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The Spoon

Daily news and analysis about the food tech revolution

Future of Grocery

Afresh CEO Matt Schwartz Explains How AI Can Help Grocery Retailers Place “the Perfect” Order

For grocery stores, measuring demand and managing orders for fresh foods can be a maddeningly difficult task that more often than not ends in lots of unused food getting thrown out. After all, bananas have a much shorter shelf life than, say, a bag of rice, and a lot of existing supply-chain technologies and processes were designed with the latter in mind.

“Existing tools don’t work for fresh food,” says Matt Schwartz CEO and cofounder of a San Francisco, California-based tech company called Afresh.

Afresh often gets labeled a “food waste” company and listed among other efforts to curb the problem of food waste at consumer-facing outlets like grocery stores. While Afresh’s store-level ordering platform can certainly help grocery retailers cut down on food waste, that’s not necessarily the main driving force behind the company. 

Over a call recently, Schwartz told The Spoon he thinks of Afresh as more of a “fresh food company” than food waste company. The system uses AI to analyze store-level data around customer demand, shipments of fresh food, sales of it, pricing and other factors. Gathering all that disparate data together, the system then makes ordering recommendations for grocers to help them create what Schwartz calls “the perfect order.” That is, “an amount that keeps you in stock for the shopper but also doesn’t cause you to drive waste from having it sit there.”

By way of example, he says it’s the difference between 14 cases of blueberries and 18: “Those four cases make all the difference when it comes to billions of pounds of waste.” 

Getting that perfect number can be complicated. Continuing with the blueberry example, Schwartz says there are a few major things grocery retailers have to consider, the first of them being customer demand. In other words, How many blueberries will shoppers want over the next few days? Retailers also have to consider existing store inventory, which can be tricky to calculate for something like berries. 

Reconciling these two things — how much a retailer has versus how much they think they will sell, also requires other types of data. That includes how many cases the shelf can hold, the shelf life of the blueberries, and the frequency of shipments, to name a few. The Afresh system connects to grocery retailers’ existing systems, then compiles the above data into a single place that a retailer making an order can view from an iPad.  

“In the long term our systems will drive decisions around inventory, forecasting, etc.,” said Schwartz.  

In a recent post for The Spoon, food tech investors Seana Day and Brita Rosenheim noted that “increased workflow and data automation solutions in the food supply chain holds significant power to help the food supply chain leapfrog into digitalization.” That includes grocery retailers, and Afresh is among several companies trying to enable this leapfrog movement. Seattle, Washington-based ShelfEngine offers a similar fresh food inventory management platform, as does a company called Crisp. Rising consumer demand for both fresh food and a more reliable supply chain (hello, panic shopping) mean we can expect a lot more software in this area in the near future.

For its part, Afresh is currently live in hundreds of stores, says Schwartz. He declined to name specific stores or chains, but said his company’s biggest partner does about $10 billion in sales every year. 

The company has raised a total of $32.8 million to date, with its most recent round being a Series A fundraise towards the end of 2020.

Food Rocket Going Beyond Speedy Grocery Through Ghost Kitchens and an Open Platform

The sudden proliferation of speedy grocery delivery startups like San Francisco’s Food Rocket has been one of the bigger food tech stories of 2021. But for Vitaly Alexandrov, Co-Founder, and CEO of Food Rocket, fast grocery delivery is just a step to a much larger play.

“In a year or two years, it will be like a commodity,” Alexandrov said of fast grocery delivery during a video chat this week, “Everyone will deliver in ten minutes.”

And he’s probably right. Throughout this year we’ve seen a number of players pop up offering on-demand, ten-minute style grocery delivery through a network of small, dark stores with a limited delivery radius. Most of the activity has been in Europe so far with companies like Getir, Glovo and Gorillas all raising big money and expanding rapidly. But we are starting to see more startups show up here in the U.S., especially in New York City. Fridge No More, JOKR and Gorillas all operate in the Big Apple, and Gorillas recently announced its jumping across the country to open up stores in Food Rocket’s hometown of San Francisco.

But Alexandrov isn’t worried about Gorillas, or any of the other competitors that will undoubtedly come to his hometown, in fact he welcomes them. “When there are many competitors, the market grows faster,” he said. The idea of ten minute grocery delivery is very new, and customers need to learn a whole new way of treating grocery shopping more like a utility. Alexandrov said that more competitors in a market vying for customers means there are more companies educating customers about this new type of service. The result is a larger pool of knowledgeable customers and that rising tide should lift all (speedy) boats.

