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Daily news and analysis about the food tech revolution

Amazon

Report: Meal Kits Not Performing Well at Amazon Go Stores

In an effort to get each of its cashierless checkout Amazon Go stores to hit a goal of $2 million in annual sales, Amazon has been examining various ways to optimize each location, according to a recent story in The Information (subscription required). Among the things the company is at least considering is dropping meal kits from Go stores.

Amazon Go stores are the convenience stores that offer a range of fresh and packaged food, snacks and grab-and-go items. The stores are built from the ground up to provide a cashierless shopping experience. Users scan the Amazon Go app on their phone as they walk in, then high-tech cameras and sensors keep track of what they purchase, so shoppers are billed automatically as they walk out.

The Information reviewed an Amazon internal analysis document, which revealed that the ideal size for an Amazon Go store was 1,440 sq. feet (not including the entryway). The decision teams at Amazon faced was to figure out how to best design the store and offer the best selection of inventory to meet fill the space and hit the sales goal.

You should read the full story as it delves into some real nitty gritty (like the debate around fountain sodas). But one item in particular in The Information’s reporting caught our eye:

A category in which Amazon Go hasn’t performed as well is meal kits, the boxes filled with ingredients a customer can take home to prepare a designated meal, such as chicken parmesan, according to the analysis. It referred to meal kits as a “strategic focus” for the company, but said they could be cut from Go stores. The company plans to add flowers, greeting cards, loose produce and bakery cases to stores this year and next year to test new product categories.

It’s not hard to understand why meal kits could be a strategic focus for Amazon at its Go stores. A Nielsen survey in March of this year found that in-store meal kit sales are where most of the growth in the sector has been taking place, generating $93 million in sales in 2018. A March 2019 study from NPD found that 93 million Americans haven’t tried meal kits but want to.

Given that growth, it was no surprise that meal kits were featured in Amazon Go’s debut store, and that Amazon meal kits started appearing on Whole Foods shelves this year. Both Amazon Gos and meal kits are all about convenience, and the combination of the two seemed like chocolate and peanut butter. Go is all about speed. For busy professionals, being able to bring home a full-fledged meal-in-a-box on your way home seemed like a winner.

But hindsight being 20/20, it’s easy to see the flaw in this logic. First, according to an InMarket study last year, “Peak visits to Amazon Go happen during business hours. Noon, 2 p.m., and 1 p.m. bring in the most visits, followed by 8 and 9 a.m. InMarket concludes that customers are stopping by for breakfast and lunch.” So at least from that data, customers weren’t even coming into the store around dinner time.

Another big issue is that while meal kits may be easy to grab, they are still hard to make. If you are a busy professional wanting to eat something quickly when you get home, you’re better off grabbing something from the hot food section of a store. Meal kits may be pre-portioned and include all the ingredients, but you still have to put them all together and cook the food. That’s not super convenient.

Granted, all of this is based on one news site, going from one strategy document. There is obviously a lot of discussion and experimentation going on internally at Amazon about Go, err, going forward. We know that Go stores might be shrunk down to fit in office buildings, Amazon is eyeballing airports as Go locations, and even changing existing locations to accept cash where required.

At the end of the day, whether or not Amazon sticks with meal kits at Go stores or not isn’t even that important. What remains impressive about Amazon is that they are always experimenting to see what works. It’s why we named the company to our Food Tech 25 list this year. The company lives for optimization, and iterating Go stores, and what’s in them, is just a part of that.

Swiggy Goes Beyond Food Delivery With New Service Swiggy Go, Expands Swiggy Stores

Today, India-based delivery service Swiggy took a few steps beyond the food world by launching Swiggy Go, an instant pickup and drop-off service that will deliver everything from laundry to house keys.

Swiggy Go is similar to another service, Swiggy Stores, which the company launched in February of 2019 for delivering household items like groceries and medicine within a one-hour timeframe. It’s also another example of a food delivery company branching out from restaurant food in an effort to become a kind of delivery superpower that can get any item to any person in major cities.

In India, Swiggy competes most closely with another food delivery service, Zomato, but adding non-food items to its delivery capabilities means it will also now be competing with Google-backed concierge service Dunzo, who operates in a handful of cities in India.

