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The Grocery Store is the Food System

For most of us, the food system isn’t a distant farm or a produce distribution center. It’s the grocery store. We push carts through brightly lit aisles where abstract forces—supply chains, agricultural policy, consumer trends—become tangible reality. The supermarket is where the nation’s entire food apparatus converges in a single, accessible arena. The grocery store isn’t just a participant in the food system; it is the food system in miniature.

This is where supply meets demand in its most direct form. Every product on the shelf represents a long chain of decisions: a farmer’s crop choice, a manufacturer’s formulation, a regulator’s approval. And every purchase we make sends a ripple back up that chain. For consumers who are generations removed from farming, the grocery store is our most immediate encounter with agriculture itself. To understand the state of our food system, look no further than your local grocer.

What we find there reveals both the system’s greatest achievements and its deepest contradictions. The grocery store offers us unprecedented abundance while masking troubling uniformity. It promises choice while concentrating power. It connects us to global supply chains while disconnecting us from the sources of our food. Understanding these contradictions is the key to understanding how our food system really works—and how we might change it.

The Paradox of Abundance

Walk down any aisle in an American supermarket and you’ll confront what appears to be infinite variety. Hundreds of cereals crowd the breakfast section. Dozens of yogurt brands compete for refrigerator space. An entire wall of nutrition bars promises everything from weight loss to spiritual enlightenment.

Yet behind this kaleidoscope of branding lies striking uniformity. Those hundred different nutrition bars? Most are built from the same handful of commodity crops—corn, soy, and wheat. The cereal aisle’s rainbow of boxes contains variations on the same basic theme. We’ve created the illusion of choice through brand variety while consolidating actual agricultural diversity into a narrow selection of crops.

This isn’t accidental. It’s the logical outcome of an agricultural system optimized for scale and efficiency above all else. Corn, soy, and wheat dominate not because they’re the most nutritious or delicious, but because they can be grown at massive scale and processed into countless products. The grocery store, in all its apparent abundance, reveals the hidden monotony of American agriculture.

The same consolidation extends beyond ingredients to the stores themselves. While shoppers see thousands of brands, most grocery retail is controlled by a handful of chains. These companies decide which products get premium shelf space, which suppliers get contracts, and ultimately which farmers stay in business. The grocery store that feels like a marketplace is actually a carefully orchestrated system where a few powerful players control most of the outcomes.

Shelf Space Storytelling

In this landscape of managed abundance, brands face a brutal challenge: capturing a shopper’s attention in roughly two seconds with a few square inches of package real estate. The front of a package becomes prime territory where complex stories must be reduced to their simplest essence.

This is where nuance dies. A product made with heritage grains grown by a cooperative of small farmers using regenerative practices might simply become “ancient grains” on the front of the pack. The food system’s infinite complexity gets flattened into marketing slogans that prioritize emotional appeal over substantive information.

The grocery store environment itself works against deeper understanding. Hurried shoppers navigating fluorescent-lit aisles while juggling shopping lists and crying children aren’t in the mood for agricultural education. Those well-intentioned photos of smiling farmers become invisible wallpaper. The little signs explaining sustainable practices can’t compete with the thousands of other messages bombarding consumers.

This dynamic warps the entire system. Brands that master simple, powerful messaging thrive regardless of their actual practices. Those that try to communicate complicated truths often struggle to compete. Over time, the market rewards not the best food, but the best marketing. And consumers, hungry for real information but overwhelmed by choice, grab whatever package speaks most clearly to their immediate concerns.

The Geography of Access

The grocery store’s role as the food system’s public face becomes starkest when we map stores across different communities. In affluent areas, shoppers debate the merits of grass-fed versus grain-fed beef while sipping kombucha from the in-store café. Twenty miles away, families navigate Dollar Generals where the “fresh” section consists of a few bruised bananas by the register, if that.

This geographic apartheid in food access follows predictable patterns that mirror broader inequalities. Wealthy communities get full-service supermarkets with extensive produce sections, in-house nutritionists, and specialty departments. Poor communities get convenience stores and small grocers with limited selection and higher prices. The cruel irony is that those who could most benefit from affordable, nutritious food have the least access to it.

These disparities reveal how our food system distributes power. When some communities get full-service grocery stores while others are left with food deserts, we’re seeing the system’s priorities made visible. Profit drives location decisions, not nutrition or community need.

Yet alternatives are emerging that point toward different possibilities. Some retailers use profits from wealthy stores to subsidize locations in underserved areas. Mobile markets bring fresh produce directly to food deserts. Community-owned cooperatives keep food dollars circulating locally while ensuring democratic control over food access. These experiments reveal what’s possible when we design food distribution around community needs rather than just market logic.

The Collective Action Paradox

Every grocery shopper faces the same psychological trap: “I’m just one person. My choices don’t matter.” This thinking, perfectly rational at the individual level, becomes problematic when multiplied across millions of shoppers. It’s the same psychology that suppresses civic engagement more broadly—one voice rarely changes everything, but when everyone thinks this way, we get the outcomes we deserve by default.

