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The Spoon

Daily news and analysis about the food tech revolution

Grocery

Ocado Invests £10M in Oxbotica to Develop Self-Driving Vehicles

UK-based grocer Ocado announced today that it has invested £10 million (~$13.8M USD) in autonomous vehicle (and fellow UK) company Oxbotica. The investment is part of an broader, multi-year deal to develop self-driving hardware and software.

For Ocado, autonomous vehicle tech could have a number of uses, from self-driving warehouse vehicles to delivery vans to smaller autonomous robots.

That Ocado bought Oxbotica to bring autonomy further up and down its tech stack makes a lot of sense. The grocer already makes autonomous smart warehouses filled with robots zipping along grids assembling items for grocery orders. It’s natural to extend that autonomy throughout its warehouses and into delivery vehicles. It’s easy to envision robots picking and packing grocery orders, which are then handed off to warehouse robot that places it in a self-driving delivery van that drives off to a customer’s house.

Ocado has also shown that it’s not shy about spending money on autonomous systems. Last year purchased Kindred Systems and Haddington Dynamics to enhance its robotics capabilities. And prior to that it led the $9 million Seed round in cafeteria robot company Karakuri.

Ocado’s investment in Oxbotica actually caps off what has been a big week for autonomous vehicles. Udelv announced its new self-driving Transporter platform. Domino’s tapped Nuro to make autonomous pizza deliveries in Houston, Texas. And Walmart announced it had invested in self-driving startup, Cruise.

It’s also been a big news week for Ocado. The company’s technology powers Kroger’s Customer Fulfillment Centers, the first of which opened up in Monroe, Ohio this week. For its part, Kroger has dabbled in self-driving delivery before through a partnership with Nuro.

If you want to learn more about robotics in grocery, be sure to attend ArticulATE, our food automation virtual summit happening on May 18. There will be a number of autonomous vehicle companies as well as Karakuri speaking!

Survey: Online Grocery Sales Back up to $9.3B in March, Pickup Remains Dominant

Online grocery sales were back up in March, following a drop in February, according to new data released today by Brick Meets Click/Mercatus. Grocery e-commerce in the U.S. hit $9.3 billion in sales (the same as January), with more than 69 million households placing an average of 2.8 orders in March.

Brick Meets Click also highlighted the continued dominance of curbside pickup as the main preference for online grocery shoppers. From the Brick Meets Click press announcement:

“Over the last 12 months, consumers’ dramatic shift to online grocery shopping has solidified, with curbside pickup attracting the largest share of monthly shoppers at 53% compared to ship-to-home and delivery,” said Sylvain Perrier, president and CEO, Mercatus. “In fact, pickup continues to have stronger consumer demand across all market types compared to delivery. Those brick-and-mortar chains that have invested in optimizing pickup services likely will continue to benefit from the high repeat intent rate as indicated in the data.”

The dominance of curbside pickup can be partly attributed to the fact that big retailers have invested so much in it. From expanded drive-up options to smart lockers to automated curbside pickup kiosks, retailers have increased the availability and convenience of curbside options.

One area of online grocery shopping that saw a drop from the same time last year was the ship-to-home category, which lost 27 percent of its monthly users. In addition to local retailer pickup and delivery options becoming more robust, the first wave of the pandemic last year saw a lot of panic buying and inventory outages. As such, people turned to whatever outlet they could find to get food delivered to their homes including CSAs and online meat providers.

Of course, the question we’ve been asking for a few months now is what does the future look like for online grocery? More people are fully vaccinated and able to return to a (relatively) normal life outside of their homes. Have their pandemic-induced behaviors changed for good when it comes to grocery shopping? Or do they miss roaming the aisles. The real numbers to watch will probably be the stats from May when the two week wait times after being vaccinated really start to kick in.

Kroger Officially Launches its First Robotic Customer Fulfillment Center

Grocery giant Kroger officially opened the first of its automated Customer Fulfillment Centers today in Monroe, Ohio, just north of Cincinnatti. Kroger had soft-opened the facility at the beginning of March, but today marks it’s official debut.

The Monroe CFC is 375,000 square feet and is powered by Ocado‘s automation technology. The CFC features 1,000 robots scurrying around carrying food items on giant 3D grids, managed by a proprietary air-traffic control system. When an order comes in, the robots assemble the items, which are bagged and placed in a temperature-controlled van and sent out for delivery. The CFC currently services a 90-mile radius from the hub location, though that radius will increase as spokes are set up that can extend that reach.

