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The Spoon

Daily news and analysis about the food tech revolution

Instacart

On Eve of IPO, Instacart Bolsters Grocery Tech Platform, Including New Features For Caper Smart Shopping Cart

Today, Instacart rolled out a slew of new updates to its grocery technology platform, updating capabilities across its white label turnkey digital commerce platform, its AI-powered search capabilities, and new features for its Caper Cart smart shopping cart. The new feature-set rollout marks further integration of the string of acquisitions the company has made over the past couple of years as it refashions itself from a pioneering personal-shopper service to a technology arms dealer for grocery retailers.

One of the key upgrades was around the company’s white-label commerce platform, Instacart Storefront. The company, which counts Costco among others as customers for the Storefront platform, gives access to Instacart’s machine learning technology, access to its white label mobile app, and a variety of other features. The company also talked up its ability to connect the online and app experience to in-store shopping via list sorting by aisle, highlighting in-store promotions and discounts, and enabling customers to use store loyalty cards.

This spring, Instacart rolled out generative AI conversational search via its website and now has added it to the in-store experience via the app. According to Instacart, the app will give customers access its ChatGPT integration via search, alongside Instacart’s own product data and proprietary AI models.

And finally, the company announced a slew of upgrades for its Caper Cart smart shopping cart. The new updates will allow customers to order made-to-order items like deli sandwiches or custom cakes directly from their Caper Cart, and will also enable retailers to offer incentives like coupons and points for completing actions like adding certain items to a cart or trying the Caper Cart for the first time. The company also is rolling out a Caper Cart dock, a permanent charging and storage place for Caper Carts.

These moves are further evidence of a strategic pivot I wrote about two years ago, in which Instacart transitions itself into a provider of technology solutions for grocery retailers:

With the move, Instacart adds another tool to a growing arsenal of e-commerce and in-store technology solutions targeted towards grocery providers at a time many are beginning to question their relationship with the company.

… as Instacart grows its enterprise technology solutions, I expect we’ll increasingly see its flagship shopper service decoupled from its technology as it looks to serve larger retailers who want greater control over the customer relationship. Since the start of the pandemic, many grocery retailers have started to roll out and standardize around their delivery services, which means a fast-growing market for technology solutions. My guess is Instacart is anticipating this as it rolls up some of the best-in-class independent solution providers as it prepares for an IPO soon.

And, right on time, the new product suite comes just as the company is set to price its IPO as soon as next week.

Instacart’s AI-Powered Shopping Cart Arrives at ShopRite and Fairway Market

Today Instacart announced that ShopRite in Spotswood, New Jersey, and Fairway Market in Kips Bay, Manhattan are the first two locations to deploy the company’s latest generation smart shopping cart.

The new Caper Cart, which the company announced last September, is the third generation of the AI-powered smart shopping cart platform and the first version of the cart built entirely on the watch of Instacart, which acquired Caper AI (the startup behind the Caper Cart) in October of 2021.

The updated Caper Cart has scales, sensors, touchscreens, and computer vision to enable self-checkout by the customer. Despite the added features, it is slimmer and lighter than the previous version and has 65% more capacity. Perhaps most important for grocers, the new cart system comes with stacked charging, allowing them to charge batches of carts at once and eliminating the need to charge carts individually or swap out batteries.

From the release:

To get started, customers at the ShopRite of Spotswood and the Fairway Market in New York City can grab a Caper Cart at the front end of the store. Powered by AI and computer vision technology, the Caper Cart recognizes and scans items as they are placed in the Cart, allowing customers to easily stay on budget with a running total shown on the screen. To checkout, customers simply scan the barcode displayed on the Cart’s screen at the store’s self-checkout area.

Instacart’s win with Wakefern Food Corp (a retailer-owned cooperative that includes ShopRite and Fairway Market) comes as its competitors in the smart shopping cart space continue to move forward. In January, smart cart startup Flow announced they’d inked a thousand shopping cart commitment from German retailer Expresso. A month later, Shopic announced they’d locked down a deal for two thousand smart carts with Israel-based grocery chain Shufersal. Stateside, Amazon has deployed its Dash cart to numerous locations.