History proves this pessimism wrong. The organic movement started with a handful of “health nuts” shopping at food cooperatives and farmers markets. Today, organic agriculture has transformed farming practices across millions of acres. Fair trade certification, once a niche concern, now influences supply chains for everything from coffee to cotton. These changes didn’t happen because any single shopper mattered, but because enough people decided their choices mattered collectively.

The grocery store makes this collective power visible in ways that other civic engagement doesn’t. When demand for organic produce increases, stores expand their organic sections within months. When shoppers ask for local products, buyers seek out regional suppliers. When customers demand better working conditions, retailers eventually respond. The feedback loops are faster and more direct than in traditional politics.

This responsiveness is both the grocery store’s greatest strength and its greatest weakness as a democratic institution. It can quickly amplify consumer preferences, but it also amplifies inequality. The preferences of wealthy shoppers get heard loudly and clearly, while the needs of poor communities go unmet. Recognizing the grocery store as both mirror and maker of our food system means grappling with this tension.

Practicing Food Citizenship

Grasping the grocery store as the food system’s most visible expression changes how we might approach our shopping. Instead of seeing ourselves as individual consumers optimizing for personal benefit, we can think of ourselves as food citizens participating in a collective system.

This starts with diversifying our food sources. Join a CSA for vegetables. Buy meat directly from local farmers. Purchase grains from cooperatives. Keep shopping at your grocery store for everything else. You’re not abandoning the mainstream system—you’re creating alternatives that keep the entire system more honest and resilient.

Within grocery stores, practice strategic engagement. Ask questions and make requests. Store managers notice when customers inquire about sourcing, suggest new products, or ask why certain items aren’t available. Be the person who asks for a bulk section, requests local suppliers, or suggests worker-owned brands. Individual requests might get dismissed, but patterns of customer interest drive purchasing decisions.

Focus your attention where it matters most. Organic certification has the biggest impact on the “dirty dozen” produce items with high pesticide residues. Fair trade certification matters most for products like coffee and chocolate where farmers typically receive tiny portions of retail prices. Local sourcing matters most for products that travel long distances and spoil quickly. Know where your choices make the biggest difference.

Support policy changes that address the grocery store’s limitations. Back ordinances that incentivize grocery stores in underserved areas. Support policies that make healthy food more affordable. Champion regulations that require clearer labeling about production practices. The market alone won’t fix systemic problems—we need public policies that can address market failures.

The Mirror and the Maker

The grocery store will never be perfect. It will always reflect compromises between efficiency and equity, convenience and sustainability, profit and purpose. But that’s exactly why it matters. The grocery store is both mirror and maker of our food system—it reflects our current priorities while shaping our future possibilities.

Unlike far off farms or corporate boardrooms, grocery stores are where we actually encounter the food system in our daily lives. They’re where abstract agricultural policies become concrete realities. They’re where supply chain decisions show up as empty shelves or abundant displays. They’re where our collective choices about what we value get tallied and sent back up the chain.

Recognizing the grocery store as the food system means taking responsibility for what we see there. The abundance and the inequality. The convenience and the hidden costs. The choices and the illusions. These aren’t just market outcomes—they’re collective creations that we sustain every time we shop.

We are not just shoppers navigating retail spaces. We are participants in a food system that we help create with every purchase. The grocery store is where that participation happens, where our individual choices become collective outcomes, where the future of food takes shape. Understanding this is the first step toward building the food system we actually want.

—

This essay was inspired by Mike Lee’s recent podcast episode “The Future of Grocery” on The Tomorrow Today Show. Listen to this podcast on Apple Podcasts or Spotify.

Mike was joined by guest co-host Melanie Bartelme from Mintel, and we spoke with Doug Scholz from the California Grocers Association, Cameron Gould Saltman (ex-TikTok Food & Beverage), Michael Robinov from Farm to People, and Errol Schweizer from The Checkout Grocery Update.

This post was originally published on Mike Lee’s wonderfully written and informational substack. You can find the post here. You should subscribe!

You can listen to the full conversation below.

The Future of Grocery

Cashierless Checkout Pioneer Grabango Shuts Down After Failing to Secure Additional Funding

Grabango, a grocery-tech startup that raised over $93 million for its cashierless checkout technology, is shutting down, The Spoon has learned. The closure follows the company’s inability to secure the necessary funding to continue operations.

In a statement to The Spoon, Grabango said:

“Grabango announced today it has permanently discontinued operations. Although the company established itself as a leader in checkout-free technology, it was not able to secure the funding it needed to continue providing service to its clients. The company would like to thank its employees, investors, and clients for their hard work and dedication. The decision was an extremely difficult one to make.”

Founded in 2016, Grabango emerged during a surge of investment in grocery checkout technology startups, spurred by Amazon’s launch of Amazon Go. However, the field quickly became crowded with competitors like Shopic, Trigo, Mashgin, and Caper (acquired by Instacart), all of which offered variations of computer vision and AI-powered shopping platforms.

Despite the competition, Grabango secured notable clients, including European grocery giant ALDI, which just six months ago introduced its ALDIgo checkout-free solution, powered by Grabango’s technology. Yet, as seen with Amazon’s recent rollback of its Go platform in Fresh stores, cashierless checkout needs to be carefully deployed because customers can sometimes find their friendly cashiers being replaced by a technology platform offputting.