Kroger first announced its automated CFC initiative back in 2018, well before the pandemic pushed record numbers of people into grocery e-commerce and delivery. The opening of Kroger’s first CFC couldn’t have come at a better time for the company. In a press announcement released today, Kroger said that 2020 saw its e-commerce business scale to more than $10 billion with a record digital sales increase of 116 percent.

Online grocery shopping is predicted to hit $250 billion by 2025, taking up 21.5 percent of total grocery sales. As such, the entire grocery sector has been adapting to this e-commerce shift. Stalwarts like Kroger, Alberstons and Walmart have all invested heavily in automation and order fulfillment. Amazon is building out its own chain of physical grocery stores. And there has been a massive funding spree since the start of the year on grocery related startups.

The Monroe CFC is just the first such facility Kroger is opening. The company says the next CFC to open will be in Groveland, Florida this spring. After that, the company will open CFCs in Atlanta, Georgia; Dallas, Texas; Frederick, Maryland; Phoenix, Arizona; Pleasant Prairie, Wisconsin; Romulus, Michigan; and centers in the Pacific Northwest and West regions.

If you are interested in the future of grocery automation, be sure to attend ArticulATE, our virtual food robotics summit on May 18!

Mercato Raises $26M to Help Indie Grocers Sell Online

Mercato, an online platform that helps smaller groceries establish e-commerce stores, has raised a $26 million Series A round of funding. TechCrunch was first to report the news today, writing that the round was led by Velvet Sea Ventures with participation from Team Europe and returning Seed investors Greycroft and Loeb.nyc.

As we have covered extensively over the past year, the pandemic accelerated consumer adoption of online grocery shopping. And while the number of people using grocery e-commerce has come down from the record highs of last summer, the most recent data from Brick Meets Click showed that U.S. consumers spent $6.1 billion on grocery pickup and delivery in February of 2021.

As a result, the big retailers in the space have ramped up their spending to keep up with demand and eventually encourage online grocery shopping. Giants like Walmart and Albertsons have and are investing in automated e-commerce order fulfillment and expanding curbside pickup and delivery options.

That’s great for big, publicly traded grocery retailers, who have the money to implement multi-faceted online shopping experiences. But what about the smaller, local, independent grocers without a huge market cap? That’s where Mercato comes in.

Mercato’s platform handles all the operational functions of running an online store for the smaller grocer. Mercato takes care of order management and processing, online marketing and even connects stores with a network of delivery drivers across the country. During the pandemic’s first big wave last year, Mercato launched a rapid on-boarding process that it now says can get grocers online in as little as 24 hours.

Mercato told TechCrunch that it has 1,000 merchants across the country on its platform, up from 60 in March of last year. The company said it will use its new funding to expand its team and its data analytics services.

Trax Raises $640M for its Computer Vision-based Grocery Inventory Management

Trax, a computer vision company that helps physical retailers and CPG companies with inventory management, announced today that it has raised a $640 million Series E round of funding. The round was led by SoftBank Vision Fund 2 and funds management by existing investor BlackRock. Other investors include OMERS and Sony Innovation Fund by IGV. This brings the total amount of funding raised by Trax to more than $1 billion.

The Trax system uses a combination of camera installations, shelf-scanning robots and computer vision to monitor products on store shelves. Product Images are sent to Trax’s cloud-based machine learning system to analyze and identify when inventory is low on store shelves, or when items are misplaced.

Trax is also used by CPG companies to help them audit store shelves to ensure they are getting the placement they paid for.

Trax, which launched its Retail Watch service in the U.S. back in October of 2020, isn’t the only company using computer vision to help stores manage inventory. Cashierless checkout systems like Grabango and Trigo promise similar, constant shelf monitoring and visibility through camera installations and advanced computer vision. And robots from Simbe and Bossa Nova offer less installation-intensive solutions.

Trax is certainly striking while the funding iron is hot. Grocery related startups have raised a bunch of money in 2021. In addition to the raft of grocery delivery startups that have secured big raises, companies that are helping physical grocery retailers are also raking in cash. Stor.AI, which helps grocers deploy online shopping services, and Shelf Engine, which helps grocers with inventory forecasting, both raised significant rounds last month.

Takeoff Technologies to Have 40 Automated Fulfillment Centers Operating This Year

Takeoff Technologies launched its first grocery automated fulfillment center in the fall of 2018. Needless to say, a lot has happened in the grocery space since then, including a global pandemic that abruptly pushed record amounts of grocery shopping online. To keep up with this wave of grocery e-commerce, more grocers have accelerated and adopted the use of automated fulfillment centers like Takeoff’s.

