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The Spoon

Daily news and analysis about the food tech revolution

Grocery

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.

Online Grocery Weee! Raises $315M Series D Round

Weee!, an online grocer with a focus on Asian and Hispanic communities, announced today that it has raised a $315 million Series D round of funding. The round was led by existing investor DST Global, with participation from new investors including funds managed by Blackstone, Arena Holdings, and Tiger Global. Weee! has raised more than $415 million in funding in total.

Founded in 2015, Weee! initially offered products for the Asian community, but the company recently added Hispanic foods to its roster. In its press announcement today, the company referred to itself as an “Ethinic Grocer,” and said it serves 14 key regions across the country. According to Weee! website, the company offers more than 3,500 products and has fulfilled more than 8.8 million orders.

Weee!’s funding comes during what appears to be salad days for investment in grocery-related startups. A raft of startups in the space have raised big funding amounts just since the start of the year. Part of the reason for all of this frothiness, of course, is the pandemic. With restaurants closed, and various lockdowns, record numbers of people turned to buying food online last year and retailers of all sizes scrambled to keep up.

What’s worth noting with Wee!’s funding is how the online grocery market is starting to segment. In addition to more general grocery startups like Instacart and Good Eggs getting funded, we are starting to see more focused startups raise lots of money too. Weezy and Fridge No More create hyperlocal stores that offer fifteen minute delivery, Imperfect Foods focuses on food surplus and rescue, and Weee! focuses on specific demographic audiences.

The question now is whether that is all money well spent. We’ve already seen a drop in the use of grocery e-commerce between January and February of this year. As more people get vaccinated and feel free to move about more, will they stop their online food buying habits in favor of getting out of the house and back into the store?

Wee!’s focus on serving Asian and Hispanic communities could actually help it weather any potential downturn in the grocery e-commerce market. By offering delivery of items that may not be stocked at general grocery stores in suburbs across the country, Weee! could become a go-to resource for Asian and Hispanic communities looking for particular types of food, but unable to get it at their local retailer.

With its new funding, Weee! says it will continue to add products and features and expand nationwide, with plans to reach 30 cities across North America by 2024.

New Speedy Grocery Delivery Startup, Jiffy, Raises $3.6 Million

Jiffy, a new superfast grocery delivery service, announced today that it has raised £2.6 million ($3.6 million USD) in Seed funding. The round was led by LVL1 Group, with participation from AddVenture, TA Ventures, Vladimir Kholiaznikov, and angel investors Oskar Hartmann, Alexander Nevinskiy and Dominique Locher.

Jiffy’s hyperlocal stores will carry roughly 2,000 SKUs and offer 15-minute delivery with no minimums. Jiffy will launch this month in the London neighborhoods of Westminster, Waterloo, Lambeth, Battersea, Clapham Town, Shoreditch, Bethnal Green, Hackney, Whitechapel, Stepney Green, with another 20 stores planned to roll out across the U.K. later this year.

Rather than building out big or even medium-sized grocery stores, hyperlocal markets are small, delivery-only stores that are tucked away deep inside a neighborhood. They carry a limited inventory and have a small delivery radius, ensuring that orders can get to homes in minutes. Additionally, being hyperlocal means that products carried can be tailored to that particular neighborhood, making inventory management easier.

Hyperlocal delivery markets are becoming quite the trend. Jiffy is just the latest in a string of funding announcements for such companies. Weezy, also in the U.K., raised $20 million in January. Germany-based Gorillas raised $44 million at the end of last year. And just this week, Fridge No More raised $15.4 million for its hyperlocal stores in New York City.

The hyperlocal model is better suited to big cities, where a large population lives in a small delivery radius. Plus, delivering in compact urban neighborhoods means that orders can be fulfilled by someone riding a scooter or bike, rather than driving a full-sized car in traffic (and then needing to find parking).

If they catch on, hyperlocal markets are poised to change the way people shop for food (at least in cities). If they work as promised, they are essentially groceries-on-demand and reduce the need for weekly stocking up trips to the market.

Given the rate these types of stores are rolling out, we’re sure to find out if the hyperlocal approach works in a Jiffy.

Survey: Online Grocery Sales Drop 14 Percent in February to $8B

Online grocery sales fell to $8 billion in February, dropping 14 percent from January’s $9.3 billion, according to new data released today from the latest Brick Meets Click/Mercatus Grocery Shopping Survey.

