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The Spoon

Daily news and analysis about the food tech revolution

Ahold Delhaize

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.

Ahold Delhaize Buys Majority Stake in FreshDirect

Dutch grocer Ahold Delhaize announced yesterday that it has bought an 80 percent stake in New York-based online grocer FreshDirect. Private equity firm Centerbridge Partners bought the remaining 20 percent. Terms of the deal were not disclosed.

FreshDirect will continue to operate as an independent unit and under its own brand name. The company will join other Ahold Delhaize brands that include Stop & Shop and Giant Foods.

The purchase of FreshDirect comes on the heels of what has been a pandemic-induced record year for online grocery sales. New York City, one of FreshDirect’s main service areas, was hit particularly hard in the early stages of the pandemic, pushing the company’s delivery capacity to the brink. With the U.S. entering its third wave with the virus, having the massive infrastructure and resources of Ahold Delhaize could help FreshDirect weather any coming storm.

The combination of Fresh Direct and Ahold Delhaize also has a tech-forward angle. In addition to being an online-only grocer, FreshDirect also recently opened up a robot-powered fulfillment center in the Washington, D.C. area. For it’s part, Ahold Delhaize has experimented with automated micro-fulfillment centers, in-store robots, and small, cashierless nano-retail environments.

With the FreshDirect acquisition, Ahold Delhaize is also bolstering its capabilities to better fend off competition from the giant players in the grocery space. Walmart has made aggressive grocery delivery moves through its Walmart+ subscription service as well as a partnership with Instacart (and experimenting with self-driving delivery cars). And Amazon, which was once online only, has made moves into the physical space with its Go Grocery and Fresh stores.

With online grocery projected to become 21.5 percent of total grocery sales by 2025, expect these types of salvos between supermarkets to continue into the next year.

Ahold Delhaize Launches Cleaning Bot Challenge to Find a Robot Floor Scrubber

Ahold Delhaize is on the lookout for a floor scrubbing robot, and it wants your help. Well, it wants your help if you’re a small startup that already has an existing prototype or MVP of a floor cleaning robot.

The Dutch grocery giant’s AI for Retail (AIRLab) unit kicked off the Cleaning Bot Challenge today in an effort to automate the process of cleaning store floors. Ahold Delhaize described the problem in a post kicking off the challenge:

In supermarkets, floors are cleaned once a day before each store opens. It takes cleaning personnel an average of two hours every morning to sweep the floors for dirt, mop the hard-to-reach corners, and then go through the store with a ride-on floor scrubber. It is certainly both a time-consuming and labor-intensive activity. 

Ahold Delhaize’s AI for Retail (AIR) Lab is, thus, looking for a partner that can automate this process by creating an autonomous cleaning robot.

To be considered for the Cleaning Bot Challenge, participants must have a team of at least two co-founders and have an existing prototype of the robot. That robotic solution must be able to scale and the founders must be able to pitch their product in Dutch or English.

It’s not surprising that Ahold Delhaize is looking to automate cleaning its floors. Repetitive, manual tasks like floor scrubbing are perfect for robots. And in the age of COVID-19, cleaning is more important than ever, so you want to ensure the process is consistent and repeatable (two more robot attributes).

It’s also not surprising because Ahold Delhaize has basically gone all-in on robots. Last year the company’s GIANT/MARTIN’s and Stop & Shop stores ordered 500 aisle roaming robots to scan for messes on the floor. Ahold Delhaize has also partnered with Takeoff to build robotic micro-fulfillment centers at some of its retail locations. And Stop & Shop even installed a Breadbot at one of its locations.

What is a little surprising, is that given all of these robo-connections and experience, the company is holding a public contest to find a floor cleaning robot, especially since there are already floor scrubbing robots on the market. A year ago, Walmart announced it was deploying Brain Corp.’s autonomous floor scrubbing robots to 1,500 of its locations.

Were none of these solutions sufficient? What was lacking from existing robot partners that spurred a global hunt for something better? We reached out to Ahold Delhaize to find out more.

In the meantime, if you have a cleaning bot up your sleeve, you have until July 7 to complete your application.

Peapod Shutting Down Online Grocery Shopping and Delivery in the Midwest

Ahold Delhaize USA announced this week that it is shutting down the Midwest division of its Peapod online grocery business. Starting Feb 18, customers in Illinois, Wisconsin and Indiana will no longer be able to place online grocery orders through Peapod.

As part of this move, Ahold said it will close distribution and food preparation facilities across Illinois which will cause the loss of 500 jobs. According to Milwaukee News and Events, 50,000 people use Peapod in the Midwest, placing 10,500 orders weekly. Ahold said that Peapod’s Midwest operation accounted for $97 million of the company’s overall $1.1 billion in revenue.

Selma Postma, President of Peapod, told Milwaukee News and Events that the issue for Peapod in the Midwest was that it was online only, so there was no network of physical stores for its supply chain or for customers to visit and get to know the brand.

