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freshdirect

November 19, 2020

Ahold Delhaize Buys Majority Stake in FreshDirect

Dutch grocer Ahold Delhaize announced yesterday that it has bought an 80 percent stake in New York-based online grocer FreshDirect. Private equity firm Centerbridge Partners bought the remaining 20 percent. Terms of the deal were not disclosed.

FreshDirect will continue to operate as an independent unit and under its own brand name. The company will join other Ahold Delhaize brands that include Stop & Shop and Giant Foods.

The purchase of FreshDirect comes on the heels of what has been a pandemic-induced record year for online grocery sales. New York City, one of FreshDirect’s main service areas, was hit particularly hard in the early stages of the pandemic, pushing the company’s delivery capacity to the brink. With the U.S. entering its third wave with the virus, having the massive infrastructure and resources of Ahold Delhaize could help FreshDirect weather any coming storm.

The combination of Fresh Direct and Ahold Delhaize also has a tech-forward angle. In addition to being an online-only grocer, FreshDirect also recently opened up a robot-powered fulfillment center in the Washington, D.C. area. For it’s part, Ahold Delhaize has experimented with automated micro-fulfillment centers, in-store robots, and small, cashierless nano-retail environments.

With the FreshDirect acquisition, Ahold Delhaize is also bolstering its capabilities to better fend off competition from the giant players in the grocery space. Walmart has made aggressive grocery delivery moves through its Walmart+ subscription service as well as a partnership with Instacart (and experimenting with self-driving delivery cars). And Amazon, which was once online only, has made moves into the physical space with its Go Grocery and Fresh stores.

With online grocery projected to become 21.5 percent of total grocery sales by 2025, expect these types of salvos between supermarkets to continue into the next year.

July 28, 2020

FreshDirect to Use Fabric’s Robots for Grocery Fulfillment in D.C. Area

Online grocer FreshDirect announced today that it has partnered with Fabric to build out an automated, robotic grocery e-commerce facility in the D.C. Metro Area. This is the first public U.S. partnership announcement for Fabric.

Using a system of totes and racks, Fabric creates automated systems for shuttling grocery items around a warehouse to fulfill e-commerce orders. Fabric will be building out an existing 10,000 sq. ft. When it opens later this year, the new FreshDirect facility in which it will be able to process 500 – 1,000 orders per day. Each order will take just minutes to fulfill, enabling FreshDirect to have a two-hour delivery window for customers in the D.C. area.

While this is the first U.S. facility for Fabric (née Common Sense Robotics), the company has two operational fulfillment centers running in Israel. Steve Hornyak, Chief Commercial Officer at Fabric, told me during a phone interview this week that his company has many more partnerships that will be announced soon, and that Fabric has seen a surge in demand.

“We got thrust five years into the future,” said Hornyak, adding that customers that had planned on implementing automation for e-commerce fulfillment in 2021 or 2022 are accelerating those timelines and starting the projects now.

There are 7.2 billion reasons grocery retailers are rushing into automation right now. The pandemic and subsequent stay-at-home orders pushed grocery e-commerce into multiple record-setting months in a row, hitting $7.2 billion in June. FreshDirect itself was hit hard in NYC during the height of the pandemic, at the beginning of the e-commerce surge, with delivery windows near impossible to get for most people. The inability to accept as many orders presumably translated into lost business for FreshDirect.

Hornyak said that the biggest issue for retailers Fabric is talking with is capacity. How do they increase the number of e-commerce orders they can fulfill? “Doing it manual sort-and-pick is arguably unprofitable,” said Hornyak. And while Fabric definitely has an incentive to bemoan the cost and speed at which humans move when picking items for an online grocery order, he has a point. Robots can just fulfill orders faster and for longer.

That’s why there are so many retailers investing in automated fulfillment. ShopRite and Albertsons both have programs with Takeoff Technologies, which builds micro-fulfillment centers in the backs of existing grocery stores. Walmart has a trial going with Alert Innovation. And Kroger is building out standalone automated warehouses powered by Ocado’s automation technology.

While we don’t know what permanent impacts the pandemic will have on buying behavior, large swaths of consumers have now had five months of new habituation, including buying their groceries online. As more automation gets built out, theoretically, delivery and curbside pickup options will get faster, which will attract more consumers, and an automated virtuous cycle will be born.

