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Daily news and analysis about the food tech revolution

delivery

Starbucks Expands Uber Eats Delivery Pilot Across U.S.

Starbucks this morning announced (via an email) it will expand the delivery pilot program it runs in Miami with Uber Eats to other U.S. cities. Starting today, the program is available in San Francisco, and will move to NYC, DC, Boston, Chicago, and Los Angeles over the next few weeks.

Starbucks has been testing out the delivery concept since 2015, when it launched a partnership in the U.S. with Postmates, which it has maintained over the last few years. Then, in 2018, Starbucks teamed up with Uber Eats in Miami to offer “favorite items that have been tested for delivery.” This latest round of cities is an expansion of that pilot.

For the Miami pilot, the caramel Frappucino has wound up being the most popular item ordered thus far. That isn’t surprising, since blended ice, sugar, and whatever else they put in those things will travel a lot better than a piping hot cup of black coffee (though fewer people probably want that in Miami anyway).

Which brings up a good point: hot liquids don’t travel well (duh). The times I’ve ordered coffee from the deli down the block, I’ve gotten a paper cup quadruple-wrapped in plastic cellophane containing a sort-of hot beverage. I’ve always blamed myself for being lazy enough to get coffee delivered in the first place. But if pricey coffee drinks become a standard delivery item, companies like Starbucks may need to think about more delivery-friendly packaging.

Still, I doubt packaging will deter people. The addition of Japan as a delivery market last year suggests the Starbucks-Uber Eats pilot is thus-far fruitful. Others — namely, Dunkin’ and McDonalds (also via Uber Eats) — are also jumping on the coffee-delivery trend, which will fuel more competition in the market.

Uber Eats, meanwhile, is ramping up its efforts across many areas of the food-delivery space. The company has been looking to use drones for delivery, and has exclusive partnerships with virtual (aka ghost) kitchens, too. While I speculate here, one could even imagine Starbucks and Uber Eats setting up a ghost kitchen to handle the influx of extra orders an expanded delivery partnership could bring.

Finally, the Uber IPO has been looming in the future for some time, though it, along with Lyft’s, are reportedly stalled at the moment due to the government shutdown. In any case, expanding a partnership in a space growing as fast as a delivery seems a well-calculated move for Uber Eats, right now and when that IPO eventually does happen.

Postmates Grabs $100M in New Funding Ahead of IPO

As first reported by Recode, food-delivery heavyweight Postmates has raised another $100 million in equity funding ahead of its IPO. The round includes participation from Tiger Global and other current shareholders, as well as a new investor to Postmates, BlackRock.

The new round comes on the heels of Postmates’ $300 million funding round from September 2018, which gave the company unicorn status and a $1.2 billion valuation. The new round kicks that valuation up to $1.85 billion, according to Recode sources. The funding is also just ahead of a projected IPO, which Postmates hired JP Morgan to advise on.

Postmates, which currently serves 550 U.S. cities, says it’s now available in 60 percent of U.S. households and does about 3.5 million deliveries per month. But in the $3.5 billion food-delivery industry, competitors are just as aggressive.

DoorDash, historically Postmates’ most direct competitor, nearly tripled its valuation last year to $4 billion. Uber Eats, meanwhile, was on track to cover 70 percent of the U.S. by the end of 2018. Uber’s IPO was also slated for the first half of 2019, though that may be delayed thanks to a slowing down of the entire IPO market as a result of the partial government shutdown.

No word yet on whether Postmates’ forthcoming IPO will also be affected by the shutdown. In the meantime, the company can look forward to rolling out is delivery robot, Serve, onto the streets of Los Angeles this year.

Amazon Looks to Your Garage as a Key to In-Home Delivery

Towards the end of 2017, Amazon launched its Key delivery service, which used a combination of connected cameras and smart locks so delivery people could drop off packages inside your house while you’re away. A few months after the debut, a survey showed that people weren’t really into the idea (understandably) of letting randos into their abodes.

Perhaps looking for an acceptable middle ground, Amazon today announced it has partnered with garage door opener company, Chamberlain Group, to enable secure delivery of packages inside your garage. Amazon actually made a bunch of announcements around Key including a Wi-Fi-enabled deadbolt from Schlage, expanded capacities for the Ring video doorbell to lock/unlock doors and Key for Business. But it’s the garage access that caught our eye.