Grabango’s shutdown is a reminder of the tough climate for startups today. The days of easy venture capital are over, and in highly competitive sectors like grocery tech, startups that can’t extend their financial runway or achieve profitability are vulnerable. It’s likely that Grabango’s assets and intellectual property will soon be scooped up by a competitor.

Halla’s Spencer Price: Grocers Will Create ‘Unique Grocery Store for Every Shopper’ in The Future

Next up in our Smart Kitchen Summit speaker preview series is Spencer Price, the founder of Halla.

Halla has built an AI personalization and recommendation platform for grocery store providers. According to Price, the turning point for his company and the broader grocery store industry was when Amazon acquired Whole Foods.

“When Amazon acquired Whole Foods in 2017, it sent grocers into this innovation frenzy,” said Price. “I think the main driving force for grocers to want to look at this type of tech back then was that Amazon generates over one-third of all of its product sales revenue from their recommendation with the ‘You may also like’ and ‘customers also bought’ type product suggestions. Grocers do not have a passive piece of AI that drives a third of their sales, and that is what we enable grocers to do. We give them that competitive weapon to fight back in this World War grocery.”

Price thinks that while the grocery industry is lagging behind other industries, such as entertainment, when it comes to personalization, they are looking to AI to make up ground.

“Netflix isn’t just on a one-account basis. Within an account, you have a handful of profiles in your household, and each profile sees a completely different set of suggested categories, titles within those categories, and even different cover art for each one of those titles that’s likely to resonate with you as a specific end user.

“Grocers are a little bit behind these content platforms, but I think in 10 years time, we will see a very similar thing, and it’s going to be even more exciting because if you can give every single shopper their own unique grocery store, that’s going to make for both the fastest and most efficient and of course, most inspiring shopping experience. Grocers want to move quickly.”

Price’s company was acquired by Wynshop in March. Price says the company brought over his entire team and that Halla remains an independent business unit within Wynshop.

The Spoon Talks With Halla's Spencer Price About AI's Impact on the Grocery Business

You can hear Price speak at Smart Kitchen Summit on June 4-5th in Seattle. Get your ticket today!

You can read the full transcript of our conversation below:

Michael Wolf: All right, I have with me Spencer Price, the CEO of Halla, now a part of Wynshop. It’s been a while since we caught up. We wrote a first article about you guys since then, and you guys have changed a lot since then.

Spencer Price: We have changed a lot since then, yes.

Michael Wolf: At that point, you were very much focused on being a personalized recommendation platform based on a lot of different data. I still think that’s a lot of what’s pretty true, but you guys did evolve since then.

Spencer Price: Yeah, so 2018 was a transitional period. We had developed, as you said, a personalized recommendation engine centered on food and beverage products. And we had a mobile app that would recommend restaurants and even specific dishes from those menus to users or groups of users with varying taste preferences, dietary restrictions, et cetera. And that was 2017 to 2018.

When Amazon acquired Whole Foods in 2017, it sent grocers into this innovation frenzy. There was a demand for us to gut the tech from the app, license it B2B, and we ended up sunsetting the mobile app, which feels like a lifetime ago now. And all we’ve done is deploy personalized recommendations, search and substitutions for online grocers ever since.

Michael Wolf: I didn’t know that that had such a big impact. It makes sense, in retrospect, the acquisition of Whole Foods by Amazon. But like you said, there was this frenzy and a wake up call to existing grocers, and that sent you in a completely different direction.

Spencer Price: Exactly. We had some innovative nimble online grocers as well as some legacy retailers that knew they needed to step up. I think the main driving force for grocers to want to look at this type of tech back then was that Amazon generates over one-third of all of its product sales revenue from their recommendation with the ‘You may also like’ and ‘customers also bought’ type product suggestions. Grocers do not have a passive piece of AI that drives a third of their sales, and that is what we enable grocers to do. We give them that competitive weapon to fight back in this World War grocery.

Michael Wolf: I love that; World War grocery sounds like a movie, starring you guys apparently. But I mean, look at the last 18 months, right? I think the world’s woken up to AI. It’s permeated all the press and the pop or consciousness largely due to the exposure of things like ChatGPT and generative AI to everyone. It seemed like like six, seven years ago, a lot of people were building ontologies and had a custom code, to make their AI to get certain outputs. But now, with generative AI, you can basically do prompts and get a lot of the same results. And these large language models just keep getting bigger. Can you talk about how your business has changed by incorporating larger langue models and generative AI?

Spencer Price: Yeah, so the way that generative AI has taken shape thus far has, of course, been through chat bots. One of the things that those, at least from a consumer-facing standpoint, one of the things that chat bot ask technology with LLMs, Gen. AI, et cetera, plays into e-commerce at large and potentially grocery down the line is conversational commerce.

We don’t see that as being a particularly exciting use case, particularly in this category where people are adding usually a couple dozen items to their basket. They’re not saying, you know, I need help finding the right sweater that matches these pants. It’s a household you’re shopping for with different dietary restrictions, taste preferences. And that’s where language models don’t necessarily perform best. That’s where recommender systems have decades of tried and true proven methods.

