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The Spoon

Daily news and analysis about the food tech revolution

Alibaba

Alibaba Spends $3.6 Billion for Controlling Stake in Chinese Supermarket Sun Art

Alibaba announced yesterday that it is shelling out $3.6 billion for a controlling stake in Chinese grocery store chain Sun Art. The investment will increase Alibaba’s stake in Sun Art to 72 percent.

The deal ups Alibaba’s existing stake (from 36 percent), and reinforces how the grocery sector is hot around the globe. As TechCrunch reported:

All of Sun Art’s 484 physical retail locations in China are now integrated into Alibaba’s Taoxianda and Tmall Supermarket platforms for groceries, as well as Ele.me and Cainiao, its on-demand food demand delivery app and logistics businesses, respectively. For customers, this means faster deliveries and larger selections, while giving Alibaba more sources of data it can use to improve its supply chain and business operations.

As they are both online retail giants, Alibaba and Amazon are often compared with one another, and it appears that the comparisons won’t end with grocery. Amazon, which purchased Whole Foods back in 2017, is also rolling out its own branded markets packed with technology meant to speed up the grocery shopping process — and gather more data as you shop to make it even faster.

As noted, the grocery sector overall has garnered a ton of interest since the pandemic. Online grocery shopping is projected to continue to grow to hit $250 billion in sales by 20205. Grocery delivery service, Instacart, has raised a ton of money and swelled its grocery gig worker “Shopper” ranks. Shipt has grown its delivery worker ranks as well in anticipation of the coming holidays. And third party delivery services like DoorDash and Uber Eats are expanding from restaurants into the grocery category.

With coronavirus cases back on the rise both in the U.S. and in Europe, it’s a safe bet that the spotlight on grocery won’t be going out any time soon.

Beyond Meat Arrives at Alibaba Stores in China

Beyond Meat continues its expansion in China, this time into the retail sector. The company is bringing its Beyond Burgers to Alibaba’s Heme supermarkets, first in Shanghai, then elsewhere in the country later this year, according to TechCrunch. 

Beyond debuted in China earlier this year with a Starbucks partnership, selling its plant-based meat products in cafes across the country. Availability of Beyond products expanded to the Yum China empire, where they were at Pizza Hut, KFC, and Taco Bell for a limited time.

The company’s arrival in Alibaba stores is its first foray into retail in China. Though it makes sense. China has the world’s largest population and is also the world’s largest consumer of meat. The Chinese government has been urging citizens for some time now to cut down their meat consumption, which makes China a lucrative market for plant-based meat products.

This move is also the latest salvo in what has been a busy few months of back-and-forth expansion news for both Beyond and its main plant-based rival, Impossible Foods. Impossible launched a direct-to-consumer sales channel at the beginning of June. Shortly after, Beyond released bulk packaging that narrowed the price gap between its burgers and traditional meat. Beyond also announced plans for its own D2C site, which has yet to launch. Then earlier this week, Impossible announced that its Impossible Sausage is now available to all restaurants in the U.S. 

This latest deal with Alibaba helps bolster Beyond’s foothold in China. Impossible is not yet in Chinese markets, though the company has suggested in the past it plans to eventually launch products there. As demand for plant-based meat offerings has surged since the start of the global pandemic, it’s a safe bet to expect the back-and-forth news from both companies to continue throughout the year.

Burger King, McDonald’s Join Ele.me’s Food Delivery Initiative to Help Coronavirus Workers

Chinese food delivery service Ele.me has launched an initiative to deliver meals to medical staff working in the epicenter of the coronavirus outbreak. The company has gathered 100 restaurants, both chains and local establishments, to get meals to hospitals in Wuhan, China, according to an article in the South China Morning Post. 

The Alibaba-owned service has gathered major QSRs like McDonald’s and Burger King along with local Wuhan restaurants to supply food delivery orders to staff at more than 10 hospitals in the city. The Post reported that an Ele.me rider “safely delivered the first order to a frontline medical staff on Sunday.” Meal delivery to doctors and nurses on the frontlines has continued since.