Amazon’s like water and has been looking for any opening it can find to deliver you more packages. In addition to Key, Amazon also debuted a delivery-to-your-trunk service (in select cars) last year. If Amazon can get inside your dwellings, it would help you avoid package theft… and ideally get you to order more stuff. And though the company doesn’t mention groceries specifically, it’s not hard to see how in garage deliveries could help expand delivery of perishable foods so they don’t sit on your front porch, and give Amazon an edge in the cutthroat world of grocery delivery.

Going through the garage could be a viable option for Key to get some traction. People skittish about a stranger in their home might be less so about their garage. Garages aren’t always connected to houses, and if they are, there is generally a locked door that separates it from the rest of the house. There could be enough of a buffer for customers to try it out.

Of course, if they can’t get in-home delivery through your trunk, your front door or your garage, then they could always just build an entire house around you for delivery.

DoorDash Is Testing Self-Driving Cars in San Francisco

Third-party delivery service DoorDash just announced it has partnered with General Motors’ Cruise Automation to test autonomous vehicles in San Francisco.

Cruise has been testing its autonomous vehicles in San Francisco over the last three years. Equipped with Lidar and radar sensors, as well as cameras that take pictures at 10 frames per second, the vehicles can see more of their surroundings at once than a human being would be able to, making it (theoretically) easier to navigate a crowded, complex metropolis like San Francisco. Cruise currently has DMV permits for testing 180 vehicles in the state of California. For the DoorDash partnership, cars will be based on the Chevy Bolt EV.

The pilot program starts in early 2019. Cruise’s vehicles will do the driving, but humans aren’t completely out of the equation: one DoorDash “dasher” will be in the car, to walk the order to the customer’s door. And though DoorDash hasn’t disclosed names of businesses who will participate, a report by Nation’s Restaurant News notes that the pilot will include restaurant meals and groceries.

That said, DoorDash already had a good bit of competition. Domino’s and Ford Motors were testing delivery via autonomous vehicles last year in South Beach, Miami. Postmates was in on that pilot, too. Self-driving car startup AutoX, meanwhile, is piloting autonomous grocery delivery around the Bay Area, and Farmstead has also been running a grocery delivery pilot with Undelv’s autonomous vehicles.

Still, DoorDash raised a total of $785 million in 2018, and gave a call to hire for so-called “moonshot initiatives” like drones, bots, and self-driving cars. All of which is to say, DoorDash clearly has big plans for tech-driven delivery in 2019.

Report: Amazon Building More Whole Foods, Will There Be Room for Robot Fulfillment?

Never let it be said that Amazon slows down, even during the holidays. The Wall Street Journal reports that Bezos’ behemoth has plans to add more Whole Food stores across the country so its two-hour grocery delivery service can reach even more people.

If true–The Journal’s story is based on “people familiar with the plans”–the news isn’t terribly surprising. Amazon is very competitive and has a history of sacrificing profitability for aggressive growth. A Progressive Grocer report earlier this year ranked Amazon as the eighth largest grocer in the U.S. And although Amazon is the leader in online grocery sales, a recent report from Brick Meets Click shows that shoppers spend way less with Amazon than they do with other grocery retailers.

Walmart, the largest grocer in the U.S. has 4,700 American locations, and the company says it has a store within 10 miles of 90 percent of the population. Walmart was on track to make same day delivery available to 40 percent of the U.S. population by the end of this year, and has a goal to make it available to 60 percent by the end of next year.

Whole Foods, on the other hand, has 470 locations (including in the U.K. and Canada) with two-hour delivery available to Amazon Prime members in 63 cities. So you can see how Amazon is playing catch up here. The question is how they will catch up, and that’s not just about the number of stores.

Part of The Journal story says that some of the spaces Amazon is looking at are slightly larger than the average Whole Foods locations, with the extra space being use for delivery and pickup. Does this mean that Amazon could be jumping on the in-store robot fulfillment center bandwagon?

Albertsons, Ahold Delhaize and Walmart are building out robot fulfillment centers in their stores to facilitate super-fast online grocery order fulfillment (Kroger is building out dedicated standalone robot warehouses). Amazon is already big into robotics in its warehouses, and started experimenting with half hour grocery pickup in select Whole Foods. For a company dedicated to efficiency and speed, it wouldn’t be a surprise to see some sort of automation being built into new locations from the ground up.

Amazon’s purchase of Whole Foods in 2017 scared and catalyzed the grocery industry into spending money and innovating throughout 2018. If Amazon is ramping up its geographical presence, and it seems likely it will, buckle up because 2019 is going to be a wild ride for everyone in the grocery game.