Not all startups in the space have found the road easy, however. Seattle-based Veeve recently announced it was pivoting towards becoming an extension of grocery retailer media networks, using its in-store shopping cart add-ons as yet another digital screen to offer up promotions and ads to in-store shoppers.

According to Instacart, the carts are available at the ShopRite of Spotswood and will soon be introduced at the Fairway Market in Manhattan.

The Instacart Caper Cart Shopping Cart

Instacart Announces ChatGPT Plugin to Power Conversational Shoppable Recipes

The wave of ChatGPT integration announcements is just getting started, and this week Instacart debuted its first effort to tap into the generative AI zeitgeist with the debut of its ChatGPT Instacart plugin.

The plugin, explained in detail in a blog post by the company’s chief architect JJ Zhuang on the company’s website, allows Instacart users to ask for recipe advice and guidance using natural language with ChatGPT. From there, the OpenAI-powered chatbot will respond with a recipe suggestion followed by a prompt that tells the user that Instacart can turn the recipe into a shopping list.

In the video below, you can watch a fish taco recipe magically transformed into a shoppable recipe via ChatGPT.

The news of the new plugin comes after OpenAI namechecked Instacart earlier this month when announcing the release of its developer APIs for integration of ChatGPT into their apps. In the announcement, they hinted that they were thinking about the same fish taco recipe Instacart showcased in this week’s news.

To use the new plugin, users must log in to ChatGPT and look for the Instacart carrot under enabled plugins. The plugin is only available to ChatGPT Plus paying subscribers, but Instacart says that they and OpenAI plan to make it available to all ChatGPT users in the “coming weeks.”

One interesting detail in the announcement was the mention of what are essentially guardrails the Instacart team has built into the plugin. From the post: “At Instacart, we know that large language model technology is still in its early stages, so our ChatGPT plugin is a custom, constrained tool that will be triggered only in response to relevant food-related ChatGPT questions, and people won’t be able to use it for non-recipe related tasks.”

What this means is the company wants to ensure that folks are only using its plugin for food-relevant content and not trying to get it to, say, write a poem about the virtues of its personal shoppers or to give suggestions about who to pick for their fantasy baseball team. That said, ChatGPT is a bit unpredictable, and there’s always the chance a clever query crafter could get a brand’s plugin to hallucinate and spit out something off-brand or off-topic, which is why Instacart lets us know they will be rolling the plugin out “thoughtfully and make any modifications as needed along the way.”

I like the move, but I think the tool’s adoption will likely be somewhat limited until we see the integration of the AI tool into the Instacart app. While the announcement doesn’t say when ChatGPT will be embedded within the Instacart app, I’m pretty sure that’s something the developers are working on.

Stepping back, it’s clear that food retail will be one of the most active sectors to integrate generative AI, and not just ChatGPT. Earlier this week, I wrote about the launch of a new proprietary generative AI platform called Open Quin. Open Quin’s first targeted vertical is grocery shopping, where users can ask for food guidance in natural language.

The Spoon Weekly: Coffee Balls, Insect-Powered Upcycling & More

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Does CoffeeB’s Podless Coffee Machine Have a Fighting Chance Against The Keurig?

Swiss retail giant Migros dropped a giant surprise on the coffee world with the debut of the CoffeeB coffee brewing system.

The new machine, which took the company five years to develop, is a single-serve coffee machine that completely does away with the plastic pod. The new system utilizes round balls of coffee called, um, Coffee Balls, instead of old-school plastic or aluminum capsules. Coffee Balls, which are wrapped in a layer of algae that keeps the coffee fresh and protected from flavor loss, can be dropped into a compost bin after they are used.

I always appreciate a complete rethink of a system to correct a shortcoming, and pod system plastic and aluminum waste are definitely problematic. But even if the CoffeeB system makes great coffee and reduces waste, does it stand a fighting chance to displace a significant number of Keurigs or Nespressos?

It will be an uphill battle. A quarter of Americans use single-serve coffee machines daily (and 4 in 10 households have a Keurig or Nespresso type capsule system), and while newer approaches like grind-and-brew coffee machines that do away with the pod have been around for a few years, none have really seemed to take off in any significant way.

If CoffeeB is to become the first new single-serve system in decades to garner any substantial market share, they’ll need to take a page out of Nespresso and Keurig’s playbook. This means creating a “Coffee Ball” ecosystem around their technology, which would include a scalable and licensable system to produce the coffee servings (aka balls), a strong coffee roaster partner program in which roasters produce branded Balls, and getting retailers on board to sell the system.

