Close Ad

The Spoon

Daily news and analysis about the food tech revolution

Grocery

Food Tech News: New Asian e-Grocer, Oatly’s pre-IPO Starbucks Rollout

Umamicart, a new Asian e-commerce grocer, launches in NY metro area

This past week, the new Asian e-grocer Umamicart launched in the NY metro area, and its next-day grocery delivery service is now available in New York, New Jersey, Connecticut, Pennsylvania, and Delaware. The platform offers Asian pantry staples, meats, seafood, tofu, fruits, vegetables, snacks, and drinks, with around 500 different grocery items currently listed. Umamicart also sells kits for making different meals like sushi, dumplings, hot-pots, and Mapo tofu. The platform requires a $30 minimum purchase, and orders less than $49.99 will be charged a $6.99 delivery fee.

Photo from Wix Restaurant’s website

Wix Restaurants Acquires SpeedETab to help enhance online restaurant presence

Wix Restaurants (a subsidiary of Wix) is a website builder for restaurants, and this week the company announced its acquisition of SpeedETab, a tool that allows restaurants to integrate online ordering into existing platforms. The addition of SpeedETab will allow restaurants signed up with Wix Restaurants to streamline orders from multiple channels, manage offline and online orders, and integrate various restaurant POS systems.

Photo from Oatly’s website

Oatly rolls out in Starbucks nationwide before IPO

Oatly, producers of oat-based vegan dairy products, announced this week that it had reached a deal with Starbucks to serve its oat milk in all Starbucks throughout the U.S. Starbucks will feature Oatly’s non-dairy oat milk in several new drinks, including the Iced Brown Sugar Oatmilk Shaken Espresso and Honey Oatmilk Latte. Oatly milk will be available on Starbucks ‘ menu year-round, as it is now part of the core menu. Oatly uses a proprietary process to create its oat milk that incorporates certain enzymes to break down finely milled oats, which results in a naturally sweet and creamy non-dairy milk. The company filed for its initial public offering last week, the details of which will be shared with the public in the next few weeks.

Photo from SIMPLIFY The Brewer’s Kickstarter campaign

SIMPLIFY the Brewer launches on Kickstarter

A first glance, the new coffee brewing equipment called SIMPLIFY the Brewer from Bathtub Coffee looks like a transparent pour-over. However, this brewer was meticulously designed by a former professional barista, Ryo John Ito. Other pour-over brewers depend on the coffee “bloom” (splashing a small amount of hot water over grounds to allow the degassing of carbon dioxide) for a good cup of coffee, and the pour-over brewing method often takes three to four minutes to complete. SIMPLIFY the Brewer’s design includes a larger opening for coffee to flow through and minimal contact between the brewer and paper filter. As a result, a strong cup of coffee is brewed in one to two minutes, which is convenient for busy coffee shops. The Kickstarter campaign for the coffee brewer is live, and pledging ¥2,720 (about $26 USD), guarantees a SIMPLIFY the Brewer shipped to you in May 2021.

Urbx’ Vertical Automated Grocery Fulfillment has High Ambitions

As they come to market, automated grocery fulfillment solutions are taking a number of different shapes. Companies like Takeoff Technologies and Dematic are building them into the backs of existing stores, while Kroger and Ocado are building out big, standalone smart warehouses.

Unlike those other players in the space, Urbx wants its automated fulfillment center to get high — vertically speaking. The Boston-based company is working on robotic fulfillment that scales up to 150 ft. tall. While the Urbx system is tall, it only takes up 1,800 sq. ft., so it can nestle into the limited, tight real estate areas in cities. As Urbx CEO, Lincoln Cavalieri explained to me by phone this week, Urbx is “ideal for urban environments, food deserts, where property prices are high.”

Urbx has a dual go-to market strategy. First, like other automated fulfillment technology companies, Urbx will work with third-parties to integrate its automation into other stores. At the same time, Cavalieri said that the company will eventually build “thousands” of its own Urbx-branded automated markets. But these Urbx markets won’t be anything like a traditional grocery store.