Kroger Selects Cincinnati Area for First Ocado-Robo “Shed”

Baby, if you ever wondered, wondered where grocery giant Kroger was going to build its first Ocado-powered automated robot warehouse, then get ready because it will be in…. Cincinnati. Well, a suburb north of the city, but it’s basically in Cincinnati-based Kroger’s backyard.

Kroger today announced that the first Ocado-powered customer fulfillment centers (CFC) will be in the suburb of Monroe, OH. Kroger says it will spend $55 million on this automated warehouse, which the company is referring to as a “shed” (ed. note: we don’t know why they call it a shed, they don’t explain it in the release, perhaps it’s a holdover from U.K.-based Ocado’s home country?).

Earlier this year, Kroger upped its investment in Ocado, taking a 6 percent stake in the company. As part of that deal, Kroger and Ocado will build twenty such automated warehouse facilities across the U.S. over the next three years. If the original timetable still holds, Kroger could announce two more CFC locations before the end of this year.

Grocery logistics has been a hot topic this year, especially as giants like Amazon, Walmart, Target and Kroger are all investing in infrastructure to get your goods to you super fast.

Kroger specifically has been on a tear lately. In addition to Ocado, the company started piloting deliveries via self-driving cars, launched Ship, its direct-to-consumer e-commerce platform, and expanded its deal with Instacart.

In addition to all that investment, in August, Kroger teamed up with the University of Cininnati to create an innovation lab, which makes the Monroe CFC location make even more sense. Having a high-tech fulfillment center just miles from your innovation lab can breed a lot of, well, innovation. Given that it’s almost Thanksgiving, perhaps they can find a way to finally make turkeys fly.

KitchenPodular Makes Ghost Kitchens Modular

The boom in restaurant delivery has created a mini-boom in companies looking to help those restaurants make delivery. Much like the pickaxe salespeople during the gold rush, startups like KitchenPodular are eager to provide tools that restaurants can use to cash in on this wave of dining convenience.

The Las Vegas-based company creates small, modular commercial kitchen spaces that can be installed just about anywhere. KitchenPodular CEO and Founder, Michael Manion, told me their goal is to provide restaurants and other eateries with a versatile, affordable and completely controllable way to scale up delivery operations.

He also wants to draw a distinction between “ghost kitchens” and “cloud kitchens.” Ghost kitchens, according to Manion, are facilities that a restaurant runs completely. Cloud kitchens, he says, are facilities where you turn over some portion of control to that facility. KitchenPodular does ghost kitchens, Kitchen United, to Manion, is a cloud kitchen.

KitchenPodular pods can be purchased (or financed) for $150,000 on average and are anywhere from 206 square ft. to 430 sq. ft., depending on the configuration. Pods contain a walk-in cooler, sinks, ventilation hood as well as eletrical and plumbing, and can be customized with a drive through and/or walk-up window. Restaurants still need to provide their own ovens and stoves.

The idea is that restaurants can keep their existing sit down location as is. There’s no need to re-architect the existing building to accommodate increased order expediting or additional parking for waves of delivery drivers pulling in and out of the restaurant. Instead, they can shift those resources to a kitchen pod, which can be stationed anywhere to expand delivery capacity or extend a restaurant’s delivery range. Additionally, Manion said that if it turns out a restaurant doesn’t like the pod’s initial location, it can just pick up the pod and move it to a new one.

KitchenPodular also offers cheaper “pick-up pods” for around $100,000. These can be freestanding or built on to existing buildings to help facilitate delivery. For instance, a restaurant in a mall could install a pick-up pod in the parking lot. Expeditors would run orders out to the pick-up pod where they would be stored until the driver pulls up to get their food, eliminating the need for them to find parking in a big lot just to grab a meal.

KitchenPodular has been making similar, though more beer-related pods for Anheuser-Busch since 2014. The company is self-funded as of now, though exploring the idea of venture backing as it looks to scale. Manion told me that so far the company has “Sold a handful, but are in production on a lot” of full kitchen pods. Customers are typically big brands, and coffee and juice companies are “huge” for KitchenPodular.

While there are certainly some advantages to these pods, restaurants need to consider other factors to figure out what’s the best solution for their situation. Pods may reduce the need for expensive build outs, but they have to be staffed, and unlike a facility like Kitchen United, there is no shared labor for dishwashing and cleaning. Plus, even though they are small, kitchen pods are still facilities, and each requires management of power, gas, water and more.