Read the full story here. 

You can hear CoffeeB CEO Frank Wilde talk about the future of single-serve coffee at SKS. Use Code NEWSLETTER for 20% off tickets.  

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Asia Pacific Leads in Plant-Based Meat IP According to Report

While many think innovation in plant-based meat is a fairly recent phenomenon, companies, researchers and entrepreneurs have looking for ways to leverage plants as an alternative to animal agriculture since the sixties.

However, there’s no doubt the pace of innovation has accelerated in recent decades amidst a worsening climate crisis and a rising global population, and one way to quantify the innovation is through an analysis of the growth in intellectual property. And now, thanks to a new report published by researcher Roots Analysis, we can do just that.

According to the Roots report, the number of cumulative IP publications for plant-based meat has grown by nearly 3x over the past decade, going from 2,388 in 2012 to 7,126 by 2022. In addition, the growth in patent filings, granted patents, and amended patents (the three of which make up the bulk of IP-related publications) has grown nearly every year over the past decade, with the annual growth of publications going from just over one hundred per year for the decade prior to 2012, to around 900 per year in both 2020 (915 new IP documents) and 2021 (891 new documents).

According to the report, most IP documents in the plant-based meat space are patent applications (77.4%) and granted patents (18.7%). When breaking the documents down by region, Asia Pacific is responsible for over half of all IP (3,717), compared to about 18% for North America (1,277 documents) and Europe (1,310 documents).

Read the full story here.

Food Retail

With Connected Stores, Instacart Continues Push to Become Technology Platform Partner for Grocers

Today Instacart announced a new bundle of technologies aimed at helping retailers digitally power their storefronts. A mix of existing and new products, the new suite is a sign of Instacart’s continued effort to transform itself from an in-store shopper and delivery services company to an omnichannel grocery technology arms dealer.

The Connected Store suite of technologies includes the following:

A new and improved Caper cart: The new suite includes a third generation Caper cart. Like the second generation Caper, the new cart allows customers to drop their items in the cart and the Caper adds it to the list without a barcode scan, but is 65% larger, has a longer-life battery, and is designed to work well in inclement weather.

Scan & Pay: For retailers who choose not to deploy Caper carts, Instacart is introducing a new service called Scan & Pay. Scan & Pay allows shoppers to scan and pay for products with their phone. The service looks especially helpful for EBT Snap users, who can scan items to identify whether they are EBT SNAP-eligible.

Lists: Lists syncs up a shopper’s personal shopping list with the Caper cart app or a grocer Instacart-powered app. Items are imported into the Caper list and checked off when you drop them in your cart.

You can read the full story here. 

Food Retail

Fresh Portal Is a Tech-Powered Take on the Old-Timey Milk Door

When I first saw the Fresh Portal at CES, I thought it made a whole lotta sense. After all, what food-ordering families wouldn’t appreciate the ability to keep groceries or restaurant-delivered food cold or warm until they arrive home from work?

But the idea behind the Fresh Portal isn’t exactly new. In fact, you can go back as far as the early 1900s to find a predecessor in the milk door. Milk doors were built into homes when the milkman was as common as the mailman, an early version of a storage locker where that weekly delivery of milk could be stored until ready for pickup. Like the Fresh Portal, the milk door was actually two doors, one on both the outside and inside with the storage cavity in between.

Fresh Portal founder Jeremy High is aware of the history of home delivery storage lockers. In a recent interview with The Spoon, he said his product is a modern, high-tech take on the old-timey milk locker.

“Fresh Portal is a modern twist on that,” High said. “It has Wi-Fi and Bluetooth. It receives deliveries of the food you’re getting delivered by DoorDash or Instacart, groceries, and even packages.”

To read the full story here.

You can meet Fresh Portal CEO Jeremy High at SKS in two weeks. Get your 20% off ticket with discount code NEWSLETTER today!

Future Food

Vienna’s LIVIN Farms Receives €6 million to Upcycle Food Waste Into Insect-Powered Protein

Turning food waste into a usable commodity might seem like magic, but it’s a reality for companies such as Vienna-based LIVIN farms. The company has announced a €6 million Series A round led by venture Investor Peter Luerssen, allowing it to expand its team and solution.

