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November 24, 2019

SKS 2019: Food Retail is Evolving Fast, but Some Things Aren’t Going Anywhere (Hint: Brick & Mortar)

The next time you step into a grocery store, take a look around and think about how much work went into orchestrating the selection. Which CPG products should the store stock? How many? And how does fresh food factor in?

Those questions don’t have an easy answer, and they’re the reason that food retail is such a tricky business. Thankfully, there are companies trying to reinvent the space with the help of tech, innovation, and creative thinking. And we heard from a few of them onstage last month during a panel at SKS 2019.

In the panel, Brita Rosenheim of Better Food Ventures spoke with Stefan Kalb of Shelf Engine, Mike Fogarty of Choice Market and Andreas Wuerfel of METRO Group about how companies are re-imagining food suppliers to be more sustainable, more efficient, and be better at serving quick-shifting consumer demands. 

You should check out the video below to get a deeper look into how companies are leveraging tech to transform food retail. First, here are a few high-level takeaways:

Food retail is changing — and fast
Kalb kicked off the panel by pointing out that the grocery space is in the midst of rapid transformation. “Because it’s a highly commoditized industry, changes spread quickly,” he said. His company Shelf Engine helps retailers stay on top of fast-moving trends by crunching customer data to forecast exactly how much of each SKU needs to be ordered. The more retailers they work with, the more data they get, the better they can help grocers optimize selection. Which, in today’s incredibly competitive food retail market, is crucial. 

Brick and mortar isn’t going anywhere
“In retail, the physical space is always going to be a quintessential part of people’s lives,” Fogarty told the SKS audience. Right now, only a small percentage of grocery sales happen online (though that number is growing). Physical retail space, he argues, will be an “anchor” for all the different sales channels that are emerging now, like pickup, delivery, vending machine, and more. 

Food retail is a slippery challenge. Tech can help
Wuerfel pointed out that optimizing retail in a company with a global presence (Metro has 750 stores in 35 countries) is, unsurprisingly, incredibly tricky. They have to “cater to every possible palate out there,” all while ordering the right number of products to reduce waste and maximize profit. To do so, Metro knew it would have to leverage new technologies. So it teamed up with TechStars to make an accelerator program to catalyze outside-in innovation for the company. That, according to Wuerfel, has helped their company stay on the cutting edge of food retail.

Check out the full video below to hear more insights from these three thought leaders in grocery and food sales. It’ll make you think a lot more the next time you set food in your local grocery store.

SKS 2019: Re-Imagining Food Retail

November 22, 2019

Walmart’s Jet.com Shuttering Fresh Food Delivery in NYC

Jet.com, which is owned by Walmart, is ceasing delivery of fresh groceries in New York City only a little more than a year after the service started.

Bloomberg first reported the story, writing:

The retailer will close a warehouse in the Bronx it was using to prepare orders and also let some drivers go, resulting in the loss of between 200 and 300 jobs, according to a person familiar with the decision. Jet — which will continue to sell dry groceries like cereal and other general merchandise — will inform customers of the news Friday and fulfill any existing orders already placed.

Jet’s move into fresh food delivery kicked off last year with a hyper-targeted focus on New York City. In addition to general fresh food, Jet also offered delivery of NYC-specific items from retailers like Bedford Cheese Shop, Orwashers Bakery and Just Bagels. (An interesting sidenote, around the same time as the Jet announcement, Walmart also announced it was acquiring Latin American online grocer, Cornershop. That deal also went bust after facing Mexican regulators).

But as Bloomberg reports, problems plagued Jet’s NYC service from the start with warehouse issues, product price fluctuations, hiked delivery fees and lots of items being out-of-stock.

Walmart acquired Jet.com for $3.3 billion in 2016 [–LINK?–]as part of an effort to expand its customer base and reach urban millennials. But a lot has changed since 2016, and even since 2017 when Jet launched the New York City delivery service.

Spurred on by Amazon getting into the grocery space, Walmart has been quick to expand its own grocery delivery and curbside pickup options independent of Jet. Walmart has been piloting automated micro-fulfillment for faster order assembly, is rolling out its Delivery Unlimited service to 1,400 stores nationwide this year, and is testing out in-home delivery.

And while Walmart lags behind Amazon is overall online grocery retail sales, research this year showed that Walmart shoppers spent more online per for groceries with Walmart than they were at Amazon.

Jet.com closing fresh food delivery in NYC wasn’t the first sign of its flagging importance to Walmart. Earlier this year Walmart conducted a sweeping overhaul of its Jet.com unit after it failed to meet expectations.

