Inside Save A Lot’s Automated Micro-Fulfillment Center Powered by Fabric
Omni Talk Retail kicks off NRF coverage with a tour of Save A Lot’s innovative micro-fulfillment center in Brooklyn, powered by Fabric. Jonathan Morav, Fabric’s VP of Sales, shares insights into how robotic automation and tri-temperature zones are transforming grocery delivery economics in dense urban areas.
Fabric develops automated MFCs, with everything built in-house, including unique features designed to support efficient operational processes. Fabric understands that technology can be amazing, but if it doesn’t seamlessly support what happens operationally outside of it, it won’t make an impact.
Key Moments:
- 0:01-1:00 – Introduction and NRF kickoff
- 1:01-2:30 – Fabric's approach to fulfillment automation and company overview
- 2:31-4:30 – Key features of the Brooklyn facility, including tri-temperature zones
- 4:31-6:00 – Save A Lot’s entry into NYC through this facility
- 6:01-8:30 – Customer experience and order processing workflow
- 8:31-10:00 – Addressable market size and facility capabilities
- 10:01-12:00 – The evolution of micro-fulfillment and its future potential
- 12:01-14:00 – How the pandemic accelerated grocery automation adoption
Explore the future of grocery innovation with this insightful tour and conversation!
And, ff you're interested in learning more, you can reach out to Fabric through the following contacts:
- Jonathan Morav – VP Sales | Jonathan.Morav@getfabric.com
- Shirley Bachar – VP Marketing and Business Development | Shirley.Bachar@getfabric.com
- Website: www.getfabric.com
- LinkedIn Page: https://www.linkedin.com/company/fabriclogistics/
#groceryshopping #supplychainmanagement #savealot #groceryinnovation #retailtechnology #retailtrends
*Sponsored Content*
This podcast uses the following third-party services for analysis:
Podcorn - https://podcorn.com/privacy
Transcript
Hello, everyone.
Chris Walton:This is Omnitalk Retail.
Chris Walton:I'm Chris Walton.
Anne Mazinga:And I'm Anne Mazinga.
Chris Walton:And we are kicking off our live NRF coverage on Saturday morning.
Chris Walton:Ann, it's Saturday morning.
Anne Mazinga:We're getting the early bird, gets the.
Chris Walton:Grocery order, gets the robotic worm, I guess today.
Chris Walton:And as you're gonna see in a second, because we are kicking off our coverage from one of the coolest facilities we have toured in quite a while, Ann and I are standing right in Save A Lot's new micro fulfillment warehouse in Brooklyn that is powered by Fabric.
Chris Walton:And joining us today to tell us what it's all about.
Chris Walton:To tell all of you what it's all about is Jonathan Murav, Fabric's VP of Sales.
Chris Walton:Jonathan, welcome to omnitalk.
Jonathan Murav:Welcome to Brooklyn.
Jonathan Murav:Thanks for having me.
Chris Walton:Thanks, man.
Chris Walton:Yeah, I've only been here a few times.
Chris Walton:It's good.
Chris Walton:It's a good place to be, though, on a Saturday morning.
Jonathan Murav:Snowy Saturday morning, no less.
Chris Walton:Very snowy Saturday morning.
Anne Mazinga:Yeah.
Anne Mazinga:Well, let's start.
Anne Mazinga:Tell those who might be meeting Fabric for the very first time in this beautiful space.
Anne Mazinga:Tell our audience about Fabric and the company's kind of background.
Jonathan Murav:Yeah, sure.
Jonathan Murav:So Fabric's a fulfillment automation technology company focused on unlocking some of the largest problems in retail.
Jonathan Murav:More specifically, unlocking profitable on demand e commerce grocery delivery for grocers in North America and globally.
Anne Mazinga:And how long have you been working with Fabric?
Anne Mazinga:How long has the company been around?
Jonathan Murav:Yeah, so the company's about nine years old now.
Jonathan Murav:I've been going on my sixth year now with the company.
Anne Mazinga:So you've been through it for the whole journey?
Jonathan Murav:I've been around for a long time.
Jonathan Murav:I've seen it all.
Jonathan Murav:It's been a great run.