If that does play out, and that’s a big IF as we still need to see if these speedy grocery startups can scale, how will each service differentiate themselves? For Food Rocket there are two phases to its future growth. Alexandrov said in the near term, one of the ways Food Rocket will stand out is by offering its own line of ready to eat meals. To do this, the company will add ghost kitchens to its operational network. So in addition to staples like milk and eggs, you could also get your lunch or dinner delivered, and menus can be tailored to tastes of the specific neighborhood served.

The second phase of its future involves opening up its platform to other retailers. Over the next three years, Food Rocket will continue to build out its network and fine-tune its inventory management, fulfillment and delivery routing systems. At that point, Food Rocket could allow a more traditional retailer like Albertsons or Kroger to use its platform for fast delivery, and it’s easy to see why retailers could be interested.

If Food Rocket’s type of fast delivery catches on with consumers, two-hour or even half-hour delivery of groceries could be considered too slow. Instead of building out their own speedy delivery infrastructure, retailers could just use Food Rocket’s and launch immediately wherever Food Rocket is operating. It’s similar to the way retailers partnered with Instacart to establish delivery (and it could carry the same pitfalls). Though Alexandrov says it beats existing third party services because Food Rocket delivery people are employees — not contractors. So when an order comes in, the system doesn’t have to take the time to find a driver willing to fulfill the order (of course, having employees also drives Food Rocket’s costs up).

But that vision of Food Rocket’s future is still a ways off, and a lot needs to happen before that vision can pan out. More immediately for Food Rocket, Alexandrov told me that the company’s next move is expanding to cover roughly 95 percent of San Francisco by September and then it’s on to Los Angeles, where Food Rocket has already signed leases in West Hollywood and Santa Monica. Alexandrov said that in order for the business to work, stores need to be set up in locations where its limited delivery radius can cover 50,000 homes. That means Food Rocket won’t be coming to my rural neck of the woods anytime soon, but it, along with the other speedy delivery startups, may be taking off in a city near you soon.

Verve Motion Hauls in $15M for its Exosuit, Which Ahold Delhaize Piloted

For workers who spend their days moving heavy things, the refrain “lift with your legs and not with your back,” could soon become “lift with your legs while wearing the high-tech exosuit.” Verve Motion, which makes just such an exosuit that assists people when picking up objects, has raised $15 million, TechCrunch was first to report today. This Series A round was led by Construct Capital with participation from existing investors, such as Founder Collective, Pillar VC, Safar Partners and OUP.

Verve Motion’s SafeLift suit sounds like something straight out of a Marvel movie. From the product description on the company’s website:

The technology behind SafeLift has been developed at Harvard over the past decade, and is based on the latest advances in robotics, apparel design, and movement science. The suit applies assistance in parallel with the user’s muscles and responds to their movement in milliseconds. It combines state-of-the-art motion tracking technology with powerful robotic actuators and integrates it all into a lightweight and easily wearable device that doesn’t restrict normal activities.

As The Wall Street Journal reported last month, Verve Motion’s suit was piloted by Ahold Delhaize last year to help warehouse workers who assembled goods for retail outlets and e-commerce orders. The suit doesn’t grant superhuman strength like the power loader from Aliens. Instead, it reduces strain associated with doing the literal heavy lifting at work. Verve Motion says that the SafeLift can reduce strain by 30 percent when performing strenuous tasks, resulting in fewer injuries and lower fatigue rates.

The technology is still new and as the WSJ points out, exosuits like this should be studied for any long-term impacts on workers. But should exosuits prove to be a safe and effective way for workers to move boxes of groceries around in a fulfillment center, we could see increased adoption of the technology. Online grocery sales were $7 billion in May of this year, and e-commerce is expected to a be a pandemic-borne habit that sticks with consumers going forward. As a result, grocery retailers will need ways to fulfill all those orders. Some retailers are adopting robotic fulfillment solutions a la Ocado or Takeoff, but exosuits could prove to be another great fit as well.