April 24, 2017

MasterCard Sees Bot Applications As A Way To “Go Where Consumers Are”

We know the potential for the chatbot interface to be one of the defining stories of connected living in 2017 is there. Mike has covered the variety of ways that “social messaging chatbots” will impact the smart home and of course, the smart kitchen. MasterCard isn’t new to the smart home game – you might remember that they are the financial provider backing grocery ordering on Samsung’s FamilyHub smart fridge.

They’re clearly betting on bot applications as a way to encourage the easy use of their products on the Masterpass platform. Last week at Facebook’s developer conference, MasterCard announced a chatbot for Facebook Messenger, allowing customers to order from select retail and food vendors by chatting with the AI-powered interface. Similar to the on-fridge ordering partnership on the FamilyHub, MasterCard will work with Fresh Direct for chatbot grocery needs and also announced Cheesecake Factory and Subway for takeout food services.

MasterCard has prioritized chatbot integrations, releasing its bot API to developers earlier in the year. According to their developer site, MasterCard wants to make it easy to incorporate their “digital payment technology into conversational commerce experiences.” Beyond food ordering, the platform could be used to order from any retail partner in the future – giving Facebook an easy way to compete with online commerce giants and keeping consumers on the platform longer.

Masterpass-Enabled Bots

Facebook is increasingly interested in bot technology and sees its Messenger platform as a way for brands to reinvent customer communications and e-commerce. Facebook advertising, an increasingly popular way for brands to reach consumers by taking advantage of all the data Facebook collects on its users and serving them up personalized ads. Brands that advertise and have a large presence on the platform often use Facebook Messenger to communicate with customers, sending order and shipment information after a sale and answering questions. You can envision a future where as ad served up to someone who had recently been browsing for new shoes takes them to a chatbot that can offer custom selections and complete the sale right in the interface.

The opportunities in using natural language processing and artificial intelligence to communicate with us wherever we’re used to having conversations – whether that’s via text or in different messenger apps – are huge. Since Facebook introduced the concept, over 11,000 bots have been introduced on Messenger.

Whether it’s helping consumers cook their favorite recipe, ordering food or even communicating with their home, chatbots are definitely here to stay.

December 29, 2016

What Happened To Smart Fridges In 2016?

As we continue our end of year wrap-up series, we wanted to drive into some smart kitchen appliance categories to see what happened (or didn’t happen) to the category as a whole and make some predictions for what’s on the horizon for 2017.

Hey Alexa, what’s in my fridge?

If there was a darling of connected tech in 2016, the Amazon Echo was it. Voice control was barely a whisper at CES last year and by September, if you didn’t have voice control baked into your smart home or entertainment device (or at least have it on your product roadmap), you were irrelevant. And Alexa fit right into the kitchen, with hands-free control in the one room if the house you don’t want to be touching your smartphone.

Voice control makes more sense for devices that do stuff – telling Alexa to pre-heat the oven is a pretty useful skill. So, the Amazon Echo compatibility for fridges is a shorter list, but worth a look:

  • GE – GE launched their Geneva skill to control a range of GE Wi-Fi appliances, including fridges but also ovens and washing machines. For fridges, Alexa can control the temperature, turn the icemaker on or off, prep hot water for coffee or tea, or just give you a status on how the fridge is doing.
  • The Samsung Family Hub connects to Amazon Echo and you can use Alexa to control all the things on the Hub’s OS like Pandora but you can also order groceries through the Groceries by Mastercard app, mirroring Amazon’s own ordering services available through voice.

Speaking of Samsung…

The fridge as the home hub

The concept of the connected fridge isn’t a new one, with appliance makers adding Wi-Fi connectivity to their products for the last several years. One of the companies on the early smart fridge bandwagon was Samsung, who began talking about an internet refrigerator back in 2001. Later during that decade, Samsung was demoing smart fridges at CES; the fridge displayed a small-ish touch screen with basic connected functionality.

Then came the Samsung Family Hub. A beast of a machine (in both size and price), this fridge first debuted last year at CES 2016 with its official launch in May. With its giant 1080p touchscreen on the front, it looked at first glance, like a version of their other Wi-Fi connected fridges on steroids. But the Family Hub actually packs some interesting features that while might seem frivolous at the outset, actually hint at some larger tech trends for fridges and other appliances in the future.

