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groceries

March 4, 2021

Urbx’ Vertical Automated Grocery Fulfillment has High Ambitions

As they come to market, automated grocery fulfillment solutions are taking a number of different shapes. Companies like Takeoff Technologies and Dematic are building them into the backs of existing stores, while Kroger and Ocado are building out big, standalone smart warehouses.

Unlike those other players in the space, Urbx wants its automated fulfillment center to get high — vertically speaking. The Boston-based company is working on robotic fulfillment that scales up to 150 ft. tall. While the Urbx system is tall, it only takes up 1,800 sq. ft., so it can nestle into the limited, tight real estate areas in cities. As Urbx CEO, Lincoln Cavalieri explained to me by phone this week, Urbx is “ideal for urban environments, food deserts, where property prices are high.”

Urbx has a dual go-to market strategy. First, like other automated fulfillment technology companies, Urbx will work with third-parties to integrate its automation into other stores. At the same time, Cavalieri said that the company will eventually build “thousands” of its own Urbx-branded automated markets. But these Urbx markets won’t be anything like a traditional grocery store.

The Urbx market won’t have any aisles to roam or bakery sections to get treats from. Instead, the “store” part will be a series of kiosks. Shoppers can either place their order by mobile phone or at the kiosk. Cavalieri said once an order is placed, Urbx’ robots can pack an order of 50 items in less than two minutes. (A 25-item order takes just a little over one minute.) Robots then deliver the packed items to the kiosk for the customer to take out.

Urbx Market

Urbx will also have curbside pickup, delivery via electric bicycles and, at some point down the line, drone delivery.

All of this, however, is still a ways away. The company has only raised a seed round of funding and won’t have its first third-party implementations ready to be installed until the end of this year. Urbx hopes to have its first Urbx market developed by the end of next year.

This is certainly the right time to launch an automated fulfillment solution. The COVID-19 pandemic pushed record amounts of people into grocery e-commerce, which is expected to grow to take up 21.5 percent of total grocery sales by 2025.

As such, many retailers are accelerating their automation endeavors to keep up with e-commerce demand. Alberstons is expanding its use of automated fulfillment centers and testing out robotic pickup kiosks. And Walmart is working with three different companies to deploy automated fulfillment centers to dozens of locations this year.

With plans for its own line of supermarkets, Urbx is the most ambitious automated fulfillment startup we’ve covered so far. Now we just have to see if rollout of tall centers can match the height of its goals.

July 31, 2020

Amazon Q2: Online Grocery Sales Tripled Year-Over-Year

Amazon announced its Q2 earnings yesterday, and unsurprisingly, the company’s grocery business went gangbusters during that time. Amazon said that its online grocery sales tripled in Q2 compared with the same time period last year.

Of course, this growth can be attributed to the COVID-19 pandemic, which was in full swing during the last few months. With large swaths of the country sheltering in place, people were pushed into grocery e-commerce. So much so that online grocery shopping experienced record sales month after month in Q2, hitting $7.2 billion in June.

This sudden demand for e-groceries caught every retailer, including Amazon, off-guard. Overwhelmed by demand, Amazon had to put new Amazon Fresh and Whole Foods delivery customers on a waitlist before they could place any orders.

To help ease the strain Amazon even went to more extreme measures, like converting the first of its full-on grocery stores in Woodland Hills, CA into a delivery-only fulfillment center. According to its earnings release yesterday, the company has increased grocery delivery capacity by more than 160 percent and tripled grocery pickup locations.

The COVID tide is raising all grocery retail boats as restaurants yo-yo between being open and closed. Amazon’s news comes days after grocery retailer Albertsons said that sales rose 21 percent to $22.8 billion for the quarter ending June 20, and that digital sales more than tripled.

The question Amazon, Albertsons and the entire grocery industry now face is how much of this record e-commerce spending is permanent. We’ve had basically five months of restricted movement/lockdowns, which is plenty of time for a new habit like buying groceries online to set in. Will people stick with it? And specifically for Amazon, will this alter any of it plans as it expands its real world grocery footprint? Amazon did debut its new smart shopping cart during Q2 as well, which indicates that it still expects people to shop at brick-and-mortar stores in some fashion in the future.

Like everything in the world right now, we’re watching it change in real time, and its unlikely anything will be settled by the end of Q3.

April 2, 2020

All_ebt’s Grocery Delivery for Food Stamp Participants is More Important Than Ever

In addition to changing life as we know it, this COVID-19 pandemic has also reinforced the enormous inequalities in our society. Working from home and setting up Zoom playdates is trivial compared with the struggles low income families on food stamps face just getting groceries.