As a player in the alternative protein space, LIVIN Farms developed HIVE PRO, a modular system for fully automated insect processing. HIVE PRO allows waste management companies and large-scale food producers to upcycle organic waste and by-products into valuable proteins, fats, and fertilizers.

In an interview with The Spoon, Katharina Unger, Founder of LIVIN Farms, explained her company’s process. “Livin Farms customers are largely food and feed processing companies and agricultural players that have access to at least several thousand tons of organic by-products every year. They typically make a loss on it by having disposal costs. Generally used feed substrates include by-products, surplus production from the bakery, potato, vegetable, and fruit processing industry, and pre-consumer wastes from retail and grain by-products.”

One of the critical elements of the LIVIN Farms solution is the use of black soldier fly larvae in its “plug-and-play” solution. A module is set up at a customer site, after which, as Unger says, her company operates it as a Farming as a Service (FaaS) model. The first step is when the organic waste of the customer is recycled on-site by being processed and prepared as feed for the insects. After that is completed, using a robotic handling machine moves the feed made from the organic food waste into pallet-sized trays. The machine then inserts seedlings (baby larvae) and empties the harvest-ready larvae from the trays.

You can read the full story here.

Food Robots

UAE Installs Bread-Dispensing Robots Around Dubai To Help Feed Those in Need

LBX Food Robotics (formerly known as LeBread Xpress) announced today they have partnered with The Mohammed Bin Rashid Al Maktoum Global Initiatives (MBRGI) Foundation to install bread-dispensing robots throughout Dubai to help feed those in food insecure situations. The custom-built Bake Xpress machines will provide a selection of complimentary local breads and pitas and will give customers the ability to make voluntary monetary donations.

The partnership started in 2020 when MBRGI, the charitable foundation of Sheikh Mohammed bin Rashid Al Maktoum (the ruler of Dubai), approached LBX to see if their robotic bread-making robots could be used as a way to get food to people in need. Two years later, the partners have deployed a total of 10 bread-dispensing robots around Dubai as part of the first phase of the collaboration. More robots are planned for the first quarter of 2023.

To read the full story here!

With Connected Stores, Instacart Continues Push to Become Technology Platform Partner for Grocers

Today Instacart announced a new bundle of technologies aimed at helping retailers digitally power their storefronts. A mix of existing and new products, the new suite is a sign of Instacart’s continued effort to transform itself from an in-store shopper and delivery services company to an omnichannel grocery technology arms dealer.

The Connected Store suite of technologies includes the following:

A new and improved Caper cart: The new suite includes a third generation Caper cart. Like the second generation Caper, the new cart allows customers to drop their items in the cart and the Caper adds it to the list without a barcode scan, but is 65% larger, has a longer-life battery, and is designed to work well in inclement weather.

Scan & Pay: For retailers who choose not to deploy Caper carts, Instacart is introducing a new service called Scan & Pay. Scan & Pay allows shoppers to scan and pay for products with their phone. The service looks especially helpful for EBT Snap users, who can scan items to identify whether they are EBT SNAP-eligible.

Lists: Lists syncs up a shopper’s personal shopping list with the the Caper cart app or a grocer Instacart-powered app. Items are imported into the Caper list and checked off when you drop them in your cart.

Department Orders: The Department Orders feature enables coordination between grocery store prepared food departments by enabling them to sync orders. For example, the bakery can coordinate with the deli to enable orders to be ready simultaneously. The new feature is powered by Foodstorm, a food service order management platform the company acquired last year.

Carrot Tags: Maybe the most innovative new feature of the new Connected Stores bundle is Carrot Tags. A customer can find items in-store by clicking them on their phone, which lights up a corresponding electronic shelf label. As someone who often has trouble finding items on his shopping list, I can see Carrot Tags coming in pretty handy.

Instacart Introduces Connected Stores

As I wrote last year, Instacart’s acquisition of Caper and continued development of digital transformation technologies is a sign the company is trying to transition to become an enabling platform player for grocers.