November 19, 2019

Kroger Partners with Infarm to Grow Greens in Grocery Stores

Kroger announced today that it has partnered with Berlin-based Infarm to install modular, indoor vertical farms in some of its grocery stores.

According to the press release, the deal will place Infarm units at 15 of Kroger’s QFC stores, starting with two locations this month in Bellevue and Kirkland, Washington.

Infarm creates high-tech pods that can be installed in locations like grocery stores or restaurants. These pods use a combination of hydroponics and cloud-connected software to monitor growing elements like light, air, nutrients, etc. Right now, Infarm units can grow leafy greens like lettuce and a variety of herbs.

The promise of indoor vertical farms like Infarm’s is reducing the environmental footprint of produce by eliminating the need for transportation. This proximity also translates to fresher food for the consumer as it’s picked on-site.

That all sounds great, but as my colleague Jenn Marston wrote recently, the promise of vertical farming has yet to pay off:

As an industry, vertical farming has yet to prove itself as an environmentally and economically efficient piece of the agriculture system, and along with the hype are more and more stories about complications or outright closures of vertical farms. Already, a company called FarmedHere shut down in 2017, Plantagon went bankrupt in March of 2019, and just recently, MIT halted work on its controversial Open Agriculture Initiative project after reportedly exaggerating results of its vertical farming experiments.

Those disappointments, however, were around larger scale vertical farms. Perhaps Infarm, with its smaller, in-store approach can succeed where others have failed.

Infarm continues to, well plow ahead. The company raised a $100 million Series B round earlier this year, and announced a partnership to bring its vertical farm pods to Marks and Spencer stores in the U.K.

Bellevue and Kirkland aren’t that far from The Spoon HQ, so you can expect one of us to make the trip and pick some in-store produce soon.

November 15, 2019

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.

October 31, 2019

Video: See Takeoff’s Micro-Fulfillment Center in a Grocery Store in Action

We’ve written a lot about micro-fulfillment as an emerging trend to watch in grocery retail. Micro-fulfillment involves a store building out a robot-driven system in the back of house to help automate the assembly of online grocery orders. But because these micro-fulfillment centers are relatively new and only in a few locations on the East Coast, we at the Seattle-based Spoon, don’t get to see them in action.

So I really appreciate that Stewart Samuel of IDG Supply Chain Analysis took some video footage during his recent visit to a working Takeoff facility at a Sedano’s Market in Miami, Florida. In it, you can see the tote boxes scurry around and up and down on rails bringing items to a human who packs each order.

What’s nice about this video is that it is not some slick, soft-focus, fluffy marketing piece produced by the company. It’s a raw, unfiltered look at how these machines operate, and the result is very… mundane. I actually mean that in a good way. Everything just seems to work, albeit at a rapid clip. The totes move around on a conveyor in precise movements with a human pulling and packing items as they are dropped off. Though I can’t tell how happy or not the person pulling items from the fast moving boxes is. That human seems to be doing the kind of manual, repetitive labor robots were supposed to save us from.

Automated fulfillment is just starting to make its way to the market. In addition to Sedano’s, Takeoff has agreements with Albertsons, Ahold Delhaize and Wakefern. Fabric just raised $110 million for its automated micro-fulfillment system. Elsewhere, Kroger is opting for a larger footprint by building out full-on standalone robot-driven warehouses. As these automated fulfillment centers come online, we’ll have to see if they fulfill the promise of faster grocery delivery and pickup and help grow online grocery shopping.

October 15, 2019

Walmart Officially Launches In-Home Delivery in Kansas City, Pittsburgh and Vero Beach

Online grocery shopping took another big step today… inside your house. Walmart officially launched its InHome Delivery service in the previously announced cities of Kansas City, MO; Pittsburg, PA; and Vero Beach, FLA.

For those unfamiliar, InHome uses a combination of smart locks and live streaming so Walmart delivery people can get inside your house (or garage) to drop off your groceries, and even put items in your fridge.

Customers in these select cities interested in trying out the service can go to InHome.Walmart.com to see if their address is eligible. If so, they select whether they want delivery in a kitchen or garage fridge and also need to buy a fifty dollar smart lock (which includes professional installation). Once the smart lock is set up, customers get unlimited deliveries for an introductory price of $19.95 per month (with a $30 minimum per basket).

When a delivery arrives, the customer is notified and then the delivery person gains access via the smart lock. The delivery people wear cameras that livestream their actions so shoppers can watch deliveries remotely on the Walmart app.

