Category Archives: Produce News

Amazon Robots Poised to Revamp How Whole Foods Runs Warehouses

Fetch-Warehouse-Robot

When Amazon.com’s $13.7 billion bid to buy Whole Foods was announced, John Mackey, the grocer’s CEO, addressed employees, gushing about Amazon’s technological innovation.

“We will be joining a company that’s visionary,” Mackey said, according to a transcript of the meeting. “I think we’re gonna get a lot of those innovations in our stores. I think we’re gonna see a lot of technology. I think you’re gonna see Whole Foods Market evolve in leaps and bounds.”

In negotiations, Amazon spent a lot of time analyzing Whole Foods’ distribution technology, pointing to a possible way in which the company sees the most immediate opportunities to reduce costs, said a person familiar with the matter who asked not to be identified because the issue was private. Amazon, through a spokesman, declined to comment, as did Whole Foods.

Experts say the most immediate changes would likely be in warehouses that customers never see. That suggests the jobs that could be affected the earliest would be in the warehouses, where products from suppliers await transport to store shelves, said Gary Hawkins, CEO of the Center for Advancing Retail and Technology, a Los Angeles nonprofit that helps retailers and brands innovate. As Amazon looks to automate distribution, cashiers will be safe — for now.

“The easiest place for Amazon to bring its expertise to bear is in the warehouses, because that’s where Amazon really excels,” Hawkins said. “If they can reduce costs, they can show that on the store shelves and move Whole Foods away from the Whole Paycheck image.”

Amazon sees automation as a key strategic advantage in its overall grocery strategy, according to company documents reviewed by Bloomberg before the Whole Foods acquisition was announced. Whole Foods has 11 distribution centers specializing in perishable foods that serve its stores. It also has seafood processing plants, kitchens and bakeries that supply prepared food to each location. Those are the places where Amazon could initially focus, according to experts.

Amazon has not had the fresh food sales volume to justify big investment in refrigerated warehouses. Whole Foods gives them an incentive to reinvent how groceries get to your store and doorstep.

Brittain Ladd, a supply chain consultant who spent two years working on Amazon’s grocery push, said Amazon may be considering building a network of automated warehouses designed for the grocery business. These would likely be 1 million square feet — large enough to serve Whole Foods and Amazon’s various other grocery initiatives like Amazon Fresh and Prime Pantry — and would utilize robots and automation to reduce labor costs, he said.

“The goal will be to create as advanced a distribution capability as possible to provide customers with exceptional service and the freshest of fresh produce, vegetables, and meat,” Ladd said.

“Amazon will win the battle against Wal-Mart by winning with fresh food. A big challenge for Amazon will be applying its logistics know-how regarding durable, long-lasting products like books, toys and tablets to delicate perishables like strawberries and steaks that have to be handled gingerly, stored at different temperatures and inspected frequently for signs of spoiling.

After automating warehouses, Amazon may bring the robots to the stores. But don’t expect them to replace cashiers immediately. The first ones will likely navigate aisles to check inventory and alert employees when items run low, said Austin Bohlig, an adviser at Loup Ventures, which invests in robotics startups. “These robots can operate alongside people inside a store, but Amazon will want to make absolutely sure they are safe,” he said.

“These robots can operate alongside people inside a store, but Amazon will want to make absolutely sure they are safe,” he said.

Amazon is experimenting with a smaller urban convenience store concept in Seattle called AmazonGo that lets shoppers check in with smartphones, grab what they want and leave without going to a cash register. They are billed automatically based on what they pluck from shelves.

Amazon said it has no plans to introduce that technology to Whole Foods, though a person familiar with the matter said the company is considering eliminating cashiers as part of its long-term grocery strategy. The person asked not to be identified because they were not authorized to speak on private matters.

Amazon has good reason to move slowly with automating tasks now done by people. The United Food and Commercial Workers Union, whose 1.3 million members mostly work in supermarkets, has had its eye on Whole Foods for years, said David Pryzbylski, an employment lawyer with Barnes & Thornburg, who has represented supermarkets in union-related cases. Whole Foods has kept unions at bay by paying good wages and avoiding mass layoffs, he said.

“If there’s an environment of uncertainty, like layoffs due to automation, unions can play on that fear,” Pryzbylski said, and make inroads in unionizing the workforce.

Story by Spender Soper and Alex Sherman at Bloomberg News

From Aldi to Publix to Whole Foods, here’s how Tampa Bay’s grocery market share breaks down

With Amazon.com’s purchase of Whole Foods Market Inc., the online giant will control 1.2 percent of the grocery market in the Tampa Bay region.

