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The Spoon

Daily news and analysis about the food tech revolution

grocery delivery

Kroger’s Q1 Earnings Call Highlights the Growth and Challenges of Supermarket Delivery

There was quite a bit of buzz this week around Kroger. Much of it came from the supermarket giant’s Q1 2029 earnings call, which took place yesterday. While fiscal results were somewhat mixed, right off the bat, Kroger chairman and CEO W. Rodney McMullen highlighted growth of what he called “an omnichannel platform to serve customers with anything, anytime, anywhere.”

In other words, right now is all about doubling down on delivery efforts for Kroger.

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

“Our customers don’t distinguish between an in-store and online experience. Rather they typically have a food-related need or a problem to solve and want the easiest, most seamless solution,” said McMullen.

Pieces of that solution include a growing list of companies Kroger partners with to not just expand shopping options for customers but also improve the logistics around doing so. To that end, Kroger has been leveraging a number of partnerships with companies over the last quarter, including Nuro, Microsoft, meal kit company Home Chef, Walgreens, and Ocado, with whom Kroger is piloting smart sheds that use robots to fulfill grocery orders.

The Kroger/Ocado partnership just broke ground on the first of 20 of these automated warehouses that the supermarket chain plans to open over the next couple years. McMullen said that this initial warehouse, located in the grocery store’s hometown of Cincinnati, OH, “introduced transformative format of e-commerce fulfillment and logistics technology in America. This in turn means Kroger customers will get fresher food faster than ever before.”

Speaking of faster than ever before: Kroger made good on that promise a few days before the call, when it started quietly testing 30-minute grocery delivery in Cincinnati via a new program called Kroger Rush. Users download a specific app, also called Kroger Rush, to order items and have them delivered. As The Spoon’s Chris Albrecht pointed out, that service seems to be aimed more at delivering last-minute lunch or dinner, though it’s not hard to imagine a point where Kroger might digitally replicate the “express lane” concept at brick-and-mortar stores, which speed up the checkout process for customers getting just a few last-minute items.

Kroger’s delivery-centric Q1 underscores something else Chris highlighted in his post from earlier this week: grocery retailers across the board are pushing the innovation envelope harder than ever as they compete with one another to deliver the fastest, most frictionless shopping experience to the customer. The race for the virtual grocery store aisle has really just begun.

Walmart, Target and Kroger Make Moves to Deliver Your Groceries Faster

Ever since Amazon bought Whole Foods in 2017, grocery chains big and small have upped their technology game to make sure they aren’t crushed by Bezos’ behemoth. The result has been more options than ever for grocery shopping, pickup and delivery.

This battle is far from over, and in the last week alone, grocery giants Walmart, Target and Kroger have made moves suggesting the fight has only just warmed up.

At the end of last week, TechCrunch uncovered Walmart’s Delivery Unlimited subscription service. For $98 a year, customers can order groceries for delivery without having to pay the $9.95 delivery fee.

Meanwhile, Target last week announced it was expanding same-day delivery for more than 65,000 items on Target.com for a flat fee of $9.99 per order. Customers must have a Shipt account (Target owns Shipt), which costs $99 per year.

Not to be outdone, Supermarket News reports Kroger has been quietly testing out a new service in its hometown of Cincinnati, OH called Kroger Rush that will deliver groceries in a half hour. Users must download the Kroger Rush app and pay a $5.95 fee per order, and the service seems to be aimed at people who want to order lunch or dinner online at the last minute. If that weren’t enough Kroger also broke ground on its first Ocado-powered smart shed, also in Cincinnati, which will use robots to facilitate faster grocery fulfillment and delivery.

For its part, Amazon has been relatively quiet lately in terms of hard announcements (well, if you don’t count its plans to launch a drone delivery service “within months”). The latest grocery rumblings we heard from the Seattle tech giant were around a possible Amazon-branded grocery store chain, though nothing official has been announced.

The bigger point in all of this is that grocery retailers are pushing innovation faster than ever. It shouldn’t come as a surprise, then, that both Walmart and Kroger made our list of Food Tech 25 list of Companies Creating the Future of Food in 2019.

