Close Ad

The Spoon

Daily news and analysis about the food tech revolution

Target

Walmart Gains Share in Online Grocery as Shoppers Look for Ways to Combat Inflation

While online grocery shopping continued to grow last year, where people shopped shifted significantly according to a new report from grocery researcher Brick Meets Click.

The new report, which details the egrocery performance for different retail formats, said Walmart was the big winner in 2022 as more and more customers looked for ways to save a buck. According to the report, which broke down the four major formats as supermarkets, Walmart, Target, and Hard Discount (i.e. Aldi and Lidl), Walmart saw its share of online grocery shoppers grow in both low-income and high-income households.

According to Brick Meets Click, households making less than $50 thousand per year were 25% more likely to shop at Walmart than a supermarket, and Walmart’s total share of online grocery in this household category grew by 2.1% vs. a contraction of 1.5% for supermarket’s share. On the high end of the spectrum, Walmart gained ground in households making over $200 thousand annually, expanding its reach into this segment by 2.1%. In contrast, supermarkets saw their reach shrink by 1.2% in 2022 vs. the previous year.

The reason for the shift towards Walmart for both segments was persistent inflation. Lower-income households were driven by what the researcher terms “flight to value,” where they buy products priced via an “everyday low price” pricing model employed at Walmart and hard discounters such as Aldi. And while high-end income households are three times more likely to shop online at a supermarket, the format lost share to Walmart in 2022 as upper-income earners also looked for ways to save on groceries.

As for Target, the retailer also saw its share of high-income households expand in 2022, which also contributed slightly to the decline of overall online share for the supermarket segment. In addition, the Minnesota-based retailer also continued to attract younger shoppers relative to the supermarket segment, as young households (18-29 years old) are 36% more likely to shop online at Target vs. a supermarket.

The report does not detail where Amazon fits in all of this. According to The Street, Amazon’s total share of physical store grocery spend was about 2% of total grocery sales at about $17.5 billion in 2021. That compares with Target’s $20.3 billion in food and beverage sales in the same year.

As for how households are getting their groceries, over half of the monthly active online shoppers (52.2%) picked up groceries via curbside or in-store pickup in March of this year, according to a separate report by the researcher. Ship to home, which usually means dry goods and shelf-stable products, dropped from 47.5% of monthly online grocery shoppers in March 2022 to 40.9% in March 2023, while grocery delivery (which usually includes fresh produce, dairy, and meat) grew from 40.8% in March of last year to 41.5% this March.

Despite the growth of the online grocery category, the researcher says that in-store is still the dominant form of grocery shopping. In a report released earlier this year, the total share of online grocery shopping accounted for just over a tenth (11.2%) of all grocery spending at the end of last year and is expected to grow to 13.6% by the end of 2027.

Target Launches Good & Gather Plant Based Brand

Retail giant Target announced this week the launch of Good & Gather Plant Based, a new line of more than 30 plant-based food and beverage products. The move is a reflection of the growing demand for plant-based foods, and Target’s new branded line could help push the category further into the mainstream.

Good & Gather Plant Based is an extension of Target’s Good & Gather brand, which currently sells more than 2,000 products found throughout the store including pantry items, dairy, deli and frozen foods. It even sells meatless patties and chick’n tenders. The new Good & Gather Plant Based brand will expand those offerings to include new items such as cashew dip, non-dairy chocolate-flavored mousse dip, and buffalo-style cauliflower wings. In the press announcement, Target says that most items will cost less than $5.

Target jumping into the plant-based food space with such gusto further illustrates the growing importance of plant-based food to retail’s bottom line. According to recent data from the Good Food Institute, the U.S. retail market for plant-based foods is $7 billion, up from $5.5 billion in 2019. Additionally, plant-based food sales grew 2.5 time faster than total food sales between 2018 and 2020.

As Liz Specht, Director of Science and Technology for the Good Food Institute pointed out on Twitter:

But Target’s introduction of Good & Gather Plant Based isn’t just a reaction to increased demand for plant-based. With most products costing less than $5, Target’s branded push and massive reach could help drive even more demand for plant-based products. Target says its Good & Gather brand generated more than $2 billion in sales last year (and remember, U.S. plant-based was $7 billion last year). If Target can position its Good & Gather Plant Based as more mainstream and put its promotional muscle behind it, that could actually move the needle for the nascent plant-based category.

