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Daily news and analysis about the food tech revolution

Albertsons

Food Tech News: DeliverZero Reduces Food Delivery Waste, N!ck’s Ice Cream Partners with Perfect Day

Welcome to our weekly Food Tech News round-up. This week, we have stories on DeliverZero’s waste-free food delivery, a partnership between N!ck’s Swedish Ice Cream and Perfect Day, changes to Albertson’s delivery fleet, and Daily Harvest’s new product.

DeliverZero uses reusable packing for food delivery

DeliverZero is a third-party food delivery service (like DoorDash or GrubHub) based in NYC, but what differentiates the company is its use of reusable packaging. When the food is delivered to customers, it arrives in reusable clamshell packaging made from BPA-free polypropylene plastic. Customers won’t have to worry about a pileup of reusable to-go containers, though. For each order they make, a delivery driver will also retrieve the previous order’s packaging and return it to the participating restaurant. If the packaging is not returned within six weeks, the customer gets charged $3.25.

At the moment, DeliverZero has partnered with over 100 restaurants in NYC. The company also announced that it will soon be expanding to Amsterdam and Chicago.

N!ck’s Swedish Ice Cream uses Perfect Day’s tech to create vegan ice cream

N!ck’s Swedish Ice Cream shared in a press release that it recently partnered with Perfect Day to produce several new vegan flavors. The company will use Perfect Day’s animal-free dairy proteins and a plant-based fat called EGP (N!ck’s has 14 patents for this) to create an ice cream that boasts a smooth and creamy texture. The new line will contain seven vegan flavors, will be keto-friendly, and contain no added sugars. Three flavors, Swedish Mint Chip, Choklad Choklad, and Karamell Swirl, are currently available for purchase on N!ck’s website, and one pint goes for $9.99. The rest of the flavors will be available on the website in February, and several undisclosed retailers will carry the ice cream in Spring 2021.

Albertsons will stop operating its own delivery fleet in several markets

Albertsons announced this week that it will stop using its own delivery fleet to fulfill grocery deliveries in several markets starting February 27, 2021. Which states and markets this will affect remains to be announced, though it was confirmed that California-based Albertsons, Vons, and Pavilions will cease using their own delivery fleets. The grocer will instead transition to using an undisclosed third-party delivery service. In the past, the company has used a combination of third-party delivery services like Instacart and Shipt with its own fleet. Due to the increase in home deliveries, the company said this transition will allow Albertsons to compete more effectively in the home delivery market.

Daily Harvest adds plant-based Mylk as an option

Daily Harvest is a trendy subscription service that targets millennials with delivered boxes of pre-made smoothies, bowls, and flatbreads. Now, the company has added a new product called “Mylk.” The plant-based milk comes in two flavors, vanilla and plain, and contains no artificial flavors, fillers, or gums. Interestingly, the almond milk does not come in liquid form, but rather a triangular cube that must be blended with water to create liquid almond milk. One order of almond Mylk costs $7.99 and makes eight 8-ounce servings.

Albertsons Debuts Automated Pickup Kiosk

Grocery retailer Albertsons announced today that it is piloting a new automated kiosk for grocery pickup. The kiosk is located at one of the company’s Jewel-Osco stores in Chicago.

The new kiosk, built by Cleveron, has regular and deep-freeze temperature zones, and gives curbside pickup customers a new contactless option when getting their groceries.

Jewel-Osco customers in the service area interested in using the new kiosk select “Kiosk PickUp” when shopping online, and are then give two-hour time slots to pick up their groceries. When customers arrive, they scan a code on their phone at the kiosk and their order is robotically moved to the front of the unit for pickup.

Last year, Alberstons expanded the use of automated micro-fulfillment centers, which use robotics in the back of house to pick and pack e-commerce orders. With today’s news, Albertsons is extending its automation efforts from the store room to the curb.

Albertsons’ moves, however, are part of a larger wave of automation running through the grocery industry right now. Last year was a record year for online grocery shopping, thanks to the pandemic closing restaurants and keeping people at home. In response, grocery chains have been adding systems to make online grocery shopping and order fulfillment easier. Kroger will open its automated fulfillment centers this year, FreshDirect built out an automated fulfillment facility in D.C. using Fabric’s technology, while Walmart started testing grocery delivery via autonomous vehicles.