What Walmart didn’t address specifically in its post is how long this $19.95 introductory price will last, or how any change in price will square with other delivery options. Just last month, Walmart announced it was expanding its Delivery Unlimited service, which hands items to you at your door, nationwide for $98 a year or $12.95 a month. How much more will people pay to get their groceries put in the fridge while they are out?

While online grocery shopping is still a small percentage of overall grocery shopping, it’s definitely growing. Retailers like Walmart, Amazon, Target, and Kroger are all working on ways to make the process more fast and convenient. Robotic warehouses, micro-fulfillment, self-driving delivery vehicles are just a few ways supermarket chains are transforming how we get our groceries.

But is in-home delivery a bridge too far? I’m a bit older so the idea of letting a stranger into my home just to drop off food seems ridiculous. But we live in a time of letting strangers ride in our cars and sleep in our houses, so maybe it’s just a generational thing.

InHome may not be for me, but I’m curious if any of you will try it. If you’re InHome curious in Kansas City, Pittsburgh or Vero Beach and try it out — drop us a line to let us know how it goes!

September 30, 2019

From Nestlé to Trader Joe’s, Six New Plant-Based Burger Brands Have Popped Up in the Last Month

A year or two ago, when you wanted to taste one of the new, ultra-meat plant-based burgers you could basically choose between Beyond Meat and Impossible Foods — assuming you were in one of the areas where one or both was available. A few months ago, you’d have a couple more options, like Lightlife and Meatless Farm.

But over the past four weeks alone (yes, just September), the faux burger space has virtually exploded with new players, all trying to take advantage of consumers’ burgeoning desire for plant-based meat. Six, to be exact. To help you keep track and figure out which alt-meat burgers to keep an eye out for in the grocery aisle, we’ve rounded ’em up for you:

“Protein Patties” from Trader Joe’s
A few weeks ago a Trader Joe’s employee posted on Facebook that the beloved grocery chain would soon launch its own meaty plant-based burger called “Protein Patties.” According to VegNews, the patties will contain 18 grams of protein each, and two-pack of the 4-ounce burgers will cost $4.99. The price is notable: the vast majority of meaty plant-based burgers out there, like Lightlife and Beyond Meat, cost $5.99 for a two-pack. Trader Joe’s can push its faux burgers in its store, which attract droves of consumers — especially millennials and Gen Z — because of its low prices, cheery staff and cult-status snack products.

“Better Than Beef” from Don Lee Farms
News broke last week that Costco would start selling Don Lee Farms’ Better Than Beef plant-based burgers in select locations. According to a press release, the new burgers will be available at Costco stores in six Western states, Texas grocery chain H-E-B and other retailers. No numbers were provided, but the same release stated that the burgers will have “the lowest calories, fat and saturated fat compared to other leading brands.” Don Lee Farms was one of the original copackers for Beyond and is now involved in a lawsuit with the plant-based meat company.

“Incogmeato” from MorningStar Farms
Earlier this month MorningStar Farms, a subsidiary of the Kellogg Company which has been making meat alternatives for over 40 years, announced it would launch a new line of meatier plant-based meats in retail in 2020. Called “Incogmeato,” the new line includes faux beef burgers as well as frozen chik’n tenders and nuggets. Though MorningStar Farms has been in the alt-meat biz for quite a while, their Incogmeato burger will be its first cook-from-fresh product, which will be sold in the refrigerated section of the grocery store.

The Awesome Burger by Sweet Earth Foods (Photo: Hardy Wilson)

“Awesome Burger” from Sweet Earth Foods (Nestlé)
Just last week Sweet Earth Foods, a U.S. company owned by CPG giant Nestlé, announced it would start selling its meaty plant-based Awesome Burger in foodservice and retail on October 1st. This is Nestlé’s first foray into more realistic alt-meat burgers in the U.S., but in Europe the Swiss company already sells the plant-based Incredible Burger to a variety of foodservice spots, including McDonald’s locations in Israel and Germany. The Awesome Burger has 26 grams of protein and a two-pack of the patties will likely retail for $5.99.

“Simple Truth Plant Based” by Kroger
At the Good Food Conference earlier this month Kroger, the largest grocer in the U.S., announced that it would soon debut its own line of plant-based products under its Simple Truth brand. In addition to alt-meat staples like burgers, the Simple Truth Plant Based line will also include cookie dough, creamy dips, and more, all with a pea protein base. The animal-free product line will debut at 1,800 Kroger stores this fall.