Food tech investment in India in general is heating up. In August, ecommerce startup FreshToHome raised a $20 million Series B round. Amazon said in July it is planning to launch a restaurant-delivery service in the country later this year, and Zomato successfully tested a drone pilot this past summer.

It’s possible Swiggy’s sudden move into non-food items is an effort to stand above the rising competition levels in India and become the go-to service in India not just for restaurant meals but for anything a person could want conveniently dropped at the front door. That may be necessary as heavyweights like Amazon — a name basically synonymous with conveniences — plans its moves in the country.

We’re seeing a similar trend start to take shape here in the States: last week, DoorDash announced it is working with Mercato to delivery groceries in 22 different states. It could be only a matter of time before Dashers start dropping non-perishables at your door, too. The next big question is, Will other third-party delivery services do the same?

Swiggy Go is currently available in Bengaluru. The company said it plans to expand the service to over 300 cities. Meanwhile, Swiggy stores will be available in all major metro areas by 2020.

Amazon Starts Testing Autonomous Delivery Bot Scout in California

Scout, Amazon’s autonomous wheeled delivery bot, will start delivering packages today in Irvine, California, according to a blog post published by Amazon.

Scout bots will operate “Monday through Friday, during daylight hours,” according to the blog post. Customers in Irvine will order their packages as normal, including options for same-day delivery for Prime members. The cooler-sized, six-wheeled bots will autonomously follow their delivery route and, for now at least, be accompanied by a human being who can take over in the event of a problem.

Back in January, when Scout debuted near Amazon’s Washington State headquarters, my colleague Chris Albrecht noted that, “If Scout’s trial proves successful, Amazon’s involvement in the space will certainly light a fire under the existing competition and accelerate robot delivery.”

Today’s post from Amazon didn’t specifically mention food delivery, but it’s a realm in which Amazon operates and where, if Scout does indeed prove successful, the Seattle giant would certainly give the competition something to worry about.

And there’s plenty of competition to go around. Postmates’ Serve bot already, eh, serves Los Angeles, Miami, NYC, Chicago, and Phoenix. Kiwi and Starship are available on a growing number of college campuses, and Kiwi also just expanded its program to the city of Sacramento. Pepsi, too, has bots on campus in the form of an autonomous roving device by San Francisco-based company Robby.

Of course, both campuses and city streets contain obstacles for bots, which Amazon said in its blog post it has been testing Scout against for some time: “All the while, the devices have safely and autonomously navigated the many obstacles you find in residential neighborhoods—trashcans, skateboards, lawn chairs, the occasional snow blower, and more.”

Now they have to navigate an even tougher test than a snow blower: the human beings who will be both interacting with the bots as they accept packages and getting used to seeing the wheeled devices roving about the block. How that reception goes will give us a good idea of where Scout is headed — literally and figuratively — in the near future.

Report: Amazon Planning Launch of Restaurant Delivery Service in India

Amazon is aiming to launch a restaurant delivery service in India this year according to a report out yesterday in Reuters. While not confirmed yet, if true it would mark another global move in the food delivery space for Bezos’ behemoth.

Reuters writes:

The Seattle-based company is working with local partner Catamaran, founded by IT industrialist Narayana Murthy, and has begun hiring staff for the new operation, the sources said, declining to be named because the plans had yet to be made public.

The story goes on to say that Amazon wants to launch the service in time for India’s month-long festive season, which kicks off in September.

Reuters’ story came on the same day that Business Standard reported Amazon was in talks to buy Uber Eats in India. None of the parties for either deal provided a comment to Reuters.

Though we don’t have a lot to work on with these reports, the potential news caught our eye because if either/both of them do pan out, it would mark another major international investment in food delivery for Amazon.

In May, Amazon announced it was part of a $575 million investment round in U.K. based food delivery startup Deliveroo (though U.K. regulators have slowed that deal down). Amazon had shut down its restaurant delivery service in the U.K. last year, and went on to shutter its restaurant delivery here in the U.S. last month, which wasn’t surprising given how far it trailed competitors like GrubHub and DoorDash.

With the global market for online food delivery projected to hit more than $160 billion by 2023, it’s no wonder Amazon wants a piece of that pie. But it will face tough competition in India as companies like Swiggy ($1.5 billion raised) and Zomato ($755 million raised) are well established.

