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The Spoon

Daily news and analysis about the food tech revolution

robotic fulfillment

Kroger to Build Out Ocado-Powered Automated Fulfillment Center in Romulus, MI

Grocery giant Kroger announced today that it will be building out its next Ocado-powered robotic fulfillment center in Romulus, MI.

Kroger is an investor in Ocado and uses the U.K.-based company’s technology to create automated fulfillment centers. These centers use a system of totes, rails and robots to assemble and expedite online grocery orders from a central location that are then sent out for delivery. Kroger is in the process of building out 20 of these facilities across the U.S.

In June, Kroger announced that the Great Lakes, Pacific Northwest and West would each get their own fulfillment center. The Romulus facility will service the Great Lakes region. Other locations announced include Frederick, MD, Monroe, OH, and Dallas, TX, among others.

Kroger’s ongoing automated march across the U.S. comes at a time when the pandemic and spurred record amounts of online grocery shopping. Though recent data suggest that the initial surge in online grocery shopping tapered off later in the summer, online grocery shopping sales are projected to hit $250 billion by 2025.

The first of Kroger’s automated warehouses aren’t scheduled to become operational until early 2021. That will give Kroger plenty of time to properly ramp up its own delivery operations amidst growing grocery e-commerce, but it also gives Kroger’s competition time to gain more marketshare. Amazon is expanding its grocery ambitions and offers Prime members free same-day delivery. Walmart just launched its own subscription service that offers free same-day grocery delivery as well. Even more regional players like H-E-B in Texas are getting into the automated grocery fulfillment game.

Kroger’s Romulus facility will be 135,000-square-foot, will create 250 new jobs and open up 18 months after the site breaks ground.

Online Grocery Demand Up 80-100 Percent At Takeoff’s Robot Fulfilment Centers

Anyone who has tried to order groceries online in the past month knows how backed up the supermarkets are. Amazon has implemented a waitlist for grocery delivery, ShopRite has virtual waiting rooms before you can actually shop for groceries, and Instacart is ratcheting its delivery force up to 750,000 workers to deal with demand.

One thing that could alleviate some of the stress being put on grocery e-commerce is robots, specifically the robotic fulfillment of online orders. Automated fulfillment centers use a series of totes and rails to to gather items for online grocery orders. These fulfillment centers are either built into the back of existing stores, or in standalone facilities.

Robots are ideal for this surge in grocery fulfillment for a few reasons. They are fast, precise, tireless, and, perhaps most important in our pandemic world, they don’t get sick.

Robotic fulfillment is still pretty nascent, with most retailers bringing robotic fulfillment online in just the past year. Given the crush of new e-commerce grocery shoppers and the need to fulfill all those orders, I spoke with Curt Avallone, the Chief Business Officer of Takeoff Technologies by phone last week. Takeoff builds automated fulfillment centers for a number of retailers including Albertsons, Loblaws, Sedano’s, and ShopRite.

“We have nine large grocery chains, six operational units and another 20 under construction,” Avallone told me. “The demand for online grocery is up 80 percent to over 100 percent at our facilities.” Additionally, Avallone said order volume is up. Where the average basket size used to be $150, that number is now pushing up towards $200 since the coronavirus outbreak.

Avallone also said that their current retail partners are ordering more micro-fulfillment centers as grocers anticipate a larger proportion of their business will be online.

“Speed is being requested by most of our retail partners, so they can do a better job of meeting customer demand,” Avallone said.

Takeoff clients are also looking to build more standalone facilities, rather than putting them in the backs of stores. “We still have a lot of facilities being attached,” Avallone said, “but there is a desire to move as quickly as possible. Sometimes standalone is faster.”

Part of the allure of standalone facilities is the ability to locate them away from traffic congestion and closer to major roads for easier routing. They can also be built without any complications from also needing to service in-store customers, and can operate 20 – 22 hours a day, and only require a crew of 12 people.

For retailers looking to add robotic fulfillment, Avallone says that Takeoff’s solution costs $3 – $4 million and takes between 12 and 16 weeks to be operational.