Food Tech News: Virtual Derby Fare Is Upon Us

The Kentucky Derby is around the corner! Not that I or many other folks will be physically present for the famed event this year. We will, however, be cooking up some classic Derby fare, courtesy of the internet. Read on for more on that as well as other food tech news bits from the last week.

Virtual Derby Menu 2020

Churchill Downs Racetrack, home of the Kentucky Derby, is once again offering an at-home Derby menu for couch-bound attendees of the famous event — of which there will be many more this year, given the venue’s reduced capacity requirements. For the event, taking place September 5, Churchill Downs has created an at-home menu fans can access online and create in their own home kitchens. 

Africa’s First High-Tech Greenhouse

Van der Hoeven Horticultural Projects has started construction on the first fully automated glass lettuce greenhouse in Africa. The greenhouse, outside Cairo, Egypt and roughly 2.5 hectares in size, will grow herbs and lettuce, while automation technology will regulate climate and plant density for more optimal growing in desert conditions.

The Profitability of Plant-Based Eggs

Eat Just, maker of the famed JUST plant-based egg, is on track to profitability, according to a report this week from Reuters. The company aims to turn an operating profit before the end of next year is also considering and initial public offering.

Target All-In on Online Grocery

Target announced this week that its grocery pickup service is now available across the U.S. The service is now available in about 85 percent of its stores. For now, only Target’s most popular items (about 750 of them) are available for pickup, though the ongoing popularity of online grocery could change that in the future.

Target Rolls Out Grocery Curbside Pickup Options Nationwide

Target announced today that it is expanding its Order Pickup and Drive Up services for fresh and frozen groceries nationwide. These services will be available in 400 stores by the end of this month and will hit 1,500 stores by the holidays this year.

According to the press announcement, 750 items across produce, dairy, bakery, meat and frozen products (so it doesn’t seem like you can order everything from Target’s grocery section). Orders will be ready for pickup just a few hours after being placed, and there is no extra charge for using the pickup services.

Techcrunch writes that Target won’t be using Shipt, the logistics company it acquired a few years back, for fulfillment. Instead, Target employees will pick and pack the groceries and hand them off.

Having a contactless curbside pickup program is table stakes anymore during this pandemic, as many people still look to avoid actually going in to grocery stores. The Wall Street Journal recently quoted a study from Nielsen that found grocery pickup sales are up 81 percent since the beginning of the year. Retailers like Walmart, Kroger and Albertsons are carving out more space for curbside pickups, and Walmart, in particular has a geofenced system so it knows when you arrive.

Having tried curbside pickup from a number of different retailers over the past couple of months, Target’s was always the most frustrating. Some items were available for Drive Up service, while others were only available for in-store pickup — or only available if you shopped in the store yourself. This patchwork of availability made creating some unified e-commerce order across their entire store a mess.

Hopefully this rollout will smooth out these inconsistencies and create another nationwide option for online grocery shoppers who want curbside pickup.

Walmart, Target and Kroger Make Moves to Deliver Your Groceries Faster

Ever since Amazon bought Whole Foods in 2017, grocery chains big and small have upped their technology game to make sure they aren’t crushed by Bezos’ behemoth. The result has been more options than ever for grocery shopping, pickup and delivery.

This battle is far from over, and in the last week alone, grocery giants Walmart, Target and Kroger have made moves suggesting the fight has only just warmed up.

At the end of last week, TechCrunch uncovered Walmart’s Delivery Unlimited subscription service. For $98 a year, customers can order groceries for delivery without having to pay the $9.95 delivery fee.

Meanwhile, Target last week announced it was expanding same-day delivery for more than 65,000 items on Target.com for a flat fee of $9.99 per order. Customers must have a Shipt account (Target owns Shipt), which costs $99 per year.