And so that’s still a foundational component of our science. However, for one of our solutions, search, LLMs allow for a much more robust level of understanding natural language. So we had our own raw sort of NLP models that we developed in -house a few years ago, that we’ve been fine tuning, and now we can incorporate some of these open source transformers and LLMs to take our vertical eyes, rather than a generalist sort of assistant, our vertical eyes recommender systems and layer them with this cutting edge technology that allows for the generation of synonym lists and a better understanding of things like typos. But the risk with using just generative AI to try to develop these highly specialized models in a category that’s clearly so nuanced and personal is the hallucinations. I was recommended a beef and banana soup from chat GPT. And I got to tell you that that feels a ways away. I did not. It was terrifying to be honest.

Michael Wolf: Did you make it?

Spencer Price: I did not. It was terrifying, to be honest.

Michael Wolf: Well, I’ve been talking to a lot of folks who are in this area of food and beverage that are trying to deploy AI centric solutions. And like you said, a lot of the LLMs have this problem with hallucination. They’re oftentimes, they’re ingesting the world of the broader internet, but they don’t necessarily go deep on things like food and beverage. So I’ve heard companies that are building special, small language models that can couple into large language models. They’re doing kind of these transformers that provide the intelligence. Sounds like you guys have your own kind of approach to that. And you’re using LLMs as the conversational smart interface that is just so much more savvy than it would have been in the past. And then diving deep into your knowledge set.

Spencer Price: Precisely. We are using these new state of the art technologies, both as sort of a research platform to understand what we can benefit from and leverage and also where the watch outs are, like the example I just shared. One thing that you’d imagine might be really nice, whether it’s with a small language model specific to what we’re doing, or using the best of these large language models.

One use case that probably strikes you as obvious is groceries have a notoriously dirty data problem. And so maybe there’s a way to clean up these product catalogs and inventories and descriptions and attributes. The challenge is you can’t run the risk of things like health claims, nutrition facts, or marketing descriptions being completely wrong. And we’ve seen a lot of inaccuracies in using it for that.

So everything we do with LLMs has a human in the loop to make sure that none of those inaccuracies end up facing a user. But by and large, what sets us apart is layering in, as you said, our knowledge base, which is an ontology of every single product, but more than that, the essence of each product, knowing that orange, for example, is a distinct flavor. It is a product and it’s also a color. And LLMs are not built to have those nuances at play to the level of sophistication that you need them to be. Does that make sense?

Michael Wolf: Yeah, it does. What are you most excited about if, 10 years down the road, you’re building systems that use technology like AI in terms of the grocery shopping experience? What do you think will change the most?

Spencer Price: So I think that personalization historically took a lot of different shapes, and then they all kind of converged five to 10 years ago by having truly individualized browsing experiences on content platforms. Netflix isn’t just on an account basis, but within an account, you have a handful of profiles in your household, and each profile sees a completely different set of suggested categories, titles within those categories, and even different cover art for each one of those titles that’s likely to resonate with you as a specific end user. Spotify acquired Echonest, and they were able to map out all the different attributes down to subjective metrics like the danceability of every single track in their library, now they have the most robust music recommendation engine in the world, and people love them for that, and I’ve never left as a result.

In online shopping, we’re talking about products now, not content. We’re a little bit behind these content platforms, but I think in 10 years’ time, we will see a very similar thing, and it’s going to be even more exciting because if you can give every single shopper their own unique grocery store, that’s going to make for both the fastest and most efficient and of course, most inspiring shopping experience. And we’re not there yet, but we have all the rails to get there in a lot less than 10 years. Depends how much. Grocers want to move quickly.

Michael Wolf: That’s exciting, getting Mike’s grocery store tailored towards me. That’s perfect. Tell us about the Wynshop deal. You guys got acquired, which is exciting news for you. What does that mean?

Spencer Price: So our biggest channel partner to reach retailers and have our personalization technology directly embedded into an e-commerce platform was with Wynshop. And they’re the leading provider of e com platform technology on a white label basis to grocers all over the continent and a handful of international accounts as well. And we’ve been working with them for a few years. We love the team. We think they have a clearly differentiated product and they got to know us, our team and our tech. And it was just a pretty perfect match, to be honest, to have what we’ve developed baked in as more of a base level set of functionality, as well as being able to offer premium levels of functionality for these grocers that they can opt into if they want.

So yeah, about six weeks ago, we joined the team. They brought on all the day to day, all the personnel, we remain an independent business unit within Wynshop, but obviously it’s not like there’s any walls up. We work with everybody there very well. They put some resources behind us and yeah, the goal is both to service their existing accounts and future customers as well with the tech we’ve built and the new stuff we’re building.

Michael Wolf: All right, well, Spencer, congratulations. You worked hard for years to build the product and then create a opportunity for you. So I’m looking forward to talking more with you in Seattle in June at the Smart Kitchen Summit. How can people find out more about Halla and Wynshop?

Spencer Price: Yeah, well, thank you so much for the opportunity and the congratulations. You can still find us even though we don’t go by holla .io, we’re just holla now, at halla .io and winshop .com, W -Y -N, shop.