Updated: Food Delivery Service Just Eat Lays Off Staff Amid Redundancies

UK third-party food delivery service Just Eat has made a round of layoffs in the UK and Ireland following the recent merging of its customer and restaurant operations teams. TechCrunch reports that while it’s unclear how many individuals are affected, it could be “as many as 100 staff overall.”

At the end of May, Just Eat united its separate customer and restaurant support divisions under a single operation, creating numerous redundancies in the process. This round of layoffs, according to TC, was announced internally on Friday and is meant to do away with those redundancies as part of a larger corporate reorganization.

A Just Eat spokesperson declined to comment to TechCrunch on the actual number but did confirm the reorganization, noting that, “At our full year results we talked about organising and energising the business to execute our strategy at pace.”

The news comes right after Just Eat, who is based in London but operates throughout the UK and in several other countries, acquired corporate catering marketplace City Pantry. Previously, Just Eat had acquired Flyt and Practi, both restaurant-tech-focused companies.

Meanwhile, Just Eat has also faced backlash from investors this year as the company’s pace of growth has slowed. In February, activist investor Cat Rock Capital Management LP, who owns a 2 percent share in Just Eat, urged the company to “merge with a rival online meal-delivery company,” in the wake of Just Eat’s inability to find a permanent CEO after Peter Plumb stepped down and was replaced by interim CEO Peter Duffy. While Just Eat has yet to find that permanent CEO, TechCrunch also reported that Graham Corfield, previously Just Eat’s UK Managing Director, has been appointed to the role chief operating officer.

And despite Just Eat’s recent acquisitions, which suggest growth into new areas, the company has been under some heavy pressure in 2019 not just from investors but competitors as well. Amazon’s recent (and somewhat controversial) investment in Deliveroo further intensifies that competition, particularly as Deliveroo tries to take over more and more of the food delivery stack by offering its restaurants everything from cheaper ingredients to wifi services.

Just Eat’s previous aforementioned acquisitions have been focused mainly on technology that powers the delivery process. Whether that’s enough to give the company a fighting chance against Deliveroo’s operation remains to be seen.

Update: An earlier version of this post incorrectly stated that Graham Corfield had been appointed to the role of chief executive officer.

Deliveroo Launches Procurement Platform to Supply Restaurants With Discount Ingredients

Deliveroo this week launched Food Procurement, a platform on which the third-party delivery service’s partner restaurants can purchase ingredients and supplies at discounted prices. It’s part of what appears to be the company’s aim to become a one-stop-shop for restaurants, where Deliveroo would provide not just drivers to shuttle food orders to customers, but also vital pieces of restaurants’ infrastructure, from internet to real estate to equipment.

With the Food Procurement platform, Deliveroo buys ingredients on behalf of the restaurants, leveraging its scale and purchasing power to negotiate better deals with suppliers. Deliveroo then negotiates its own contracts with the restaurants, who get a better rate on ingredients and items like cleaning supplies and packaging products.

As Ajay Lakhwani, VP of new business at Deliveroo, said in a statement, “By using our size and scale to negotiate great prices we can both simplify the procurement process and help independents and chains can make big savings.” Deliveroo has been piloting the platform for the last year and says it can save restaurants up to 20 percent of their total ingredients bill.

While partner restaurants are not obligated to sign up for the Food Procurement platform, several hundred already have.

Amid Brexit concerns, food prices in the UK are soaring currently, which makes Deliveroo’s platform an attractive prospect, especially for mom-and-pop restaurants with tighter margins who don’t have the purchasing power to sway suppliers into cheaper ingredient prices.

The platform also underscores Deliveroo’s aforementioned aim to be more than just a delivery partner to restaurants. The company has struck numerous partnerships with third parties to offer discounts to restaurants on everything from print services and energy costs to wifi and waste management.

While those perks will inevitably save restaurants on costs, they also shift more power into the hands of Deliveroo. Such a shift definitely has its ups and downs for both sides. It’s also probably something we’ll see more of in future. As I wrote in March, when rumors of Uber-operated ghost kitchens surfaced, “it’s not hard to imagine a third-party delivery service taking over more of the operations up and down the operational stack.”

