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The Spoon

Daily news and analysis about the food tech revolution

automated fulfillment

Takeoff Technologies to Have 40 Automated Fulfillment Centers Operating This Year

Takeoff Technologies launched its first grocery automated fulfillment center in the fall of 2018. Needless to say, a lot has happened in the grocery space since then, including a global pandemic that abruptly pushed record amounts of grocery shopping online. To keep up with this wave of grocery e-commerce, more grocers have accelerated and adopted the use of automated fulfillment centers like Takeoff’s.

We last checked in with Takeoff during the first wave of the pandemic in 2020. At that time, the company had six centers operational and another 20 under construction. Since it has almost been a year since then, we checked back in with Max Pedró, Co-Founder and President of Takeoff Technologies this week. Pedró said that Takeoff now has 13 sites that are live now, and will have more than 40 by the end of this year. Takeoff has partnerships with retailers such as Albertsons, Ahold Delhaize, and Carrefour, with sites running on both coasts of the U.S., as well as in Canada, Australia and in Dubai.

The latest market survey from Brick Meets Click showed that grocery e-commerce dropped between January and February of this year. Usage fell particularly among those over 60, who were among the first groups of people to get vaccinated. Online grocery shopping is expected to go through a market correction this year as vaccinations allow people to move more freely outside of the home.

But Pedró believes that customers have developed new habits after a year of lockdowns and e-commerce is here to stay. He’s not alone in that belief. Mercatus forecasts grocery e-commerce will hit $250 billion by 2025, taking up 21.5 percent of total grocery sales.

Obviously, Pedró has a horse in the automated fulfillment race, but he outlined his reasoning for why he believes the technology is here to stay. First, Pedró said that automated fulfillment makes the online grocery business model more economical. Part of the reason it can become more economical is because automated fulfillment creates more throughput — grocers can pick and pack more orders, faster. Finally, Pedró said that automated fulfillment allows independent grocers to better compete with giants like Walmart and Amazon, which offer free two-hour delivery to their members.

Along with all this opportunity, Takeoff is also facing increased competition in the automated fulfillment space. Swisslog is providing fulfillment to regional Texas grocer H-E-B. Walmart has enlisted the help of Alert Innovation, Dematic and Fabric to build out dozens of automated fulfillment centers. And Kroger is starting to open up its own, standalone automated Customer Fulfillment Centers powered by Ocado.

There are still questions over how many customers will continue to use e-commerce for groceries after they’ve been vaccinated, and the overall efficacy and economics of automated fulfillment. But for now, it appears that Takeoff’s technology is taking off with retailers this year.

If you’re curious about the future of robotics in grocery, be sure to attend ArticulATE, our virtual food automation conference on May 18!

Urbx’ Vertical Automated Grocery Fulfillment has High Ambitions

As they come to market, automated grocery fulfillment solutions are taking a number of different shapes. Companies like Takeoff Technologies and Dematic are building them into the backs of existing stores, while Kroger and Ocado are building out big, standalone smart warehouses.

Unlike those other players in the space, Urbx wants its automated fulfillment center to get high — vertically speaking. The Boston-based company is working on robotic fulfillment that scales up to 150 ft. tall. While the Urbx system is tall, it only takes up 1,800 sq. ft., so it can nestle into the limited, tight real estate areas in cities. As Urbx CEO, Lincoln Cavalieri explained to me by phone this week, Urbx is “ideal for urban environments, food deserts, where property prices are high.”

Urbx has a dual go-to market strategy. First, like other automated fulfillment technology companies, Urbx will work with third-parties to integrate its automation into other stores. At the same time, Cavalieri said that the company will eventually build “thousands” of its own Urbx-branded automated markets. But these Urbx markets won’t be anything like a traditional grocery store.

The Urbx market won’t have any aisles to roam or bakery sections to get treats from. Instead, the “store” part will be a series of kiosks. Shoppers can either place their order by mobile phone or at the kiosk. Cavalieri said once an order is placed, Urbx’ robots can pack an order of 50 items in less than two minutes. (A 25-item order takes just a little over one minute.) Robots then deliver the packed items to the kiosk for the customer to take out.

Urbx will also have curbside pickup, delivery via electric bicycles and, at some point down the line, drone delivery.

All of this, however, is still a ways away. The company has only raised a seed round of funding and won’t have its first third-party implementations ready to be installed until the end of this year. Urbx hopes to have its first Urbx market developed by the end of next year.

