Ida is a relatively new French startup that wants to work with supermarkets and grocery stores to optimize new orders for fresh produce, such as fruits, vegetables, meat, poultry and fish. The startup recently raised a $2.9 million (€2.7 million) funding round from Frst, Daphni, Motier Ventures and Kima Ventures.
Currently, grocery stores rely primarily on order sheets with a large number of columns representing the replenishment schedule. These error-prone tables lead to both food waste and shortages. Supermarkets are losing money or missing out on potential revenue.
“The vegetable manager will take these sheets of paper and a pen. They will then go through the stock line by line, reference by reference. Then they’ll make some guesses and say, “Okay, so far I have a good idea about eggplant.” “The weather is pretty nice today, so here we go for four two-kilo cases of eggplant,” co-founder and CEO Mateo Beacco told me.
Of course, this isn’t 100% guesswork, as experienced people will look at past years to find trends and guess if it’s time to order more strawberries. But there has been more turnover in these jobs in recent years. Even for people who have worked at the same grocery store for a year, it’s difficult to be accurate every day.
That’s why Ida wants to change this process by giving grocers the right tools. Ida is a tablet app connected to a sales forecasting algorithm that guides humans when it’s time to reorder fresh produce.
Ida is starting with vegetables and fruits, but may soon expand to other departments, such as meat and fish. By focusing on perishables, Ida addresses an underserved portion of supermarket inventory because it’s quite simple to predict how many boxes of cereal you have in your store using barcodes and POS connected. Or, as Beacco puts it, “SAP gives you a moving average.”
Behind the scenes, Ida doesn’t just look at what’s happening at the points of sale because it doesn’t work well for vegetables and fruits. Instead, the company generates a probabilistic inventory that takes into account real-world scenarios.
“With probabilistic inventory, my cucumber sales are mixed with my organic cucumber sales because when you buy organic cucumbers, the cashier will count them as non-organic cucumbers,” Beacco said. As another example, you can probably store potatoes for a while, but cherries go bad very quickly.
This way, instead of having to count how many cucumbers you currently have, Ida can give you an approximate number of cucumbers in your store. Of course, if something seems very off, staff members can correct these inventory numbers.
Second, Ida takes into account over a hundred different parameters combined with at least three years of sales data to forecast demand. Ida reviews weather, seasonality, prices, other area grocery stores, specials and more.
Third, Ida uses this forecast data to generate your next orders. And stores can set up safety stock to ensure they don’t run out of a specific item (without overordering).
“As I mentioned earlier, you order eggplants in 2 kilogram boxes. We are therefore faced with a mathematical problem which is constrained optimization. I order in 2kg increments, my shelf holds 5kg and we’re going to try to take all the data into account to say we need 4 cases, not 3 or 5,” Beacco said.
Ida doesn’t process orders alone. Instead, staff members can review everything and change some things manually. Currently, the startup estimates that 70 to 75 percent of Ida’s suggestions are accurate and not manually edited by grocers. Once this task is accomplished, Ida generates purchase orders for the purchasing center, but also potentially for local producers since Ida can mix and match suppliers in its tablet application.
In many ways, Ida is just getting started. Other young startups are tackling this vertical, such as Guac In the United States, it will be interesting to see if grocery stores adopt these software solutions to manage fresh produce on a large scale. But it seems obvious for supermarkets to improve their bottom line and reduce their overall impact on the environment.