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Daily news and analysis about the food tech revolution

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Israel’s Tastewise Turns Diverse Data into Real-Time Insights Using AI

Those who rely on data to make an important business decision know the adage, “Garbage in, garbage out.” Data is plentiful for those in the food world, but it is a challenge to select the correct data, understand what the information means, and how it relates to your specific situation.

Enter Tastewise, an Israeli market intelligence platform that harvests a vast—and we mean vast–array of structured and unstructured data and turns it into meaningful insights. Working with Nestle, Mars, PepsiCo, and others, Tastewise recently upped its game by adding AI capability using ChatGPT to its functionality.

In a recent interview with The Spoon, Alon Chen, Tastewise Co-Founder, and CEO explained the company’s origins. After working for Google, Chen ran into Eyal Gaon, who became co-founder and CTO. The two men discussed the gap between bringing new products to market and eventual success.

“We found very early on that 90% of innovation–tens of thousands of new products that come out to the market every single year– fail, right? CPG companies and others win up; they innovate a lot less and focus on acquisitions because they can’t keep up. We took a deeper look at this and said, why is that? “

The answer became evident to the two men. Companies, especially in the food area, focused on retail data, which becomes stale quicker than a week-old banana. “Retail data is not good for the food industry because if something is successful and you see that on sales data, you are already 18 months too late,” commented Chen.

Which led to a two-part solution—the underpinnings of the Tastewise platform. Step one is harvesting data from myriad sources ranging from restaurant menus to recipe sites on the Web. The trick of turning raw information into actionable insights is to take structured (quantitative) and unstructured (qualitative) data and offer users easy-to-understand answers. For example, Tastewise can tell a CPG customer what customers are enjoying the latest food fad. The details of those results can go deep into the location and demographics of those trends and the foodies behind them.

“We call it the fast-moving consumer data,” Chen observed. “Fast moving consumer data, which is a whole new category that we think that is evolving today and is now being integrated into the different workflows and the tasks nig companies have in place. Tastewise is a layer of data that brings consumer preferences and needs into the food brand and the food manufacturing life cycle.”

Taking its SaaS data platform to a new level, Tastewise has added AI functionality to its product line. Called TasteGPT, users can ask such questions as:

  • What product ideas are the best fit for my Gen Z consumers?
  • What concepts should I invest my R&D budget in?
  • Where should I launch my new beverage product first?
  • Where is my competition under-represented, and what can I do about it?
  • What should the focus of my next marketing campaign be?

“AI influences how consumers choose what to eat and drink in countless ways. Consumers are also more informed than ever, and they expect us to meet their needs accurately, specifically, and on-demand,” Chen said at the March launch of the new AI capability. “TasteGPT can now help companies get closer to their consumers by capturing the pulse of culinary, nutritional, and dietary needs, and to stay competitive in a rapidly changing market.”

“Artificial intelligence is the only way to mitigate a lack of credible data by enabling organizations to make sense of vast amounts of data,” said Gaon. “With relevant AI tools, data turns into meaningful insights that drive better decision-making and innovation in real-time.”

BentoBox Survey: Restaurants & Their Customers Embrace Direct Online Ordering

It’s clear that the COVID-19 pandemic changed the way restaurants do business. As a purveyor of online marketing and commerce solutions for the hospitality industry, New York-based company BentoBox recently decided to quantify some of those changes.

BentoBox saw a jump in business during the pandemic, with more restaurants seeking the online tools that the company offers. The team used data from that growing customer base to understand how the pandemic has reshaped the food industry since March 2020—and what might be next for restaurants.

“We mined all our data to see what it says about what’s going on in the market,” BentoBox’s Chief Marketing Officer Darcy Kurtz told The Spoon in a recent Zoom interview. “That’s been especially important these last couple of years, because things are shifting so quickly, and so dramatically.”

One of the biggest themes in the data was a rise in costs for restaurants, reflected in price increases on restaurants’ online menus. “The food itself is costing more, labor is costing significantly more when you can even get it, and real estate costs are significantly higher,” Kurtz said. And for restaurants, which operated on thin margins even before the pandemic, those price increases can sting.

One way to combat rising costs is by switching to the ghost kitchen model–and BentoBox saw a 100% increase in the number of ghost kitchens using its software platform this year, according to the company’s recently published report. The ghost kitchen model also has a relatively low cost of entry, allowing new restaurants to launch more easily without the need for heavy investment.

BentoBox’s pool of restaurant customers has grown by almost 60% since March 2020. Kurtz attributed that boom in business to a new emphasis on the importance of restaurants’ virtual experiences. “Today, your digital presence is really your front door,” Kurtz said. That’s especially true for ghost kitchens, which rely completely on their online presences to get discovered.

The majority of the company’s growth was driven by increased sales of online ordering tools. Before the pandemic, many restaurants didn’t have direct online ordering functions on their own websites, instead relying on third-party platforms like GrubHub and Uber Eats.

