Grocery Chains Broaden Automation with Micro-Fulfillment Centers
Russell Redman @ supermarketnews.com
Major U.S. supermarket operators are ramping up their deployment of automated micro-fulfillment centers (MFCs) for online grocery orders with partner Takeoff Technologies.
This fall, Albertsons Cos. is slated to launch two facilities for its Safeway banner, while Wakefern Food Corp. and Ahold Delhaize USA aim to add more of the robotics-powered warehouses, Takeoff CEO and co-founder Jose Vicente Aguerrevere said in an interview.
TAKEOFF TECHNOLOGIES
Most recently, in late July, Waltham, Mass.-based Takeoff and grocery cooperative Wakefern opened an MFC in Clifton, N.J., that serves ShopRite stores in North Jersey and New York operated by Wakefern member Inserra Supermarkets.
“We launched about two months ago with Wakefern in New Jersey under the ShopRite brand, and that facility is already working at capacity, servicing five other ShopRite stores. We have a pretty aggressive rollout plan with the different members of the cooperative in the New York and New Jersey area”
Albertsons and Takeoff last October unveiled plans to pilot an MFC at a store, and now two more facilities are slated to get under way in the next couple of months, according to Aguerrevere. At the time the partnership was announced, Boise, Idaho-based Albertsons said it was the first national grocer to implement an automated e-commerce fulfillment solution for customers.
“We’re opening one in October and one in November with Albertsons, specifically for the Safeway banner, in San Francisco and San Jose,” Aguerrevere said.
Last fall, Ahold Delhaize USA and Takeoff announced the first MFC for the Stop & Shop banner in the Hartford, Conn., area to fulfill orders via the retailer’s Peapod online grocery arm. Plans call for several more MFCs to be built this year, with further expansion in 2020.
“We launched with Ahold Delhaize in Windsor, Conn., for the Stop & Shop brand. They are a big, publicly traded company, and the CEO announced that part of their go-to-market is to use hyperlocal automation because the biggest challenge is making e-commerce viable and having the economics in order to keep expanding in the U.S. and Europe,” explained Aguerrevere. “It's a beautiful facility and has been open for eight months, and there are plans to further increase those facilities.”
Takeoff’s first deployment in the U.S. was with Florida grocer Sedano’s Supermarkets late last year. The robotics-driven warehouse serves 14 Sedano’s stores in the Miami area and fulfills online grocery pickup orders.
“The first one we opened in the U.S. was with Sedano’s, one of the largest Hispanic players in the U.S. We branded it as the first automated supermarket and opened it last December,” Aguerrevere said. “Sedano’s was a player new to e-grocery, so part of their challenge was automation and new processes, as well as how to create an e-grocery channel. It's been almost 10 months since we launched, and the facility is running really well.”
Acting as a hub, the MFCs are designed to provide a lower cost-to-serve by covering the expense of order assembly and last-mile delivery/pickup. Takeoff said the artificial intelligence-enabled robots can assemble grocery orders of up to 60 items in less than five minutes, a fraction of the speed — and cost — of current manual-picking options. For the robotics technology, Takeoff has an exclusive agreement with Knapp, a global provider of automated warehouse solutions.
Takeoff is targeting compact, vertical spaces to develop hyperlocal facilities that are a fraction of the footprint of a typical supermarket. The company noted that retailers can use its solution to leverage underutilized real estate and turn existing stores into micro distribution centers.
To that end, Takeoff works with retailers to identify 10,000- to 12,000-square-foot spaces in existing locations for its automated fulfillment system, which includes robotics plus e-commerce, online inventory management, customer service, reporting and analytics functions. From the start of construction, it takes about three months to get an MFC up and running, according to Aguerrevere.
“By placing the automation right in the store, not only do we take advantage of the available space, processes, labor and infrastructure, but also the last mile is very efficient,” he said. So we look at e-grocery not only in the pick-and-pack and the automation, but also in the total cost to serve for an order. This is how we make e-grocery viable”
The robotics can pick about 800 items per hour versus 60 items for manual in-store picking, and the system can process approximately 3,500 online grocery orders weekly week per location for a two-hour service. “So it's one item every six seconds instead of one item every 60 seconds,” Aguerrevere noted.
In mid-September, Takeoff announced Version 2.0 of its Microfulfillment Solution, to be rolled out in 2020. Version 2.0 will feature a smaller and cleaner design of the MFC’s floorspace, allowing for easier construction and installation, as well as 6% faster order picking and increased storage capacity. It will also introduce the use of autonomous mobile robots, known as “open shuttles,” to roll independently within the MFC, using a smart technology to avoid humans and other obstacles while transporting totes of groceries.
Takeoff also in September closed Series C fundraising with an additional $25 million, bringing the total funds raised to $86 million. The company was founded in 2016 by Aguerrevere and Max Pedro, who serves as president.
“It’s been an amazing experience with retailers in North America. We actually have two more that we haven’t announced in North America, from the U.S. and Canada, that are going to go live in the next three months. We’ll announce those pretty soon, And then we’re supposed to go live with Woolworths in Australia and New Zealand between May and June next year. So from now until June next year, we’ll have eight go-lives with the different retailers we’re working with”
