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The Spoon

Daily news and analysis about the food tech revolution

automated fulfillment

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.