“But when COVID hit and there was only one way of getting revenue, restaurants added their own online ordering paths in droves,” Kurtz said. And diners have responded: According to the report, BentoBox found a 54% year-over-year increase in direct online order volume. The company also noted a 200% increase in restaurants’ monthly revenue through digital loyalty programs.

Kurtz said that loyalty to local restaurants drove these trends: “People have learned that third party ordering apps take a lot of money from their favorite restaurants. So once their favorite restaurants got online ordering, customers said ‘oh, I’ll just go direct because I know that’s best for my local restaurants.’”

With the Omicron variant rearing its head, there’s no way to be certain of how in-person restaurant business will recover in the near future. But BentoBox’s data is clear on one thing: Online ordering is here to stay.

“What we’re finding is that people are just eating out more. They’re still doing online ordering—and they’re doing it all week, not just on the weekends,” Kurtz said. “They found out how convenient it is, and they found out that delivery food can still taste great. So I think for restaurants, the great news is that there are new revenue streams and the total available market of diners has grown.”

But Kurtz predicted that restaurants may struggle to support that expanded business model in an ecosystem where labor is scarcer and inputs cost more.

Because the pandemic has shifted the rhythm of delivery demand, restaurants will also have to adapt to a new schedule. “The fact that Fridays haven’t rebounded is a signal that the hybrid work model is going to have an effect on the operational cadence of these restaurants,” Kurtz said. “Especially with restaurants that are in business districts, they’re really going to have to figure out how to shift their operations, because it’s not going to be a steady five-day-a-week sort of operation.”

With restaurants’ online presence growing in importance, we’re likely to see more growth for commerce and marketing solutions companies like BentoBox. And in turn, that growth should provide more consolidated data on the new shape that the industry is taking.

Q&A: Tools for the Data-Driven Restaurant, According to Sevenrooms Founder Allison Page

The restaurant industry faces a lot of question marks right now, but one certainty is that future dining room and off-premises experiences will generate and include a lot more data.

Founder and Chief Product Office Allison Page created Sevenrooms on the idea that restaurants need to be able to better understand their customers through this data. In doing so, businesses can ultimately provide a better, more efficient and enjoyable restaurant experience for everyone. The company’s front-of-house-focused software gives restaurants insights about these customers by providing data collected throughout the guest journey: from reservations and waitlists to online ordering and review aggregation, to name just a few areas.

Allison will be discussing data with other panelists at The Spoon’s upcoming Restaurant Tech Summit, a day-log virtual event that will discuss the state, present and future, of restaurant tech. As a teaser, we recently got some high-level thoughts from her around the future of the data-driven restaurant. Full Q&A is below. And if you haven’t already, grab a ticket to the show here.

1. What problem does SevenRooms solve for restaurants/the restaurant industry?

When we started SevenRooms, our goal was to provide hospitality operators with better access to their guest data. Before SevenRooms, if you asked an operator who their biggest spenders, best tippers or brand advocates were, they would have no idea. Ten years later, access to actionable data has changed the way operators think about data (hint: it’s no longer a dirty word) and the role it plays in their day-to-day operations. 

Since the onset of the pandemic, our solution has provided even greater benefits for operators, especially in light of staff shortages across the world. We give them a platform that helps them punch above their weight class and do more with less. Over the past 18 months, we have continued to help them automate so many of the manual processes that enabled them to add headcount, without having to hire more staff. This includes guest profiles that build themselves, marketing automation to leverage that data, and, subsequently, the insight needed to provide personalized, unmatched experiences whether a guest is on- or off-premise. 

Now, as the world and restaurant industry reopens, operators realize the importance of owning their direct channels instead of solely relying on third-party platforms. With a fully integrated guest experience and retention platform like SevenRooms, they now have the tools they need to acquire, engage and retain more guests. 

2. What is the biggest change in terms of the restaurant industry’s approach towards technology as a result of the pandemic? 

At the start of the pandemic, we saw many restaurants rush to tech as a solution to many of the challenges they had to face. This led to quick, not always great, decisions, and many lessons learned over the past 18 months. The biggest takeaway from the pandemic is that operators now understand the importance of a direct relationship with their customers. 

Before COVID, restaurants were leveraging third-parties for reservations and online ordering. But when the pandemic started, restaurants began to understand the impact of outsourcing all of their customer relationships to third-party brands. For many restaurants, this meant that when they were mandated to close they didn’t have access to guest data that would allow them to email their customers and let them know they were now available for takeout only. Many months and negative press articles later, it’s been proven that the economics of a third-party-only strategy are not sustainable. 

The past year has also highlighted the importance of working with technology providers who seamlessly integrate across a restaurant’s existing tech stack. This helps create operational efficiencies, versus slowing them down and creating extra work. With restaurants more short-staffed than ever before, it no longer makes sense to use 10 different systems to do 10 different things in your restaurant. Operators want one system, one vendor, one support team and one invoice. They don’t have the bandwidth to have inefficiencies in their tech stack, especially when they’re putting out fires, navigating government regulations and keeping guests and staff safe.  