Previously, Ele.me had suspended meal delivery services to hospitals in order to prevent the spread of the deadly epidemic. But businesses around China, many of them tech companies, are now upping funds and resources to help medical staff fighting the virus, and the various initiatives have become something of a team effort in getting aid to workers on the frontlines in Wuhan.

At last check, more than 7,711 cases of coronavirus have been confirmed and 170 people have died. The World Health Organization is meeting today to decide whether coronavirus should be declared an international public health emergency.

Which brings us back to food and food tech. A number of companies stepping up to help are focused on getting food to both workers and those quarantined. Besides Ele.me, Meituan, another food delivery service, has set up a 200 million yuan fund to aid staff and is also providing free takeaway meals every day for hospital staff in Wuhan. Travel service Fliggy, which has been refunding flights, has pledged to supply medical staff in Wuhan with access to things like fresh produce from convenience stores, according to the South China Morning Post article. And as my college Chris Albrecht wrote yesterday, a hotel in Hangzhou, China has dispatched robots to bring meals to quarantined guests.

As Chris notes, the initiative at the Hangzhou hotel highlights “how robots can be used in situations that are hazardous to humans and help save lives (everyone needs to eat).” The same can be said of food delivery, which happens to be one of those sectors of food tech that’s really easy to hate on. It’s ethically questionable in some cases. It may not be sustainable or profitable.  Delivery fees suck. 

But food delivery, with its streamlined model and technical logistics, is also an easier, arguably safer way to get a daily necessity — a hot meal — to people fighting a deadly crisis. In providing meal services to workers in Wuhan, companies like Ele.me are hopefully sending a signal to restaurants and food delivery companies around the world to step up and do likewise, whether it’s in the event of this virus spreading or at some future point, in the face of a different crisis. 

Starbucks Launches Voice Order and Delivery in China With Alibaba

Starbucks customers in China can now order just by speaking. This week, the coffee retailer launched voice ordering and delivery capability through Alibaba’s smart speaker, Tmall Genie.

According to an announcement from Starbucks, customers can now place an order through the speaker and have it delivered within a 30-minute timeframe via Alibaba’s food delivery platform, Ele.me. Users can track their order in real time and earn Starbucks rewards points. In the future, Starbucks Rewards members will also get more personalized recommendations — based on past orders, seasonal items, and other data — when using voice order.

To top it all off, there’s a Starbucks-themed Tmall Genie (pictured above) available through the Starbucks virtual store in China. Because who wouldn’t want to talk to an adorable DJing bear to order their coffee?

The move comes about a year after Starbucks and Alibaba first announced their partnership and is the latest in a series of initiatives to make Starbucks more widely available in China, one of the fastest-growing markets in the world for coffee consumption. While still a predominately tea-drinking nation, China saw a a 16 percent annual increase in coffee consumption between 2004 and 2013 — a growth set to continue over the next few years at 15 to 20 percent.

Starbucks began offering delivery in China through Ele.me in 2018, and also launched a virtual store across Alibaba apps including Taobao, Alipay, and Tmall. In addition, Starbucks now operates ghost kitchens in Alibaba’s Hema supermarkets to fulfill more delivery orders.

Unconnected from Alibaba, Starbucks this year opened an “express retail” concept store for pickup-only orders in Beijing.

These many different moves are meant to help Starbucks as it continues to compete with its main rival in China, Luckin Coffee. The latter is aggressively growing its number of physical locations across China.

More importantly, Luckin caters primarily to delivery and pickup, with many of its stores acting mostly as hubs for fulfilling these orders.

Starbucks is attempting a similar model with its Star Kitchens and express store concept. Whether adding something like voice-order capabilities makes a difference in the rivalry remains to be seen, though it certainly won’t hurt Starbucks to have a major tech giant like Alibaba in its corner as the fight for coffee dominance in China continues.

From Pop Rocks To Spicy Snickers: Why Data Science Is The Future of Food Creation

When I think of interesting food products, I often think of Bill Mitchell, a legendary food scientist who stumbled upon what would eventually become Pop Rocks.

Hunkered inside a General Foods research lab in the 1950s, Mitchell discovered that mixing sugar with carbon dioxide in his mouth caused them to fizz and pop. The prolific food researcher — who would go on to invent a number of other innovative products like Tang and Cool Whip — filed for a patent on his idea in 1959. It took a couple decades for Pop Rocks to become a part of the 1970s cultural zeitgeist, but the fizzing candy is still sold to kids around the world today.