Shopic Raises $10M for its Clip-On Smart Cart Cashierless Checkout Solution

Smart shopping cart startup Shopic announced today that it has raised $10 million in equity funding. The round was led by Claridge Israel, with participation from existing investors Entrée Capital, IBI Tech Fund, and Tal Capital. This brings the total amount raised by Shopic to $21 million.

The Tel Aviv, Israel-based Shopic creates cashierless checkout retail experiences through its a device that clips on to the handles of existing shopping carts. The Shopic device has cameras and a touchscreen, and uses computer vision to recognize products placed inside the cart. The Shopic system keeps tally of everything in the cart and ties in with a store’s POS so customers can skip the checkout line and get charged automatically upon leaving.

Shopic also promotes its smart carts as advertising vehicles and real-time inventory management systems. In addition to presenting an ongoing receipt as people shop, the touchscreen can also display customized digital promotions and ads based on data such as a customer’s shopping history. Because Shopic’s system is keeping track of what items are placed in the cart (and taken out) and when, it also provides real-time inventory insight as well as information about how customers shop.

The cashierless checkout space has seen a ton of funding and installation activity around the world so far this year. There are a number of solutions coming to market including retrofitting stores with cameras (Trigo, Grabango) and smart shopping carts (Caper, Veeve). Even Shopic’s very specific sub-section of turning existing shopping carts into smart carts is getting crowded, with other players such as SAI, WalkOut and Nomitri vying for grocery retailer dollars as well.

All of this action illustrates how adoption of cashierless checkout is certainly accelerating, thanks in part to its contactless nature and fears stirred by the pandemic. But despite all the funding and the momentum, it will still be awhile before it crosses over into the mainstream. I recently spoke with the CEOs of cashierless checkout startups Trigo and AiFi. The Trigo CEO believes we’ll see cahierless checkout options in every major city of the world as early as next year. That could mean there’s just one store offering it, however. AiFi’s CEO said we’re about a decade away from cashierless checkout becoming mainstream.

In its press announcement today, Shopic said that it is already deploying solutions with major grocery chains around the world, and will use its new funding to accelerate commercial activities and expand its team.

Gorillas is Hiring Up to Expand its 10-Minute Grocery to San Francisco, LA and Chicago

As of now, New Yorkers have just about all the fun when it comes to super speedy grocery delivery in the U.S. Companies like Fridge No More, JOKR, Gorillas and, starting next month, Buyk are all building out a network of small, delivery-only grocery stores that promise to deliver your food in as few as ten minutes

But based on its current job listings, Gorillas is prepping to make a move out west. The company is currently hiring the following positions:

Germany-based Gorillas certainly has the cash to fuel such expansion. The company just raised $290 million in March, and has raised $335 million in total. There also currently isn’t that much competition in terms of speedy delivery grocery services on the West Coast. Food Rocket launched 15-minute grocery delivery in San Francisco at the end of May. Gopuff has a number of locations across California (and Chicago), though its delivery times are a comparatively “sluggish” 30 minutes.

Gorillas, like its rivals, operates dark stores in neighborhoods that have a limited delivery radius of typically one to one and a half miles. The economics of that certainly works in densely packed urban areas like New York, Chicago or even San Francisco, but Los Angeles is sprawling (though it does have a ton of people). I’m curious to see which neighborhoods Gorillas will start with and how it will expand.

As I’ve said before, I believe this new crop of speedy delivery services are not the next Kozmo.com’s. and they have the potential to turn grocery shopping into an on-demand utility. There is power in the idea of ordering a pint of ice cream and having it arrive at your doorstep 10 minutes later, and it could upend traditional notions of going to the grocery store in person (moreso than the pandemic did).

We’ll have to wait and see on that front, but in the meantime, one good thing about the Gorillas job openings is that they are all full-time with benefits, even the delivery driver position.

South Korea: Online Grocer Kurly Raises $200M Series F

Kurly, the South Korean startup behind online grocery service Market Kurly, announced today that it has raised a $200 million Series F round of funding. The Korea JoongAng Daily reports that this latest round was led by existing investors such as Aspex Management, DST Global, Sequoia Capital China, along with new investors like Millennium Management and CJ Logistics. This brings the total amount of money raised by Kurly to $428 million and gives the company a $2.2 billion valuation.

At the same time, Kurly also said that it would no longer seek to go public on U.S. stock exchanges and will instead IPO on a Korean stock exchange. For more on that, The Korea Economic Daily has some good background and context as to why Kurly may have made its stock market switch.

