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The Spoon

Daily news and analysis about the food tech revolution

micro-fulfillment

Dawn of the Robocorn? Micro-Fulfillment Robot Specialist Fabric Raises $200M on $1 Billion Valuation

Fabric, a maker of robotic micro-fulfillment solutions for grocery and e-commerce retailers, announced today they have raised $200 million in a Series C funding round. The new funding puts the company’s valuation at $1 billion.

Formerly called Common Sense Robotics, Fabric works with large online grocers and retailers such as Walmart, Instacart, and FreshDirect to build automated micro-fulfillment centers via a mix of fulfillment-as-a-service and hybrid ownership models. The company’s solution involves an intricate blend of robotics, vertically stacked storage of products, and human operators and packers that help package up the final delivery and handoff to delivery drivers.

You can see what a Fabric micro-fulfillment center (MFC) in Tel Aviv looks like in action as it processes an order below:

The World's First 1-hour Delivery Fulfilled by Robots

The funding, which vaults the company into what it describes as a ‘robocorn’ status, is not a surprise given the fast growth of the company and the broader micro-fulfillment market. Interact Analysis forecasts MFC automation and robotics market to grow from $136 million in 2020 to $5.3 billion in 2025. Revenue growth will be fueled by a rapidly growing number of MFC installations in various formats throughout the forecast; Interact expects the the total number of MFCs installed annual to grow from 29 in 2020 to over 2100 new MFCs installed in 2025.

The company plans to use the funds to grow its fulfillment solution in the general merchandise market and build a network of micro-fulfillment centers in cities across the United States. The company’s model relies heavily on building warehouse fulfillment centers that allow grocery retailers to outsource micro-fulfillment to Fabric. Fabric also co-invests and builds distributed fulfillment centers in partnership with larger players such as Instacart and FreshDirect.

That strategy makes Fabric part of a new kind of third-party logistics (3PL) player built around robotics and automation as an enabling platform for their distributed fulfillment networks. While large 3PL companies like XPO Logistics and C.H. Robinson been adopting automation in their warehouses for some time, companies like Fabric, Exotec and Attabotics are building hybrid networks of dark and retail/integrated grocery MFCs architected from the get-go with robotics in mind (rather than a bolt-on or forced integration). As more retailers invest in distribution networks tailored towards a grocery industry with 50%+ e-commerce penetration, next-gen MFC platform companies like these are well-situated to benefit.

“While we use the term ‘robocorn’ a bit tongue in cheek, we see this milestone as a real turning point in the industry, from what was once trepid exploration of micro-fulfillment to total market validation and now rapid expansion,’ said Fabric CEO Elram Goren in the release sent to The Spoon. “We’re thankful to our partners for trusting us to serve them and to our incredible team who will continue moving mountains to make our vision a reality. This is still ‘day one’ for us, and we’re extremely excited about the road ahead as we expand our offering into new markets, drive more efficiencies across the supply chain, and focus on scaling.”

Urbx’ Vertical Automated Grocery Fulfillment has High Ambitions

As they come to market, automated grocery fulfillment solutions are taking a number of different shapes. Companies like Takeoff Technologies and Dematic are building them into the backs of existing stores, while Kroger and Ocado are building out big, standalone smart warehouses.

Unlike those other players in the space, Urbx wants its automated fulfillment center to get high — vertically speaking. The Boston-based company is working on robotic fulfillment that scales up to 150 ft. tall. While the Urbx system is tall, it only takes up 1,800 sq. ft., so it can nestle into the limited, tight real estate areas in cities. As Urbx CEO, Lincoln Cavalieri explained to me by phone this week, Urbx is “ideal for urban environments, food deserts, where property prices are high.”

Urbx has a dual go-to market strategy. First, like other automated fulfillment technology companies, Urbx will work with third-parties to integrate its automation into other stores. At the same time, Cavalieri said that the company will eventually build “thousands” of its own Urbx-branded automated markets. But these Urbx markets won’t be anything like a traditional grocery store.

The Urbx market won’t have any aisles to roam or bakery sections to get treats from. Instead, the “store” part will be a series of kiosks. Shoppers can either place their order by mobile phone or at the kiosk. Cavalieri said once an order is placed, Urbx’ robots can pack an order of 50 items in less than two minutes. (A 25-item order takes just a little over one minute.) Robots then deliver the packed items to the kiosk for the customer to take out.

Urbx will also have curbside pickup, delivery via electric bicycles and, at some point down the line, drone delivery.

All of this, however, is still a ways away. The company has only raised a seed round of funding and won’t have its first third-party implementations ready to be installed until the end of this year. Urbx hopes to have its first Urbx market developed by the end of next year.

This is certainly the right time to launch an automated fulfillment solution. The COVID-19 pandemic pushed record amounts of people into grocery e-commerce, which is expected to grow to take up 21.5 percent of total grocery sales by 2025.

As such, many retailers are accelerating their automation endeavors to keep up with e-commerce demand. Alberstons is expanding its use of automated fulfillment centers and testing out robotic pickup kiosks. And Walmart is working with three different companies to deploy automated fulfillment centers to dozens of locations this year.

With plans for its own line of supermarkets, Urbx is the most ambitious automated fulfillment startup we’ve covered so far. Now we just have to see if rollout of tall centers can match the height of its goals.

H-E-B to Use Swisslog for Automated Micro-Fulfillment

Even though everything is bigger in Texas, the San Antonio-based H-E-B grocery chain is going small. Today, the chain announced it has partnered with Swisslog to install automated micro-fulfillment centers at an undisclosed number of stores (tip of the hat to Grocery Dive).