That’s the thing with food: so much of what has makes it to store shelves, whether Pop Rocks or the popsicle, is the result of magical mistakes. But in the era of smart phones, connected appliances and Amazon Alexa, this may soon change. Increasingly, new products will be less likely to come from happy accidents like that of Dr. Mitchell’s and instead will grow out of insights gleaned from consumer data made available through connected platforms.

Take the recent story about Mars using Alibaba data to create a spicy Snickers bar. According to Bloomberg, Mars used data gathered through the Chinese Internet giant’s various online platforms that showed customers who like chocolate also buy spicy food.

From the story:

That prompted the creation of the Spicy Snickers candy bar, which incorporates the Sichuan peppercorn, the source of China’s famous “mala” (numb and spicy) taste. Typically Mars spends two to three years developing a new product; the Spicy Snickers came together in less than one.

It’s not just Internet giants getting in on the action. Because every Joule sous vide appliance from ChefSteps is connected, the kitchen startup knows what customers are cooking at any given time. The company is able to analyze this data to unearth potential opportunities for new products.

For example, Joule usage data showed one of the biggest challenges time-starved consumers face when creating a sous vide meal is creating multi-ingredient sauces to go with a protein. This catalyzed the company to create a new product called Joule Ready sauces that solves for this exact problem. The Seattle startup has also built an agile production process that allows them to scale up new sauces based on consumer usage data and double down on popular ones.

While data-driven product development has been on the rise for some time, products like the spicy Snickers are a sign food companies are embracing data insights to take new risks and speed time to market.  And this embrace of data is only the beginning. A whole host of new startups are building upon the foundation of better food and consumer data to build AI platforms that not only will discover new products faster, but ensure a much higher likelihood of success.

Just as we saw with baseball, there might be some old-schoolers that decry the world of food undergoing its own Moneyball revolution. As for the inventor of Pop Rocks, I suspect Bill Mitchell would have been ok with it.

The reason? His grandson — also named Bill Mitchell — runs a little connected beer brewing appliance by the name of PicoBrew.

Can Bitcoin, Bakeries, and Banning Straws Fix Starbucks’ Lagging Growth?

Starbucks may have projected slower growth recently, but it looks to be business as usual for the coffee retailer, and that business traversed several industries and a couple continents this week.

Most notably, Starbucks is reportedly one of the key backers of a new company, Bakkt, which the Intercontinental Exchange (ICE) created to better integrate cryptocurrencies into global commerce. In other words, there’s a high possibility Starbucks might accept Bitcoin as payment one of these days.

But as my hero John Oliver says, “this is a brand new, very complicated space and literally nobody knows how it’s going to develop so you need to be careful.” And while there’s much ado about crypto lately, the reality is that Bitcoin and others remain highly volatile in terms of price, which is one of the biggest reasons more retailers haven’t adopted them as forms of payment.

That could change, partly because Microsoft is providing the cloud infrastructure for Bakkt and companies like consulting heavyweight BCG are involved. There’s also this telling statement from Starbucks: “As the flagship retailer, Starbucks will play a pivotal role in developing practical, trusted and regulated applications for consumers to convert their digital assets into US dollars for use at Starbucks.”

Starbucks has been an undisputed leader in mobile payments over the years, so its involvement in the space isn’t that surprising, and it could make cryptocurrency more attractive to investors and therefore less volatile. The question is, will it be enough to turn hype into a mainstream form of payment?

Interestingly, in some overseas markets, Starbucks has been criticized of acting too slow when it comes to technological advancements. That’s a big reason for the company’s move this week to strike a partnership with Alibaba and integrate delivery services into its business in China. Starbucks will use the Alibaba-owned food-delivery service Ele.me to enable delivery at 2,000 stores by the end of the 2018. The deal includes a virtual store that integrates with Alibaba’s apps like Alipay and Hema.

