Grocery Guys

FreshDirect, one of the trailblazers in the online grocery space, has begun a new chapter as part of Ahold Delhaize USA.

Though retaining its strong reputation for delivery of high-quality fresh foods and other groceries — and marking its 20th year in business this year — FreshDirect has sharpened its focus on its hometown metropolitan New York market, including not just the greater New York City area but also parts of New Jersey and Connecticut. The move comes after the pure-play e-grocer shut down delivery service to the Philadelphia and Washington, D.C., markets at the end of August.

FreshDirect’s service change comes as it further integrates with Ahold Delhaize USA, which acquired the company in January 2021. To that end, FreshDirect has partnered with supermarket chain Stop & Shop to help create an “omnichannel ecosystem” that brings more convenience, personalization and value to customers via brick-and-mortar and digital channels.

The ecosystem concept is designed to capitalize on densely populated markets like New York City, where FreshDirect operates from a 400,000-square-foot automated fulfillment center and campus in the borough of the Bronx. And FreshDirect Managing Director Dave Bass sees the online grocer’s current value proposition as a key differentiator.

“When I think about FreshDirect, there are really three key areas that we focus on,” Bass told Supermarket News in a podcast interview. “One is that we deliver the highest-quality and freshest food, and the second is that we create food experiences. And then the third is that we drive simple, healthy solutions to make every day better for our customers. We take, very much, a customer-first approach to understand what our customers needs are.”

Bass has led FreshDirect as managing director since September 2021. He previously served as senior vice president of omnichannel merchandising support at Peapod Digital Labs, Ahold Delhaize USA’s digital innovation arm.

“ADUSA is set up in a unique way, where they look at the [grocery retail] brands as being particularly local and focused on that local customer to win. At the same time, there’s a good-size company behind us that we can leverage for synergies and savings that in some ways the customers may not see and in some ways maybe they do,” he said. “But it has been a great first year for me here, and I’m really excited about the future potential growth for FreshDirect in the tristate market.”

Wellness. It’s a much-used buzzword these days, but with good reason, according to Leslie Waller, vice president of marketing at Campbell Soup Company. Supermarket News met up with Waller at the recent Groceryshop convention to talk with her about how Campbell’s strategy around wellness has evolved, in addition to what consumers are searching for online in this category. 

In this episode, you’ll find out:

Contact Chloe Riley at [email protected], or reach out and say hi on LinkedIn. 

This week on SN Off the Shelf, a Supermarket News podcast, SN editors Chloe Riley and Russell Redman discuss two top stories from the week: 1. Grocery pricing was still high in August, even despite relaxed inflation and 2. Instacart’s making a lot of moves as it gears up for an anticipated IPO — including partnering with the musician Lizzo. Here’s why it matters to grocery.

In this episode, you’ll find out:

You can contact SN Executive Editor Chloe Riley at [email protected] (or reach out and say hi on LinkedIn), and likewise, say hi to SN Managing Editor Russ Redman at [email protected]. Thanks for listening.

In driving its “lead with fresh, accelerate with digital” strategy, The Kroger Co. — the Supermarket News 2022 Retailer of the Year — aims to build a seamless ecosystem in which customers can move easily between channels and get the same high-quality experience. That includes shifting between brick-and-mortar stores and digital, and among in-store shopping, pickup and delivery.

“Our aspiration is to be the destination for our customers for their food needs,” Yael Cosset, senior vice president and chief information officer at Cincinnati-based Kroger, told SN in a podcast discussion. “At the heart of our vision for a seamless ecosystem is the precise understanding of our customers.”

Unsurprisingly, technology is playing a central role. On the e-commerce side, Kroger has opened six customer fulfillment centers (CFCs) and nine supporting “spoke” facilities under its more than four-year-old partnership with Ocado Group. These high-tech facilities use Ocado’s automation and artificial intelligence technology to fill online grocery delivery orders, including in markets where Kroger doesn’t have physical stores.