The Urbx market won’t have any aisles to roam or bakery sections to get treats from. Instead, the “store” part will be a series of kiosks. Shoppers can either place their order by mobile phone or at the kiosk. Cavalieri said once an order is placed, Urbx’ robots can pack an order of 50 items in less than two minutes. (A 25-item order takes just a little over one minute.) Robots then deliver the packed items to the kiosk for the customer to take out.

Urbx will also have curbside pickup, delivery via electric bicycles and, at some point down the line, drone delivery.

All of this, however, is still a ways away. The company has only raised a seed round of funding and won’t have its first third-party implementations ready to be installed until the end of this year. Urbx hopes to have its first Urbx market developed by the end of next year.

This is certainly the right time to launch an automated fulfillment solution. The COVID-19 pandemic pushed record amounts of people into grocery e-commerce, which is expected to grow to take up 21.5 percent of total grocery sales by 2025.

As such, many retailers are accelerating their automation endeavors to keep up with e-commerce demand. Alberstons is expanding its use of automated fulfillment centers and testing out robotic pickup kiosks. And Walmart is working with three different companies to deploy automated fulfillment centers to dozens of locations this year.

With plans for its own line of supermarkets, Urbx is the most ambitious automated fulfillment startup we’ve covered so far. Now we just have to see if rollout of tall centers can match the height of its goals.

Walmart Canada to Deploy First Automated Kiosks for Grocery Pickup

Walmart Canada is adding automated kiosk pickup to one of its stores in the Toronto area, which, the company says, will be the first of its kind in that country.

In a corporate blog post published yesterday, Walmart Canada outlined a number of moves the company is making to accelerate its e-commerce efforts, including:

  • Building out a 22,000 sq. ft. space inside the Scarborough West Supercentre that will automate online grocery picking and packing that is six times faster than manual order picking
  • Expanding grocery pickup to 60 more stores this year
  • Piloting “ring scanner” technology that allows workers to pick and scan items hands-free

But the new feature we are most interested in is the new automated grocery pickup. According to Walmart Canada’s blog post, these new automated kiosks will “serve as vending machines for online grocery orders and can serve up to five customers simultaneously.” To use the kiosk, customers pull into a dedicated parking spot, enter a code into the machine and their order will appear in under two minutes.

All of these new, automated features are being built in partnership with Dematic, and will launch later this year.

This isn’t the first automated kiosk we’ve written about. Albertsons debuted its own robot-powered kiosk for grocery pickup at a Jewel-Osco in Chicago. But to our knowledge, this is the first public mention of automated kiosk pickup from Walmart in North America.

In January, Walmart announced that it was partnering with Dematic, Fabric and Alert Innovation to deploy automated fulfillment centers to “dozens” of locations. Automated kiosks weren’t mentioned at that time, but it’s safe to assume that if Walmart Canada is testing them out, they will make their way to the U.S. at some point.

As we covered this week, a ton of resources are flowing into the online grocery sector. Smaller online grocery startups around the world are raising a lot of money, and big players like Walmart, Albertsons and Kroger are making big investments in their own e-commerce infrastructure.

The reason for this big push into grocery e-commerce is that online grocery sales hit $9.3 billion in January, and is projected to hit $250 billion and take up 21.5 percent of total grocery sales by 2025. Retailers are bolstering their e-commerce capabilities now, to accommodate the growth that is to come.

Instacart, Crisp, Rohlik, Flink. Online Grocery Gets Funding in the U.S. and Europe

Apparently investors have been shopping for online grocery startups, as there was a spate of funding news in the sector across North America and Europe over the last 12 hours.

Grocery delivery service Instacart raised another $265 million from existing investors including Andreessen Horowitz, Sequoia Capital, D1 Capital Partners, Fidelity Management & Research Company LLC, and T. Rowe Price Associates, Inc. This brings the total amount raised by Instacart to roughly $2.6 billion and values the company at $39 billion.