3. In your eyes, how has the emphasis on takeout and delivery formats impacted the front of house? 

Speaking from the SevenRooms perspective, we saw an opportunity to combine the data collected during takeout and delivery with in-person dining data to get a holistic 360-degree view of the customer. This has created an incredibly powerful data set for restaurant operators to provide exceptional experiences to their guests across both on- and off-premise. 

The shift to off-premise dining during the pandemic meant that operators could no longer have the face-to-face hospitality interactions they were accustomed to. This meant that they had to completely adjust their operations to provide that same level of service and hospitality via delivery and takeout instead. For some of our restaurant partners, many who had never offered takeout, this meant reimagining their operations, physical spaces and menus for delivery and pickup. 

The biggest impact to the front of house has been being able to capture and leverage more data on their customers. For the first time, operators now have a single source of truth on their guests — across both on- and off-premise. This includes who their regular or big spender online ordering customers are, whether they have any specific preferences and allergies and so much more. Data enables operators to not only personalize the experience for guests when they order delivery, but also understand the types of experiences they want when they dine in person. Most importantly, this data can be used to ‘surprise and delight’ guests and to create personalized marketing campaigns that will boost revenue and retention. 

For example, take an NYC diner that only orders from their neighborhood Italian restaurant for delivery, even though they live on the same block as the restaurant. With access to this data, the restaurant knows the customer’s address and can create specific, personalized promotions for that guest. Perhaps a Wine Wednesday experience featuring the wine they order the most, a complimentary appetizer or special treat in their bag, or a handwritten note from the general manager inviting them into the restaurant to try a new pasta dish. Data helps operators build long-lasting relationships with guests that keep them coming back for years to come. 

4. What is the biggest challenge for restaurants right now when it comes to digitization? 

Right now, the biggest challenge for restaurants when it comes to digitization is working with vendors who are on their side. In other words, working with technology vendors who are aligned with their success and 100% focused on building solutions that help them run their businesses more effectively. When business priorities are misaligned, what’s best for the restaurant falls to the wayside. Restaurant operators need to learn to ask the hard questions of their tech vendors to ensure they have their best interests in mind. 

Another challenge falls in the realm of the platforms and integrations restaurants choose to use within their tech stacks. Oftentimes, restaurants are using systems that don’t speak to each other – making it almost impossible to put together a seamless experience for guests, let alone a consistent one. The key to a good digital guest experience is in a seamlessly integrated tech stack.

5. What are you most excited about when it comes to the impact of restaurant technology?

When thinking about SevenRooms, I’m most excited about how we can help restaurants stay in business longer and generate more revenue. Also, how operators can use restaurant technology to impact the way someone feels and the experiences they have both in a dining room and at home.  

I’m also incredibly excited about all of the different ways data is starting to be used throughout the industry. It now touches so many areas of hospitality businesses — helping operators to be more efficient in everything they do, from inventory and menu planning, to employee scheduling and marketing, to reservations and online ordering. At SevenRooms, we are continuing to talk about the importance of data, especially from a 360-degree perspective, and how it can contribute to a restaurant’s bottom line for years to come. Today, it’s so much easier to really understand the ROI of every tech platform because the data is available and becoming more actionable and easier to digest for operators. It’s wonderful to see technology leading the charge when it comes to innovation in these areas. 

6. What do you think the restaurant industry will look like in five years? 

Data-enabled with a human touch. Over the next five years, we’re going to see more data-powered experiences, more personalization and deeper relationships between restaurants and customers than ever before. 

On-premise operators have no choice but to think about data and the role it plays in bringing hyper-personalized experiences to the table. This largely stems from the fact that guest expectations are higher than ever coming out of the pandemic. Over the course of the past year, consumers have learned how to make gourmet meals at home, the ins and outs of baking the perfect sourdough bread, even turning to meal kits for date nights. They have more options available to them than ever before. When they dine out, they want the experience and hospitality that comes with the food, not just the food itself. If they aren’t getting the experience they need or want, there’s another option waiting right next door. 

We’re at the early innings of a data revolution for the hospitality industry. Over the next five years, hospitality experiences are only going to become more personalized and tailored to the wants and needs of guests – to the levels we see on an everyday basis from the likes of Amazon and Spotify today. The restaurant industry has been through a lot over the past year, but it’s one of the most inspiring industries to work in and be a part of every day and I’m excited to see what the next five years hold. 

Data: Restaurant Tech’s Biggest Opportunity

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As online ordering becomes more the norm, the next step in on the path to digitization is all about data. More specifically, it is about making sense of the mountains of customer data brought about by the uptick in digital ordering. Think customer order history, dietary preferences, as well as external data like weather, nearby events, and other factors that could impact restaurant traffic.

