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The Spoon

Daily news and analysis about the food tech revolution

fulfillment

Fabric (Formerly Common Sense Robotics) Raises $110M Series B for More Automated Grocery Fulfillment

Fabric, the fulfillment automation company formerly known as Common Sense Robotics, announced today that it has raised a $110 million Series B round of funding led by Corner Ventures with participation from Aleph, Canada Pension Plan Investment Board (CPPIB), Innovation Endeavors, La Maison, Playground Ventures and Temasek. This brings the total amount of funding raised by the company to $136 million.

Fabric builds out robotic micro-fulfillment centers that allow retailers such as grocers to process online orders quickly. A combination of lift and ground robots autonomously shuttle items around precisely where they are packed by a human and sent out for delivery or pickup. These fulfillment centers can be built off-site and squeezed into smaller spaces, giving retailers micro distribution hubs that are closer to consumers to facilitate faster delivery. For example, Fabric is building 18,000 sq. ft. facility in an underground parking structure in Tel Aviv.

Though they are still new, micro-fulfillment centers have the potential to be great disruptors in the grocery space. Online grocery shopping is currently a very small slice of overall grocery spending, but it’s growing. The ability for a retailer to fulfill and deliver online orders more quickly should create a virtuous cycle that begets more online grocery shopping.

Because of this potential to get you your groceries faster (so you presumably buy more), Fabric is among a bunch of companies looking to automate order fulfillment. Takeoff Technologies also creates robot-powered micro-fulfillment centers, typically built into the back of existing grocery stores, and is currently working with Albertsons, Ahold Delhaize and ShopRite. Walmart has partnered with Alert Innovation to pilot an automated fulfillment center at a store in New Hampshire, while Kroger is building out standalone robotic smart warehouses around the country.

As noted, last month Common Sense Robotics rebranded as Fabric, in a move that seemed to de-emphasize the “robot” part of its offering. In a press statement at the time, Elram Goren, CEO and co-founder of Fabric, explained the rebranding by saying “For us, our robots and software are critical to what we do, but at the end of the day, they’re a means to an end. What we’re really here to do is to be the fabric that binds retailers and their customers together, enabling goods to be fulfilled and delivered faster and cheaper within cities.”

As part of its re-brand, the company moved its headquarters from Tel Aviv, Israel to New York City, where it is building its first U.S.-based fulfillment center. According to today’s press release, Fabric says it has contracts to build out 14 more centers in cities across the U.S. in 2020 and will use the new funding to expand operations here.

Common Sense Robotics De-Emphasizes Robotics with “Fabric” Re-Branding

Common Sense Robotics announced today that it is changing its name to Fabric in a move that emphasizes the company’s focus on overall logistics and puts its robotic origins on the back burner.

Up until now, Fabric had been best known for building out automated robot fulfillment centers that could be built into dense urban areas to facilitate fast delivery of online grocery shopping orders. The hook for the company was its ability to build its robotics vertically to make more efficient use of the spaces it built into. In July, the company announced it was breaking ground on an 18,000 sq. ft. facility in an underground parking structure in Tel Aviv.

In today’s press announcement, Elram Goren, CEO and co-founder of Fabric, provided a statement about the rationale for the name change and the removal of robotics from its name, saying “For us, our robots and software are critical to what we do, but at the end of the day, they’re a means to an end. What we’re really here to do is to be the fabric that binds retailers and their customers together, enabling goods to be fulfilled and delivered faster and cheaper within cities.”

We reached out to Fabric to find out more about the impetus for the name change, and was told that all of the messaging could be found in the press release.

Fabric is part of a wave of companies looking to automate and subsequently speed up online grocery order fulfillment, which is a small-but-growing slice of overall grocery shopping. Takeoff Technologies, which builds similar fulfillment centers in-store, is working with Sedano’s, Ahold Delhaize and Albertsons, and recently announced a standalone fulfillment center in New Jersey for ShopRite. Kroger is building out robotic fulfillment centers using Ocado’s technology. And Walmart is using Alert Innovation for its own back-of-house automated fulfillment.

In addition to the re-brand, Fabric also announced today that it will move its corporate headquarters from Tel Aviv to New York City. So now we’ll have to see if a new name and a new town can help Fabric weave itself into the U.S. grocery business in a meaningful way.

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.

With Ahold Delhaize, In-Store Robot Fulfillment Centers Now a Trend

If it’s true that it takes three occurrences of something to make it a trend, then in-store robot fulfillment centers are now officially a trend in the U.S. Reuters reports Ahold Delhaize, the Netherlands-based grocery company, has partnered with Takeoff to roll out automated mini-warehouses at some of its retail locations, which include Food Lion, Stop & Shop and Giant Food.

The move makes Ahold Delhaize the third grocery giant to experiment with in-store robot fulfillment in recent months. In August, Walmart announced it would partner with Alert Innovation to build out an automated fulfillment center in its Salem, New Hampshire store. And just last week, Albertsons announced it was piloting its own robot fulfillment in partnership with Takeoff as well.

