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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.

Stop & Shop Now Accepting EBT Payments From SNAP Customers Shopping Online

The Stop & Shop grocery chain announced today that its customers on the Supplemental Nutrition Assistance Program (SNAP) can use their Electronic Benefits Transfer (EBT) card when placing orders online for pickup and delivery. The new program extends to all SNAP participants across Stop & Shop’s five state reach – Massachusetts, Rhode Island, Connecticut, New York and New Jersey as well as delivery customers in New Hampshire.

Customers shopping online will be able to filter searches for SNAP eligible products, and apply their benefits at checkout. However, EBT cards can only be used for SNAP-eligible grocery items, and not for things such as fees, taxes or driver tips.

Adding an EBT payment option is absolutely a good thing to do. Providing greater access to grocery delivery can help alleviate food deserts in certain areas. Instacart has launched EBT payment options with ALDI, Publix, The Save Mart Companies and Price Chopper/Market 32. And last year, Amazon expanded the availability of EBT payments for groceries as well.

The outstanding issue for all of these services, however, is the payment of fees. Stop & Shop, for instance, charges $2.95 for pickup and $9.95 delivery fee for orders less than $100 (orders greater than $100 carry a $6.95 delivery fee). To really help bridge inequality and bring more equity to food availability, it would be nice if big retailers and well-funded delivery services did more to offset the costs of delivery and pickup for customers.