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The Spoon

Daily news and analysis about the food tech revolution

Grocery

Sustainable E-Grocer Imperfect Foods Increases Series D Round to $110M

Imperfect Foods has increased its recently announced series D round to $110 million, up from $95 million. The increased round now includes two additional investors, Hamilton Lane and Blisce, and brings Imperfect’s total funding to $229.1 million.

The company says it will increase the production capacity of its online grocery store and improve the shopping experience for customers. 

Imperfect Foods’ evolution from food redistribution service to full-stack online grocer started in 2019 when the company began offering “rescued” foods beyond produce items: meats, pantry staples, and dairy, for example. The idea was to extend Imperfect’s original modus operandi — rescuing surplus food and selling it to consumers for a discount — to any type of food, whether an avocado or an unused cheese plate rescued from an airline.

Rescuing food is one tactic in the fight against food waste. Surplus and so-called “ugly” groceries, inventory at restaurants, and, yes, cheese plates and other food items from airplanes, would typically go to the landfill, contributing to the world’s multibillion-dollar food waste problem. Redirecting that cosmetically imperfect but perfectly edible food to consumers also informs the business models of Misfits Markets, Flashfood, Too Good to Go, and several others.

More investment dollars for Imperfect and these other companies suggests U.S. consumers are receiving the concept of ugly-food redistribution more in 2021 than they have in the past. Historically, the category has been more popular in Europe. However, with online grocery projected to be 21.5 percent of total grocery sales by 2025 and awareness of our food waste problem increasing, more folks are willing to pay less for their food items, even if they come with imperfections.

Imperfect said in a press release sent to The Spoon that the Series D round, including the add-on investments, will help the company build “the most sustainable online grocery service.” Currently, users in parts of the U.S. can sign up at the company’s e-commerce storefront to receive deals on grocery delivery. Imperfect currently serves the West South Central, Midwest, and Northeast regions and the West Coast. 

Stop & Shop Pilots Locker Pickup at Boston Location

Grocery retailer Stop & Shop is testing out the use of pickup lockers at one of its Boston stores (hat tip to Supermarket News). The temperature-controlled lockers allow customers to place an order online and have that order assembled and securely kept in-store until pickup.

The new lockers have three temperature settings: frozen, refrigerated and room temperature. After placing an order, the customer selects the locker option and a 45-minute time window for pickup. Customers receive a code via text within 15 minutes of their pickup time that they scan or enter on the locker kiosk screen. A light on the locker containing their order will flash and the door will unlock, allowing customers to grab their goods and go.

Stop & Shop is charging $2.95 for locker pickup and customers can’t order alcohol or other age-restricted items. There are also size restrictions, so presumably no ordering a 20-pack of paper towels.

If this pilot is successful, Stop & Shop says it could roll them out to more stores.

Pickup lockers are poised to become a regular feature at the grocer store. Albertsons launched two different takes on unattended pickup in recent months. In October, the company launched locker pickup at select Chicago Jewel-Osco locations in Chicago. Then in January of this year, the company debuted its robotic pickup kiosk, also at a Chicago Jewel-Osco.

Grocers are experimenting with new ways to get customers their groceries faster. The pandemic has more people shopping for groceries online, and at-store pickup can be a more convenient option for customers while being less costly for a retailer than ramping up home delivery.

In addition to these nascent locker programs, we’re also seeing retailers like Walmart, Albertsons and H-E-B increased their use of in-store automated order fulfillment. Kroger is meeting its e-commerce demand by building out large automated warehouses across the country to fullfill orders.

I expect we’ll see more locker options added to grocery stores, along with the incentive to use them, throughout this year. It’s not quite as convenient as curbside pickup (i.e., customers have to get out of their cars), but in urban areas where people may shop on bike or foot, it should provide a more convenient grocery experience.

Rosie Raises $10M Series A for its Local Grocer E-Commerce Platform

Rosie, which provides an online marketplace for local grocery stores, announced today that it has raised a $10 million Series A round of funding. The round was led by Avenue Growth Partners and brings the total amount raised by Rosie to nearly $12 million.