The giant touchscreen features interesting apps like the Groceries by Mastercard app which allows you to order food from FreshDirect and ShopRite, right from your fridge. The fridge also gives users the ability to photo tag their items to keep track of what’s there.

The other future-facing features are the cameras placed in the fridge’s doors to let you see what’s inside when the doors are closed. Why would we want to do that? Well to check when you’re at the grocery store to see what you’re out of, for one. You can also look inside the fridge from the touchscreen on the front, negating the need to open the doors. LG debuted similar functionality at CES 2016, with theirs using a “knocking” feature and a clear window on the front of the fridge to let someone knock, illuminate the interior lights and see what’s in the fridge without opening the door.

But ordering groceries from your fridge’s touchscreen and being able to see what’s inside from your phone in a supermarket isn’t really the compelling story here. The story is what Samsung (and others) haven’t yet put inside this device – and what will make refrigerators way smarter in the future.

The fridge as a part of the kitchen’s OS ecosystem

Moving from connectivity and entertainment to a true smart appliance, the fridge of the future might actually have a database of knowledge and machine learning behind it that will allow it to know things about your food. Startups like Innit are pioneering a new category using food data along with image recognition software to allow an appliance like a refrigerator to recognize food without any user inputs and generate useful information from that. Information like a recipe that could be made with the contents left in the fridge on the day before shopping day would help prevent food waste and also give users helpful ideas for dinner.

The technology concept driving Innit is what’s missing from the Samsung Family Hub and every other Wi-Fi connected fridge. Cameras and connectivity are great, but when something requires the user to constantly input and maintain a database in order to fully deliver on its usefulness, it falls apart. Consumers don’t want another thing to have to update, they want tech that makes things easier.

Innit’s partnership with appliance giant Whirlpool is proof that manufacturers are recognizing the shortcomings of current technology. And the opportunity in the kitchen isn’t going unnoticed; Microsoft announced in a blog post in early September it too is planning to build a fridge with a connected, machine learning based platform. Microsoft will collaborate with Liebherr’s appliance division to create a platform that uses computer-based deep learning algorithms with imaging software to recognize food that’s placed inside a refrigerator.

Unique to Microsoft is the modularity they’re building into every “SmartDevice ready” appliance, theoretically making any refrigerator purchased today easily upgradable in the future. Products like the Samsung Family Hub fridge have been criticized for offering a host of features without any clear answers on how the device will keep pace with future innovation and developments. With the price tags on connected appliances still one to three times what consumers pay for their dumb counterparts, future-proofing these products seems critical to their long-term success. This coupled with the longer buying cycles of white goods mean appliance manufacturers might start thinking about their revenue streams and what kind of role that plays, whether that’s through a grocery replenishment partnership or technology upgrades that offer new functionality.

Appliance-As-A-Service (AAAS….?) 

Mike Wolf wrote a post here at The Spoon and an even larger analysis at the NextMarket blog on the concept of paying monthly fees to obtain a consumer good, or what’s known as the “X as a service” model. Much of the consumer market is trending towards a service or subscription model, from streaming videos to clothing and furniture. Could kitchen appliances follow suit?

Bad acronym aside, it’s not completely crazy. We’re finally seeing appliances evolve to provide significant value beyond the existing reactive position they’ve held in the kitchen for the last fifty or sixty years. There’s machine learning and artificial intelligence set to change how we cook and how tasty and well-prepared the food we sit down to eat will be along with connectivity giving us capabilities and efficiencies that might make us want to cook more with more convenience. But the current trajectory requires consumers to piece together a smart kitchen and then also keep tabs on upgrades and seek out tech support for issues they encounter. What if appliances like smart fridges could be purchased as a service, with upgrades and support and maybe other services baked in?

Though we haven’t seen any company make a serious move towards AAAS just yet, we think it’s an area to watch in 2017 and beyond. If for no other reason than it’s actually a pretty awesome acronym.

With CES 2017 just a week away, we’re sure to see more developments in the smart fridge and more broadly, smart kitchen appliance category.

