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Daily news and analysis about the food tech revolution

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Walmart Gains Share in Online Grocery as Shoppers Look for Ways to Combat Inflation

Delivery & Commerce

While online grocery shopping continued to grow last year, where people shopped shifted significantly according to a new report from grocery researcher Brick Meets Click.

The new report, which details the egrocery performance for different retail formats, said Walmart was the big winner in 2022 as more and more customers looked for ways to save a buck. According to the report, which broke down the four major formats as supermarkets, Walmart, Target, and Hard Discount (i.e. Aldi and Lidl), Walmart saw its share of online grocery shoppers grow in both low-income and high-income households.

According to Brick Meets Click, households making less than $50 thousand per year were 25% more likely to shop at Walmart than a supermarket, and Walmart’s total share of online grocery in this household category grew by 2.1% vs. a contraction of 1.5% for supermarket’s share. On the high end of the spectrum, Walmart gained ground in households making over $200 thousand annually, expanding its reach into this segment by 2.1%. In contrast, supermarkets saw their reach shrink by 1.2% in 2022 vs. the previous year.

The reason for the shift towards Walmart for both segments was persistent inflation. Lower-income households were driven by what the researcher terms “flight to value,” where they buy products priced via an “everyday low price” pricing model employed at Walmart and hard discounters such as Aldi. And while high-end income households are three times more likely to shop online at a supermarket, the format lost share to Walmart in 2022 as upper-income earners also looked for ways to save on groceries.

As for Target, the retailer also saw its share of high-income households expand in 2022, which also contributed slightly to the decline of overall online share for the supermarket segment. In addition, the Minnesota-based retailer also continued to attract younger shoppers relative to the supermarket segment, as young households (18-29 years old) are 36% more likely to shop online at Target vs. a supermarket.

The report does not detail where Amazon fits in all of this. According to The Street, Amazon’s total share of physical store grocery spend was about 2% of total grocery sales at about $17.5 billion in 2021. That compares with Target’s $20.3 billion in food and beverage sales in the same year.

As for how households are getting their groceries, over half of the monthly active online shoppers (52.2%) picked up groceries via curbside or in-store pickup in March of this year, according to a separate report by the researcher. Ship to home, which usually means dry goods and shelf-stable products, dropped from 47.5% of monthly online grocery shoppers in March 2022 to 40.9% in March 2023, while grocery delivery (which usually includes fresh produce, dairy, and meat) grew from 40.8% in March of last year to 41.5% this March.

Despite the growth of the online grocery category, the researcher says that in-store is still the dominant form of grocery shopping. In a report released earlier this year, the total share of online grocery shopping accounted for just over a tenth (11.2%) of all grocery spending at the end of last year and is expected to grow to 13.6% by the end of 2027.

Four Years After CES, Breadbot’s Robotic Breadmaker is Dishing Out Loaves at Grocery Stores

Robotics, AI & Data

For robot startups seeking to make a splash at CES, there are a few options: holding a large press conference, making it weird and creepy, or serving cocktails. However, one method stands out above the rest for drawing in crowds: wafting the aroma of freshly baked bread (aka ‘the Subway method‘).

That’s what the folks behind the Wilkinson Baking Company did back in 2019, and the end result was their robot, the Breadbot, became a sensation that year at the world’s largest tech event. The smell of fresh bread pulled in journalists, tech nerds, and passersby like a tractor beam, garnering the type of press that big budget brands like Samsung would envy.

The small Eastern Washington-based company, co-founded by brothers Randall and Ron Wilkinson, has been working diligently to bring their product to market since then. Their goal was to transition from a working prototype to a production-ready machine suitable for grocery stores.

As part of the transition, the company also looked to find a new CEO. The Wilkinson brothers, both in their late sixties, wanted a CEO that could take the early-stage startup from a small LLC with a big idea to one that was mature enough to raise funding and bring the first product to market. Paul Rhynard, a former strategy consultant for McKinsey who also had experience raising capital as Chief Strategy Officer for Russell Investments, stepped in for Randall in April of last year and has since helped raise a seed round of $3 million last summer to fund the build-out of the company’s first production run of robots.

According to Rhynard, the new robot was built after testing the early prototype in a small grocery store in Eastern Washington.

“The machine that was at CES has been dramatically updated,” Rhynard told The Spoon. “One of the key differences is we rebuilt the brain of it. We have fully custom chipboards and a custom tech stack that run the machine. It was a huge update from a control and software standpoint of actually operating the machine.”

The company also made significant upgrades to the mechanical system, including adding four hoppers instead of one, which allows the Breadbot to make four varieties of bread throughout the day. The new Breadbot has significant updates to how it bakes and measures bread quality which, according to Rhynard, allows the machine to achieve more consistent results.

“So now we have a machine that we can scale up and start to place in grocers around the country,” said Rhynard.

And that’s what they’re starting to do. The company built 20 robots and so far has placed seven of them in different grocery chains which include Super One Foods, which is operating a Breadbot in a store in Northern Idaho and two more in Montana, and last month the company installed a Breadbot at Akins Fresh Market in eastern Washington. Three more Breadbots are set to be installed in a high-end Milwaukee, Wisconsin grocery retailer this month.