Jonathan Murav:And have had leadership positions across operations, strategy, and now leading the sales organization.
Chris Walton:And tell us a little bit about where Fabric currently has installations, because we're going to talk about this one particularly because there's a lot of aspects that are unique.
Chris Walton:But talk about what you've learned over the course of the time at Fabric that's enabled you guys to put this installation in place.
Jonathan Murav:Yeah.
Jonathan Murav:So I think, you know, Fabric was founded as a technology company, but we're not only a technology company.
Jonathan Murav:So we actually started as a company that actually operates the sites that we build.
Chris Walton:Okay.
Jonathan Murav:So early on in the process, we built a very strong operating muscle and that what allowed us to do is actually feel the pain that our customers are feeling.
Anne Mazinga:The operators.
Jonathan Murav:Yeah, that the operators are feeling.
Jonathan Murav:And take those learnings and put them back into Our product development from firsthand experience.
Jonathan Murav:Right.
Jonathan Murav:And I think that's a really powerful distinction that we have against some of the other folks that we compete with in the space.
Jonathan Murav:And you see that evident in the product that we've deployed.
Jonathan Murav:And our customers tell us, wow, this is exactly what we need.
Chris Walton:Yeah, so you're eating what you cook, so to speak.
Jonathan Murav:That's it?
Jonathan Murav:Yeah, that's it.
Chris Walton:We love that.
Chris Walton:We love people that eat what they cook.
Chris Walton:It's kind of our mantra here at Omnitok.
Chris Walton:All right, so we're standing in this pretty brand new Brooklyn warehouse facility that you guys are powering for.
Chris Walton:Save a lot.
Chris Walton:It's pretty impressive.
Chris Walton:You guys can see if you're watching like there's robots moving here behind us in the background.
Chris Walton:What is so unique about this site particularly?
Jonathan Murav:Yeah, so I think first and foremost, we are literally in the heart of Brooklyn, New York, probably the densest part of.
Jonathan Murav:You know, we thought that when we.
Anne Mazinga:Were pulling up our Lyft driver was like, do you know where you're going?
Anne Mazinga:Yes, we do know where we're going because yeah, there's restaurants, there's housing.
Jonathan Murav:We are surrounded by 2 million people.
Jonathan Murav:We are within 30 minute reach of 2 million people.
Chris Walton:Wow.
Jonathan Murav:Okay, so this facility serves all of Brooklyn from this one location and walking down the street, you would never imagine that behind the two rolling gate doors that have graffiti on them, that there's this state of the art robotic automation technology that is fulfilling on demand 30 minute delivery to the whole of Brooklyn.
Chris Walton:That's crazy.
Jonathan Murav:Okay.
Chris Walton:Yeah.
Chris Walton:And so, and so like it's.
Chris Walton:This building looks pretty old too.
Chris Walton:Right?
Chris Walton:Like, so why, why is that such an important factor here?
Chris Walton:Like in terms of what you're able to do and where you're able to put this?
Jonathan Murav:Yeah.
Jonathan Murav:So we've designed a modular, easy to deploy system that can be deployed in what we call atypical spaces.
Chris Walton:Okay.
Chris Walton:Atypical spaces.
Jonathan Murav:So we were, we were designed or we designed a system to be able to be deployed in very dense urban areas.
Anne Mazinga:Okay.
Jonathan Murav:Backs of stores.
Jonathan Murav:Think like a big box grocery store anywhere across the country.
Jonathan Murav:And we also run the gamut.
Jonathan Murav:We could actually go into like very large warehouses.
Jonathan Murav:And so we go from what we call nano to kind of a more macro model.
Jonathan Murav:Right.
Jonathan Murav:And that's really interesting because when you start to think about solving for on demand grocery, proximity to your end customer is absolutely key.
Anne Mazinga:Right.
Jonathan Murav:You can't do that in some large warehouse that's an hour outside of the city.
Jonathan Murav:Right, right.
Jonathan Murav:And so we built this system In a way that allows us to deploy it in a building that's literally 100 years old in the heart of Brooklyn.
Chris Walton:And how big is this facility, Jonathan?
Chris Walton:And then also I'm curious too, like, like how do the dynamics of cold and fresh and all that.
Jonathan Murav:Yeah, great question.