This is certainly the right time to launch an automated fulfillment solution. The COVID-19 pandemic pushed record amounts of people into grocery e-commerce, which is expected to grow to take up 21.5 percent of total grocery sales by 2025.

As such, many retailers are accelerating their automation endeavors to keep up with e-commerce demand. Alberstons is expanding its use of automated fulfillment centers and testing out robotic pickup kiosks. And Walmart is working with three different companies to deploy automated fulfillment centers to dozens of locations this year.

With plans for its own line of supermarkets, Urbx is the most ambitious automated fulfillment startup we’ve covered so far. Now we just have to see if rollout of tall centers can match the height of its goals.

Walmart Canada to Deploy First Automated Kiosks for Grocery Pickup

Walmart Canada is adding automated kiosk pickup to one of its stores in the Toronto area, which, the company says, will be the first of its kind in that country.

In a corporate blog post published yesterday, Walmart Canada outlined a number of moves the company is making to accelerate its e-commerce efforts, including:

  • Building out a 22,000 sq. ft. space inside the Scarborough West Supercentre that will automate online grocery picking and packing that is six times faster than manual order picking
  • Expanding grocery pickup to 60 more stores this year
  • Piloting “ring scanner” technology that allows workers to pick and scan items hands-free

But the new feature we are most interested in is the new automated grocery pickup. According to Walmart Canada’s blog post, these new automated kiosks will “serve as vending machines for online grocery orders and can serve up to five customers simultaneously.” To use the kiosk, customers pull into a dedicated parking spot, enter a code into the machine and their order will appear in under two minutes.

All of these new, automated features are being built in partnership with Dematic, and will launch later this year.

This isn’t the first automated kiosk we’ve written about. Albertsons debuted its own robot-powered kiosk for grocery pickup at a Jewel-Osco in Chicago. But to our knowledge, this is the first public mention of automated kiosk pickup from Walmart in North America.

In January, Walmart announced that it was partnering with Dematic, Fabric and Alert Innovation to deploy automated fulfillment centers to “dozens” of locations. Automated kiosks weren’t mentioned at that time, but it’s safe to assume that if Walmart Canada is testing them out, they will make their way to the U.S. at some point.

As we covered this week, a ton of resources are flowing into the online grocery sector. Smaller online grocery startups around the world are raising a lot of money, and big players like Walmart, Albertsons and Kroger are making big investments in their own e-commerce infrastructure.

The reason for this big push into grocery e-commerce is that online grocery sales hit $9.3 billion in January, and is projected to hit $250 billion and take up 21.5 percent of total grocery sales by 2025. Retailers are bolstering their e-commerce capabilities now, to accommodate the growth that is to come.

Ahold Delhaize Launching Automated Fulfillment Center in Philadelphia

Ahold Delhaize announced today that it is building out an automated fulfillment center in Philadelphia (hat tip to Winsight Grocery Business). When completed, this facility will be able to fulfill 15,000 online delivery orders a week.

This new fulfillment pilot will be powered by Peapod Digital Labs, Ahold Delhaize’s in-house e-commerce engine, and offered to customers of the Giant Co. market. Ahold Delhaize is also working with Swisslog’s AutoStore for the robotics and software systems for the automated fulfillment center.

This is not Ahold’s first trip to the robotic fulfillment center rodeo. The company owns a majority stake in FreshDirect, which is using Fabric for a Washington D.C.-area fulfillment center. And in 2018, the company announced it was working with Takeoff Technologies to create a number of micro-fulfillment centers for its retail brands including Stop & Shop, Food Lion and Giant Food. According to Winsight, Ahold said today more micro-fulfillment pilots are forthcoming.

Ahold Delhaize’s expanded use of automation is no surprise. Grocery e-commerce had a banner year in 2020, thanks in large part to the pandemic keeping people at home. Online grocery is expected to remain sticky with consumers even after the pandemic recedes with some projecting online grocery taking up 21.5 percent of total grocery sales by 2025.

As such, grocery retailers are investing in new ways of getting people their food faster. Kroger is building out a series of Ocado-powered automated fulfillment centers across the U.S. Walmart is planning to implement dozens of automated micro-fulfillment centers at its stores. And Albertsons is expanding the use of automated fulfillment as well.

Most of these, however have been announcements. We’ll need to watch this space in the coming months to see if automated fulfillment centers truly deliver on their promise of cost-effective, increased efficiency.