Rhynard says the company’s business model is a lease-plus-fee model, where grocers pay a monthly fee and a small amount per loaf baked. In return, Breadbot provides a turnkey solution, which includes providing bread mix, yeast, bread bags, and ongoing maintenance.

In return, grocers get what is essentially a bakery in a box that sits in full view of the customers on the store floor. The machine, which can produce up to 200 loaves a day, can produce bread throughout the day, with each loaf taking about 96 minutes from start to finish to make a loaf. In the stores it is currently operating, the Breadbot is making three varieties of bread: Nine grain, homestyle, and honey oat.

According to Rhynard, early on stores aligned the baking of the bread with the hours of the baking staff, which meant the Breadbot baked all the bread in the morning. Now, he says, some stores are going to start experimenting with baking bread during peak shopping hours, from four to seven at night, which will allow shoppers to buy hot, freshly made bread (and take in that fresh-baked bread smell).

Rhynard says that while grocery stores are their key target customer, they are also having talks with other potential types of customers, including cafeterias and the military. The company is also talking to potential customers in places where fresh-baked bread is difficult to come by, including Hawaii, which imports the vast majority of its bread from the US west coast.

To fund further growth, Rhynard said the company is now starting to look to raise a Series A. He knows it will be challenging given the current state of the market, but he’s optimistic the company’s current traction will attract new backers.

For now, though,the company is busy finding new customers looking to pull in shoppers with the smell of freshly baked robot bread.

Meet the Breadbot 2.0

Dispatches from Israel Food Tech Ecosystem: Amir Zaidman, The Kitchen

Foodtech

Last month, I visited the Kitchen Hub at their office in Ashdod, Israel and sat down with Amir Zaidman, Co-Founder and Chief Business Officer of the Kitchen. Prior to co-founding the Kitchen, he spent 10-14 years in business development in medical technology working on both the startup and investing sides. 

We chatted about what the Kitchen does, what sets Israeli startup founders apart, what the ecosystem needs, how precision fermentation is the new software, and what it’ll be like for Israeli customers to try the first cultivated meat product. 

J: Let’s talk about what the Kitchen is and what it does. 

A: First and foremost, we have capital we invest in startups like a seed or pre-seed stage venture capital. We have more money than a typical seed stage venture capital would invest because we are also getting money from the government to invest in those startups. While a typical seed stage fund would not invest $200-0.5M, we can invest closer to $1M in a company. Those companies become portfolio companies and they have access to the facility but it’s also the very close support that the team in the Kitchen is giving the teams in the companies. At least for the first 2-3 years after we invest in them, it’s a very intense relationship. 

J: Would you say the Kitchen is like a venture studio? 

A: Not exactly. For us, venture studio is when we start with a blank page. Then we brainstorm and figure out what we want to do based on needs from the industry, global trends, and where the industry is going. We start scouting for the enabling technologies, science, intellectual property that might be relevant for the project. When we find that, we go into negotiations with universities or research institutes and we go into a licensing agreement to own the license for that technology. Then we go recruit the team and give them equity into the new company that we created that holds the license for the technology. The venture studio model for us is starting from nothing and bringing all of those building blocks together. 

The third thing the Kitchen does is activity in the foodtech community in Israel. 

J: Let’s dive into your role here, I understand there’s two main components so can you elaborate on what those are?

A: I take part in this venture studio model by thinking about our new directions and what we need to do. The most significant part is making deals with universities and entrepreneurs for the terms under which they’ll come into the Kitchen. It depends on whether or not it’s a venture studio or a regular investment. But if it’s a regular investment, it’s very much in line with a typical VC investment model. And if it’s on the other side, then it’s more complicated with the licensing agreement and everything that has to do with that. 

The second thing, which is the part of my job that keeps me most busy, is working with the CEOs of the startups on their business development activities, around possible agreements that they might have like joint development or collaboration agreements, and most importantly, on their next round fundraising.

J: You have a view of the entire food tech ecosystem here because you’re working with many startups, but you also have a more specific view of individual startups and what they need. What secret weapon do startups here have that make them competitive in a global market? 

A: I think there’s a few elements to that. One is that Israelis are very entrepreneurial, which means that a person might define himself as an entrepreneur, regardless of the vertical that he’s working in. One day, he’s an entrepreneur in medical technologies and the next in food tech. When there is a new field which is impactful, it will draw seasoned entrepreneurs from other verticals to come and build their next startup in the space. 

The second thing is that there’s a lot of innovation in Israel. 

But I think the most important is that because Israel is such a small market, all Israeli startups are born global. They never consider the Israeli market first. They think of Europe, the US, and Asia first. They have to think global which helps them get a bigger sense or a better sense of the bigger picture.

J: Where do you find the best research and the best founders here?

A: Everywhere. The food tech sector is so diverse. If you look at cybersecurity, they come from specific intelligence units in the military. It doesn’t work like that in food tech in Israel. We source the IP and science from specific research institutes, but the entrepreneurs themselves, we get them from everywhere. We get them from previous entrepreneurs of biotech companies, medical technologies, or food companies.

J: They come from everywhere but what are the characteristics that they share? When you’re thinking about building a community of food tech startups here, what are you looking for? 

