Artificial intelligence (AI) is becoming a greater part of multiple industries, including groceries. From product placement on store shelves to pricing adjustments, AI is affecting grocery stores and services across the world. Investments in AI are also increasing as more companies look to technology to remain competitive, and more consumers continue to shop online.
Now, Hungryroot, an AI-enabled grocery service, has announced its Series C funding round of $40 million. The company has a $750 million valuation and offers a personalized online grocery service that uses AI and user quizzes. Hungryroot plans to use the funding to expand its team, marketing, automation technology, personalization algorithm, groceries and recipes.
AI-Powered Grocery Shopping
Hungryroot is different from other online grocers because it uses machine learning and predictive modeling to fill a customer’s cart based on their needs and objectives. When a customer signs up, they take a survey about their eating habits, food preferences, family size and more. The smart algorithm predicts a weekly basket of fresh groceries and simple recipes that best meet their needs.
While customers have the option to edit their order or change their preferences at any time, Hungryroot is finding that the predictive technology is accurate. Most customers trust the company to select the majority of their weekly groceries for them, and 72% of all items purchased are chosen by the algorithm. As customers continue to engage with the service over time, the predictive model becomes more and more accurate.
“We plan to use the new funds to expand from about 300 grocery items available each week to 3,000 over the next three years,” says Ben McKean, CEO and founder of Hungryroot. “Additionally, we will invest in new technology to improve our algorithms and automation technology, expand our team further and scale our marketing efforts.”
Hungryroot food.
Hungryroot
Prices and the Pandemic
Recent reports show grocery prices have gone up dramatically due to the coronavirus pandemic, higher demand and lower supply. Hungryroot shares that the price of its service is comparable to traditional grocers and other online services available today.
“Our customers report saving $22 a week on average just by using Hungryroot. Our customers are not just paying for groceries though. They are paying for a customer-first, personalized grocery experience complete with meal planning, nutritional support and at-home delivery. We do the work for our customers, so they do not have to, saving them time, money and headspace,” says McKean.
Hungryroot pivoted to become a personalized grocery service about six months prior to the pandemic. The company saw an increase in sales between March and April 2020, which they attributed to the pandemic.
AI-enabled platforms are paving the way for what grocery will become as the industry continues to shift online. It is creating a new way to grocery shop. The days of walking into a giant grocery store with an empty cart and browsing through tens of thousands of items will soon be a routine of the past. Companies like Hungryroot are reinventing the end-to-end grocery experience and reducing the average time consumers spend shopping from two to three hours a week to just two to three minutes.