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The Spoon

Daily news and analysis about the food tech revolution

grocery shopping

Is Grocery Shopping’s Future Bringing Your Own Containers? Pete and Gerry’s Is Finding Out.

A trip to the grocery store creates a trail of packaging, much of which is plastic, that is mostly destined for a dump, sometimes a recycling center, and sadly, too often, the ocean.

Some supermarket chains are trying to do their part to reduce waste, with the latest being Giant Eagle, which has pledged to phase out single-use plastics by 2025. However, moves like these, while noble, don’t account for the waste produced by the packaged products on store shelves, from cans of beans, pints of ice cream or cartons of eggs. That latter one is getting some attention now from Pete and Gerry’s, the organic egg company.

The company announced in a press release yesterday that it has been trialing a reusable egg carton at co-op food stores in New Hampshire and Vermont. The cartons are made of recycled, durable, BPA-free plastic that can be washed at home and reused repeatedly, according to the release. Once a consumer buys the carton for $2.99, they can fill it up from the Pete and Gerry’s display of loose eggs, which are discounted from a standard dozen. More than 500 of the cartons have been sold, Fast Company reports.

Pete and Gerry’s said that an average American who eats 279 eggs per year would save more than 1,800 cartons from entering the recycling and waste stream by using the reusable carton. On a larger scale, if every one of the 327 million American did so, more than 594 billion cartons would be out of circulation. Pete and Gerry’s said that it’s looking to bring the program to more stores.

One aspect of a reusable anything is that customers must bring it with them whenever they go shopping. At their core, these items inconvenience the customer. And introducing them requires companies to be brave enough to add some friction between them and a transaction. 

One company doing so is Blue Bottle Coffee, which announced last week that “by the end of 2020, all of our US cafes will be zero waste.” The company means it: it asks customers to bring their own reusable cups, or will charge them a deposit to use one of the cafe’s, and will sell whole bean coffee in bulk to customers with their own containers rather single-use bags.

Eventually, our standard should require the use of reusable containers. The tactic taken by many food companies is to switch to materials that are more easily recycled. Clearly, this won’t be good enough. Recycling has proven to be ineffective while the world continues to drown in plastic.

The future of food shopping should be a little more difficult for everyone, especially for those who can afford it, for the sake of the planet. “Zero-waste stores” are already attempting this, demanding that their customers bring their own containers. Larger grocery chains and consumer packaged goods companies need to step up and expand efforts such as the delivery service Loop, which utilizes reusable containers.

The planet has suffered because of our thirst for convenience. It’s time for more companies to step up and demand customers give up some of that convenience.

Takeoff, eh? Canada Grocer Loblaws Testing In-Store Robotic Micro-Fulfillment

Loblaws, Canada’s largest grocery chain, announced this week that it was piloting Takeoff Technologies‘ robot-powered micro-fulfillment center in one of its stores. Supermarket News reports that the two companies have already started building out the center in Toronto and will fulfill orders for Lawlaws’ PC Express pickup service next year.

Typically built into the back of a retailer, Takeoff’s automated fulfillment centers use a series of totes, rails and conveyors to shuttle food items around. Once an online grocery order comes in, totes automatically bring the items to a human who assembles them into bags that go out to the car. According to Supermarket News, Takeoff’s system can gather grocery orders of 60 items in less than five minutes. You can see the Takeoff robots in action here.

Ideally, micro-fulfillment technology like Takeoff’s allows retailers to convert un- or little-used space into more productive and revenue-generating areas for a store while creating a faster, more convenient online grocery shopping experience for customers. Online grocery shopping is still a small percentage of overall grocery spending, but it’s growing, and automated fulfillment (and the holidays!) could help spur more food shopping from home.

This new partnership expands Takeoff’s reach across North America and into Canada and adds another high profile partner for the startup. Here in the U.S., Takeoff already has a number of pilots going on with Sedano’s, Albertsons, Ahold Delhaize and Wakefern.