Perhaps things are heating up because it’s the start of summer (pardon the pun), and with kids home from school, more groceries are needed around the house. Whatever the reason, the big players are accelerating their friction-free shopping experiences that will bring food to your front door faster than ever.

Walmart Launches In-Fridge Delivery, Will Shoppers Let Them In?

Today, Walmart announced Walmart InHome, a new service today that not only delivers your groceries but also puts them into your fridge while you’re away.

InHome will be available this fall for 1 million customers across Kansas City, MO, Pittsburgh, PA and Vero Beach, FLA (Florida gets everything). Walmart shoppers at participating stores will be able to select the InHome delivery when they place an order. Delivery people will be granted access through a homeowner’s existing smart home/lock set up. The Walmart delivery people will also be wearing connected cameras, and will livestream their delivery, which the customer can watch on the Walmart app.

There are some things Walmart didn’t call out specifically with today’s announcement. We don’t know how much an InHome delivery fee will be as opposed to standard delivery. And Walmart said the delivery drivers would undergo an “extensive training program,” but didn’t mention anything specifically about background checks. And the company didn’t say whether the livestream of the driver includes audio or two way communication.

This isn’t the first time Walmart has tried to go from grocery aisle to home fridge. About two years ago, the company partnered with smart lock maker August and third-party delivery provider Deliv for an in-home delivery service, but that obviously didn’t pan out as people can now use whatever smart locks they have to grant home access.

Walmart’s persistence however, comes at a time when its arch rival, Amazon, is trying to make deliveries into your home as well with its Key program. Rather than having drivers wear cameras, Amazon works with a series of approved smart locks and connected cameras to stream deliveries. Perhaps seeing that people were squeamish about letting strangers into their homes, Amazon has also launched delivery into a shopper’s garage (one step removed from the actual house), as well as into car trunks.

The question remains, however, for both Amazon and Walmart, exactly how many people will let strangers in their house (even while livestreamed) and into their fridge.

Farm-to-Table Delivery Service GrubMarket Raises $25M in New Funding

GrubMarket, a kind of on-demand farmer’s market that will deliver goods right to your door, announced it has raised $25 million in an oversubscribed C1 round (hat tip: TechCrunch). The round — originally meant to be $15 million — was led by WI Harper Group and Digital Garage, with participation from Evolv Ventures, Arancia International Inc., University Growth Fund, and CentreGold Capital. Existing investors also participated: ACE & Company, GGV Capital, Fusion Fund, Bascom Ventures. This latest round brings GrubMarket’s total funding to $89.1 million.

The company sources food directly from farmers then sells it online to individual consumers, businesses, and as wholesale to other businesses. Right now, the company counts WeWork and Whole Foods among its clients.

To use GrubMarket, one need only sign up for an account, fill a shopping cart, and pick a delivery date. You can also opt to pick your order up at a farmer’s market or in some cases directly from the seller. There’s no subscription required to use the site, which offers free delivery on orders over $39.99 and a $5.99 fee for smaller orders.

It’s not a bad deal for sellers, either, who can set up a virtual storefront in minutes on the GrubMarket site and get access to a potentially larger audience through GrubMarket’s customer base.

But as far as that customer base goes, GrubMarket will have to work hard to compete, as it has a growing amount of company in the farm-to-table-delivery space. Farmbox Direct ships its organic produce nationwide. Good Eggs raised a $50 million Series C round in May of 2018, and in Europe, and in the UK, Farmdrop closed a £10 million round to deliver its predominately organic and local goods to consumers.

GrubMarket, who is inching towards an IPO, told TechCrunch it plans to use the $25 million funding for new technology and more acquisitions. It’s done a couple of the latter, including Southern California’s Chasin Foods in January and FarmBox SF in 2016.

For now, the San Francisco-based company only serves counties in the Bay Area: Santa Clara County, San Mateo County, Alameda County, San Francisco County, Contra Costa, and Marin County.

Kroger and Nuro Expand Self-Driving Grocery Delivery to Houston

They say everything is bigger in Texas, but soon, diminutive electric vehicles will be autonomously shuttling around Houston, as Kroger announced today it is expanding its self-driving grocery pilot with Nuro to Texas’ largest city.

