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Daily news and analysis about the food tech revolution

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Walmart to Launch Its Walmart+ Membership Service on September 15

Walmart today announced it will launch its own membership service, Walmart+, on September 15. The service will be available for $98/year or $12.95/month and include free same-day delivery from Walmart stores, fuel discounts, and other perks.

A Walmart+ membership gets you free, unlimited delivery “on more than 160,000 items” from Walmart stores (with a minimum order of $35), access to the company’s Scan & Go tech that lets customers skip the checkout line, and discounts on fuel. Walmart said in today’s press release that “the list of benefits will continue to grow over time.”

Walmart has been testing free delivery through its Delivery Unlimited program since last year. When Walmart+ launches across the company’s stores nationwide, current Delivery Unlimited subscribers will automatically become members of Walmart+.

Walmart+ was first revealed in February of this year in a move that immediately invited comparisons to Amazon and its Prime membership service. Speaking to TechCrunch today, Walmart said it was “not launching Walmart+ with the intent to compete with anything else.” And the service is by no means a mirror image of Prime, especially considering that Prime includes free access to streaming movies, music and more.

At least initially, Walmart+ seems to be focused more on groceries and household items (along with some toys and electronics), an area the company is already strong in. This focus on grocery makes sense given the record amounts of online grocery shopping still happening because of the pandemic. A recent survey showed that Walmart has actually overtaken Amazon as the leading retailer for online grocery shopping, and adding Walmart+ could help solidify its lead.

Walmart and Amazon have actually kind of switched places over the past week with their announcements. With today’s news, Walmart, which has a vast network of real-world stores, is announcing it’s Prime-like service. Last week, Amazon, the online retail giant, announced the opening of its first full-on real world supermarket in Woodland Hills, CA. Both moves help illustrate how important the grocery category has become for each company.

Another thing to watch with Walmart+ is how many customers will adopt the Scan & Go technology, which allows shoppers to skip the checkout line by scanning product barcodes with their phones. Walmart’s approach is more manual than that of an Amazon Go store, which uses cameras and sensors to automatically track what shoppers are buying. Will the extra scanning step inhibit adoption of Scan & Go? Also, in the pandemic era, where contactless payments are increasingly table stakes, will Walmart incentivize more people to use Scan & Go, and will customers like the system?

We’ll mark our calendars and see.

Additional reporting by Chris Albrecht.

First Amazon Fresh Grocery Store Opening in Woodland Hills, CA

The first Amazon Fresh grocery store is finally opening in Woodland Hills, CA, the company announced via blog post early this morning.

This Amazon Fresh is the first of many planned physical grocery stores for Amazon. The store will feature free same-day delivery for Amazon Prime members, curbside pickup and will even let you pickup your Amazon packages at the store.

Unlike Amazon’s other subsidiary, Whole Foods, which doesn’t sell products with things like artificial flavors or preservatives, Amazon Fresh will carry all manner of CPG products.

Amazon was supposed to open the Woodland Hills store in April of this year, but the COVID-19 pandemic altered those plans. Over the past five months, Amazon used the location as a “dark store” to fulfill online orders as the company desperately tried to keep up with a surge in demand for grocery delivery.

Though this Woodland Hills Amazon Fresh won’t feature Amazon Go-like cashierless checkout, it does have the recently announced Amazon Dash Cart. These carts basically enable cashierless checkout by automatically keeping track of whatever items are put in it.

The opening of this Amazon Fresh comes during a time of record online grocery sales, thanks to the pandemic. But a recent Coresight survey found Walmart is now the leading retailer for online grocery shopping, while use of Amazon for grocery e-commerce has declined. Part of Walmart’s ascendancy could be attributed to its vast network of retail stores across the country that allow easy access to curbside pickup of e-commerce grocery orders.

The new Amazon Fresh isn’t open to the public yet. That will happen “in the coming weeks,” according to today’s blog post. In the meantime, select customers in Woodland Hills will be invited to come in and shop during this soft opening.