Albertsons first automated kiosk in Chicago is already fulfilling orders and the company says it plans to install a second unit at a San Francisco Bay Area Safeway soon.

Albertsons Pilots Temperature-Controlled Lockers to Expand Pickup Options

Albertsons announced today that it will pilot temperature-controlled lockers as an added pickup option for its grocery customers.

The lockers, delivered by Bell and Howell, are modular, can be installed either inside or outside and feature dynamic temperature control to accommodate various items placed in them. Customers will see this new “PickUp” option from participating stores when they shop via Albertsons website or mobile app. Customers placing an order will receive a unique code they use to unlock the self-serve locker.

Grocery retailers could soon be facing a double whammy of demand, given the continued use of e-commerce, thanks to the pandemic (and flu season!) and the impeding holidays. During the early days of the pandemic, we saw the strain as retailers couldn’t keep up with demand for grocery delivery. Though those systems seem to have improved, grocers like Walmart and Target have vastly expanded curbside pickup options to provide more flexibility for customers. Adding self-serve lockers gives customers even more options for getting their food while relieving increased demand pressure placed on the grocers.

Delivery lockers like the ones Albertsons is installing are starting to become a trend. The winner of last week’s Smart Kitchen Summit Startup Showcase was Minnow Technologies, which makes IoT-enabled food delivery lockers for places like offices, residential buildings and restaurants.

Amazon pioneered the pickup locker, many of which were at grocery stores, ironically. Though those were for general Amazon packages, it wouldn’t be a surprise to see Amazon adding similar temperature-controlled pickup lockers at its new chain of Amazon Fresh and Go Grocery stores.

The first Albertsons PickUp lockers will be installed at select Jewel-Osco locations in Chicago, with more coming to San Francisco Bay Area Safeways later this year.

Albertsons Expanding Use of Micro-Fulfillment with Takeoff

Albertsons is adding more micro-fulfillment centers (MFC) from Takeoff Technologies in an effort to keep up with grocery e-commerce, according to a story in Supermarket News.

Takeoff Technologies’ MFCs use a series of conveyors, rails and totes to help automate the process of fulfilling online grocery orders. When an order comes in, the system retrieves and assembles the various items, which are then packed into bags by a human before being sent out for delivery or curbside pickup.

Albertsons launched the first two of its MFCs with Takeoff in San Jose and San Francisco towards the end of last year. The grocer is now looking to build out a number of new MFCs with Takeoff over the rest of this year and into next. Chris Rupp, chief customer and digital officer at Albertsons Cos., told Supermarket News, “We have a series of new locations we’ll launch over 2020 and 2021 that will help us deliver more groceries, faster, to customers in some of our highly concentrated areas of business.”

Those new MFCs will include both back-of-house facilities — that is, fulfillment centers built into the backs of existing stores — as well as standalone MFCs that are basically dark grocery stores. Last year ShopRite announced it was building out a standalone MFC with Takeoff.

That Albertsons is expanding its use of MFCs is not that surprising. The pandemic has pushed people into record amounts of online grocery shopping. Back in April, at the height of the lockdowns, I spoke with Curt Avallone, the Chief Business Officer of Takeoff Technologies who said that the company had seen demand for online grocery up 80 to 100 percent at its facilities, and that basket sizes had gone up from $150 to $200.

Those levels may have plateaued or even dipped since April, but Albertsons’ committing to building out more automated MFCs is an indication that grocery e-commerce is now a more permanent part of the country’s shopping habits.

Albertsons isn’t alone in adopting more automation to fulfill online orders. During my call with Avallone, he said that Takeoff had six operational units with other partners including Sedano’s and Loblaw’s, with another 20 MFCs being built. Kroger is also hard at work building out its own Ocado-powered smart warehouse fulfillment centers across the country.

Publix Has Ambitious Plans to Get More Hydroponically Grown Greens in Its Stores

Back in 2019, we predicted that hydroponically grown greens would soon become a mainstay of grocery stores in the U.S. We did not predict that a global health crisis would disrupt the supply chain and make consumers hyper-aware of where their food comes from and what goes into growing it, but that’s exactly what happened. The result? Hydroponic farming’s march into the grocery store has been accelerated.