As Instacart grows its enterprise technology solutions, I expect we’ll increasingly see its flagship shopper service decoupled from its technology as it looks to serve larger retailers who want greater control over the customer relationship. Since the start of the pandemic, many grocery retailers have started to roll out and standardize around their delivery services, which means a fast-growing market for technology solutions. My guess is that Instacart is anticipating this as it rolls up some of the best-in-class independent solution providers as it prepares for an IPO soon.

With Connected Stores, Instacart is attempting to integrate what has seemed to this point a loose grab-bag of technologies assembled mostly by acquisition into a cohesive suite of technologies. It’s an evolution that makes sense for the company strategically and for its collection of platform products, even if it does still feel the suite is much a re-naming and branding exercise as it is an actual integration across products. As part of the effort, the company is trying to showcase the full vision with its first partner store in Good Food Holdings’ Bristol Farms store in Irvine, California. According to the announcement, Good Food Holdings will also use Instacart’s Storefront Pro software to power its online store.

The news of the Connected Store platform comes as the company readies for its IPO, which it filed for in May.

Instacart Brings Caper’s AI-Powered Checkout to Fenway as It Transforms Into a ‘Retail Enablement Platform’ Company

Last fall, Instacart acquired smart checkout startup Caper AI as it looked to bulk up its technology solutions to offer retailers who want to enable contactless checkout. This week, the company has relaunched Caper’s system and announced one of its first locations for the system: Fenway Park.

Instacart is making its Fenway debut thanks to Aramark’s Sports and Entertainment, the same group that helped Bartesian’s automated bartender gain entry into the luxury suite in different ballparks this season.

Physically, the Caper Counter looks to be no different than the product Caper offered as a solo company. The only difference is Instacart now owns it. The system uses computer vision and sensors to identify items based on shape, color, size, and other features. The customer can load up to ten items into the Caper Counter at a time.

When Instacart acquired Caper last fall, I suggested that the acquisition looked to be part of an effort by the company to transform itself into a digital platform arms dealer as more grocery providers looked to make online grocery one of their core competencies and questioned whether Instacart’s online grocery service was disintermediating them from their customers.

From my post:

…as Instacart grows its enterprise technology solutions, I expect we’ll increasingly see its flagship shopper service decoupled from its technology as it looks to serve larger retailers who want greater control over the customer relationship. Since the start of the pandemic, many grocery retailers have started to roll out and standardize around their delivery services, which means a fast-growing market for technology solutions. My guess is that Instacart is anticipating this as it rolls up some of the best-in-class independent solution providers as it prepares for an IPO soon.

This effort to transform itself is precisely what is happening. Over the past month, the company announced the Instacart Platform, a suite of technology offerings for grocers and retailers to help them with digital transformation. The company has also changed how it describes itself. At the time of the acquisition last fall, the company called itself ‘the leading online grocery platform in North America.‘ In today’s announcement, the company has swapped the term online grocery platform company for what it calls a retail enablement platform “that works with grocers and retailers to transform how people shop.”

For those who want to see the Caper Counter in action, the automated checkout system will be available at three different locations at Fenway Park starting today.

Instacart Acquires Smart Cart and Grocery Checkout Technology Startup Caper AI

Today Instacart announced they had acquired Caper AI, a smart cart and grocery checkout technology company. Instacart confirmed to Techcrunch they paid $350 million for the company.

In Caper AI, Instacart acquires a portfolio of automated checkout and smart cart technology solutions, many of which are deployed in major national grocery retailers across North America. One such retailer is Kroger, which began deploying “KroGo Powered by Caper” smart shopping carts at a store in Kroger’s hometown of Cincinnati, Ohio, earlier this year.

Caper’s latest generation smart carts feature machine vision that allows shoppers to place the items in the cart and bypass counter checkout altogether.

Caper also has an automated checkout solution targeted towards smaller format stores. The company’s AI Counter utilizes a scale and machine vision to recognize up to 10 items and automate the checkout process.

According to the announcement, Instacart plans on integrating Caper’s technology into the Instacart app as well as both its in-store and online experiences for its grocery partners. One interesting potential application hinted at is a shoppable recipe integration with Caper’s smart carts: “Over time, Instacart expects to integrate Caper’s technology into the Instacart app and the ecommerce websites and apps of its retail partners, allowing customers to build online shopping lists and browse recipes ahead of time and check off their lists as they go. And, for Instacart shoppers who shop on behalf of customers, they can also utilize the carts to find items more efficiently and bypass long checkout lines.”