All_ebt is a startup that wants to make getting groceries for those on food stamps a little bit easier. We’ve written about All_ebt before. They use a combination of Facebook Messenger and virtual Visa cards to enable those on the Supplemental Nutrition Assistance Program (SNAP) to shop for groceries anywhere online and have them delivered.

In this time of quarantine, getting groceries delivered takes on new importance. The ability to buy groceries online and have them delivered means those on food stamps don’t have to put themselves or their families at risk of exposure to COVID-19 by going to the store, and it can also mean that parents who need to work can get groceries dropped off at a convenient time.

I spoke with Eli Caldéron Morin, Co-Founder of All_ebt today by phone and he said that there’s been a surge of interest in his company’s service. “In the last three days, we’ve signed up 800 people each day,” Morin said “We were signing up about 10 people a day before.”

When people do sign up , they get a virtual Visa card in moments that they can use to buy SNAP-approved food items (i.e. no tobacco or alcohol, etc.). A physical card arrives in the mail a few days later. With this virtual Visa card, they can order groceries through Amazon, Walmart, Instacart, or even other third-party delivery services like DoorDash that are delivering SNAP-approved food from independent and convenience stores.

As Morin explained it to me, there are two parts to any electronic benefits transfer: the main part to pay for food, and a discretionary part, which is like cash. Delivery fees are paid for out of that discretionary cash.

Right now, All_ebt makes its money by charging a $4.99 monthly fee to the user, but eventually he wants to shift that burden to the merchant. To help it scale to the point where it can effect that shift, All_ebt recently launched an equity crowdfunding campaign to raise $107,000.

All_ebt has previously raised money from angels, has won hackathons put on Y Combinator and Facebook, and was a winner on a famous investor, Tim Draper’s, TV show “Meet the Drapers.”

For those who are on food stamps, or who know someone who is, if they are interested in using their SNAP benefits for grocery delivery, they can sign up with All_ebt at allebt.org.

March 30, 2020

Pepper Groceries Pivots to Help B2B Food Suppliers Sell Direct to Consumer

There are two consistent stories that we are seeing unfold during this time of global pandemic and massive restaurant closings. First is that the traditional ways of the restaurant business are gone for now and any company that wants to survive in that space needs to pivot into something new. The second is that all the food that would have been used by those now shuttered restaurants needs somewhere to go.

Pepper sits right in the middle of that venn diagram. A few months ago it was a startup that helped restaurants streamline their food buying from multiple suppliers. With restaurants closing, Pepper’s original business plan was kind of shot. But because Pepper was working with food suppliers, it knew even though so many restaurants slowing down or ceasing operations, those suppliers still had food to sell. So Pepper did what any smart startup does in challenging times: it pivoted.

It quickly transformed its platform from business-to-business to direct-to-consumers. Pepper’s first market is the greater New York City area, and people in the five boroughs there can visit PepperGroceries.com to purchase seafood, produce, meat, cheese and even kitchen and janitorial supplies from the companies that used to supply restaurants.

Each of these suppliers has their own delivery trucks, and orders are turned around in a couple of days. Pepper currently works with four suppliers and is in talks to bring on more. For now, all the money a shopper spends on Pepper goes directly to the suppliers.

“All the proceeds are going to pockets of the suppliers,” Bowie Cheung, Co-Founder and CEO of Pepper told me by phone this week. “The general thing is to see how much relief we can provide to these [suppliers]. Drum up as much demand as we can.”

Cheung said that while the service is only available in the New York/New Jersey area right now, the platform can easily scale up and go nationwide. Pepper is venture-backed with an undisclosed seed round investment from Greylock Partners and Box Group.

Like so many things being upended by the coronavirus right now, one has to wonder whether this will be a temporary pivot for Pepper or a new normal both for the startup and the food suppliers it works with. As Cheung summed it up, “How and where does the industry go in a couple of months? I have no idea.”

August 28, 2019

Kroger Looks to Build Next Robotic Warehouse in Dallas, Texas

Kroger wants to build its next Ocado-powered robotic smart warehouse in Dallas, TX. The plans aren’t finalized, and as the Dallas News reported:

The Cincinnati-based grocer will ask the Dallas City Council on Wednesday for $5.7 million: 10-year and five-year property and business personal property tax abatements totaling $3.7 million, and $2 million from 2012 bond money designated for economic development in southern Dallas, according to the city’s meeting agenda.

Kroger confirmed with the Dallas News that it is working with the Dallas city council on the approval process.

Kroger has plans to build 20 of these automated fulfillment centers, or “sheds” as the grocer calls them, and Dallas would be the fifth announced location, joining, Monroe, OH, Groveland, FL, Forest Park, GA and one unspecified in the Mid-Atlantic region.

