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Daily news and analysis about the food tech revolution

Takeoff

Takeoff Technologies to Have 40 Automated Fulfillment Centers Operating This Year

Takeoff Technologies launched its first grocery automated fulfillment center in the fall of 2018. Needless to say, a lot has happened in the grocery space since then, including a global pandemic that abruptly pushed record amounts of grocery shopping online. To keep up with this wave of grocery e-commerce, more grocers have accelerated and adopted the use of automated fulfillment centers like Takeoff’s.

We last checked in with Takeoff during the first wave of the pandemic in 2020. At that time, the company had six centers operational and another 20 under construction. Since it has almost been a year since then, we checked back in with Max Pedró, Co-Founder and President of Takeoff Technologies this week. Pedró said that Takeoff now has 13 sites that are live now, and will have more than 40 by the end of this year. Takeoff has partnerships with retailers such as Albertsons, Ahold Delhaize, and Carrefour, with sites running on both coasts of the U.S., as well as in Canada, Australia and in Dubai.

The latest market survey from Brick Meets Click showed that grocery e-commerce dropped between January and February of this year. Usage fell particularly among those over 60, who were among the first groups of people to get vaccinated. Online grocery shopping is expected to go through a market correction this year as vaccinations allow people to move more freely outside of the home.

But Pedró believes that customers have developed new habits after a year of lockdowns and e-commerce is here to stay. He’s not alone in that belief. Mercatus forecasts grocery e-commerce will hit $250 billion by 2025, taking up 21.5 percent of total grocery sales.

Obviously, Pedró has a horse in the automated fulfillment race, but he outlined his reasoning for why he believes the technology is here to stay. First, Pedró said that automated fulfillment makes the online grocery business model more economical. Part of the reason it can become more economical is because automated fulfillment creates more throughput — grocers can pick and pack more orders, faster. Finally, Pedró said that automated fulfillment allows independent grocers to better compete with giants like Walmart and Amazon, which offer free two-hour delivery to their members.

Along with all this opportunity, Takeoff is also facing increased competition in the automated fulfillment space. Swisslog is providing fulfillment to regional Texas grocer H-E-B. Walmart has enlisted the help of Alert Innovation, Dematic and Fabric to build out dozens of automated fulfillment centers. And Kroger is starting to open up its own, standalone automated Customer Fulfillment Centers powered by Ocado.

There are still questions over how many customers will continue to use e-commerce for groceries after they’ve been vaccinated, and the overall efficacy and economics of automated fulfillment. But for now, it appears that Takeoff’s technology is taking off with retailers this year.

If you’re curious about the future of robotics in grocery, be sure to attend ArticulATE, our virtual food automation conference on May 18!

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.

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.

Takeoff to Provide Robotic Order Fulfillment for ShopRite

Wakefern Food Corp. announced yesterday that it has partnered with Takeoff Technologies to build an automated fulfillment center in Cliffton, NJ. The center will fulfill orders for online shoppers at select ShopRite stores in New Jersey and New York.

Takeoff builds robot-powered micro-fulfillment centers, which use a series of tote boxes, rails and conveyors to quickly assemble online orders for either delivery or pickup. These centers are on the smaller side and typically in the back of existing supermarkets. Through its automated system, Takeoff can put together online orders of up to 60 items in just minutes.

Wakefern, which is a cooperative of 50 retailer-owned grocery retailers across the east coast, including ShopRite, The Fresh Grocer, Price Rite Marketplace and Dearborn Market, said in the press release it has agreed to build out more fulfillment centers with Takeoff in the future.

While online shopping is currently a small percentage of overall grocery shopping, it’s growing, and retailers are preparing for it by testing automated fulfillment systems like Takeoff’s, expanded curbside pickup and self-driving delivery vehicles. All in an effort to get you your groceries faster and get more of your business.

Robotic order fulfillment seems to be picking up steam as Kroger recently announced it will open its fourth Ocado-powered automated fulfillment warehouse in Georgia, Common sense Robotics opened up its own micro-fulfillment center in Tel Aviv, and Walmart has partnered with Alert Innovation to test out its micro-fulfillment solution.

For its part, this is the fourth grocery retail customer for Takeoff, which already has agreements in place with Sedano’s, Albertsons, and Ahold Delhaize.