A company that wants to help restaurants make sense of all this is Brightloom. 

Until relatively recently, Brightloom went by the name Eatsa, and for a time was a restaurant itself, pushing whole hyper-digitized, automated-dining concept long before major QSRs started adopting cubbies and kiosks. The Eatsa restaurant itself didn’t last terribly long. In fact, the company started shuttering these locations in 2017 and by the end of that year was licensing its automated-restaurant technology out to others instead of trying to own the whole stack.

In 2019, rebranded as Brightloom and pivoted sharply away from automated ordering tech to what CEO Adam Brotman refers to as a “data driven personalization service.” Instead of providing cubbies and online order systems for the restaurant front of house, Eatsa now provides a “customer growth” platform through which restaurants can access and analyze their data.

Brotman told me this past spring that the reason for the shift was that digital ordering “was becoming some[thing] of a commodity.” Even before the pandemic shut dining rooms down and forced more restaurants to rely on off-premises channels like pickup and delivery, businesses were incorporating more ways for customers to order digitally. All those order channels — apps, websites, even SMS — produce data that, with the right tools, can be extremely valuable to restaurants in terms of being able to offer customers relevant experiences and upsells.

Boston Consulting Group notes that one-third of restaurants’ digital customers ordered online for the first time during the pandemic. That number is expected to go up, and restaurants will have to meet that demand. “Going digital” nowadays means being able to message and connect with restaurant customers directly, knowing what they buy from how, how often they’re buying it, and through which channels. 

“Even just having a great looking website or mobile app is not easy. Organizing your data and doing data driven, personalized marketing, on your email and push notifications, that is even harder,” Brotman said. 

Brightloom addresses those types of areas for restaurants, and the company has recently seen its popularity among restaurants grow. The company claimed in a press release this month that restaurants using the Brightloom platform “experienced lifts in revenue per guest of 5.7% or more across 23 million guests.” The company has also added larger-name chains, such as Ruby Tuesday and El Pollo Loco, to its roster of customers. Finally, Brightloom also recently launched Brightloom Pro, which includes more customization capabilities for individual restaurant brands. 

Food tech investor Brita Rosenheim recently noted that it’s “dizzying” for restaurant operators to make decisions around how to use their data. Because of that, there is a tremendous opportunity for restaurant tech companies that can partner with these restaurants  to help them “utilize customer data to better uphold their brand, funnel customers into more profitable channels, and make better decisions about merchandising, pricing, and promotions.”

If you want to learn more about this brave new data-centric restaurant world, join The Spoon and guests on August 17 for a virtual Restaurant Tech Summit. Brightloom and Adam Brotman will join the likes of Olo, Delivery Hero, Wow Bao, and many other restaurants and restaurant tech companies. Grab a ticket here, and come ready to ask some questions. 

More Headlines

Bbot Raises $15M Series A for its Restaurant Ordering and Payment Software – The company said it will create new POS and loyalty program integrations with the new funds, and will focus on features for food halls and virtual brands. 

Delivery Service Swiggy Raises $1.25B – The “heavily oversubscribed” round includes the $800 million the India-based delivery service raised earlier this year.

Zenput Raises $27M to Manage Operations for Multi-Unit Restaurants – Multi-unit restaurant operators, grocery stores, and convenience stores can release new operating procedures and health and safety protocols and enforce them across all units. 

Retailers: Don’t Fret Over Online Grocery’s Downward Trend

In looking at Brick Meets Click/Mercatus online grocery sales data since March of this year, you might start to worry. After matching a record high of $9.3 billion in total U.S. grocery e-commerce in March, the numbers have steadily come down. April’s tally was $8.4 billion. May fell to $7.0 billion. And just this week, the latest data showed total U.S. online grocery sales dropped again to $6.8 billion.

But as Brick Meets Click Partner and Research Lead David Bishop explained to me by phone this week, there’s no need to panic.

“We’ve expected and predicted that 2021 would be a very choppy year,” Bishop said, adding the the pandemic, the subsequent delta and lambda variants and government relief like the child tax credits coming out will make for a very up and down year. But, he added, “Keep an eye on the big picture. We are still at significantly higher levels than prior to the pandemic.” More importantly, Bishop reassured me, online grocery shopping isn’t going anywhere. “We’re still at 70 percent of the peak, and we’re going to keep more than 50 percent of incremental gains.”

A closer look at Brick Meets Click’s numbers shows that almost the entirety of the drop in online grocery sales came from ship-to-home services (think mail order services like Imperfect Produce, Crowd Cow, etc.). Store delivery and home pickup options remained flat from May to June at $5.3 billion, and this, Bishop said, is where retailers should be paying attention — especially when it comes to curbside pickup.

Brick Meets Click’s June data showed that 33 percent of monthly active users received online grocery orders only via pickup, compared with 16 percent receiving their online groceries only via delivery. “The customer is signaling that pickup is the preferred method when given the option between home delivery and store pickup,” Bishop said.