Perhaps no one is pursuing this shift more seriously than grocery retail chain Publix, whose Greenwise brand has partnered with Brick Street Farms to locate a shipping-container-turned vertical farm at one of Greenwise’s brick-and-mortar markets in Florida. 

The 40-foot shipping container (see image above) sits outside the Greenwise market in Lakeland, Florida. Like other vertical farming operations, it uses hydroponics to grow leafy greens without the use of soil or pesticides. Greens are packaged onsite and travel mere feet to reach the produce section of the store.

Speaking on the phone this week, Curt Epperson, Business Development Director of Produce and Floral for Publix, and Albert Gottuso, Category Manager for Produce at Publix, highlighted the advantage of this method over traditional means of getting produce in the store. Most of Publix’ conventional leafy greens are grown in California and have to travel thousand of miles before they reach store shelves. Besides the obvious lower carbon footprint, growing greens onsite also uses less water than traditional farming and means fresher greens on store shelves compared to those that are harvested shipped, and hydrated before they ever reach the produce section.

But hydroponic greens were on the Publix agenda long before the deal with Brick Street Farms. During our call, Gottuso said the company has maintained relationships for years with local hydroponic farmers to sell greens in its stores. For instance, Livingston, TN-based Tanimura & Antle sells its butter lettuce at Publix stores in that state.

“This hydroponic product out of nowhere became our best seller for leafy lettuce,” he said. That in turn led the chain to consider how it could supply hydroponically grown greens to more of its locations. 

Multiple efforts are currently underway. Earlier in 2020, Publix partnered with Vertical Roots on a mobile vertical farm customers could interact with. In March, the chain teamed up with large-scale vertical farming company Kalera.

All of these efforts fit into Publix overall hydroponic program, which Epperson says is still testing different techniques in terms of getting indoor greens to local stores. 

Gottuso added that the chain is expanding this hydroponic program so that every state has a grower with an indoor farm supporting local stores in its area. “Our goal is that every store that we service has a local hydroponic program that can offer an assortment of variety of blends,” he said. 

This push towards local, more sustainably grown greens is happening across the grocery sector. Kroger has a partnership with Berlin-based InFarm, which puts its vertical farming pods in the store’s produce section. And just this week, San Francisco-based Plenty announced a partnership with Albertsons to sell its greens (which are grown offsite in a warehouse) at that retailer’s store.  

Publix doesn’t plan to stop at leafy greens. Though they are by far the most popular product to grow hydroponically, Epperson suggests there is potential for cucumbers, tomatoes, and peppers, among other produce types. 

As to whether or not hydroponic farming could ever replace traditional farming, at least in terms of leafy greens, Epperson noted that the jury is still out. “It’s very difficult to get the yield you would get in conventional growing,” he said. Calling it “blue sky” thinking, he pointed to a day when Publix might have vertical farms located next to all of its distribution centers. And that idea isn’t exactly unattainable — Square Roots is already doing something similar with Gordon Food Service. 

The introduction of technology to the greenhouse could also play a big role in making hydroponics more widespread in the grocery sector. Gottuso says technology allows companies to build greenhouses in areas where they historically haven’t been (like the Southeast). These large greenhouses also provide the scale needed to supply the shelves of a major grocery retailer because they are “adept to growing larger amounts of produce.”

If Publix’ ambitions around hydroponics can do likewise and scale effectively, we can expect many more locally grown greens — and other produce types — to hit store shelves in near future.

Albertsons and Takeoff Partner for Robot-powered Grocery Micro-Fulfillment

Grocery retailer Albertsons and Takeoff Technologies announced today that they are forming a strategic partnership with a dedicated teams to “collaborate on the evolution of microfulfillment,” according to the press release. Translation: Albertsons is getting more robots to grab your groceries.

Takeoff creates robot-driven micro-fulfillment centers to facilitate online grocery orders. The automated system consists of a series of tote boxes, rails and conveyors and is small enough to be built into the back of an existing grocery store. When an online order comes in the robots taxi each item to a human who packs them all up for delivery or pick up.

