Dive Brief:

• Albertsons will deploy fresh food optimization technology from Afresh Technologies across its entire fleet of more than 2,200 supermarkets, according to a Thursday press release.
• The grocer plans to use the artificial intelligence-driven platform to help achieve a 50% reduction in food waste by 2030.
• Albertsons is adding Afresh's technology as it sees unexpectedly strong customer demand for fresh products.

Dive Insight:

Albertsons has elected to add Afresh's technology to fresh departments in all of its stores after the companies ran a test of the system together last year, Afresh co-founder and CEO Matt Schwartz said.

The technology allows grocers to determine how much of a fruit or vegetable to order by crunching a variety of data points reflecting store-level customer demand, historical sales data and perishability. Taken together, that information allows Afresh to help fresh department managers avoid being left with unsalable food or inadvertently selling food that might spoil faster than customers expect.

"The goal is to minimize food waste, but leave the grocer with a full shelf, so that when you as a shopper walk in, you're not faced with an out-of-stock, and also so that your food is fresher," Schwartz said. "It turns out that ordering can actually influence the days of shelf life of a product, because if a grocer orders too much food, it'll sit in the back cooler, and then by the time it gets to the shelf, it's lost shelf life."

Albertsons has recently seen stronger fresh food sales than it had forecast, the company's CEO, Vivek Sankaran, said earlier in January during the grocer's earnings call for the third quarter of 2021. Fresh department identical sales outpaced center store sales by 5 percentage points during the three-month period compared with the same stretch in 2020, Sankaran said.

Sankaran attributed Albertsons's unexpectedly robust fresh sales to its use of automation to manage production planning and streamline operations, which he said has led to better quality, higher in-stock levels and more time for employees to interact with customers.

The addition of Albertsons to Afresh's customer base marks a significant expansion of the technology startup's operations. Afresh previously rolled out its Fresh Operating System to a number of other grocery chains, including WinCo Foods and Heinen's, both of which decided in 2020 to use the technology in all of their locations. Afresh also counts Save Mart, Bashas' and Cub Foods among its clients.

Founded in 2017, Afresh has raised funds from a variety of investors, including Food Retail Ventures, which is headed by former Ahold USA CEO James McCann and participated in a $12 million Series A follow-on round of investment in Afresh in mid-2020. Later that year, Afresh brought in another $13 million in capital.