Survey: As Online Grocery Trends Up, Walmart Leads and E-Commerce is Here to Stay

Results of a new survey from Coresight Research (registration required) released today show that as grocery e-commerce continues to trend up, thanks to the pandemic, Walmart has overtaken Amazon as the leading retailer and online grocery shopping appears to be the new normal for many consumers.

Coresight has been conducting weekly surveys of US consumers since mid-March and today’s results are from a survey done on August 19th. In this latest survey, Coresight found that 60 percent of respondent had bought groceries online in the past 12 months, up from 52 percent back in March.

Coresight also found that Walmart became the leading retailer for online grocery shoppers, surpassing Amazon. In August 56 percent of the online grocery shoppers had bought from Walmart, up from 52 percent back in March. Amazon saw a decline in Coresight’s study, with 55 percent of online grocery shoppers indicating they bought from there, down from 63 percent in March.

Now that we are six months into this pandemic it seems like people are getting habituated into buying their groceries online. Coresight’s survey found that 36 percent of online grocery shoppers “plan to retain their current online purchasing frequency one the pandemic eases or ends.”

These findings aren’t too surprising. Other research firms have shown month-over-month record numbers of online grocery shopping since the pandemic hit the U.S.. But Coresight’s surveys help add to this body of research and round out the picture of how consumers are changing habits as the pandemic continues.

What is worth studying more is the Walmart v. Amazon rivalry. All grocery retailers struggled under the sudden crush of new customers when the pandemic first hit. Amazon, which saw its grocery business triple year-over-year thanks to COVID, actually had to implement a waitlist for new delivery customers. Coresight surmised from its data that Amazon grew its sales through bigger baskets from existing customers, while Walmart may have been able to attract more customers.

Anecdotally, this fits with my own grocery experience. As delivery windows were hard to come buy during that initial e-commerce wave, Walmart, with its massive network of real-world stores was still able to fulfill my online grocery orders through curbside pickup.

And as Coresight points out, I’m not alone in finding online grocery shopping to be the new normal. Grocers have ironed out many of the early issues that plagued grocery e-commerce and with six months of shopping for groceries online now under their belt, people may have had enough time to establish new food buying habits.

Earlier this year, Coresight predicted that the online grocery sector would grow by 40 percent in 2020 to hit $38 billion in sales. I wonder if they will have to adjust that number as this new data comes in. Additionally, the grocery landscape continues to change. Not only is Amazon adding real world supermarkets to its arsenal of shopping options, but Walmart is expected to launch its new Walmart+ delivery service soon (and has since added Instacart as a grocery delivery partner), and new third-party players like Uber and DoorDash are now getting into the grocery delivery space.

UK Regulators Finally Approve Amazon’s 16% Stake in Deliveroo

The UK’s Competition Markets and Authority (CMA) has at last approved Amazon’s 16 percent minority stake in food delivery service Deliveroo. The CMA’s findings, released today, note that the proposed Amazon-Deliveroo deal “has not resulted, and may not be expected to result, in a substantial lessening of competition (SLC) within a market or markets in the United Kingdom (UK) for goods and services.”

That concern — that Amazon’s investment in Deliveroo would lessen competition and consumer choices along with it — has hindered the investment since it was first announced back in May of 2019. For a quick recap, here’s how the saga has played out since then:

  • May 2019: Amazon announces its participation as the largest investor in Deliveroo’s $575 million Series G funding round.
  • July 2019: The CMA opens an investigation into Amazon’s investment, saying there were “reasonable grounds” that such a deal would mean the two companies would “cease to be distinct.”
  • October 2019: The CMA launches a formal probe into the deal.
  • April 2020: The deal gets initial approval, with the CMA citing “significant decline in revenues” for Deliveroo thanks to the pandemic.
  • June 2020: Regulators grant provisional clearance of the deal.

With this final approval, the CMA did warn Amazon that that increasing equity ownership of Deliveroo could result in further investigation, according to CNBC.