Here at The Spoon, we are more interested in the food tech angle, and Kurly is just the latest example of an online grocery startup raising big money. According to PitchBook data released last week, investors have poured more than $10 billion into grocery startups in 2021. Kurly’s $200M Series F is downright quaint compared to the $3 billion raised by Xingsheng Youxuan, or the $1.5 billion raised by Gopuff, or the $850 million raised by Getir.

Kurly’s business is also a little more traditional than many of the grocery startups raising money right now. Unlike Gopuff and Getir and the raft of smaller companies promising grocery delivery in just 10 minutes, Kurly offers its customers next-day delivery. What it lacks in speed however, it more than makes up for in size as it provides its service across South Korea.

The pandemic has driven a good deal of interest and investment in the online grocery sector. Fears of COVID-19 drove people into online grocery last year. And while online grocery sales have come down (at least in the U.S.) as vaccinations have rolled out, there is some market research showing this new e-grocery behavior will stick with consumers. Now we’ll have to see what post-pandemic reactions to online grocery are around the globe (and if it was worth all the investment).

PitchBook: More than $10B Invested in Grocery Startups This Year

We’ve been saying that investment in grocery startups is downright frothy this year, and now PitchBook has put a number to all this VC activity. CNBC reports that venture-backed grocery startups have raised $10 billion so far in 2021, according to PitchBook’s data, vaulting past the $7 billion raised in the sector last year.

Part of the reason for the big jump is the mega-rounds that some grocery startups around the world raised during the first half of this year:

And that doesn’t even count all the other, smaller fundraises that have happened for companies like Food Rocket and Fridge No More.

The pandemic certainly had a hand in driving all this frothiness. Lockdowns, social distancing and general fears around catching COVID-19 pushed record amounts of people into online grocery shopping in 2020. Additionally, there are a wave of startups like Gorillas, and Gopuff and Fridge No More that are creating an entirely new type of on-demand, speedy delivery model. These companies operate dark stores in neighborhoods with a small delivery radius, promising grocery delivery in as few as 10 minutes. This is a new concept for most shoppers, and the allure of tapping a few buttons on your phone and food arriving minutes later could upend the way we buy groceries.

CNBC adds that all of this massive funding is disproportionate to the opportunity in the online grocery category. As such, there could be a wave of consolidation coming soon. This is true whenever money floods a particular sector, and it is especially worth considering given the fluctuating state of the pandemic.

Questions around how much consumers will stick with online grocery shopping once the pandemic recedes remains unclear. Vaccines have helped abate the virus, but they are rolling out at different paces around the world, and viral variants threaten to bring resurgences in case numbers. Brick Meets Click reported that online grocery shopping dropped to $7 billion in sales this past May, down 16 percent year-over-year. But that $7 billion figure is still 3.5 times higher than pre-pandemic online grocery sales.

But none of what might happen can change what’s already been done. That $10 billion has been invested, now we’ll just see which companies can bring bring returns.

Vegano Launches an All-Vegan E-Commerce Grocery Marketplace in Canada

Vancouver, Canada-based startup Vegano launched an online vegan marketplace today that will function as an e-commerce grocery-delivery storefront for plant-based food items.

For now, the service operates in the Metro Vancouver area as well as Squamish and Whistler. The company said it plans to expand to Toronto and Montreal by the end of this year in addition to heading Stateside and launching in Los Angeles. 

As its name suggests, Vegano sells 100 percent vegan foods sourced locally to each area the company serves. Up to now, this has been primarily through the Vegano’s meal kit service. Each week, users can pick three meal kits, which are delivered with pre-portioned ingredients and cooking instructions. Vegano says meals can be prepared in 30 to 45 minutes. 

The new online marketplace currently sells around 500 items from brands like No Whey Foods, Very Good Butchers, Field Roast, and others. The company said it plans to bump that number of products up to 10,000 by the end of 201. While shoppers don’t have to be existing Vegano meal kit subscribers to order from the marketplace, there is a $9.99 delivery fee for non-members. Members, meanwhile, can choose marketplace items and arrange to have them delivered on the same day as their meal kit.