Jonathan Murav:Yep.
Jonathan Murav:So the facility is 7,000 square feet, which actually for us is a little bit larger on the nano side of the equation.
Jonathan Murav:Our true nanos run about 4,000 square feet and can drive kind of top line sales of $10 million a year through the system, which is really, really amazing.
Jonathan Murav:And I think what's really interesting about what we built here in Brooklyn, it's the world's first fully automated tri temperature zone automated grocery facility.
Chris Walton:And what does that mean?
Jonathan Murav:So what that means is that all of the goods are in automation, ambient, chilled and frozen, all stored in automation and picked via all in these bins behind us.
Jonathan Murav:All in the bins behind us across multiple temperature zones.
Anne Mazinga:Same size bins, roughly.
Jonathan Murav:Yeah, yeah, same size bins, roughly frozen totes that keep the goods frozen, you know, indefinitely.
Jonathan Murav:And what that really allows us to do is drive a really lean model because where grocers struggle the most is pulling together all the disparate elements of an order from the frozen section of the shopping floor, from the ambient section, from the chilled section.
Jonathan Murav:And that takes a lot of labor and a lot of money.
Jonathan Murav:And that's where a lot of the losing economics of the online grocery model reside.
Jonathan Murav:And our tri temperature zone really cuts that down to a bare bones labor footprint.
Jonathan Murav:Wow.
Jonathan Murav:Yeah.
Anne Mazinga:Yeah, We've been in, in facilities similar to this before, but yet they were not.
Anne Mazinga:You could do the ambient goods, but it was, it was manual after that process.
Anne Mazinga:So it is really cool to see, you know, being able to have the same racks, the same kind of tote system set up for all three of those conditions.
Anne Mazinga:Well, I'd love to hear a little bit more about the process from the Save A Lot side.
Anne Mazinga:Like tell us a little bit about what Save A Lot Save A Lot's getting from this type of operation.
Anne Mazinga:And if I'm understanding correctly, like as a customer, maybe walk me through the customer process and then understanding like the benefits from Save A Lot's perspective.
Anne Mazinga:So I order through Uber Eats.
Anne Mazinga:Is that.
Jonathan Murav:Yeah.
Jonathan Murav:So the end customer is shopping exclusively on UberEats today.
Jonathan Murav:We'll probably bring on some additional marketplaces in the near future.
Anne Mazinga:Sure.
Jonathan Murav:So a customer will go on the Uber Eats application, find the Save A Lot storefront, hopefully listed right at the top.
Jonathan Murav:Right.
Jonathan Murav:And I think we're seeing that more and more now, which is really great because the customer feedback has been fantastic.
Jonathan Murav:And I think Uber algorithms are picking up on that.
Jonathan Murav:And they'll do their shop like you do on any other application.
Jonathan Murav:Right.
Jonathan Murav:They'll pick what they want.
Jonathan Murav:That order comes into this facility, the robots get to work to start collecting.
Jonathan Murav:All the elements of that order will have pickers who actually select those goods at the station, making sure that the goods are of high quality, of precious quality to go out to the end customer.
Jonathan Murav:They bag them.
Jonathan Murav:And then right over here we have an Uber Eats driver who just arrived, literally just walked in, just walked in, and within a few minutes they come to pick it up.
Jonathan Murav:You know, a typical order of 50 items gets picked within five minutes.
Anne Mazinga:So.
Anne Mazinga:And Save A Lot doesn't have a lot of bricks and mortar locations in this area.
Anne Mazinga:So explain a little bit about what this is now enabling.
Anne Mazinga:Like if I'm an Uber Eats customer and I go on and I see that I have eggs in there, a good price, and I'm ready to pull the trigger.
Anne Mazinga:And now I'm shopping Save A Lot and I'm.
Jonathan Murav:Yeah, so.
Jonathan Murav:So what this has enabled for Save A Lot is the ability to go into a market.
Anne Mazinga:Yeah.
Jonathan Murav:Literally the largest market in the country.
Chris Walton:Right.
Jonathan Murav:Which happens also to be the most expensive market in the country in a way that makes economic sense for them.
Anne Mazinga:Right.