In-store robot fulfillment has the promise of speeding up delivery or pickup of groceries. Takeoff’s system usually takes up about an eighth of a store’s square footage. When an online grocery order comes into the store, a series of crates on racks and conveyor belts automatically shuttle food items to a human who assembles and bags them. The automated system could have a grocery order ready in as little as a half hour.

The fact that the fulfillment centers are built inside existing stores means that grocers don’t have to set up a separate distribution center with its own inventory (and accompanying systems). Since people typically shop from a grocer that is already in their neighborhood, delivery or curbside pick up of orders are that much closer–and thereby faster to reach their destination.

Online grocery shopping is set to hit $100 billion by 2022, and a recent study from the Retail Feedback Group showed that there is growing acceptance of purchasing fresh items such as produce and meats online, site unseen. This willingness to purchase even more food online from a generation of shoppers used to getting things on demand will make convenience and speed table stakes for anyone in the grocery game.

It should also be noted that the Ahold Delhaize deal marks the third publicly announced partnership for Takeoff. In addition to the aforementioned Albertsons, the startup is also working with Miami-area grocery chain Sedano’s. The company says it has agreements with five retailers and will have five of its fulfillment sites open in Q1 of 2019.

Not every grocer is jumping on the in-store bandwagon, however. Kroger upped its investment in U.K.-based Ocado earlier this year and has plans to build out twenty dedicated robot-driven grocery fulfillment centers over the coming years. The locations of the first three are set to be announced in the coming weeks.

None of these in-store automated systems are online yet, so it remains to be seen how they will be used and how much efficiency they will truly bring. But if they work as promised, today’s robot trend will be tomorrow’s new normal.

Grocery Logistics is Hot as Boxed Nabs $110 Million Investment from Aeon Group

Boxed, an e-commerce company that sells bulk grocery items, yesterday announced a $110 million investment led by Aeon Group, one of the largest retailers in Japan. This minority stake brings the total amount raised by Boxed to $243.6 million and values the company at $600 million.

The news was first reported by The New York Times as part of a larger story about Boxed‘s high-tech warehouses and the larger role fulfillment is playing for grocery retailers. Amazon’s purchase of Whole Foods last year shook up the grocery business with its combination of technology-driven logistics and groceries. Now, having an optimized logistics infrastructure to handle e-commerce and delivery is an essential component for every retailer.

All the major grocery retailers are getting into the logistics game. Amazon is bringing its delivery expertise to Whole Foods, Target acquired Shipt and Grand Junction, and Walmart acquired Parcel after previously acquiring Jet.com. All of this activity means how you get your groceries is becoming as important as the quality of groceries you are getting.

Which brings us back to Boxed, which in addition to operating its own e-commerce, has a robust fulfillment offering. The Times writes that the investment deal between Aeon and Boxed is structured such that Boxed can license its technology, which includes “mobile app technology, personalization software, a packing algorithm that maximizes space in shipping boxes, software that tracks item expiration dates, order management software and warehouse robotics automation” to other retailers in the U.S.

The Boxed/Aeon deal is reminiscent of the recent Kroger/Ocado deal. Earlier this year, Kroger upped its investment in U.K.-based Ocado, which runs a number of automated smart warehouses for more efficient last-mile grocery delivery. As part of that deal, Kroger will be building out twenty similar warehouses for grocery delivery here in the U.S..

Fulfillment centers are also moving from dedicated warehouses and into the grocery stores themselves. Walmart is building out a robotic fulfillment center at one of its locations to bolster its curbside pickup service. And the startup Takeoff will unveil its first robot-driven micro-fulfillment center inside a grocery store later this fall.

The good news is that as Boxed and all these other grocers bring fulfillment into the modern era, consumers will be the beneficiary, with expanded options for faster grocery shopping.

Robot Fulfillment for Curbside Grocery Pickup is Becoming a Thing

Two-hour delivery may grab the lion’s share of headlines in the grocery news world, but store curbside pickup could wind up being a sleeping giant.

Case in point: Walmart announced last Friday that it is partnering with Alert Innovation to build out a robotic fulfillment center in its Salem, New Hampshire store. As Supermarket News reports:

“Walmart is adding a 20,000-square-foot extension to the Salem store to house the Alphabot system, warehouse online grocery orders and serve as a pickup point, with drive-through lanes for customers. When the project is finished, automated mobile carts will retrieve ordered items and ferry them to personal shoppers at one of four pick stations. The associates then will pick, assemble and deliver the orders to customers.”

You can get a glimpse of the system in action in this video:

Associates, Alphabot Team Up to Make Grocery Pickup Even Better

As you can see in the video, small, wheeled robots (Alphabots) scurry around on tracks to bring items to a human, who then puts them in the bag corresponding with the correct online order. Then, expanded, dedicated drive-through lanes provide a fast way for shoppers to pick up groceries (still loaded into trunks by humans… for now) without getting out of their car. The new system is scheduled to be up and running at the Salem Supercenter by the end of the year.