“Happy Little Plants” by Hormel
It’s not a pre-formed burger per se, but this month Hormel Foods, owner of brands like Skippy peanut butter, announced the launch of its Happy Little Plants line. Its first product will be a plant-based ground “meat” product that can be turned into meatballs, tacos, pasta sauce and, yes, burgers. Happy Little Plants are currently available in Hy-Vee grocery stores in select states.

If you want to know more about the plant-based revolution and the eater of the future, you better get one of the last tickets to the Smart Kitchen Summit {SKS} in Seattle next week! We’ll see you there. 

September 16, 2019

Takeoff Raises $25M for Robot-Driven Grocery Microfulfillment Centers

Takeoff Technologies, which builds automated microfulfillment centers for grocery retailers, announced today that it has raised a $25 million Series C round of funding led by Forrestal Capital. This brings the total amount raised by the company to $86 million dollars.

Takeoff builds small robot-driven fulfillment centers, typically located in the back of grocery stores. The system uses a series of totes and rails to assemble online grocery orders for pickup or delivery in as little as a half hour. The company has announced partnerships with Albertsons, Ahold Delhaize, Wakefern and Sedano’s, and with today’s funding, Takeoff says it will scale out across North America, Europe and Australia.

The company also announced version 2.0 of its microfulfillment centers, which will be rolled out in 2020. According the press release, version 2.0 will have a “smaller and cleaner” design to allow for easier installation and six percent faster order packing. The v2.0 will also feature autonomous mobile robots that transport grocery totes.

Automated fulfillment centers are a big area of investment for grocery retailers this year as companies look to streamline order processing. Rather than having humans wandering the store aisles fulfilling orders for other humans, robots can do the job more quickly and accurately. As mentioned, Albertsons and Ahold Delhaize are working on in-store solutions through Takeoff, while Walmart is piloting its own in-store microfulfillment center with Alert Innovation. Kroger is taking a different approach and is building out 20 robot-driven smart warehouses over the next two years.

A recent study by Brick Meets Click showed that while online grocery shopping is only 6 percent of overall grocery sales, they have actually grown 15 percent year-over-year. Microfulfillment centers like the ones Takeoff builds provide the infrastructure to meet demand when online grocery eventually goes mainstream — which isn’t that far off.

September 16, 2019

FutureProof Retail to Add AI-Based Grocery Recommendations From Halla

FutureProof Retail, which provides mobile checkout technology for grocers, announced today that it will incorporate Halla’s AI-based product recommendations into its service.

FutureProof Retail uses mobile phones to create a line-free checkout process for supermarkets. Unlike other cashierless checkout solutions that install cameras and use computer vision to identify what you purchase, FutureProof moves everything to a whitelabeled app from the retailer on your phone. You scan barcodes to add items to your cart, and when you’re done, you hit a checkout button and a store employee does a quick check of your bag to make sure you aren’t shoplifting. You can see it in action in this video:

Express Checkout El Rancho Awareness Video from FutureProof Retail on Vimeo.

With today’s announcement, when people scan an item Halla’s recommendation engine will kick in to suggest a complementary product right there on the phone’s screen. So if you scanned a bag of Tostito’s chips, the app would recommend salsa. But Halla’s recommendations are also dynamic and adapt as you shop. As we wrote when the company raised $1.4 million in May of this year:

…if you are using a grocer’s app with Halla I/O built in, the app will serve up intelligent recommendations as you continue to shop online. Buy salt, it could recommend pepper. By salt and noodles and beef, and it might guess that you are making a bolognese and recommend tomato sauce.

Halla developed its recommendations based on data from anonymized grocery transactions to see what items are typically purchased at the same time, as well as restaurant and menu items (menu descriptions are, after all, typically a list of ingredients). Halla had initially started off making recommendations for restaurants as well, but pivoted away from that to focus on grocery.

It’s important to note that Halla will only provide one recommendation per item. “As of today our recommendations are focused on complementary products with one goal in mind, what is most likely to be purchased,” Halla Co-Founder and CEO, Spencer Price, told me by phone this week. Price said that this focus on a single product is important because shopping is a very emotional experience for people, and one that can’t be junked up with lots of pop-ups on a phone screen with lists to scroll through.

FutureProof works with Fairway Markets in New York and other regional grocery chains, though Price was unable to provide a timeline or location for where its recommendations will go live through this partnership.

Almost as important as the news itself is the fact that FutureProof has publicly named Halla as a partner. There are other AI-based food recommendation engines out there like Spoonshot and Analytical Flavor Systems, but they are pretty quiet about their clientele.