While Takeoff has a few partnerships it can point to, there are plenty of automated fulfillment players getting into the game or trying out different approaches to fulfillment. Alert Innovation also builds in-store fulfillment and has partnered with Walmart on a pilot location. Fabric just raised $110 million and moved its headquarters to the U.S. to expand its robotic fulfillment presence here. And instead of inside its stores, Kroger is building 20 standalone robot-powered smart warehouses domestically.

Despite all this, automated fulfillment is still in the early days of testing, and it remains to be seen if and how it will impact a retailer’s bottom line. As more of these systems come online in 2020, we’ll definitely see if they fulfill their robotic promise.

Gallup: 81 Percent of Americans “Never” Order Groceries Online (But That’s Still Good News for Grocers)

A survey out from Gallup last week showed that the vast majority of Americans are not shopping for groceries online. According to Gallup, “Eighty-one percent of Americans say they never order groceries online, while 11% say they do so at least once a month.”

Gallup posited the following explanation for American hesitancy when it comes to online grocery shopping, writing:

The slow adoption of online food ordering could indicate that people enjoy picking their own groceries in person or that they don’t see sufficient savings of time or money to justify the switch. The delivery charges that go along with food delivery may be a factor in that.

That sounds pretty dire for the grocery industry, which is investing pretty heavily in online ordering and fulfillment mechanisms. But one of the good things about this stat is that we have a similar Gallup poll from almost exactly a year ago to compare it to. If you are looking for a silver lining, last year Gallup found that 84 percent never bought groceries online. So there’s been a three percent drop in the number of “nevers.”

Additionally, there’s more (relatively) good news to be found if you dig into the numbers a bit. Last year Gallup found that 14 percent of adults with children under 18 bought groceries online at least monthly. The 2019 survey found that 19 percent of those with children under 18 bought groceries online at least monthly. So if you’re playing the (very) long game, there are more families online grocery shopping, and they are raising a new generation that will grow up believing online shopping is the normal way to get groceries.

The Gallup stats should be taken as a piece of a bigger set of data around the evolution of grocery shopping. While it was small, Gallup did find an increase in the number of people who have at least tried online grocery shopping this year. In May, Coresight Research found that between 2018 and 2019, there was an increase of 35 million people who shopped for groceries online. And in July, a Field Agent survey found that 66 percent of its respondents expect to be buying their groceries online in the next five years.

Having said all that, in-store shopping is still the way to go when it comes to groceries for most Americans. Gallup’s 2019 found that 83 percent say that they shop at grocery stores at least once a week, which is why the biggest opportunity for grocers may be investing in curbside pickup (which many are already doing). Curbside pickup allows people to maintain their regular life schedules, and gives them an opportunity to inspect items at the store in case any need to be returned.

My guess would be this time next year, Gallup will show another year of incremental growth in online grocery shopping. But as big investments from Walmart, Kroger and Albertsons move out of testing and into real life, the adoption for online grocery shopping will accelerate soon after that.

Study: People Like Shopping In-Store to Evaluate Products

They say you eat with your eyes first. When it comes to shopping people still like buying items they can see and feel. EMarketer has a story about a recent study from Adeptmind, which asked people what the biggest perk of shopping in-stores was. The answer, overwhelmingly, was that people like to evaluate products in person for quality and size.

Though the Adeptmind study was about shopping in general, it bolsters an eMarketer survey from March of this year that found 96.1 percent of respondents primarily shopped for food and beverage products in-store vs. digitally.

These findings may seem obvious if you’ve ever had to wait in a very long line at the checkout stand — lots of people still shop in grocery stores. When it comes to items like produce, especially, consumers like to evaluate its quality in person.

The need for people to evaluate food in-person could also provide a value add for retailers offering curbside pickup. It marries the convenience of online ordering and fulfillment, and could also allow customers to check produce quality on the spot and ask for any returns before driving off.