Not to be outdone, Supermarket News reports Kroger has been quietly testing out a new service in its hometown of Cincinnati, OH called Kroger Rush that will deliver groceries in a half hour. Users must download the Kroger Rush app and pay a $5.95 fee per order, and the service seems to be aimed at people who want to order lunch or dinner online at the last minute. If that weren’t enough Kroger also broke ground on its first Ocado-powered smart shed, also in Cincinnati, which will use robots to facilitate faster grocery fulfillment and delivery.

For its part, Amazon has been relatively quiet lately in terms of hard announcements (well, if you don’t count its plans to launch a drone delivery service “within months”). The latest grocery rumblings we heard from the Seattle tech giant were around a possible Amazon-branded grocery store chain, though nothing official has been announced.

The bigger point in all of this is that grocery retailers are pushing innovation faster than ever. It shouldn’t come as a surprise, then, that both Walmart and Kroger made our list of Food Tech 25 list of Companies Creating the Future of Food in 2019.

Perhaps things are heating up because it’s the start of summer (pardon the pun), and with kids home from school, more groceries are needed around the house. Whatever the reason, the big players are accelerating their friction-free shopping experiences that will bring food to your front door faster than ever.

Target (Finally) Enters the Shoppable Recipe Game with Cooklist

Yesterday Target announced that it was kicking off a partnership with shoppable recipe startup Cooklist (h/t Dallas News). The retail giant will launch the new service first in 47 Dallas-Fort Worth stores and Target’s delivery service Shipt.

The Dallas-based Cooklist is a mobile app that lets people search from the million-plus recipes in its database, select their favorite, then compare prices and order the ingredients for either pickup or same-day delivery from nearby participating grocery stores. The app also keeps track of what groceries you have in your house and helps remind you when food is about to expire.

As of now the app can generate shopping lists of goods from 81 national grocery chains, but only offers grocery delivery through Target.

Cooklist’s partnership with Target isn’t exactly surprising. Last July the startup announced that it had raised a $250,000 “pre-seed” round, half of which came from the Techstars Retail Accelerator in Minneapolis. As part of the membership, Cooklist got office space at the Target HQ.

This is Target’s second shoppable recipe partnership announcement in as many days. Earlier today, guided cooking platform Innit revealed new shoppable recipe capabilities that basically let users create their own individualized meal kits(ish) and pick them up or order them for delivery from more than 30 retailers, including Target.

However, “Tarjay” has some catching up to do: Walmart and Albertsons/Safeway have been working with shoppable recipe platform Myxx for months, and Amazon Fresh has a whole bevvy of shoppable recipe partnerships with Fexy Media, Whisk, and SideChef.

It’s no secret that grocery competition is heating up, with retailers big and small trying to find ways to get you your goods list faster, cheaper, and more conveniently. Compared to some of its competitors, Target’s recent dive into the deep end of shoppable recipes is definitely on the later side — but I don’t think that’s a dealbreaker. The entire space is pretty young with lots of room for growth. With two partnerships in two days, Target shows that it’s taking shoppable recipes seriously.

Target Cancels Indiegogo For Smart Home Replenishment Platform

Well that’s disappointing.

Today Target notified backers that the retailer has decided not to move forward with a beta of Fetch, the IoT powered replenishment platform the company introduced via an Indiegogo campaign in April.

While Fetch was similar in concept to Amazon’s Dash platform, Target chose three ordinary looking (but connected) household items in a paper towel holder, a toilet paper spindle and a soap dispenser to act as replenishment sensors . Each device was to come with built-in Bluetooth and would reorder consumables for the user.

Not anymore, at least with this particular Indiegogo campaign. Here’s an excerpt from the cancellation update on the Indiegogo page:

Hi Backers,

We’d like to thank you again for pre-ordering Target Fetch. Your support as early adopters is very much appreciated.

We’re always testing and piloting new products and services for our guests as we work to meet their needs now and into the future.

At this time, we’ve made the decision to not move forward with the Indiegogo beta test for Target Fetch. Our purpose was to learn, and we received great input.

I liked the idea of Target creating its own replenishment ordering platform and had actually backed the campaign out of curiosity. As I wrote in my post from April of this year:

 I do think it makes sense for Target to start to think about ways to allow customers to subscribe to products online as more consumers transition to online shopping. Combine Fetch with Target’s same day delivery service, Shipt, (which is expanding to more cities) and it’s easy to imagine never running out of paper towels or any of the household basics.