A: You don’t stumble upon foodtech. It’s not something that you do because it was there, you have to want it. And you typically want it because you feel that this is something that can change the world for the better. All of the CEOs and founders of those companies are passionate like that and this is what makes them unique. 

J: With the Kitchen’s access and view of the food tech community as a whole, what is it that you think that founders here really need? What kind of resources do you hope will become more accessible in the coming years?

A: You’re touching a very hot point, because we’ve been talking about those issues for the past three years. If you’re a food startup in the US, you’ll come up with the idea, you will go to a research center, and they will help you develop it. In Israel, you cannot outsource the development or the manufacturing.There’s a lot of infrastructure that is missing. And we’re working on that. Not the Kitchen specifically, but the Israeli community with some support from the government. Every startup in precision fermentation has to buy some equipment and there’s a movement to set up a precision fermentation center, which will be like cloud computing but for precision fermentation. You can do the very small scale in your lab and when you go up one notch to bigger fermenters, you will be able to lease and not buy. 

J: This is interesting because food tech is a very capital intensive industry compared to software.

A: Software used to be capital intensive, because you used to have to own your own servers,  until AWS and Amazon invented web services. And suddenly, it didn’t have to be so capital intensive because you can have everything on the cloud. 10-15 years ago, it wasn’t like that. This is now also changing in food tech.

J:Ultimately, the goal of food tech is to change the way people eat which requires a big behavioral change, even if the technology is there. How would you say the consumers here in Israel have been reacting to things like cultivated meat? 

A: I can’t really say because no cultivated meat product has been launched in Israel yet. We’re hoping the first ones will be launched by the end of this year. I can tell you that Israel is very fast to adopt new trends and technologies and it’s very plant based. I expect those new technologies to be very well accepted. Although the market is small, it’s gonna be a very good test market for every new product. We have a lot of chefs that are extremely interested in what’s happening in food tech because they want to incorporate the new technologies into their menus. It wasn’t like that, three-four years ago but now the culinary world and the food tech worlds are getting closer together.

J: Cultivated seafood was one of the theses the Kitchen had that resulted in Wandafish and Forsea. Clean packaging and reduced sugar have also been themes among the Kitchen’s portfolio. My final question is, as you’re thinking about the trends and new theses to follow, what technology are you hoping to see?

A: One of the main things we are hoping to find is technologies that will enable sophisticated technologies like precision fermentation and cell cultivation to produce products that will be affordable. Because today those technologies are expensive and they produce expensive products. Cultivated steak will probably be more expensive than a regular store-bought animal based one because the meat industry is good at creating affordable products at mass scale. It’s very difficult to compete. The companies that are creating cultivated meat are very close to market but they have premium prices. So we’re looking for the technologies to enable them to reduce costs, to reduce price, to be more efficient, and to bring the gospel to the people. 

Edited for clarity and length

Dispatches From the Israel Food Tech Ecosystem

Foodtech

When I first attended the Greencircle NY-Israel food tech conference in New York City last year, I never imagined that I would be living in Israel just a year later, exploring the food tech ecosystem for myself. I relocated to Tel Aviv in mid-January for an exchange program and have since been discovering the richness of Israel’s culture, language, cities, people, and places. While the high-tech innovation was a significant draw, my primary goal was to immerse myself in the culture and history of Israel as a whole. In the short time I’ve been here, I learned that the country’s foundation lies in its entrepreneurial mindset.

As I met more local Israelis, I was struck by the sheer number of people working in the high-tech industry. It makes sense considering Israel’s startup history dates back to the country’s founding. As a young nation facing existential threats, Israel’s defense system has always had to adapt to new scenarios, avoiding heavy reliance on conventional methods. There is a strong culture of questioning everything, evident in both political protests and companies that foster a climate of critical thinking. This environment encourages innovation not only for entrepreneurs but also for intrapreneurs, who develop new ideas and frameworks within existing organizations.

Food tech and ag tech are thriving industries in Israel, driven by the nation’s limited natural resources, water shortages, and a broader global climate crisis. According to the Good Food Institute Israel, alternative protein startups in the country raised $454 million in 2022, making up 30% of climate tech investments. Moreover, Israel ranked second globally, only behind the US, in alternative protein investments. The Israel Innovation Authority, an independent publicly-funded agency, is a significant driver of the country’s food tech advancements, offering a variety of practical tools and funding platforms to meet the needs of local and international innovation ecosystems.

Leading universities such as Hebrew University in Jerusalem, Technion University in Haifa, and Tel Aviv University also contribute to food tech innovation through academic research. However, beyond government funding and academic research, I am particularly interested in the intangible aspects of Israel’s culture that foster a high concentration of founders and an environment conducive to risk-taking. 

Roee Nir, the co-founder of Forsea, a cultivated fish company making an eel product, told me what sets Israeli founders apart is, “We are Israelis, and we are very communicative within ourselves. We like to meet, we like to share ideas, and we love that this is a very central industry that is erupting from Israel.”

