00:00:04
this company packs and delivers a
00:00:06
hundred thousand grocery orders to
00:00:07
hungry new yorkers every week
00:00:09
freshdirect's process of shipping highly
00:00:11
customized grocery boxes
00:00:12
straight to customer stores cuts the
00:00:14
grocery supply chain in half
00:00:16
and it all happens from this facility in
00:00:18
the bronx the size of 11 football fields
00:00:21
we're a super high velocity grocery
00:00:23
store so we're receiving lots of food
00:00:24
every day
00:00:25
it's coming in going right back out but
00:00:27
getting a box like this delivered on
00:00:29
time to the right
00:00:30
door is a logistical nightmare when you
00:00:32
think about millions of items that are
00:00:34
coming in and going out of this building
00:00:36
in a single week there's a lot of
00:00:37
complexity around that
00:00:39
normally it takes a team of 3 200 people
00:00:42
and a sophisticated ai system to get it
00:00:44
all done
00:00:45
but by march the company could barely
00:00:47
keep up with a wild spike in orders
00:00:49
in a pandemic a lot of people just kind
00:00:51
of scared to go outside and we help
00:00:53
eliminate the scariness
00:00:54
we visited the fresh direct facility in
00:00:56
early september to see how the company
00:00:58
manages on-time delivery
00:01:00
in the face of pandemic demand
00:01:03
today is actually the busiest day we'll
00:01:05
have had since january
00:01:06
so as people return to school and people
00:01:08
return back home from their vacations
00:01:10
from the summer
00:01:10
they tend to stock up heavily
00:01:12
freshdirect began delivering groceries
00:01:14
to new yorkers back in 2002.
00:01:16
at the time the model was revolutionary
00:01:18
freshdirect's supply chain is just three
00:01:20
steps
00:01:20
from the farm into our building directly
00:01:23
to the consumer's house
00:01:24
the new model cuts out three to four
00:01:26
steps from the normal grocery store
00:01:27
supply chain
00:01:28
customers can fill carts and order
00:01:30
online or through the app
00:01:32
just like a regular grocery store
00:01:33
freshdirect sells everything from
00:01:35
toothpaste and toilet paper
00:01:37
to produce fresh meats and prepared
00:01:39
meals if you think about a normal
00:01:40
produce selection
00:01:42
you might find two or three hundred
00:01:43
different types of produces we have
00:01:45
anywhere from four to six hundred
00:01:46
depending on the time of the year
00:01:48
about sixty five percent of our product
00:01:50
is what we consider fresh be it meat
00:01:51
seafood or deli or from our kitchen
00:01:53
or fresh produces and cheeses and such
00:01:57
today fresh direct sources from over 100
00:01:59
partner farms across the world
00:02:01
all that food comes into fresh direct's
00:02:03
headquarters here in the bronx
00:02:05
today we have about 120 trucks inbound
00:02:07
over a million pounds of produce come
00:02:09
through the receiving area each week
00:02:11
from help with farms we're getting
00:02:12
everything from these cherry tomatoes
00:02:13
that you saw to these bean steaks to
00:02:15
these tomatillos
00:02:16
this load of fresh berries will be in
00:02:18
the building for less than 24 hours
00:02:23
first the incoming inventory is checked
00:02:25
for quality and quantity
00:02:26
and then put into the tracking system so
00:02:28
you can see he's putting out these
00:02:29
labels
00:02:30
and i captured all the information on
00:02:31
that barcode and what happens from here
00:02:33
is we're actually directing the food
00:02:35
to where it has to go so in that system
00:02:37
it knows those tomatoes what place they
00:02:38
have to go within the warehouse
00:02:40
next the new inventory is moved to all
00:02:42
the appropriate fridges or storage areas
00:02:44
pantry and shelf stable goods are
00:02:46
forklifted onto these giant inventory
00:02:48
walls
00:02:49
some goods are moved through this
00:02:50
facility in as little as an hour and a
00:02:52
half
00:02:53
but you could actually read the dates
00:02:54
and those labels and you'll see they're
00:02:55
all about a week or less old what's