This might sound familiar to readers of The Spoon, as it’s pretty much what the startup Takeoff is doing: creating robot-powered micro-fulfillment centers within existing grocery stores paired with dedicated pickup areas. Takeoff says it only needs 6,000 – 10,000 square feet inside a store to build out its robot fulfillment system.

There’s a lot to unpack with these automated grocery centers. However, there are four major convergent factors that I think could drive their rapid adoption:

First is optimization. Walmart is big on robots, especially for tasks it says are manual and repetitive (oh hi, shelf scanning robot!). It makes more sense for robots to grab items from a backroom than a human to run around with a shopping cart. The Alphabot system, Walmart says, will allow its employees to focus on customer service and selling things. This is something we hear a lot — robots let humans prioritize the more human tasks (like picking produce).

Then there’s speed. A robotic system can fulfill orders faster than a human. While Takeoff currently has a two-hour pickup window for pre-ordered groceries, the company says the system actually completes an order in only two minutes and can ratchet the pickup window down to a half hour, if need be.

In terms of convenience, getting your groceries in half an hour makes curbside pickup competitive with a two-hour home delivery. There’s no need to wait at home (or let a stranger in) when you can pick up orders quickly from your trusted local store on your way home from work, or make them a part of your existing errand routine. Not to mention that curbside pickup from Walmart, at least, is free.

Finally, and this is probably not as huge of a deal as the other factors listed, studies show that a big reason people don’t buy groceries online is that they want to touch and feel a product before purchasing it. Having curbside pickup theoretically allows shoppers to get out of their car (gasp!) and inspect delicate items such as fruits and vegetables, then return them if the selection isn’t to their liking.

Seeing as how none of these robotic fulfillment centers in grocery stores have gone online yet, we don’t know how people will interact with them. But the idea isn’t something retail outlets should sleep on.

Takeoff is Creating New Hybrid, Hyperlocal Robotic Grocery Fulfillment Centers

This fall, startup Takeoff will be launching its first hyperlocal grocery micro-fulfillment center powered by robots and artificial intelligence (AI). Whew! There’s a lot to unpack in that opener, mostly because Takeoff is at the center of quite a few trends we’re seeing in grocery retail.

First, a brief explainer. Takeoff partners with existing grocery retailers (the company declined to provide specifics names at this time) and builds mini-robotic fulfillment centers inside these stores. Takeoff co-founders Jose Vicente Aguerrevere and Max Pedro told me in an interview that their system requires 6,000 – 10,000 square feet, which is “an eighth or less” of the size of a typical grocery store.

As you can see in the video below, these fulfillment centers are big, automated system that shuttle around crates of products, bringing them to a human picker, who bags the items for pickup or delivery. The robots are from KNAPP, and Takeoff has built an end-to-end software solution that manages inventory, robotic fulfillment and customer delivery logistics for its system.

Depending on the partnership, customers will either order groceries through the Takeoff app, or through the retailer’s app. Once placed, the order is sent to the robot fulfillment center where it automatically grabs the selected items. After the items are sorted and bagged, customers can either pull up to a special Takeoff drive-through at the store or schedule a delivery within a two-hour window.

Because Takeoff partners with existing retail stores, it doesn’t have to manage its own inventory. Vicente Aguerrevere and Pedro said that additionally, with Takeoff being embedded in the store, they get a hyperlocal view into what products are popular in each neighborhood. With this data, Takeoff can fine tune its own stocking and fulfillment procedures to be more efficient.

While it remains to be seen what Takeoff will look like when it actually launches (location TBA), the startup is worth watching because it will sit in this nexus of so many grocery trends: microhubs, robotics, and pick-up/delivery.

At first glance, Takeoff is kind of like Farmstead, which is using AI to precisely manage inventory and deliver groceries from smaller, urban microhubs. By skipping big warehouse fulfillment centers (a la Good Eggs) and their requisite zoning requirements, Takeoff can go deeper into urban areas to facilitate faster grocery service by being closer to the customer. But where Farmstead is using humans, Takeoff is relying on robots.

This robotics approach is then similar to Common Sense Robotics, which is using robots to speed up delivery in its own microhubs. Robots can move quickly and accurately, and operate heavy loads without a break. But Common Sense builds its own bespoke micro warehouses to re-shape the supply chain. Takeoff is working within existing supply chains in grocery stores, leveraging supermarket infrastructures and neighborhood locations.

Hooking up with grocery stores doesn’t just help Takeoff leverage someone else’s inventory — it also helps with the last mile. Because Takeoff functions inside grocery stores, which are already close to where people live, customers can either pick up their groceries while running errands or let Takeoff’s software coordinate a drop-off through various delivery services.

Takeoff plans to make money through revenue sharing with potentially no up-front cost for the store, depending on the arrangement. Takeoff is based in Waltham, MA, has 75 employees and recently closed a $15 million Series B round, bringing its total fundraising to $37 million.

There is definitely a lot to unpack with Takeoff, now we’ll just see if retailers bring them on board to pack more of their groceries.