Bishop also said that in the broader landscape, especially in the media, the message has been about delivery, and the need for faster delivery. (We at The Spoon are certainly guilty of adding to that narrative.) “The fact of the matter is that more households use pickup than delivery,” said Bishop, “And the sales gap is widening.”

Bishop doesn’t think retailers should abandon delivery, but more emphasis and resources should be put towards adding and improving curbside pickup options for customers. This in turn will create a virtuous cycle with customers. Adding more curbside pickup options with faster, more convenient pull-up options will get more people to use curbside pickup services.

Adding those pickup options, however isn’t as simple as a CEO snapping their fingers. Operational plans need to be put into place as to how the customer orders, who does the order packing, where that order is staged before pickup and who takes it out to the car. Additionally, larger chains need to order signage that directs people to pickup spots for all their store locations, and there may be city regulations that need to be met before traditional parking spots can be reserved for pickup. All that takes time.

Now that we have data around how consumer behavior is evolving with online grocery shopping, retailers can take action and adjust. Yes, there will be continued month-to-month fluctuations in the numbers, but the overall trend remains the same. “We’re trying to reinforce the underlying point, which is, we have had the acceleration [of grocery e-commerce] thanks to the pandemic,” Bishop said. “This is the year of reconciliation. Retailers and customers will re-jig how they operate and behave.” And The Spoon will be here to cover how stores and customers change with the times — so don’t worry.

More Headlines

Uproot is Bringing Plant-Based Milk Dispensers to College Campuses – the dispenser hardware is free, but schools need to buy the milks from Uproot.

Plant-Based Cheese Company Nobell Foods Raises $75M – The company basically trains soybeans to produce casein, which it says could wind up being cheaper than the costs of producing cheese using cow’s milk.

Instacart and Fabric Partner to Offer Automated Fulfillment to Grocers – Rolling out later this year, the robot-powered fulfillment service will be offered for both inside existing stores or standalone facilities.

Bbot Raises $15M Series A for its Restaurant Ordering and Payment Software – The company offers a range of hardware tools such as tablets, scanners and printer controls, as well as a suite of software to enable contactless and online ordering and manage catering.

Survey: More than One-Third of US Online Grocery Shoppers to Keep E-Commerce Habit Post-Pandemic

One question looming over U.S. grocery retailers is how many of their customers who were pushed into online shopping last year will continue to do so after the pandemic recedes. Thanks to new data released from Coresight Research this week, we are starting to get an answer.

According to US Online Grocery Survey 2021: Post-Surge Prospects (subscription required), more than one-third of online grocery shoppers don’t plan on changing up their online grocery shopping habits once the pandemic ends. In addition to that, more than one-quarter of shoppers said they expect to buy groceries online more frequently than they did during the pandemic. Roughly 30 percent of survey respondents said that they’ll shop “slightly less frequently” or “much less frequently” post-pandemic, and 6.3 percent said they’ll stop buying groceries online altogether.

Demographically speaking, Coresight found that online grocery shoppers aged 30 – 44 are most likely to continue with grocery e-commerce, with roughly 63 percent saying they expect to continue online grocery shopping at the same or increased frequency after the pandemic. Coresight attributed this to this age group being familiar with digital channels and often having young families that drive up basket sizes and typically involves planning ahead for grocery purchases.

One interesting note from Coresight’s research is that home delivery was the default option for online grocery purchases. The survey found 56 percent of respondents who had bought groceries online over the previous 12 months had their orders delivered, whereas 43 percent chose curbside pickup. This data runs counter to what Bricks Meets Click/Mercatus have found in its surveys. In April Brick Meets Click reported that curbside pickup attracted the biggest share of monthly shoppers with 53 percent, compared to ship-to-home and delivery. The discrepancy could be because Coresight’s data looked back 12 months prior to April, during the thick of the pandemic, when lockdowns were keeping people across the country at home. Brick Meets Click’s data is more recent and comes at a time when vaccinations are rolling out in earnest.

Of those people who opted for delivery, Coresight found that 42.7 percent used same-day shipping service and more than one-quarter used faster two-hour delivery services. This actually makes a lot of sense when you consider that Coresight also found Amazon to be the most-shopped retailer, followed by Walmart in the second spot. Amazon offers free two-hour grocery to its Prime members and Walmart+ offers same-day delivery.

While this is just one survey, data points like this are important as grocery retailers decide where to invest their resources. Walmart and Albertsons, for instance are expanding their use of automated fulfillment, curbside pickup and delivery options to accommodate the growth in e-commerce. In order for those investments to be worth it, online grocery needs to remain popular with consumers.

Survey: Online Grocery Sales Drop 14 Percent in February to $8B

Online grocery sales fell to $8 billion in February, dropping 14 percent from January’s $9.3 billion, according to new data released today from the latest Brick Meets Click/Mercatus Grocery Shopping Survey.