Coolhobo Brings Augmented Reality to Chinese Millennial Shoppers

While the name “Coolhobo” might conjure up an image of an old-timey drifter with a bindle and a sweet leather jacket, it’s actually a slight mispronunciation of the Chinese word for “carrot” (胡萝卜).

Based in Shenzen, China, Coolhobo is an early-stage startup that does augmented reality shopping and is aimed at Chinese Millennials. Though it could be used for any type of shopping, the company is starting with groceries. Coolhobo is creating a mobile app that allows shoppers to find desired products in a store, discover more information about them and share their experiences in a social setting to make shopping more fun.

As Coolhobo Co-Founder and CEO Loïc Kobes explained it to me, when the app is launched, users will be able to choose a product they are looking for (for example, a particular bread), and the app will tell them what store close by carries it. Once in the store, a cute Coolhobo virtual assistant pops up in the app to direct the user to the product’s location. Customers point their camera at the item and an array of floating information flitters about on-screen about the product, including nutrition and preparation information, as well as reviews from other customers.

Show is better than tell, so here’s a Coolhobo demo video that walks you through the experience:

AR Shopping by Coolhobo, Adding features and testing new UI

Kobes said that Chinese consumers really like imported products, but there isn’t a lot of information about them. Coolhobo provides that information, and can help customers choose between two similar imported items. But even once they choose something, “People need help to understand how to prepare it, how to cook it,” said Kobes.

Kobes described Coolhobo as a B2B and B2C company, and said he’s in partnership talks with a number of Chinese and international retailers. He said the app is scheduled to launch in June or July. Kobes took an earlier version of Coolhobo through the SOSV accelerator program, and is currently raising a seed round of funding.

According to Kobes, China is far ahead of the U.S. when it comes to shopping experiences, and, in particular, integrating mobile technology into them. This summer, we’ll see if Coolhobo’s augmented reality will be enough of a carrot for stores and consumers to sign up for the experience.

Next Gen Grocery: The Future Market Looks At The Future Of Food

Mike Lee spent time as a kid marveling at concept cars at auto shows in Detroit. “This huge auto industry institutionalized the tradition of creating a non-production model concept whose sole purpose was to show the world what that company was dreaming about for the future.” Lee grew up and went searching for that kind of tangible look at innovation in the food world – and couldn’t find it. So he founded The Future Market, a futurist food project that looks at the ways food might be produced and consumers might shop for food in the future. Through concept products, specialized events, working shops and live engagements, the Future Market aims to be at the center of conversations around what our food systems will look like many years from now.

The Future Market focuses on two core areas of work – one is helping big food companies partner with startups and embed innovation into their own companies to act more like startups. Their innovation food platform, Alpha Food Labs, is a project designed to work with large corporations and food producers to help them maneuver faster through rapid prototyping projects.

If you were in NYC this past June, you might have seen a live demonstration of Future Market’s other big area of work: a conceptual grocery store of the future. The Future Market’s grocery store of 2042 looks like this: you walk into a market, filled with foods of the future – synthetic food, nontraditional forms of protein, sustainable and local produce – and a food ID system that knows your food preferences and nutritional needs through real-time biometrics matches you with products that are perfect for your health profile and palate but also meet your budget and are sustainable.

A little intrusive? Maybe – but food is core to life and what we put in our bodies, whether healthy or unhealthy, impacts not just how we feel today but our future health and well-being. People are bombarded with what’s considered healthy and what’s not and are often confused about what choices to make. And we’re seeing more companies come to the table to try and provide personalized nutrition options based on our own DNA. The Future Market is analyzing these trends and working to show consumers how these technologies might actually make eating and shopping more straightforward.

But Lee isn’t just interested in showing consumers what the future of food looks like, he wants to enable more cooperation across industries working in the smart kitchen to drive innovation.