Kroger began its self-driving partnership with Nuro in Scottsdale, AZ in August last year and in that time has made thousands of deliveries, according to today’s press announcement. The expansion into Houston will involve two Kroger stores serving four zip codes:

  • Store One: 10306 South Post Oak Road, Houston, TX, servicing 77401 and 77096
  • Store Two: 5150 Buffalo Speedway, Houston, TX, servicing 77005 and 77025

Today’s news comes a little over a month since SoftBank invested $940 million in Nuro, which makes the R1, a pod-like, electric low-speed vehicle. They are about half the size of a traditional car and have a top speed of 25 mph. But Houstonians won’t see those pods on the street quite yet. Similar to the Scottsdale program, the Houston roll out will initially use self-driving Toyota Priuses, before shifting to Nuro’s R1s next year.

While the pilot in Scottsdale has evidently generated enough positive results to expand the program to a more populated city like Houston, there is still a bigger question over whether people want self-driving vehicles for grocery delivery. Part of the value in grocery delivery is the delivery person, who lugs heavy bags from the curb to your front door (or up your steps). This is one reason Nuro’s self-driving rival, AutoX, is putting more emphasis on its restaurant food delivery business.

Kroger didn’t provide a specific launch date for its Houston delivery, only saying that it will start this Spring.

Autonomous grocery delivery is definitely something we will be talking about at our upcoming ArticulATE food robot conference next month in San Francisco. AutoX’s COO, Jewel Li will be speaking as well as Ali Ahmed, the CEO of Robomart, which also uses pod-like vehicles to get you your food. Get your tickets today!

ArticulATE Q&A: Albertsons on What it’s Looking for From Robots

Robots are on the verge of transforming everyday grocery shopping into something more sci-fi. From shelf-scanning robots to self-driving delivery to your door, the food retail biz has been surprisingly aggressive in its moves to modernize.

Albertsons is not immune to this wave of automation. The grocery giant is piloting a robotic micro-fulfillment center built into the back of one of its stores through a partnership with the startup Takeoff. These robot centers will drastically shrink the amount of time it takes to process online orders, allowing for faster delivery or curbside pickup.

Narayan Iyengar is the SVP, eCommerce & Digital at Albertsons, and he is among the luminary speakers we’ve lined up for our upcoming ArticulATE food robot and automation summit in San Francisco on April 16. You should get a ticket and join us! To give you a sense of the great conversations that will take place, we did a brief (and lightly edited) Q&A with Iyengar to get a sense of how Albertsons is weaving robotics into their overall retail experience.

What is Albertsons looking to find out with this robotic fulfillment center pilot that you’re doing with Takeoff?

Iyengar: I think the space is actually quite exciting and evolving very fast and to me, there are a couple of different ways of thinking about this for grocery home delivery in general. There are multiple models of grocery, there is the big central fulfillment type model that works in some pockets and some cities in the US. Then there is a store-pick model, which we and several other third-party delivery services pick from our stores and deliver, let’s called that model two. But as volumes increase, we have to find a model that makes economic sense as well as uses the existing supply chain, “cool chain” and the merchandise to be able to serve customers same day or early next day.

So when we all look at the models that are available out there, does it cut across all three things: One does it use the existing flow for fresh [food]? Two, does it use the existing supply chain? Three, will it drive down the price for picking and packing?

So, as a part of this pilot they’re trying to test the three things: One, prove out that this model would work. That is to say, we collect the order, we have an automated system that picks and packs the groceries, and then we deliver it to the last mile. Second is to see if this particular technology vendor is the best at executing this model for us. And the third one is to test out the integration, because the robotics, it’s just one part of it. The rest of the model needs to work as well: the website for the app, the inventory management, all of that needs to get integrated.

How does Albertsons view automation overall? How are you learning to design a workforce that includes both humans and robots?

This particular Takeoff technology, yes it’s robotic, yes it’s automated, but when you look at practical solutions that work, they tend to be a lot less “sexy” than you think. They are very practical, it’s got a bunch of conveyor belts that bring totes of items that humans pick from. So, it dramatically reduces labor hours required to do a certain task. It’s robots and automation helping humans be faster.