Founded in 2012 and based in Ithaca, NY, Rosie is an e-commerce platform that allows smaller and independent grocers to sell their wares digitally. Users download the Rosie app and select from local grocery stores available in their area. Customers shop for groceries as they would through any such app and schedule a time for either pickup or delivery (this option seems dependent on the retailer).

According to the press announcement, Rosie works with “hundreds” of retailers across the country. The company said it experienced a 900 percent increase in the number of stores signed up for the service during the pandemic.

Rosie is certainly raising money at the right time. Grocery e-commerce experienced massive growth last year thanks to the pandemic. With various levels of quarantines and lockdowns happening over the past 12 months, digital grocery shopping has become a new habit for many U.S. consumers. Online grocery is projected to be 21.5 percent of total grocery sales by 2025.

Because of this boost in e-commerce, we’ve seen all the big players make moves to grab more of your grocery dollars. Walmart, Amazon, Target, Albertsons and Kroger have all made major moves to expand shopping options, increase pickup and delivery, and speed up order fulfillment.

There are a number of startups, however, working to help make sure smaller grocers don’t get left behind. Similar to Rosie, Mercato is another platform that gives independent stores the ability to sell goods online. On the delivery side, Dumpling is building out a network of small business, independent grocery delivery services.

Rosie’s news comes on the heels of online grocer Good Eggs announcing a $100 million fundraise earlier this week. Given the growth in e-commerce, expect a steady stream of similar funding announcements throughout the year.

Online Grocer Good Eggs Raises $100M, Plans Southern California Expansion

Online grocer Good Eggs announced today that it has raised $100 million in new funding. The round was led by Glade Brook Capital Partners with participation from GV, Tao Invest, Finistere Ventures, and Rich’s, as well as existing investors Benchmark Partners, Index Ventures, S2G, DNS Capital, and Obvious Ventures. This brings the total amount raised by Good Eggs to roughly $170 million.

This new funding comes after a record-breaking year for online grocery sales thanks to the pandemic. While the numbers have tapered off from their highs, the various pandemic lockdowns have lasted long enough for shoppers to form new grocery-buying habits. The online grocery market is projected to grow over the next four years and take up 21.5 percent of total grocery sales.

Bentley Hall, CEO of Good Eggs, told me during an interview this week that his company has benefited from this growth in online grocery. Hall said that in 2020 Good Eggs, which currently only operates in the California [SAN FRANCISCO] Bay Area, moved to a bigger warehouse facility, hired more than 400 new employees and saw its revenues surpass $100 million.

As part of today’s announcement, Good Eggs also said it has appointed Vineet Mehra as the company’s new Chief Growth and Customer Experience Officer. Prior to Good Eggs, Mehra was Global Chief Marketing Officer and Chief Customer Officer at Walgreens Boots Alliance. Mehra will oversee Good Eggs’ expansion into Southern California.

Hall didn’t specify where in Southern California his company would be expanding to first, only saying that by the end of 2022 Good Eggs would be serving two of the following three regions: Los Angeles, Orange County and Northern San Diego.

The boom in online grocery is bringing with it increased competition for Good Eggs. The company will face pressure from giants that are greatly ramping up their grocery activities. Walmart is adding more automation to fulfill online grocery orders faster and Amazon has already opened six physical Fresh supermarkets around Los Angeles/Southern California.

Hall indicated that the company isn’t currently looking at automation at its facility to speed up order fulfillment, but he does see a future where the company offers curbside pickup options in addition to its delivery program.

Foodspace is Using AI to Create Better CPG Data So You Find That Spicy Cheese Faster

You ever search for a food product online or at the grocery store but can’t find that exact something that perfectly matches your taste, dietary or nutritional preferences? You’re not alone. One of the big reasons searching for food products can be so frustrating is they are often bucketed under data categories that are holdovers from existing category management systems built fifteen or twenty years ago.

