Fabric to build micro-fulfillment systems for Instacart food sales

Micro-fulfillment automation provider Fabric will integrate its software and robotics solutions with online grocery retailer Instacart’s technology and personal shoppers under a multi-year partnership to power “a new fulfillment process” within both dedicated warehouses and existing retailer locations, the companies said Thursday.

The initiative marks the first phase of San Francisco-based Instacart’s plan to bring automated technology solutions to retailers across the U.S. and Canada, and thus create “new e-commerce services for retail partners and an even faster, more effortless online grocery shopping experience for customers.” Terms of the deal were not disclosed.

In early-stage concept pilots rolling out over the coming year, Instacart plans to marry the speed of Fabric’s robots with the human touch and attention to detail of Instacart’s shoppers, enabling faster fulfillment of customers’ full grocery lists, ranging from packaged goods, household essentials and produce to deli items, frozen food, and alcohol. Once orders are carefully packed, shoppers will deliver orders to customers' doors or place them in staging areas for curbside pickup.

The plan is the latest step in the fast growth of automated grocery fulfillment sector, following linkups between logistics solutions provider Knapp and food retailer The Kroger Co., warehouse robotics and automation provider Berkshire Grey Inc. and an unnamed global retailer, robotic storage and fulfillment technology provider AutoStore and Asian-American specialty grocer H Mart, AutoStore again with grocery distributor Ahold Delhaize USA, and autonomous mobile robot (AMR) maker Geek+ with convenience store chain Circle K.

New York-based Fabric has also been busy in the area, having recently penned a deal for automated grocery fulfillment with retail giant Walmart Inc. to build local fulfillment centers (LFCs) inside many of its brick and mortar storefronts in a move to provide same-day pickup and delivery services for products from fresh and frozen groceries to consumables and electronics. Also in 2020, Fabric partnered with online grocer FreshDirect to expand its micro-fulfillment services to customers in new markets.

“Everything about our micro-fulfillment solution has been built for speed, efficiency, and elasticity to meet today’s on-demand requirements. This partnership with Instacart is another validation that Fabric’s tech and operations are best-fit to serve retailers’ next-gen fulfillment needs,'' Elram Goren, CEO and co-founder of Fabric, said in a release. “We see an enormous opportunity to integrate our product and services into Instacart’s e-commerce solutions to provide a compelling service offering for grocers.”

As grocers hustle to meet a surge in online grocery shopping, they are leveraging healthy funding from venture capital firms to build a new crop of “dark stores,” where orders are fulfilled without the presence of live consumers in the building, according to Rueben Scriven, senior analyst at market research firm Interact Analysis.

“If rapid on-demand delivery companies are able to acquire just 9% of the U.S. online grocery market, there would need to be more than 2,300 manual and automated dark stores in the U.S. by 2025 and this doesn’t even take into account the facilities operated by brick-and-mortar retailers such as Walmart and Kroger,” Scriven said in an email.

"We’re forecasting just under 700 automated micro-fulfillment centres will be installed by 2025 in the U.S. grocery sector, up from just 23 at the end of 2020. Whilst this seems like a lot, it represents a small share of the total number of micro-fulfillment centres, as the majority will be operated manually,” Scriven said.

We’re excited to announce the first phase of our next-gen fulfillment initiative - combining Fabric robotics w/ Instacart's technology & shopper community to create a new solution to support retailers and a more seamless experience for customers & shoppers https://t.co/3W8Xs6FAWD

— Instacart (@Instacart) July 22, 2021