But that’s not all. Kroger, which serves more than 60 million households annually, is leveraging the vast stores of data from across its physical and virtual properties and brands to create more personalized experiences and value for customers. The company also is using tech-based solutions and its data and analytics capabilities, for example, to hone its supply chain to improve product freshness, expedite pickup and delivery service, and introduce new, on-trend items in its Our Brands portfolio.

According to Cosset, Kroger is seizing “the opportunity to leverage data to really understand what matters to every single customer — what they want, from the freshest product for a simple meal they cook at home to a quality fresh meal solution when they’re on the go; when they want it, whether they’re doing their weekly shop or looking for an immediate solution delivered to them in 30 minutes; and also how they want it. Do they want to go to the store, pick it up or get it delivered to their home? All of this without having to compromise on the freshness, quality or value they get from Kroger.”

Overall, The Kroger Co. operates 2,723 supermarkets and multi-department stores under more than 20 banners. More than 2,250 stores have pharmacies, and over 1,600 have fuel centers. Eighty-two percent of Kroger’s customers within five miles of one of its stores, with most living within two miles.

On the digital side, as of the fiscal 2021 year-end, 2,257 stores provided online grocery pickup, and over 2,500 stores offered delivery. Including click-and-collect and delivery via Kroger Delivery, third-party partners such as Instacart and Kroger’s Ship direct-to-home service, the company covered 98% of households in its trade area with e-commerce services. Digital represents a more than $10 billion annual business for Kroger. About 18.5 million households engaged online with the retailer in 2021.

“Our seamless ecosystem is about bringing all of our assets together — our stores, our dedicated facilities, leveraging technology, our partners, petabytes of data about customer preferences — ultimately to bring that seamless experience to life to fit the context of your day, your need,” Cosset said. “So data and technology is present across the entire ecosystem.”

Inflation is a major concern for Americans, according to recent survey data, and it’s starting to affect their grocery shopping habits.  

Some 76% of U.S. consumers say their food buying habits have shifted, and nearly half (45%) feel like they can’t afford their previous lifestyle, according to data from advertising technology company NCSolutions.

We sat down with the CEO of NCSolutions, Alan Miles, to drill down into just how deeply inflation is affecting consumer habits, and additionally: what the grocery industry can be doing about it. 

In this episode, you’ll find out:

Contact Chloe Riley at [email protected], or reach out and say hi on LinkedIn. 

Amid the expanding use of digital channels and the rise of omnichannel shopping, CPG brands are looking to connect with consumers in new ways and measure those interactions. 

To that end, Dollar General last month announced what it called an “evolution” in its media platform, DG Media Network (DGMN). The Goodlettsville, Tenn.-based discount store giant launched DGMN in 2018.

“DG Media Network is here to deliver our brand partners an up-close and personal view of the Dollar General customer in a way that really no one else can,” Charlene Charles, head of DG Media Network operations, said in a podcast interview with Supermarket News. “We do this by creating more meaningful intersections between our partners and customers — essentially making it easier to reach the hard-to-reach and hard-to-measure [consumers] with the brands and products they want and need.” 

Dollar General said the DGMN upgrade includes a spate of new advertising partners from major CPG companies — Unilever, General Mills, Hershey’s and Colgate-Palmolive, to name a few — plus new strategic partners to expand DGMN’s technology, analytics and media capabilities.

Dollar General certainly has a lot to offer CPG brands, with nearly 18,400 stores in 47 states. The chain noted that three-quarters of its stores serve markets of 20,000 people or fewer, a segment of customers often overlooked under current media strategies. The retailer’s mobile app also has 4 million monthly active users.

“We very much pride ourselves in the fact that we can reach more than 90% of our active DG customers through paid media,” Charles said. “Building on that, we have speed in our reporting through a self-service dashboard showing near-time real attributable sales, and we’re focusing on striving to provide measurement to demonstrate performance for every dollar in and dollar out.”

High food prices have shoppers hunting for savings and embracing store brands.

The number of online grocery operators — especially those offering rapid delivery — has proliferated over the past few years, driven most recently by the explosion in e-grocery demand amid the pandemic.