Vegano says it has experienced a 150 percent growth in sales since January 2021. And little wonder, given the rise in sales of plant-based proteins around the world. Canada, specifically, got a major boost in this area last year when one of its own plant-based food producers, Merit Functional Foods, nabbed a $100 million investment from the government. Additionally, companies like Impossible and Eat Just have expanded their product lines to Canadian restaurants and retail shelves. The overall market for plant-based protein in Canada is expected to grow 14 percent annually by 2024.

Vegano closed a $4.2 oversubscribed round of Series A funding in March of this year. Funds are going towards scaling the company, and growing its marketplace and CPG offerings, in addition to accelerating product development. The company also plans to launch its own line of products to its marketplace by the end of this year.

Czech Online Grocer Rohlik Raises $119M, Its Second Nine-Digit Round This Year

Czech online grocery startup Rohlik announced today that it has raised a €100 million (~$119M USD) Series C round of funding. TechCrunch was first to report the news, writing that the round was led by existing investor Index Ventures, with participation from Partech and Quadrille Capital, who had also previously invested in Rohlik.

This funding comes just months after Rohlik raised a €190 million (~$230 million USD) Series B round in March of this year. This brings the total amount of funding raised by Rohlik to nearly $380 million, and according to TechCrunch, Rohlik is now valued at €1 billion (~$1.2 billion USD).

That Rohlik is able to raise gobs of money in such quick succession is not a surprise. Investment in the online grocery space has been frothy this year, with players like Weee!, Instacart, Xingsheng Youxuan and many more all hauling in big rounds in the first half of 2021. Driving much of this investment is the pandemic, which pushed droves of people into avoiding public spaces and buying their groceries online for either pickup or delivery.

More recently, funding has been going towards smaller, dark grocer stores that promise grocery delivery in under fifteen minutes. Companies like Gorillas, Getir and Gopuff have also raised tons of cash for rapid expansion this year. Rohlik, however, is more of like a traditional big-box online grocer offering delivery in two hours. This “slower” approach doesn’t seem to have impacted the bottom line. Rohlik told TechCrunch that its revenues in 2020 passed €300 million with more than 750,000 customers, with basket sizes between €60 and €100 per order.

The pandemic remains the big question mark looming over the entire online grocery space. While vaccines are rolling out around the world, many countries in Europe have only a third of their populations fully vaccinated as of now, and the full effect of complications like the Delta variant remain unknown. How potential resurgences in the virus could impact how people shop for groceries remains to be seen.

For its part, Rohlik has already expanded its services to Hungary and Austria, with plans to move into Germany, Romania, Italy, France and Spain.

AiFi and Trigo CEOs Weigh in on When Cashierless Checkout Will Go Mainstream

The cashierless checkout space has been on fire this year. Whether its new companies coming out of stealth, raising money or announcing partnerships, there has been no shortage of news coming out of the space.

Despite all of this activity in cashierless checkout, we are still very much in the early stages of the technology. If you want to experience the joy of simply walking into a store, grabbing what you want, and walking out while a system automatically charges your account, you need to live in a pretty major metropolis. Even then you have to seek such a store out, as autonomous stores are still very few and far between.

So for most of 2021, we’ve been in the ramping-up phase of cashierless checkout: debuts, funding, initial retail agreements. When will we get to the practical part, where cashierless checkout becomes mainstream? It’s a question I asked during two separate video chats with the CEOs of AiFi and Trigo.

AiFi is one of the startups that’s been making waves this year. It announced deals with European retail brands Wundermart and Żabka, and set up one of its pop-up, cashierless NanoStores at the Indianapolis 500 with Verizon that ran entirely on 5G. When asked for a timeline, AiFi CEO Steve Gu said, “We are on the cusp of this huge revolution.” He continued, “I think a decade is a very good number. Ten to fifteen years ago smart phones weren’t really a thing. [Cashierless checkout is] similar to smart phones, give it another ten years.”

Trigo was among the first players outside of Amazon to start building a cashierless checkout system. The company recently announced a partnership and strategic investment from German supermarket chain REWE. Trigo is also working with UK store Tesco, and Israeli supermarket chain Shufersal. I posed the same question to Michael Gabay, Trigo’s Co-Founder and CEO. He responded, “Now retailers are starting to plan their rollout. In two years there will be hundreds of stores. Next year you will find autonomous stores in any major city around the world.”