Takeoff isn’t the only company providing robotic fulfillment for retailers. Fabric (formerly Common Sense Robotics) is expanding its presence here in the U.S., Amazon is working with Dematic at its new standalone grocery stores, Kroger is building out standalone facilities powered by Ocado‘s technology, and Alert Innovation is working with Walmart.

With sheltering in place likely to be with us for a while, and at least one study showing that 60 percent of US shoppers are scared to go into grocery stores, online grocery’s sudden surge could become new normal. If so, we’ll need all kinds of tools, including robots, to help fulfill orders and the promise of online grocery shopping.

Kroger Building Next Ocado Automated Fulfillment Center in Frederick, MD

Looks like grocery shoppers on the west coast hoping for an automated warehouse to fulfill their grocery orders will have to wait a little bit longer. Kroger announced today that its next Ocadao-style robot-powered fulfillment center will be in Frederick, MD.

Kroger is building 20 of these smart warehouses, but none so far have made it out west. Other cities getting automated fulfillment centers include Monroe, OH, Groveland, FL, Forest Park, GA, Dallas, TX, and Pleasant Prairie, WI. Frederick appears to be the vague “mid-Atlantic” location the company had previously announced.

These automated fulfillment centers use robotic totes on rails to assemble online grocery orders. Kroger, which is an investor in Ocado, is taking more of a standalone approach to automated grocery fulfillment, building out entirely new, separate facilities. Other retailers such as Albertsons are building out automated micro-fulfillment centers in the back of existing retail locations.

Online grocery shopping is still a small percentage of overall grocery shopping, but its growing. Automated fulfillment centers like the ones Kroger is building have the potential to boost online grocery’s slice of the pie by offering faster turnaround of online orders (and thus, create more orders).

All these systems are just coming online over the coming months, so it remains to be seen how people will engage with them. Additionally, we’ll have to see if there is a difference in convenience and shopper adoption between standalone facilities and in-store ones (or some combination of both).

Kroger shoppers living in Baltimore, Washington D.C. and Philadelphia being served by the new Frederick facility won’t actually be that far ahead of the west coast. The new warehouse won’t open until 24 months after groundbreaking.

Albertsons and Takeoff Partner for Robot-powered Grocery Micro-Fulfillment

Grocery retailer Albertsons and Takeoff Technologies announced today that they are forming a strategic partnership with a dedicated teams to “collaborate on the evolution of microfulfillment,” according to the press release. Translation: Albertsons is getting more robots to grab your groceries.

Takeoff creates robot-driven micro-fulfillment centers to facilitate online grocery orders. The automated system consists of a series of tote boxes, rails and conveyors and is small enough to be built into the back of an existing grocery store. When an online order comes in the robots taxi each item to a human who packs them all up for delivery or pick up.

Today’s announcement expands on a pilot program Albertsons and Takeoff announced a little more than a year ago. The first micro-fulfillment center of that deal opened this past October in South San Francisco, with another set to open in San Jose before the end of the year.

A year in between the announcement of the pilot deal and its actual implementation may seem like a long time. But as Trung Nguyen, VP of eCommerce for Albertsons told us at our Articulate summit earlier this year, a company the size of Albertsons has to move cautiously when implementing new technologies. The grocer isn’t just interested in cool new solutions; those solutions have to work at scale immediately.

While online grocery shopping is still a small part of overall grocery shopping, it’s growing. Robot powered micro-fulfillment centers like Takeoff’s promise to not only speed up order fulfillment, but since they’re built into existing grocery stores, they push that fulfillment closer to the consumer. This, in turn, should translate into faster order turnaround for delivery or pickup (and more online grocery ordering).

This has been a big year for Takeoff. The startup added ShopRite and Loblaws as customers and raised $25 million.

While Albertsons is heading in Takeoff’s micro-fulfillment direction, rival grocery chain Kroger is going a different way. Kroger is an investor in and using Ocado’s robotics and software platform for online grocery fulfillment. Instead of building smaller centers in stores, Kroger/Ocado is building larger, standalone fulfillment warehouses throughout the country.

Regardless of the implementation, automation is coming to your local grocery store, and it looks like we’ll see a lot more of it happen next year.