“There is no open-source, uniform data standard whereby every food manufacturer can record the nutritional info, ingredient lists, processing methods, and ingredient provenance information into. That may sound like a really unsexy thing, but it prevents so much innovation from happening in the smart kitchen space,” comments Lee. “Imagine the web without HTML—every site used a different, proprietary coding language to create web pages. The internet would be a mess of incompatibility. It’s the same challenge if you want to create a smart fridge that understands all the ingredients within every item inside of it. If we had a uniform data standard that all food companies shared, smart fridges would be so much smarter.”

Don’t miss Mike Lee, at the 2017 Smart Kitchen Summit. Check out the full list of speakers and to register for the Summit, use code FUTUREMARKET to get 25% off ticket prices.

The Smart Kitchen Summit is the first event to tackle the future of food, cooking and the kitchen with leaders across food, tech, commerce, design, delivery and appliances. This series will highlight panelists and partners for the 2017 event, being held on October 10-11 at Benaroya Hall in Seattle. 

Freshub Partners With Big Data To Make Smart Kitchen Shopping Easier

Freshub is one of the companies looking to own point-of-sale solutions for the kitchen. Home replenishment services and in-home grocery shopping have been buoyed by connected appliances like Samsung’s FamilyHub fridge and voice assistant devices like Amazon Echo.

Just a few months ago, the company launched the second generation of its software platform, enabling grocery ordering using natural language interfaces such as voice and gesture recognition on appliances and devices. Now Freshub is partnering with IRI, a big data and predictive analytics company that works with large retail companies to deliver relevant consumer data and analytics solutions.

The partnership will allow Freshub to have access to enormous amounts of data about what consumers like to buy, preferences based on the types of things they already buy and predictions about what they’ll want or need next. This is similar to Amazon’s suggestion engine, with recommendations for similar things that a shopper might want after they establish a buying history. The joint press release from IRI and Freshub also indicates “the relationship also will spur development of a range of additional innovative features, such as product-level health indicators.”

IRI Retail President David Hoodis commented,

“Retail and CPG companies can more rapidly adapt to the demands of today’s connected consumers by offering effortless and efficient shopping experiences.”

Having a platform that can offer this type of “if you buy this, then you’ll like that” platform for appliance and device makers to add to their connected kitchen offerings is appealing. The real story behind connected devices in the home is what will happen to all that data and how marketers can use it to make personal recommendations for each consumer in their home, and Freshub’s partnership with IRI could give them the data chops necessary to compete with the likes of Amazon and Google.

Dutch Grocery Delivery Service Picnic Cuts out the Middleman and Possible Profits

All eyes are on Amsterdam-based grocery-delivery startup Picnic, fresh out of a 100 million euro ($123.5 million dollars) investment from a number of Dutch firms which will allow them to fund a national rollout of their service. The Hague, the third largest city in the Netherlands, will be the newest marquee name added to the company’s delivery footprint. Picnic symbolizes hope for clever newcomers to digital commerce who believe they can make inroads in a David vs. Goliath battle for home shoppers.

Picnic, which is free to customers, works directly with suppliers to deliver fresh goods to homes using energy-efficient, custom-designed electric vehicles made in France and Italy. The company’s strategic advantage is its mastery of logistics; rather than following the lead of most on-demand delivery services, Picnic follows set routes somewhat akin to milkmen of the ‘50s and ‘60s.

The company piloted its service one and a half years ago in Amersfoort where it grabbed a sizeable market share from existing competitors. Picnic then expanded to Leusden, Soest, Utrecht, Maarssen and Almere with a warehouse in Utrecht. Picnic now has 90 electric carts roaming the streets of The Netherlands and has garnered 30,000 customers.

Despite the large investment, Picnic’s future is under debate. In addition to its free delivery, the company offers low prices but is faced with the enormous resources available to competitor Albert Heijn.  Owned by parent company Ahold Delhaize, Heijn is the largest supermarket chain in The Netherlands with ah.nl as its digital grocery delivery/in-store pickup business. Ahold, which has more than 1,000 stores Heijn stores, and owns the majority of U.S. online grocery retailer Peapod, has yearly revenue of more than 38 billion euros. Beyond heavily financed rivals, many question Picnic’s business model of free delivery. This begs the question as to whether Picnic is aiming become a major player or sell its logistics “value chain” to a larger competitor with a pan-European customer base.