Similarly, Anat Natan, the co-founder of Anina Culinary Art, credits the Israeli mindset of daring, inventive, and non-traditional thinking.  When asked where this mindset comes from, she told me “If you look back, the Jewish needed to survive. Even though we’re very advanced as a country in a lot of aspects, we’re a startup nation. We’re only 75 years old. We’re still establishing (ourselves), and when you’re building something, you have to do more than when you maintain something. We’re still in the building phase of the Israeli country.” 

In this series, I will continue to explore that startup mindset and developments in Israel’s food tech industry through interviews with founders and investors. I will delve into how startups are established, the groundbreaking innovations taking place, and the implications for Israel’s agricultural sector, environment, economy, and even its conflict with Palestine, because no analysis of food technology in Israel would be incomplete without considering the complex political environment. The food chain is an intricate web that intersects all aspects of society, which is especially true in a region as diverse and multifaceted as the Middle East.

Stay tuned for my first interview tomorrow!

Joy Chen is a contributor at the Spoon and has been writing about robotics and alternative proteins for the past year and a half. Although originally from the United States, she is currently studying at Tel Aviv University in Tel Aviv, Israel. 

2023 Restaurant Tech EcoSystem: Nourishing the Bottom Line

Business of Food, Delivery & Commerce, Foodtech, Robotics, AI & Data

In collaboration between TechTable and Vita Vera Ventures, we are pleased to share an updated 2023 Restaurant Tech Ecosystem map.

We all saw that the pandemic brought a wave of experimentation in the restaurant tech space, but we also know that tech-driven change is not always linear. 

In early 2022, we made bold predictions about the restaurant tech environment in 2023, as we anticipated numerous acquihires ahead (acquisitions primarily driven by tech talent vs strategic tech value). This was due to the tight tech labor market (at the time) and the increasingly challenging funding and interest rate conditions. 

However, with the recent wave of macro tech layoffs, the tech labor market is no longer tight, and we believe more restaurant tech companies may be forced to shut down rather than finding a soft landing through acquisition. We’ve already seen a strong reset on requirements for capital efficiency and valuations of startups in the sector. This macro shift may create potential for rollup opportunities, but many early-stage assets across the sector are overfunded single-point solutions and still subscale.

This is ironic as the need for tech-driven solutions has never been stronger, but companies without the right growth metrics will likely struggle to survive. The inflationary environment is also forcing harder decisions for operators, which may further dampen their willingness to engage with new solutions.

With that in mind, we are pleased to share our 2023 Restaurant Tech Ecosystem, which serves as a current heat map of the broader ecosystem within the US (and is clearly not exhaustive). 

Click here to enlarge/download image of map. Click here for downloadable PDF.

The Journey from Point Solutions to Comprehensive Tech Stacks

While single-point solutions for things like online ordering, loyalty programs, and delivery were popular during the pandemic, we have reached a moment now with perhaps too many point solutions in the market. 

Tech stacks that require too many logins are now in fact creating a cognitive burden for employees, rather than the intended promise of efficiency and ease of use. As a result, operators are beginning to seek integrated systems and smaller tech stacks that can do more. (See commentary in the previous section about rollup opportunities!) 

Restaurant tech advisor David Drinan succinctly identifies the near-term priority for most operators: “The restaurant industry is thirsty for technology innovation that will deliver high margin, incremental revenue.”

On the operational side, managers are still struggling with certain areas such as scheduling and inventory management. These tasks can be time-consuming, especially for independent restaurant owners who have limited resources. As a result, we have seen a growth category of solutions that can automate these functions and provide real-time data to help operators make informed decisions.

Help *Still* Wanted   

The labor shortage in the restaurant industry has been a major challenge for operators in recent years, and labor optimization is still at the top of every operator’s mind. The pandemic caused many workers to permanently leave the hospitality industry, leaving restaurants short-staffed. 

According to the National Restaurant Association, almost two-thirds of US restaurant operators say they do not have enough employees to support existing demand. Instead of replacing this lost workforce, many operators are turning to tech to automate more functions and reduce the need for human labor. 

From digital menus and ordering kiosks to automated kitchen equipment, there are many ways that technology can help restaurants operate more efficiently with fewer employees. By automating basic tasks such as taking orders and processing payments, operators can free up their staff to focus on more complex tasks that require human expertise, such as customer service and food preparation.

Another trend the restaurant industry is grappling with is the changing expectations of younger workers when it comes to the employer/employee relationship. With more emphasis on work-life balance, career development, and job satisfaction, younger workers are looking for more than just a paycheck. 

To meet these expectations, operators are looking for workforce management solutions that can help to improve engagement, development, and rewards for their employees. This includes tools for tracking and managing schedules, as well as innovative solutions for tip outs and other compensation mechanisms. By investing in these solutions, operators can not only attract and retain top talent but also improve the overall efficiency and productivity of their workforce.

Finally, it is worth noting that basic scheduling and labor management tools can have a significant impact on profitability by reducing labor costs and improving operational efficiency. By automating scheduling and timekeeping, for example, restaurants can reduce the likelihood of overstaffing or understaffing, which can be costly in terms of wasted labor or lost sales opportunities. 

In the end, the ability to leverage technology to optimize labor is critical for restaurants to remain competitive in a challenging operating environment. While kiosks and text ordering have shown promise in the QSR space, there are many other opportunities for technology to make a positive impact on the industry as a whole.