Brick Meets Click said the biggest factor in February’s decline was that fewer households bought groceries online. Monthly active users fell to 60.1 million in February, a 12 percent decrease from the 69.7 million in January. A lot of that drop off came from people over 60 years old, which could be a result of increased vaccinations in that age group. As more people get vaccinated, there will be more confidence in going out and into stores in-person.

In addition to fewer households placing orders, there were also just fewer orders in general. Online grocery shoppers averaged 2.7 orders in February, down 6 percent compared with 2.8 orders in January. However, Brick Meets Click said that most of this decline was in the ship-to-home segment. The combined delivery and pickup segment was only down 4 percent from January to February.

One bit of good news is that there was a four percent increase in average order value in February. Online grocery shopping households spent an average of $82 in February on orders received via delivery or pickup (that’s 55 percent more than orders placed for ship-to-home service).

Speaking of delivery and pickup, that segment nabbed $6.1 billion in February, gobbling up more than three-quarters of the total online grocery market for the month. Within that, curbside pickup accounted for nearly half of all online grocery sales in February.

Brick Meets Click’s latest data comes on the heels of a blockbuster quarter for online grocery related funding. Grocery-related startups around the world have been pulling in millions for faster delivery, e-commerce transition and market expansion. Is all this new money for naught as vaccines continue to roll out, freeing up people to leave their homes to shop in-person?

Not necessarily. Industry analysts have been expecting this type of market correction since last year. However, online grocery is projected to grow and eventually reach $250 billion, taking up 21.5 percent of total grocery sales by 2025.

The more immediate question for investors and even retailers pouring money into e-commerce solutions is whether to focus on delivery or curbside pickup. The data from February shows a preference for pickup, but we’ve seen retailers like Walmart and Albertsons devote more resources to both automated curbside pickup and faster delivery.

Brick Meets Click’s data for the next few months will certainly be fascinating to watch, not just from an industry perspective, but also a sociological one. After a year of lockdowns, what new grocery shopping habits will remain permanent, and what will that mean for innovation at retail overall?

Wefarm Raises $11M to Expand Its Knowledge-Sharing Platform for Small-Scale Farmers

U.K.-based Wefarm announced today it has raised $11 million in Series A funding for its knowledge-sharing platform for small-scale farmers. The round was led by Octopus Ventures with participation from new and existing investors including True Ventures, Robo Frontier Ventures, LocalGlobe, June Fund, and AgFunder. The investment brings Wefarm’s total to $32 million.

The company says it will use the new funding to expand its service from an SMS-based tool to a fully online platform where farmers can share knowledge and advice as well as get access to a marketplace of retailers.

Wefarm started in 2015 as a simple SMS tool for small-scale farmers around the world to connect with one another and share farming know-how. Since then, the company has also added a Retailer network that connects farmers with nearby, independent retailers known for selling high-quality, trusted farm products. The underlying goal with both networks is to put more power in the hands of farmers when it comes to knowledge-sharing and buying and selling goods. 

The platform started as a simple SMS tool because many small-scale farmers around the world do not have reliable access to the internet. They do, however, typically have mobile phones, and WeFarm says that since its launch, 37 million conversations have taken place with its SMS tool.

Wefarm’s launch of a fully online platform comes at a time when internet connectivity is less scarce than it used to be in certain parts of the world. In a statement sent to The Spoon, Wefarm CEO Kenny Ewan noted that the world’s small-scale farming community “is ready to expand into an online space with us.”

The online expansion arrives as a forum-like platform that will “enable farmers to work together to solve problems, support each other, and aggregate their buying and selling power to change the global supply chain.” Farmers can also continue to use the SMS tool if they prefer.

Orders for Food and Consumer Goods Robots Grew 56 Percent Last Year

Often when we write about the growth in food robotics, it’s based on anecdotal data. For example, over the past year robot startups have told us that thanks to COVID-19, they’ve seen a surge in demand.

Now, thanks to the Association for Advancing Automation (A3), we have some hard numbers to reaffirm what we’ve already been reporting. The A3 announced yesterday that for the first time last year, orders of robots for non-automotive purposes surpassed automotive robot orders. According to the press announcement, sales of robotic units in North America in 2020 were up 3.5 percent over sales in 2019. North American companies ordered 31,044 robotic units at a value of $1.572 billion last year.

For our specific purposes here at The Spoon, the A3 said that orders for food and consumer goods robots grew by 56 percent in 2020. And not only were more robots being ordered for the food sector, they were being used for higher-level tasks. Mark Joppru, Vice President, Consumer Segment & Service Robotics, US ABB Robotics and Machine Automation, said in the A3 press release:

In food applications, for example, where robots were traditionally used to automate simpler processes like case loading, they are increasingly being commissioned for higher value processes, like directly preparing food, resulting in improvements to food safety and hygiene. While these trends have existed for several years, COVID has changed perceptions and priorities for customers, accelerating the adoption of robotic automation.

