Ocado to acquire two robotics companies to accelerate order delivery

UK – British online grocery retailer Ocado has announced plans to buy two robotics companies – Kindred Systems and Haddington Dynamics – for a total of $287 million, in an effort to grow its business and accelerate delivery and innovation.

Ocado already has made meaningful progress in developing the machine learning, computer vision and engineering systems required for the robotic picking solutions that are currently in production at our customer fulfilment centre in Erith.

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The two acquisitions will thus be an addition to an already established robotics system that helps the British online grocer fulfil customer orders.

Approximately US$262 million will be spend by the online retailer to acquire Kindred Systems, a robotics company that designs, supplies and services advanced piece-picking robots for e-commerce and order fulfilment.

Another US$25 million will be spent in the acquisition of Las Vegas-based Haddington Dynamics, a robotic-arm designer and manufacturer.

The acquisitions by Ocado come at a time when online grocery sales are rising in astronomical numbers as more consumers purchase goods online due to Covid-19 restrictions on movement.

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A recent study conducted by Coresight revealed that 52% of sampled consumers bought groceries online in the past 12 months — the first time that more than half of respondents had done so and representing more than double the number of shoppers from two years ago.

Before the COVID-19 outbreak, e-grocery sales were reckoned at 4.3% of the 2020 total grocery market and projected to rise to 5.4% in 2021, reach a double-digit share of 10.7% in 2024 and then hit 13.5% in 2025.

However, with online grocery reaching a double-digit share this year, post-pandemic estimates show the channel growing to 12.5% ($132.88 billion) of the $1.06 trillion grocery market in 2021 on its way to surpassing a 20% share in 2025.

Ocado has since raised its full-year profits expectations by 50%, as the group continues to see high demands with consumers moving to online grocery “in record numbers”.

“We consider the opportunities for robotic manipulation solutions to be significant, both for OSP clients and across the fast-growing online retail and logistics sectors,” said Tim Steiner, CEO of Ocado.

 “Given the market opportunity we want to accelerate the development of our systems, including improving their speed, accuracy, product range and economics.”

Both acquisitions are subject to customary conditions and are expected to close during calendar year 2020.

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