Kroger Restaurant Supply was born out of the Kroger’s e-commerce accelerator, which aims to identify new growth areas for the company, Scherger explained. “We're always out looking for new customer problems, existing customer problems and how might we solve them with our existing assets,” he said.
One of the ideas was “how could we be a better partner for restaurants,” he explained.
Kroger already operates delis, which Scherger describes as “a microcosm of a restaurant, ” in its 2,700+ stores, and in recent years it has done a number of pilots with ghost kitchens. Working closely with both groups plus the Texas Restaurant Association, Scherger became attuned to the challenges across the supply chain such as out of stocks, volatile pricing, high minimums and fulfillment costs.
Scherger and his team also did a lot of research, talking to local mom-and-pop restaurants and smaller chains, and then analyzed its existing technology (which includes machine learning, AI, robotics and predictive analytics) and supply chain.
“…We decided could do something about it,” he said about local restaurants’ inventory and supply chain challenges. “…When we decide we want to go solve something, we go and do it,” he said.
The restaurant supply division had a soft launch about two weeks ago and is serving restaurants in the Greater Dallas area. In the coming weeks the division will see what’s most in demand from its new restaurant customers, “and then as we learn, as our models learn what the restaurants are ordering that will filter in and inform the future,” Scherger explained.
To promote the new initiative, Kroger will be advertising on social media and also hiring local sales representatives.