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Well. It’s been a week of ups and downs, hasn’t it! The question right now is just how much the news from the past few days will impact our vision of the future.
I’m talking, of course, about robots. (Did you have something else on your mind?)
It’s been a will they/won’t they type of week for robots and automation:
- On Saturday we broke the story about Picnic’s new second-gen pizza (and more) assembling robot.
- On Monday, after years of touting their productivity, Walmart decided to stop using shelf-scanning robots to manage inventory.
- On Tuesday, British grocer Ocado doubled-down on robots by acquiring Kindred Systems and Haddington Dynamics.
In other words, news indicating the future of food robots was all over the (non-electoral) map. In its press announcement, Picnic said, “Interest has also increased around a contact-free, high-hygiene food preparation, due to COVID-19, therefore intensifying customer interest in Picnic’s solutions even further.” We actually saw this type of COVID-assisted demand in action last week when White Castle added 10 more Flippy cooking robots to its roster. So food-related robots are doing well!
But then Walmart abandoned shelf-scanning robots, throwing a wet blanket on robo-prospects. According to The Wall Street Journal, Walmart had discovered that as more people shopped online, stores were using more human workers for picking and packing orders. There were efficiencies then, by combining store workers’ shopping for orders with other tasks like inventory monitoring as well as other automated systems.
But the WSJ also reported that Walmart was concerned about how robots were interacting with humans. Walmart was using Bossa Nova’s ‘bots, which are six feet tall and autonomously wander store aisles. Perhaps this was too off-putting for other people shopping.
Will other retailers follow Walmart? Both Schnuck Markets and Woodman’s Markets in the midwest recently added a shelf-scanning robots to a number of their locations. Will they too, discover the same results and kill these programs?
But the bad robot news pendulum swung back to good news with Ocado’s purchases. The difference between Walmart and Ocado is that Ocado’s robots are relegated to automated fulfillment centers, so they don’t interact with everyday shoppers. Ocado’s dual robo-purchases reinforce and improve existing workflows when it comes to grocery order fulfillment. It’s not adding anything new, just ideally making its current systems faster and cheaper.
If there’s a thread to be found among these news stories, perhaps it’s that the future of food robots is more about behind the scenes, rather than out mingling with everyday people. At least when it comes to restaurants and retail. Now we’ll have to see how other businesses eyeing robots and automation vote with their dollars.
Invest-a-Palooza 2020 is here for ghost kitchens
As demand for delivery orders has gone up, so too has the amount of cash flowing into the ghost kitchen and virtual restaurant space. The last couple weeks have brought a couple eye-popping investments, the latest being Reef Technology’s $700 million fundraise announced Monday. While that massive figure reflects Reef’s entire business, which is more than just ghost kitchens, company co-founder and chief executive, told TechCrunch that ghost kitchens “will be a significant part of non-parking revenue” in the future.
Reef’s mega fundraise and the company’s confidence in its ghost kitchen business echos the overall growth of the sector. Since July, when Euromonitor predicted the ghost kitchen market would be worth $1 trillion by 2030, there has been an almost-non-stop flow of investment dollars into the space. To give a sense of just how much money is flowing into this sector, here’s a look some of the significant investments over the last few months:
- In July, Zuul grabbed $9 million in funding to expand its ghost kitchen concept across NYC. The company’s current facility, in Manhattan’s SoHo neighborhood, is home to brands like Sweetgreen and Junzi. Zuul also recently launched its own virtual food hall.
- In August, Dubai-based iKcon raised a $5 million pre-seed round for its ghost kitchen network, which currently has 10 locations across the United Arab Emirates. Notably, iKcon also operates its own proprietary tech stack in the kitchens.
- Virtual Kitchen, a company founded by two ex-Uber employees, raised $20 million in September, bringing the San Francisco-based company’s total funding to $37 million. It is expected to expand its “delivery-only kitchens” with the funds.
- Also in September, Yummy Corporation, based in Indonesia, raised a $12 million Series B round for its ghost kitchen network in Jakarta. The company is expanding into other cities and has raised a total of $19.8 million so far.
- Last month, restaurant tech company Ordermark raised $120 million to expand its network of virtual restaurant brands. Unlike the others on this list, Ordermark does not actually operate its own kitchens. Rather, it pairs restaurants with available kitchen spaces as it help those eating establishments transition to off-premises formats.
- Reef raised $700 million in part to expand its ghost kitchen business as a key part of its “neighborhood hubs.”
It’s an understatement to say that the pandemic has accelerated the growth of both ghost kitchens and virtual restaurants. What’s in part driving this massive influx of cash lately, though, is that said pandemic hasn’t subsided (the opposite), therefore dine-in rooms at restaurants haven’t re-opened, at least not in its former capacity. That fact is unlikely to change for a long time, and restaurants, restaurant tech companies, and investors alike may be finally accepting that the future for many restaurants is inside the ghost kitchen, not the dining room.
California Passes Prop. 22, Leaving Gig Workers as Independent Contractors This was a big win for profit-seeking third-party delivery services.
Meat-Tech 3D Closes $7M Funding Round, Files for IPO – The funding announcement comes about one week after Meat-Tech 3D said it had started the process for an IPO in the U.S. (The company is traded on the Tel Aviv Stock Exchange already.)
Muji Releases a Line of Shelf-Stable Plant-Based Meat Items – The products are available right now to Muji customers in Japan via both the company’s brick-and-mortar stores and its website. Dishes include plant-based versions of a burger, minced meat, meatballs, and a thinly sliced meat.
Bits x Bites Closes $30 Million for Its New China Agrifood Tech Fund – The company has invested in a variety of future food themes ranging from cell-based meat (Future Meat) and Food AI (Analytical Flavor Systems) to CRISPR (Tropic Biosciences).