This echoes what we’ve been hearing from food robot startups throughout the pandemic. Cleanliness and hygiene are the new priorities for the companies buying food robots. Robots provide a contactless way of preparing, ordering and delivering food, create more social distance in kitchens and can help alleviate staffing issues.

Just as important, robots are getting more sophisticated and, as Joppru points out, able to complete higher value tasks. Flippy is working the fryers at White Castle. Woowa Brothers delivery bots are integrating with elevator and security systems to increase navigation within buildings. And robot kiosks like RoboEatz can prepare 1,000 meals before needing a human to refill the ingredients.

Given the constant stream of robot news we’re been writing, it’s not too hard to imagine that this time next year, we’ll be writing about record growth for the industry in 2021.

Ukko Raises $40M to Fight Food Allergies and Develop its Good Gluten

Ukko, a biotech company that uses artificial intelligence (AI) to develop food and therapeutics that fight food allergies, announced today that it has raised a $40 million Series B round of funding. The round was led by Leaps by Bayer (the impact investment arm of Bayer), with participation from Continental Grain Company, PeakBridge Ventures, Skyviews Life Science and Fall Line Capital. Existing investors including Khosla Ventures and TIME Ventures, the investment fund of Marc Benioff, participated as well.

This brings the total amount of funding raised by Ukko to $47.7 million dollars. According to the press announcement, the new funding will allow Tel Aviv, Israel-based Ukko to enter into clinical trials for its investigational therapeutic for peanut allergies and, more relevant for our purposes, accelerate development of the company’s proprietary gluten.

Simply speaking, Ukko uses its AI platform to analyze patient data to map how an allergen triggers a reaction in the body. With that information, Ukko breaks down the gluten protein to its component level and gets rids of the bad parts that cause allergic reactions. It keeps the good parts. Ukko then creates this new good gluten either by genetically modifying wheat plants or fermenting yeast (or some other applicable base cell) to grow it in a bioreactor.

The result, Ukko Co-Founder and CEO Anat Binur told me by phone this week, is a gluten that stretches and bakes and has all the biophysical aspects of gluten, and can be eaten by people with gluten sensitivities and celiac disease. This, in turn, means that gluten-sensitive people don’t need to sacrifice quality when enjoying different types of baked goods.

At least, that’s the plan. Binur said that some of the company’s new funds will go towards clinical trials of its gluten and getting the product through all the safety protocols and to the point of commercialization.

Once Ukko’s gluten reaches the commercialization stage, Binur said that there are a number of options for how it comes to market. Ukko could sell its own gluten, which could be added to gluten-free starches (like almonds or rice). Alternatively, the company could sell its own gluten flour as an ingredient to food companies and restaurants/bakeries, or create its own line of branded gluten-free flour to be sold on store shelves. Or Ukko could pursue some combination of all three.

By one estimate from Grand View Research, the gluten-free products market was valued at $21.61 billion in 2019, and projected to grow at a CAGR of 9.2 percent through 2027. So there is plenty of market opportunity just in gluten for Ukko.

But Ukko’s platform can be applied to any food allergy. As noted, the company is developing therapuetics for peanut allergies, but Ukko’s tech could be used for dairy allergies, soy allergies, egg allergies, etc. Creating replacement foods from the ground up that have the same nutrition and behave like the original could help alleviate a lot of sickness and save lives.

Data Analysis Shows Strong Foot Traffic Debut (and Dropoff) for Amazon’s Woodland Hills Fresh Store

It was by no means high on the list of disappointments in 2020, but I was still bummed that I couldn’t visit Amazon’s first Fresh grocery store in Woodland Hills, CA when it soft launched in August of this year.

It was Amazon’s first full, physical supermarket (the company had opened smaller scale Go Grocery stores before) and excitement was high. What types of Amazon-type technology would Jeff Bezos bring to the grocery sector?

Evidently a lot of people were keen on checking out Amazon, Fresh, according to data released this week from Placer.ai, a company that uses mobile phone location data to gather and analyze foot traffic to real world retail locations.

According to Placer, Amazon Fresh saw a surge of customers in the first weeks it opened to the public in September. In a blog post this week, outlining its findings, Placer wrote:

The first week saw visits on par with two local players with very strong visits rates, Trader Joe’s and Ralphs. But, Amazon Fresh quickly burst ahead with four of the next five weeks seeing the location drive over 5,000 more visits per week than either of those two competitors.

Amazon Fresh was also getting roughly the same number of visits per visitor as comparable grocers. Ralph’s and Trader Joe’s were seeing 2.4 and 2.2 visits per visitor respectively, while the new Amazon Fresh was already seeing 2 visits per visitor, indicating that people were having a good enough experience at Fresh to come back.

