Kroger Unveils State-of-the-Art Fulfillment Center
- Apr 16, 2021
Nearly three years after teaming with Ocado Group, a global grocery e-commerce technology company, America’s largest supermarket retailer Kroger Co. has launched its first automated Customer Fulfillment Center near Cincinnati.
The grocery chain giant will open its next CFC in Groveland, Fla., and has announced plans for more CFCs throughout the U.S.
Kroger and U.K.-based Ocado formed an exclusive partnership in May 2018, and began planning for automated e-commerce facilities long before the pandemic hit. Rodney McMullen, Kroger’s chairman & CEO, noted 2020 was a pivotal year for grocery e-commerce, as Kroger’s digital business surged 116 percent to more than $10 billion.
McMullen said in prepared remarks the momentum Kroger has experienced is well-timed with the evolution of its Kroger Delivery business and underpins the permanent shift in grocery consumer behavior and need for modern e-commerce and last-mile solutions.
Located at 6266 Hamilton Lebanon Road in Monroe, Ohio, the $55 million, 375,000-square-foot fulfillment center combines vertical integration, machine learning and robotics to enable Kroger to quickly process e-commerce orders and deliver fresh food in a 90-mile radius. That coverage area will increase as spoke locations are integrated into the system.
Over 1,000 bots whiz around giant 3D grids at the newly built facility, orchestrated by a proprietary air traffic control system. Known as The Hive, the grid contains totes with products and ready-to-deliver customer orders. As the orders near their delivery times, the bots retrieve the products from The Hive and are brought to pick stations to be sorted for delivery. Algorithms ensure the items are packed properly with evenly weighted bags and fragile items on top. The orders are loaded into a temperature-controlled Kroger Delivery van. Machine learning algorithms will optimize the delivery routes, considering factors including road conditions and optimal fuel efficiency. The CFC will be able to fulfill thousands of orders each day and also has the capability to support fulfillment of pickup orders.
In January, the Kroger Co. announced plans for a new automated facility in Phoenix, where it operates as Fry’s Food Stores. The company said it was making a capital investment of $80 million for a CFC development of approximately 222,900 square feet. At that time, the location was not identified but Kroger expected to be ready to open the CFC 24 months after breaking ground. Also this spring, Kroger will open a CFC in Groveland, Fla., near Orlando, Fla., a new area for Kroger operations. In addition to the Phoenix center, Kroger has also announced plans to open CFCs in Dallas; Forest Park, Ga., near Atlanta; Frederick, Md., Pleasant Prairie, Wis.; Romulus, Mich., outside Detroit; as well as sites throughout the Pacific Northwest and West regions. Kroger is expected to announce additional locations as the network expands.
At every CFC, on-site associates will support delivery operations and help process, package and load orders. The Monroe CFC will employ nearly 400 associates and the Phoenix site is expected to hire about 700 workers.