I’m not fully convinced about the broad adoption of FutureProof’s cashierless implementation. Manually scanning products and having a human check your bag before you leave a store seems to bring friction into a process that is supposed to be frictionless. Regardless, for those who do use it, FutureProof’s app requirement seems like a good vehicle for Halla’s technology because of its immediacy and visual cues. I imagine the company will look towards announcing partnerships with smart shelf displays like AWM Smart Shelf in the near future.

September 15, 2019

The Food Tech Show: Impossible’s First Retail Product is Almost Here And We’re Pretty Excited About It

We’ve been head’s down preparing for the fifth Smart Kitchen Summit (in just three weeks!), but The Spoon crew took some time this week to talk about some of the latest news in Food Tech.

Here are some of the stories we discussed:

  • The Caper smart grocery cart
  • The new bill in California that would require gig economy workers to be treated as employees and the potential impact on food delivery
  • Impossible’s first retail product, which looks like it will be a pound of “ground beef”
  • A look at this year’s class of Startup Showcase finalists for the Smart Kitchen Summit

If you want to see the startups we talk about or hang out with the Spoon crew, make sure to go to the Smart Kitchen Summit and get your tickets before they’re gone! Use discount code PODCAST for 25% off of tickets at www.smartkitchensummit.com.

As always, you can listen to the podcast on Apple Podcasts, Spotify or wherever you get your podcasts. You can also download the episode directly to your device or just simply hit play below.

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September 5, 2019

Kroger Launches Own Line of Plant-Based Meat and Dairy

If you’re shopping at Kroger, you have a plethora of plant-based meat and dairy options to choose from. Today the retailer announced that this fall, consumers will have one more — this one coming from Kroger itself.

At the Good Food Conference in San Francisco today Gil Phipps, Kroger’s Vice President for Private Brands, announced that the Cincinnati-based retailer would be rolling out a new plant-based line under its Simple Truth brand. This will make Kroger one of the largest retailers to introduce its own branded line of meatless meats.

Photo: Kroger

The grocery chain’s new product line goes far beyond just burgers and sausages (though it’ll have those, too). The Simple Truth Plant Based line will also include pasta sauces, cookie dough, deli slices and creamy dips, all based around pea protein.

The Simple Truth Plant Based line will debut at 1,800 Kroger stores this fall with new products arriving every month. Pricing details have not been disclosed but presumably the retailer will try to undercut other animal alternative products already on its shelves.

If Kroger’s new line proves popular — and based off of rising consumer demand for plant-based options everywhere and anywhere, I’m guessing it will be — you can bet we’ll see a lot more retailers developing their own alternative protein brands.

August 19, 2019

JUST Egg Heads to Kroger Grocery Banners as Demand for Plant-Based Egg Grows

On Friday alternative protein startup JUST announced that it would be selling JUST Egg at 2,100 Kroger-owned grocery stores around the U.S.

JUST Egg is a plant-based liquid egg substitute made of mung beans and contains no saturated fat or cholesterol. Over the next few weeks, the product will be sold in the egg aisle of Kroger, as well as Kroger grocery banners like Fred Meyer, and QFC. It’s currently available at Kroger-owned Harris Teeter and Roundy’s brands.

This news is just the latest in JUST Egg’s latest expansion efforts. The plant-based scramble is already pretty widely available in retail: you can find it at Whole Foods, Sprouts, and even Costco, where it’s sold in a 2-pack for $9.99 (at other stores it typically costs almost that much for one 12-ounce bottle).

JUST Egg is also amping up its restaurant presence, and just forged its first fast-food partnership with Tim Horton’s in Canada. And that’s just in North America. Internationally, JUST Egg is also available at both retailers and restaurants in Hong Kong, China, and Europe.

But the fact that JUST is expanding the footprint of its Egg product so quickly indicates that there’s significant consumer demand for a tasty plant-based egg alternative — from both vegans and flexitarians. In fact, in an email to The Spoon JUST reported that a whopping 77 percent of those who buy JUST Egg also eat meat. The fact that JUST will be selling its plant-based scramble in the egg section means that the company has an even better chance of capturing flexitarians who are either curious to try a new product or want to reduce their environmental footprint.

As of now, JUST Egg doesn’t have any significant competition. But given its popularity, I doubt that will be the case for very long. It’s smart to snap up as much retail shelf space and build brand recognition while it’s still the #1 player — before the grocery egg section gets crowded with more alternatives.

If you want to stay up to date on all the plant-based food trends, make sure to subscribe to our weekly alternative protein newsletter Future Food! It’s fun, we promise. 

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