The Kroger Co. (NYSE: KR), America’s largest grocery retailer, today announced the official opening of the Customer Fulfillment Center (CFC) in the Village of Pleasant Prairie, WI, a city centrally located between Milwaukee and Chicago, powered by the Ocado Group (LSE: OCDO), engineering a model for the region, leveraging advanced robotics technology and creative solutions to redefine the customer experience for our customers in Wisconsin, northern Illinois, and northwest Indiana.
“We are thrilled to launch Kroger Delivery in Pleasant Prairie, continuing our long-standing engagement in the state of Wisconsin. Our tradition of fresh is all about our customers, and this true milestone moment incorporates end-to-end cold solutions, including customized refrigerated vans, providing Kenosha County residents with everything fresh, every time,” said Gabriel Arreaga, Kroger’s senior vice president and chief supply chain officer. “Through the incredible relationships with several local departments including Kenosha County and Village of Pleasant Prairie, this collaboration was key to success that will bring nearly 250 jobs to the 336,840 square-foot high-tech fulfillment center and will enable us to expand our delivery services to new areas in the region in need of our best-in-class service.”
The company also collaborated with Kenosha Area Business Alliance, Wisconsin Department of Transportation and Wisconsin Economic Development Corporation.
“Kroger is a tremendous example of how a company’s vision and collaboration with the Village can provide new jobs to the region, said John Steinbrink Sr., Pleasant Prairie Village President. Kroger is a welcomed community partner, and we look forward to seeing their investment in our community succeed. Our residents will be excited to know a facility in Pleasant Prairie can deliver fresh groceries right to the doorstep of our neighborhoods. In addition, the Village staff would like to thank Kroger and Kenosha County for working with the Village on the Transportation Economic Assistance Grant that widened Highway H. The road improvements will ensure traffic surrounding the new Kroger facility continues to flow smoothly.”
“Through our growing partnership, we are helping Kroger Delivery to introduce a world-leading online grocery proposition to their customers across the USA. Enabled by Ocado Group’s unique, cutting-edge technology, this fulfillment centre will introduce a step change in the kind of service and efficiency that shoppers across Wisconsin, northern Illinois, and northwest Indiana can expect from grocery ecommerce,” said Luke Jensen, CEO of Ocado Solutions.
“Kenosha County is the hotspot for economic development in the State of Wisconsin and we welcome Kroger’s new state-of-the-art food fulfillment center,” said Samantha Kerkman, Kenosha County Executive. “Utilizing the latest robotics and logistics technology, this e-commerce fulfillment center provides a vital role in offering access to fresh food, especially to those residents without easy access to groceries. We look forward to providing the Kroger leadership team with a supportive business environment here in Kenosha County.”
“Kroger’s partnership with Ocado on this new Pleasant Prairie facility allows Wisconsin to help discover innovative solutions for grocery ordering and delivery,” said Missy Hughes, secretary and CEO of the Wisconsin Economic Development Corporation (WEDC). “While this facility will use robots and the latest technology to fulfill orders, this project is also expected to create more than 200 jobs.”
WEDC is supporting the project with up to $1.5 million in state tax credits to the Kroger Fulfillment Network and up to $500,000 in tax credits to Ocado Solutions. The company worked closely with Kenosha Area Business Alliance, Kenosha County, Wisconsin Department of Transportation, Wisconsin Economic Development Corporation and the Village of Pleasant Prairie.
Kroger Delivery Explained
This expansion represents an extension of a partnership between Kroger and Ocado, a world leader in technology for grocery e-commerce. In 2018, the companies announced a collaboration to establish a delivery network that combines artificial intelligence, advanced robotics, and automation in a bold new way, bringing first-of-its-kind technology to America.
The delivery network relies on highly automated fulfillment centers. At the hub sites, more than 1,000 bots whizz around giant 3D grids, orchestrated by proprietary air-traffic control systems in the unlicensed spectrum. The grid, known as The Hive, contains totes with products and ready-to-deliver customer orders. As customers’ orders near delivery times, the bots retrieve products from The Hive and are presented at pick stations for items to be sorted for delivery, a process governed by algorithms that ensures items are intelligently packed. For example, fragile items are placed on top, bags are evenly weighted, and each order is optimized to fit into the lowest number of bags, reducing plastic use.
After being packed, groceries are loaded into a refrigerated delivery van, which can store up to 20 orders. Powerful machine learning algorithms optimize delivery routes, considering factors like road conditions and optimal fuel efficiency. Drivers may travel up to 90 miles with orders from facilities to make deliveries.
Kroger currently operates customer fulfillment centers in Monroe, OH, Groveland, FL, Forest Park, GA (Atlanta), Dallas, TX and Pleasant Prairie, WI with additional customer fulfillment centers slated for California, Frederick, MD, Phoenix, AZ, Romulus, MI (Detroit), Cleveland, OH, Charlotte, NC, Denver, CO as well as South Florida and the Northeast.