So we have two different timelines, but I think both are saying basically the same thing. We’ll continue to see more autonomous store openings around the world over the next couple of years, but we won’t reach a more mainstream point for a while. This is understandable, given the complexity of the technology, the new paradigm it creates for consumers and the rate at which large food retail chains often move. Besides, good things like cashierless checkout, come to those who wait.

Hey, New Yorkers! You Have a Bunch of Dark Delivery Grocery Stores. Are You Using Them?

Bloomberg ran a story over the weekend about Russian grocery delivery service, Samokat, expanding into New York City this August. The U.S. operations will go by the name Buyk and will use the dark-store, limited-delivery radius model that has become all the rage this year.

According to Bloomberg, Buyk already has agreements to open up a number of dark stores that will each deliver to a roughly one-mile radius. The company says that because it developed the technology three years ago and already has experience scaling in Russia, it will have an advantage over its competitors here in the States.

And it will be facing competition when it opens up in New York. By our count, Buyk will be the fourth such, small, speedy, grocery delivery service operating in the Big Apple by the end of this summer, joining Fridge No More, Gorillas and JOKR. Interstingly, Buyk and Gorillas are both foreign companies (Russia and Germany, respectively) that are looking to gain an early foothold in the U.S. early on in the speedy grocery delivery game before more homegrown competitors spring up.

My question for our New York-based Spoon readers is: Are you using these services? Granted they are really new so you may not have had time to check them out yet. JOKR just launched in June, Gorillas launched at the end of May and Fridge No More in October of last year. Given the newness of these services and their small, neighborhood-focused approach, a lot of people probably still haven’t learned about or have access to this new type of on-demand-groceries-in-less-than-fifteen-minutes service.

But at least one New Yorker, The Wall Street Journal reporter Anne Kadet, appears to be hooked after testing Gorillas, Fridge No More and JOKR. Earlier this month, Kadet wrote:

My conclusion? Whether you need a full grocery delivery or just a carton of milk for the pancake batter you’ve already started, you can’t go wrong with any of the three. They all offer a user-friendly app, no minimum delivery, decent prices and service that lives up to their speed guarantees.

As I’ve written before, on-demand speedy grocery delivery has the potential to upend the way we shop for groceries. Whether we need a last-minute ingredient, are throwing an impromptu party or are just feeling lazy, the ability to summon our food and drinks with a few taps could alter our relationship to grocery retail. This, in turn, could put pressure on existing large retailers like Albertsons and Kroger to change the way they do business. That is, if these new speedy upstarts can scale economically. Which means they’ll need a lot of customers in those small delivery areas.

Which is why I’m asking, New Yorkers, are you using any of these services? Leave a comment or drop us a line and let us know!

Google Launches a Tool to Help Americans Struggling With Food Security

Google launched its new Find Food Support website today, which aims to connect people struggling with food insecurity to resources like food banks, school lunch programs, and food pantries. Google said in a blog post that it worked with No Kid Hungry, FoodFinder, and the U.S. Department of Agriculture to capture data on food assistance programs around the country.

Google pointed out in its post today that the COVID-19 pandemic made the problems of hunger and food insecurity worse for many Americans. The number of people without access to “a sufficient quantity of affordable food” rose to 45 million in 2020, a nearly 30 percent increase from 2019.

The company also said that over the last year, Google searches for “food bank near me,” “food stamps application,” “school lunch pick up,” and other similar phrases reached “record highs.” And while anyone could type these terms into a search bar on their own, the Find Food Support tool centralizes all this information and can offer more precise results.

The tool includes a Google Map locator with which a user can find their nearest food bank, school lunch program, or other assistance program. There are currently 90,000 locations across all 50 U.S. states included, with more locations on the way. To find a nearby location, users simply type their address into the search bar and pull up relevant results. 

In addition to the locator, users can also view SNAP benefits in their area, find support for seniors, see state benefit sites, and access assistance hotlines and text lines, among other things. Those that want to donate food, time, and money can also find relevant information via the tool.

The Find Food Support tool follows other efforts in the food industry to connect food insecure individuals with resources. In April of this year, Instacart expanded its EBT SNAP payment integration to three new grocery retailers (though the SNAP payments can only be used for food, not Instacart’s delivery fees). Also in April, the USDA said it is expanding its P-EBT program to cover kids meals for summer months.