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Apr 17, 2019

Axios Future

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Any stories we should be chasing? Hit reply to this email or message me at steve@axios.com. Kaveh Waddell is at kaveh@axios.com and Erica Pandey at erica@axios.com.

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1 big thing: Robots move in on food

A Kiwi Campus delivery bot (R) sizes up a Bear Robotics robotic server. Photo: Kaveh Waddell/Axios

Edging beyond the gimmicky demos of years past, robot startups are mounting a play for the more than $5.7 trillion U.S. food industry, launching their products on farms, in grocery stores and restaurants, and all the way to your front step.

Kaveh writes: Most bots are still wildly expensive, which has kept them from mass deployment. But they're nudging open the door to the industry, and slowly accustoming people to letting robots take care of their food.

The big picture: In recent years, the food industry has fallen behind as others, like e-commerce players, have rushed to take up robots.

  • In food, bots are generally able to do just one thing — pick a strawberry, flip a burger — and often need human supervision.
  • But they can reliably do some of these tasks as well as or better than a person, and faster — without fatigue, complaints or health benefits.

Now, big companies, some spurred by fear of Amazon's sweeping ambitions and robotics prowess, have started to buy them.

  • At ArticulATE, a conference billing itself as the first-ever food bot event, Trung Nguyen, Albertson's VP of e-commerce, yesterday said his company considered installing robots for years but was stymied by cost.
  • In October, however, the chain announced that it's testing a robotic system to pack grocery orders.
  • Kroger and Walmart, too, are installing robots to scan shelves, mop floors, and pack online orders.

In total, $1.2 billion of venture capital flowed into grocery automation last year — about twice the 2017 number.

Robots are popping up across the industry:

For the moment, robots are largely filling a labor gap in the food industry. Fewer employees than ever are willing to work long, greasy shifts in fast-food kitchens, and Nguyen says grocery delivery services are losing their drivers to Uber and Lyft.

  • "Initially, for us, it's about providing a third hand" for overworked kitchen staff, says David Zito, founder of Miso, whose Flippy works grills at CaliBurger and a deep fryer at Dodger Stadium in L.A.
  • But, he tells Axios, the kitchen "ends up looking more and more automated over time."
  • Flippy's next mission is automating pizza-making.

What's next: "The restaurant industry is very conservative, and [tech] adoption is low," said John Ha, CEO of Bear Robotics, which makes roving servers like the one pictured above. But Ha and others hope the industry will jump in all at once, if robots clearly prove their worth — like it did years ago with payment systems.

The bottom line: Despite restaurants' reticence, fast food in particular — where many tasks are designed to be simple and repetitive — is among the industries most likely to be automated, according to McKinsey.

2. Online travel agency alleges hotel collusion

Photo: Scott Olson/Getty

Lawyers for six major hotel chains today asked a judge to dismiss a lawsuit by an online travel agency accusing them of colluding to stifle bidding for rooms.

What's happening: TravelPass Group accuses chains like Hilton, Hyatt and Marriott of squeezing small internet travel agencies out of the online market for room booking. The case comes as public pressure is mounting against the concentration of market power across industries, from technology to agriculture, airlines and banking.

  • In the hotels case, TravelPass says that starting in 2014, the chains worked together to block it and other online agencies from bidding on the internet search keywords that underlie the room booking business.

How it's supposed to work: When you type words into your search engine — like, say, Hilton and Bahamas — an invisible bidding war takes place among hotels and agencies to fill your desire. Ads appear above and alongside your search.

  • But Austin Lowe, a lawyer for TravelPass, tells Axios that the alleged scheme resulted in its ads not appearing. As a result, its $165 million valuation cratered to $25 million, the lawsuit says.

In the hearing today, the hotels asked a judge to dismiss the suit, or to move it to another jurisdiction. Hyatt, Hilton and Marriott all declined to comment.

3. Meanwhile, up in the Arctic ...

With Elbrus, Russia's new Arctic logistics ship. Photo: Lev Fedoseyev/TASS/Getty

Arctic melting has ignited a commercial and military race to capitalize on the suddenly open Northern Passage. Russia is well ahead. For instance, writes the NYT's Helene Cooper, here's how much competing countries are pulling from the Arctic in GDP, mainly in raw materials and shipping:

Russia: About 20% of its GDP

U.S.: Less than 1%

4. Worthy of your time

Illustration: Aïda Amer/Axios

The pay gap between bosses and workers (Andrew Edgecliff-Johnson - FT)

Musk and Bezos battle for your internet (Miriam Kramer - Axios)

Blue collar jobs: Big money, no debt (Michael Sasso - Bloomberg)

Pinkertons are ready for climate chaos (Noah Gallagher Shannon - NYT)

Growth of suburban poverty (Tanvi Misra - CityLab)

5. 1 fashion thing: Accidentally hip

Rocking the look in New York. Photo: Daniel Zuchnik/Getty

The quirky tastes of Gen Z are bringing old — and nearly obsolete — clothing brands back.

Erica writes: The sports apparel brand Champion, which sells simple sweatshirts that feature its red and blue "C" logo, is having a big comeback, Bloomberg reports.

What's happening: In the age of Instagram marketing, a couple of snaps of Chance the Rapper, Beyonce or Kylie Jenner sporting a simple pair of sweatpants from a forgotten brand is enough to propel that company to success.

  • Champion's U.S. sales jumped from $600 million in 2010 to $1.4 billion last year. Teenage boys rank Champion as one of their top 15 favorite fashion brands — alongside A-list companies like Gucci and Tommy Hilfiger.
  • The company expects to hit $2 billion in sales by 2022.