If one thing struck me as off about the initiative, it wasn’t the idea of Fetch itself, but instead how the company chose to roll it out.  I had to wonder why a national retailer like Target would use an Indiegogo campaign to introduce the concept to consumers. Not only did using Indiegogo take the buyer away from Target’s home turf (both in the form of its home page and the in-store retail environment), but it also risked the chance of a slow uptake of its online campaign.

And so what happened? The uninspiring campaign accumulated 200 total backers and hit only 86% of its revenue goal (and this after extending the deadline).

What today’s announcement didn’t make clear is whether Target is cancelling the Fetch project in totality or just the Indiegogo beta rollout. According to the timeline on the Indiegogo, the Fetch team been working on the project since early 2016, so it’d be surprising if they gave up on the concept altogether.

We’ve reached out to Target and will provide an update when we hear back.

Food Tech News Roundup: Ben & Jerry’s, Food Waste Snacks, and Target Takeovers

It may have been a short week (at least for some of us), but it still feels good to reach the weekend finish line. Let’s celebrate with some food tech news, shall we?

We’re still riding a high from the announcement of the FoodTech 25: twenty five companies we think are changing the way we grow, source, cook, eat, and think about food. But lots of other food innovation news popped up around the web as well! Here are a few of our favorite stories, from Ben & Jerry’s new sustainability initiative to BYO homebrewing packs.

Chobani incubator to focus on food tech
Lately, quite a few CPG brands have been launching food-related incubators — including Greek yogurt darling Chobani. This week Chobani announced new incubator program which will revolve around our favorite subject: foodtech. The Food Tech Residency will be the company’s fourth incubator initiative, and will run parallel to their original incubator class. They’re currently searching for startups involved in agtech, food safety, innovative packaging, and other areas to improve the food system. Once selected, participating companies will have access to all Chobani Incubator programming, including factory visits, mentorship, opportunities to pilot new products, and a chance to pitch for funding. They have three spots open, so if you’re an emerging food tech or agtech startup, get on it!

 

Tyson Foods rolls out snacks made of food waste
Poultry giant Tyson Foods has created a snack brand which makes “Protein Crisps” out of food waste such as chicken breast trim, spent grain from beer brewing, and excess vegetable purée from juicing. Dubbed “¡Yappah!,” the brand will be used as an umbrella under which Tyson will release other sustainable food products. Each individual 1.25-oz serving has 8+ grams of protein and is packaged in a recyclable aluminum can. The crisps launched on IndieGoGo on May 31st, and are available to back now with a projected ship date of July 2018. Clean meat, food delivery startups, and now food waste snacks? Tyson Foods continues to work to be on the cutting-edge of all emerging food innovation trends.

PicoBrew now offers DIY PicoPaks
Countertop homebrewing startup PicoBrew rolled out DIY PicoPaks this week via Kickstarter, an option that lets Pico users load up their own ingredients to make beer and fusion drinks. The new bring-your-own ingredients option – which will work with the new Pico U as well as the existing Pico Cs and Pico Pros – provides an option for those in the Pico community who have wanted brewing flexibility beyond want preconfigured PicoPaks allow. The reward bundle includes containers for both beer brewing and PicoPak minis to create “fusion drinks” at home such as kombucha or goldenmilk. Post-Kickstarter, it will be interesting to see if PicoBrew offers brewers a variety of DIY container bundles depending on their preferences and brewing frequency.

Three new Targets to open up in Seattle area in 2019 & 2020
Target will add three smaller, grocery-sized stores in the Seattle area over the next two years, according to the Seattle Times. These are in addition to their original urban format store, which opened in Seattle in 2012. Their new stores are designed to fit into dense cityscapes and will stock products tailored to the surrounding neighborhood. This, as well as their recent expansion into same-day delivery, smart home-powered replenishment service, and acquisition of Shipt, is another way that Target is trying to keep up with the shifting grocery game and fight against Amazon.

 

Photo: Ben & Jerry’s.