A new startup called Foodspace wants to eliminate this annoying experience by helping the CPG and food retail industry update their old-school category management systems with technology that makes sure that every conceivable product attribute a consumer may be searching for is documented and assigned to products headed to a physical or digital shelf.

The Boston-based startup plans on doing that by using machine vision technology that analyzes scanned images of new product packaging introduced by CPG manufacturers and uses AI to synthesize and assign attributes based on its understanding of the product packaging and label data. The attributes go beyond the typical high-level product categories such as organic or gluten free, and factors in things such as sensory preferences (creamy, grainy, etc) and consumer taste and lifestyle archetypes. All told, Foodspace’s system can assign nearly three thousand different attributes to a product.

The end result should be faster, more personalized searches for consumers. If, for example, a person who likes cheese, loves spicy food, and has a gluten allergy heads to the deli section of an online grocery store, they shouldn’t have to drill down five categories deep within the deli category to find that gluten-free habanero cheddar. With Foodspace’s AI-powered synthesis and matching of different attributes, a consumer finds a product match much faster, perhaps almost immediately, depending on the understanding the online grocer has about the shopper.

Of course, this move towards more granular, highly-consumer centric data is something that CPG and retail industries recognize is important, but have been slow to evolve away from because of the huge magnitude of switching towards systems that have thousands of product attributes. The Food Industry Association (which goes under the acronym FMI), has been working on a new framework called Shopper Centric Retailing that would update product information in the more detailed way, and this week at FMI’s annual midwinter meeting, the industry consultant who developed Shopper Centric Retailing framework, Winston Weber, announced Foodspace as a “premier” strategic solution partner to help food product companies transition their products to the new format.

In short, Weber sees Foodspace’s technology as an enabling platform to help food brands migrate to the future.

Foodspace’s technology is “helping translate products in the online space, to the benefit of brands, retailers and the end consumers,” said Weber CEO and namesake Win Weber in the press release. “Their technology is the conduit for which the Shopper-Centric Retailing business model can optimize consumer satisfaction.”

As I thought about better product data that could personalize my food product searches, I started to wonder if this could help usher in the personalized food profile concept that I’ve been thinking about ever since I heard Mike Lee talk about the idea at Smart Kitchen Summit in 2017.

Foodspace CEO Ayo Oshinaike thinks so. “The universal data set that enables that is not there,” Oshinaike told me via Zoom. “That’s the piece that’s in the middle that Foodspace is trying to solve with the breaking down of the information accuracy and how we’re able to relate products to consumers.”

Kroger Building Ocado-Powered Warehouse in Phoenix, AZ

Kroger announced on Friday that it will build out its next automated customer fulfillment center (CFC) in Phoenix, AZ. This marks Kroger’s first robot-powered warehouse in the U.S. Southwest region.

These CFCs use robotic technology from UK grocery Ocado (which Kroger is an investor in). Online orders are assembled automatically inside the center through a series of totes on rails, and packaged up for delivery.

Kroger announced a few years back that it would build out 20 such warehouses across the U.S., and has since started work on sites in a number of different locations including: Monroe, OH, Groveland, FL, Forest Park, GA, Dallas, TX, and Pleasant Prairie, WI, Frederick, MD, Romulus, MI, as well as the Pacific Northwest, Great Lakes and West Regions. The first Kroger CFC is expected to open in Monroe this year.

Ocado Robotic System For Kroger

Grocery e-commerce, which got a boost last year thanks to the pandemic, is expected to become the new normal for many shoppers. Online grocery is projected to grow over the coming years and take up 21.5 percent of overall grocery sales by 2025.

As such, grocery retailers are building out a variety of automated systems to keep up with that increased demand. While Kroger is building out these centralized delivery warehouses that serve large areas of customers, others are taking a more local approach. Albertsons built out micro-fulfillment centers in the backs of two of its Bay Area stores, and is expanding to more. And Texas grocery chain H-E-B is adding automated micro-fulfillment to a number of its locations.