According to the press announcement, H-E-B will make use of Swisslog’s AutoStore solution, which will use a combination of bins and robotics to shuttle grocery items around. Swisslog says that it has more than 170 AutoStore installations worldwide. H-E-B has 400 locations across Texas.

Swisslog’s micro-fulfillment centers will help H-E-B speed up the processing of online grocery orders for delivery and curbside pickup. Keeping up with the crush of new e-commerce customers was something retailers across the country struggled with throughout a good part of this year as pandemic fears pushed people into online grocery shopping.

While the first few months of the pandemic saw record amounts of online grocery shopping, recent survey data from Brick Meets Click shows that grocery e-commerce dropped in August to $5.7 billion, down from its peak of $7.2 billion in June. Having said that, August’s online grocery numbers were higher than the the $5.3 billion in April.

Swisslog is among a number of companies angling to bring more automation to grocery e-commerce fulfillment. Alert Innovation is being used by Walmart, Fabric is working with Fresh Direct, Takeoff Technologies has lined up Albertsons, ShopRite, and Loblaw’s, and Kroger is building out its own centers using Ocado.

While we’re still waiting to see exactly how many people stick with online grocery shopping (FWIW, even Whole Foods’ CEO thinks a lot of people won’t go back into grocery stores), H-E-B’s announcement shows that retailers continue to make big investments in micro-fulfillment. Will these micro-moves yield Texas-sized returns?

Report: Amazon’s Grocery Store Will Have Robotic Fulfillment

When Bloomberg surfaced a report last week giving us a first-look inside Amazon’s new grocery store, we were struck by how conventional it was, especially when it came to automation and robotics. But a report from the HNGRY blog this week says that actually, the Amazon grocery store will have robot-powered micro-fulfillment.

From HNGRY’s story:

HNGRY has now confirmed that Amazon is working with Dematic to provide this very technology inside of its new stores, which will ultimately enable faster than average last-mile delivery and in-store pickup. The company has carefully designed this 7,200 sqft area to house room-temperature robotic-picked storage aisles that will house everything from alcohol to packaged food, occupying about 21% of its 33,574 sqft total footprint.

If HNGRY’s reporting is accurate, this actually makes more sense than Bloomberg’s report in a lot of ways. First, Amazon loves robots. It bought robotics company Kiva Systems a long time ago for automating Amazon warehouses. And Amazon is building a big new, dedicated robotics center near Boston.

But it also makes sense from a competitive standpoint. Automated order fulfillment can translate into faster turnaround for grocery pickup or delivery. Already, Walmart is working with Alert Innovation on robot micro-fulfillment, and Albertsons has partnered with Takeoff Technologies.

It would be highly unlikely that Amazon, which prizes speed and efficiency above all else, would cede this type of advantage to its competitors. Amazon offers two-hour delivery for Prime members and waived the delivery fee for Prime members towards the end of last year.

Amazon is also seeing growth in its grocery delivery business. In its most recent earnings report, Amazon said that delivery orders from Amazon Fresh and Whole Foods doubled year-over-year in Q4 of 2019.

HNGRY’s report is reassuring, in a way. I was worried Amazon’s supermarket was shaping up to be a bit of a bore. But it’s likely the company still has a few more technological surprises in store.

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.

Albertsons Partners with Takeoff for In-Store Robot-Powered Micro-FulFillment Center

Albertsons announced today it will pilot a new micro-fulfillment center in one of its grocery stores using Takeoff‘s robot-powered technology. The deal marks the first time a nationwide grocery chain will implement Takeoff’s technology, and further highlights how robots will play an increasingly important part of the grocery retail experience.

Details on the upcoming Albertsons implementation were light. The press release only said the micro-fulfillment technology would be built into an “existing store” and didn’t say where or when the build out would be complete.

Takeoff partners grocery chains to create automated systems inside grocery stores to fulfill ecommerce orders. The center typically requires 6,000 – 10,000 square feet (about an eighth of a store’s total space) and holds commonly ordered items in its inventory. When an ecommerce order comes into the store, Takeoff’s software coordinates a series of crate-bots that shuttles food around a railed system. Items are automatically brought to a human who bags the order for pickup or delivery.

Get ready for Takeoff

Albertsons may be the first nationwide chain to implement Takeoff’s solution, but the startup has been working with other partners including another test this month with Hispanic market, Sedano’s in Miami. I spoke with Takeoff’s CEO, Jose Vicente Aguerrevere and President, Max Pedro earlier this month, who said that their company has agreements with five retailers and will have five micro-fulfillment sites going live in Q1 of 2019.

It should be noted, however, that Albertsons is not the only national chain experimenting with robot-powered systems to speed up order fulfillment. This summer, Walmart announced it was building out a 20,000 square foot robotic fulfillment center to its Salem, New Hampshire store. And Kroger is leveraging its investment in Ocado to create 20 robot-driven smart warehouses across the country to speed up its last mile logistics.

All of this is to say that automation is hot. More than $1.2 billion has been invested in grocery tech this year, according to Pitchbook, and robots are playing a starring role. In addition to fulfillment, robots are scanning shelves to check on inventory, powering self-driving vehicles for food delivery and possibly being embedded into shopping carts.

Automation may be great, and it certainly seems poised to, err, take off in the coming year, I just hope robots can start doing a better job of picking out produce I order online.