Ben & Jerry’s works to offset their ice cream’s carbon footprint
Customers at Ben & Jerry’s scoop shop in London’s Soho neighborhood now have an opportunity to counterbalance the carbon footprint of their waffle cone of Cherry Garcia or Chocolate Chip Cookie Dough. For each purchase, Ben & Jerry’s will pay a penny to offset the carbon used to raise the cows, produce the ice cream, and ship it to the shop. Customers then have the option to donate a cent of their own and double the impact.

According to Forbes, the ice cream company is partnering with a not-for-profit who is helping them use blockchain to divide carbon credits — which are typically quite large — into smaller transactions which can link up to each ice cream purchase. They’re even developing an app to help customers keep track of their person carbon offsets.

 

Photo: Anova

Anova finally opens new Anova Kitchen
We’ve been monitoring the retail ambitions of sous vide specialist Anova closely, so we were intrigued to learn this past week that the company will finally open the Anova Kitchen for a sneak peek on June 6th. A company spokesperson told The Spoon that the new space will be used for events and will have some public-facing retail space, but that we shouldn’t expect the Anova Kitchen to be open to the public every day.  This contrasts with Brava, who plan to open a full time retail space early this summer.  Either way, we’re intrigued to check out the Anova’s new retail/event space. If you are too, make sure to RSVP for next week’s event and report back to us!

Did we miss anything? Tweet us @TheSpoonTech to let us know the best food tech news of the week!

Meet Fetch, Target’s Smart Home Powered Replenishment Service

If you’re like me, when it comes to home staples like paper towels and soap, you tend to buy the same brands over and over on fairly predictable replacement cycles.

This is something Amazon realized a couple years ago with the launch of the Dash replenishment platform and product subscriptions, and now Target is getting in on the replenishment game themselves with Fetch.

So what’s Fetch? It’s a new smart home powered replenishment platform developed by Target’s Open House innovation team that enables Target customers to subscribe to home consumables and then have them auto-ordered when they run out. What’s interesting about Fetch is it uses three sensor-enabled smart products – including a paper towel dispenser, a soap dispenser and yes, a toilet paper spindle – to figure out when a consumer is out of a given product and hit the reorder button. Fetch uses algorithms to predict when you’ll run out of product and, when it reorders, send a notification to your smartphone.

According to the product’s Indiegogo video (see below), the Fetch campaign is launching on May 1st. One obvious question I had is why is it being intro’d via Indieogogo? While I’m not entirely sure (we’ve reached out to Target to ask), my guess is this is a way for Target to essentially roll out a beta of the service before it’s rolled out to a wider audience.

There’s no question that this is an answer to Amazon’s Dash and subscription platforms. What’s interesting to me is Amazon seems to have moved away from the Dash button and replenishment platform and increasingly emphasizing voice (“Alexa”) and subscription ordering (including virtual Dash buttons). That said, I do think it makes sense for Target to start to think about ways to allow customers to subscribe to products online as more consumers transition to online shopping. Combine Fetch with Target’s same day delivery service, Shipt, (which is expanding to more cities) and it’s easy to imagine never running out of paper towels or any of the household basics.

August Home Expands In-Home Delivery Platform, Adds Deliv as Partner

Not long ago, my mom ordered a box of tea online, which a guy in a pizza delivery car tried to steal from her front porch while she was at work. Obviously, she’s not the first person to ever experience this. In her case, a neighbor happened to catch the guy in action and set the cops on his trail, recovering the package in process. Most folks, though, aren’t so lucky, and lots of them are ordering much more than a $20 box of tea.

All the same, risk of theft doesn’t deter most who order goods via same-day delivery. As we get busier and more mobile, we rely more and more on the convenience factor for anything from stereos to dental floss. And since this is as unlikely to change as mankind’s need to steal, it makes sense that that same-day, in-home delivery is rapidly becoming an option for both consumers and retailers.

News from August Home should help accelerate that option. The smart-lock maker just announced that it is opening up it’s in-home delivery platform to any retailer, and that it has formed a partnership with same-day delivery service Deliv for last mile delivery fulfillment.