These smart warehouses use technology from UK-based Ocado (in which Kroger is an investor) and combine robots and logistical software to automate fulfillment of online grocery orders. The automated system uses a series of totes on rails to shuttle around a grid system, picking up items and assembling them for orders.

Though the vast majority of Americans have still never bought their groceries online, the number of people who do is steadily growing, and retailers like Kroger are building out the infrastructure now for when it (eventually) becomes mainstream. Kroger, in particular is investing in an online ordering future, as my colleague, Jenn Marston wrote about Kroger’s Q1 earnings report in June:

[Kroger’s] digital sales grew 42 percent over the quarter, making delivery and/or pickup options available to 93 percent of Kroger’s customers. Online grocery delivery is now available at 2,126 Kroger locations and pickup at 1,685 locations. The company plans to have those options available to “everyone in America” by the end of this year…

But Kroger rivals aren’t sitting still. Walmart is testing robotic fulfillment, launching a grocery delivery subscription service and experimenting with in-home delivery. Albertsons and Ahold Delhaize are testing their own robotic fulfillment solutions, too. Given the competition, Kroger has to push its own innovation efforts. For example, just a few hours south of Dallas, down in Houston, Kroger is experimenting with self-driving delivery vehicles.

At some point, Kroger will connect the automated warehouses with the automated vehicles for round the clock delivery to get you the groceries you want when you want them.

September 5, 2018

With its own Grocery Delivery Service, Walmart Grabs More Data

Walmart is leaving no stone unturned when it comes to getting you your groceries. As of today, that includes testing out its own delivery service (h/t Food Dive). The retailing giant announced a pilot program for its new last-mile delivery service, dubbed Spark Delivery, which will deliver groceries directly to customers’ front door.

From a blog post announcing the service:

Spark Delivery is a crowd-sourced delivery platform that allows Walmart to learn even more about the full last-mile delivery process. The pilot uses an in-house platform that provides drivers with the ability to sign up for windows of time that work best for their schedule as well as Grocery Delivery order details, navigation assistance and more. Components of Spark are powered by Bringg, a leading delivery logistics technology platform. Walmart’s team of personal shoppers are an important component of the overall process as they meticulously shop for customers’ orders. Spark Delivery engages the services of independent drivers who partner with Delivery Drivers, Inc, a nationwide firm who specializes in last-mile contractor management, to complete deliveries.

There’s quite a bit to unpack there. First, the drivers are not Walmart employees; instead, they are contracted out through Delivery Drivers, Inc. (DDI), which does all the recruiting, screening and management of the drivers. Later on the post outlines how DDI can help drivers establish their own delivery business through the Contractor Entrepreneurial Program. This is similar to what Amazon offers through its Flex delivery program.

Second, the company is working with delivery logistics company Bringg, which also counts Coca-Cola and Panera as customers. The Bringg infrastructure includes live tracking of deliveries by the customer which, according to Food Dive, is rare in grocery delivery — this could give Walmart an edge.

What intrigues me most from the company’s post is Walmart’s desire to “learn even more about the full last-mile delivery process.” Once again we see how important data is. Right now, Walmart is contracting grocery delivery out to third parties like DoorDash and Deliv. This gets the retailer some insight into what people are buying and where, but inserting itself further up the logistics stack will provide the company more minute details about delivery routes, times, etc.. This, in turn, can be used to better understand and hyper-target specific neighborhoods and customers.

DoorDash, Deliv and any other delivery service contracting with Walmart might want to be concerned about their long-term prospects with the company. If its own delivery pilot works out, why hand off that customer understanding to a third party?

This move means more tumult in an already tumultuous time in the grocery biz. Ever since Amazon acquired Whole Foods last year, the grocery business has had a fire lit under its collective butt to up its technology and logistics game. Throughout 2018 we’ve seen retailers like Kroger, Albertsons, Target and Amazon all roll out expanded delivery options.

As mentioned at the top of this story, Walmart has been busy covering all of its grocery bases. It currently offers delivery in roughly 50 markets and is expanding that number to 100 metro areas, which will cover 40 percent of U.S. households. It’s also piloting a new robot-powered micro-fulfillment center for expedited and expanded grocery pickup. And it’s even testing out self-driving cars to chauffeur people to and from grocery pickups.

Walmart grocery delivery has a $9.95 fee and a $30 minimum order. Walmart Spark Delivery is currently being piloted in Nashville and New Orleans.