Here’s The Spoon’s 2019 Food Robotics Market Map

Today we head to San Francisco for The Spoon’s first-ever food-robotics event. ArticulAte kicks off at 9:05 a.m. sharp at the General Assembly venue in SF, and throughout the daylong event talk will be about all things robots, from the technology itself to business and regulatory issues surrounding it.

When you stop and look around the food industry, whether it’s new restaurants embracing automation or companies changing the way we get our groceries, it’s easy to see why the food robotics market is projected to be a $3.1 billion market by 2025.

But there’s no one way to make a robot, and so to give you a sense of who’s who in this space, and to celebrate the start of ArticulAte, The Spoon’s editors put together this market map of the food robotics landscape.

This is the first edition of this map, which we’ll improve and build upon as the market changes and grows. If you have any suggestions for other companies or see ones we missed you think should be in there, let us know by leaving a comment below or emailing us at tips@thespoon.tech.

Click on the map below to enlarge it.

The Food Robotics Market 2019:

ArticulATE Q&A: Albertsons on What it’s Looking for From Robots

Robots are on the verge of transforming everyday grocery shopping into something more sci-fi. From shelf-scanning robots to self-driving delivery to your door, the food retail biz has been surprisingly aggressive in its moves to modernize.

Albertsons is not immune to this wave of automation. The grocery giant is piloting a robotic micro-fulfillment center built into the back of one of its stores through a partnership with the startup Takeoff. These robot centers will drastically shrink the amount of time it takes to process online orders, allowing for faster delivery or curbside pickup.

Narayan Iyengar is the SVP, eCommerce & Digital at Albertsons, and he is among the luminary speakers we’ve lined up for our upcoming ArticulATE food robot and automation summit in San Francisco on April 16. You should get a ticket and join us! To give you a sense of the great conversations that will take place, we did a brief (and lightly edited) Q&A with Iyengar to get a sense of how Albertsons is weaving robotics into their overall retail experience.

What is Albertsons looking to find out with this robotic fulfillment center pilot that you’re doing with Takeoff?

Iyengar: I think the space is actually quite exciting and evolving very fast and to me, there are a couple of different ways of thinking about this for grocery home delivery in general. There are multiple models of grocery, there is the big central fulfillment type model that works in some pockets and some cities in the US. Then there is a store-pick model, which we and several other third-party delivery services pick from our stores and deliver, let’s called that model two. But as volumes increase, we have to find a model that makes economic sense as well as uses the existing supply chain, “cool chain” and the merchandise to be able to serve customers same day or early next day.

So when we all look at the models that are available out there, does it cut across all three things: One does it use the existing flow for fresh [food]? Two, does it use the existing supply chain? Three, will it drive down the price for picking and packing?

So, as a part of this pilot they’re trying to test the three things: One, prove out that this model would work. That is to say, we collect the order, we have an automated system that picks and packs the groceries, and then we deliver it to the last mile. Second is to see if this particular technology vendor is the best at executing this model for us. And the third one is to test out the integration, because the robotics, it’s just one part of it. The rest of the model needs to work as well: the website for the app, the inventory management, all of that needs to get integrated.

How does Albertsons view automation overall? How are you learning to design a workforce that includes both humans and robots?

This particular Takeoff technology, yes it’s robotic, yes it’s automated, but when you look at practical solutions that work, they tend to be a lot less “sexy” than you think. They are very practical, it’s got a bunch of conveyor belts that bring totes of items that humans pick from. So, it dramatically reduces labor hours required to do a certain task. It’s robots and automation helping humans be faster.

Automation has been the standard thing in the retail and grocery industry for many, many years now. And so this essentially is technology that miniaturizes that and puts that within a store in a smaller footprint. Broadly speaking, I think everybody is in the process of testing and learning at the store level to see what does automation and robotics look like. Many of them will not be ambulatory robots that resemble the sci-fi movies, they’ll be much more mundane and down to earth, but extremely practical.