But online grocer Farmstead brings a different model to the table with its “farm to fridge” approach.

Leveraging artificial intelligence technology, Burlingame, Calif.-based Farmstead said it has “reinvented the grocery buying experience” and “rewired how food moves across the country” to make locally sourced food more accessible and reduce food waste. The company, founded in 2016, started off in the San Francisco Bay Area and last year entered Raleigh-Durham, N.C., and Miami following a late 2020 launch in Charlotte, N.C.

Farmstead launched in Chicago this past February and said it aims to expand nationwide and serve a primarily suburban, midmarket customer base.

“We are live in five markets right now. We started in the Bay Area, a first-tier market, and then we went to Charlotte and Raleigh to explore how the model would change or not change in markets that were a lot smaller than the Bay Area. Then we went back to bigger cities, in Miami and Chicago,” Pradeep Elankumaran, co-founder and CEO of Farmstead, told Supermarket News in a podcast interview. “Upcoming markets, a lot of it is still confidential, but we’re looking to open in another eight to 10 markets very rapidly.”

Farmstead also licenses its Grocery OS technology stack to other retailers, providing a turnkey solution for getting a dark-store delivery operation up and running in several weeks, from securing commercial real estate space to inventory sourcing to delivery service. The e-grocer focuses on one- to two-hour free delivery and serving consumers across a large radius, generally 50 miles, which the company said helps eliminate food deserts while offering better prices than local supermarkets. In addition, the efficiencies of the Farmstead model are aimed at helping users of its solution reach per-market profitability faster.

“We realized the tech stack that powers our own operations is very relevant for folks operating out of stores or big FCs [fulfillment centers], as well as smaller FCs,” Elankumaran said. “It’s easy to find a pick-and-pack solution, it’s easy to find a delivery solution and it’s easy to find an inventory control solution. But when you’re delivering every single day, and you have to deliver within a few hours of when the customer places the order, the way all of these pieces fit together winds up mattering a lot more than any particular part of the solution.”

Two years into the pandemic, high demand, supply shortages and inflation make every day an adventure for the online meat retailer

Online bulk-products retailer Boxed Inc., which went public in December, is taking a two-pronged approach to growth, covering both retail and technology.

New York-based Boxed provides warehouse club-style shopping — including groceries, pantry items, household staples, HBA, office supplies, and organic and green products — through its website and mobile app. Consumers and businesses can buy club-sized packages with free two-day delivery in the continental U.S. on purchases of over $49, without the membership fees of traditional warehouse clubs. Members of the BoxedUp loyalty program get free shipping for a $19.98 order minimum.

The company also offers Boxed Express, an on-demand delivery service for perishables, and in late 2021, entered the rapid grocery delivery arena via its first acquisition: New York City e-grocer MaxDelivery.

“Boxed was private for almost nine years. So now, as we go public in a great way, I’m invigorated and recharged because I’m learning something new every single day now,” Boxed CEO Chieh Huang told Supermarket News in a podcast interview at the recent FMI Midwinter Conference in Orlando, Fla. “For the growth prospects of the company, it’s really impactful. As of our last earnings call at the end of last year, we had $105 million in cash. So being able to invest in growth, not only on the e-commerce side but also on the software side, I think is the biggest impact of the IPO.

As part of its plan to go public, Boxed has launched a new income stream by licensing its end-to-end e-commerce platform as a software-as-a-service (SaaS) offering. The technology includes customer-facing front-end and back-end operational software plus homegrown automation robotics for fulfillment. In reporting fiscal 2021 results in mid-March, Boxed said it tallied $20.3 million in software and services revenue — an income source not present in 2020.

“We now have two sides of the house: One is the e-commerce business, and one is the software business,” Huang said. “One thing that we’re really excited about is the B2B growth prospects,” he added. “Most people don’t know, but 25% of our business was B2B pre-COVID. And that just almost went away at COVID hit the United States. So seeing that bounce back is something that we’re really looking forward to.”