The approval comes at a time when consolidation is rampant among third-party food delivery services worldwide. The CMA finally approved the Takeaway.com’s acquisition of Just Eat, a deal that has created the largest food delivery service outside of China. The newly formed Just Eat Takeaway.com then swooped up Grubhub. Uber Eats, meanwhile, had been looking to buy Grubhub but backed away from such a deal in part because of the regulatory scrutiny the move would raise. Instead, it acquired Postmates in July.

With the pandemic still wrecking much havoc on the restaurant industry, we will probably see more of this consolidation — and probably a good deal of scrutiny, too — before the year is out.

Amazon Q2: Online Grocery Sales Tripled Year-Over-Year

Amazon announced its Q2 earnings yesterday, and unsurprisingly, the company’s grocery business went gangbusters during that time. Amazon said that its online grocery sales tripled in Q2 compared with the same time period last year.

Of course, this growth can be attributed to the COVID-19 pandemic, which was in full swing during the last few months. With large swaths of the country sheltering in place, people were pushed into grocery e-commerce. So much so that online grocery shopping experienced record sales month after month in Q2, hitting $7.2 billion in June.

This sudden demand for e-groceries caught every retailer, including Amazon, off-guard. Overwhelmed by demand, Amazon had to put new Amazon Fresh and Whole Foods delivery customers on a waitlist before they could place any orders.

To help ease the strain Amazon even went to more extreme measures, like converting the first of its full-on grocery stores in Woodland Hills, CA into a delivery-only fulfillment center. According to its earnings release yesterday, the company has increased grocery delivery capacity by more than 160 percent and tripled grocery pickup locations.

The COVID tide is raising all grocery retail boats as restaurants yo-yo between being open and closed. Amazon’s news comes days after grocery retailer Albertsons said that sales rose 21 percent to $22.8 billion for the quarter ending June 20, and that digital sales more than tripled.

The question Amazon, Albertsons and the entire grocery industry now face is how much of this record e-commerce spending is permanent. We’ve had basically five months of restricted movement/lockdowns, which is plenty of time for a new habit like buying groceries online to set in. Will people stick with it? And specifically for Amazon, will this alter any of it plans as it expands its real world grocery footprint? Amazon did debut its new smart shopping cart during Q2 as well, which indicates that it still expects people to shop at brick-and-mortar stores in some fashion in the future.

Like everything in the world right now, we’re watching it change in real time, and its unlikely anything will be settled by the end of Q3.

Amazon’s New Smart Cart Raises Lots of Questions (Like, Can Its Cashierless Checkout Scale?)

Amazon has taken the cashierless checkout tech that powers the company’s Go stores and shrunk it down to a smart shopping cart to for its large-format grocery store in Woodland Hills, CA. But this Dash Cart, however, raises more questions about the scalability of Amazon’s cashierless checkout technology.

The Verge first reported on Amazon’s Dash Cart, which features a ring of cameras, weight sensors and a touchscreen. The cart keeps track of everything put in there and automatically charges the customer upon leaving. There is even some Alexa integration (duh) to help with grocery lists.

The Dash Cart will debut at Amazon’s first full-sized grocery store location in Woodland Hills. But that store has gone “dark” to focus on fulfilling the record amounts of online grocery shopping happening during the pandemic and is not currently open to the public.

This raises the first question: Why debut this Dash Cart now, during the middle of a pandemic where, as noted, grocery e-commerce is experiencing record sales? Perhaps we’ll see the Dash Cart put to use in other Amazon venues like Whole Foods. Adding a fleet of Dash Carts to existing Whole Foods stores could be cheaper/easier than retrofitting them all with the cameras and sensors needed for store-wide cashierless checkout.

Debuting the Dash Cart now, when everyone’s attention is focused elsewhere, could also help hide some of the new tech’s flaws. As The Verge notes, the Dash Cart can only account for roughly two bags worth of goods, which isn’t a lot, especially at a full-sized grocery store.

