A $7B spice deal. Walmart's mushroom farms. AI designers.
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Rev your engines

Hi there, 

Zume, a Palo Alto pizza delivery startup that uses robots to cook pizzas inside delivery vehicles en route to shoppers’ homes, recently announced plans to focus more on robots and less on pizza. 

It's partnering with appliance maker Welbilt to adapt its robotic technology to different food products — Zume’s CEO cited coffee, frozen yogurt, and steamed buns as possibilities — and provide it to restaurants as a service.


Zume has raised $70M and patented its truck-based kitchens, below. 

Cooking food while driving to consumers' homes offers a few advantages, beyond the novelty factor:

  • The food arrives warm and freshly baked
  • Restaurants can reduce their reliance on chemical stabilizers used to preserve food
  • Delivery trucks don't have to drive back to the restaurant to fulfill new orders
It also raises the possibility of personalization. If food is crafted by robot hands connected to the internet, why couldn’t restaurants let each user choose the shape, size, and design of their food?

For example, 3D pizza printer startup BeeHex (which is not on wheels — yet) shows us how this could work. BeeHex envisioned a mobile app that would let users personalize the shape, toppings, and amounts of sauce and cheese on their pizzas, which would then be assembled by the printer.

And one of the world's fastest growing cafe chains, Wheelys, competes with Starbucks by relying on IoT-connected, mobile coffee kiosks on bikes. 

And it’s not just hot food. Other startups and retailers are imagining new ways to squeeze value out of delivery trucks.

Recently, Walmart applied for a patent on delivery trucks filled with mobile manufacturing systems to create or customize products while driving.

The patent notes the trucks could hold 3D printers, sewing machines, embossing machines, and even "live plants to be harvested... e.g. tomato plant, mushroom farm, herbs, etc." 

The system would also use customer data to predict who might order what and route its trucks accordingly, supporting faster deliveries of personalized items. 

Today, these mobile kitchens and roving factories still require human drivers. But in 10 years, that may no longer be the case. 

By combining self-driving trucks with automated manufacturing systems, the retailers and restaurants of the future could significantly reduce their brick-and-mortar presences while still supporting quick fulfillment of personalized orders placed through mobile apps. 

And, the easier it is for shoppers to order personalized products, the more they'll do so, and the more personal data retailers will collect. Data will power more efficient deliveries and better personalization options, continuing the cycle.

Stay hungry,


Deal of the Week

Tailor Brands, an NY-based startup, raised a $15.5M Series B. Tailor Brands aims to use AI to automate branding and marketing for small businesses by automatically generating logos, marketing materials, and more based on company descriptions. 

I tested it out, saying I run a direct-to-consumer makeup startup called Zoe's. Tailored Brands offered up a few logo options and showed me how they would look on my non-existent company's swag. 

For the time being, Tailor Brands' algorithms likely won't be replacing any human designers, and will serve businesses who otherwise wouldn't be able to afford professional branding.

But, the model calls attention to the growing threat that automation poses to white collar jobs. We've written about this in detail here

It also highlights the importance of brand in a direct-to-consumer, online world. As D2C startups proliferate, many of them hope to mainly differentiate themselves through brand. (Inc editor Tom Foster dove into the D2C brand bubble here). 

Many of them use similar tactics — tactics replicated by Tailor Brands in the images above, including the use of pastel colors and bold lettering. Soon, we may see a backlash as human designers move toward radically different designs to stand out from a sea of algorithmically-generated websites and logos.
CB Insights Hits 

Flash Briefing: Can AI Save Physical Retail?

AI has the potential to transform physical retail, through tools ranging from personalized in-store services, to robots, to machine vision for analyzing shoppers. This briefing analyzes investment activity, patents, partnerships, and more to explore how AI is shaping the store of the future. Get the slides and recording. 
News & Views

Notable deals

Caffeine & cash. Nestle acquired the rights to Starbucks' packaged coffee business for $7.15B. This means Nestle will now sell Starbucks-branded, packaged coffee beans and grounds in grocery stores and other non-Starbucks locations. Starbucks' packaged business saw $1.8B in sales in 2017. 

Nestle has been investing heavily in its coffee business recently, acquiring Blue Bottle and Chameleon Cold Brew. Meanwhile, holding group JAB has snapped up Panera, Keurig, Peet's, and others. We previously wrote about this rising breakfast rivalry here

A fancy cookie. Mondelez, the parent company of Oreo, Ritz, Nabisco, and other candy and snacking brands, spent $500M to acquire Tate's Bake Shop. Tate's sells premium cookies that use natural ingredients, and the deal highlights Mondelez's desire to move up market.

Building a spice empire. Flavor producer International Flavors & Fragrances acquired flavor company Frutarom for $7.1B. As food brands hope to attract millennials by offering bolder, more exotically flavored snacks and packaged meals, the flavoring industry is gaining new importance. 

Beyond applesauce. Major fruit and vegetable company Del Monte invested in Purple Carrot, a plant-based meal kit startup. The deal represents Del Monte's first disclosed startup investment, and follows a growing trend of traditional food brands looking at direct-to-consumer meal delivery. Nestle, for example, invested in Freshly, and Smithfield invested in Chef'd. 
Business Wire

Robots ramp up. LG invested $3M into Bossa Nova Robotics, a startup making in-store robots for retailers. Walmart has already rolled out Bossa Nova's robots in 50 stores to help monitor inventory and restock shelves.
Korea Herald


Battles in India. Walmart has officially beaten out Amazon to acquire a majority stake in Flipkart, India's leading e-commerce platform. Walmart will pay $16B for a 77% stake.

Recent news & perspectives

Robo-restaurants. Spyce, a restaurant with robotic chefs, opened its doors in downtown Boston. Initially designed by MIT students in 2016, Spyce has raised $3M in funding from Qualcomm Ventures and others. 
Civil Eats

Robot chefs may sound efficient, but restaurants are still a difficult business. An earlier robot restaurant, Eatsa, struggled and ultimately closed 5 of its 7 locations. 

Soy wars. As China threatens tariffs on US agricultural goods, US soybean and pork producers are already seeing major declines in orders.

Rising threats. Consultancy A.T. Kearney released a report arguing that exiting NAFTA would cost US retailers $15.8B.
Business Journals

From clicks to bricks. In a partnership that likely benefits Blue Apron more than Costco, the struggling meal kit company announced plans to start selling its meal kits through Costco stores. 

For the dogs. Amazon launched a new private label dog food brand, called Wag.
Retail Dive

Moving offline. E-commerce platform Shopify announced plans to open a brick-and-mortar store in the US this summer. Just as Shopify offers e-commerce solutions to retailers today, its store will showcase new brick-and-mortar technologies that retailers can use.
And one more thing... 

Stephen Hawking once threw a cocktail party for time travelers.

No one showed up. 

Check it out. 

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