In the first few months it was operational, shelf engine, The Seattle-based company that streamlined the process of stocking store shelves for supermarkets and groceries had no name.
Co-founders Stefan Kalb and Bede Jordan went on a ski trip outside of Salt Lake City about four years ago when they discussed what exactly could be done about the problem of food waste in the United States.
Kalb is a serial entrepreneur whose first business was a food distribution company called Molly & # 39; s, which was sold to a company called HomeGrown in 2019.
A graduate of Western Washington University with an actuarial degree, Kalb founded his grocery company to make a difference in the world. While Mollys did indeed promote healthy eating, the problem was that Kalb and Bede, a former Microsoft Engineer, tackling Shelf Engine can have even more influence.
Food waste is not only bad for its inefficiency in the face of a massive US food insecurity problem, but also bad for the environment.
Shelf Engine suggests addressing the problem with perishable food demand forecasts. The idea is to get inefficiencies out of the ordering system. As a rule, about a third of the food from the bakery and other perishable goods is thrown on the store shelves. Shelf Engine guarantees the use of the store and all unsold items for which the company pays.
Shelf Engine receives information about how much sales a store typically generates for certain items, and can then predict how much demand will be for a particular product. The company makes money by arbitrating between the price of goods from vendors and sales to grocers.
It enables foods to reduce food waste and have a wider range of products on the shelves for customers.
Shelf Engine initially launched a product to be sold on groceries, but was more popular by becoming a marketplace and perfecting its models in terms of how much of a particular item was needed on the store shelves.
The next agenda item for Bede and Kalb is to gain insight into secondary sources such as imperfect product resellers or other grocery stores that serve as points of sale.
According to Kalb, the business model already shows results in around 400 branches in the northwest and now has a further $ 12 million for the market launch.
The funds came from Garry Tans Initialized and GGV (and GGV Managing Director Hans Tung) has a seat on the board of the company). Other investors in the company are Foundation Capital, Bain Capital, 1984 and Correlation Ventures .
Kalb said the money from the round will be used to expand the engineering team and its sales and acquisition process.
The investment in shelf engine is part of a wave of new technology applications coming to the supermarket as Sunny Dhillon. A Signia Ventures partner wrote an article for theinformationsuperhighway's Extra Crunch.
"The profit margins on food are always very thin, and the difference between a profitable and an unprofitable grocer is often only cents for the dollar," Dhillon wrote. "As e-grocery becomes more widespread, retailers not only have to optimize their fulfillment processes (e.g. MFCs), but also the logistics of deliveries to a customer's door to ensure speed and quality (e.g. dark stores). "
Aside from Dhillon's version of a delivery-only grocery network with mobile fulfillment centers and dark shops, there's plenty of room for chains with existing real estate and bespoke shopping options to increase their margins on perishable goods.