Ahold’s Midwest contraction comes at a time when grocery retailers are aggressively expanding their online, delivery and pickup operations. Kroger is building out automated fulfillment warehouses. Alberstons is placing robotic micro-fulfillment centers in the backs of its stores. Walmart is rolling out its Delivery Unlimited service nationwide. And Amazon waived its grocery delivery fee for its Prime members (oh, and it’s building out its own chain of physical supermarkets).

Ahold said it closing down Peapod’s Midwest operations to focus on the East Coast, where it is actually trying out different e-commerce-forward store formats. Last year, Ahold subsidiary Giant Foods opened up a physical hub powered by Peapod that services delivery and pickup of e-commerce orders.

There’s a saying that vertical cuts are better than horizontal ones. So while we never applaud people losing their jobs, the decision to lop off the Midwest to strengthen Ahold’s position on the East Coast makes sense. Now Ahold will just need to keep innovating and pushing to keep up with the grocery delivery competition.

Giant Foods Opening a Physical Hub for Ecommerce Orders

GIANT Foods announced yesterday it will open a new physical hub in Pennsylvania that only services ecommerce orders. With this move, Giant joins the ranks of grocery stores architecting new experiences to accommodate the growth in online shopping.

Opening Feb. 12 in Lancaster, PA, the new 38,000 sq. ft. hub will be called Giant Direct, Powered by Peapod (both Giant and Peapod are subsidiaries of Ahold Delhaize). It will be a fulfillment center for orders placed online via Giant or Peapod’s websites or apps, and will offer delivery as well as a dedicated pull-up area where groceries can be brought out directly to a customer’s car.

For customers without online access, there are also vestibules at the store where customers can walk up and place their orders via tablets.

The new hub was announced last June, and as Grocery Dive reports, is a re-model of a traditional retail location that closed in 2017. The new hub will be able to serve 40 percent more customers than its previous iteration, and because it only services online orders, can speed up fulfillment of order delivery to the neighborhoods it services.

Ahold Delhaize and retailers across the grocery spectrum are making big infrastructure changes in anticipation of big growth in ecommerce. According to KPMG more than half of U.S. consumers are expected to shop online for groceries this year.

Earlier this month, Ahold Delhaize tapped Robomart for (eventual) autonomous mobile commerce. The company has also partnered with Takeoff to build out micro robotic fulfillment centers in the back of some of its stores.

Kroger is building out the first of its planned twenty robotic “sheds” to speed up online order fulfillment, and is also piloting self driving delivery vehicles.

Walmart is retrofitting a store in New Hampshire with a mini-robotic fulfillment center for faster order processing and is also experimenting with self-driving delivery.

What I’m most curious about with the new Giant Direct store is if and how people will use the in-store tablets. How big will the average orders be, and how fast will they get fulfilled? Will people place an order, run errands and return, or will they wait in their cars?

If you’re in the Lancaster area and plan to shop at Giant Direct, we’d love to hear how your experience was. Leave a comment or drop us a line.

Robomart Drives Home a Deal with Stop & Shop for Mobile Commerce

Robomart announced today that its self-driving mobile commerce vehicles will be used by Stop & Shop in the greater Boston area starting this Spring.

Robomarts are literally little mini-marts on wheels that shoppers can summon via the Robomart mobile app. Once the Robomart arrives, customers choose from the selection carried in the vehicle and are charged for what they take. According to today’s press announcement, the Robomart vehicles will carry a selection of Stop & Shop produce, as well as meal kits and other convenience items directly to consumer’s doors.

I spoke with Emad Rahim, Co-Founder and Chief Strategy Officer for Robomart, who said that while details like the exact neighborhoods where Robomart will be available are still being worked out, they will start off with “a few vehicles,” which may expand to even more depending on how the program works out.

Rahim also said that even though these Robomarts have self-driving capabilities, they will be tele-operated by drivers located in Boston. The company is in ongoing discussions with the city of Boston to make sure it complies with local laws. “Robomart is actively working with the City of Boston and Massachusetts Department of Transportation to ensure Robomart follows all guidelines required,” Rahim said in an emailed statement.

The Robomarts in this pilot will also feature Stop & Shop branding on the side, acting, essentially as big, roaming billboards for the grocer.

I wrote last week about that mobile commerce could be a sleeping giant in the grocery world. With point-to-point delivery (whether by robot, self-driving car or drone), there is always down time for the vehicle, which must travel back to a location empty, before picking up its next order. Since mobile commerce vehicles essentially carry a store with more inventory, they can stay active without needing to reload after every stop.

There are a couple more things of note with this announcement. First, the press release calls out meal kits directly. We’ve been following the evolution of meal kits from mail order to retail shelves. Including them in a mobile commerce play makes a lot of sense. A car pulls up to your door and you can grab all your ingredients for dinner that night in one box.

Second, it looks like Stop & Shop is stepping up its automation efforts in a big way this year. Earlier this week, Ahold Delhaize, Stop & Shop’s parent company, announced it would be rolling out 500 aisle-roaming robots to GIANT/MARTIN and Stop & Shop stores. Some Stop & Shop stores will also be getting mini-robot fulfillment centers thanks to a partnership with Takeoff.