Kroger’s CFCs are the opposite of “micro” fulfillment. The forthcoming Phoenix facility will be 200,000 sq. ft., and will open 24 months after groundbreaking to support customers across Arizona.

Instacart Expands Curbside Pickup Options for Retailers

Grocery fulfillment service, Instacart, announced this week it is expanding curbside pickup options for its retail partners.

Instacart currently provides curbside pickup services for more than 60 retailers, including ALDI, Food Lion, Publix, and starting this week, three Costcos in New Mexico. Instacart’s curbside pickup is available in more than 3,300 stores across 30 states today.

In its announcement, Instacart outlined the new order fulfillment and curbside pickup options for its retailers:

  • Partner Pick – Retailers use their own employees to pack and fulfill orders that come in through customized Instacart Pickup software
  • Instacart In-Store Shopper Pick – Instacart in-store Shoppers will pick and pack grocery orders for pickup
  • Full-Service – A new pilot program at select retailers where full-service Instacart Shoppers will be able to choose orders to pick, pack and stage for pickup or delivery

Last year, the pandemic pushed record number of shoppers into online grocery shopping, accelerating the need for more delivery and curbside pickup options. Even after the pandemic recedes, online grocery shopping is expected to grow and take up 21.5 percent of total grocery sales by 2025.

Curbside pickup is an attractive option for both retailers and shoppers. For retailers, it only requires setting up designated pickup areas in their parking lot and letting customers come to them. And for shoppers, the pickup option can be more convenient, fitting into their regular errand schedule and not requiring them to stay at home to wait for a delivery driver.

As such, retailers are implementing a number of different ways to get customers their pickup orders more efficiently. Albertsons, for instance, has made a number of moves including the use of robots to automate online order fulfillment at some stores, as well as trialing an automated pickup kiosk and temperature controlled pickup lockers.

With Instacart’s news this week, retailers who can’t afford fancy robotics to fulfill orders will be able to use their own employees to pick and pack, or leverage Instacart’s scalable gig workforce to do so.

It wasn’t all good news from Instacart, however. With some retailers using their own workforce for packing orders, Instacart also announced it would be laying off 2,000 employees, including it’s only unionized labor group.

Imperfect Foods Raises a $95M Series D Round

Imperfect Foods, a national online grocer that specializes in selling surplus and cosmetically “imperfect” foods, announced today that it has raised a $95 million Series D round of funding. The round was led by Insight Partners and brings Imperfect’s total amount of funding to $214.1 million.

Imperfect Foods (formerly Imperfect Produce) aims to reduce waste in our current food system by “rescuing” so-called ugly foods — think misshapen carrots or potatoes — and selling them directly to consumers at a discounted prices. Without these rescues, such food would go straight to the landfill, further contributing to the world’s multibillion food waste problem.

In 2020, Imperfect transitioned from a regional produce delivery service into a national full-service grocer, expanding its catalog to include pantry items, meat, seafood, dairy and other products. Items sold are surplus, cosmetically imperfect, or sourced from sustainable partners. Some examples from last year include buying up allotments of cheese plates going unused by airlines and popcorn kernels from empty movie theaters. Imperfect also released a holiday snack box at the end of 2020 that featured cosmetically imperfect but otherwise perfectly edible snack items.

Imperfect said in today’s press announcement that it has a growing customers subscriber base of more than 350,000 customers. But it’s not alone in the “ugly” food space. Misfits Market, which does much the same thing, has raised more than $100 million in funding.

That money is flowing into Imperfect and Misfits is not too much of a surprise. The global pandemic pushed record numbers of people into online shopping. Even though vaccines are now out, and we may be seeing the pandemic recede, grocery e-commerce is projected to remain sticky with consumers and grow to gobble up 21.5 percent of overall grocery spending by 2025. So having an established grocery delivery infrastructure right now is far from an imperfect business idea.

Stor.AI’s Software Now Allows Grocers to Accept SNAP Payments Online

Stor.AI (formerly Self Point), which makes digital commerce software for grocery stores, announced a new feature this week that allows stores of any size to accept online payment for Supplemental Nutrition Assistant Program (SNAP) participants.