Ghost Kitchens: It’s Even More Complicated

In our 2021 restaurant tech retrospective, we had a lot to say about this growing subsector, including the challenges for success (a.k.a. profitability) within the confines of a ghost kitchen business model.  

Now, as the concept of virtual and ghost kitchens continues to evolve even further, it’s important for operators to understand the complexities involved and navigate these challenges to build successful ghost kitchen operations.

One major obstacle has been the potential for tension between virtual brands and existing businesses, where adding virtual brands can lead to direct competition with their own existing businesses. Finding the right tech and operational partner to balance between these two is key.

Additionally, ensuring food safety and maintaining quality standards across multiple brands can be a challenge. Many of the generic virtual brands have lacked distinct value or clear taste standards, leading to underwhelming food quality issues and removal from the major third-party delivery platforms.

Last Mile Magic

Making the economics work for restaurant delivery is a growing priority for the industry. This includes better interoperability between POS/Kitchen systems and delivery providers, better routing and batching systems, localized kitchens, and of course even the mode of transportation for delivery.

We are tracking over 20 companies in the North American unattended last mile category, but it is still early days with most (all?) of the solutions operating in limited geographies and customer trials. So we have left this slice off the infographic for 2023, but don’t forget to keep your eyes on the sky, as we’ve seen recent growth of backyard drone delivery companies which are proving to be faster and better for the environment (if they can outweigh the noise and regulatory concerns).

GenAI on the Menu

Tech entrepreneurs have long dreamed of personalized food recommendations, but few have succeeded in creating true personalization beyond dietary concerns, allergens, or ingredient likes/dislikes. 

However, we have now reached a unique moment where new technologies like ChatGPT will be able to create meaningful and personalized interactions with guests. This has always been the premise of a variety of AI-driven restaurant tech startups, but the ability to leverage the underlying data to engage and interact with guests in a truly personal and conversational manner is game-changing. 

By using data from previous orders and interactions alone, ChatGPT can help to create a more tailored experience for guests, from recommending menu items to offering personalized promotions. ChatGPT can become a critical part of a restaurant’s marketing team by creating content, with the ability to easily translate to different languages as well. This could give operators a crucial competitive advantage as consumers demand more personalized experiences. We have only begun to see the capabilities of ChatGPT with free templates being offered to restaurant operators already.

Moreover, conversational AI like ChatGPT can also be a valuable tool for restaurant operators seeking to understand their own operating metrics. By integrating ChatGPT into their tech stack, operators can ask natural language questions and receive real-time responses, empowering them to make informed decisions about their operations.

Emerging Restaurant Tech Concepts to Watch

  • Chat/AI across marketing and operations
  • Tech-enabled employee support and training (for example, personalized perks, tip-out options, or language choices) 
  • AI for scheduling to free up managers
  • Dynamic pricing
  • Reusable containers + tech-driven circular economy for foodservice 

Looking ahead –  As always, we welcome your thoughts and reactions, and look forward to continuing to follow this sector together in the coming years. Reach out to us: Brita@vitavc.com and hello@techtablesummit.com. 

Starship Logs 10 million Kilometers With Sidewalk Robots

Delivery & Commerce, Robotics, AI & Data

I remember reading as a kid about a guy who had driven his Volkswagen Bug a million miles, enough to drive to the moon and back twice. I remember thinking that’s a lot of miles!

And today, after learning Starship, the company which kicked off the sidewalk robot industry back in 2014, had logged 10 million kilometers (about six million miles, or 12-plus roundtrips to the moon), I thought the same thing: That’s a lot of miles!

Unlike Albert Klein’s 1963 Volkswagen, Starship reached the milestone with a fleet of vehicles, which the company says number two thousand today. Still, it’s an impressive feat, especially compared to self-driving car companies like Waymo and Cruise, each of which Starship says it’s lapped six times.

Starship noted in the announcement that the milestone was reached through more than four million deliveries and that they currently complete 140 thousand road crossings daily.

Since Starship started rolling its robots onto college campuses and towns back in 2016, there’s been several new companies have launched similar products. Uber launched its robot and spun it out as Serve, and Kiwibot started delivering in the Bay area in 2018. Amazon unveiled its Scout sidewalk robot in 2019 but has since scaled back the initiative.

This expansion of the sidewalk delivery space has resulted in several cities debating just how much space should be ceded to the robotic rovers, with some cities banning them while others granting them pedestrian rights.

Through it all, Starship has continued to build out its fleet, and today many of them are delivering goods with little to no human intervention. In fact, according to the company, one robot recently made 24 deliveries in a 16-hour period without any human oversight.

Who knows, at this rate, that productive little robot may make the million-mile club all by itself someday.

French Fries & Bananas Top The List of Popular Drone-Delivered Items

Delivery & Commerce, Robotics, AI & Data

So what items flew off the shelves last year when it came to drone delivery?

According to Flytrex, a company specializing in backyard drone delivery, the most popular item ordered off restaurant menus last year was french fries, followed by turkey sandwiches, burrito bowls, Italian sandwiches, and pizza, according to a report published by the company summarizing its 2022 delivery activity.

