[TheDevs]

Advances in AI Drive Massive Growth in Online Grocery Deliveries, Says Picnic CEO

Advances in artificial intelligence (AI) are set to revolutionize the online grocery delivery industry, according to Michiel Muller, CEO of Picnic, a Dutch app-only supermarket. With its disruptive offer of free delivery within 20 minutes, Picnic has already transformed the Dutch supermarket landscape. Muller revealed that the company utilizes AI for a wide range of operations, including predicting sales, route planning, and optimizing delivery time slots. As technology improves and datasets expand, these predictions are expected to become even more accurate, providing customers with precise delivery windows.

Picnic has developed its own in-house software to streamline every aspect of the delivery process, from stock processing and packing at the warehouse to the complex “last mile” of dropping off goods. The company’s delivery times are calculated with exceptional precision, thanks to the efforts of 300 data analysts and 300 employees at Picnic’s headquarters. By receiving orders exclusively through their app, Picnic ensures efficient order management, resulting in significantly less food waste compared to traditional supermarkets.

The company’s drivers, operating the iconic white Picnic vans, are rated based on their driving performance, including adherence to speed limits. Picnic’s investments in bespoke software and distribution hubs equipped with extensive conveyor belts have made profitability a challenge. However, sales have soared from 10 million euros in 2016 to 1.25 billion euros in 2023, accompanied by a substantial increase in staff from 100 employees to 17,000.

While Picnic faced losses of approximately 200 million euros last year due to expansion in Germany, it achieved gross profitability in its home market this year. Muller attributes profitability to the level of automation, stating that Picnic aims to reach 100 percent automation in the Netherlands within a few years, with Germany and France following suit.

Currently, Picnic operates primarily in Lille and the greater Paris suburbs in France. Muller acknowledges the potential of central Paris but highlights the challenge of heavy traffic congestion. The company plans to consolidate its activities in Germany and France before considering further expansion, even beyond Europe.

In 2024, Picnic raised 355 million euros from investors, including the Bill & Melinda Gates Foundation and German retail giant Edeka, to support its growth in Germany and France. Muller humorously remarks that with 183 countries in the world, the possibilities for expansion are vast.