The new capability allows stores to accept payments through Electronic Benefits Transfer (EBT) payment cards, split payments across multiple methods, and add virtual tags to an online store showing which items are EBT-eligible.

Up until a couple years ago, SNAP participants were unable to use their EBT card to shop for groceries online, exacerbating digital inequality. In 2018, a startup called All_ebt helped SNAP participants shop for groceries online through a combination of Facebook Messenger and Virtual Visa cards.

The U.S. government got involved in April of 2019, when the USDA launched a pilot program allowing SNAP participants to grocery shop online. That pilot involved a limited number of states and retailers like Amazon and Walmart.

When the pandemic hit the U.S. last year, people were encouraged to stay home and take fewer trips to the grocery store. The inability for SNAP participants to shop for groceries online and forcing them to shop in stores made the issue not just about inequality, but also safety.

Thankfully, SNAP-enabled shopping online got a big boost in 2020, with Kroger accepting SNAP for pickup, Amazon and Walmart expanding EBT payment acceptance across the country, and Instacart partnering with ALDI for grocery delivery to SNAP participants.

With today’s Stor.AI news, even more SNAP participants will be able to buy groceries online. Smaller, neighborhood stores of all shapes and sizes will now be able to accept EBT payments and serve more customers.

These moves, of course, don’t eliminate the inequalities present in our current food system. They are, however good steps towards bridging the digital divide and allowing more people to benefit from the modernization of grocery retail.

Kroger Using Smart Shopping Carts Powered by Caper

With the news last week that grocery giant, Kroger is using Caper’s technology, smart shopping carts are now officially a thing to watch out for.

Winsight Grocery Business broke the news last week that Kroger has quietly started testing its new “KroGo Powered by Caper” smart shopping carts at a store in Kroger’s hometown of Cincinnati, Ohio. The high-tech shopping carts feature a touchscreen, barcode scanner and scale that allow for a more automated checkout process.

Shoppers scan the barcode of items they place inside the cart, which automatically keeps track of everything being purchased (there are safeguards in place is a user tries to put something in without scanning it). Produce and other fresh items are weighed on the built-in scale on the cart. If an item is removed, the user manually deletes it from the running list on the touchscreen. KroGo users have a separate checkout station that communicates with the cart to automatically tally up the total bill shoppers pay.

Interest in this type of automated checkout has accelerated thanks to COVID-19 pandemic. Automated checkout removes the cashier from the grocery shopping experience, eliminating a vector of human-to-human interaction. This is particularly important when it comes to keeping the spread of germs in check, given how many different people a cashier interacts with on a daily basis.

But Caper Co-Founder and CEO, Lindon Gao, told me by phone this week that his company’s smart cart technology got a boost from another source: his competition. “Amazon Dash has really brought this concept more to the market,” Gao said, speaking of Amazon’s own smart cart tech, “It has validated what we have done all along.”

In addition to adapting to new pandemic realities and the shot of validation from Amazon, the retailers Caper are working with also want to enhance the shopper’s experience. And according to Gao, Caper’s built-in touchscreen on the cart does just that.

“The screen is the holy grail,” Gao said. That’s because shoppers don’t need to download an app in order to use the automated checkout. Everything is there on the cart. Additionally, Gao said that people most people don’t shop while looking at their phones, but the on-cart screen travels with them up and down the aisles.

The screen also provides new advertising and promotional real estate for the retailer. A store can advertise specials, upsell companion items (frozen pizza + ice cream!), and push out possible recipes based on what’s in the cart.

Moving automated checkout to the cart can also mean faster adoption by retailers. Other cashierless checkout solutions like those from Grabango and Zippin require stores to be retrofitted with cameras and sensors. That can take time and be costly, especially for larger stores. A retailer adopting smart carts just needs to deploy new carts and don’t require shoppers to download an app to make the automated checkout work.

