Couche-Tard's Circle K Venture Fund Reaches Into New Frontiers of Convenience
More than half of initial $100M has been invested in delivery and distribution for urban and suburban consumers.
LAVAL, Quebec — Alimentation Couche-Tard Inc. announced it has invested nearly $55 million of its Circle K Venture Fund's initial $100 million in companies that are developing forward-looking solutions that enhance the customer experience in stores and beyond, improve efficiency and make customers' lives easier every day.
"The evolution of our customers' convenience needs has accelerated over the past two years since the start of the pandemic, and these investments and partnerships allow us not only to participate in the growth of these innovative teams, but also to explore ways to add real value for our customers, shareholders, and team members," said Chief Financial Officer Claude Tessier. "As we move forward on our strategic goals, the Fund supports cutting-edge solutions with the potential of improving the customer journey and the experience of our team members in our stores, to create new ways of delivering our products and presenting our offerings, and to change the very nature of convenience."
Since the Fund's 2020 inception, Couche-Tard has secured equity stakes in multiple entrepreneurial companies that are shaping the future of convenience, forming collaborative partnerships and entering into agreements to test and commercialize their innovations, the company said.
Its most recent investments are Food Rocket and Farmstead, U.S.-based companies that offer delivery of convenience, grocery and pantry items at competitive prices. Couche-Tard is partnering with them to pilot commercial programs that will test and learn the best approaches to competing in the world of delivery and distribution for its urban and suburban customers.
"The convenience landscape is changing dramatically," said Kevin Lewis, chief marketing officer at Alimentation Couche-Tard. "At Circle K, we are constantly innovating and exploring new technology that helps us deliver on our mission to make our customers' lives a little easier every day. When we met the Farmstead team, we saw an opportunity to partner with them, exploring and learning about the new behavior of our U.S. suburban consumers using e-commerce and last-mile systems that lead to actual long-term profitability.
"We're also proud to have invested in Farmstead, as part of our effort to cultivate and support retail innovation that transforms the customer experience in our stores and beyond," Lewis added. "Getting in on the ground floor on industry-leading new technology is a key element of Circle K's innovation strategy as we continue to grow."
Farmstead is the first online grocery brand to offer fresh produce, locally sourced fare and national brands, delivered for free, at better prices than local supermarkets, according to the company. Through their partnership, Couche-Tard and Farmstead will:
Open up new formats for e-commerce fulfillment in U.S. suburbs using Farmstead's Grocery OS tech stack and Circle K's retail footprint;
Improve Farmstead's national supply chain for non-perishables and convenience items;
Collaborate on distribution; and
Co-market across a variety of new projects.
"We are in the early innings of significant change in the U.S. food system, which requires new supply and technological alliances," said Pradeep Elankumaran, Farmstead co-founder and CEO. "We're thrilled to be partnering with Circle K on that journey, with its scale and decades of multinational experience in the convenience industry, and to be advancing with Circle K as an investor."
The Venture Fund has also made investments in Pensa Systems, a leading innovator in the automated use of computer vision and artificial intelligence for retail-in-store data and analytics, and Jackpocket, the first licensed third-party app in the U.S. to provide an easy and secure way to order official state lottery tickets.
Couche-Tard also noted that the Fund has invested in technology that helps retailers and other groups alleviate staffing issues by tapping into the gig economy. It will continue to invest in strategic partnerships offering innovative solutions that respond to evolving consumer needs and help transform the global landscape of convenience and mobility, the company said.
Laval, Quebec-based Couche-Tard operates in 26 countries and territories, with close to 14,200 stores. Its banners include Couche-Tard and Circle K.