Automation has been the standard thing in the retail and grocery industry for many, many years now. And so this essentially is technology that miniaturizes that and puts that within a store in a smaller footprint. Broadly speaking, I think everybody is in the process of testing and learning at the store level to see what does automation and robotics look like. Many of them will not be ambulatory robots that resemble the sci-fi movies, they’ll be much more mundane and down to earth, but extremely practical.

So our approach to testing all of this from a labor management perspective and so on is we have a design a new system for Takeoff, for this solution that they are piloting. We are going to design a new process, a new way of working which includes aspects of what the automated system does best, and how do you build the workflow around it? How do you manage the ordering process around it? How do you pick and pack? And how do you do the layout of micro-fulfilment centers in a way that maximizes the value of this automated system? So the layout, the labor process — all that needs to be thought through and redesigned, which is a part of what we hope to accomplish in this pilot.

What are the specific needs for grocery as Albertsons consider automation?

I mean it’s no surprise here really, but there are three or four broad things. The first one is the fact that you are dealing with fresh produce, it has its own set of logistical challenges that need to be addressed. The way you pack it is different, you cannot pack a hot rotisserie chicken along with ice cream, for example. You have different zones that you have to consider not just for transportation, but also when packing. The cool chain becomes important because the quality of items you’ll receive will be heavily determined by temperature staying within the relatively narrow zone throughout: from the time that fish is caught all the way to the time you’ll cook it. So the fact that you’re dealing with fresh and the cool chain needs to be considered and that makes grocery very different.

The second challenge that needs to be considered is that grocery is often a very large number of SKUs. Traditional e-commerce, you go to buy one item. You end up with a couple other things [in your] cart so you end up having three, four, five item tops when you buy anything. You buy a television, you probably buy a couple of cables next to it and maybe a speaker; a pair of shoes, you buy a couple of pairs of socks… For grocery, the average basket it 30 to 40 items, and many of those items cost $2 or $3. It’s a high number of items, so you’ve got to design a system that works towards a set of items that can be picked in a high degree of repetition.

And the third one is the repeat nature of purchasing. Grocery shopping is a habitual thing. People are used to doing it in a certain way because unlike other items that you often buy once in six months, once in three months — I mean, how often you buy a pair of shoes that or a television set, right? — food is something that you buy multiple times a week. You keep running out of milk or eggs or other things and end up going to grocery store and reordering very, very frequently. So the entire chain, both the interface as well as the delivery system, lends itself very well to habit formation.

How are Albert and customers treating online shopping and have you noticed them trending towards delivery or pick up?

Well, it’s a bit of both — I mean, we’re seeing good traction for our home delivery, both our own home delivery as well as Instacart partnership and so on. We are also seeing ‘drive up and go’ grow in all the centers that we offer it. I think the grocery market is so large and basically everybody has a stomach, and you have absolutely as many different preferences as there are people.

So, we are seeing there’s a certain section of the population that wants immediate delivery, and [is] willing to pay a premium for it. There’s a certain set of people who are more methodical and do the stock up trip, they plan a couple of days in advance and they order in bulk, we have solutions for that. And there is another set of people that want to order online but they don’t want to be tied to being at home at a certain point in time. So for them drive up and go works fine because you order and then you can pick it up any time after two hours from the time you order, so it fits well with that schedule.

What is your favorite fictional robot?
Giant Robot (from Johnny Sokko) is really cool!

AutoX Eyes Expanded Restaurant Delivery for its Self-Driving Cars

AutoX, the startup that made a splash last year with its self-driving grocery delivery + mobile-commerce solution, expanded into the hot food delivery space, and is now working with 14 restaurants in the San Jose area.

When it launched its first pilot, AutoX caught our eye because the company wasn’t just making straight grocery deliveries. It also outfitted its self-driving cars with li’l mini-marts in the backseat of the vehicles, so people could make additional purchases on the spot.