As such, there are actually quite a few players in the smart cart space. In addition to Caper, Veeve, Storewide Active Intelligence, Tracxpoint, and Imagr, all have various takes on the technology coming to market.

Given all this activity, smart shopping carts are definitely a thing we’ll be watching out for this year.

Weezy Raises $20M Series A for Fast Grocery Delivery

UK-based speedy grocery delivery service Weezy has raised a $20 million Series A round of funding. TechCrunch was first to report the news, writing that the round was led by New York-based Left Lane Capital, with participation from DN Capital, existing investors Heartcore Capital and angel investors. Today’s funding announcement follows a $1 million pre-Seed round raised by Weezy in August of last year.

Weezy promises grocery delivery in as little as 15 minutes, thanks to its network of smaller fulfillment centers that are nestled within neighborhoods, closer to shoppers. Orders are then delivered via a network of its delivery people riding electric scooters or bicycles.

Weezy operates in London and will use the cash to expand to more neighborhoods in that city and across the U.K. As TechCrunch notes, the presence of a U.S.-based lead investor could indicate that a hop across the pond to the states could be in the offing.

Speedy European grocery delivery appears to be a sector that’s heating up for venture capital. Last month, Germany-based Gorillas raised $44 million for its similar, smaller fulfillment center approach to grocery delivery.

Here in the U.S. we see companies such as Fabric building out small automated grocery fulfillment centers and DoorDash building out a network of dark convenience stores that are delivery only.

It’s no wonder that money is flowing into online grocery services. The pandemic pushed record amounts of people into e-grocery shopping last year. With the virus still raging across the globe and subsequent lockdowns, online grocery shopping remains sticky with consumers, who are now habituated to new purchasing behaviors.

Walmart to Test Grocery Delivery to Smart Home Lockers

Walmart announced today that it will start testing grocery delivery to smart lockers that sit outside a person’s home. The pilot program will begin this Spring in Bentonville, Arkansas.

The smart lockers are built by Home Valet and feature three temperature zones (frozen, refrigerated and fresh). When a grocery delivery order is placed with Walmart, the delivery driver unlocks the box with a smart device, and places the groceries inside. Customers unlock the box when they return home and retrieve their items.

This smart locker approach could actually benefit Walmart shoppers in a few ways. First, customers get more flexibility because they don’t need to be/stay at home when their delivery is scheduled. Second, it secures groceries away from the elements and potential porch thieves. And finally, this delivery method is contactless, which will continue to be important even after the pandemic recedes. (Bonus benefit: Dropping off groceries to a box outside your house is a lot less creepy than Walmart’s idea of having a delivery driver enter your house when you aren’t there.)

But the smart locker is just the latest aggressive move by Walmart to make its delivery more convenient as it dukes it out with other retailers like Amazon and Kroger for your grocery dollar. In addition to launching its Walmart+ delivery service last year, Walmart is also testing grocery delivery via drones and autonomous vehicles.

Walmart can’t afford to rest on its laurels. Online grocery shopping is projected to hit $250 billion by 2025, accounting for 21.5 percent of all grocery sales. As such, everyone in the space is testing new programs to get you your groceries faster. Kroger is set to open the first of its robot-powered automated fulfillment centers this year. Albertsons recently debuted an automated curbside pickup kiosk. And Amazon will drop off groceries inside your garage when you’re out.

Walmart’s smart locker reminded me of a patent that Amazon was issued a couple years back for a robot that would live at your house, and then autonomously venture out to retrieve packages from a nearby pickup hub.

This might be a little overkill, but it’s not hard to imagine a time when Walmart’s smart locker sprouts wheels and goes to pick up your groceries. Walmart is already automating the middle-mile for delivery, so it’s not a big mental leap for your grocery being autonomously driven from a fulfillment center to a neighborhood hub. Once your order arrives at that hub, your smart locker drives over to get your groceries and drives them back to your doorstep to await being put in your kitchen.

That particular vision is still a ways away, but given how much retailers are investing in delivery infrastructure, it’s not that far off in the future.