Michael Wolf: Cool. Hey, well, Spencer, thanks so much for spending time with me, man.

Spencer Price: Thank you so much, Mike. Look forward to seeing you in June.

Big Tech Set Its Sights on Reinventing Checkout. Consumers Said ‘Not So Fast’

When it comes to technology and grocery shopping, one primary focus for grocery chains and technology providers in recent years has been the checkout experience.

Amazon and various other technology companies have been developing platforms to enable consumers to skip the checkout counter. These platforms aim to transform the shopping experience into something akin to walking into a giant pantry, loading up your cart, and then walking out without going through a checkout line.

Others (including Amazon) pushed technology into the shopping cart, enabling customers to check out products as they walked through the store, get coupons and ads for special deals, and learn more about items via a built-in touchscreen.

And then there’s online grocery shopping. After two decades of slow adoption by both grocers and shoppers, a pandemic forced every major grocery chain to invest heavily in enabling the easiest of all grocery buying options: letting us shop at home and have our groceries delivered to our door.

Meanwhile, everyday consumers continue to do things the way we’ve always done things. It’s a lazy Sunday, and you’re in no hurry? Get in line and chat it up with the cashier and bagger. Are you hurrying to return to work or arrive home in time for dinner? Jump into the self-checkout line and get out as soon as possible. Too busy to head to the grocery store at all? Order online and have stuff delivered to your home.

In other words, grocery shoppers are not a monolith. Most of us change our behavior depending on the current situation.

But what about Just Walk Out? It’s a radically tech-forward evolution of checkout, but one in which Amazon appears to have widely overestimated just how many people would use it and how easy it would be to implement. As I said in last week’s Food Tech News Show (FTNS), self-checkout fits most shoppers’ needs when they are in a hurry, and there aren’t that many situations where consumers feel they need to skip checkout altogether.

As for self-checkout, it definitely isn’t perfect and could be made a much better experience. As Scott Heimendinger said on the FTNS, self-checkout can sometimes be unnecessarily difficult, almost like plugging in a USB. Amazon and others should probably spend their time using technology to make self-checkout work better.

We love robots - FTNS

Target is doing something about self-checkout, changes which it claims will allow shoppers to get out quicker. According to the company, self-checkout lines with cameras were able to check out twice as fast as self-checkout lines without a camera. Of course, their motivation is mostly somewhat self-motivated, driven by the retailer’s desire to limit theft, so my guess is there’s a good chance they can bungle the rollout if it doesn’t deliver clear benefits and customers are feeling spied on.

All that said, while some shoppers may not like it, the combination of computer vision and self-checkout might be the future, particularly if it makes the self-checkout experience less painful than it currently is. Because of this, Amazon should look at repurposing its Just Walk Out into a self-checkout accelerator, not a platform for making shoppers feel like they are shoplifting. For now, however, they’re emphasizing the rollout of their Dash shopping carts, a solution that is unclear if shoppers are asking for. Others, like Instacart, are also betting big on as well. The company had a blog post touting their progress today, saying they plan to have ‘thousands’ of shopping carts deployed by the end of 2024.

Just Walk Out and other light-touch self-checkout will thrive in the near term in shopping contexts where a consumer needs one or two items and is in a hurry, such as airports and stadiums. One of the smartest implementations I’ve seen with self-checkout is at Costa Coffee at SeaTac airport, where they had a Mashgin AI-powered self-checkout station with a dedicated line for customers who just wanted drip coffee. In other words, a quick and low-touch checkout solution for a product with a high degree of certainty where customers are often in a hurry.

The bottom line is that everyday shoppers will continue to shop the way they’ve become accustomed to, choosing between three primary methods: full-service checkout, self-checkout, and delivery. More advanced technology should primarily focus on improving these existing modes. New technology that allows (or forces) consumers to change their behavior should only be used in scenarios that make sense.

Otherwise, consumers will reject it, and retailers will be forced to retrench, just like we saw last week with Amazon’s pullback of Just Walk Out.

Podcast: The Anti-Tech Grocery Store & Food Tech News of the Week

The Spoon Podcast is back after a summer hiatus with a food tech news wrap-up discussing some of the most interesting stories of the week!

In this episode, Spoon contributor Allen Weiner and I talk about:

You can listen to the full episode by clicking below or by finding The Spoon Podcast on Apple Podcasts, Spotify, or wherever you listen to podcasts! And while you’re at it, do us a favor and leave us a review!

As mentioned in the show, the Spoon is once again leading the charge for food tech at CES, the world’s biggest tech show. If you are interested in showcasing your future food or food tech innovation, head over to The Spoon’s CES page for more info.

Also, on October 25th, we’ll be bringing leaders at the intersection of food and AI together for a day of conversation. Please use the discount code PODCAST for 15% off tickets to the Food AI Summit.

Walmart Gains Share in Online Grocery as Shoppers Look for Ways to Combat Inflation

While online grocery shopping continued to grow last year, where people shopped shifted significantly according to a new report from grocery researcher Brick Meets Click.