Placer reports that one of the reasons Amazon Fresh enjoyed so much foot traffic is because of the store’s “True Trade Area.” When picking a location for a store, a grocer might consider its main customer base to be within a straight five-mile radius of that store. But Placer’s data gathering shows that this strict geographic limitation isn’t accurate, and that a store’s shopping base can actually come from further out. This expanded reach is what Placer calls the True Trade Area.

As you can see from this map, Amazon Fresh Woodland Hills’ True Trade area actually covers a large swath around Los Angeles, so it was pulling customers from outside of Woodland Hills.

I was curious about some of Placer’s findings, so I spoke with Ethan Chernofsky, Placer.ai’s VP of Marketing (and author of the Amazon blog post), by phone this week. My first question was whether some of Fresh’s sizeable foot traffic could be attributable to curbside pickup. Amazon.com’s customer base it so huge, perhaps people were just ordering groceries online and picking them up at the Fresh store, even if that meant driving to another part of town. But Chernofsky said that was unlikely, given the length of time people were staying at the Fresh location.

But while Amazon Fresh enjoyed an early boom in foot traffic, starting in October, Amazon Fresh saw its numbers fall. As the Chernofsky detailed his analysis “Between October and November, the Amazon Fresh True Trade Area decreased by 27.1%, just as monthly visits declined 27.6%. On the other hand, Ralphs saw visits rise 13.7% as its own True Trade Area declined by 7.1%.”

One explanation for the drop could be that the excitement wore off, and what was once shiny and new was no longer shiny and new. Chernofsky doesn’t think that’s it though. As he wrote in a corporate blog post “the close relationship between visits per visitor metrics between the top local grocers indicates that this location was actually succeeding in driving repeat visits even among the launch buzz.”

Instead, Chernofsky attributed the drop to the COVID resurgence in Los Angeles this fall. As the virus reemerged, travel and work was limited, so there was less cross shopping, or tacking on a visit to the grocery store during an errand.

Amazon Locations Around Los Angeles

Another factor could be the fact that Amazon added three additional Fresh locations in Los Angeles since the opening of the first Woodland Hills location. The Northridge and North Hollywood locations both opened in mid-November and seem like they would draw from the same pool of customers as the Woodland Hills location’s True Trade Area.

Regardless, data like that from Placer is worth looking at to see how well Amazon is doing as it starts its forays into real world grocery. I’m still looking forward to a time when I can see the Amazon Fresh stores in person.

Study: Online Grocery to Hit $250B, Account for 21.5 Percent of Total Grocery Sales

There are a lot of questions around the lasting impact the pandemic will have on the way we get our food. A new report out today from Mercatus and Incisiv attempts to answer some of those questions as they pertain to the way we’ll shop for groceries.

In the report, titled “eGrocery’s New Reality: The Pandemic’s Lasting Impact on U.S. Grocery Shopping Behavior,” Mercatus and Incisiv predict that by the year 2025, online grocery will hit $250 billion and account for 21.5 percent of all grocery sales.

Worth noting is how the pandemic has altered and shaped the online grocery landscape. Of the 60,000 American shoppers across the country surveyed for the report, 62 percent of respondent said they were shopping online because of COVID-19. And it seems like this new e-commerce behavior has become normal for many people. The 21.5 percent adoption in 2025 is a post-COVID data point, and is up 60 percent over pre-COVID projections.

Another finding from the report is that while 40 percent of online shoppers are likely or very likely to continue buying groceries online, the vast majority — 78 percent — still prefer going to the physical grocery store either to shop or do curbside pickup.

Who is shopping online may surprise you, as Mercatus/Incisiv found that older populations (45-plus years old) made the biggest shifts towards technology. In that group, 46 percent adopted new fulfillment options like curbside pickup and 35 percent ordered groceries online for the first time.

The report also found that 43 percent of respondents have shopped online for groceries in the past six months, up from 24 percent two years ago.

The one caveat with this report is that it was backed by Mercatus, which sells a grocery e-comerce platform. So it has a horse in this online grocery race. But Mercatus has also backed research by Brick Meets Click, which has helped provide a barometer of online grocery adoption both pre- and during this pandemic.

Speaking of, that Brick Meets Click survey was released last week and showed that online grocery shopping had fallen to $5.7 billion in August from its record peak in of $7.2 billion June. That $5.7 billion, though, is up from $5.3 billion in April, so there is still plenty of inertia behind the move to online grocery shopping.

Mercatus/Incisiv seem to have taken this slowdown into account, writing:

Growth of online grocery will slow in the immediate term, as shoppers return to stores due to reduced concern for COVID-19 risks. Retailers will be required to invest both in technology and re-alignment of operating models (store labor, forward deployment etc.) to improve customer experience and drive the next wave of growth, while ensuring profitability. Growth is expected to pick-up again in early 2022.

Of course, none of these projections are set in stone. We still have one full quarter in what has been a tumultuous year, and literally anything could happen to impact the meal journey. So all our questions won’t be answered for quite some time.