Kroger opens next-gen supply chain facility in Midwest

Dan Berthiaume
Senior Editor, Technology
Dan Berthiaume profile picture
Kroger’s newest CFC serves parts of Wisconsin, Illinois and Indiana.

The Kroger Co. is bringing fast online delivery to two major metro areas.

America's largest grocery retailer is opening its newest Customer Fulfillment Center (CFC) in the Village of Pleasant Prairie, Wis. a city centrally located between Milwaukee and Chicago. The 336,840-sq.-ft. facility is expected to create nearly 250 jobs and streamlines deliveries of online grocery orders to customers in Wisconsin, northern Illinois, and northwest Indiana.

Introduced in partnership with U.K.-based online grocer Ocado in May 2018, the CFC model combines vertical integration, machine learning, and robotics with affordable and fast delivery service for fresh food. CFC facilities leverage proprietary technology solutions focused on artificial intelligence (AI) and advanced robotics and automation to create more seamless and efficient fulfillment, picking and delivery capabilities for enhanced digital commerce capabilities across the U.S. 

The delivery network relies on automated fulfillment centers where 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 designed to ensure that 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. 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.

"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 VP and chief supply chain officer.

"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 center 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 e-commerce," said Luke Jensen, CEO of Ocado Solutions.

Kroger currently operates customer fulfillment centers in Monroe, Ohio; Groveland, Fla; Forest Park, Ga. (Atlanta); Dallas; and Pleasant Prairie. Additional customer fulfillment centers are slated for California; Frederick, Md.; Phoenix; Romulus, Mich. (Detroit); Cleveland; Charlotte, N.C., and Denver; as well as South Florida and the Northeast.

Based in Cincinnati, Kroger operates 2,800 stores, including more than 100 stores in Southeast Texas and Louisiana, under a variety of banners across the U.S., including Kroger, Fred Meyer, Ralphs, Dillons, Smith's, King Soopers, Fry's, QFC, City Market, Owen's, Jay C, Pay Less, Baker's, Gerbes, Harris Teeter, Pick 'n Save, Metro Market, and Mariano's.