The launch of Deliveroo’s procurement platform comes right on the heels of news that that the service’s recent investment from Amazon is now being scrutinized by the UK government’s Competition and Markets Authority (CMA). The Food Procurement platform doesn’t appear to be affected by this scrutiny at the moment.

Call for Grubhub Antitrust Investigation Suggests Deep Scrutiny of Third-Party Delivery Is On the Way

DoorDash may have knocked Grubhub out of the top spot overall for U.S. market share of third-party food delivery, but in NYC, the latter is still king. And a growing number of parties are starting to take issue with that. Case in point: Grubhub took another blow at the end of last week when a New York City council member called for an antitrust investigation into the company.

In a letter dated July 2 and obtained by the New York Post, Mark Gjonaj, head of the City Council’s Committee on Small Business, asked New York Attorney General Letitia James to open the investigation and revisit the 2013 settlement agreement that allowed Grubhub to purchase Seamless.

“While I am not accusing any entity of committing unlawful acts, I do believe that Grubhub’s outsized market share and heavy-handed tactics could lead to artificially reduced competition which in turn may drive up the commissions paid by struggling locally owned restaurants,” Gjonaj wrote.

Currently, Grubhub controls 69 percent of the food delivery market in NYC, according to Gregory Frank, an antitrust lawyer who testified at the June oversight hearing in NYC that addressed concerns over the commission fee Grubhub and other third-party delivery services charge restaurants.

The call for an antitrust investigation comes on the heels of a report that Grubhub has been buying website domains by the thousands and creating so-called shadow sites without those restaurants’ knowledge. At the same time the New York State Liquor Authority is creating new rules that could cap the fees Grubhub can charge its participating restaurants to 10 percent. Currently, those fees range anywhere from 15 to 30 percent. Grubhub has denied those accusations.

Grubhub isn’t the only player in the third-party delivery space currently under scrutiny. Earlier this month, the UK government’s Competition and Markets Authority put the brakes on Amazon’s minority investment in Deliveroo while it investigates potential breaches of competition rules.

Third-party food delivery apps were recently predicted to have 44 million U.S. users by 2020. More lawmakers are stepping in to regulate the market, combined with others questioning the economics of third-party food delivery, and still others urging brands to pull their delivery programs back in house suggest the honeymoon period for third-party is over. Massive players like Grubhub aren’t going anywhere anytime soon, but they’ll likely be operating under far more scrutiny from government bodies and civilians alike going forward.

Report: Amazon Still Working on a Robot for Inside the Home

Amazon is still hard at work building an actual Rosie the Robot-type robot for your home, according to a report today in Bloomberg.

We first heard about this robot a little more than a year ago, but this latest report indicates Amazon has not given up on the project and has actually increased work on it — though details remain scant. We know it’s called “Vesta” internally at Amazon, and Bloomberg’s sources say prototypes have wheels and “are about waist-high and navigate with the help of an array of computer-vision cameras.” It also can be summoned with voice commands a la Echo and Alexa.

Evidently, Amazon had wanted to debut the robot this year according to Bloomberg, but it’s not ready for scaled up production. The robot could also never see the light of day, projects get killed all the time at large companies, but Bloomberg writes that Amazon has added engineers to the project, which could mean it plans to sell Vesta at some point.

Beyond all this, we still don’t know what this robot is for. It could be some type of mobile Alexa that follows you around, and, for our purposes here at The Spoon, potentially help you by controlling various connected kitchen gadgets or ordering groceries, but without more information, we’re just guessing.

When we first wrote about Vesta, I was skeptical that it would be just a mobile virtual assistant. First, we don’t know if the robot can do things like climb stairs, which is kind of important in a lot of houses. Second, Echos are so cheap, if you need a ubiquitous Star Trek-like computer assistant, you could just get a bunch of Dots and place them all throughout the house.

Others disagreed, however. Last year friend of The Spoon, Kevin Tofel, wrote:

So maybe Vesta is more of a roving Echo than a robot that can fold laundry or make your coffee.

I’m OK with that and here’s why. I’d rather have one smart speaker that also has a camera than speakers and cameras — think Echo Show and Echo Spot — in every room of the house. If that one device can either follow me around the house or be within earshot, I don’t need multiple devices that basically do the same thing. And I can send a camera-enabled device away if that device is a robot.