Walmart Scaling its Automated Fulfillment with Alert Innovation, Dematic and Fabric

Walmart announced today that it is ramping up its use of automated centers to fulfill online grocery orders. The company said it is already planning “dozens” of locations with “many more to come.”

Automated fulfillment centers use robotics to assemble items for incoming orders. The result is a faster turnaround for customer delivery or pickup.

According to a corporate blog post announcing the news:

[Walmart will] be building local fulfillment centers with various technology partners, including Alert Innovation, Dematic and Fabric. With these partners, we’ll be testing different orientations and add-on innovations to understand what works best in different environments. For example, in some locations, we’ll be adding on to our stores. In others, the fulfillment centers will sit inside the existing store footprint.

At its Salem, New Hampshire location, Walmart had piloted Alert Innovation’s automated fulfillment technology back in 2019. Walmart didn’t explain why has chosen three different solutions going forward, though if the retailer is going all-in on automated fulfillment, one company may not have been able to scale up quickly enough. We do know that Fabric specializes in building automated fulfillment centers in small, non-traditional spaces, and Walmart said its rollout would test different automated fulfillment configurations.

After a slow burn for the past few years, automated fulfillment is becoming hot with grocers in 2021. FreshDirect is also using Fabric’s solution for a fulfillment center in the Washington D.C. area. Albertsons is expanding its use of Takeoff Technology’s micro-fulfillment. Dematic is being used in Amazon’s grocery stores. H-E-B is using Swisslog. And Kroger is set to open up the first of its planned 20 automated customer fulfillment centers this year.

The reason for this burst in robotic fulfillment activity is the pandemic. COVID-19-related fears pushed people into record amounts of online grocery shopping last year. While a vaccine is being deployed, people have developed new habits, and online grocery shopping is expected to take up 21.5 percent of total grocery sales by 2025.

As such, retailers need to increase their throughput now to retain customer loyalty. Faster turnaround means more slots available for curbside pickup and delivery. Walmart may not have found inventory counting robots on its floors particularly efficient, but it seems to believe robots in the backroom building out orders is.

Kroger to Build Out Ocado-Powered Automated Fulfillment Center in Romulus, MI

Grocery giant Kroger announced today that it will be building out its next Ocado-powered robotic fulfillment center in Romulus, MI.

Kroger is an investor in Ocado and uses the U.K.-based company’s technology to create automated fulfillment centers. These centers use a system of totes, rails and robots to assemble and expedite online grocery orders from a central location that are then sent out for delivery. Kroger is in the process of building out 20 of these facilities across the U.S.

In June, Kroger announced that the Great Lakes, Pacific Northwest and West would each get their own fulfillment center. The Romulus facility will service the Great Lakes region. Other locations announced include Frederick, MD, Monroe, OH, and Dallas, TX, among others.

Kroger’s ongoing automated march across the U.S. comes at a time when the pandemic and spurred record amounts of online grocery shopping. Though recent data suggest that the initial surge in online grocery shopping tapered off later in the summer, online grocery shopping sales are projected to hit $250 billion by 2025.

The first of Kroger’s automated warehouses aren’t scheduled to become operational until early 2021. That will give Kroger plenty of time to properly ramp up its own delivery operations amidst growing grocery e-commerce, but it also gives Kroger’s competition time to gain more marketshare. Amazon is expanding its grocery ambitions and offers Prime members free same-day delivery. Walmart just launched its own subscription service that offers free same-day grocery delivery as well. Even more regional players like H-E-B in Texas are getting into the automated grocery fulfillment game.

Kroger’s Romulus facility will be 135,000-square-foot, will create 250 new jobs and open up 18 months after the site breaks ground.

Kroger to Build Three Robot-Powered Fulfillment Centers in the Pac. Northwest, Great Lakes and West Regions

Kroger announced today that it will be building robot-powered fulfillment centers in the Pacific Northwest, Great Lakes and West regions of the U.S. This expansion marks the first such robot warehouses to be situated on the west coast.

These smart warehouses use technology from U.K. grocer Ocado to automate the process of online grocery order fulfillment. Kroger is taking a centralized approach to such fulfillment, building out 20 robot centers in various locations across the U.S. to serve as hubs for customer delivery.

Other retailers are taking a more localized approach to automated order logistics, choosing instead to build out micro fulfillment centers in the backs of existing neighborhood supermarkets. Albertsons and Ahold Delhaize both have partnerships with Takeoff Technologies to build these types of centers, while Walmart is using Alert Innovation for a similar experiment.