So our approach to testing all of this from a labor management perspective and so on is we have a design a new system for Takeoff, for this solution that they are piloting. We are going to design a new process, a new way of working which includes aspects of what the automated system does best, and how do you build the workflow around it? How do you manage the ordering process around it? How do you pick and pack? And how do you do the layout of micro-fulfilment centers in a way that maximizes the value of this automated system? So the layout, the labor process — all that needs to be thought through and redesigned, which is a part of what we hope to accomplish in this pilot.

What are the specific needs for grocery as Albertsons consider automation?

I mean it’s no surprise here really, but there are three or four broad things. The first one is the fact that you are dealing with fresh produce, it has its own set of logistical challenges that need to be addressed. The way you pack it is different, you cannot pack a hot rotisserie chicken along with ice cream, for example. You have different zones that you have to consider not just for transportation, but also when packing. The cool chain becomes important because the quality of items you’ll receive will be heavily determined by temperature staying within the relatively narrow zone throughout: from the time that fish is caught all the way to the time you’ll cook it. So the fact that you’re dealing with fresh and the cool chain needs to be considered and that makes grocery very different.

The second challenge that needs to be considered is that grocery is often a very large number of SKUs. Traditional e-commerce, you go to buy one item. You end up with a couple other things [in your] cart so you end up having three, four, five item tops when you buy anything. You buy a television, you probably buy a couple of cables next to it and maybe a speaker; a pair of shoes, you buy a couple of pairs of socks… For grocery, the average basket it 30 to 40 items, and many of those items cost $2 or $3. It’s a high number of items, so you’ve got to design a system that works towards a set of items that can be picked in a high degree of repetition.

And the third one is the repeat nature of purchasing. Grocery shopping is a habitual thing. People are used to doing it in a certain way because unlike other items that you often buy once in six months, once in three months — I mean, how often you buy a pair of shoes that or a television set, right? — food is something that you buy multiple times a week. You keep running out of milk or eggs or other things and end up going to grocery store and reordering very, very frequently. So the entire chain, both the interface as well as the delivery system, lends itself very well to habit formation.

How are Albert and customers treating online shopping and have you noticed them trending towards delivery or pick up?

Well, it’s a bit of both — I mean, we’re seeing good traction for our home delivery, both our own home delivery as well as Instacart partnership and so on. We are also seeing ‘drive up and go’ grow in all the centers that we offer it. I think the grocery market is so large and basically everybody has a stomach, and you have absolutely as many different preferences as there are people.

So, we are seeing there’s a certain section of the population that wants immediate delivery, and [is] willing to pay a premium for it. There’s a certain set of people who are more methodical and do the stock up trip, they plan a couple of days in advance and they order in bulk, we have solutions for that. And there is another set of people that want to order online but they don’t want to be tied to being at home at a certain point in time. So for them drive up and go works fine because you order and then you can pick it up any time after two hours from the time you order, so it fits well with that schedule.

What is your favorite fictional robot?
Giant Robot (from Johnny Sokko) is really cool!

With Ahold Delhaize, In-Store Robot Fulfillment Centers Now a Trend

If it’s true that it takes three occurrences of something to make it a trend, then in-store robot fulfillment centers are now officially a trend in the U.S. Reuters reports Ahold Delhaize, the Netherlands-based grocery company, has partnered with Takeoff to roll out automated mini-warehouses at some of its retail locations, which include Food Lion, Stop & Shop and Giant Food.

The move makes Ahold Delhaize the third grocery giant to experiment with in-store robot fulfillment in recent months. In August, Walmart announced it would partner with Alert Innovation to build out an automated fulfillment center in its Salem, New Hampshire store. And just last week, Albertsons announced it was piloting its own robot fulfillment in partnership with Takeoff as well.

In-store robot fulfillment has the promise of speeding up delivery or pickup of groceries. Takeoff’s system usually takes up about an eighth of a store’s square footage. When an online grocery order comes into the store, a series of crates on racks and conveyor belts automatically shuttle food items to a human who assembles and bags them. The automated system could have a grocery order ready in as little as a half hour.

The fact that the fulfillment centers are built inside existing stores means that grocers don’t have to set up a separate distribution center with its own inventory (and accompanying systems). Since people typically shop from a grocer that is already in their neighborhood, delivery or curbside pick up of orders are that much closer–and thereby faster to reach their destination.