Starbucks currently has 3,400 stores in China, with plans to double that number by 2022. But it’s also facing a lot of competition in this market, particularly from Luckin Coffee, who charges less and also just raised $200 million. That said, Starbucks still controls about 80 percent of the coffee market in China, and the company claims this deal with Alibaba “opens up 500 million or more active users of those apps that will have access to Starbucks.”

Stateside, the coffee giant has a slightly different tactic: standalone bakeries. This week, Starbucks opened the first of a planned 1,000 Princi bakeries, a “high-end Italian bakery chain.” The shop serves a mix of pizzas, pastries, beer, wine, and, of course, coffee.

Starbucks backed Italian bakery chain Princi in 2016; the Seattle store is the test location for this “upscale retail strategy.” Because apparently paying almost $5 for a latte is no longer considered upscale. Starbucks opened a Princi at its Reserve Rotary and Tasting Room last fall, as well as one at the Flagship Reserve store at the Starbucks HQ. This new location is the first standalone store. NYC and Chicago locations are in the works.

Starbucks is also one of the major chains joining the movement to ban single-use plastic straws, having recently announced it will eliminate them from all stores by 2020. But with all of the above expansion, not to mention Starbucks’ general reach, which is huge, will trading straws for sip-able lids make a difference?

That’s what several folks are wondering. The Guardian even weighed the new lids against the old lid-and-straw combo and found the former to be slightly heavier, therefore using more plastic. Starbucks’ notes these new lids are “made from polypropylene, a commonly-accepted recyclable plastic that can be captured in recycling infrastructure,” but that only matters if people actually recycle the lids. The numbers aren’t encouraging — only around 9 percent of the world’s plastic is recycled. Color me cynical, but since Starbucks partially helped create the disposable coffee world we live in, I’d say the company’s going to need a bigger fix if they want to make a true impact in terms of waste reduction. Hopefully they’ll continue to prioritize addressing waste issues, even as they push to pick up those lagging numbers.

We’ll have a chance to ask more at the next Smart Kitchen Summit, when we talk to Ben Pote, Starbucks’ Director of Culinary, Global Product Innovation. Swing by if you’re in the area, and leave your thoughts, musings, and rants on all this news in the comments below.

Alibaba Opens Robot Restaurant as Automation Expands Around the Globe

Alibaba has opened up a highly automated restaurant in Shanghai, as robots continue to enter eateries around the globe.

The Robot.he restaurant in the Hema supermarket uses a series of apps, QR codes, and robots to provide a futuristic dining experience (hat tip to Axios). The Hema app tells customers where to sit in the restaurant and is used to pay for meals as well as to order more food once seated. Once the food is ready, small pod-like robots scurry out on shiny tracks to deliver it straight to the table.

While there is a ton of technology at play here, Hema still relies on humans for much of the work. From the video (see below), staff on-hand helps with the selection of seafood, and there are human cooks making the meals.

Alibaba’s news site, Alizila, didn’t say exactly when the restaurant opened, or provide much information regarding future plans for Hema, but Alibaba is getting more into robots in other parts of the company, rolling out its autonomous delivery vehicles.

China will certainly be a hotbed for robot restaurant activity. Last month, Alibaba rival JD.com announced it would open up 1,000 completely robot-run restaurants by 2020. And for what it’s worth, Google recently invested $500 million in JD.com, so who knows how Alphabet’s AI endeavors might tie in with JD’s robo-ambitions.

But the Hema opening also shows how robot restaurants are opening around the globe. While they are a novelty right now, they will quickly become the norm. Here in the U.S., Spyce Kitchen’s robot restaurant whips up bowls of food, Creator makes a $6 hamburger and Cafe X just opened up its first sidewalk robot barista-in-a-box. Over in France, EKIM is busy building out its robot pizzaiolo, and in Japan, robots are making street food.

There are a few factors contributing to this rise of the restaurant robot. First, robots can run all day without a break, and in places where labor is tight, robots could be increasingly necessary. Second, robotics and AI are getting more evolved and developing technologies to better handle the different shapes and textures of food. And while this automation will impact the number of jobs available to millions of people, robots can also take over the menial, sometimes dangerous and repetitive jobs, freeing people up for higher-skilled labor.

And hopefully freeing people up to eat at more robot restaurants.