That was Whole Foods’ market share in Hillsborough, Pinellas, Hernando and Pasco counties in 2016, according to Chain Store Guide. Whole Foods has three stores here, with two in Tampa and one in Clearwater.

Amazon is planning to buy the specialty grocer for $13.7 billion, but the implications of the deal go far beyond the more than 400 Whole Foods stores it will own. It will mean a new level of competition for Publix Super Markets Inc., which is based in Lakeland. Publix employs more than 36,000 people in the Bay area, including corporate workers at the Lakeland headquarters.

Publix, the hometown grocer, controls 39.3 percent of the grocery market with 117 stores here, according to Chain Store Guide. Use the interactive graphic below to see grocers’ market share versus number of stores.

Tampa Bay grocery market share

Winn-Dixie and Winn-Dixie Marketplace, which are owned by Jacksonville-based Southeastern Grocers, has nearly as many stores in that same area — 100, according to Chain Store Guide. But it controls only 16.1 percent of the market. Wal-Mart Stores Inc. controls 16.4 percent of the market with just 32 stores. (That figure doesn’t include Walmart Neighborhood Markets, which account for 3.2 percent of the market with 17 stores.)

The market share numbers will likely look different in the coming years. Amazon’s digital savvy has the potential to increase Whole Foods’ market share, and there are new competitors to consider. Sprouts Farmers Market Inc. is just entering the Florida market, with three stores open so far this year (in Carrollwood, South Tampa and Sarasota).

German discount grocer Aldi, which controls 1 percent of the market with 15 stores, recently announced it will ramp up its U.S. expansion plans. Lidl, another German discount grocer, appears to be laying the groundwork to enter Florida in the coming years.

Market share versus number of stores

tampa_cbsa_2017-4src=embed

Story by Ashley Gurbal Kritzer at the Tampa Bay Business Journal

Supreme Court Wants Quick Response On Citrus Veto

The Florida Supreme Court on Wednesday gave Gov. Rick Scott’s administration until noon Monday to respond to a lawsuit challenging the governor’s veto of $37.4 million intended to go to residents whose healthy citrus trees were cut down as the state tried to eradicate citrus-canker disease.

The Supreme Court set the deadline after the lawsuit was filed Tuesday on behalf of homeowners in Broward and Lee counties and their attorneys. Lawmakers included the money in the 2017-2018 budget after years of litigation about the state’s removal of trees in those counties and other parts of the state.

The money would satisfy judgments against the state, which destroyed healthy trees from 2000 to 2006 as officials fought citrus canker.

The filing Tuesday at the Supreme Court contended that Scott’s veto of the money was unconstitutional and asked justices to address the issue before the July 1 start of the fiscal year. In vetoing the money June 2, Scott cited “ongoing litigation” as the reason.

Story by Health News Florida.

Aldi’s expansion puts grocery retailers on notice

Discount grocery retailer Aldi announced June 11 that it would invest $3.4 billion to expand its U.S. store base to 2,500 by the year 2022.

The German grocer currently operates 1,600 stores in the United States and said earlier this year it would expand to 2,000 by the end of 2018 at a cost of $1.6 billion.

The $5 billion move would have Aldi as the third-largest U.S. food retailer by store count behind Walmart and Kroger.

“It should absolutely be more than scary to traditional grocers and retailers,” Mikey Vu of the consulting firm Bain & Co., was quoted as saying in a June 12 article in The Wall Street Journal. Vu said Aldi has improved its stores and products in recent years, and is attracting a larger mix of shoppers.

A point of differentiation by Aldi and other discounters, such as Lidl, which is set to open its first U.S. locations this week, is their longstanding use of store brands to keep prices down, a common practice in Europe. U.S. consumers have traditionally been more brand loyal, but that is beginning to erode, especially with the millennial generation.

Millennials “are value-oriented and don’t hold the same stigmas about private-label items that older generations do,” Mike Paglia, director of the research firm Kantar Retail, was quoted as saying in the WSJ article.

“As we continue to expand and grow, our purchasing power continues to increase and allows us to bring products at better prices for consumers,” Scott Patton, Aldi’s head of corporate buying, said in an interview with CNBC.

Aldi said the new store openings would create 25,000 jobs over the next five years.

Story By Producenews

Publix to offer delivery from all stores throughout the Southeast

publix

If grocery shopping just isn’t a pleasure for you, Publix Super Markets Inc. will now do it for you — in all 1,100-plus stores throughout the Southeast.The Lakeland-based grocer said Wednesday that it will offer same-day delivery via Instacart in all Publix markets by 2020.