Today’s announcement expands on a pilot program Albertsons and Takeoff announced a little more than a year ago. The first micro-fulfillment center of that deal opened this past October in South San Francisco, with another set to open in San Jose before the end of the year.

A year in between the announcement of the pilot deal and its actual implementation may seem like a long time. But as Trung Nguyen, VP of eCommerce for Albertsons told us at our Articulate summit earlier this year, a company the size of Albertsons has to move cautiously when implementing new technologies. The grocer isn’t just interested in cool new solutions; those solutions have to work at scale immediately.

While online grocery shopping is still a small part of overall grocery shopping, it’s growing. Robot powered micro-fulfillment centers like Takeoff’s promise to not only speed up order fulfillment, but since they’re built into existing grocery stores, they push that fulfillment closer to the consumer. This, in turn, should translate into faster order turnaround for delivery or pickup (and more online grocery ordering).

This has been a big year for Takeoff. The startup added ShopRite and Loblaws as customers and raised $25 million.

While Albertsons is heading in Takeoff’s micro-fulfillment direction, rival grocery chain Kroger is going a different way. Kroger is an investor in and using Ocado’s robotics and software platform for online grocery fulfillment. Instead of building smaller centers in stores, Kroger/Ocado is building larger, standalone fulfillment warehouses throughout the country.

Regardless of the implementation, automation is coming to your local grocery store, and it looks like we’ll see a lot more of it happen next year.

Albertsons to End Plated Meal Kit Subscription Service

Albertsons struck another nail in the coffin of mail order meal kits yesterday when the company announced that it will be ending its Plated subscription service and shifting that brand to become one of the retailer’s private label products.

From the press announcement:

As a result, Plated’s subscription service will be phased out at the end of November, giving way to a sharper focus on how the brand can help deliver a differentiated in-store experience. The company plans to expand the Plated brand with new product offerings in additional stores in 2020.

Plated was acquired by Albertsons in 2017 for $200 million and began rolling Plated meal kits out to stores nationwide in 2018. But 2019 has been a tough year for Plated:

The bloom is definitely off the rose for mail order meal kits. Blue Apron, a pioneer in the business, continues to limp along with dismal results. A report earlier this year from Nielsen said that sales of meal kits grew with in-store retail being the engine for meal kit growth. Research this year from NPD found that 93 million US adults hadn’t tried meal kits but wanted to, and that those who bought meal kits were happy with their purchase and that meal kits had an opportunity to expand beyond dinner.

That last bit helps explain why Albertsons said its Own Brands will manage Plated “into a holistic home meal solution” that goes beyond dinner. Meal kit company Sun Basket announced this summer that it was expanding its lineup of meal offerings to include breakfast, lunch and snacks. Albertsons’ rival Kroger has also been experimenting with a new lineup of meal kit options that offer more food flexibility and require less work to make.

What I’m curious about is whether we’ll see an uptick in meal kit sales as retailers like Amazon, Walmart roll out free and superfast same-day grocery delivery. Will people order meal kits, or will service continue to bend towards convenience and allow people to just go ahead and order hot bar options (e.g. fully cooked rotisserie chicken) that arrive in an hour?

Video: Albertsons Brings Labor into Automation Decisions on “Day One”

A recurring theme during our recent ArticulATE food robot and automation conference was the issue of human labor. What do you do when machines displace people in the workforce? It’s a tough question employers throughout the food world are grappling with.

On the one hand, automation is coming, and we need to figure out what combination of government and private sector will be responsible to help re/train people put out of work by robots. On the other hand, food-related companies like Albertsons (and restaurants), are having a tough time finding people to work for them.

Trung Nguyen, VP of eCommerce for Albertsons, told the audience at ArticulATE that the grocer is having a hard time filling jobs, especially truck driving jobs. Turns out people would rather set their own hours and work unsupervised driving for Uber than a delivery truck.

Even with a labor crunch, Albertsons is very methodical in its approach to automation. That’s because Albertsons is unionized, and, as Nguyen explained, before any kind of automation is implemented, the company brings in union reps and lawyers on “day one.” This way, Nguyen said that there is clear communication in what the company does.