Starship Raises $25 Million to Roll Out More Delivery Robots

Starship Technologies, makers of squat, autonomous wheeled delivery robots, announced yesterday that the company has raised $25 million in additional “seed” funding. The round includes follow-on investments from existing backers including Matrix Partners and Morpheus Ventures. This brings the total amount the company has raised to $42.2 million. The company also announced it has brought on Lex Bayer, a former Airbnb exec as Starship’s new CEO.

Starship’s rolling robots can be used to deliver items like packages, restaurant food or groceries within an hour. They are currently in pilot programs in Redwood City, CA and Washington DC, and according to press materials, Starship robots have covered 100,000 miles in 20 countries and 100 cities around the world.

Starship, which also counts Daimler Benz as an investor, said the new money will help scale its business. Earlier this year, the company announced that it would deploy 1,000 delivery robots to corporate and academic campuses across the U.S. and Europe by the end of the year.

The robot delivery space is certainly heating up. In addition to Starship, Marble has its own fleet of delivery robots, and counts DoorDash as a partner. DoorDash may also be working on its own robots as part of its own moonshot initiatives program. Kiwi robots are rolling around UC Berkeley’s campus delivering food. And over in China, Alibaba just unveiled its own driverless delivery robot, the G Plus.

But the biggest hurdle for Starship isn’t the competition, it’s state and local laws. While states like Virginia and Wisconsin have passed laws permitting robot deliveries, San Franciso has tightened restrictions on how they can be used. That’s one reason why Starship’s rollout on campuses is a smart decision. It can work out and improve its technology on private property, sidestepping those municipal hurdles.

If you’re intrigued by robots and want to learn more about how they are impacting the food industry, be sure to check out our podcast, The Automat, which hosts entertaining and informative conversations about tomorrow’s food-related robots and artificial intelligence today.

Alibaba and JD.com Releasing More Robots Across China

Two Chinese e-commerce giants are making separate moves that will see robots running packages around — and running restaurants — as automation continues to rise around the world.

First up: Alibaba just unveiled its new G Plus driverless delivery robot. According to The Verge, the robot can carry multiple packages of different sizes (or fresh food!), and can travel at up to 9.3 miles per hour. The robot uses LIDAR to build a 3D map and, if it detects people, it will slow down to 6.2 miles per hour. Upon arrival, it can either drop off the package or users can get their delivery through a PIN code. The G Plus is currently in use at Alibaba’s headquarters and will go into commercial production by the end of this year.

Alibaba also showed off a smart locker that can be installed outside a user’s apartment. The Cainiao uses facial recognition to unlock and can expand to accommodate different sized packages. What’s also pretty cool is that the temperature of the locker can be controlled remotely so a pizza delivered could be held warm, or produce kept cold, until retrieved.

Elsewhere, Nikkei Asian Review writes that JD.com, China’s second largest e-commerce company, will open 1,000 restaurants completely staffed by robots by the year 2020. Though a location hasn’t been determined yet, the first of these robo-restaurants will open in August. It will be roughly 400 sq. meters (~4,300 sq. ft.) and will serve 40 dishes from around China, with customers ordering and paying by smartphone.

Nikkei also points out that rising labor costs and rents are putting economic pressures on restaurants in China. Combine that with an impending labor shortage and robots are likely to play an increasingly important role around the country. But it’s not just in China; it’s projected that robots and other forms of automation could replace up to 66 million human workers around the world, according to a study by the Organization for Economic Cooperation and Development.

In France, EKIM just raised €2.2 million to build its robot pizza restaurants. Here in the U.S. we already have a variety of robots working across various foodservice sectors: we have Starship’s delivery robots, standalone kiosks like Briggo serving coffee or Blendid whipping up smoothies, Penny the table-bussing robot, Flippy the burger-making robot, and even Spyce Kitchen, the fully autonomous robot restaurant in Boston.

Humans, however, are waking up to all the implications robots will bring about. San Francisco put the brakes on robot deliveries in that city, and in Las Vegas, members of the Culinary Workers Union voted to go on strike in a bid to get more protections against being replaced by robots.

If you want to to know what’s happening with food robots and artificial intelligence, be sure to subscribe to our Automat podcast. Each week we talk with experts from around the world who are building the next generation of automation.