The new report, which details the egrocery performance for different retail formats, said Walmart was the big winner in 2022 as more and more customers looked for ways to save a buck. According to the report, which broke down the four major formats as supermarkets, Walmart, Target, and Hard Discount (i.e. Aldi and Lidl), Walmart saw its share of online grocery shoppers grow in both low-income and high-income households.

According to Brick Meets Click, households making less than $50 thousand per year were 25% more likely to shop at Walmart than a supermarket, and Walmart’s total share of online grocery in this household category grew by 2.1% vs. a contraction of 1.5% for supermarket’s share. On the high end of the spectrum, Walmart gained ground in households making over $200 thousand annually, expanding its reach into this segment by 2.1%. In contrast, supermarkets saw their reach shrink by 1.2% in 2022 vs. the previous year.

The reason for the shift towards Walmart for both segments was persistent inflation. Lower-income households were driven by what the researcher terms “flight to value,” where they buy products priced via an “everyday low price” pricing model employed at Walmart and hard discounters such as Aldi. And while high-end income households are three times more likely to shop online at a supermarket, the format lost share to Walmart in 2022 as upper-income earners also looked for ways to save on groceries.

As for Target, the retailer also saw its share of high-income households expand in 2022, which also contributed slightly to the decline of overall online share for the supermarket segment. In addition, the Minnesota-based retailer also continued to attract younger shoppers relative to the supermarket segment, as young households (18-29 years old) are 36% more likely to shop online at Target vs. a supermarket.

The report does not detail where Amazon fits in all of this. According to The Street, Amazon’s total share of physical store grocery spend was about 2% of total grocery sales at about $17.5 billion in 2021. That compares with Target’s $20.3 billion in food and beverage sales in the same year.

As for how households are getting their groceries, over half of the monthly active online shoppers (52.2%) picked up groceries via curbside or in-store pickup in March of this year, according to a separate report by the researcher. Ship to home, which usually means dry goods and shelf-stable products, dropped from 47.5% of monthly online grocery shoppers in March 2022 to 40.9% in March 2023, while grocery delivery (which usually includes fresh produce, dairy, and meat) grew from 40.8% in March of last year to 41.5% this March.

Despite the growth of the online grocery category, the researcher says that in-store is still the dominant form of grocery shopping. In a report released earlier this year, the total share of online grocery shopping accounted for just over a tenth (11.2%) of all grocery spending at the end of last year and is expected to grow to 13.6% by the end of 2027.

Afresh Rolls Out Its AI-Powered Fresh Food Management System to 2,200 Albertsons

Afresh Technologies, a fresh food management technology company, has announced the rollout of its predictive ordering and inventory management platform to more than 2,200 Albertsons Companies stores in the United States, including Safeway, Jewel-Osco, Shaw’s, Vons and ACME. The platform, which helps store teams to better order and plan fresh produce inventory, reducing food waste and achieving superior freshness in their stores, was implemented within seven months, making it one of the fastest in-store technology rollouts in the grocery industry.

The Afresh platform also provides department managers with easy-to-use ordering tools that leverage real-time insights. The company’s CEO and co-founder, Matt Schwartz, said that “supply chain and store technology implementations typically require a multi-year transformation and radical overhauls,” but that Afresh and Albertsons Companies were able to complete the roll out of the system in just months.

Suzanne Long, Chief Sustainability and Transformation Officer at Albertsons Companies, said that “driving sustainability practices across Albertsons Cos. is essential to our business and the communities we serve. Our partnership with Afresh helps us improve ordering and better manage our inventory of fresh fruits and vegetables so our customers have access to fresher products, and we’re able to make meaningful progress toward achieving our goal to have zero food waste going to landfill by 2030.”

Afresh, which raised a $115 million series B in August (bringing their total funding to $148 million), has been gaining momentum over the past year. The company currently has its software in 3,000 stores in the US, including Heinen’s, Save Mart, Bashas, Cub Foods, and Albertsons.

Total Online Grocery Sales Down 6% in March, But Grocer’s Home Delivery Business Still Growing

According to a new report by market researcher Brick Meets Click, total US online grocery sales were down 6% in March versus 2021, dropping to $8.7 billion versus March 2021’s record sales of $9.3 billion.

Bricks to Click defines the online grocery market in three segments: Ship-to-Home, Pickup, and Delivery. Ship-to-Home, which includes grocery delivered via parcel carriers (UPS, FedEx, USPS), saw the biggest decline, dropping by 30% from $2.1 to $1.4 billion. Pickup, which includes curbside, in-store, lockers, and drive-thru pickups, was down by 11%, dropping from $4.3 to $3.8 billion.

But it wasn’t all bad news. Delivery – which includes both grocer first-party (Kroger, etc.) and third-party service provider (Instacart, Shipt, Doordash) delivery – was up year over year, going from $2.9 billion to $3.5 billion.

In its analysis, Brick to Click pointed to the emergence of fast-grocery delivery as one of the reasons for the category’s growth.

“Two factors continued to drive Delivery’s strong performance in March,” said David Bishop, partner at Brick Meets Click. “First, the aggressive expansion of third-party providers into grocery is enabling additional ways for people to shop online, and second, newer services focused on faster cycle times are appealing to a broader range of trip missions and usage occasions,” he added.