The speed of online grocery order fulfillment has definitely become more of a priority during this pandemic. Quarantining has driven record online grocery sales over the past few months, but retailers were ill equipped to handle the deluge of new orders. The result has been out of stock items and massive delays in delivery windows.

The question, however, is, will those online grocery shoppers remain after the pandemic recedes. Companies like Kroger and Albertsons are making big investments in automated fulfillment, but once we get back to “normal,” which definitely won’t be the old normal, will people want to go back into the grocery store to pick out their own food?

Kroger’s march towards automation predates the pandemic by a long shot, so current fluctuations driven by the coronavirus probably aren’t driving too much of its implementation. Besides, the first of Kroger’s robot warehouses isn’t even scheduled to open until early 2021, so there is time for grocers and shoppers to figure out any new preferences to grocery shopping.

Takeoff, eh? Canada Grocer Loblaws Testing In-Store Robotic Micro-Fulfillment

Loblaws, Canada’s largest grocery chain, announced this week that it was piloting Takeoff Technologies‘ robot-powered micro-fulfillment center in one of its stores. Supermarket News reports that the two companies have already started building out the center in Toronto and will fulfill orders for Lawlaws’ PC Express pickup service next year.

Typically built into the back of a retailer, Takeoff’s automated fulfillment centers use a series of totes, rails and conveyors to shuttle food items around. Once an online grocery order comes in, totes automatically bring the items to a human who assembles them into bags that go out to the car. According to Supermarket News, Takeoff’s system can gather grocery orders of 60 items in less than five minutes. You can see the Takeoff robots in action here.

Ideally, micro-fulfillment technology like Takeoff’s allows retailers to convert un- or little-used space into more productive and revenue-generating areas for a store while creating a faster, more convenient online grocery shopping experience for customers. Online grocery shopping is still a small percentage of overall grocery spending, but it’s growing, and automated fulfillment (and the holidays!) could help spur more food shopping from home.

This new partnership expands Takeoff’s reach across North America and into Canada and adds another high profile partner for the startup. Here in the U.S., Takeoff already has a number of pilots going on with Sedano’s, Albertsons, Ahold Delhaize and Wakefern.

While Takeoff has a few partnerships it can point to, there are plenty of automated fulfillment players getting into the game or trying out different approaches to fulfillment. Alert Innovation also builds in-store fulfillment and has partnered with Walmart on a pilot location. Fabric just raised $110 million and moved its headquarters to the U.S. to expand its robotic fulfillment presence here. And instead of inside its stores, Kroger is building 20 standalone robot-powered smart warehouses domestically.

Despite all this, automated fulfillment is still in the early days of testing, and it remains to be seen if and how it will impact a retailer’s bottom line. As more of these systems come online in 2020, we’ll definitely see if they fulfill their robotic promise.

Takeoff to Provide Robotic Order Fulfillment for ShopRite

Wakefern Food Corp. announced yesterday that it has partnered with Takeoff Technologies to build an automated fulfillment center in Cliffton, NJ. The center will fulfill orders for online shoppers at select ShopRite stores in New Jersey and New York.

Takeoff builds robot-powered micro-fulfillment centers, which use a series of tote boxes, rails and conveyors to quickly assemble online orders for either delivery or pickup. These centers are on the smaller side and typically in the back of existing supermarkets. Through its automated system, Takeoff can put together online orders of up to 60 items in just minutes.

Wakefern, which is a cooperative of 50 retailer-owned grocery retailers across the east coast, including ShopRite, The Fresh Grocer, Price Rite Marketplace and Dearborn Market, said in the press release it has agreed to build out more fulfillment centers with Takeoff in the future.

While online shopping is currently a small percentage of overall grocery shopping, it’s growing, and retailers are preparing for it by testing automated fulfillment systems like Takeoff’s, expanded curbside pickup and self-driving delivery vehicles. All in an effort to get you your groceries faster and get more of your business.

Robotic order fulfillment seems to be picking up steam as Kroger recently announced it will open its fourth Ocado-powered automated fulfillment warehouse in Georgia, Common sense Robotics opened up its own micro-fulfillment center in Tel Aviv, and Walmart has partnered with Alert Innovation to test out its micro-fulfillment solution.

For its part, this is the fourth grocery retail customer for Takeoff, which already has agreements in place with Sedano’s, Albertsons, and Ahold Delhaize.