AutoX quietly expanded into restaurant delivery about a month ago, and at the recent CES show in Las Vegas, its autonomous cars delivered food from Applebee’s to hungry press and attendees. According to Li, one of the reasons AutoX likes restaurant delivery is that it can easily make multiple deliveries, reducing the amount of time the car spends empty.

Autonomous car delivers burgers at CES

Another reason hot food is appealing is that when a driverless car arrives with your groceries, there is no driver to help you carry them in. Hauling heavy bags of groceries could be a problem for older people or those living many flights of stairs up. You don’t exactly have to lug a burger and fries.

That’s not to say AutoX is abandoning its grocery roots. Far from it. Li says that they will just adapt their platform accordingly. “We’re exploring how to better use our technology,” said Li, “Maybe we don’t deliver to apartment buildings for groceries, or we do some kind of reward for coming downstairs.”

Additionally, the company is bringing its self-driving technology to minivans, which would allow it to make multiple grocery deliveries along one route.

There is increased competition for AutoX, however, on all sides and in its own back yard. On the restaurant front, DoorDash recently started testing self-driving car deliveries in San Francisco. For groceries, Udelv uses autonomous delivery vans to deliver food from Farmstead. And elsewhere in the Bay Area, Robomart just announced a self-driving mobile commerce partnership with Stop & Shop.

AutoX, however, may wind up partnering with some of its competition down the road. Right now the AutoX app serves as the marketplace for users to place restaurant orders, but eventually, Li said, the company’s self-driving fleet could be a delivery option for customers on a different platform like Uber Eats or DoorDash.

AutoX is part of a larger automation trend disrupting and transforming the food industry. If you’re interested in how self-driving technology and other food robotics will shape the meal journey, be sure to attend out Articulate summit in San Francisco on April 16!.

Walmart Adds Grocery Delivery Partners, but How Long Will They Last?

Walmart announced yesterday that it has added four new online grocery delivery partners to its roster: Point Pickup, Skipcart, AxleHire and Roadie. Walmart says it currently offers delivery in 800 stores and will double that number by the end of this year.

This announcement follows several moves Walmart’s made over the past year to expand its grocery delivery options. The company also works with Deliv and DoorDash, and Walmart subsidiary Sams Club has a partnership with Instacart. But one has to wonder how long these relationships will last, given some of the other moves coming out of Bentonville.

In September of last year Walmart announced Spark, its own crowd-sourced delivery platform. At the time of that announcement, the company said it wanted to “learn even more about the full last-mile delivery process,” which reads like it is interested in keeping and controlling more of the data generated around grocery delivery rather than handing it over to third party delivery services.

Walmart is also making moves that leapfrog human delivery drivers altogether. The retailer started a pilot in November with Ford and Postmates for delivery via self-driving car. And at CES last week, Walmart hooked up with Udelv for grocery delivery via that company’s self-driving cargo vans.

True autonomous car deliveries are still a ways off, as state and local laws around driverless vehicles are still being worked out. But it’s not hard to imagine Walmart ditching its third party delivery partners, combining its homegrown delivery service with some sort of autonomous delivery to manage and control the entire delivery stack. In addition to owning the entire customer relationship, the software that drives delivery vehicles can report back logistical information that helps Walmart further understand its customers (geographies, order times, frequencies, etc.) and refine the delivery process (better routes).

Given the aggressive nature of Walmart’s actions in its grocery battle with Amazon and Kroger, I wouldn’t be surprised if the company went the mobile commerce route as well, perhaps even leasing Robomarts. These self-driving stores on wheels can be more efficient than strict delivery vehicles because they spend more time making money (no travels back to HQ, empty), and they also act as big, roving billboards with Walmart branding.

Again, that’s a ways off, but online grocery sales tripled from 2013 to 2018, and are expected quadruple over the coming years. Walmart is making moves like these new partnerships to expand its delivery footprint now, but with all of the company’s other machinations, how many of these third-party partners will it need when online grocery ordering and delivery becomes the new normal?

Report: Amazon Building More Whole Foods, Will There Be Room for Robot Fulfillment?

Never let it be said that Amazon slows down, even during the holidays. The Wall Street Journal reports that Bezos’ behemoth has plans to add more Whole Food stores across the country so its two-hour grocery delivery service can reach even more people.