March 28, 2018

AgShift Raises $2M, Reveals RJO as First Client

Today AgShift, a startup that uses computer vision and deep learning to reduce food waste, announced its first client: RJO Produce Marketing. This news comes just days after AgShift raised $2 million in its first seed round

Agshift uses its technology to attack food waste generated in the supply chain. Right now food inspection is done manually at different points along the food system, with workers literally eyeballing product to assess its quality using their own judgment, which can vary.

“The food supply chain is fragmented,” said Miku Jha, Founder and CEO of AgShift. “Inspections are done by different people at different points.” The results, according to Jha, are “subjective and inconsistent.” One person’s Grade A is another person’s Grade B.

Jha wants to take the subjectivity out of this process with — what else? — a mobile phone app. Instead of just looking at a piece of fruit, inspectors at wholesalers and distributors hold the produce up to the phone’s camera and take a picture (like depositing a check via mobile app, the software guides you for proper positioning). AgShift’s software in the cloud analyzes that image to quantify its bruising, color distribution, average size, mold, etc. to determine its quality.

Using the USDA’s produce guidelines (or a customized set of specifications), AgShift says its software can objectively give fruit its proper rating, and provide precise reasons why it made that choice. According to Jha, this level of consistency throughout food supply chain will deliver higher-quality produce to consumers.

It will also reduce food waste on multiple fronts. AgShift analyzes color distribution better than the human eye. So if, for example, it sees some strawberries that are 90 percent dark red at a shipping point, it can tell suppliers that it is more ripe. Then the suppliers can divert those riper berries to closer destinations, rather than running the risk of them getting spoiled on a cross-country trip.

AgShift can also reduce food waste by removing human judgment from the equation. Right now, vendors and buyers might dispute the rating of a food shipment. This can lead to canceled orders and food getting thrown out. With a computer generated rating, lower quality food can be assessed earlier in the supply chain and re-sold at a lower price or re-purposed, rather than discarded.

Industry watchers may note that AgShift sounds a lot like the Eden technology Walmart recently rolled out at its grocery stores to prevent food waste. Walmart is obviously a giant and a master of the supply chain, but Eden appears to be Walmart-specific. AgShift’s agnostic platform will give it a broad range of potential customers.

AgShift’s platform is already in trial use by a number of companies, the first of which to be publicly announced is RJO Produce Marketing. According to the press release, RJO provides “quality assurance inspections, in-depth market analysis and category management services for key perishable commodities.”

While the two million raised by AgShift is a rounding error for a company like Walmart, it’s just the start for this startup. The Sunnyvale-based company was founded two years ago and currently has 12 people working in their California and India offices. Jha said the money will be used to fund R&D and expedite the product.

Jha’s mission with AgShift is a global one. As she points out, we spend a lot of time talking about growing more food for a growing population — but a good first step is reducing the amount of food we waste right now.

December 13, 2017

Target Jumps into Same Day Delivery Battle with Shipt Acquisition

Retail giant Target announced today that it has acquired same day delivery service Shipt for $550 milliion. It’s a keeping up with the Joneses move for Target as competitors like Amazon, Walmart ramp up the race to get you your groceries fastest.

With the Shipt acquisition, Target says it will start offering same-day delivery to roughly half of its stores by early 2018, and will be offered in all major markets before the 2018 holiday season. The service will start off with groceries, essentials, home and electronics and will expand to include all major product categories by the end of 2019.

As Recode notes, Shipt currently operates in 72 U.S. cities, customers pay $99 a year (just like Amazon Prime!) for unlimited deliveries from a number of grocery chains. Target customers will have to pay for a Shipt membership in order to get their groceries.

The Shipt acquisition follows Target’s August purchase of Grand Junction, which provides technology infrastructure for local deliveries.

Target most likely feels the, ahem, target on their backs as retailers continue to up the stakes for consumer delivery expectations. The competition is fierce:

  • Amazon acquired Whole Foods earlier this year, expanding their logistical footprint, and continues to ramp up same day delivery with its PrimeNow service.
  • Walmart acquired Parcel earlier this year to facilitate same day delivery in New York, and partnered with August and Deliv for fridge-to-fridge drop off.
  • Alberstons signed a deal for Instacart to offer same day delivery in 1,800 of its retail locations.

For retailers like Target et. al., who sell everything, food and recipes and same day delivery will also become a gateway for people to purchase hard goods. This is at the heart of Walmart’s deal with Tasty. Be inspired by a recipe, buy the ingredients and any device you need to make that meal.

Based in Birmingham, Alabama, Shipt has raised roughly $65 milliion in funding and will be run as a wholly owned subsidiary of Target and will continue to sign partnership deals with other retailers.

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