Publix rolled out Instacart delivery service with a pilot program in the Miami area in July 2016 and quickly expanded to the Tampa Bay region. It is now offered in major markets throughout Publix’s footprint and will expand to dozens of others in the next five months. (See list below.)

The Instacart delivery service has created 2,800 jobs, according to Publix.


“We selected Instacart because we knew their approach and expertise would deliver a high-quality experience for our customers,” said Laurie Douglas, Publix senior vice president and chief information officer, in a statement. “The overwhelming response of our customers has proven that Instacart and Publix are a strong and dynamic team. We are excited to take the next steps in building our unique relationship to dramatically grow the service in our markets.”

Publix has defined its relationship with Instacart as a “collaboration” and on Wednesday said it was “strengthening its relationship” with the app-based delivery service. The grocer promotes the Instacart service with signage throughout its stores and has a section devoted to the service on its website.

 

Publix’s relationship with Instacart sets it apart from Shipt, a similar app-based delivery service that began offering Publix delivery in 2015. Shipt has green-and-white branding that is similar to Publix’s own logo, but there is no formal relationship between the two.

Publix’s decision to offer delivery services from all of its stores represents a major investment and a watershed moment within the grocery industry. Publix is known in grocery and real estate circles for the data it collects and analyzes. Instacart also has the ability to mine data from customers, and the fact that Publix is doubling down on delivery means the Lakeland grocer sees a profitable future in the service.

Wal-Mart Stores Inc. and Kroger Co., Publix’s two biggest competitors, have been rapidly expanding their click-and-collect services, in which customers order online and have items brought directly to their cars.

The Instacart delivery service goes a step beyond that with home delivery, and it also sets Publix up to compete with Amazon.com, which is laying the groundwork to be a major player in the grocery realm, as well as Jet.com, the e-commerce company Walmart acquired in September 2016. Jet.com has a grocery platform that the company has been rapidly expanding throughout the Mid-Atlantic.

Walmart is also piloting a program in New Jersey and Arkansas in which employees deliver items on their way home from work.
Here are the stores where Publix currently offers delivery:

Florida (Daytona Beach, Fort Lauderdale, Fort Myers, Jacksonville, Melbourne, Miami, Naples, Orlando, Sarasota, St. Petersburg, Tallahassee, Tampa and West Palm Beach), Georgia (Atlanta), South Carolina (Columbia), North Carolina (Charlotte, Durham and Raleigh) and Tennessee (Knoxville and Nashville).

The next five months will bring Publix delivery to Instacart in the following markets:
▪Alabama: Birmingham, Dothan, Huntsville, Mobile and Montgomery
▪Florida: Cape Coral, Crestview, Fort Pierce, Gainesville and Panama City
▪Georgia: Albany, Augusta, Macon and Savannah
▪North Carolina: Asheville, High Point, Wilmington and Winston-Salem
▪South Carolina: Charleston, Greenville, Hilton Head Island, Myrtle Beach and Spartanburg
▪Tennessee: Chattanooga
▪Virginia: Richmond

Story by : Ashley Gurbal Kritzer at the Tampa Bay Business Journal.

Florida packing houses struggle to maintain supplies amid greening crisis

packinghouses

Stories of the fatal bacterial disease, citrus greening, often focus on growers, who have seen their annual harvest decline by more than 70 percent because of greening.

Just as severely impacted have been Florida’s fresh citrus packinghouses, which buy a large portion of Florida’s annual orange, grapefruit and tangerine harvests and sell them to supermarket chains and retailers across the U.S. and ship to export markets, including Japan, Canada and Europe.

In the 2000-01 citrus season, Florida had 106 citrus packinghouses operating across citrus belt, which runs roughly south of Interstate 4, according to the Florida Department of Citrus. That was before greening was first confirmed in Florida in the fall of 2005.

Each of the top 24 packinghouses sold more than 1 million cartons of fresh citrus that season, according to the Lakeland-based Citrus Administrative Committee, a federal agency that regulates the industry. All packinghouses combined shipped 55 million cartons.

The 2016-17 season saw only 26 packinghouses operating in Florida, less than a quarter of the total from 16 seasons earlier, the statistics show.

Among them, only one, Egan Fruit Packing LLC in Fort Pierce, will ship more than 1 million cartons, and the industry output in 2016-17 will total just more than 12 million cartons, a 78 percent decline during the 16 seasons.