We last checked in with Takeoff during the first wave of the pandemic in 2020. At that time, the company had six centers operational and another 20 under construction. Since it has almost been a year since then, we checked back in with Max Pedró, Co-Founder and President of Takeoff Technologies this week. Pedró said that Takeoff now has 13 sites that are live now, and will have more than 40 by the end of this year. Takeoff has partnerships with retailers such as Albertsons, Ahold Delhaize, and Carrefour, with sites running on both coasts of the U.S., as well as in Canada, Australia and in Dubai.

The latest market survey from Brick Meets Click showed that grocery e-commerce dropped between January and February of this year. Usage fell particularly among those over 60, who were among the first groups of people to get vaccinated. Online grocery shopping is expected to go through a market correction this year as vaccinations allow people to move more freely outside of the home.

But Pedró believes that customers have developed new habits after a year of lockdowns and e-commerce is here to stay. He’s not alone in that belief. Mercatus forecasts grocery e-commerce will hit $250 billion by 2025, taking up 21.5 percent of total grocery sales.

Obviously, Pedró has a horse in the automated fulfillment race, but he outlined his reasoning for why he believes the technology is here to stay. First, Pedró said that automated fulfillment makes the online grocery business model more economical. Part of the reason it can become more economical is because automated fulfillment creates more throughput — grocers can pick and pack more orders, faster. Finally, Pedró said that automated fulfillment allows independent grocers to better compete with giants like Walmart and Amazon, which offer free two-hour delivery to their members.

Along with all this opportunity, Takeoff is also facing increased competition in the automated fulfillment space. Swisslog is providing fulfillment to regional Texas grocer H-E-B. Walmart has enlisted the help of Alert Innovation, Dematic and Fabric to build out dozens of automated fulfillment centers. And Kroger is starting to open up its own, standalone automated Customer Fulfillment Centers powered by Ocado.

There are still questions over how many customers will continue to use e-commerce for groceries after they’ve been vaccinated, and the overall efficacy and economics of automated fulfillment. But for now, it appears that Takeoff’s technology is taking off with retailers this year.

If you’re curious about the future of robotics in grocery, be sure to attend ArticulATE, our virtual food automation conference on May 18!

Grocery Apps Remain Popular with VCs as Everli, Nice Tuan and Zapp Raise Money

Given the frothy state of funding, it feels like there is a giant online supermarket stocked full of grocery-related startups and VCs are just wandering the aisles, filling up their baskets with companies promising to revolutionize the way we get our food.

At the beginning of March, we wrote about a single 12-hour period in which four grocery startups got funding (Instacart, Crisp, Rohlik and Flink). And it seems that VCs were just getting warmed up. Since that day, we’ve seen a number of grocery startups raise money including Stor.AI, Fridge No More, Jiffy, Shelf Engine, Weee!, Gorillas, Getir and GoPuff.

That list has grown once again this week as three more grocery startups have raised rounds of funding:

Everli, which is kind of like a European Instacart facilitating grocery pickup and delivery from local stores, raised a $100 million Series C round of funding led by Verlinvest (hat tip: TechCrunch).

Nice Tuan, a Chinese app that focuses on community grocery shopping received a $750 million investment round led by Alibaba Group Holding and DST Global (hat tip: Deal Street Asia).

Zapp, a London-based operator of delivery-only stores has received an undisclosed round of funding, TechCrunch reports from multiple sources.

There are couple things of note from this round of news. First is that European speedy delivery startups remain popular with investors right now, especially London-based ones. Zapp faces competition from the likes of Weezy, Jiffy, Getir and Gorillas.

Second is that these funding rounds are no joke. Nice Tuan’s $750 million haul follows fellow Chinese grocery app Xingsheng Youxuan’s $2 billion funding round in February. In the U.S., goPuff raised $1.5 billion, In Europe Gorillas raised $290 million and Getir raised $300 million (evidently startups starting with the letter “G” are also popular).

How long with this frothiness continue? That’s unclear. Will startups like Weezy or Fridge No More, whose funding is only in the double digit millions feel pressure to raise more to compete? And what about the overall grocery delivery space? The pandemic forced record amounts of grocery e-commerce, but a market correction is predicted for this year bringing those numbers back down to earth. But many of these startups are looking to change the way we grocery shop altogether by turning it into more of an always-on utility. Will people adopt speedy delivery as their new norm?

We don’t have a particular crystal ball for that, but we at The Spoon will chronicle it all as the market unfolds.