UPDATE: Amazon says that they did a lot of customer research and that the cart was intentionally built to accommodate the high percentage of grocery shoppers that shop for two bags of groceries multiple times per week. This behavior seems like it might have been impacted by COVID, but presumably could return once the pandemic recedes.

The bigger question is, why does the Dash Cart exist at all? Does this mean that Amazon’s cashierless checkout tech, which works seamlessly at convenience store size, doesn’t scale up to a full-sized store very well? We’ve seen Amazon implement the technology in its larger Go Grocery store (10,400 sq. ft.), but perhaps that pushes the limits of what its system is currently capable of.

UPDATE: Amazon says that it’s technology can scale to any size store and square footage was not a consideration. The Woodland Hills store was never built around cashierless checkout.

A final question comes to mind: Why didn’t Amazon just purchase one of the existing smart cart companies like Caper or Veeve. Veeve in particular is founded by ex-Amazonians, is located near Amazon HQ, and hasn’t raised a lot of money so it could probably be picked up cheap. Plus, not for nothing, Amazon isn’t always great at hardware (see: Fire phone and its smart oven), getting some outside help might, you know, help.

Having asked all those questions, it would be silly to think Amazon doesn’t have a plan or doesn’t know what it’s doing. This is bound to fit into some larger plan, even if it’s just a stopgap as it works out the issues with scaling its cashierless checkout.

KloveChef Opens Up Voice-Guided Cooking Platform to Publishers

KloveChef, the voice-guided cooking startup cofounded by one of India’s biggest celebrity chefs in Sanjeev Kapoor, is opening up its platform this month to publishers wanting to add voice-guided cooking functionality to their recipes.

The new tool will allow anyone who has recipe content — chefs, cookbook authors, bloggers or food retailers — to upload their recipes to KloveChef’s platform via a web interface and it will convert them into a voice-guided recipes.

“We will democratize the interactive recipe creation and distribution,” said Bahubali Shété, KloveChef cofounder and CEO, in an interview with The Spoon.

Shété told me that recipe publishers will be able to use KloveChef to publish their recipes across a variety of voice platforms such as Amazon Alexa, Google Assistant, Google Home and Amazon Fire TV. To do so, they just copy the recipe URL or paste the full recipe into the web interface and KloveChef will convert into a voice-guided recipe.

Shété also said that publishers will have the option of letting users send their recipes posted on other web channels such as YouTube or Pinterest to their voice assistants for guided cooking.

KloveChef is opening up their voice platform after finding some success with their Alexa voice skill targeted primarily at home cooks in India. According to Shété, the guided cooking assistant has a total of 465,000 users and 100,000 monthly active users.

Shété says publishers can make money through KloveChef if the recipe is converted into a shopping list. The recipe-to-shopping list feature, which KloveChef has been testing through its app in India, currently has over 1 million recipes converted into shopping lists via voice search.

I have to admit, I like the idea of self-publishing recipes to voice platforms. It reminds me of the early days of ebooks, when authors would use technology from early pioneers like Smashwords to put their books into the world and on other popular platforms. Perhaps not all that surprisingly, just as like those early days of ebooks, recipe self-publishers are relying on Amazon to reach the end consumer, only instead of Kindle this time it’s Alexa.

It’s too soon to see how successful KloveChef will be in attracting cooks for its voice guided recipe assistant outside of India. In its home market, they’ve been able to leverage the large reach of Kapoor, while here in the states, Alexa tends to favor its featured partners such as Food Network or Tasty. KloveChef will have to compete with the algorithm-favored partners through attracting recipe publishers such as popular food bloggers or food retailers with built-in audiences to accrue a sizeable user base.

Looking forward, the company hopes to also attract users by making the platform better over time. One of the early features will be adapting guided cooking where users can speed up a recipe or slow it down depending on their experience. The company plans to release the new capabilities by mid-August.

Amazon Adding Second Go Grocery Store in Seattle Area

Amazon is building out a second location of its cashierless Go Grocery store, The Seattle Times reported yesterday. This second location will be “coming soon” to the Seattle suburb of Redmond, WA. and at the same time, Amazon is hiring for a third such store in Washington D.C..