Over in the Czech Republic, online grocer Rohlik raised €190 million (~$230 million USD) in a round led by Partech with participation from Index Ventures, the EBRD, Quadrille Capital, J&T Bank, R2G, and Enern. According to TechCrunch, Rohlik offers items that it buys itself wholesale, as well as offering goods in concert with existing retailers. The company will use the funds to expand across its existing service areas (the Czech Republic, Hungary and Austria) and into new markets (Germany, Poland, Romania).

In the Netherlands, Dutch grocer Crisp announced that it has raised a €30 million (~$36 million USD) Series B round of funding led by Target Global with participation from Keen Venture Partners and others. EU-Startups reports that Crisp offers fresh seasonal ingredients sourced locally and delivered in one hour across the Netherlands. This brings the total amount raised by Crisp to €46 million (~$55 million USD) since 2018.

And finally, German delivery-only grocer Flink announced that it has raised $52 million in seed funding. TechCrunch writes that Target Global led this funding as well, along with participation from Northzone Cherry Ventures and TriplePoint Capital. This brings the total amount raised by Flink to $64 million, as the company is expanding beyond Germany and into France and the Netherlands.

Investment in the online grocery space has been frothy since the start of the year. In the U.K., Weezy raised $20 million. Here in the U.S., Good Eggs raised $100 million and Imperfect Foods raised $110 million. But all these deals pale next to Chinese grocery app Xingsheng Youxuan, which raised $2 billion.

Why so much money? Partly it’s because the pandemic and limited trips outside our homes pushed people into record amounts of online grocery shopping last year. But as we’re a year into this pandemic, new habits around online grocery have formed. In the month of January, U.S. consumers spent $9.3 billion on grocery e-commerce, and online sales of food and beverages is projected to hit $143 billion by 2025. In other words, the market for online grocery markets is looking pretty super right now.

Walmart Ditches $35 Minimum for Express Delivery

Walmart announced today that it is dropping the $35 minimum order requirement for its Express delivery service. The move comes during a time of record-breaking online grocery shopping and increased competition among retailers to grab consumer dollars.

Walmart launched its two-hour Express delivery service last May, during the height of the first wave of the pandemic. The speedy delivery lets customers order groceries, staples, electronics and more, and costs an additional $10 on top of the existing delivery charge (Walmart+ subscribers pay just the $10 Express fee).

This is the second time Walmart has waived a $35 minimum order. In December, Walmart removed the $35 minimum for Walmart.com orders for its Walmart+ subscribers, though that didn’t apply to groceries until today.

We’re a year into the pandemic, and while there are vaccines being deployed, online grocery is expected to remain sticky with consumers. Brick Meets Click estimated that online grocery hit $9.3 billion in sales during the month of January, with nearly 70 million households placing an average of 2.8 orders across delivery, pickup and ship-to-home categories.

Walmart’s removal of the minimum order for Express delivery is most directly a shot at Amazon, which offers free two-hour delivery for its Prime members (there’s a $4.99 fee if the order is less than $35). The two companies are locked in a pretty heated battle to win your grocery business. Walmart has been going after Amazon in the digital realm with the Walmart+ membership service that it launched last September, and Amazon has been expanding into the physical world with its line of real world Fresh grocery stores.

Though Walmart has vastly more retail locations than Amazon, Walmart+ has far fewer subscribers. One estimate has Walmart+ at roughly 8 million subscribers, while Amazon has an estimated 126 million Prime members in the U.S. Though to be fair, Walmart+ is only five months old, compared with the more than 15 years Prime has been around.

Today’s minimum order waiving it just the latest move by Walmart to grab a bigger chunk of our grocery e-commerce . In January, the company announced that it was deploying automated fulfillment centers to dozens of its stores to speed up order processing. The retailer is also testing out smart lockers for home delivery, grocery delivery via autonomous cars, and even delivery by drone.

Walmart’s Express delivery is available at roughly 3,000 stores, which, the company says, reaches nearly 70 percent of the population.

Instacart and Walgreens Launching Same Day Delivery Nationwide

Drug store chain Walgreens announced today that it is partnering with Instacart to roll out same-day delivery service across the U.S.

