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The Spoon

Daily news and analysis about the food tech revolution

Takeoff Technologies

Food Tech Show Live: Dark Kitchens, Dark Grocery

The Spoon team got together on Clubhouse on Friday to talk about the biggest stories of the week. Our special guest was Veronica Fil, the CEO of Grounded Foods.

The stories we discussed include:

If you’d like to join us for the live recording, make sure to follow The Spoon’s Food Tech Live club on Clubhouse, where you’ll find us recording our weekly news review every Friday.

As always, you can listen the most recent episode and past episodes on Apple Podcasts or Spotify. To listen to last week’s episode, just click play below.

Albertsons Expanding Use of Micro-Fulfillment with Takeoff

Albertsons is adding more micro-fulfillment centers (MFC) from Takeoff Technologies in an effort to keep up with grocery e-commerce, according to a story in Supermarket News.

Takeoff Technologies’ MFCs use a series of conveyors, rails and totes to help automate the process of fulfilling online grocery orders. When an order comes in, the system retrieves and assembles the various items, which are then packed into bags by a human before being sent out for delivery or curbside pickup.

Albertsons launched the first two of its MFCs with Takeoff in San Jose and San Francisco towards the end of last year. The grocer is now looking to build out a number of new MFCs with Takeoff over the rest of this year and into next. Chris Rupp, chief customer and digital officer at Albertsons Cos., told Supermarket News, “We have a series of new locations we’ll launch over 2020 and 2021 that will help us deliver more groceries, faster, to customers in some of our highly concentrated areas of business.”

Those new MFCs will include both back-of-house facilities — that is, fulfillment centers built into the backs of existing stores — as well as standalone MFCs that are basically dark grocery stores. Last year ShopRite announced it was building out a standalone MFC with Takeoff.

That Albertsons is expanding its use of MFCs is not that surprising. The pandemic has pushed people into record amounts of online grocery shopping. Back in April, at the height of the lockdowns, I spoke with Curt Avallone, the Chief Business Officer of Takeoff Technologies who said that the company had seen demand for online grocery up 80 to 100 percent at its facilities, and that basket sizes had gone up from $150 to $200.

Those levels may have plateaued or even dipped since April, but Albertsons’ committing to building out more automated MFCs is an indication that grocery e-commerce is now a more permanent part of the country’s shopping habits.

Albertsons isn’t alone in adopting more automation to fulfill online orders. During my call with Avallone, he said that Takeoff had six operational units with other partners including Sedano’s and Loblaw’s, with another 20 MFCs being built. Kroger is also hard at work building out its own Ocado-powered smart warehouse fulfillment centers across the country.

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.

Takeoff Raises $25M for Robot-Driven Grocery Microfulfillment Centers

Takeoff Technologies, which builds automated microfulfillment centers for grocery retailers, announced today that it has raised a $25 million Series C round of funding led by Forrestal Capital. This brings the total amount raised by the company to $86 million dollars.

Takeoff builds small robot-driven fulfillment centers, typically located in the back of grocery stores. The system uses a series of totes and rails to assemble online grocery orders for pickup or delivery in as little as a half hour. The company has announced partnerships with Albertsons, Ahold Delhaize, Wakefern and Sedano’s, and with today’s funding, Takeoff says it will scale out across North America, Europe and Australia.

The company also announced version 2.0 of its microfulfillment centers, which will be rolled out in 2020. According the press release, version 2.0 will have a “smaller and cleaner” design to allow for easier installation and six percent faster order packing. The v2.0 will also feature autonomous mobile robots that transport grocery totes.

Automated fulfillment centers are a big area of investment for grocery retailers this year as companies look to streamline order processing. Rather than having humans wandering the store aisles fulfilling orders for other humans, robots can do the job more quickly and accurately. As mentioned, Albertsons and Ahold Delhaize are working on in-store solutions through Takeoff, while Walmart is piloting its own in-store microfulfillment center with Alert Innovation. Kroger is taking a different approach and is building out 20 robot-driven smart warehouses over the next two years.

A recent study by Brick Meets Click showed that while online grocery shopping is only 6 percent of overall grocery sales, they have actually grown 15 percent year-over-year. Microfulfillment centers like the ones Takeoff builds provide the infrastructure to meet demand when online grocery eventually goes mainstream — which isn’t that far off.