In addition to these cashierless stores, The Times reports that its regular grocery store (like the one built in Woodland Hills, CA) is coming to more areas in Seattle, California, and the Chicago and Washington, D.C..

Amazon opened its first Go Grocery in the Capitol Hill neighborhood of Seattle earlier this year. As we wrote at that time:

Just like it’s smaller convenience store bretheren, Amazon’s Go Grocery uses a series of built-in cameras and sensors to automatically monitor what shoppers pick up and keep, and charge them accordingly when they walk out of the store. However, the new version of this cashierless technology has been updated, allowing Go Grocery to expand and also automatically monitor the purchase of fresh items like apples and lettuce, which had been harder for computer vision and sensors to keep track of.

Amazon is expanding is physical grocery ambitions at a time when the global pandemic created record amounts of online grocery shopping. That deluge of e-commerce however swamped Amazon’s grocery delivery service forcing it to create waitlists and convert its Woodland Hills store into delivery only.

Having a network of physical stores was one way Walmart was able to outmaneuver Amazon during this pandemic. Having real world locations opens up the possibilities of curbside grocery pickup, which can be more convenient than trying to schedule a home delivery.

As the pandemic continues, cashierless checkout technology like Amazon’s could be attractive, however, to wary shoppers who want more of a contactless commerce experience.

We’ll certainly be watching Amazon to see how quickly it expands it grocery footprint over the coming year.

U.K. Regulators Grant Provisional Clearance to Amazon’s Highly Scrutinized Deliveroo Investment

The U.K.’s Competition and Markets Authority (CMA) has provisionally cleared Amazon’s 16 percent investment in Deliveroo on the basis that the deal would not likely “damage competition in either restaurant delivery or online convenience grocery delivery,” according to a statement from the CMA.

Amazon was set to be the largest contributor to a $575 million investment announced in May 2019. By July of the same year, British regulators were scrutinizing the deal, claiming there were “reasonable grounds” to suspect that Amazon and Deliveroo would “cease to be distinct” were it to go through. Many months and a pandemic later, the CMA provisionally approved the deal in April 2020. Grounds for approval were that, thanks to the pandemic decimating the restaurant industry, Deliveroo would have had to exit the food delivery market without Amazon’s investment.

Though it seems the stakes are actually less dire for Deliveroo. The CMA said today that it has revised its provisional findings from April and found that “Deliveroo would no longer be likely to exit the market in the absence of this transaction.”

Even so, a lot has changed in the third-party since Amazon first announced its plans to invest in Deliveroo. The biggest development (besides COVID-19) has been Takeaway.com’s acquisition of Just Eat that was approved in April and created one of the largest food delivery companies in the world. That deal alone makes the U.K. food delivery market more competitive, and renders Amazon (a little) less of a behemoth come to gobble up marketshare. Uber Eats also operates in the U.K., as do a handful of smaller players. 

Another concern of the CMA’s was that through its investment, Amazon would cease to be competitive with Deliveroo. Thanks in large part to the Just Eat-Takeaway.com deal, that appears to no longer be the case.

“Looking closely at the size of the shareholding and how it will affect Amazon’s incentives, as well as the competition that the businesses will continue to face in food delivery and convenience groceries, we’ve found that the investment should not have a negative impact on customers,” Stuart McIntosh, Inquiry Chair for the CMA, said in a statement.

The CMA will now ask for views on the new findings by July 10. From there, it will make its final decision, which is due by August 6, 2020.

Amazon to Fund Food Companies as Part of New $2B Climate Pledge Fund

Amazon announced today the launch of The Climate Pledge Fund, which will use an initial $2 billion in funding to back clean technology companies including those in the food and agriculture space.

The fund is part of the broader Climate Pledge, an initiative founded by Amazon and Global Optimism last year to achieve net zero carbon by 2040, 10 years earlier than the Paris Agreement deadline.