00:02:56
insane is the speed at which it moves
00:02:58
fresh produce ends up in temperature
00:03:00
controlled fridges
00:03:01
there are 38 different temperature zones
00:03:03
throughout this facility
00:03:04
for example bananas they like about 65
00:03:07
degrees
00:03:08
they're like a certain amount of
00:03:08
humidity a traditional grocery store is
00:03:11
built with temperatures that make
00:03:13
human shoppers happy you as a consumer
00:03:15
could walk into a bricks and mortar
00:03:16
grocery store in the middle of the
00:03:17
summer in shorts and flip-flops and be
00:03:19
totally comfortable it's not good for
00:03:21
the food
00:03:21
because it detracts from the shelf life
00:03:23
there's no food on display
00:03:24
here all that food is tucked away on ice
00:03:26
in the proper temperature and is only
00:03:28
taken out when it's needed so we just
00:03:30
have
00:03:30
less waste as opposed to a bricks and
00:03:32
mortar store
00:03:33
freshdirect says catering to a food's
00:03:35
ideal climate extends its shelf life up
00:03:37
to seven days beyond a traditional
00:03:39
grocery stores
00:03:40
we have a room that's at 55 degrees for
00:03:42
things like tomatoes
00:03:43
where we went 45 degrees things like
00:03:45
onions and potatoes they're like colder
00:03:47
temperatures
00:03:47
there's a separate inventory room for
00:03:49
meat and even fish
00:03:51
this fish is probably two days out of
00:03:53
the water and it's here from nova scotia
00:03:54
so our fishermen
00:03:55
they actually go out these are harpoon
00:03:57
caught swordfish 368 pounds
00:04:02
the supply chain has such a tight
00:04:04
turnaround that a customer could place
00:04:05
an order for a fish in
00:04:07
say alaska and within a day or two it'll
00:04:09
be fished out and flown to this facility
00:04:12
there are times where we could sell fish
00:04:14
to a consumer five days out
00:04:16
that's not actually landed in a boat yet
00:04:19
once all the items are inventoried they
00:04:21
don't sit around long
00:04:22
before they're picked up and tugged to
00:04:23
one of 12 kitchens
00:04:25
fruits and veggies for pre-cut packages
00:04:26
are chopped in one room
00:04:28
upstairs the bakery starts buzzing in
00:04:30
the early morning downstairs
00:04:32
we could do anywhere from 13 to 18 000
00:04:35
finished goods per day
00:04:36
these chefs make more than 500 different
00:04:38
prepared dishes
00:04:40
in the cold room they're pulling
00:04:41
together shrimp cocktails ravioli
00:04:44
cheeseboards and salads in the hot room
00:04:47
it's salmon stews chicken fingers
00:04:49
and one of the most popular items
00:04:51
rotisserie chicken
00:04:52
down the hall fish are filleted yeah
00:04:54
hovie actually also has some black cod
00:04:56
right there also known as butter fish or
00:04:58
sable fish
00:04:58
out of british columbia hovie how many
00:05:00
years cutting fish 28 years
00:05:02
on a promo he'll cut close to a thousand
00:05:04
pounds of fish a day
00:05:08
and here over 250 cuts of meat are
00:05:10
butchered a day
00:05:11
they're sliced right as orders come in
00:05:13
to help cut down on food waste
00:05:15
but when kobe 19 hit meat orders spiked
00:05:17
so much the team had to lessen the
00:05:19
variety of meat cuts until they could
00:05:20
catch up with the demand
00:05:22
we took a look at that volume and said
00:05:23
okay these are the stakes that we have
00:05:25
the most volume on these are the things
00:05:26
that we're going to feature
00:05:28
once workers finish preparing all the
00:05:30
food the real work begins
00:05:32
pulling all the items for an order
00:05:34
together the average order fresh direct
00:05:36
gets is about 30 items
00:05:38
which might not sound like a lot but on
00:05:40
a relatively busy week now we're
00:05:42
delivering to
00:05:43
north of a hundred thousand houses and
00:05:45
if each of those houses has
00:05:47
30 items in their delivery we're moving
00:05:50
three million different food items
00:05:52
out of in essence one mega facility
00:05:58
each order that comes in gets assigned a
00:06:00