But again, without more information, it’s hard to say how useful this robot may or may not be.

What we do know, however, is that we have reported on three different versions of home-related Amazon robots over the past year. In January, Amazon launched Scout, a squat cooler-looking rover bot that deliver packages. And in February, The Spoon uncovered a patent for an Amazon autonomous ground vehicle that would live in a persons garage and go out to fetch packages.

In addition to the robot news, the Bloomberg story also reported that Amazon is also prepping a new version of its Echo with improved sound.

British Regulators Eye Amazon’s Investment in Deliveroo

There is a certain level of irony in the fact that as America wrapped up celebrating its independence from Great Britain, British regulators were clamping down on one of America’s most influential companies.

The Guardian reports that Amazon’s recent minority investment in UK-based food delivery service, Deliveroo, is now being scrutinized by the UK government’s Competition and Markets Authority (CMA).

There were “reasonable grounds,” according to the CMA, to suspect that Amazon and Deliveroo could “cease to be distinct.” The CMA has ordered that any further integration between the two companies must be paused as the government investigates whether any competition rules were broken and determines whether it will launch a full merger inquiry.

Amazon was part of a $575 million Series G round of investment in Deliveroo earlier this year. The investment came after Amazon failed to gain any traction for its Amazon Restaurants delivery service in Britain, and shut it down.

With the CMA order, Deliveroo is prohibited from engaging in activity that “could lead to its integration into Amazon’s business while the regulator makes its decision,” reports The Guardian. This includes changes to big contracts or senior management without permission from the CMA.

The CMA’s move is part of a larger backlash growing against Amazon, whose massive size and influence has spooked state and city regulators here in the U.S. In May, under growing pressure from multiple city governments, Amazon dropped its no-cash accepted policy at its nascent chain of Go stores. And at the beginning of the year, Amazon decided to abandon plans to build a second HQ in New York after facing protests from lawmakers and activists there.

In another bit of irony, while the CMA’s move against Amazon serves to protect competition in the UK, we at The Spoon saw Amazon’s investment in Deliveroo actually as a way for the two companies to meaningfully break into the U.S. market.

Amazon Shutting Down Restaurant Delivery in the U.S.

Amazon is getting out of the (crowded) restaurant food delivery game. According to Geekwire, Amazon will shut down Amazon Restaurants toward the end of this month. Amazon confirmed Geekwire’s story in a statement stating “As of June 24th, we will discontinue the Amazon Restaurants business in the US.”

Additionally, Amazon is shutting down its office lunch delivery service, Daily Dish, on June 14.

The closing of Amazon Restaurants in the U.S. follows its closure of restaurant delivery in the U.K. last year. It also comes at a time when tons of money is flowing into the restaurant delivery space. DoorDash raised an additional $600 million at the end of May (bringing its total amount raised to $2 billion), Uber, which has Uber Eats, just went public last month, and Postmates is about to IPO as well.

But the most interesting bit of relevant funding news came from Amazon itself, which was part of a recent $575 million fundraise by UK-based food delivery company Deliveroo. Firing up the speculation engine, it’s not hard to imagine a scenario where Amazon’s moola helps Deliveroo make a move into the U.S.

That could actually be the smarter play for Amazon. Shuttering Amazon Restaurants isn’t even that much of a surprise. Even though Amazon is a logistics powerhouse, delivering a burrito is different from delivering a book on burritos. In a recent survey of restaurant delivery market share, Amazon lagged far behind Grubhub, DoorDash, Uber Eats and Postmates. Combining Deliveroo’s strengths in food delivery with Amazon’s network and presence in the U.S. would be a win/win for both parties.

I mean, Amazon’s already got the delivery drones, let Deliveroo fill ’em up with burgers.

Amazon Unveils Its New Drone, Says It Will Start Making Deliveries “Within Months”

The battle to deliver your goods as fast as possible is taking to the skies. Amazon unveiled its new delivery drone today at its re:Mars conference in Las Vegas and said it would start delivering packages to people “within months.”