Check out the full video from the conference to hear more about how the Albertsons grapples with the labor issue, why scale is important to a chain like Albertsons, and how it, too, has started piloting some autonomous vehicle delivery tests in the Bay Area.

ArticulATE 2019, Rethinking Grocery in the Age of Automation

Be sure to check back all through the week for more videos of the full sessions from ArticulATE!

Albertsons Lays Off 10 Percent of Plated’s Corporate Staff

Albertsons-owned meal kit service Plated laid off roughly 10 percent of its corporate staff, according to Bloomberg. The cost-cutting move follows news from last month that Albertsons was scaling back Plated’s availability at its retail stores and the abrupt departure of Plated’s CEO in January.

Albertsons bought Plated in September of 2017 for $200 million, and started rolling out meal kits to Albertsons retail locations in April of 2018. The plan was to expand Plated’s meal kits out to 650 stores by the end of last year.

The layoffs amount to 25 employees in the New York City office, and Bloomberg reports that “The cuts will allow Plated to reduce expenses and better utilize the larger company’s operations structure already in place.”

After launching in 20 stores in California and 20 stores in Chicago, a recent search by The Idaho Statesman found Plated meal kits only available in 19 California stores and two stores in Texas.

An Albertsons spokesperson told Grocery Dive that the company remained committed to meal kits and that it is innovating in the space for future meal kits expansion. Albertsons said this innovation could include moving beyond the core offering of dinner and into other meals or snacks as well as wine pairings.

It’s hard to imagine Albertsons giving up on meal kits entirely, as a recent Nielsen survey showed retail outlets is where most of the growth in meal kits is coming from. Additionally, an NPD study found that 93 million U.S. adults want to try meal kits and that broadened meal categories (breakfast, etc.) were a big opportunity for meal kit companies.

Plus, Albertsons surely doesn’t want to be left behind as rivals such as Amazon now sells meal kits in its Whole Foods stores, and Kroger, which owns meal kit company Home Chef, rolls out customizeable meal kits, and has expanded meal kit sales into drug stores.

Nielsen: Move Into Retail Making Moola for Meal Kits

The move into retail has been a smart one for the meal kit industry, as the new sales channel helped drive meal kit growth in 2018, according to a report out this week from Nielsen (h/t Grocery Dive).

Overall, Nielsen found that meal kit users (both online and offline) have increased 36 percent throughout 2018 and that 14.3 million households purchased meal kits in the last six months of 2018 (up from 3.8 million household from the end of 2017). And Nielsen says there’s more room to grow, with 23 percent of American households saying they would consider purchasing a meal kit within the next six months.

Nielsen points out that the majority of meal kit sales still happened online in 2018, but growth came from in-store sales, which makes sense as meal kits made their debut in grocery aisles last year: Kroger purchased Home Chef, Albertsons rolled out Plated meal kits, and HelloFresh made a deal with Giant and Stop & Shop. Nielsen says that 187 new meal kit items were introduced at retail outlets last year, and that in-store meal kit sales generated $93 million over the course of 2018 with the number of in-store meal kit purchasers increasing by 2.2 million households in less than a year. This jump accounted for a 60 percent growth in meal kit users.

So who’s buying meal kits? In a blog post, Nielsen writes:

Overall, affluent consumers earning an income of more than $100k drove meal kit growth across online and in-store in 2018. Compared to 2017, these consumers increased their online meal kit purchases by 6 points and their in-store purchases by 9 points. Across both outlets, growth is also being led by consumers between the ages of 35-44, who showed a 4.3 point increase in meal kit purchases online and a 9.2 point increase in those bought in-store. Meanwhile, meal kit purchases from older consumers aged 45-54 declined 2.8 points online and 7 points in-store over the past year.

We are typically pretty bearish on the future of mail-order meal kits here at The Spoon. A lot of that sourness is driven by our own experiences with the product. Mail-order meal kits are expensive, they generate a lot of packaging waste, they are a lot of work to make, and because the ingredients are fresh, you pretty much have to make them as soon as they arrive (whether you still want that recipe or not) or else they spoil.

Meal kits in grocery stores, however, can still offer the same benefits of meal kits — pre-portioned fresh ingredients, introduction to new types of cuisine — but do it in a way that is more convenient and fits into a consumer’s existing daily flow.