According to the announcement, tens of thousands of Walgreen’s items are now available for delivery via Instacart across Illinois, with the program set to expand nationwide to roughly 8,000 stores over the coming weeks. Instacart will deliver groceries, over-the-counter medications, health and wellness products, household essentials, convenience products and more in as little as one hour.

After the partnership launch in Illinois, Instacart delivery will expand to markets such as Southeast Florida, Dallas, Atlanta, Washington D.C., New York City and more. The delivery partnership will be across all 50 states throughout the spring.

This isn’t the first delivery partnership for Walgreens. Last year the drug store company partnered with DoorDash for delivery in select U.S. cities and expanded its partnership with Postmates nationwide. Both of those announcements came during or shortly after the first major wave of the COVID-19 pandemic here in the U.S. Around that time, with people in various states of lockdown and social distance across the country, grocery e-commerce skyrocketed.

Buying food online has remained sticky with consumers in the U.S. throughout the different waves of the pandemic. The most recent market survey from Brick Meets Click showed that in January 2021, 70 million U.S. households placed an average of 2.8 grocery orders online for pickup, delivery and ship-to-home orders.

Consumers have now spent just about a year under the thumb of the pandemic and new habits have definitely formed around how we get our food and other goods. Delivery is no longer a nice to have, it’s table stakes for any household good-related retailer.

U.S. Online Grocery Sales Hit $9.3 Billion in January

Total grocery e-commerce sales in the U.S. hit $9.3 billion this past January, with nearly 70 million households placing an average of 2.8 orders across delivery, pickup and ship-to-home categories, according to a new Brick Meets Click/Mercatus Grocery Shopping Survey.

January’s $9.3 billion in sales is up 15 percent over November 2020, and Brick Meets Click credits a large part of this growth to a 16 percent increase in the number of households that buy groceries online.

Among the survey’s findings:

  • Seventy-seven percent of all online grocery spending went to delivery and pickup.
  • Seventy-eight percent of households engaged with a delivery or pickup service (up from 64 percent in November).
  • Ship-to-home usage rate dropped from 56 percent to 46 percent during the same period.
  • Despite growth in other areas, the overall usage rate in January fell short of the record 76.7 million households that shopped online in April 2020 (at the height of the pandemic’s first wave).

Pickup and delivery’s share of orders grew roughly six percent from November, accounting for 66 percent of all online orders completed during January 2021.

While online grocery saw a lot of gains over the past few months, the overall satisfaction metric (the likelihood of using a specific service again) with online grocery dropped to 56 percent, down 32 percentage point from the record high ratings level in November. Pickup had the biggest drop, losing 35 percentage points.

“Even though many grocers remain capacity constrained – especially with pickup – others are growing market share as they staff up or expand pickup to a larger store base,” David Bishop, partner, Brick Meets Click said in today’s press announcement. “While throwing more labor at the issue isn’t ideal, this, along with improving assembling productivities via enhanced pick and pack practices, is vital to remaining competitive in the near term and not inadvertently giving your customer a reason to shop elsewhere.”

As a grocery industry watcher, it’s always fun when these types of market numbers come out to see if and how people are adopting online grocery. But these numbers are also important because grocer retailers are currently investing a lot of money in systems and infrastructure to fulfill online grocery orders. Ahold Delhaize and Walmart recently announced expanded automated fulfillment centers for their stores, and Kroger will start opening its automated customer fulfillment centers this year.

As vaccines arrive and the pandemic recedes (knocks on wood), the question will be how much people’s habits have changed thanks to COVID, and for how many online grocery shopping will become the new normal.

Report: Chinese Online Grocer App Xingsheng Youxuan Raises $2B

The Chinese online grocery app Xingsheng Youxuan has raised $2 billion in new funding, Reuters reports. According to Reuters’ sources, investors in the round include FountainVest Partners, Primavera Capital Group and KKR & Co. The new funding values Xingsheng Youxuan at $6 billion, but companies involved did not confirm details with Reuters.

Founded three years ago, Xingsheng Youxuan fulfills online bulk orders to grocery stores in or near residential areas. Xingsheng Youxuan operates in 13 provinces and covers more than 6,000 counties and 30,000 towns. The company gets more than 8 million daily orders.