The first thing you notice about the fully electric drone is its unique design that combines elements of both a helicopter and an airplane. From the blog post announcing the drone:


It can do vertical takeoffs and landings – like a helicopter. And it’s efficient and aerodynamic – like an airplane. It also easily transitions between these two modes – from vertical-mode to airplane mode, and back to vertical mode.

The best way to get a sense of it is to watch this video (complete with soothing music) of the drone in flight:

Amazon Prime Air’s New Delivery Drone

Amazon’s drone can fly up to 15 miles and deliver packages that are less than five pounds (like a latte!) in less than 30 minutes.

The company is also touting the device’s numerous safety features. The propellers are completely shrouded and those shrouds acts as wings during flight. There are also numerous sensors, cameras and artificial intelligence on board so it can navigate unexpected obstacles or weather conditions during flight, as well as land safely in someone’s yard without running into wires or curious/agitated pets.

Amazon’s drone unveiling comes more than five years after Jeff Bezos first dropped the idea that Amazon was exploring drone delivery. It also comes just over a month since Google’s Wing Aviation got Federal Aviation Administration and Department of Transportation approvals to make commercial drone deliveries. Part of the reason they were able to do so was because Google basically went through the process of becoming a small airline. Amazon didn’t say where it was in the regulatory process, or where in the world it would be making deliveries, but the company does already know a thing about delivery by air with its fleet of 50 cargo planes.

In addition to Amazon and Google duking it out over drone dominance, look for an ecosystem of startups to spring up to help facilitate drone delivery. Already companies like AirSpace Link are providing services like route mapping for companies that want to do drone delivery.

Update: Amazon to Invest in Deliveroo

UPDATE: Deliveroo confirmed this funding via press release sent out today. From that announcement:

  • Amazon is set to be the largest investor in Deliveroo’s Series G funding round
  • Deliveroo is raising a total of $575MM with participation from Amazon alongside existing investors T Rowe Price, Fidelity Management and Research Company, and Greenoaks
  • Deliveroo will invest heavily in expanding the company’s tech team at its UK Headquarters, expand further to reach new customers, and continue innovating through its delivery-only super kitchens, “Editions”

Original post:

Amazon is in negotiations to invest hundreds of millions of dollars in UK-based food delivery service Deliveroo, according to a report in Sky News. If true, Amazon’s money would be part of a larger £450 million (~$575M USD) fundraise by Deliveroo.

Deliveroo has raised close to a billion dollars already, and Sky’s sources were unable to peg a clear valuation on the company if this new round goes through. Deliveroo was valued at $2 billion during its last round of funding a year and a half ago.

For Amazon, this deal is basically an if-you-can’t-beat-’em-buy-into-’em strategy. In November of last year, Amazon shuttered its Amazon Restaurants delivery service in the UK after two years of trying to break into that market. As my colleague, Catherine Lamb wrote at the time:

Despite its big name and massive reach, it seems Amazon Restaurants couldn’t compete against existing food delivery companies in the U.K. like Deliveroo and Uber Eats. Since 2013, Deliveroo has carved out a sizable chunk of the U.K. food delivery market and become one of the fastest-growing tech companies in Europe. The company also differentiates themselves with their Editions project: geographically-targeted hubs of delivery-only cloud kitchens Deliveroo began rolling out in 2017.

Speaking of Uber Eats, Deliveroo’s reported fundraise comes on the heels of Uber’s IPO. Though Uber’s IPO was anemic, it still raised $8.1 billion that will help fuel Uber Eats’ expansion to 700 cities from the current 500.

Additionally, Uber is looking to expand into other food verticals, including cloud, or “ghost” kitchens, that would house delivery only restaurants that are only available on the Uber app. The company has even reportedly started leasing space in Paris to build out such a ghost kitchen.

This move into the virtual restaurant game would then pit Uber Eats against Deliveroo not only for restaurant delivery dominance, but also makes a play for Deliveroo’s own ghost kitchen program: Deliveroo Editions.

An influx of cash (sprinkled in with some Amazon-style know-how), then, puts a few more arrows in Deliveroo’s quiver to put up a bigger fight. Or, as my colleague, Catherine pointed out, bring the fight to the U.S., where Deliveroo isn’t active yet.

*The headline for the original version of this post said Amazon invested hundreds of millions in Deliveroo when that was still the report. We updated the headline to more accurately reflect the story.