box to make sure all 30 items end up in
00:06:03
the right box
00:06:03
the company has been perfecting an ai
00:06:05
system for nearly two decades
00:06:07
the system tracks when each item comes
00:06:09
in and the expiration date
00:06:11
then it finds the most efficient route
00:06:13
along nine miles of conveyor belts to
00:06:15
move the box to all the right pick
00:06:17
stations
00:06:18
each pick station has one worker and a
00:06:19
selection of products the worker grabs
00:06:21
from and places in the corresponding box
00:06:24
this picker has pantry goods and
00:06:26
toiletries at her station
00:06:28
so it tells her what item she'll scan it
00:06:31
it'll verify it's the right item
00:06:32
she'll confirm that she put in the
00:06:33
customer's bag and that will go to the
00:06:35
next person
00:06:35
but you can see the speed with which you
00:06:37
can pick these items rather than walking
00:06:38
around a store all day the work comes to
00:06:40
her
00:06:40
but it isn't set up like a normal
00:06:42
grocery store where all the say tomato
00:06:44
sauces are together
00:06:45
to even out the workload high ticket
00:06:47
items like olive oil
00:06:48
are paired with lower ticket items like
00:06:50
organic baby food at one pick station
00:06:53
we call it slotting the building so the
00:06:54
fewer stops that we make in our store
00:06:56
with our totes as they go through the
00:06:57
more efficient we can be
00:06:58
the goods are also grouped at pick
00:07:00
stations based on affinity
00:07:02
so the people that would buy this tea
00:07:04
have an affinity to buying other
00:07:05
products that are here such as the lawn
00:07:07
drink
00:07:08
or the dry rose cider after a worker
00:07:12
picks the right item they hit a green
00:07:13
button and the order box zooms off to
00:07:15
the next station
00:07:16
after visiting sometimes dozens of pix
00:07:18
stations an order can finally be
00:07:20
complete
00:07:21
it goes through one last check before
00:07:23
being loaded on a fresh direct truck
00:07:25
so as soon as the product gets here our
00:07:27
goal is to have it here less than two
00:07:28
days and back out the door so there's
00:07:30
literally thousands and thousands of
00:07:31
bags that go to shipping every hour on
00:07:33
the outbound side there's over 400
00:07:34
trucks going out with deliveries
00:07:36
those trucks run 2 000 routes each week
00:07:39
we've got a refrigerator in the back of
00:07:40
the truck so everything is already
00:07:42
staying cold
00:07:43
john's a 12-year veteran driver for
00:07:45
freshdirect he typically does routes
00:07:47
around new york city but
00:07:48
sometimes takes deliveries all the way
00:07:49
out to the hamptons so i start at four
00:07:52
and coming from the hamptons i'm getting
00:07:53
back like four four thirty so the
00:07:55
traffic coming back is ridiculous
00:07:57
the pandemic caused an 800 surge in new
00:07:59
website traffic and increased demand for
00:08:01
fresh direct
00:08:02
but orders aren't just coming in from
00:08:04
new yorkers worried about leaving their
00:08:06
apartments
00:08:07
a surprising amount of demand came from
00:08:08
new yorkers who fled to the suburbs
00:08:10
that's been a new area of growth for us
00:08:13
even as demand spread out
00:08:14
freshdirect's hub and spoke model
00:08:16
allowed the company to quickly ramp up
00:08:18
delivery to more coverage zones
00:08:20
freshdirect expanded to new jersey
00:08:22
connecticut westchester county
00:08:24
and long island by the end of 2020 the
00:08:26
company plans to add a thousand new
00:08:28
workers to match demand
00:08:30
freshdirect's success is indicative of a
00:08:32
larger trend in shopping habits
00:08:34
in 2019 e-grocers held 3.4 percent of
00:08:37
the grocery market
00:08:38
and in 2020 it's expected to hit 10.2
00:08:41
percent
00:08:42
here we are in september looking at
00:08:44
probably the biggest growth we've ever
00:08:46
seen
00:08:46
and just each month it gets bigger and
00:08:48
covered 19 opened up the floodgates for
00:08:50
online grocery
00:08:51
and i don't think we'll ever go back
00:08:54
[Music]