Even with those caveats, KitchenPodular seems like it could make sense for companies wanting to take advantage of delivery. The pods are turnkey and provide for those gold rushing restaurants to mine new markets without making a huge commitment.

CheckMate Raises $3M to Streamline Restaurant Ordering

Tiger Global has invested $3 million in CheckMate, a service that helps restaurants unify orders received across multiple platforms, according to TechCrunch. This is a Series A round for CheckMate and is the first outside funding the startup has received.

Off-premise ordering has become a growing part of a restaurant’s business (at our recent Smart Kitchen Summit, restauranteur Richard Blais said delivery was thirty percent of his restaurant’s business). Services like Uber Eats, PostMates and DoorDash can open up a restaurant to new customers, but it can also bring chaos to a restaurant as none of those services talk to each other. That means restaurants need to set up separate tablets for each platform, resulting in a bank of incoming order screens that staff needs to manage and manually enter into their PoS system.

CheckMate works to alleviate that morass by aggregating all those disparate orders from different services and plugging them into a restaurant’s existing management system. This unification reduces complexity and simplifies the order management process.

The rise in restaurant delivery services has spawned a mini-boom of startups looking to clean up the complications those delivery services create. In addition to CheckMate, there’s also Ordermark and Ingest.ai.

For its part, Tiger Global has been investing in pieces that connect all of the dots when it comes to the evolution of restaurants. In July, Tiger Global invested in restaurant POS software maker Toast, and in September, the company led the $300 million investment in Postmates.

Food Tech News: Grocery Goes Electric, Green, and Voice-Enabled

Happy long weekend, to those of you lucky enough to have one! This is a cause for celebration — and for food tech news. This week was heavy on grocery, from Tesla shipping trucks to international in-store vertical farms. Enjoy!

 

 

Kroger expands Ship, enables voice ordering for grocery pickup
It was quite a week for grocery giant Kroger! First, the company expanded Ship, its home delivery service, to the Mid-Atlantic region, covering Virginia, West Virginia, and the Raleigh-Durham area (h/t BizJournal). With this latest expansion, Ship is now offered in each Kroger store division. According to BizJournal, the company will next roll it out to their other divisions, like Harris Teeter and Ralphs.

A few days later, the grocery chain let drop on their Linkedin page that they would be launching voice-enabled ordering through an action on the Google Assistant voice app (h/t FoodDive). Customers can access the app through iOS, Android, or Google Assistant, and use it to view their Kroger Grocery Pickup. So far, the service is available in six banner stores including QFC and Fred Meyer.

 

Amazon unveils new food-related variable type for Alexa
Speaking of voice assistants, this week Amazon added four new variable types to Alexa’s skillset, including AMAZON.Food. According to  VentureBeat, AMAZON.Food “captures food items, such as ‘bacon,’ ‘scrambled egg,’ and ‘lemon juice,'” so that it can help users save time and have better voice experiences. All the recently-announced skills are in public beta and can be used in skills published to the Alexa Skills Store.

Albertsons adds 10 Tesla semi trucks to its delivery crew
On Tuesday grocery chain Albertsons announced that it is purchasing 10 all-electric Tesla tractors for its Southern California fleet. The trucks will be able to travel between 300 and 500 miles on a single charge, even when pulling a fully stocked trailer. This move is part of the company’s efforts to reduce carbon emissions, as part of their overarching sustainability agenda.

Ember launches copper mug for the holidays
Looking for a gift for the coffee/tea/hot chocolate lover in your life? Ember, the company that makes connected mugs/thermoses that allows users to precisely control the temperature of their drinks, launched a copper mug today. The metallic mug costs $129.99 and joins Embers’ travel and ceramic mug.

 

Vertical farming company Infarm crosses country lines into Paris
Berlin-based startup Infarm, which installs small vertical farms inside grocery stores and restaurants, is expanding out of Germany for the first time — and into Paris (h/t Techcrunch). The French launch of Infarm’s in-store farm unit will be at the Metro flagship store later this month. This expansion comes after the company raised a $25 million Series A in February of this year.

 

Google’s new algorithm can help you avoid food poisoning
Google has teamed up with Harvard to develop an algorithm which alerts you to restaurants that carry a higher risk of food poisoning. As Harvard reports, the algorithm uses machine learning to flags search terms associated with food poisoning (like “vomiting”) and check them against the location history of the affected user. Using this information, it can determine likely restaurant food safety issues, after which it can alert local health inspectors to investigate.

Did we miss anything? Tweet us @TheSpoonTech with a tip! 