November 1, 2016

Interview With the Greats: Dave Arnold on Innovation in the Kitchen

Dave Arnold never stops. The fortysomething owner of Manhattan cocktail bar Booker & Dax is exactly the kind of madman inventor that we need to push the food world forward, and lucky for us, he’s always working on a cool project. Even luckier, he always wants to tell you all about it.

Arnold is also the director of the Museum of Food & Drink in New York City, the host of Heritage Radio Network show Cooking Issues, and the author of Liquid Intelligence: The Art & Science of the Perfect Cocktail. He’s inspired an entire generation of chefs to innovate with technology in their search for ever better food and drinks, with wacky inventions like the Searzall blow torch for your steaks and milk-washed spirits for your cocktails. (And he’s working on a centrifuge for restaurant and home use!)

We sat down with Arnold a few weeks ago to talk shop about the future of food and technology. Here’s an abbreviated version of our conversation.

TheSpoon: Do you see a difference between technology for professional kitchens versus for home kitchens?

Dave: One-hundred percent. It can go both ways. In a professional kitchen, if something’s accepted, people will learn how to use it, because they have to. People in professional kitchens put up with things that you’re not allowed to sell to people at home, things that are very hot or very large or take a lot of energy.

The problem with restaurants is that chefs are extraordinarily busy, and they don’t trust that every one of their employees is a rocket scientist. So stuff in a restaurant has to be fairly intuitive to use and bulletproof. It has to withstand intense abuse. That’s why if you take off the label that says Vitamix and put on one that says Vitaprep, the price goes way up and the warranty goes way down, because everyone knows that in a commercial establishment, people beat the heck out of things. Commercial equipment needs to have a level of robustness and intuitive use that is not necessary for home equipment.

But home equipment — it depends on who you’re shooting at. When you’re shooting at people who aren’t avid cooks or who don’t cook that much, it has to be intuitive at home in a different way. It has to have a lot more convenience and bells and whistles on it. It has to polish out nicely, to tell you when your breakfast is done. Also, most home equipment is built around maximizing kitchen space, which is super important commercially as well, but typically home people don’t have to put out as much product out of a particular square footage. You’re maximizing a different problem.

Where it can get interesting is, you can have something that home people can experiment with because maybe you can’t make that much of it, so it’s hard to do in service because the product takes too long or maybe it’s a little too complicated to train everyone on. So things that I can do at home better than in a commercial kitchen? Rotary evaporation. It’s illegal to do rotary evaporation in a commercial kitchen because you’re doing distillation. But at home you’re dealing with a tinkerer. Someone who sees themselves as a learner, a hobbyist. There’s a weird sweet spot there for home people to do interesting things that are difficult to do in most commercial restaurant environments. Because as much as commercial restaurant environments are creativity driven, it’s business, and it’s hard to justify the cost of building in super-high levels of creativity.

Molecular Cocktails from Booker & Dax with Kate Krader and Dave Arnold

Molecular cocktails from Booker & Dax with Kate Krader and Dave Arnold; photo courtesy Flickr user Meng He

TheSpoon: Let’s talk about that creativity.

Dave: In the wake of the popularity of the Spanish style at El Bullí, there were a bunch of people who had positions in higher-end restaurants as research chefs. Not the way Chipotle would have a research chef; it was specifically for fine dining. I don’t really know how that trend is doing now, but it’s hard: Customers’ interest in visibly creative stuff goes up and down. Everyone always wants something to be different and new, but sometimes they want it to be different and new in a way that doesn’t look like people have been hypercreative with it, and sometimes they want hypercreative.

Look at the mid 2000s , with WD50, Alinea, Moto: All over the country a lot of the new techniques were being used and pioneered by restaurants that weren’t advertising that that’s what they were going to do. Modernist Cuisine is fairly good at documenting where a lot of these recipes came from. You can treat it as a library of where these ideas came from.

Even Michael Laiskonis at Le Bernadin was using hydrocolloids a lot. Dominique Ansel at Daniel, Greg Brainin at Jean-Georges. All the cooks who went there were smart people interested in these new techniques because they knew it would allow them to achieve something different, new and good. None of those folks were using it in very obvious ways that said to the customer, “This is using a new technique.” That’s what I mean by the hypercreativity isn’t always obvious.