Brick Meets Click said the biggest factor in February’s decline was that fewer households bought groceries online. Monthly active users fell to 60.1 million in February, a 12 percent decrease from the 69.7 million in January. A lot of that drop off came from people over 60 years old, which could be a result of increased vaccinations in that age group. As more people get vaccinated, there will be more confidence in going out and into stores in-person.

In addition to fewer households placing orders, there were also just fewer orders in general. Online grocery shoppers averaged 2.7 orders in February, down 6 percent compared with 2.8 orders in January. However, Brick Meets Click said that most of this decline was in the ship-to-home segment. The combined delivery and pickup segment was only down 4 percent from January to February.

One bit of good news is that there was a four percent increase in average order value in February. Online grocery shopping households spent an average of $82 in February on orders received via delivery or pickup (that’s 55 percent more than orders placed for ship-to-home service).

Speaking of delivery and pickup, that segment nabbed $6.1 billion in February, gobbling up more than three-quarters of the total online grocery market for the month. Within that, curbside pickup accounted for nearly half of all online grocery sales in February.

Brick Meets Click’s latest data comes on the heels of a blockbuster quarter for online grocery related funding. Grocery-related startups around the world have been pulling in millions for faster delivery, e-commerce transition and market expansion. Is all this new money for naught as vaccines continue to roll out, freeing up people to leave their homes to shop in-person?

Not necessarily. Industry analysts have been expecting this type of market correction since last year. However, online grocery is projected to grow and eventually reach $250 billion, taking up 21.5 percent of total grocery sales by 2025.

The more immediate question for investors and even retailers pouring money into e-commerce solutions is whether to focus on delivery or curbside pickup. The data from February shows a preference for pickup, but we’ve seen retailers like Walmart and Albertsons devote more resources to both automated curbside pickup and faster delivery.

Brick Meets Click’s data for the next few months will certainly be fascinating to watch, not just from an industry perspective, but also a sociological one. After a year of lockdowns, what new grocery shopping habits will remain permanent, and what will that mean for innovation at retail overall?

Fridge No More Raises $15.4M for 15-Minute Grocery Delivery in NYC

Fifteen minutes is the new hour, or so it seems in the grocery delivery game. New York City startup Fridge No More announced today that it has closed a $15.4 million Series A round of funding. The round was led by Insight Partners with participation from existing investors including Altair Capital.

Fridge No More operates small, hyperlocal delivery-only grocery stores and currently serves the Williamsburg, Park Slope and Gowanus neighborhoods in Brooklyn. Typical Fridge No More stores are roughly 2,000 – 3,000 sq. ft. and house just 2,000 SKUs. The delivery radius for each store is approximately one mile, and done on scooter or bike by actual store employees. Orders are placed via iOS or Android app and are manually picked, packed and delivered to the customer within fifteen minutes.

In addition to providing super fast service, there are no minimum orders and no delivery fees. Fridge No More is able to do this because they don’t spend a lot of money on the stores themselves. Since dark stores don’t service in-person customers, they can be tucked away in cheaper locations like basements or other odd spaces, there is no checkout that needs to be set up and there are no cashiers to pay.

Another benefit of creating these smaller stores is that they can tailor the inventory to that particular neighborhood. Fridge No More doesn’t need to stock everything, it can figure out which items sell the most and stock those.

Fridge No More’s approach is similar to that of both Weezy in the U.K. and Gorillas over in Germany, both of which also raised significant funding this year.

As we’ve covered previously, the online grocery sector has been getting a lot of love from investors this year. Online grocery related startups around the world are raising lots of money. In fact, this is our second grocery e-commerce related funding announcement today (Stor.ai raised $21 million).

As we’ve also covered before, the big reason for this is the pandemic, which forced a lot of people to shift from in-person shopping to more contactless online grocery shopping. And with online grocery sales projected to reach $250 billion by 2025, I’m sure we’ll be covering a lot more announcements over the rest of this year.

One aspect worth noting is Fridge No More’s name. Obviously its hyperbole, but if these types of super-fast grocery services catch on, how will they change grocery shopping (at least in dense urban areas where a one-mile delivery radius contains a ton of business). Will people stock up on less and just have speedy delivery on speed dial? Will they just make multiple orders throughout the day if they forgot or suddenly need something?

