Logistics service provider MonarchFx on Wednesday said it had launched a food and beverage division that will offer fulfillment services capable of supporting both online shopping and traditional grocery stores.
Combining online services with brick and mortar food fulfillment in a "unichannel" concept will allow food retailers to adapt in a fast-changing sector, Jim Tompkins, the founder of supply chain consulting firm Tompkins International who launched MonarchFx in 2016, said in a statement.
Grocery stores could soon evolve into places to dine, taste, and explore new products, even as they build online platforms that can support myriad delivery and pick up options, Tompkins said in a video titled "The New Grocery: Distributed Logistics." Raleigh, N.C.-based MonarchFx also announced it had hired Keith Goldsmith as senior vice president, responsible for leading customer growth for the food and beverage sector.
"Few industries are experiencing more disruption than grocers and food producers," said Tompkins. "Winners in the world of the new grocery have recognized it is not about online versus traditional stores, but rather the emergence of an entirely new shopping experience that leverages both."
The move is the latest expansion by MonarchFx, which has targeted the e-commerce fulfillment sector by compiling a team of logistics industry partners who are intending to open a nationwide network of automated DCs in time for the 2018 peak holiday season.
By launching a food and beverage unit, MonarchFx is entering a sector that is in the midst of an overhaul lead by major players such as e-commerce giant Amazon.com Inc., which purchased Whole Foods Market in 2017, and grocery chain Kroger Co., which signed a deal in May to partner with the British online grocery fulfillment service Ocado.
The turbulence of that change could create a good market opportunity for MonarchFx's new offering, according to Lindsey Mazza, a senior manager in the North American Supply Chain Technologies practice at consulting firm Capgemini. "The grocery industry is on the precipice of a full-cycle disruption," Mazza said in an email. "Customer interaction with grocery retailers is about to change in a big way and there is no clear winner yet in the fulfillment space; leading edge fulfillment providers offering new services will create an edge for traditional grocers."
Although traditional grocery inventory like dry goods have a famously low profit margin, retailers have recently added a succession of value-added offerings that change that balance, she said. Those products range from prepared foods and home meal replacement to in-store services in the bakery, deli, produce, and meat and seafood departments.
Despite those growing margins, many start-ups have failed at the test of handling and transporting delicate fresh foods, she said. But in recent years, providers have begun to fine-tune their ability to pick and deliver groceries, so a skilled food and beverage fulfillment firm could find a great opportunity. "Customers are ready for order on-line, pick-up in store, for home delivery and for pick-up at easy-access locations be it close to home to close to store," Mazza said. "Grocers and fulfillment alliances have partnered to overcome the hurdles, and customers are pushing the envelope of developing the next fulfillment choice."