With the move, Instacart adds another tool to a growing arsenal of e-commerce and in-store technology solutions targeted towards grocery providers at a time many are beginning to question their relationship with the company. Over the past decade, Instacart has provided many grocery chains an easier glide path for moving into e-commerce and in-store shopping automation, areas with steep learning curves that grocers with tight margins have historically been more than happy to outsource. However, some grocers see Instacart’s in-store shopping service as taking too big a cut and possibly disintermediating them in the process.

However, as Instacart grows its enterprise technology solutions, I expect we’ll increasingly see its flagship shopper service decoupled from its technology as it looks to serve larger retailers who want greater control over the customer relationship. Since the start of the pandemic, many grocery retailers have started to roll out and standardize around their delivery services, which means a fast-growing market for technology solutions. My guess is Instacart is anticipating this as it rolls up some of the best-in-class independent solution providers as it prepares for an IPO soon.

In short, this move and others are part of Instacart evolving into a more diversified omnichannel grocery technology arms dealer.

Instacart and Fabric Partner to Offer Automated Fulfillment to Grocers

Instacart announced today a new multi-year partnership with Fabric that will see the two companies jointly offer automated order fulfillment services to North American grocery retailers.

The new automated fulfillment option will combine Instacart’s e-commerce ordering capabilities and human shoppers with Fabric’s robot-powered item-assembly process. Retailers can outfit this new system inside existing retail spaces or in dedicated warehouses. So customers will place a grocery order online, robots will assemble those items and Instacart shoppers will pack them up and either stage the completed order for curbside pickup or deliver it to the customer’s front door.

The company didn’t provide many details about implementing this new automated system, only saying it is the first phase of its “next-generation fulfillment initiative” and that it “plans to kick off early-stage concept pilots in partnership with Fabric and grocery retail partners over the coming year and beyond.”

Interest in automated fulfillment certainly accelerated over the past year because of the pandemic. Fears of COVID-19 had record amounts of people buying groceries online in the U.S. Those numbers have come down in recent months as the vaccines have rolled out and people feel more comfortable shopping in person. The latest data from Brick Meets Click shows that U.S. online grocery sales for pickup and delivery were $5.3 billion in June, down from its peak of $7.2 billion in June of 2020. If those numbers continue to trend down, will retailers still feel the pressing need to automate?

Big retailers like Albertsons, Kroger and Walmart have all doubled down on their own automated fulfillment plans over the past year. But as Grocery Dive has pointed out, there are still concerns around the efficacy of automated order fulfillment and whether it provides truly valuable productivity gains and return on investment. Now, instead of building their own automated infrastructure, smaller retailers could choose to offload that work to Instacart and Fabric, so we could see more grocers trying these systems out.

Instacart Appoints Fidji Simo as its New CEO

Grocery delivery company Instacart announced today that it is appointing Fidji Simo as its new CEO effective August 2. Simo has been on Instacart’s board since January of this year. She has spent the past decade at Facebook where she was most recently Vice President and Head of the Facebook app. Instacart Founder and soon-to-be-former CEO Apoorva Mehta will move into a new role as Executive Chairman of the Board and will also report to Instacart’s Board of Directors.

According to the press announcement, Simo oversaw development at strategy for the Facebook app, and helped drive Facebook’s mobile monetization strategy. She was also responsible for “rolling out videos that autoplay in News Feed,” which may or may not be a plus, depending on your point of view.

However, Simo was also at Facebook as it moved from a private company to a public one and will most likely be leading Instacart as it does the same. Founded in 2012, Instacart has since raised $2.7 billion in funding and is preparing for an IPO. The company was thrust into the national spotlight last year as the pandemic pushed record numbers of people into online grocery shopping.

Simo is also joining Instacart at a time when it is facing competition on many fronts. Big players like Amazon and Walmart are ramping up their own grocery delivery efforts, a new wave of smaller grocery stores offer grocery delivery in as few as 10 minutes, and other third-party delivery services such as DoorDash and Uber are moving further into grocery. In response, Instacart has been forced to add half-hour express delivery in select cities. The service is also reportedly looking to create automated fulfillment centers.