In a 2013 report on the future of grocery delivery in Europe, McKinsey and Company, the consulting firm predicted that the market for online grocery will play out differently in different countries based on geography, product margins and consumer interest. It cited pricing, selection and online experience (including issues about payment security) as obstacles that had to be overcome to win marketshare, either in individual countries or across the continent. The past four years have shown McKinsey to be right on the money with its analysis.

The U.K. represents a microcosm of the dynamics of the European grocery delivery market opportunity estimated by Euromonitor to be worth about 10 billion pounds—representing a major tipping point. As in the Netherlands, competitive forces pit local supermarket chains Tesco, Waitrose, Morrisons and Sainsbury against online-only retailer, Ocado. Sensing the U.K. market was ripe for its massive reach, Amazon began its Amazon Fresh service in mid-June 2016 to Central and East London. It is Amazon’s first grocery-delivery foray outside the U.S.

Amazon’s service is available only to Prime Members which costs 79 pounds per year. On top of that fee, after one free month, customers pay an additional seven pounds per month fee on top of their Prime membership.  For each delivery over 40 pounds (weight) there is no additional charge; for smaller ones there is another four pounds tacked on.

And then there’s Asda, a large British grocery chain that is a wholly owned subsidiary of Walmart. With stores primarily in the North of England, its grocery delivery service was not highly rated by shoppers in a 2015 survey. However, it does provide the U.S. retailing giant with a base to invest and expand at any point.

Amazon Go Delays Public Opening Due To Tech Challenges

The Wall Street Journal reported yesterday that Amazon is delaying the public opening of its first fully automated grocery store known as Amazon Go. The store, which has only been open in beta to Amazon employees in the Seattle location, was supposed open at the end of this month. This is being pushed back, due to a few glitches involving tracking items and processing payments.

Amazon reported that it was experiencing technical problems with two key areas of its “Just Walk Out” technology – the company’s payment system was unable to handle or process payments when more than 20 people were in the store at a time. The system also struggled when an item was moved from its specific location on a shelf.

The traditional grocery store has been experiencing disruption for the last several years, with the rise of e-commerce giants like Amazon and Jet.com taking aim at consumer packaged goods (CPGs). Other rising stars like meal kit delivery subscriptions and grocery store delivery give consumers more options for fresh foods like produce and meat that don’t involve setting foot in a brick and mortar store.

But Amazon’s vision for the more convenient food store utilizes existing and emerging tech like connected sensors, machine learning, RFID tags and mobile payments to implement a cashier and checkout line-free experience for consumers. Not only does it create a streamlined door-to-door shopping event for the customer, but it cuts costs for the grocer – who in this case is Amazon – and could help impact the bottom line in a field where margins are shrinking.

And it’s clear why Amazon wants to build physical stores – as much as e-commerce is making grocers in North America rethink ways to attract customers with sales, fresh foods and produce and upgraded natural food and organic offerings, Nielsen’s 2017 research shows only 10% of consumers are currently shopping online for groceries. Amazon will need a multi-prong approach to remain competitive in grocery, especially when it comes to fresh foods and non-CPG items.

Amazon Go’s tech issues don’t seem major – but they are a good reminder that full-on grocery automation is hard. There are a lot of variables to consider, especially in a busy store, where customers are moving around, bumping into each other, moving merchandise without putting it back but not actually buying it. As a reminder to automation enthusiasts, earlier versions of what Amazon is trying to accomplish – self check-out kiosks – are still widely underused in grocery stores. And those of us who have used them know all too well that often, the light above the conveyer belt will inevitably blink when a customer has a problem, beckoning a store employee over.

So the future may be automated – but it’s not clear how seamless those shopping experiences will be, at least not yet. Amazon Go’s public opening and subsequent operations will certainly be telling.