One of the things we wondered early on in the pandemic was how much behavior change, such as online grocery adoption, would stick over the long haul. From the looks of it, many consumers are continuing to use online grocery shopping as the country emerges from the pandemic, but look to be mixing home delivery with trips to the grocery store.

You can read the full release from Bricks Meets Click here.

Tech-Powered Retail is Flourishing in the Food Industry. Everywhere Else, Not So Much

When B8ta launched in 2015, I loved the idea. What wasn’t there to like about a highly experiential, tech-powered retail concept where consumers could try out cool new gadgets and companies could get invaluable early feedback about their products?

The same with Amazon Books, which opened the same year. I mean, sure, it almost seemed cruel that the dominant e-tailer was going to head to head with Barnes & Noble on their turf, but that didn’t mean I wasn’t intrigued to see how the tech giant might rethink physical goods retail.

Fast forward to this year, and within the span of a couple weeks, we’ve learned both B8ta and Amazon Books are closing their doors.

Contrast this with the world of food retail. Everyone from Amazon to Walmart to upstarts like Nourish & Bloom are employing cutting-edge technology like AI, robotics, and more to power new food shopping experiences. So why is it that tech-powered food retail is flourishing while other retail concepts seem to struggle?

Part of it may be due to changing consumer habits post-COVID. B8ta founder Vibhu Norby talked about this when explaining the company’s struggles with Modern Retail:

“Although foot traffic began to tick back up, “a lot of specialty retailers like us, we had a much slower recovery curve,” Norby said. “A lot of landlords – they were looking at percentages, looking at averages…trying to determine who they should give concessions to.” 

That slower-than-expected recovery led the company to close 15 of its stores roughly a year ago to cut costs, even though b8ta was still on the hook for leases. “We didn’t really have a choice…part of the plan was to negotiate settlements of different types with the landlords,” Norby said. Eight stores in California, Colorado, Massachusetts, New York and Texas remained open. 

In other words, physical goods retail had struggled for years and COVID just made things much worse, killing walk-in traffic during the worst part of the pandemic and permanently reducing traffic during the long and slow recovery.

Another big reason is that most retail industries outside of food have already been cannibalized by e-commerce. Items like books and electronics, which is pretty much all Amazon Books sold. Of course, it has to be noted that Amazon itself is as responsible for the death of physical goods retail as anyone, all of which makes the Amazon Books concept seem something of a self-indulgent thought experiment. But thought experiment or not, it does say something that a company as inventive and tech-forward company as Amazon couldn’t make physical retail work.

Finally, it may have a lot to do with how entrenched physical retail food shopping is, even two years into a period of massive growth for online grocery shopping. The reality is that even after grandma and grandpa finally tried Instacart, most people, young and old, continue to shop for some or all of their groceries at their local store. That’s for many reasons, whether it’s the difficulty of selling fresh food online or the last-minute nature of many dinner plans. Still, I imagine the biggest reason is this: Consumers like to see, touch, smell, and taste the food before buying it.

I still think there’s a future for new retail concepts, but potential operators should tread carefully and make sure it’s not an industry where consumers can easily buy the product on Amazon or elsewhere.

And, if possible, sell some food.

How California’s New Food Waste Law Could Catalyze Interest & Investment in Tech-Powered Food Recovery Platforms

Starting next year, California’s Senate Bill 1383 will begin to require businesses and consumers to separate food waste from their garbage and put them into “green” bins for proper composting.

The legislation, passed in 2016 by then-governor Jerry Brown and the California state legislature, also will begin requiring tier 1 food businesses (grocery retailers, food distributors, food service providers) to divert 20% of food destined to be thrown away to food recovery organizations by the year 2025.

While I think it’s a good thing that everyone in California – both consumers and businesses – will eventually be required to start composting, I’m more interested in how SB 1383 could catalyze interest in platforms that help put food destined for the waste bin on someone’s plate instead. After all, while composting is a net positive from a climate impact reduction perspective, it’s also the last stop on the food waste recovery and mitigation express. In other words, when food feeds someone instead of ending up as fertilizer, everyone wins.

Image Source: CalRecycle SB 1383 Overview

The timing is good for the law, partly because the pandemic has driven home the realization among businesses that it’s their responsibility to try and divert food to local food banks or other food recovery organizations as good corporate citizens. And of course, it also makes good business sense, since by redirecting food to food recovery organizations, these businesses can also claim these donations on their taxes.

As grocery retailers and other tier 1 food businesses ramp up their food diversion efforts, there are some organizations that could help them along the way. One of these companies is Goodr, which offers grocery retailers and other food-related organizations a tech platform and associated service to help them get excess food in the hands of food charities. Goodr sprang into action in its home market of Atlanta during the early days of the pandemic and showed it could really make an impact. Other organizations such as Quest also provide food diversion services and food waste audits.

One of the challenges of a food recovery program is just having the ability to track and manage potential food waste. There are a number of technology platform providers such as Afresh and Crisp that give grocery providers tools powered by machine vision, AI, and other cutting-edge technologies to better predict and manage fresh food inventories. There are even food robot companies like Simbe developing technologies to help assist in food waste reduction management.