Robots are going to be big this year. If you want to see the future of food robots firsthand, be sure to attend Articulate, our food robot and automation conference we’re holding on April 16 in San Francisco.

Ahold Delhaize Orders Up Nearly 500 Floor Roaming Robots

The days of hearing “Clean up on aisle 7” on the grocery store intercom are numbered. Ahold Delhaize is bringing nearly 500 robots to roam the aisles of GIANT/MARTIN’s and Stop & Shop stores to identify messes.

Dubbed “Marty,” the Badger Technologies robot has been in tests at GIANT locations where, according to the press release, the robots were “…easily recognized by customers in stores by their friendly appearance where they were tested and used to identify hazards, such as liquid, powder and bulk food item spills and provide reporting that enables corrective action.” So the robot doesn’t clean up any messes at the moment, it just lets us humans know where to go to with the mop.

What’s not mentioned in this press announcement is any kind of shelf-scanning or inventory management that Marty will perform. Badger’s website lists inventory management and data analytics as part of its suite of products, so it has the capabilities. But from the press release and a Badger corporate blog post, this rollout seems to be more about risk mitigation rather than making sure there are enough rolls of Bounty paper towels available at any given time. Perhaps cleanup and risk management is a more pressing issue for Ahold Delhaize, and more shelf-scanning functionality will be added to the robots at a later date.

Ahold Delhaize seems to be a big believer in robots. In addition to these 500 Martys rolling around its floors, the company also enlisted Takeoff to build out robot fulfillment centers in the back of some Ahold Delhaize locations. Albertsons is piloting a similar system with Takeoff as well, and Walmart is building and testing out its own in-store robotic fulfillment center.

But. As much as I love robots, I have to imagine these are a stop gap measure until cameras and computer vision take over. Cashierless checkout systems like Grabango and Trigo Vision use ceiling-mounted cameras to automatically monitor what people purchase. However, they also provide stores with an always-on inventory system. Robots can roam around the store, but if someone picks up a box of cereal after the robot has rolled by, that won’t get identified until the robot comes back around. Cameras and computer vision can keep an eye out and monitor that in real time all the time. Computer vision might not be as good as identifying hazards like spilled water or milk on a white floor now, but cameras and AI continue to get better and will likely take over for robots like Badger at some point.

What does the future of robots look like? How will they interact with AI systems? If you are curious about the answers to these questions, you should definitely come to Articulate, our first-ever food robot and automation conference on April 16 in San Francisco. Tickets are limited, get yours today!

With Ahold Delhaize, In-Store Robot Fulfillment Centers Now a Trend

If it’s true that it takes three occurrences of something to make it a trend, then in-store robot fulfillment centers are now officially a trend in the U.S. Reuters reports Ahold Delhaize, the Netherlands-based grocery company, has partnered with Takeoff to roll out automated mini-warehouses at some of its retail locations, which include Food Lion, Stop & Shop and Giant Food.

The move makes Ahold Delhaize the third grocery giant to experiment with in-store robot fulfillment in recent months. In August, Walmart announced it would partner with Alert Innovation to build out an automated fulfillment center in its Salem, New Hampshire store. And just last week, Albertsons announced it was piloting its own robot fulfillment in partnership with Takeoff as well.

In-store robot fulfillment has the promise of speeding up delivery or pickup of groceries. Takeoff’s system usually takes up about an eighth of a store’s square footage. When an online grocery order comes into the store, a series of crates on racks and conveyor belts automatically shuttle food items to a human who assembles and bags them. The automated system could have a grocery order ready in as little as a half hour.

The fact that the fulfillment centers are built inside existing stores means that grocers don’t have to set up a separate distribution center with its own inventory (and accompanying systems). Since people typically shop from a grocer that is already in their neighborhood, delivery or curbside pick up of orders are that much closer–and thereby faster to reach their destination.

Online grocery shopping is set to hit $100 billion by 2022, and a recent study from the Retail Feedback Group showed that there is growing acceptance of purchasing fresh items such as produce and meats online, site unseen. This willingness to purchase even more food online from a generation of shoppers used to getting things on demand will make convenience and speed table stakes for anyone in the grocery game.

It should also be noted that the Ahold Delhaize deal marks the third publicly announced partnership for Takeoff. In addition to the aforementioned Albertsons, the startup is also working with Miami-area grocery chain Sedano’s. The company says it has agreements with five retailers and will have five of its fulfillment sites open in Q1 of 2019.

Not every grocer is jumping on the in-store bandwagon, however. Kroger upped its investment in U.K.-based Ocado earlier this year and has plans to build out twenty dedicated robot-driven grocery fulfillment centers over the coming years. The locations of the first three are set to be announced in the coming weeks.

None of these in-store automated systems are online yet, so it remains to be seen how they will be used and how much efficiency they will truly bring. But if they work as promised, today’s robot trend will be tomorrow’s new normal.