It’s a pretty straightforward operation. August owners can order at a participating retailer and choose “same day” at checkout, along with their desired time window. Once the transaction is completed, they can opt to authorize “secure in-home delivery.” If no one answers the doorbell, the delivery driver can access a one-time-use passcode to unlock the door and leave the package. Users are notified via phone, so they know a delivery is occurring, even if they’re up the block folding the last of their laundry. If they have the equipment, customers can also choose to watch the delivery in real time through the August app (or view a recording of it later).

August’s move to expand its platform comes after Amazon launched Amazon Key in late 2017, which uses its own combination of smart lock and cloud camera, and helped make the concept of in-home delivery more prominent with mainstream consumers. Just last month, Amazon also purchased the maker of Blink security cameras, in a move that could bolster Key offerings.

August and Deliv partnered with Walmart this past September to test drive their new service. Not only did consumers have the option of in-home delivery, they could also get “in-fridge” delivery, where the driver enters your pad and puts any perishables in the fridge or freezer. Presumably, the same option will exist for this wider rollout of the August-Deliv service.

I’d love to say I’m weirded out by the idea of some dude walking into my house and opening my fridge, but I’m not. People open their homes to strangers all the time— cleaning services, maintenance work, and pet care, for example. And while a camera and a one-time passcode don’t guarantee complete security, they beat having your groceries swiped off the front porch by, of all things, the local food delivery guy.

Target Jumps into Same Day Delivery Battle with Shipt Acquisition

Retail giant Target announced today that it has acquired same day delivery service Shipt for $550 milliion. It’s a keeping up with the Joneses move for Target as competitors like Amazon, Walmart ramp up the race to get you your groceries fastest.

With the Shipt acquisition, Target says it will start offering same-day delivery to roughly half of its stores by early 2018, and will be offered in all major markets before the 2018 holiday season. The service will start off with groceries, essentials, home and electronics and will expand to include all major product categories by the end of 2019.

As Recode notes, Shipt currently operates in 72 U.S. cities, customers pay $99 a year (just like Amazon Prime!) for unlimited deliveries from a number of grocery chains. Target customers will have to pay for a Shipt membership in order to get their groceries.

The Shipt acquisition follows Target’s August purchase of Grand Junction, which provides technology infrastructure for local deliveries.

Target most likely feels the, ahem, target on their backs as retailers continue to up the stakes for consumer delivery expectations. The competition is fierce:

For retailers like Target et. al., who sell everything, food and recipes and same day delivery will also become a gateway for people to purchase hard goods. This is at the heart of Walmart’s deal with Tasty. Be inspired by a recipe, buy the ingredients and any device you need to make that meal.

Based in Birmingham, Alabama, Shipt has raised roughly $65 milliion in funding and will be run as a wholly owned subsidiary of Target and will continue to sign partnership deals with other retailers.

Target Axes Store of Future & Project Goldfish Innovation Programs

Wall Street can be cruel, especially when it comes to innovation initiatives.

Last week, the Minneapolis Star Tribune reported Target has axed two of its innovation initiatives, the Store of the Future and Project Goldfish, after the company missed expectations for the holiday season. The Store of the Future concept, which was expected to launch this year, was a rethink of Target that included smaller format stores and robots for order fulfillment.

“At Target, we regularly pause to evaluate our business and have to make tough choices about where our company is best served to invest our time and resources,” Dustee Jenkins, Target’s senior vice president of communications, told the Star Tribune. “We recently made some changes to the innovation portfolio to refocus our efforts on supporting our core business, both in stores and online, and delivering against our strategic priorities.”

The moves also comes after departures of some key execs, including their head of innovation, Jamil Ghani, left for Amazon. The loss of Ghani is doubly painful since many analysts believe Amazon is responsible for slowing sales at Target and other large retailers.

From the Star Tribune:

The cutbacks have left some within the company unsettled about Target’s long-term plans for growth and innovation, especially as more consumers are flocking to Amazon.com. The online behemoth is known for innovation, including its one-hour Prime Now delivery service and a new store concept without registers that it recently opened in Seattle.

However, not all innovation efforts at Target have seen the ax. The company’s recently relaunched Open House concept store in San Francisco reopens this week.

Editors Note: I will be hosting an event at the store on February 16th on the future of the smart kitchen. Sign up for our newsletter to get more info on that event.