Finally, there are marketplaces like Olio and Too Good to Go that enable grocery retailers, restaurants, and other organizations to list excess edible food for sale on a highly-discounted basis to local consumers. While food sold on these platforms will not count towards the company’s 20% food diversion requirement, using them will help a company reduce the overall amount of food wasted and help provide low-cost food to consumers.

But what I am most excited about is how SB 1383 could give rise to new solutions to help food retailers and foodservice providers waste less food. New regulations often serve as catalysts for innovation, giving large businesses a new reason to invest in core technology infrastructure. As SB 1383’s regulations begin to go into effect, innovators with good ideas for new technology to help companies reduce food waste and redirect excess food towards food insecure citizens will have a growing market opportunity for their solutions. This growing opportunity will likely attract more venture investment for a category that has, at least in the past, had a hard time convincing investors there was enough of a market to garner them a return on their investment.

Dawn of the Robocorn? Micro-Fulfillment Robot Specialist Fabric Raises $200M on $1 Billion Valuation

Fabric, a maker of robotic micro-fulfillment solutions for grocery and e-commerce retailers, announced today they have raised $200 million in a Series C funding round. The new funding puts the company’s valuation at $1 billion.

Formerly called Common Sense Robotics, Fabric works with large online grocers and retailers such as Walmart, Instacart, and FreshDirect to build automated micro-fulfillment centers via a mix of fulfillment-as-a-service and hybrid ownership models. The company’s solution involves an intricate blend of robotics, vertically stacked storage of products, and human operators and packers that help package up the final delivery and handoff to delivery drivers.

You can see what a Fabric micro-fulfillment center (MFC) in Tel Aviv looks like in action as it processes an order below:

The World's First 1-hour Delivery Fulfilled by Robots

The funding, which vaults the company into what it describes as a ‘robocorn’ status, is not a surprise given the fast growth of the company and the broader micro-fulfillment market. Interact Analysis forecasts MFC automation and robotics market to grow from $136 million in 2020 to $5.3 billion in 2025. Revenue growth will be fueled by a rapidly growing number of MFC installations in various formats throughout the forecast; Interact expects the the total number of MFCs installed annual to grow from 29 in 2020 to over 2100 new MFCs installed in 2025.

The company plans to use the funds to grow its fulfillment solution in the general merchandise market and build a network of micro-fulfillment centers in cities across the United States. The company’s model relies heavily on building warehouse fulfillment centers that allow grocery retailers to outsource micro-fulfillment to Fabric. Fabric also co-invests and builds distributed fulfillment centers in partnership with larger players such as Instacart and FreshDirect.

That strategy makes Fabric part of a new kind of third-party logistics (3PL) player built around robotics and automation as an enabling platform for their distributed fulfillment networks. While large 3PL companies like XPO Logistics and C.H. Robinson been adopting automation in their warehouses for some time, companies like Fabric, Exotec and Attabotics are building hybrid networks of dark and retail/integrated grocery MFCs architected from the get-go with robotics in mind (rather than a bolt-on or forced integration). As more retailers invest in distribution networks tailored towards a grocery industry with 50%+ e-commerce penetration, next-gen MFC platform companies like these are well-situated to benefit.

“While we use the term ‘robocorn’ a bit tongue in cheek, we see this milestone as a real turning point in the industry, from what was once trepid exploration of micro-fulfillment to total market validation and now rapid expansion,’ said Fabric CEO Elram Goren in the release sent to The Spoon. “We’re thankful to our partners for trusting us to serve them and to our incredible team who will continue moving mountains to make our vision a reality. This is still ‘day one’ for us, and we’re extremely excited about the road ahead as we expand our offering into new markets, drive more efficiencies across the supply chain, and focus on scaling.”

Buyk Launches 15 Minute Grocery Delivery in NYC

Buyk, a new ultra-fast grocery delivery startup, launched operations in NYC this week.

The company announced this week that they’d launched delivery in Manhattan. Buyk, which was founded by Rodion Shishkov and Slava Bocharov – the same founding team who started Russian fast-grocery store Samokat – announced early this year that they’d raised $46 million for a US launch.

Buyk’s model utilizes hyperlocal dark stores sprinkled around different neighborhoods to ensure delivery within 15 minutes. Once customers put their order in, items are pulled within 2 minutes and then delivered by bike courier (“buykers”) to the customer within 5-10 minutes.

Buyk’s service is available today in Manhattan, and the company says they plan to expand to all NYC boroughs by the end of the year. In 2022, the company plans to expand to other major US metro areas, including cities in California, Florida, Massachusetts, and Illinois.

Buyk is just the latest fast-grocery player to launch in via New York. Just this year, we’ve seen JOKR, Gorillas, Fridge No More. Throw in goPuff’s 500 city blitz, and that’s a total of five dark store/fast grocery players to take a bite of the Big Apple in 2021.

With all the new entrants, it will be increasingly tough for these players to make a name for themselves. But a crowded market isn’t always bad; if ultra-fast grocery becomes a strategic must-have that forces bigger players like Walmart, Amazon, or even a 7-11 to look at launching their own offering, chances are one of these companies will become acquisition targets.