And we’re really just at the beginning of what is possible for meal kits at retail as they only started rolling out last year. There is tons of head room for experimentation and innovation, whether that comes in the form of frozen foods, meal kits sold in new retail outlets like drug stores, offices, or even customized meal kits created in stores and brought out to you curbside so they can be made that night.

Microsoft Continues March into Grocery Stores with Albertsons Partnership

Microsoft and Albertsons are partnering to integrate Microsoft’s Cloud and AI technologies into Albertsons grocery stores, the two companies announced today. This deal marks another move by Microsoft into major grocery retail operations, following a partnership with Kroger last month.

Details of the new Microsoft/Albertsons partnership are light, with the pres release saying the arrangement “includes immediate and long-term initiatives to digitally transform the customer journey, optimize operations and deliver better products and services”

According to the two companies, part of transforming that customer journey includes “eliminating the friction” customers experience either trying to find products or while standing in checkout lines. Though they don’t say it specifically, this could indicate that the two companies will be working on cashierless checkout at Albertsons stores.

Microsoft has long been rumored to be working on such technology, and there has been a flurry of activity in the cashierless checkout space ever since Amazon launched its Go stores last year. A number of startups are working on cashierless checkout with some, like Grabango, already in pilots with grocery chains.

While this deal with Albertsons is more of a general relationship announcement for Microsoft, the Redmond giant made a more concrete pact with Kroger last month. Microsoft is actually working with Kroger to build out two tech-heavy pilot stores that made extensive use of smart displays and sensors for inventory management. Additionally, those Kroger + Microsoft solutions are meant to be packaged up as a turnkey package that can be sold to other grocery stores.

Both of these announcements seem to be, at least in part, targeted at Amazon. First both of these deals involve Azure, Microsoft Cloud answer to Amazon’s AWS, so Amazon is being shut out of that line of business. But more broadly, ever since Amazon bought Whole Foods, grocers everywhere have ratcheted up their technology efforts to stave off Amazon from dominating the industry.

In addition to launching this new high-tech initiative with Microsoft, Albertsons is also getting into the robot game. The grocer partnered with Takeoff to build out a test mini-automated fulfillment center in the back of one of its stores. We’re actually talking with Narayan Iyengar, SVP of Digital and eCommerce at our upcoming ArticulATE summit in San Francisco in April. While he’s on stage, we’ll see what else we can get out of him about Microsoft as well.

ArticulATE Q&A: Albertsons on What it’s Looking for From Robots

Robots are on the verge of transforming everyday grocery shopping into something more sci-fi. From shelf-scanning robots to self-driving delivery to your door, the food retail biz has been surprisingly aggressive in its moves to modernize.

Albertsons is not immune to this wave of automation. The grocery giant is piloting a robotic micro-fulfillment center built into the back of one of its stores through a partnership with the startup Takeoff. These robot centers will drastically shrink the amount of time it takes to process online orders, allowing for faster delivery or curbside pickup.

Narayan Iyengar is the SVP, eCommerce & Digital at Albertsons, and he is among the luminary speakers we’ve lined up for our upcoming ArticulATE food robot and automation summit in San Francisco on April 16. You should get a ticket and join us! To give you a sense of the great conversations that will take place, we did a brief (and lightly edited) Q&A with Iyengar to get a sense of how Albertsons is weaving robotics into their overall retail experience.

What is Albertsons looking to find out with this robotic fulfillment center pilot that you’re doing with Takeoff?

Iyengar: I think the space is actually quite exciting and evolving very fast and to me, there are a couple of different ways of thinking about this for grocery home delivery in general. There are multiple models of grocery, there is the big central fulfillment type model that works in some pockets and some cities in the US. Then there is a store-pick model, which we and several other third-party delivery services pick from our stores and deliver, let’s called that model two. But as volumes increase, we have to find a model that makes economic sense as well as uses the existing supply chain, “cool chain” and the merchandise to be able to serve customers same day or early next day.

So when we all look at the models that are available out there, does it cut across all three things: One does it use the existing flow for fresh [food]? Two, does it use the existing supply chain? Three, will it drive down the price for picking and packing?