Then there is the question looming around Instacart’s grocery delivery business in general. During the pandemic, it was an easy way for retailers to quickly add delivery infrastrcuture to their business. But given Instacart’s fees and concerns about who owns the customer relationship, not all retailers are finding the same value with the service.

Given all that, Simo is taking over Instacart at a critical point in the company’s existence and will certainly have her hands full the moment she starts.

Report: Instacart Looking to Add Automated Grocery Fulfillment

According to a story out in Bloomberg today, Instacart is looking to create automated fulfillment centers, which would use robots to assemble grocery orders. These fulfillment centers would either be standalone or attached to an existing grocery store.

From the Bloomberg story:

Under one proposal, Instacart would create a network of stand-alone fulfillment centers that would handle more than 3,500 orders a day with more than 100,000 units sold, according to documents reviewed by Bloomberg. More than 700 robots and about 160 people would do the work, with the machines fetching most of the items and workers gathering fresh and perishable food. The installation would cost $20 million, with annual maintenance costs of $380,000 a year. A second option is a smaller 25,000-square foot attached to a store that would handle more than 700 orders a day totaling 22,000 items. It would have more than 150 robots, 40 workers and would cost $6.5 million to set up and $270,000 a year to maintain, according to the documents.

The reason for this automation plan is simple: speed. Speed of order fulfillment is becoming more critical to a grocery retailer’s success than ever. The pandemic forced a lot of people into trying online grocery shopping last year, and while overall grocery e-commerce numbers have dipped since the record highs of 2020, the habit appears to be sticking with people. Brick Meets Click data showed that online grocery sales for pickup or delivery were $6.6 billion in April of this year. That’s down from the $7.1 billion in grocery e-commerce sales in March of this year, but up from $5.3 billion in April 2020.

All those online grocery orders need to be picked and packed before they get to the customer. Instacart’s current solution is to have human gig workers (Instacart’s “Shoppers”) do this. But a robotic fulfillment center can assemble a grocery order in minutes, which is much faster than a person wandering the aisles looking for particular brands of peanut butter and loaves of bread.

This need for speed is why so many existing grocery retailers are investing in automated fulfillment. Kroger recently opened up the first of its standalone, automated Customer Fulfillment Centers powered by Ocado’s robotic technology. And both Walmart and Albertsons are expanding their use of automated fulfillment centers as well.

Instacart is obviously feeling the time crunch. Earlier this month, it launched a 30-minute delivery service of its own, but that service is only available in 15 cities right now. But Instacart faces pressure from a new wave of delivery-only startups vying for your speedy delivery dollar. Gopuff averages half-hour delivery times and operates 24 hours a day. And startups like Fridge No More and Gorillas offer delivery with no minimum order in just 10 – 15 minutes. No wonder Instacart is eyeballing automating some of its processes.

Of course, any talk of automation immediately brings up the question of jobs and who will get replaced. It’s a big, ongoing discussion around the push and pull of innovation, equality and what kind of society we want to create. In the case of Instacart, it’s a natural question to ask as the company swelled its gig shopper ranks to more than 500,000 shoppers during the height of the pandemic last year. What happens to all of those people when the robots come in?

We reached out to Instacart for comment on the Bloomberg story and received the following emailed statement:

We’re constantly exploring new tools and technologies that support the needs of the 600 retailers we partner with and further enable their businesses to grow and scale over the long-term. Shoppers are and will continue to be central to Instacart and our service, and any suggestion otherwise is wholly inaccurate.

Bloomberg writes that Instacart hasn’t signed on any retail partners for its automated fulfillment plans as of yet, and as of right now any speculation around Instacart’s automation plans is just that, speculation. Instacart is undoubtedly exploring a number of different technological options as it marches towards its inevitable IPO, and those plans will most likely include robots of some kind.

Instacart Launches 30-Minute Delivery in Select Cities

Instacart announced today that it is rolling out 30-minute grocery delivery in 15 of its markets across the U.S. through a number of its retail partners. The launch is part of a new “Priority Delivery” service that will also include 45 and 60 minute delivery for more customers in more cities nationwide. The move towards faster delivery comes amid mounting pressure from a new crop of startups promising delivery of groceries in as little as ten minutes.