Google and Albertsons Partner for Shoppable Maps, Predictive Grocery Lists and More

Google and Albertsons announced a wide-ranging, multi-year partnership today that will see a range of high-tech features added to consumer grocery shopping across more than 2,200 Albertsons stores.

According to the press release, Albertsons has been working with a number of different teams across Google over the past year. In a corporate blog post, also released today, Google outlined new grocery delivery and pickup features that have been integrated into Google Search and will be coming to Google Maps later this year:

Delivery and curbside pickup have grown in popularity during the pandemic — they’re convenient and minimize contact. To make this process easier, we’re bringing helpful shopping information to stores’ Business Profiles on Maps and Search, like delivery providers, pickup and delivery windows, fees, and order minimums. We’re rolling this out on mobile Search starting with Instacart and Albertsons Cos. stores in the U.S., with plans to expand to Maps and other partners.

Other fruits of this partnership weren’t specified, but the companies said forthcoming innovations include: Shoppable maps with dynamic hyperlocal features, AI-powered conversational commerce, and predictive grocery list building.

That Albertsons has hopped into the virtual shopping cart with Google actually makes a lot of sense. The pandemic pushed record numbers of people into online grocery shopping last year, and while those online sales figures have cooled recently, grocery e-commerce is predicted to hit $250 billion by 2025. So integrating high-tech features from a trusted and ubiquitous brand like Google to grab more of those online dollars is a no brainer.

As a result of all this money flowing into grocery e-commerce, retailers are locked in a fierce battle to be your grocer of choice. A partnership with Google isn’t a nice to have — at this point it’s a need to have for Albertsons. Albertsons is up against deep-pocketed giants like Amazon, which is building out its own chain of physical supermarket stores, and Walmart, which is expanding its delivery options and adding more automated fulfillment. Albertsons could also find it is getting squeezed on the smaller end by a cohort of new, urban grocery startups that promise delivery in 10 minutes.

But Albertsons isn’t being caught flat-footed. It has proved itself to be a very tech-forward retailer, and its innovation has only accelerated since the pandemic. The grocer is expanding the use of automated micro-fulfillment, piloting smart lockers and robotic curbside pickup kiosks, and is even testing out remote controlled grocery delivery robots.

For its part, Google continues to be a bit of a sleeper in the foodtech world. Over the past few years, the company has been rolling out a number of features that transform the way we find, order and get our food delivered.

While we don’t know the full extent of what its partnership with Google will bring, these first steps are a smart play by Albertsons. By getting inserted into Google Search and Maps results, Albertsons can more seamlessly integrate with consumers’ everyday routine, and create a more frictionless shopping experience for customers.

Turkey: Getir Raises $300M to Get People Groceries in Ten Minutes

Turkish on-demand grocery delivery startup Getir announced on Friday that it had raised a $300 million Series C round of funding. The new round was led by Sequoia Capital and existing investor Tiger Global, and comes just months after Getir finalized a $128 million Series B investment round. The company has raised $470 million to date.

Getir is part of the current crop of startups that promise super speedy grocery delivery. Getir operates a number of smaller distribution centers that are set up in different neighborhoods within a city. Users order items via an app and couriers are dispatched to complete deliveries in roughly 10 minutes.

In February, Getir expanded to offer delivery in London, and the company says it will use its new funding to expand into The Netherlands, Germany and France. But it will face competition as it does so, as a number of speedy grocery delivery startups in Europe have received funding recently. In London, Weezy and Jiffy offer similar services. And in Germany, Gorillas just closed a $290 million round last week for its own Euro expansion.

As we covered last week, all of these startups (plus the ones in the U.S. like GoPuff and Fridge No More) are all angling to change the way consumers view grocery shopping. By providing delivery in 10 minutes or less, companies essentially turn groceries into a utility that is available on tap. Shoppers could literally get groceries multiple times a day to fulfill a need or even just on a whim because they want something.

It’s still very early stages for all of these startups however, and it remains to be seen if and how customers will respond to such a service, and how far these types of services can scale. Can speedy delivery only work in dense urban environments? And as more players compete, how many micro-groceries stores does one neighborhood need? Given the rate of funding in the space, I assume we’ll find out pretty fast.

Germany: Gorillas Raises $290 Million for its Dark Grocery Store Chain

Gorillas, which operates a chain of dark grocery stores that offer fast delivery, has raised a $290 million Series B round of funding, according to TechCrunch. The round was led by Coatue Management, DST Global, and Tencent, with Green Oaks, Fifth Wall, Dragoneer, and Atlantic Food Labs also participated. Gorillas raised a $44 million Series A round of funding in December of 2020.