On the grocery side, Flytrex says the top banana was, well, bananas, followed by sports drinks, milk, chocolate, and eggs.

Both lists of high-flying products jibe with the category breakouts detailed in the report. On the restaurant side, sandwiches & salads was the top overall category, followed by chicken & wings, Mexican food, and burgers.

On the grocery side, the top category was fresh produce (like bananas), followed by dairy & eggs, pantry items, and sweets & snacks.

Some other interesting tidbits from the Flytrex report:

  • The average time from takeoff to delivery was 3:32 minutes.
  • The fastest time from order to delivery was 12:13 minutes.
  • The largest order Flytrex delivered last year was a comfort food special: 3 Tomato Soups and 1 Noodle Soup, 2 Cobb salads with Chicken, 2 BLTs, and 2 (and 1/2) Cheese Sandwiches.

It should be noted that these statistics are from Flytrex’s drone delivery service in the North Carolina and Texas markets, so they might differ slightly if extrapolated to, say, Seattle, where salmon chowder and sushi might show up, or New York City, where bagels would likely make an appearance. Overall, though, it’s an interesting look into ordering patterns for those markets that have greenlighted drone delivery.

You can check out the full report here.

Fresco Introduces Complete Refresh of KitchenOS Platform, With Aim of Delivering True Multi-Brand Device Contol

Next-Gen Cooking

Today, Fresco announced the launch of its KitchenOS platform, a ground-up refresh of its smart kitchen software suite. As part of the announcement, the company revealed that Instant Brands, the maker of the popular Instant Pot smart pressure cooker, would be the first brand to launch the new KitchenOS with the Instant Pot Pro Plus.

The new KitchenOS, which includes new firmware, apps, and smart recipes, is the result of a two-year effort by the Dublin-based company designed to enable multi-appliance control and a new personalized user experience.

In an interview with The Spoon, Fresco CEO Ben Harris said the company realized in 2021 that in order to achieve a scalable approach to the smart kitchen, they would need to rebuild the platform from the ground up. They began to work on the new platform, accelerating their pace last year after a $20 million Series B investment.

“When we launched the Drop scale nine years ago, we received a lot of inbound interest from appliance manufacturers who saw the need for a neutral platform for the kitchen and the inevitability of one interface for the entire kitchen and their expectation that there would be one screen for orchestration,” said Harris. “They all want the back-end infrastructure, they all want the apps, they want the IoT branded for themselves, but customized with similar components under the hood.”

This led to numerous partnerships and many custom-built apps for appliance brands, but the problem, according to Harris, was that as the inbound requests started to multiply for custom-built customer-facing apps, it really began to slow the company’s ability to build products.

“We would tweak something on the platform over here, and it would cause problems over there,” said Harris.

According to Harris, the company faced three major problems around this time. First, they had to build new firmware for every single appliance, which meant it took nine months to launch a new product. Second, the company had to build a new UI for every appliance. And finally, they had to create new recipes for an appliance to work with the appliance firmware and app.

Limited cross-brand connectivity was another issue. Because each brand had a custom app and entirely unique firmware, a brand’s appliances could only communicate with another brand’s appliances through the Fresco app. Harris and the Fresco team knew that to achieve the promise of the smart kitchen, this would need to change.

It was around the same time they realized this approach was not scalable that Harris and the rest of the team started discussing the evolution of the Fresco platform with one of the company’s advisors, Steve Horowitz. Horowitz, who was added to the board when his firm invested in Fresco (then Drop), was with Google during the early days of Android and helped lead the engineering team that developed what would become one of the world’s dominant mobile operating systems.

In 2021, the company went back to the drawing board and started to rethink how they could build a more scalable platform that didn’t require building entirely new custom apps and delivered on the promise of true appliance-to-appliance interconnectivity. To achieve this, the company began working on what Harris described as a universal firmware and universal appliance UI that would work with all appliances connected to the Fresco platform.

Shots from the new Fresco/Instant Brands App

According to Harris, getting there required a step back to examine the commonality across appliances and a reimagining by the company of how they view the universe of appliances in the kitchen.

“We used to build appliances by their category, like stand mixer, oven, blender,” said Harris. “But we actually realized that we needed a sort of universal communication layer between recipes and between appliances.”

Harris says this step-back enabled them to realize that there were 77 common cooking capabilities in the kitchen – such as bake, broil, steam, etc – and across these cooking capabilities, there were 8 ways to describe them such as time, temperature, and cooking speed.  

“Suddenly, we now had, architecturally, from a back end point of view and then from a customer UI point of view, this set of universal concepts that we can have to join recipes and appliances, and to have appliance control,” said Harris. “We rebuilt the consumer experience with this multi-brand appliance control that sits inside our appliance partner apps, to reflect this top-to-bottom experience that ultimately allows us to deliver on the vision of this universal appliance control that can orchestrate all of your appliances.”

This new approach would need buy-in from their partners. That’s because it would require each appliance to have a new firmware and a new app that included access to a common Fresco account alongside the appliance brand’s account. From a customer perspective, it’s this single Fresco account identification, that sits within the different brand apps, that would enable the cross-brand connectivity.

