Dive Brief:

• Automated order management and forecasting firm Shelf Engine has raised $41 million in Series B funding, according to a company press release.

• Shelf Engine, which uses advanced statistical models, neural networks and machine learning to carry out targeted product ordering, is currently in use at 2,000 grocery stores and plans to increase its footprint by “thousands” of stores in the next 18 months, according to Stefan Kalb, the company's co-founder and CEO.

• As grocers look to improve margins for e-commerce orders and their fresh assortments, Shelf Engine promises to boost order accuracy and reduce food waste.

Dive Insight:

Grocers have stepped up their investments in order management technology in recent years as new innovations promise to reduce shrink and improve order accuracy, particularly in their fresh assortments.

Shelf Engine has benefited from those investments, having integrated with grocers like Kroger and Walmart. And it’s aiming to continue building momentum as grocers across the industry look to sharpen their operations as shopping habits begin to normalize. The company can handle the entire ordering process, from vendor relations to shelf slotting, and actually buys products from manufacturers on behalf of retailer clients. It makes money on the markup it passes along to retailers on the goods sold to shoppers.

Shelf Engine uses shopper data along with artificial intelligence systems to make accurate orders that take into account historical sales patterns as well as volatile events like severe weather and the pandemic. The company claims grocers who use its solution see an average profit margin increase of more than 50%.

"We're reducing waste, while simultaneously increasing sales, and that goes straight to the grocer's bottom line," Kalb said in a statement.

Reducing food waste has also become a major focus for retailers, both for the economic benefit and for the sustainability boost. Shelf Engine said its ordering technology can reduce food waste by up to 32%. Other technology providers like Afresh, which broadcasts discounts on products nearing their sell-by date, are also tackling one of the industry’s most persistent problems.

Launched in 2015, Shelf Engine has 145 employees and is based in Seattle. With its latest funding round, the company, which attracted $12 million in a Series A round last July, has raised $58 million to date.