As with the U.S., online grocery shopping in China skyrocketed last year thanks to the pandemic. While there are vaccines being distributed and (hopefully) the pandemic will recede this year, online grocery shopping is expected to remain sticky with consumers. Grocery e-commerce is predicted to hit $250 billion and take up 21.5 percent of all grocery sales in the U.S. by 2025.

While Xingsheng Youxuan’s new round is by far the biggest single funding round into a grocery company we’ve seen, a lot of investor money has poured into the grocery space around the world over the past year:

We are also seeing increased investment by established players to bolster their online ordering and fulfillment infrastructure. Walmart and Ahold Delhaize recently made moves to expand their use of automated fulfillment centers, for example. And Kroger is set to open up the first of their 20 planned automated customer fulfillment centers across the U.S. this year.

All of this is to say that 2021 is shaping up to be a transformational year for grocery all around the globe.

Ahold Delhaize Launching Automated Fulfillment Center in Philadelphia

Ahold Delhaize announced today that it is building out an automated fulfillment center in Philadelphia (hat tip to Winsight Grocery Business). When completed, this facility will be able to fulfill 15,000 online delivery orders a week.

This new fulfillment pilot will be powered by Peapod Digital Labs, Ahold Delhaize’s in-house e-commerce engine, and offered to customers of the Giant Co. market. Ahold Delhaize is also working with Swisslog’s AutoStore for the robotics and software systems for the automated fulfillment center.

This is not Ahold’s first trip to the robotic fulfillment center rodeo. The company owns a majority stake in FreshDirect, which is using Fabric for a Washington D.C.-area fulfillment center. And in 2018, the company announced it was working with Takeoff Technologies to create a number of micro-fulfillment centers for its retail brands including Stop & Shop, Food Lion and Giant Food. According to Winsight, Ahold said today more micro-fulfillment pilots are forthcoming.

Ahold Delhaize’s expanded use of automation is no surprise. Grocery e-commerce had a banner year in 2020, thanks in large part to the pandemic keeping people at home. Online grocery is expected to remain sticky with consumers even after the pandemic recedes with some projecting online grocery taking up 21.5 percent of total grocery sales by 2025.

As such, grocery retailers are investing in new ways of getting people their food faster. Kroger is building out a series of Ocado-powered automated fulfillment centers across the U.S. Walmart is planning to implement dozens of automated micro-fulfillment centers at its stores. And Albertsons is expanding the use of automated fulfillment as well.

Most of these, however have been announcements. We’ll need to watch this space in the coming months to see if automated fulfillment centers truly deliver on their promise of cost-effective, increased efficiency.

Founders of PeaPod Launch Sifter, a Grocery Site for People with Dietary Restrictions

The founders of one of the earliest online grocery sites, PeaPod, announced this week the launch of a new grocery platform called Sifter (hat tip: Grocery Dive). The new platform is essentially an online shopping cart that allows customers to put together grocery lists based on dietary preferences, allergens, and medical conditions, and send that list on to partner retailers for fulfillment.

On Sifter’s website, shoppers select different “SiftTags,” which allow them to select different dietary and allergen filters. If you are managing a health condition, like IBS or diabetes, for example, the site then populates items that are identified as acceptable for these conditions. The RecipeSifter feature on the site enables a customer to paste in the URL of different recipes, and the site will determine if the recipe is acceptable for your dietary preferences, allergens, medical conditions, etc. Sifter will then show all of the ingredients listed in the recipe, and allow you to add these items to your cart.

Once grocery items are selected on the Sifter’s site, the customer is then directed to the retailer’s site to complete the purchase. As of right now, Sifter has partnered with retailers like Stop & Shop, Giant Foods, Walmart, and Amazon to fulfill the grocery orders. Though, it should be noted, a single retailer might not be able to fulfill all of the items on a particular list.