When it is obvious, and people are actively trying creativity that way, there tends to be acceleration of what happens. People push the boundary faster and harder, make more mistakes frankly, so you try 10 things that suck and come up with 1 good thing. If you can do that you’re super winning.

TheSpoon: Right now with connected kitchen appliances it seems like everyone is trying way more than 10 things. How do we move away from gimmicks into useful technology?

Dave: I have a particular opinion on this. Ninety-nine percent of the applications that people are positing today will be the future, are not the future. If they are the future, God help us. It’s so dystopic that would someone would print your meal out. It’s a horror show. Luckily I don’t anticipate you ever pushing a button and it printing whatever paste it has, applying food coloring to it to make it look like a hamburger, and then you eat it.

The current printing technology is either working with liquids (in that case it sucks because you need your viscosity to be right), or you’re dealing with paste that has to be extruded through a very fine nozzle. There’s only so much you can do with current technology.

True, that technology will change and get better. Let’s say someday you could find what you think is going to be the best-tasting pig and then recreate it a million times with a transporter beam where you store the information and keep recreating it over and over again. Or maybe it’s the best meal ever. It would be like a CD player of meals: You could have your favorite chef create it, scan it, and then whenever you want, you could just have it. When you get to that level, sure, print me some food.

The issue isn’t that the current technology sucks (which it does) or that the way people are using the current technology is wrong and bad (which it most certainly is). All that’s important is that you push the technology. Someone will find a good use.

Look at the development of almost anything: Steam engines sucked for a while until someone got one that worked right. You need to have the person who has no idea what’s going to happen in the future just work. They need to work and make stuff and throw stuff against the wall and see what happens: Push technology, create. Eventually someone will do something amazing.

Searzall_FlickrArnoldGatilao

The Searzall in action; photo courtesy Flickr user Arnold Gatilao

We all have to play this game. Well, I don’t tend to play it, but most of us play it, where we pretend that the gimmick idea is reasonable when we all know it’s not. Of course it’s not reasonable!

Remember when they had the first car phones? If you had said, “That’s dopey, who the heck is going to use that?” we’d never have what we have today. Or as I said when I was a teenager in the 80s and somebody showed me email and I was like, “That’s not ever going to go anywhere.” Who knows? That person was wrong about why it was going to be great. The person who showed me had no understanding of how the technology was actually going to change the world, but they just kept at it.

TheSpoon: Are there certain food-tech trends that you’re excited about?

Dave: There’s stuff that I thought was going to have a lot of potential for a long time and never has. If you’d asked me over 10 years ago, I’d say by now almost everything would be completely traceable, RFID and that safety would be on lockdown and that we wouldn’t have recalls and all of this other nonsense. Once everything is traceable that way, I’d assumed we’d already be in a situation where — and we’re getting there — your grocery list would be more integrated with what you’re doing.

I didn’t expect FreshDirect and Peapod and all that to make as big a dent as it did, in the same way that I didn’t understand how the whole retail world was going to get flipped by Amazon the way it did 10 years ago.

Especially because in the late 90s, there was Urbanfetch. I was like, “Oh yeah, this is never going to work. You’re going to be connected on your computer and someone’s going to go show up in half an hour with your ice cream.” I used to mess with them. You weren’t allowed to tip them and they had no minimum order. So I was like, “It’s 4 AM. I’m going to hit this button, and you’re going to deliver me a pack of gum in half an hour?” The guy’s like, “Yes.” And they showed up with the gum and I’m like, “And I’m not allowed to tip you?” He’s like, “Nope.” And every time they were late they’d give you a free pint of ice cream. It’s a crazy business model. They were losing money, but that was back when people thought it was okay to lose money as long as you lost it in very large quantities. That was a sign that wasn’t going to work. That means someone comes along and does it right, like FreshDirect.

Here’s another situation where I was totally wrong. Who’s going to order vegetables off of a website? Turns out everybody, except me.

Most of the time, on these kinds of predictions, I’ve been wrong.

The only time I’ve been right — I predicted low-temperature sous vide cooking is going to grow and it’s here to stay. And that people will be interested in the why of cooking. It’s not a fad. The general trend is toward deliciousness. I think I’ve been proved right on that.

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