Jonathan Murav:So if you think from a grocer's point of view, they need to now go into Brooklyn, if that's where they want to be.
Anne Mazinga:Yeah.
Jonathan Murav:Find two acres of land with a lot of parking spaces, you know, pay tens of thousands of dollars a month.
Jonathan Murav:Right.
Jonathan Murav:For that facility.
Jonathan Murav:And that just doesn't work with the Save A Lot business model as a discount grocer.
Jonathan Murav:Right, right.
Jonathan Murav:And so what we've given them the ability to do is enter a new market in an economic way that makes economic sense to them.
Chris Walton:Yep.
Jonathan Murav:Get brand exposure to the large.
Jonathan Murav:In the largest market in the country.
Anne Mazinga:Yeah.
Jonathan Murav:And hopefully also drive like significant top line sales because they're in this really dense area where there's high demand for the types of groceries that they're offering to the market.
Chris Walton:So, Jonathan, so for context, where is the nearest Save A Lot store?
Jonathan Murav:It's about an hour from here.
Jonathan Murav:That's like two.
Jonathan Murav:And then beyond that, it's like probably 10 hours away is the nearest one.
Jonathan Murav:So this is truly like in terms of brand exposure, it's a brand new market for them.
Anne Mazinga:Right.
Jonathan Murav:A lot of customer education has gone into it.
Jonathan Murav:And after about 12 weeks now we're happy to say that we're seeing like really compelling traction from the market.
Chris Walton:And what is the addressable market size that you think that you're able to meet from this type of installation?
Jonathan Murav:Yeah, so, you know, there are 2 million people who live in Brooklyn.
Jonathan Murav:You know, we think we're probably interesting for at least six to 700,000, 600, 7,000 of those people.
Jonathan Murav:Now when you're talking about that relative to the volume that this site needs to get out to kind of meet interesting economics.
Jonathan Murav:You know, this site's designed to do about 350 orders a day.
Chris Walton:Okay.
Jonathan Murav:So there is just a lot, you know, very like you can get to a very low percentage of penetration in the market and still make this a really compelling offering.
Chris Walton:Right, right.
Chris Walton:Wow.
Chris Walton:It's super interesting.
Chris Walton:So last question we have for you, we'll get you out here on this because I think it's a good capstone question is, you know, we've seen a lot of starts and stops in the micro fulfillment arena over the last.
Chris Walton:Since we've been doing this eight years.
Chris Walton:Yeah.
Chris Walton:But it's always been something that we've been interested in, keenly followed.
Chris Walton:We've been interested to keenly follow it as well.
Chris Walton:This is really unique, really new.
Chris Walton:What is your take on the continued evolution of micro fulfillment as a concept?
Chris Walton:Where do you think it's going to go next?
Jonathan Murav:Yeah, so I mean, fabric's been at the forefront of this new and innovative industry now for nine years.
Jonathan Murav:I actually think we were the ones who coined and copyrighted mfc.
Jonathan Murav:Oh yeah, right.
Anne Mazinga:Patent pending.
Jonathan Murav:Yeah.
Chris Walton:No, no, I'll take your word for it.
Anne Mazinga:I'm kidding.
Jonathan Murav:Don't fact check me on that.
Jonathan Murav:No, I think it's true.
Jonathan Murav:I think it's true.
Jonathan Murav:So we've kind of had a front row seat to the evolution now like any new industry and any new technology and any new innovation, it's going to go through its ebbs and flows in terms of maturity, rate of market adoption, first movers and then followers.
Jonathan Murav:Yeah, right.
Jonathan Murav:And I think, you know what we're, you know, I truly feel that we're at this inflection point where both the grocers and the technology are now ready for meaningful scale.
Jonathan Murav:Right.
Jonathan Murav:And now that's, you know, after a nine year journey.
Jonathan Murav:Right.
Jonathan Murav:And it's taken some time, but.
Anne Mazinga:Right.
Anne Mazinga:And I think like the marketplace adoption too has got to be up from the consumer side too, more so than it was.
Anne Mazinga:Where it makes it easier to go.
Jonathan Murav:Into a new market demand aggregation marketplaces out There in place.
Jonathan Murav:Yeah.
Jonathan Murav:Really amazing point.