If true–The Journal’s story is based on “people familiar with the plans”–the news isn’t terribly surprising. Amazon is very competitive and has a history of sacrificing profitability for aggressive growth. A Progressive Grocer report earlier this year ranked Amazon as the eighth largest grocer in the U.S. And although Amazon is the leader in online grocery sales, a recent report from Brick Meets Click shows that shoppers spend way less with Amazon than they do with other grocery retailers.

Walmart, the largest grocer in the U.S. has 4,700 American locations, and the company says it has a store within 10 miles of 90 percent of the population. Walmart was on track to make same day delivery available to 40 percent of the U.S. population by the end of this year, and has a goal to make it available to 60 percent by the end of next year.

Whole Foods, on the other hand, has 470 locations (including in the U.K. and Canada) with two-hour delivery available to Amazon Prime members in 63 cities. So you can see how Amazon is playing catch up here. The question is how they will catch up, and that’s not just about the number of stores.

Part of The Journal story says that some of the spaces Amazon is looking at are slightly larger than the average Whole Foods locations, with the extra space being use for delivery and pickup. Does this mean that Amazon could be jumping on the in-store robot fulfillment center bandwagon?

Albertsons, Ahold Delhaize and Walmart are building out robot fulfillment centers in their stores to facilitate super-fast online grocery order fulfillment (Kroger is building out dedicated standalone robot warehouses). Amazon is already big into robotics in its warehouses, and started experimenting with half hour grocery pickup in select Whole Foods. For a company dedicated to efficiency and speed, it wouldn’t be a surprise to see some sort of automation being built into new locations from the ground up.

Amazon’s purchase of Whole Foods in 2017 scared and catalyzed the grocery industry into spending money and innovating throughout 2018. If Amazon is ramping up its geographical presence, and it seems likely it will, buckle up because 2019 is going to be a wild ride for everyone in the grocery game.

Kroger Shifts Driverless Delivery Program into Higher Gear

Kroger announced today that it is ejecting humans from its autonomous delivery vehicle pilot, and going full-on, self-driving car with expanded availability.

Since August, the grocery retailer has been working with robotics company Nuro, testing grocery delivery via autonomous vehicles in Scottsdale, AZ. The initial test run completed close to one thousand deliveries. However, those were all done in self-driving Toyota Priuses, which still had a human in the car, presumably for safety reasons.

Today, Kroger is kicking the people to the curb and kicking the self-driving delivery into a higher gear as it adds Nuro’s autonomous R1. The R1 is a pod-looking vehicle that can only carry cargo with literally no place for a driver.

The two companies are calling this pilot expansion “the first-ever unmanned delivery service available to the general public,” which appears to be true, but it’s certainly not the only self-driving delivery service tests being run right now. Online grocer Farmstead has been running autonomous delivery in the Bay Area with Udelv. And in San Jose, CA, AutoX has been running its own driverless delivery test.

Kroger and Nuro’s approach is a little different as it lies somewhere between traditional delivery cars and the newer, smaller-scale rover-style robots. As noted earlier, the R1 is a completely unmanned vehicle and only transports goods. It travels at less than 25 miles per hour and is half the width of a regular car. This means it can be more nimble than a traditional full-size car when navigating traffic and pedestrians, but it also can’t travel as fast, limiting the delivery radius.

Kroger and Nuro are still in the midst of testing, and full autonomous delivery vehicles are still a ways off as the technology needs to improve and city and state regulations need to be developed to keep up with the technology. However, if you’re in the Scottsdale area, and want to experience a driverless vehicle pulling up to your house delivering your groceries, here’s how you can try it out:

Where: Fry’s Food Stores (single location): 7770 East McDowell Road, Scottsdale, AZ 85257
When: Customers can place delivery orders immediately, for delivery 7 days a week
How: Customers shop via frysfood.com or the Fry’s Food Stores mobile app and place their order based on slot availability
What: Grocery orders can be scheduled for same-day or next-day delivery by Nuro’s fleet of self-driving vehicles
Price: $5.95 flat fee; no minimum order

If you do order, let us know how it goes!