According to the press announcement, Instacart’s 30-minute delivery will be available in 15 of the largest cities in the U.S. including Chicago, Los Angeles, Miami, San Diego, San Francisco, and Seattle. The new service will be available at more than 300 store locations from retailers including Ralphs, Safeway, Sprouts Farmers Market and Stater Bros. This half hour delivery will expand to more cities and retailers in the coming months. The company didn’t say how much more Priority Delivery will cost, but Grocery Dive reports the company expects to “add a small, incremental fee for the service that will be dynamic and vary according to market conditions.”

For grocery delivery, two-hour delivery is fast becoming too long to wait. New services from the likes of Gopuff, which raised $1.5 billion earlier this year, promise an average delivery time of 30 minutes, 24 hours a day. Additionally, there is a raft of new smaller, delivery-only grocery stores like Fridge No More and Gorillas opening up deeper inside residential neighborhoods that promise on-demand delivery in 10 to 15 minutes. Right now, Fridge No More and Gorillas are only available in select New York City neighborhoods, but Fridge No More doesn’t require a minimum order and does not charge a delivery fee, and Gorillas has no minimum order and flat $1.80 delivery fee.

If these new groceries-as-a-utlity services catch on, it’s not hard to imagine them quickly spreading to other densely populated urban areas. Operationally speaking, they don’t cost a tremendous amount to operate. The stores can be small, don’t have to be pretty (because they aren’t open to the public), and because they are in specific neighborhoods, they can customize inventory to match that area’s demand.

In internet time, Instacart is already an elder statesman in the grocery delivery game. Now we’ll see if it’s move towards faster delivery can help it stave off the rising competition.

Instacart Expands EBT SNAP Payments to Three More Grocers, Now Available at More Than 4,000 Stores

Online grocery delivery service Instacart announced today an expansion of its EBT Supplemental Nutrition Assistance Program (SNAP) payment integration to three new retailers: Publix, The Save Mart Companies and Price Chopper/Market 32. This boosts Instacart’s EBT SNAP availability by more than 1,500 stores across 15 states. Once complete, Instacart will offer EBT SNAP payment options in more than 4,000 stores across 38 states and Washington D.C.

From today’s press release announcing the news:

EBT SNAP is now available at all Publix locations in Alabama, Florida, Georgia, North Carolina, South Carolina, Tennessee and Virginia. The Save Mart Companies – including Save Mart, Lucky California, Lucky and FoodMaxx banners – is now available across California and Nevada, making them the first Northern California retailer to offer EBT SNAP online. Price Chopper/Market 32 is now available across its New York stores, and will soon expand to its Connecticut, Massachusetts, New Hampshire, Pennsylvania and Vermont locations in the coming weeks. 

Instacart began accepting EBT SNAP payments in pilot program with grocery retailer ALDI back in October 2020. That program expanded to more than 2,000 ALDI locations nationwide. Earlier this year, Instacart announced EBT SNAP payments program Food Lion stores.

The Center on Budget Policy and Priorities writes that 38 million people in the US, or 12 percent of the country’s population receive SNAP benefits. Until a couple of years ago, those on the SNAP program were unable to use their benefits to buy groceries online. In April of 2019, the USDA announced a pilot program allowing SNAP participants to purchase groceries digitally.

Instacart’s expansion also comes on the heels of USDA announcing this week that it is expanding the Pandemic EBT (P-EBT) program to provide food to kids over the summer who would otherwise get free meals at school. According to NPR, the P-EBT program takes the value of the meals kids would normally receive at school ($6.82 per weekday) and puts that on a debit or existing SNAP card to be used at grocery stores.

Increasing access to online grocery e-commerce to those on SNAP is an important step to begin bringing about more equity to our food system. Being able to buy groceries online for pickup and delivery became even more critical during the pandemic, when trip to the grocery store could literally get you sick.

It should be noted that EBT SNAP money can only be used to buy food, it cannot be put towards Instacart’s delivery fees or tips. Those add-ons can get expensive and may price out those who could use the convenience of Instacart the most. As I’ve written before, it would be nice if Instacart, which has raised $2.7 billion, put more resources towards solving issues around fees and tips for those on SNAP. The company has taken what amounts to a baby step on that front as Instacart says it will waive delivery or pickup fees through June 16, 2021 on up to the first three EBT SNAP orders for each customer.