Feb 17, 2021
“Make no mistake. COVID-19 changed everything for
the grocery industry.”
Brittain Ladd (5:51-5:55)
Our former guest Brittain Ladd from Episode 41, one of our top 20 most downloaded episodes of all time, joins The Produce Moms again to talk about the current state of retail and the exciting innovations we’re seeing with micro fulfillment centers.
Brittain is one of the most well-loved leaders in the produce industry and his insight into what changes we’ll see in the produce and grocery retail industries is phenomenal. A former US Marine, Brittain has traveled the world designing retail logistics and supply chain programs, strategies, theories and instigating innovations that are life changing. He was even the first person to recommend Amazon acquire Whole Foods, among many other accomplishments!
Before COVID-19 happened, online sales was only about 3% of a grocery retailer’s business. Brittain predicted this would jump to about 15-20% by 2025 and emphasized the important role companies like Instacart would play in this, but he wasn’t taken seriously. Fast forward to COVID-19 hitting and online sales, in some cases, turning into about 50% of a grocery retailer’s business. Now grocery stores are looking to micro fulfillment centers to help serve their customers closer and in a safe manner.
“Micro fulfillment is nothing more than robotic solutions that can fulfill online orders and other retail products.” Brittain Ladd (7:45-7:55)
Micro what? If you’re having a hard time understanding what micro fulfillment is, Brittain gives a great example of a rubik's cube. Imagine a rubik's cube was 22,000 square feet and each cube holds inventory. On top of the rubik's cube are robots that can move forwards and backwards, left to right, with the ability to pull cubes in and out of their spots. That’s kind of how a micro fulfillment automation store operates.
Don’t worry, your fresh produce isn’t being handled by robots. Micro fulfillment centers hold products that require “ambient air” (aka no refrigeration or freezing) and are found in the center aisle of your grocery store. If a customer orders groceries from a retailer that uses micro fulfillment centers, the fulfillment center will provide any boxed or “center aisle” products, while the grocery store will pick out the chilled or fresh products, which is about 15% of what a customer typically orders.
“That’s how you make sure as a grocery retailer that, even though you’re using automation to fulfill orders, you never ever fail to realize that quality and freshness are absolutely the main thing you have to maintain when it comes to fresh products,” says Brittain.
On average, retailers lose $25 for every online grocery order which is why more and more of them are looking to create their own micro fulfillment centers directly on site rather than working with a third party. Brittain has a big vision for the future of grocery retail that allows micro fulfillment centers to be next to a store and retailers can open up their store to allow for more fresh produce, meat, milk, eggs, dairy, better selections for cheeses and areas for cafes, seeing brick-and-mortar grocery retailers becoming a haven and playground for people who love fresh produce. This is something that Amazon is currently building with their new Amazon Fresh grocery stores.
What about Instacart? Brittain foresees Instacart opening about 100 more micro fulfillment centers by the end of 2022, and by 2025 making their own deliveries for their own customers with their own grocery brand. He also predicts convenient stores starting to provide more and more fresh produce, dairy and meat products because, again, with COVID-19, they’re realizing they have customers looking to them to fulfill a need that’s outside of soda and bags of chips.
“Any time you can fulfill faster and closer to customers, you’re keeping your fresh produce that much more fresh.” Brittain Ladd (25:30-25:37)
The incredible thing about Brittain’s insight and this episode is learning how technology, automation and robotics is helping companies come together to provide fresher produce to consumers. These innovations are helping farmers and the fresh produce industry we love, while creating fast, efficient, safe and healthy ways to provide consumers the freshest meat, dairy and produce possible.
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