More New Yorkers will find out soon enough as Fridge No More will use its new funding to scale up operations in that city, before moving into more locations on the East Coast.

Stor.ai Raises $21M for its Grocery Digital Commerce Software

Stor.ai (formerly Self Point), announced today that it has raised $21 million in an extended Series A round of funding. The round was led by Meitav Dash and Mizrahi Tefahot, with participation from Kli Capital.

The Tel Aviv, Israel-based Stor.ai offers a suite of tools that help grocers of any size deploy their own online shopping services. Stor.ai’s software helps manage customer data, inventory, payment and order fulfillment.

Stor.ai’s funding comes amidst a wave of capital being poured into digital grocery-related startups around the world. Since the beginning of the year we’ve seen the following raises:

In addition to startup funding, we’ve also seen increased investment in e-commerce operations from all the major grocery retailers. Walmart is working with three different vendors to add automated fulfillment to dozens of its locations. Albertsons is expanding its own use of automated fulfillment, testing robotic curbside pickup kiosks, and even piloting remote controlled robot delivery. And Stop & Shop is experimenting with its own locker pickup pilot in Boston.

The reason for all of this investment is the pandemic, which spurred record numbers of people into online grocery shopping. In January, grocery delivery and pickup hit $7.1 billion in sales. And while vaccines and warmer months may cause a market correction as people feel more comfortable shopping in-store, online grocery is projected to hit $250 billion in sales and be 21.5 percent of total grocery shopping by 2025.

For its part, Stor.ai says it will use the new funding to build out new features to its core offering, scale up its growth in North America and enter new markets in Latin America and Europe.

Imperfect Foods Will Be a Net-Zero Carbon Company by 2030

Online grocer Imperfect Foods announced today its pledge to become a net-zero carbon operation by 2030. Via a press release sent to The Spoon, the company claims this timeline is 10 years ahead of most major retailers and 20 years ahead of the Paris Agreement Deadline.

Imperfect began as a service that rescued surplus fruits and veggies from supermarkets to sell at discounted prices to customers. A few successful fundraises later, the company is a full-fledged online grocer selling not just rescued produce but also meat, dairy, and pantry staples from other environmentally conscious companies.

To track its carbon footprint, Imperfect has partnered with Watershed, a software platform that measures a business’s carbon footprint across every touchpoint of its supply chain. Speaking in today’s press release, Imperfect said that through Watershed’s platform, the company can see which parts of its supply chain are emitting greenhouse gases and redesign operations based on that information.

Imperfect laid out a few steps for going net-zero carbon. It plans to have its first “zero-waste-to-landfill” facility operational by 2022, and a total of six such facilities operational by 2025. All six fulfillment centers will run off renewable power by 2026, and the company’s vehicle fleet will be electric by 2027. Finally, improving regional sourcing by 15 percent is a near-term goal, slated for 2022.

Imperfect’s announcement today is the latest in a string of recent stories about food companies’ various sustainability efforts, from Just Salad’s zero waste delivery aspirations to Burger King’s reusable cup program. Sweetgreen a chain that has pledged to go carbon neutral by 2027, is also using Watershed to track its carbon footprint.

There are also a few grocery-specific developments around sustainability of late. Kroger’s Zero Hunger/Zero Waste program addresses many sustainability issues, and Aldi says it will shift to sustainable packaging by 2025. Walmart, meanwhile, has a goal of reaching zero emissions by 2040.

For its part, Imperfect’s goal is to go beyond just sustainable food sourcing and “ensure [that] each internal process ladders up to an operationally net-zero carbon business model.”

 

Kroger “Soft Opens” First Ocado-Powered Automated Warehouse

Kroger has “soft opened” the first of its Ocado-powered automated Customer Fulfillment Centers in Monroe, Ohio, Kroger CEO Rodney McMullen said during an earnings call this week.

According to Dayton 24/7, the new facility is 335,000 square feet, costs $55 million and employs 400 people. The new warehouse will use totes on rails to help assemble orders for delivery, pickup and distribution.

The opening comes almost three years after Kroger announced it was upping its investment in and bringing Ocado’s automation technology here to the U.S. In that time, it selected a number of additional sites across the U.S. that will be home to more fulfillment centers.

