The food business originally lagged other industries in embracing digital transformation. But the pandemic and autonomous vehicle technology are now catapulting grocery and restaurant delivery to the forefront of e-commerce and the digital revolution overall. Food has been muscling into a lead compared with other major verticals such as deliveries of medical supplies or manufacturing parts.
"Grocery deliveries and medical supplies are the two areas driving adoption of autonomous delivery," said Anand Gopalan, CEO of Velodyne Lidar, which supplies key technology to help self-driving vehicles find their way.
"Many items have a short shelf life and require same-day delivery, so the robotic solution becomes very attractive," Gopalan said.
Daniel Davenport, senior director of the North American automotive practice for CapGemini consultants, added: "We have to eat every day, and that kind of habitual consumption and regularity is a real driver for companies to be interested in AVs."
Bots, even drones in a few cases, already are crisscrossing "last mile" delivery segments of cities, dropping off chicken-parmesan sandwiches or bags of Tostitos in both pilot and early commercial phases.
"There will be humorously awkward moments where we'll pull up at an intersection and run into two or three others testing delivery AVs, though the others have safety drivers," said Matthew Johnson-Robertson, CEO of Re- fraction AI, which has a fleet of 25 three-wheeled delivery bots plying the streets of Ann Arbor, Mich., the college town where other AV experimenters have included hometown pizza giant Domino's.
In general, progress in the food delivery business varies according to the type of food, who's supplying it and how far it has to travel.
The cargo could be consumer packaged goods and other groceries from retailers ranging from Walmart to Kroger, or it could be perishables, such as fresh produce, or hot meals from restaurants.
There is long-haul trucking, midrange or regional distribution, and last-mile delivery, which gets meals and other goods to consumers' doorsteps or items from the warehouse to the loading docks of a grocery store.
The fastest progress has been in last-mile deliveries of perishables for restaurants and grocery stores, partly incentivized by how third-party human deliveries of restaurant meals, necessitated by the COVID-19 pandemic, eat up revenues, Davenport said.
As opposed to self-driving road vehicles, ground-delivery bots, including cooler-shaped sidewalk robots, are booming in particular. This is in part because "companies fear accidents from AVs based on automobiles, and liability insurance costs are really high," Davenport said. "So if you take a smaller vehicle, moving much more slowly, you radically reduce the risk profile."
But available technology can propel AVs only so far in delivery. "Anything in this space needs to be grounded first and foremost in a consumer need, a tension that we can meet," said Andre Moraes Sr., a senior director of digital for PepsiCo Foodservice.
For example, PepsiCo's test of a self-driving "snackbot" called Hello Goodness at the University of the Pacific in Stockton, Calif., "identified the need for ease of accessing snacks and beverages on the go within a college campus and met it with a solution that had a low footprint, no interference and fit well within the campus space," Moraes said.
Last-mile challenges include the need for sophisticated obstacle-avoidance systems for delivery drones to operate effectively in complex urban environments. "Construction drones, for instance, operate within a manageable workspace, but food-delivery drones need to move around pretty much boundlessly," said Yoojung Hong, CEO of This Is Engineering, a Seoul-based drone maker.
Reilly Brennan is among those who aren't bullish on the long-term future of AV delivery of restaurant meals. "Most coverage is written and consumed by people who live in cities and have a lot of money," said Brennan, whose company, Trucks Venture Capital, is based in San Francisco. "The average American family isn't doing seven-nights-a-week delivery with DoorDash."
In the realm of regional distribution, the appeal of using AVs for "milk runs" on often-repeated, business-to-business distribution routes is that they require little decision-making by drivers and their return on investment can be easily calculated. Yet, Gopalan noted, "Those vehicles are large and are often moving fast on high-speed roads versus last-mile vehicles." Still, Velodyne expects to see commercial rollout within two years of its lidars in van-sized, driverless AVs that can "move goods from one microhub to another microhub."
Walmart has been active in all of these sectors, including experiments with AV-tech providers ranging from Waymo to Nuro. Since 2018, for instance, Walmart has been testing multitemperature autonomous box trucks provided by startup Gatik, based in Palo Alto, Calif., for movement of goods on a 2-mile route between a store-type fulfillment center and a small-format Walmart Neighborhood Market in Bentonville, Ark., where Walmart is headquartered. Now they're adding a 20-mile test route between New Orleans and Metairie, La.
For long-haul, "ramp to ramp" routes, San Francisco-based Ouster, for example, just announced a deal with Plus, a developer of automated-truck technology in Cupertino, Calif., to provide lidar sensors for a 1,000-vehicle fleet of 18-wheelers.
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