Few expect things to improve in the near future, which is why several of the remaining packinghouses, including Ben Hill Griffin Inc. in Frostproof, have already announced they won’t re-open for the 2017-18 season.

“We don’t have enough fruit to efficiently run the plant we have,” said Dennis Broadaway, general manager of the packinghouse operated by the Haines City Citrus Growers Association. “We’ve been sitting on this surplus equipment, thinking things may turn around. Obviously, it’s not going to turn around.”

Broadaway was referring to equipment on two of the three packing lines, which have been idle for the past three seasons, he said.

The Haines City Citrus Growers Association has put its packinghouse up for sale, although it expects to run the facility in 2017-18 and perhaps the following season until it finds a buyer, Broadaway said.

As Broadaway stated, locking up a supply of fruit is the key to survival until scientists can find a way to overcome citrus greening’s damaging effects.

Like the Haines City Growers, some packinghouses ensure supply by signing long-term agreements with independent growers that commit a certain portion of their harvest to that company. As citrus growers leave the industry, particularly small and medium-sized growers with less than 1,000 grove acres, those packinghouses are left with finding uncommitted fruit on the open market.

Others hope to survive by pursuing a grow-your-own strategy. That means packing mostly fruit from your own groves like the Peace River Packing Co. in Fort Meade.

“Our model is we have to secure our own fruit supply, and we’re planning aggressively to meet that goal,” said General Manager Larry Black. “We’ve increased the acreage we’re growing under from 1,800 acres to 2,700 acres in the last 10 years.”

About 80 percent of the oranges, grapefruit and tangerines that run through the Peace River packinghouse come from the company’s own groves, he added.

That percentage has increased in recent seasons because the supply from independent, or third-party, growers has dried up not just for Peace River but across the industry, Black said.

“We grew our third-party business in the past, but in the last three years that supply has really diminished,” he said.

Even with aggressive new plantings, however, the Peace River packinghouse’s output has fallen from more than 1 million cartons in 2008-09 and the following season to about 400,000 this season, Black said.

In addition to a diminishing third-party market, the contraction stems from the greening-related production declines in its mature groves, the same declines seen across Florida, he said. In addition, new groves don’t produce marketable fruit until at least the third season after planting.

“Over the next five years, we’re going to focus on rehabilitating groves that have not been productive,” Black added.

That means Peace River won’t be increasing its acreage, but much of that acreage will have newer, more productive groves, thus increasing supplies.

Another packinghouse pursuing a grow-your-own strategy is operated by the Hunt Bros. Cooperative, which has more than 5,000 grove acres in Polk County and the Immokalee area.

Frank Hunt III, president of the family company, agreed the supply of third-party fruit has dried up.

“In recent years, we haven’t purchased anything,” he said. “My volume is off 40 percent from what it was, but because I control my fruit, we are able to maintain packinghouse volume.”

Hunt Bros. has shipped 889,936 cartons of fruit through April 30, the second highest total in the state, according to Citrus Administrative statistics. Still, that’s down from 1.4 million cartons in the 2013-14 season.

One hope for maintaining supplies, at least in the near term, is the success of some new tangerine varieties that appear to tolerate greening infection better than the traditional varieties, Black said. The trees still become infected, but greening symptoms such as the smaller size of the fruit and increased pre-harvest drop appear to be not as severe.

About 70 percent of Florida’s “specialty citrus” crop, including tangerines and tangelos, is sold on the fresh market.

The U.S. Department of Agriculture forecasts the 2016-17 specialty harvest at 1.63 million boxes. A carton of citrus, the standard packinghouse measure, equals a half-box.

In addition to tolerating greening, the new specialty varieties are easy to peel and are seedless or nearly so, Black said. Both qualities are in high demand among U.S. consumers.

Shipments of the new varieties have increased from 33,061 cartons in 2013-14 to 258,289 cartons this season, a nearly eight-fold increase, according to Citrus Administrative statistics. The agency projects that total to rise to 400,000 cartons next season.

One popular new variety is the Sugar Belle tangerine, developed by breeders at the Citrus Research and Education Center in Lake Alfred and released to commercial growers in 2009.

Because of high demand from growers, Sugar Belle ranked second among all specialty trees grown last year in Florida citrus nurseries, according to Fred Gmitter, professor of citrus genetics and breeding at the Lake Alfred center who helped develop the variety.

“There’s been a high interest in new varieties from Florida growers,” Black said. “The Sugar Belle and other new releases are showing some encouraging signs against greening.”

Story by Kansas.com