Grocery e-commerce and the need for more robust fulfillment logistics has exploded over the past year, thanks to the pandemic. As such retailers of all stripes have been investing in more automation to accommodate online grocery shopping. Albertsons has expanded its use of robotic micro-fulfillment and started testing automated curbside pickup kiosks. And Walmart has partnered with three different technology provides to expand its use of automated order fulfillment.

As the Biden administration accelerates the availability of vaccines and the warm weather of spring and summer fast approaches, the question of how much consumer behavior has changed remains. While industry watchers expect there to be a short-term correction in the use of grocery e-commerce, there is a sense that after a year of lockdowns and social distancing, new habits have set in. Online grocery sales are projected to hit $250 billion and take up 21.5 percent of total grocery sales by 2025.

Kroger’s new Customer Fulfillment Center in Monroe is expected to have an official, grand opening launch soon.

Online Grocer Cropswap Launches New Feature to Help Food Insecure Families

“Farm-to-phone” grocery platform Cropswap today announced a partnership with Nourish LA to bring healthier food donations to underserved residents of Los Angeles.

Food insecurity, which the USDA defines as “the limited or uncertain availability of nutritionally adequate and safe foods, or limited or uncertain ability to acquire acceptable foods in socially acceptable ways,” has increased over the last year. Los Angeles county alone estimates that “nearly 1 in 4 residents” in that county has suffered food insecurity since the COVID-19 pandemic started. 

Cropswap, which launched during the pandemic, connects its users with local farmers via an app. In June of last year, the company also launched a subscription service through which customers can get delivery or pickup orders of produce, seeds, and other items on a regular basis. 

For the Nourish LA partnership, Cropswap as added an in-app donation feature that lets users give a seasonal Harvest Box to those in need for $50. The box is filled with organic produce from Sow a Heart Farm, in Fillmore, California, and contains what Cropswap says is enough to sustain a family for one week. Users can simply add the donation to their existing total. Cropswap and Nourish LA handle the actual process of getting the food to its recipients. 

Given that they’re a relatively easy way to encourage giving, in-app donation buttons have surfaced in multiple different areas of the food industry over the last twelve months. Uber Eats last year set up an in-app donation button to help struggling independent restaurants. Also last year, Delivery Hero partnered with the United Nation’s World Food Programme’s Share the Meal program. Users can donate a meal via the regular Delivery Hero app interface.

A $50 box of food is obviously more costly for the giver than, say, donating a few bucks or a single meal. However, online grocery has seen a surge in new users over the last year, and consumer enthusiasm for buying from local farms has also increased. Those two factors working together means there’s a much bigger potential audience for Cropswap’s self-proclaimed “Instacart for local produce.” That in turn means a wider pool of those able to and/or willing to donate a week’s worth of food to those in need.

Refraction AI Raises $4.2M for its Three-Wheeled Robot Delivery

Robot delivery company Refraction AI announced today that it has raised $4.2 million in new seed funding. The round was led by Pillar VC, with participation from eLab Ventures, Osage Venture Partners, Trucks Venture Capital, Alumni Ventures Group, Chad Laurans (founder of SimpliSafe), Invest Michigan, and others.

Based in Ann Arbor, Michigan, Refraction’s take on delivery robots is between smaller rovers like those from Starship and larger autonomous vehicles like Nuro‘s. Refraction’s REV-1 robots have three wheels, are ruggedized for inclement weather, and are fast enough to travel in bike lanes.

Refraction debuted the REV-1 back in July of 2019, and started making limited lunch deliveries from Ann Arbor restaurants in December of that year. In June of 2020, right after the pandemic’s first big wave in the U.S., Refraction launched its grocery delivery service.

We’re still early into the new year, but 2021 is already been a pretty active year for delivery robots. A number of startups around the world like Ottonomy, Delivers AI and Bizero have come out of stealth. Last week Safeway announced it was piloting the use of Tortoise’s teleoperated robots for grocery delivery. And Kiwibot will be making making deliveries in Santa Monica, California as part of that city’s zero emission delivery zone.

Luke Schneider, CEO of Refraction, told me by phone last week that the company will use its new capital to start scaling up the business. Refraction currently has 25 robots in operation around Ann Arbor. Schneider said that Refraction will be adding to its fleet and doing more deliveries, and will expand either to different cities or into different retail sectors. He also said that the company will also hire more people to expand the team, and build up operations in Austin, Texas where Schneider is located (though manufacturing will remain in Michigan).