Since the start of the pandemic in early 2020, the use of online grocery shopping has seen a spike, and it is predicted that by 2024 that online grocery shopping will be adopted by 55% of consumers in the US. Sifted is one of a crop of new companies looking to help people with dietary restrictions get their food. Through Dinner Daily, customers are offered personal meal planning and can shop for ingredients through stores like Kroger, Ralph’s, and Fred Meyers. eMeals partnered with Albertsons and Safeway to fulfill groceries needed for the meal recommendations it provides.

Sifter is available now throughout North America.

Uber Q4: Delivery Up 150% Year-Over-Year as It Expands Beyond Restaurants

Uber unveiled its earnings this week for the fourth quarter of 2020. Its food delivery business remains the strongest part of the business, a point hardly surprising since we’re still in the midst of a pandemic and restaurant dining rooms remain closed in many places.

A few of the latest stats, according to the company earnings call yesterday, include:

  • Uber reported $3.17 billion in total revenue from October through December, 2020.
  • Q4 gross bookings for delivery grew 128 percent and reached a $44 billion run rate in December.
  • Revenue “more than tripled” from last year and grew 19 percent compared to the third quarter of 2020.

On this week’s call, Uber CEO Dara Khosrowshahi also called out Uber’s plans to expand delivery into areas beyond traditional restaurants. “It’s become clear that the pandemic has increased consumers’ appetite for on-demand delivery of not just food, but all goods, and we take a major step to address this enormous opportunity,” he said.

Recent(ish) acquisitions by Uber support that statement. At the end of 2019, the company acquired majority ownership of online grocery Cornershop and in 2020 expanded its grocery delivery services. Uber’s more recent $2.65 billion acquisition of rival service Postmates gives it access to the latter’s delivery-as-a-service business that connects customers with Walmart, 7-Eleven, Apple, and other stores. Just last week, Uber also nabbed alcohol-delivery service Drizly.  

“These new initiatives will remain an investment priority going forward,” Khosrowshahi said on the call.

Overall, Uber’s losses are narrowing. For all of 2020, net losses totaled $6.77 billion, which is a roughly 20 percent improvement from the $8.51 billion in 2019.

GrubMarket Raises $90M to Make Its Food Delivery Service Available Nationwide

Virtual food marketplace GrubMarket announced today it has raised $90 million in an oversubscribed Series D round, up from $60 million when the round was first announced in October 2020. Participants include “funds and accounts” managed by BlackRock, ACE & Company, Celtic House Venture Partners, Sixty Degree Capital, The Strand Partners, Reimagined Ventures, Trinity Capital Investment, Madison Bay Capital Partners, Marubeni Ventures, GGV and others.

GrubMarket connects consumers with farmers via an extensive online marketplace where customers can shop for grocery items and some household goods. GrubMarket also has a B2B component through which it sells wholesale goods to grocery retailers, restaurants, corporate offices, and other business settings. The company counts Whole Foods, Kroger, Hello Fresh, Blue Apron, and many other companies among its customers.

Meanwhile, its WholesaleWare platform, which is a software platform food companies can use to manage their businesses. That includes anything from inventory and financial management to HR tasks and driver routing.

Mike Xu, GrubMarket’s CEO, said in a statement that the Series D round was originally intended to be no more than $30 million, and that the company has made “efforts to keep this round $100 million.” He said the new capital will allow the company to invest more in talent, technology, and acquisitions in the future. The company also plans to “expand to most regions of the country” over the next 12 months. In October of 2020, Xu said his company plans to go public, but did not give an exact timeframe for an IPO.   

Online grocery as a category is expected to account for 21.5 percent of all grocery sales by 2025, and companies currently offer all manner of takes on the concept. Right now that includes big-box retailers like Walmart, those like Rosie that are focused on independent grocers, and those like Imperfect Foods, which cater to specific niches of the buying public. GrubMarket’s “farm-to-pantry” approach certainly serves a demand, since buying direct from farms has increased among consumers.

But Grubmarket’s focus more and more appears to be on reinventing the supply chain and doing away with some of the inefficiencies there, hence the WholesaleWare platform and the growing B2B customer base. Expect that portion of the business to grow substantially from the new infusion of capital.