Kroger employee putting grocery bags into a Nuro driverless delivery vehicle.
To help support its “Zero Hunger/Zero Waste” social and environmental impact plan, grocery chain Kroger partnered with robotics firm Nuro in 2018 for driverless delivery. — Nuro

Why it matters:

  • Last-mile delivery is challenging for food companies to execute profitably.
  • That’s why driverless vehicles in the form of robots and drones are gaining appeal for food deliveries on college campuses and in local markets by players like Grubhub and Kroger, for example.
  • The limited scale of testing, and some recent high-profile pullbacks, indicate autonomous delivery is still in its infancy.

Food companies ranging from legacy retailers Kroger and 7-Eleven to disruptors Grubhub and Uber Eats have been testing food-delivery robots that navigate the streets and sidewalks of communities around the country without the help of a human driver.

These companies hope that driverless vehicles could someday provide a cost-effective solution for the fulfillment of food orders to consumers’ homes or offices, although for now the tests are limited to small geographic areas and are seen more as learning exercises.

“There is a huge demand for autonomous delivery,” a spokesperson for automated delivery company Starship told CO—. “Wherever we start service, we have people who want to use it.”

Grubhub tests robotics-fueled food delivery on college campuses

Starship vehicles, which resemble six-wheeled moon rovers, use advanced technology to navigate sidewalks and cross streets, avoiding people and obstacles on the way. They can carry a small delivery— about 20 pounds, or about three grocery bags — in a truck-like compartment that remains locked until the customer opens it using an app.

Starship recently unveiled a partnership with Grubhub to begin robotic delivery of food orders on college campuses around the country. This delivery service is currently available at several colleges, including the University of Kentucky; the University of Nevada, Las Vegas; Wayne State University; Southern Methodist University and Fairfield University. Plans call for its expansion to several other college campuses later this year.

“Robot delivery solves the unique challenges of accessing hard-to-reach areas that come from operating on a college campus,” said Adam Herbert, Senior Director of Campus Partnerships at Grubhub in a statement. “With Starship’s robots, students can enjoy a fun, new way to order their favorite meals right to their door.”

Starship’s robots operate at what is called “level 4 autonomy,” which means little to no human supervision is required. That includes crossing streets, climbing curbs, and sharing sidewalks with other users.

“Being able to make this possible takes years of doing this on a daily basis, with a large number of robots,” the Starship spokesperson said.

The company said it has received a positive reaction from people that goes “well beyond social acceptance to adoration.”

Starship recently conducted a survey of more than 7,000 students on campuses across the country where the company provides delivery and found that 95% said they would recommend autonomous robot services to friends on other campuses.

Grubhub rival Uber Eats, meanwhile, has partnered with robotics firm Nuro, which has also deployed robots to deliver groceries for Kroger in Houston and for Save Mart, a regional supermarket chain in California. It also has a test in place making deliveries for 7-Eleven in one California community.

“We partner with industry leaders who share both our vision of a seamless autonomous delivery experience and our commitment to revitalizing local commerce through the use of our technology,” a spokesperson for Nuro told CO—.

In addition to its partnerships with Kroger, Save Mart, and Uber Eats, Nuro also conducted a pilot with Domino’s to deliver pizzas in Houston.

[Read: Big Brands’ Inventory Management Partners Share Top Tips to Slay Supply Chain Snarls]

The report concluded that a driverless delivery vehicle accompanied by a single human completed routes faster and more efficiently than manned deliveries.

Kroger: Food delivery via autonomous vehicles meets customers ‘in the context of their day’

Kroger launched its partnership with Nuro in 2018, and earlier this year unveiled plans to expand it in the Houston market.

"The role of autonomous vehicles in our seamless ecosystem continues to increase, contributing to meeting our customers in the context of their day without compromising on the quality or value, while contributing to our long-term growth and sustainability goals," said Yael Cosset, Kroger’s Senior Vice President and Chief Information Officer, in a statement.

Kroger said the all-electric, autonomous vehicles support its “Zero Hunger/Zero Waste” social and environmental impact plan. The vehicles reduce corporate greenhouse gas emissions and allow consumers to choose delivery options that help them reduce their impact on the environment, the retailer said.

[Read: The Zero-Waste Movement Is Creating Opportunities for Businesses Large and Small]

Drones that can deliver up to 10 pounds of groceries

Other grocery companies, including Greer’s Market and Rouses Markets, two regional chains operating in the Southeast, have conducted limited tests with drone-based delivery. Both partnered with technology provider Deuce Drone.

“We continue to focus on technological advancements that make shopping Greer’s in store and online advantageous to all consumers,” said Lucy Greer, a spokeswoman for Greer’s, which launched a one-store test of drone delivery last year.

The drones can carry up to 10 pounds of groceries and can deliver a package more economically than other delivery methods, said Donny Rouse, CEO of Rouses, in a statement when that company launched the test in 2020.

Wheeled vehicles continue to garner the most interest among retailers and other companies seeking efficient solutions for the “last mile” of delivery, however.

Research indicates that autonomous delivery is still in its infancy. A recent report from Coherent Market Insights valued the delivery robot market at only about $520,000 in 2021, but projected it would grow at a compound annual growth rate of 43.4% between 2022 and 2030, reaching $13.74 million in that time.

Another recent report cited the potential for driverless vehicles accompanied by humans on foot.

“It removes the need to find parking where you leave a vehicle by itself, as well as it removes the delivery person’s walk back to the vehicle,” said Sara Reed, Assistant Professor of Business Analytics at the University of Kansas, in a blog post on the report.

The report concluded that a driverless delivery vehicle accompanied by a single human completed routes faster and more efficiently than manned deliveries.

 Starship driverless delivery vehicle with Grubhub branding on it.
Starship recently unveiled a partnership with Grubhub to begin robotic delivery of food orders on college campuses around the country. — Starship

Still in the test-and-learn phase

Some companies — including Amazon and FedEx — have recently announced that they were scaling back their initial tests of driverless, last-mile delivery robots, however. The limited tests did not meet early expectations, although both companies gleaned learnings from them, according to company reports.

Navigating the regulatory landscape around autonomous vehicle delivery is one of the key challenges that autonomous delivery faces, according to Nuro.

“From early on, we’ve understood the importance of engaging with regulators when introducing a new technology that was not contemplated by legacy laws,” the Nuro spokesperson said.

The company began meeting with the U.S. Department of Transportation before going public with its business plan and gained insight into how its technology fits within existing federal vehicle standards and regulatory processes. Nuro also works closely with state regulators to help them better understand its vehicle technology and operations.

Getting buy-in from local communities is also important, according to Starship.

“Last-mile delivery has many inefficiencies that can be addressed by autonomous food delivery,” the Starship spokesperson said. “Traffic congestion and the resulting pollution are two big problems, and Starship robots mitigate both by traveling on often under-utilized sidewalks and operating nearly an entire day on a single charge.

“Most people would agree that it doesn’t make sense for a two-ton car to deliver eggs and milk,” the spokesperson continued. “The future of delivery will be multi-modal, and autonomous options will be a huge part of that.”

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Published November 29, 2022