The Berlin-based Gorillas is among a cohort of startups building out small, delivery-only grocery stores deep inside residential neighborhoods. Thess dark stores carry a limited inventory (that can be customized per neighborhood location), and have a limited delivery radius, so orders can be fulfilled and dropped off, usually in less than fifteen minutes. Gorillas currently operates stores in more than 12 cities across Europe including Berlin, Munich, Amsterdam and London.

A funding round this big and this fast following a recent Series A for a grocery related startup is not at all surprising. As noted, Gorillas is just one player in the speedy grocery delivery space. Similar startups in Europe that have recently raised funding include Weezy, Jiffy, and Flink. Here in the U.S., DoorDash is building out a chain of DashMart stores, Fridge No More is making deliveries in New York City, and GoPuff, which delivers many household items in addition to groceries, raised $1.5 billion this week.

As we have written a lot lately, the big question for these stores is whether they can scale. On paper, the ability to get last-minute groceries delivered in just minutes is great. But it also needs a certain population density to make the economics work, and we have yet to see those economics scale on a national level. If Gorillas can use its funding to do so, then it could become, well, an 800 lbs gorilla in the space.

iFoodDS Raises $15 Million for Fresh Food Supply Chain Management

iFoodDs, a startup that provides fresh food supply chain management software, announced today that it has raised a $15 million Series A round of funding led by Insight Partners.

Based in Seattle, Washington, iFoodDS has developed a cloud-based system to give retailers, foodservice chains, processors, shippers, packers and growers more visibility into the fresh food supply chain. The iFoodDS platform helps supply chain constituents to better track food safety, traceability, quality management and transparency.

In May of last year, iFoodDS acquired HarvestMark and its food traceability and quality inspection solutions. Terms of that deal were not disclosed.

iFoodDS’s funding fits into a larger trend around improving supply chain management, and we’ve seen a number of startups tackling this issue from a different angles. Varcode uses temperature sensors and blockchain to validate food as it moves through the cold chain. Earlier this month, Shelf Engine raised $41 million to help retailers better forecast and order fresh food. And the non-profit, GS1 is working with companies like IBM Food Trust and Ripe.io to develop interoperable food traceability systems.

Shortcomings in the U.S. supply chain were laid bare last year as the COVID-19 pandemic and subsequent panic buying and hoarding left supermarket shelves empty across the country. Enabling better insights into the supply chain not only helps alleviate these types of product outages but can also help reduce food waste. By bringing enhanced management tools to the supply chain, food can be routed to destinations more efficiently, monitored throughout the process, all while ensuring authenticity and quality.

Cashierless Checkout Startup Imagr Expanding into Europe, Says Pilots Cost €65,000

New Zealand-based startup, Imagr announced today that it is expanding its cashierless checkout services into Europe and opening an office in Amsterdam, The Netherlands next month.

Imagr is part of a rising cohort of cashierless checkout startups that create more automated retail experiences for shoppers. Imagr’s particular solution uses smart baskets and shopping carts equipped with cameras to recognize items placed inside. The carts tally up everything the shopper keeps and charges the user automatically in conjunction with the Imagr mobile phone app.

Up until now, IMAGR had focused on the Asia-Pacific region, providing its checkout technology to three stores across Aukland, New Zealand and Tokyo and Osaka Japan. According to a press release emailed to The Spoon, Imagr has finalized deals with two European retailers.

In addition to its European expansion news, Imagr provided something we haven’t heard from other cashierless checkout startups: pricing information. Imagr says that full store system pilots of its smart cart solutions start at €65,000 (~$77,600 USD).

Smart carts is its own robust subsector of the burgeoning cashierless checkout market. Smart carts don’t require the physical installation of cameras into the stores themselves. Instead, a retailer swaps out their existing shopping carts for the more high-tech smart carts. Because there is no buildout into the store, smart carts could prove to be appealing to retailers looking to experiment with the technology. Other players in the smart cart space include Caper, Veeve, Tracxpoint, Storewide Active Intelligence, and Amazon.

Cashierless checkout has had a busy year so far in 2021. AiFi partnered with European convenience store chain Wundermart to build out 1,000 stores. And here in the U.S. Standard Cognition raised $150 million for its solution.

With the global pandemic pushing retailers to create more contactless retail experiences, we’re going to see a lot more expansion announcements from cashierless checkout startups around the world.