Jonathan Murav:That's been a big boost as well.
Anne Mazinga:Sure.
Jonathan Murav:Yeah.
Chris Walton:How did the pandemic impact things, good or bad, in terms of the evolution of the mfc?
Jonathan Murav:Yeah.
Jonathan Murav:I mean, obviously it accelerated kind of market penetration for E commerce grocery.
Jonathan Murav:First and foremost, it bought a lot of eyeballs to that segment.
Jonathan Murav:I think the penetration rate was like 4% before the pandemic.
Jonathan Murav:Now it's like north of 10%, 12%.
Jonathan Murav:And during the pandemic, as high as like, 25%.
Jonathan Murav:And obviously, on a store by store basis, you know, that penetration can go to 20, 30%.
Jonathan Murav:Right.
Jonathan Murav:So first and foremost, it just bought a lot of eyeballs to the segment.
Jonathan Murav:And that's created, I think, an impetus for grocers to start to move.
Anne Mazinga:Yeah.
Jonathan Murav:Because this has become a more meaningful part of their P and L.
Jonathan Murav:Right.
Jonathan Murav:Which they can no longer afford to ignore because they're actually losing money on these orders.
Anne Mazinga:Right.
Jonathan Murav:And so it starts to eat into their gross margins.
Jonathan Murav:And so now it's kind of compelled the grocers to start to move in a more aggressive way.
Anne Mazinga:And, Jonathan, is that something that you would say is one of the most important things when you're talking to new potential clients?
Anne Mazinga:Like, is that the most important problem that they're trying to solve right now and why they're kind of reaching out to fabric?
Jonathan Murav:Yes, I think, like, you know, in terms of, like, prioritization, I mean, first and foremost is how can I be more competitive and gain market share against the guy across the street?
Chris Walton:Oh, really?
Chris Walton:Okay.
Jonathan Murav:Right.
Chris Walton:All right.
Jonathan Murav:Two is like, how could I optimize my existing P and L and, you know, just make more with less, be more efficient.
Jonathan Murav:Yeah.
Chris Walton:So it's market share first and then profitability second.
Jonathan Murav:That's interesting.
Chris Walton:I wouldn't have thought that.
Jonathan Murav:Yeah.
Jonathan Murav:Because grocers are really concerned about, you know, know, how do they compete against, you know, the next guy.
Chris Walton:Right, right, right.
Jonathan Murav:Yeah.
Chris Walton:It's a very, very competitive space.
Jonathan Murav:Yeah.
Chris Walton:All right.
Chris Walton:Well, man, this was so awesome.
Anne Mazinga:Yeah.
Chris Walton:This is such a great kickoff to our coverage at nrf.
Chris Walton:It's Saturday morning.
Chris Walton:I mean, I imagine people are going to be watching this, probably going to want to reach out, get tours themselves for those that are here in New York, maybe even after the show, after the conference as well.
Anne Mazinga:For sure.
Chris Walton:People are interested and they want to do that.
Chris Walton:What's the best way for them to do that?
Chris Walton:Jonathan?
Jonathan Murav:Yeah, sure.
Jonathan Murav:So you can find me on LinkedIn.
Jonathan Murav:Jonathan.
Jonathan Murav:J O N A T H A N.
Jonathan Murav:Last name Morav.
Jonathan Murav:M O R A V.
Jonathan Murav:Find me on my LinkedIn, shoot me a DM.
Jonathan Murav:You can shoot me an email, Jonathan moravetfabric.com or you can just find us on our website, getfabric.com and send us a message through there.
Anne Mazinga:Thank you so much.
Chris Walton:Yeah, Jonathan, thank you so much.
Chris Walton:Thanks for opening the doors to us today.
Jonathan Murav:We're happy to have you.
Chris Walton:Saturday morning in January in New York.
Jonathan Murav:It's cold in here, too, right?
Chris Walton:It's nice, but it's nice.
Chris Walton:It's very nice in here compared to outside.
Chris Walton:So thank you for opening the doors.
Jonathan Murav:My pleasure.
Chris Walton:It's been a great experience.
Chris Walton:Great getting to talk to you and Anne, as always.
Anne Mazinga:Be careful out there.