Startups! They’re Just Like Us! Amazon and Instacart Break Up

Like Ben and Jennifer, Brad and Angelina, and Cardi B and Offset*, Instacart and Amazon have broken up. In a blog post today, Instacart announced that it was winding down (consciously uncoupling?) its grocery delivery relationship with Amazon.

Like with so many other power couples, this breakup wasn’t entirely a surprise. Instacart and Whole Foods first hooked up back in 2014. The two then put a ring on it, as it were, with a five year deal signed in 2016. But then Amazon came in and bought Whole Foods in 2017. Totes Awk!**

Amazon has it’s own delivery service, so we kinda knew Instacart was going to be on the outs soon enough. The split will begin in earnest in February and continue ramping down over the months that follow.

The news itself has been extensively covered already, but what we are most interested in is: How is Instacart taking this, and what will they do next?

For its part, Instacart seems to be doing just fine. Whole Foods had been playing an increasingly smaller role in Instacart’s overall business. Whole Foods reportedly represented just 5 percent of Instacart’s revenue, down from 10 percent of revenue the previous year.

At least Instacart can sleep easy at night on its giant pile of VC money. Throughout 2018, Instacart has raised $950 million. So it’s got some runway to get out there, and meet new people. Actually, it’s been doing just that, expanding its relationships with Sam’s Club and Kroger.

Despite all that good news, I’m still a little worried about Instacart falling into the same patterns of relying on others. Sure it’s got some new partners, but where is the innovation? Team InstAzon announced their breakup on the same day that Postmates unveiled a shiny new delivery robot that it built in-house and will be scurrying around neighborhoods next year.

Kroger, too, is showing signs that it may not be Team Instacart 4EVR. It’s started building robot-powered smart warehouse and distribution centers (no need for Instacart’s human shoppers there) and testing out self-driving grocery delivery vehicles with Nuro in Scottsdale, AZ.

Hopefully, this break up will give Instacart the “me” time it needs to figure itself out, maybe finally take up robotics (or drones) and get to a place where it can live its best life.

*I’m too old to know who Offset is, but my millennial colleagues assure me that it’s worth putting him in there.

**Again, my millennial colleagues assure me that this is how the kids talk. Though I’m not sure why they had to stifle a laugh when telling me that.

Farmstead Raises $2.2M for its AI-Driven Grocery Retail and Delivery

Farmstead, an online grocer that uses artificial intelligence (AI) to predict product demand, today announced that it has raised $2.2 million in venture funding from ARTIS Labs, Resolute Ventures, Y Combinator, Red Dog Capital and other investors. This brings the total amount raised by the company to $7.5 million.

Farmstead‘s hook is that its stores don’t overstock and try to carry every item. Instead, their goal is to carry just enough of the items people want so that have enough to meet demand, but not so much inventory that it goes to waste. As we wrote back in March:

[Farmstead] can get away with carrying such a small inventory because its AI platform predicts the items customers will want and orders just the right amount. To do this, Farmstead combines historical sales data and current trend data with consumer recommendations and external factors, such as holidays and product sell-by dates. Its machine learning processes these data points to assess which items to carry and how many it should stock at any given time.

At that time, Farmstead was focused on creating smaller micro-hubs that could be placed deeper into residential areas (because they are smaller, they could sidestep zoning restrictions). However, it seems like the company is moving away from that strategy somewhat. When I spoke with Farmstead CEO and co-founder Pradeep Elankumaran in October, he said that the company was actually using one larger facility in San Francisco.

In October, Farmstead announced that it had been running a pilot program delivering groceries via Udelv’s autonomous delivery vehicles. Udelv differs from other self-driving platforms in that it uses actual delivery vans. As we noted then, the idea of a van controlled by code is compelling for a grocery delivery company because of all the data it can collect, which can in turn be used to make delivery routes more efficient.

More than $3.5 billion has been invested in food and grocery delivery startups this year. Farmstead will need to bolster its coffers as it goes up not only against giant food retailers like Amazon and Walmart to sell you your food, but also well-funded delivery/logistics startups like Instacart, which have raised hundreds of millions of dollars to bring your groceries to your door.