“When you set up an account and our partner apps, you agree to basically set up the dual account both with Instant Brands and Fresco at the same time,” said Harris. “And you agree to both the Instant Brands and the Fresco terms and conditions. And then that allows both the individual tenants for Instant Brands and each one of our partners, and then also the sort of interconnectedness that’s brought by Fresco.”

One obvious concern appliance brands may have with having a single Fresco account embedded within different apps to connect across brands is that customer data privacy is protected both for the customer and the individual brands. According to Harris, that privacy was their top priority in architecting their new platform.

“That’s a real, clear, hard-line,” said Harris. Harris said each brand would get its own “data warehouse for lack of a better term”, and they ensured that each set of data would adhere to all data privacy rules. Harris said that if a customer opts in, their data would be part of aggregate, anonymous data around usage to help appliance brands build better products. But, in the end, “nobody sees anyone else’s user data, and they only have their own appliances and their own users that they are interacting with.”

Beyond the new architecture to enable cross-device interactivity, Fresco also focused on redesigning the customer experience, implementing design tenets from the likes of Apple Watch and other Apple Carplay to help guide users during the cook. Unlike early guided cooking platforms, however, Fresco focused on making sure the user would have as much or as little assistance as they needed and made sure to clearly communicate information to customers in a way that ensure they were informed and had control.

In rethinking the customer experience, Harris gave a shout-out to Wired writer Joe Ray, whose review of the Drop/Fresco platform gave them clarity on what they needed to focus on. 

“Joe Ray did an amazing job of calling out the issues with the experience we’ve built. And that was obviously a catalyst in the process, in really assessing the underlying data, and for to ask ourselves if we are delivering on our promises.”

According to Harris, the complete rebuild of the code base was a long and difficult process, but it was a necessary one given the direction of the smart home and smart kitchen. He pointed to Matter (he says Fresco will integrate as devices become Matter-compliant), and how all the big smart home brands were aligning around the standard. However, kitchen products, he pointed out, were fundamentally different and needed a platform like Fresco.

“This is where the future is, this is what Matter is building,” said Harris. “All of these appliances starting to be able to work together in any location. We’re just accelerating that we’re delivering it today, instead of waiting years before that Matter becomes a reality.”

GoodBytz Unveils Modular Robotic Kitchen That Can Make up to Three Thousand Meals Per Day

Robotics, AI & Data

GoodBytz, a robotic kitchen startup based in Germany, debuted its new kitchen robot last week in its hometown of Hamburg at the INTERNORGA 2023 trade fair.

The GoodBytz food robot is a modular system that can be tailored around different food types and menus:

  • The refrigerated storage module can hold up between 24 and 72 different ingredients and sauces and feeds into different food assembly robots.
  • The food assembly robot modules can measure ingredients, fill bowls, place toppings, and perform cleaning functions.
  • A separate topping module can plan up to 24 ingredients and sauces into the bowls. GoodBytz offers a ‘cooking zone’ module that can output up to 3,000 meals per day if an operator wants a system set up for hot food.
  • The serving module makes up to four different types of bowls available for serving, and the output module presents the finished food ready for delivery to the customer.
  • A dishwasher module

Below is a schematic that shows the standard GoodBytz system. At 12.75 square meters – a little less than 200 square feet – the system has quite a large footprint, but that’s not that surprising given it’s essentially a self-contained professional food service kitchen.

The robot is centered around an internal chamber in which a couple of robotic arms maneuver around to gather ingredients, cook and place them into bowls. Once an order is placed, a robotic arm positions a cooking pot under the ingredient dispensing station to gather ingredients, dispense sauces and then place the pots on a shelf where they are rotated and cooked. The cooking shelf is reminiscent of the Spyce cooking system, in which the pots are spun in place to ensure proper heat and ingredient distribution.

Once the food is finished, the robotic arm picks up the cooking pot and pours the finished food into the bowl. From there, a separate robotic arm maneuvers the bowl under a dispensing station that puts vegetables and other items to complete the bowl and then places the bowl onto a conveyor belt so it can be rolled out to be picked up for serving.

GoodBytz Robotic Kitchen

The cooking robot’s sensors measure ingredients and adjust cooking times based on the dish being prepared, and the system features a touchscreen control module that allows for recipe customization. GoodBytz claims that the system, which can integrate with different ERP systems, can monitor food ingredient inventories and track ingredient freshness.

GoodBytz CEO Hendrik Susemihl told The Spoon the company uses a robotics-as-a-service business model, where the customer pays a fixed monthly service fee for the robots and an additional price-per-produced dish. The pricing varies depending on the configuration, with a cold bowl configuration differing from a configuration where meals are cooked in a convection oven.

The company’s prototype robotic kitchen was operational just three months after the company was founded in August 2021 and opened up a ghost kitchen in June 2022 to test the robot under natural conditions. GoodBytz plans to start cooking meals for its first big customer, Sodexo, in Q3 of this year. At INTERNORGA 2023, GoodBytz announced partnerships with system suppliers Palux and Winterhalter.

GoodBytz is first targeting the European market, but Susemihl said the company is eyeing expansion into the Asia and North American markets next year. The company has raised a €4 million seed round and is starting to raise its series A.