Online grocery shopping is set to hit $100 billion by 2022, and a recent study from the Retail Feedback Group showed that there is growing acceptance of purchasing fresh items such as produce and meats online, site unseen. This willingness to purchase even more food online from a generation of shoppers used to getting things on demand will make convenience and speed table stakes for anyone in the grocery game.

It should also be noted that the Ahold Delhaize deal marks the third publicly announced partnership for Takeoff. In addition to the aforementioned Albertsons, the startup is also working with Miami-area grocery chain Sedano’s. The company says it has agreements with five retailers and will have five of its fulfillment sites open in Q1 of 2019.

Not every grocer is jumping on the in-store bandwagon, however. Kroger upped its investment in U.K.-based Ocado earlier this year and has plans to build out twenty dedicated robot-driven grocery fulfillment centers over the coming years. The locations of the first three are set to be announced in the coming weeks.

None of these in-store automated systems are online yet, so it remains to be seen how they will be used and how much efficiency they will truly bring. But if they work as promised, today’s robot trend will be tomorrow’s new normal.

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.

Takeoff is Creating New Hybrid, Hyperlocal Robotic Grocery Fulfillment Centers

This fall, startup Takeoff will be launching its first hyperlocal grocery micro-fulfillment center powered by robots and artificial intelligence (AI). Whew! There’s a lot to unpack in that opener, mostly because Takeoff is at the center of quite a few trends we’re seeing in grocery retail.

First, a brief explainer. Takeoff partners with existing grocery retailers (the company declined to provide specifics names at this time) and builds mini-robotic fulfillment centers inside these stores. Takeoff co-founders Jose Vicente Aguerrevere and Max Pedro told me in an interview that their system requires 6,000 – 10,000 square feet, which is “an eighth or less” of the size of a typical grocery store.

As you can see in the video below, these fulfillment centers are big, automated system that shuttle around crates of products, bringing them to a human picker, who bags the items for pickup or delivery. The robots are from KNAPP, and Takeoff has built an end-to-end software solution that manages inventory, robotic fulfillment and customer delivery logistics for its system.

Depending on the partnership, customers will either order groceries through the Takeoff app, or through the retailer’s app. Once placed, the order is sent to the robot fulfillment center where it automatically grabs the selected items. After the items are sorted and bagged, customers can either pull up to a special Takeoff drive-through at the store or schedule a delivery within a two-hour window.

Because Takeoff partners with existing retail stores, it doesn’t have to manage its own inventory. Vicente Aguerrevere and Pedro said that additionally, with Takeoff being embedded in the store, they get a hyperlocal view into what products are popular in each neighborhood. With this data, Takeoff can fine tune its own stocking and fulfillment procedures to be more efficient.

While it remains to be seen what Takeoff will look like when it actually launches (location TBA), the startup is worth watching because it will sit in this nexus of so many grocery trends: microhubs, robotics, and pick-up/delivery.

At first glance, Takeoff is kind of like Farmstead, which is using AI to precisely manage inventory and deliver groceries from smaller, urban microhubs. By skipping big warehouse fulfillment centers (a la Good Eggs) and their requisite zoning requirements, Takeoff can go deeper into urban areas to facilitate faster grocery service by being closer to the customer. But where Farmstead is using humans, Takeoff is relying on robots.

This robotics approach is then similar to Common Sense Robotics, which is using robots to speed up delivery in its own microhubs. Robots can move quickly and accurately, and operate heavy loads without a break. But Common Sense builds its own bespoke micro warehouses to re-shape the supply chain. Takeoff is working within existing supply chains in grocery stores, leveraging supermarket infrastructures and neighborhood locations.

Hooking up with grocery stores doesn’t just help Takeoff leverage someone else’s inventory — it also helps with the last mile. Because Takeoff functions inside grocery stores, which are already close to where people live, customers can either pick up their groceries while running errands or let Takeoff’s software coordinate a drop-off through various delivery services.

Takeoff plans to make money through revenue sharing with potentially no up-front cost for the store, depending on the arrangement. Takeoff is based in Waltham, MA, has 75 employees and recently closed a $15 million Series B round, bringing its total fundraising to $37 million.

There is definitely a lot to unpack with Takeoff, now we’ll just see if retailers bring them on board to pack more of their groceries.