From Amazon’s Climate Pledge Fund page:

In order to meaningfully reduce the amount of net greenhouse gas emissions, low-carbon solutions need to be developed in all sectors of the global economy. The Climate Pledge Fund will invest in companies in multiple industries, with an initial focus on: transportation and logistics; energy generation, storage, and utilization; manufacturing and materials; circular economy; and food and agriculture. Companies of all sizes and stages will be considered, from pre-product startups to well-established enterprises looking to scale. The scope of The Climate Pledge Fund is global and will consider investments in companies developing products or services that reduce carbon emissions and help preserve the natural world.

The fund announcement comes while the world is still in the throes of a global pandemic, which has had both positive and negative impacts on the environment.

There are plenty of opportunities for Amazon to make a big impact when it comes to de-carbonizing the meal journey. We cover a ton of startups that are fighting food waste, developing tools for sustainable and precision agriculture, and creating alternative proteins that don’t require resource intensive livestock raising.

The Climate Pledge Fund is accepting “indications of interest” right now via email.

Amazon Expands Online SNAP EBT Purchasing to 36 States

Amazon announced today that online grocery shopping for people who rely on the Supplemental Nutrition Assistance Program (SNAP) is now available in 36 U.S. states and the District of Columbia.

Toward the end of May, the USDA had announced that it was expanding the online SNAP purchasing program to 36 states, which it said would cover 90 percent of SNAP participants. In addition to wider availability, the USDA press release said, “Soon more SNAP authorized retailers, under multiple store banners, will be accepting SNAP benefits online.”

Amazon seems to be first out of the gate to announce its participation. In a press release, Amazon wrote:

SNAP recipients in Alabama, Arizona, California, Connecticut, Colorado, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming can now use their benefits to shop for groceries on Amazon and other participating retailers.

We checked Walmart’s website to see how broad its acceptance of SNAP is across the U.S., but only found an update from the company in April listing just 19 states plus D.C. We have reached out to Walmart for more information. UPDATE: A spokesperson for Walmart said that it accepts online SNAP payments in 36 states plus D.C..

In April of this year, Kroger launched its own program to accept online SNAP payments at 2,000 of its grocery pickup locations.

In addition to bringing out more digital and food equity, the expanded ability of SNAP participants to purchase groceries online is coming at a critical time. The COVID-19 pandemic has caused massive unemployment and loss of income, and created new exposure risks for people to physically go into a grocery store. The ability for those in need to purchase groceries online and get them delivered can help with both of those things.

Amazon Adds 11 More States Where SNAP Participants Can Buy Groceries Online

Amazon announced yesterday that it has expanded the number of states in which supplemental nutrition assistance program (SNAP) participants can buy groceries online through the retail giant. (h/t TechCrunch)

In a blog post yesterday, Amazon wrote:

Eleven states have been added the U.S. Department of Agriculture pilot enabling Amazon customers to use SNAP benefits to purchase groceries online (Colorado, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, Vermont, Virginia, West Virginia, and Wisconsin). We are committed to making food accessible through online shopping and we look forward to adding more states soon. Read about the program.

Amazon now offers SNAP purchasing in 25 states, plus the Washington DC area. Through the program, SNAP participants can pay for groceries online using their electronic benefits transfer (EBT) card. Other retailers in the program have included Walmart and ShopRite.

The ability for SNAP participants to purchase groceries online has always been an important issue. Many low-income families live in food deserts and are unable to access fresh, healthy food. The ability to have food delivered can not only lead to healthier lifestyles but also helps provide at least some equity when it comes to digital access to online grocery shopping.

The ability to shop for groceries online became more important these past couple of months as the COVID-19 pandemic made trips to the grocery store potentially deadly. People without access to delivery or curbside pickup are putting themselves at risk of contracting the disease.

Another startup looking to help SNAP participants get their groceries more safely online is All_EBT. That company uses a combination of virtual Visa cards and Facebook Messenger to allow people to purchase SNAP approved items from any online retailer.

There is still a lot of work left to be done when it comes to issues around food and digital equity, and expansion of services like Amazon’s are good first steps.