Kroger to Use Gatik Robotic Trucks for Middle-Mile Delivery of Fresh Products

Delivery & Commerce, Robotics, AI & Data

This week Kroger announced a collaboration with Gatik, a company specializing in autonomous middle-mile logistics, to utilize autonomous box trucks in Dallas, Texas. According to the announcement, the partnership aims to enhance delivery frequency, reliability, and responsiveness for customers while streamlining costs and increasing efficiency throughout the supply chain.

Starting in the second quarter of 2023, Gatik’s medium-duty autonomous box trucks will be responsible for transporting fresh products from Kroger’s Customer Fulfillment Center (CFC) in Dallas to several retail locations. These trucks are fitted with a 20-foot cold chain-capable box, designed for the safe and efficient transportation of ambient, refrigerated, and frozen goods.

The two companies believe the collaboration will provide Kroger customers with an expanded range of same-day pick-up times and more flexible order cut-off times. Gatik will handle the transportation of groceries, foodstuffs, and general merchandise for 12 hours daily, seven days a week.

Gatik’s autonomous middle mile solution will assist Kroger in addressing the needs of customers who shop online and in-store, offering quicker and more dependable access to products. Since commencing commercial operations in 2019, Gatik says it has successfully delivered half a million customer orders using its robo-trucks.

The deal is another win for Gatik, which has previously secured middle-mile delivery contracts for Walmart in Louisiana and Arkansas and for Loblaws in Canada. The company, which raised over $121 million in funding, was recently rumored to be in talks with Microsoft to raise more funding at a $700 million valuation. The Microsoft deal would be a strategic investment that would result in the autonomous truck company using Microsoft’s Azure cloud computing platform to develop technology for autonomous delivery vehicles.

Video Sessions: Food Robotics Outlook 2023

Robotics, AI & Data

We also heard from entrepreneur and restaurant operator Andrew Simmons, who is reinventing his neighborhood restaurant with digital technology and robotics.

Atish Aloor told us how his company CloudChef is creating a way to digitize the chef and building an operating system for repeatable, high-quality cooking.

Mark Oleynik of Moley and Khalid Aboujassoum of Else Labs discussed the opportunity and challenges of building cooking robots for the home kitchen.

Arthur Chow of S2G Ventures and Buck Jordan of Vebu Labs discussed the funding environment for food robotics startups and how the market’s unique characteristics make it different from other food tech verticals.

This content is for Spoon Plus subscribers. However, if you are interested, you can learn more about Spoon Plus here. 

‘It’s Tough for Robotic Companies’: VCs Talk About the Funding Landscape for Food Automation

Robotics, AI & Data

It’s not a secret that the tech industry is going through a challenging time when it comes to venture capital. The food tech sector is no exception, and, according to Vebu Labs managing partner Buck Jordan, food robotics has been hit especially hard.

“It’s tough for robotic companies,” said Jordan during the venture capital landscape session at this week’s Food Robotics Outlook 2023 event from The Spoon. According to Jordan, the overarching reason is that food robotics startups have an especially long journey to get to that first dollar of revenue.

“The challenge is that robotics is a really expensive sport. It takes two or three years to get to a commercializable major product.”

Arthur Chow, an investor at S2G Ventures, agrees.

“With valuations, the hammer has come down hard on the anvil there in the last couple of months,” said Chow. “These are really capital-intensive businesses. So you’re just looking at a math equation around valuation; how many rounds you have to raise in the future and how much you will get diluted. And then ultimately, an exit value, which there haven’t been a lot of exits.”

The reason for these long journeys to revenue is that, often, the founders of these companies have such big visions for their robotic systems.

“We all start these food robotics companies with like, ‘let’s automate everything, the biggest thing,'” said Jordan, previously a founder of Miso Robotics, the company behind the Flippy restaurant robot. “We devise these like huge, aggressive, big projects, and they’re incredibly valuable, but the capital curve to get there is so steep.”

One potential remedy to these long gestation times is taking a portion of that bigger idea and offering something useful – and quicker to market – than a hugely complicated system that takes years to perfect.

“I suspect that some robotics companies who are a little more responsible, or a little more revenue-oriented, are going to start paring down their objectives,” said Jordan.

Jordan pointed to Creator, a maker of fully roboticized restaurants, as an example of a company he believes has valuable technology that could be ‘parted out’ to the market and be successful.

Both Jordan and Chow believe that there will be a number of food robotic startups that could get acquired over the next year as well-funded companies look to roll up interesting IP. But beware, says Jordan.

“There’s an opportunity because you can buy this IP for pretty affordable prices, but you need to have a team and expertise in house to do that. And so, woe be to the pure financial investor who starts rolling these things up without having a team on board to do that.”

In the end, both investors still see an opportunity for food robotics, but believe the key will for startups to not only show a path to revenue, but clearly illustrate how they can enable new lines of revenue over time.

“It’s sort of that gradual build we’re talking about,” said Chow. “We start with one use case in revenue and it makes money there, but then you do need to, over time, build and continue to think about the utilization of the robot and an ROI.”

You can watch the full session below.

Venture Capital Food Robotics Outlook 2023