent from April (which was a record month as well).

The online survey was conducted from May 20 – 22 with more than 1,700 US adults, and showed total online grocery orders grew 18 percent month-over-month to 73.5 million in May, up from 62.5 million in April. In the press announcement, Brick Meets Click said that this increase was driven by increased capacity as retailers added more time slots for fulfilling orders to keep up with demand.

The number of households ordering groceries online increased as well, with 33 percent (roughly 43 million customers) saying that they shopped for groceries online during the previous 30-day period, up slightly from 31 percent in April.

Households also increased the number of orders placed and their total spend per order in May. Households placed an average of 1.7 orders for either delivery or pickup, up 10 percent from 1.6 orders in April. And the average order was $90, up $5 from April. Brick Meets Click attributed the spend increase to higher consumer prices that started in April, improvements to product availability and customers getting more comfortable with online grocery shopping.

Despite all that growth and record setting, the question remains as to how permanent these new behaviors are. States are starting to ease their social distancing restrictions, allowing people to be out and about more freely. And Bloomberg reported on a McKinsey survey yesterday that showed 7 in 10 people still shopped at the grocery store during the pandemic. As Bloomberg noted, online grocery still suffers from clunky ordering processes, entrenched habits and the fact that people are fussy and like to pick their own produce.

Given the relaxations of lockdowns, it’s unlikely we’ll see another record month for June. Rather, we should anticipate a drop. How big of one, we’ll have to wait and see.

With Moscow Store-Within-a-Store, Zippin Shows New Solution for Grocers to Go Cashierless

Zippin announced today that it has opened its first cashierless store-within-a-store at a Azbuka Vkusa supermarket in Moscow. While this marks further international expansion for Zippin, the bigger story is that Azbuka Vkusa’s implementation could model a half-step into cashierless — and contactless — checkout for big grocery store chains.

Zippin is among the many startups making cashierless checkout for retail, which allow shoppers to walk into a store, grab what they want, and go, getting charged automatically as they exit. Zippin’s approach is similar to Amazon Go’s in that it uses a combination of both cameras and shelf sensors to monitor what people take. Last year, Zippin launched its pre-fab Cube, which has all the pieces and technology to make it easier for a store to open up a pop-up cashierless store-within-a-store.

But real estate in an urban environment like Moscow is at a premium, so rather than carving out floor space for a Zippin Cube, Azbuka Vkusa converted one of its existing aisles into a mini-store. The market cordoned off one end, installed cameras on the ceiling, retrofitted the existing shelves with sensors and installed a special QR code-scanning turnstile. Azbuka did all of the implementation with Zippin managing the process remotely.

What makes this interesting is that it’s a proof of concept for big grocery store chains looking to get into cashierless checkout. Grocery stores are like battleships; they can’t turn on a dime, and retrofitting an entire store takes a lot of time and resources, both of which are in short supply during this COVID-19 pandemic.

But the ability to carve out a small part of an existing store, retrofit existing shelves, and stock it with a mix of popular items people want to grab quickly could split the difference. This would allow bigger stores to start implementing cashierless without massive overhauls.

In addition to providing more convenience for shoppers, cashierless checkout is also contactless, an important word in the time of COVID-19. “Since [the] pandemic broke out, we’ve seen a clear increase in inbound inquiries,” Zippin CEO Krishna Motukri told me by phone this week, “The contactless aspect of it is a huge bonus, and probably the main driver of it now.”

Grocery stores are definitely investing in new ways to protect their frontline workers right now and a cashierless section could be an arrow in that particular quiver.

Zippin’s new Moscow location is the latest news in what has been a busy couple of weeks for the cashierless checkout space. Last week, Shopic raised $7.6 million for its tech solution, and this week, Standard Cognition acquired Italian startup, Checkout Technologies.

It’s a pretty safe bet that there is more news on the way as grocers and other retailers experiment and implement new ways of coaxing a nervous public back into their stores.

Cashierless Tech Consolidation: Standard Cognition Buys Checkout Technologies

Standard Cognition, a San Francisco-based cashierless checkout startup, has acquired aptly named Italian company Checkout Technologies, which also does autonomous retail. TechCrunch was first to report the news. Terms of the deal were not disclosed.

Standard Cognition has raised $86 million in funding, while Checkout had raised just €1.3M ($1.42 USD). Standard Cognition CEO Jordan Fisher told TechCrunch that the two companies had been talking since the middle of last year and were in the final diligence stage of the deal when the COVID-19 pandemic struck Italy particularly hard.

The global COVID-19 crisis could actually help spur adoption of cashierless checkout at retail. The technology allows shoppers to walk into a store, grab what they want and get charged automatically upon exit. This type of contactless transaction reduces the number of human-to-human interactions happening in a store, which could help protect store workers and put shoppers more at ease with in-store shopping.

Fisher also told TechCrunch that he expects to see consolidation in the autonomous checkout space. There is certainly a bevy of startups bringing their cashierless solutions to market. In addition to Standard Cognition and Checkout Technologies, there is Trigo, Grabango, Zippin, Caper, Shopic, Swiftly, Skip, AiFi, and Accel Robotics. Not to mention Amazon, which is the grandaddy of cashierless checkout and will be licensing out its technology. And while Walmart’s IRL store hasn’t implemented cashierless checkout yet, it has banks of cameras monitoring in-store inventory, and it’s not too huge a leap to think they will roll out cashierless options soon.

We started to see some grocery retailers go public with their cashierless partnerships last year. Trigo is at Tesco and Shufersal, Grabango with Giant Eagle, and Zippin with Lojas Americanas. But the big impediment to implementing these cashierless technologies, at least at large grocery chains, is that they need to work at scale and right away. There’s still a learning curve and workflow adoption of cashierless checkout that needs to happen for most consumers.

But the coronavirus pandemic is accelerating the adoption of certain technologies around food, especially if they help promote the safety of workers and shoppers alike. Cashierless checkout could be here in a meaningful way sooner than we expected.