With Zume Deal, Softbank Has Pieces For Full-Stack Food Delivery

Softbank is investing $375 million into food delivery and logistics company, Zume, according to a new report in The Wall Street Journal. Softbank is also expected to invest another round of $375 million into Zume at a later date.

We had heard rumblings about this deal earlier this year, and The Journal got the news through an SEC filing. Zume provided the following statement to The Journal: “We’ve recently closed a round of funding to support our growth and hiring.”

Based in the Bay Area, Zume uses mountains of data to predict how many and what types of pizzas will sell in different neighborhoods. The startup also uses robots to help make the pizza, and a special van outfitted with ovens to finish cooking pizzas on their way to people’s houses. Earlier this year, the company announced that it would license its predictive technology out to help other types of restaurants to improve delivery of different types of cuisines.

As we’ve noted before, this investment makes a lot of sense for both companies. For Zume, it brings the necessary capital to expand both geographically outside of the Bay Area, and helps it broaden into other food categories.

For Softbank, putting money into Zume aligns nicely with some of its other investments. Softbank has invested in food delivery services DoorDash and Uber Eats. And last month, Softbank joined forces with Toyota to form a joint venture called MONET, which will use the car company’s e-Palette technology to create customizable self-driving vehicles that could be anything from a dentist office to a mobile pizza oven.

The result of all those pieces is a full stack solution for restaurant delivery, with Zume’s analytics predicting demand, Uber Eats or DoorDash providing delivery, and MONET vehicles providing the transportation. That type of vision is a ways off, but you can smell the piping hot corporate synergies.

The first $375M investment from Softbank brings the total amount raised by Zume to $423 million. TechCrunch reports that this will give Zume a pre-money valuation of $1.5 billion.

Deliv Raises $40M for Same Day Delivery, Brings on Google as Investor

Deliv, the appropriately named same day delivery service, announced today that it has closed a $40 million Series C round that includes Google as an investor. This brings the total amount raised by Deliv to $80.4 million.

Founded in 2012, Deliv provides crowdsourced, same-day shipping services for more than 5,000 retailers including Walmart, FreshDirect and Plated.

Bulking up its war chest was a necessary play for Deliv, as the logistics and delivery sector is red hot and loaded with competition. So far this year, $3.5 billion has been invested in food and grocery delivery startups, with players like Instacart, Postmates and DoorDash all raising hundreds of millions of dollars as they try to provide last mile logistics as a service. Even mega retailers are getting in on the delivery game: Target acquired Shipt, while Amazon and Walmart both launched their own homegrown delivery services.

Not only that, but delivery is being revolutionized beyond the standard cargo van cruising down roads. Autonomous delivery vehicles are (slowly) becoming a thing, with players like Kroger and Farmstead piloting the technology for grocery delivery. On a smaller scale, companies like Starship are using li’l robots to autonomously deliver packages to your door.

Deliv is distinguishing itself from the others in at least one way: it coordinates not just the last mile, but the last feet of delivery. Last year, it partnered with Walmart and August smart locks to provide grocery delivery directly into your fridge when you weren’t at home (with permission, of course).

That type of delivery may be too personal for some, but it illustrates how companies vying for market share in this competitive space won’t be able to rely just on delivery speed. They will also need to innovate to stand out.

Video: Richard Blais Wants to Make a Drone Delivery Service for Donuts

During his fireside chat at the 2018 Smart Kitchen Summit, Richard Blais compared the state of food technology to something it has probably never been compared to ever before. “There’s this Biggie/Tupac thing happening in food always,” he said, using the most famous rap rivalry of all time to reflect the current tension in restaurants: old world vs. new, low-tech vs. high-tech, woodfire grills vs. robots.

Despite his culinary pedigree, Blais embraces technology in the kitchen — at least, when it can make things easier for him. At the same time, he doesn’t want robots to take over everything in the kitchen. Repetitive tasks (hello, french fry preparation), sure. Donuts delivered via drone? You betcha. (That’s a real business idea, by the way — and he’s going to call it the Dronut.)

Inviting technology into the kitchen is a delicate balancing act, though. In the end, Blais is open to most things — as long as food tastes awesome. “That’s the ultimate judge,” he said. “Is that thing delicious?”

Watch the full video of Richard Blais’ fireside chat (and find out his dairy-based DJ name) below.

Richard Blais at Smart Kitchen Summit

Look out for more videos of the panels, solo talks, and fireside chats from SKS 2018! We’ll be bringing them to you hot and fresh out the (smart) kitchen over the next few weeks.