Online grocer FreshDirect LLC said today that it has partnered with micro-fulfillment provider Fabric to widen its services and add on-demand delivery in the Washington, D.C., metro area later this year. Bronx, N.Y.-based FreshDirect said that Fabric’s robotic technology will enable it to deliver orders to customers within two hours.

FreshDirect claimed that it is the Northeast’s leading online fresh-food grocer, delivering to customers in seven states, including the New York and Philadelphia metropolitan areas. Launched in 2002, the privately held company sells liquor through FreshDirect Wines & Spirits, an independently owned store with a New York state license.

Fabric was founded in 2015 as CommonSense Robotics and has offices in New York and Tel Aviv, Israel. The startup said its micro-fulfillment system is designed to enable fast fulfillment from small spaces, allowing retailers to reduce costs and cut fulfillment times.

FreshDirect, Fabric follow hub-and-spoke plan

“Fabric was purpose-built for, not adapted to, micro-fulfillment,” said Steve Hornyak, chief commercial officer at Fabric. “We are the only vendor that provides a complete hardware and software solution that’s optimized for high throughput from small spaces.”

“Unlike rigid hardware-based fulfillment, our software-driven solution and unique topology are flexible enough to fit in any space that works best for our retail partners,” he told The Robot Report.

Fabric said its modular approach gives retailers the flexibility to build fulfillment centers that fit their requirements for speed and profitability. Retailers can choose a platform model to run and operate independently on their real estate or a robotics-as-a-service (RaaS) model with minimal capital expenditure (capex), said the company.

Speaking of models, FreshDirect has a hub-and-spoke operational structure, with its primary facility at its headquarters in the Bronx. The company said its relationship with Fabric will “serve as a blueprint for future service upgrades” as they look to expand across the U.S. It said it expects its first foray into automated micro-fulfillment to improve efficiencies, enable faster service, and substantially increase order-volume capacity.

Capital region rollout

“Washington, D.C., has always been an important market for FreshDirect, and we are excited to partner with Fabric to meet the current surge in demand while improving the customer experience,” stated David McInerney, FreshDirect CEO. “Fabric’s technology will allow us to turn our existing regional facilities into high-velocity automated distribution centers, speeding our expansion into new markets.”

FreshDirect said its upgraded services will be rolled out across its existing delivery area, which includes the District of Columbia; Silver Spring/Potomac, Maryland; and the Vienna/Dulles area in Virginia. It said this service will enable customers to order from a wide selection of fresh food and grocery items within a two-hour window, in addition to existing next-day service.

“FreshDirect is the pioneer of grocery e-commerce in the U.S.,” said Elram Goren, co-founder and CEO of Fabric. “Now with Fabric’s robotic micro-fulfillment technology, purpose-built for on-demand fulfillment, they are positioned to best serve their Washington, D.C., customers profitably and at scale.”

Pandemic accelerates online groceries

“We haven’t experienced any technical issues so far, other than COVID-related delays in permitting and construction,” said Hornyak. “The pandemic catapulted the grocery industry four to five years into the future in a matter of four to five weeks. Online sales penetration is now in the double digits, and automating the fulfillment process has gone from a ‘nice to have’ to an undisputed necessity practically overnight.”

“There’s only one way to meet consumers’ demand for same-day orders, do it profitably and at scale, and maintain the consumer relationship — automated micro-fulfillment,” he added. “Once COVID-19 ends, we will have entered a new era of ‘Grocery 2.0,’ in which brick-and-mortar shopping is more experiential, and the back of the store is partitioned off for robotic fulfillment of online orders.”

Fabric said it is rapidly expanding its U.S. operations with more than 170+ team members globally and 15 sites under development or contract, including two live micro-fulfillment centers.