So, as a part of this pilot they’re trying to test the three things: One, prove out that this model would work. That is to say, we collect the order, we have an automated system that picks and packs the groceries, and then we deliver it to the last mile. Second is to see if this particular technology vendor is the best at executing this model for us. And the third one is to test out the integration, because the robotics, it’s just one part of it. The rest of the model needs to work as well: the website for the app, the inventory management, all of that needs to get integrated.

How does Albertsons view automation overall? How are you learning to design a workforce that includes both humans and robots?

This particular Takeoff technology, yes it’s robotic, yes it’s automated, but when you look at practical solutions that work, they tend to be a lot less “sexy” than you think. They are very practical, it’s got a bunch of conveyor belts that bring totes of items that humans pick from. So, it dramatically reduces labor hours required to do a certain task. It’s robots and automation helping humans be faster.

Automation has been the standard thing in the retail and grocery industry for many, many years now. And so this essentially is technology that miniaturizes that and puts that within a store in a smaller footprint. Broadly speaking, I think everybody is in the process of testing and learning at the store level to see what does automation and robotics look like. Many of them will not be ambulatory robots that resemble the sci-fi movies, they’ll be much more mundane and down to earth, but extremely practical.

So our approach to testing all of this from a labor management perspective and so on is we have a design a new system for Takeoff, for this solution that they are piloting. We are going to design a new process, a new way of working which includes aspects of what the automated system does best, and how do you build the workflow around it? How do you manage the ordering process around it? How do you pick and pack? And how do you do the layout of micro-fulfilment centers in a way that maximizes the value of this automated system? So the layout, the labor process — all that needs to be thought through and redesigned, which is a part of what we hope to accomplish in this pilot.

What are the specific needs for grocery as Albertsons consider automation?

I mean it’s no surprise here really, but there are three or four broad things. The first one is the fact that you are dealing with fresh produce, it has its own set of logistical challenges that need to be addressed. The way you pack it is different, you cannot pack a hot rotisserie chicken along with ice cream, for example. You have different zones that you have to consider not just for transportation, but also when packing. The cool chain becomes important because the quality of items you’ll receive will be heavily determined by temperature staying within the relatively narrow zone throughout: from the time that fish is caught all the way to the time you’ll cook it. So the fact that you’re dealing with fresh and the cool chain needs to be considered and that makes grocery very different.

The second challenge that needs to be considered is that grocery is often a very large number of SKUs. Traditional e-commerce, you go to buy one item. You end up with a couple other things [in your] cart so you end up having three, four, five item tops when you buy anything. You buy a television, you probably buy a couple of cables next to it and maybe a speaker; a pair of shoes, you buy a couple of pairs of socks… For grocery, the average basket it 30 to 40 items, and many of those items cost $2 or $3. It’s a high number of items, so you’ve got to design a system that works towards a set of items that can be picked in a high degree of repetition.

And the third one is the repeat nature of purchasing. Grocery shopping is a habitual thing. People are used to doing it in a certain way because unlike other items that you often buy once in six months, once in three months — I mean, how often you buy a pair of shoes that or a television set, right? — food is something that you buy multiple times a week. You keep running out of milk or eggs or other things and end up going to grocery store and reordering very, very frequently. So the entire chain, both the interface as well as the delivery system, lends itself very well to habit formation.

How are Albert and customers treating online shopping and have you noticed them trending towards delivery or pick up?

Well, it’s a bit of both — I mean, we’re seeing good traction for our home delivery, both our own home delivery as well as Instacart partnership and so on. We are also seeing ‘drive up and go’ grow in all the centers that we offer it. I think the grocery market is so large and basically everybody has a stomach, and you have absolutely as many different preferences as there are people.

So, we are seeing there’s a certain section of the population that wants immediate delivery, and [is] willing to pay a premium for it. There’s a certain set of people who are more methodical and do the stock up trip, they plan a couple of days in advance and they order in bulk, we have solutions for that. And there is another set of people that want to order online but they don’t want to be tied to being at home at a certain point in time. So for them drive up and go works fine because you order and then you can pick it up any time after two hours from the time you order, so it fits well with that schedule.

What is your favorite fictional robot?
Giant Robot (from Johnny Sokko) is really cool!