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The Spoon

Daily news and analysis about the food tech revolution

METRO

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

SKS Q&A: Andreas Wuerfel on How Big Grocery Can Stay Innovative, Agile and Competitive

If you’ve eaten out in Europe, Russia, or Asia, chances are at some point you’ve patronized a café, hotel, or kiosk that purchase food from mega-retailer METRO AG. As the largest non-U.S. wholesale and foodservice company, the Germany-based METRO functions in 35 countries and serves over 24 million businesses.

One place it doesn’t serve is the U.S. However, Andreas Wuerfel works for METRO as Group Director for U.S. Strategic Partnering; keeping a finger on the pulse on retail trends in the U.S. through local partners and applying them to the METRO network. Which means that he is uniquely positioned to track innovation across foodservice and grocery across the globe.

If you want to hear Wuerfel speak about the ways that METRO is forging the future of retail — digitally and otherwise — get your ticket to SKS. Then get a sneak preview with the Q&A below.

You’re the Group Director for U.S. Strategic Partnering at METRO. Tell us about what your role entails.
While METRO Group has no local operations, the US is a key “lighthouse” market for us. US restaurant, hotel, and retail innovation trends often foreshadows development in our Europe and Asia markets. Gaining an understanding early, and working with key US players is important to the degree [with which we] can cooperate across our Europe customer footprint. With that in mind, my role is to help initiate our “bridge-to-Europe” strategic/commercial deal opportunities, to help create win-win-win value for our Europe customers, our US partners, and METRO at large.

You were involved with founding the METRO Accelerator program, powered by Techstars. Why did Metro AG decide to help create an accelerator?
Globally, the retail sector is undergoing rapid change. Much of that dynamics comes from outside our traditional channels. Outside established large IT firms, it is often young startup teams that best ideate, invent and disrupt “the future of retail”. In working with retail tech and hospitality tech founder teams from around the world, our METRO Accelerator is specifically designed as an outside-in innovation program — to help capture, fund, and shape the relevant early-stage digital applications most meaningful for our small business customers and our own stores long term.

How do you stay competitive in the competitive wholesale retail space, especially against giants such as Walmart or Tesco?
Despite the aforementioned retail industry transformation — simply put — it’s still all about ensuring we offer “the right product for the right customer at the right price exactly when and where needed.” To ensure this “contract with our customers” is fulfilled, METRO leverages its unique footprint and supply-chain advantages. (Globally, METRO Cash & Carry is the only wholesaler doing business in 35 countries, with deep access to local assortment and competitive pricing).

What are a few ways you’ve seen tech transform retail?
Inside METRO, we’ve found tremendous value in helping educate and consult the “long tail” of the hospitality and retail industry. We are unique in that our primary customers are 24+ million small business owners. Not consumers but rather the many independent restaurants, hotels, retail operators, catering companies, and small professional offices — all looking to understand and benefit from the use of digital innovation as well as new “next-gen” food & beverage choices. Our down-market innovation programs and corporate investment initiatives therefore all center around enabling our small business customers and their guests, in the process helping to transform the independent retail customer side of our business.

Keep an eye out for more speaker Q&A’s as we ramp up to our fifth year of SKS on October 7-8 in Seattle! We hope to see you there.

Meet Farmlab.One, The Latest Indoor Farming Experiment From Germany’s Largest Retailer

While we haven’t arrived at a future where every corner grocery has an in-store farming system with rows and rows of produce, it isn’t for lack of trying.

This is especially true for METRO Group, Germany’s largest retailer, who has been experimenting with in-store farming since early 2016.

That’s when the retailer launched Kräuter Garten (herb garden), the first retail in-store farming installation in Europe. The technology for METRO’s first foray into vertical farming was provided by INFARM, a vertical farming startup based in Germany. Since the launch of  Kräuter Garten in Berlin, other retailers such as EDEKA (Germany’s largest grocery store chain) have since taken an interest in in-store growing.

Now METRO is at it again, launching another vertical farming experiment with Farmlab.one, a joint project between the retail giant and Schmiede.ONE, a German innovation lab focused on future business models that intermingle agriculture and cutting edge technologies such as artificial intelligence.

The project will be managed by James Lindsay of Schmiede.ONE in an indoor lab in Düsseldorf. METRO has provided resources in the form of indoor farming racks from TowerGarden, the indoor farming division of Juice+. The project is starting with three crops to start, which you can watch here via Periscope.

While the project is a modest one, it’s a sign of continued interest in vertical, in-building farming by a large food retailer. In the US, we’ve seen growing interest in solutions from companies like Farmshelf, and just last month we saw one of the biggest investments ever in a vertical farming startup when Jeff Bezos, among others, invested $200 million in stealthy startup Plenty.

A comparison of yields and resource consumption of indoor vs. soil-based farming. Source: Schmiede One

While it’s unlikely that in-store vertical farms could produce at the scale to meet the total demand for fresh produce purchased at a high-volume urban retail storefront, it’s clear that soilless vertical farms produce at a much high rate of productivity compared to soil based farming, which means much less overall space is needed to produce the same amount of produce. With such high yields, one can envision a future where a mix of in-store grown produce combined with other warehouse grown urban farmed food could be enough to meet a large percentage of overall demand for fresh produce.