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Kroger is entering the drone delivery race

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On Monday, Kroger and Drone Express, a division of TELEGRID Technologies, Inc., announced a pilot to offer grocery delivery via autonomous drones.

Video Transcript

JULIE HYMAN: Let's turn now to some things that grocery stores are doing creatively to get new business. Kroger getting into the drone game apparently, Brian Sozzi. What does that look like exactly?

BRIAN SOZZI: This one hit this morning, Julie and Myles. So Kroger has teamed up with a company called Drone Express to launch drone delivery from one of its stores in Centerville, Ohio. The test pilot will start-- the test pilots will start very soon, delivering probably merchandise under five pounds. Those are the legal weights, according to the FAA.

These drones will be operated by Drone Express in a trailer on the site of this particular Kroger store. And Kroger has created some bundle items like s'mores and health and wellness items that could be packed in these box and delivered, I believe to a 10-mile radius, in under 15 minutes from that particular store. They will look to also test more of these drone deliveries on the west coast at a Ralph store, which Kroger owns, later this year.

My take here is very simple. This is awesome. This is great. I wish I could open my window right now and have a drone just land right next to it and pull out my s'mores or my energy drinks or another cup of coffee. I think it's great. And you're seeing other supermarkets get involved in this game. Walmart later this year will launch a drone delivery test with Zip Line. They launched that-- they revealed that late last year. Our very own Julia La Roche reported first on that.

You have Amazon continuing to move forward with its drone delivery services. UPS was doing drone deliveries of medications in certain parts of Florida last year. This is great. This is a look at the future. Bring on the drones. I'm all for it. I need my merchandise quicker.

MYLES UDLAND: Congratulations to the engineering team that Kroger for hitting their OKR in the first quarter of proving out a prototype of drone delivery, which is absolutely not going to be rolled out anytime soon.

BRIAN SOZZI: Well, [INAUDIBLE] Myles, this is-- they linked up with a company that does-- it handles the drones. That company is Drone Express. So all Kroger has to do--

MYLES UDLAND: There you go.

BRIAN SOZZI: --is essentially take this box, stick it on the bottom of the drone, and send it out to happy customers wherever it goes. So that's-- Kroger is not managing this directly. But it's good for the brand, and it's good for their, I guess, their sales.

MYLES UDLAND: Brian, all someone at Kroger needs to do is make sure they keep their budget to invest with this company in coming quarters so that they can keep the program alive.

BRIAN SOZZI: Bring on the drones. I'm all for it.

JULIE HYMAN: Yeah, I still feel like we're not there.

BRIAN SOZZI: Julie, I knew you weren't going to be. I knew it. I knew it. Before I even brought this up, I knew you were not going to be on board with drones. I already knew it.

JULIE HYMAN: It's not a matter of whether I'm on board. It's whether the FAA is on board. It's whether--

BRIAN SOZZI: They are. They have been.

JULIE HYMAN: --Americans are on board. Eh.

MYLES UDLAND: Just--

JULIE HYMAN: Have you seen any-- let me ask you this. Have you seen any drones delivering anything ever in real life?

BRIAN SOZZI: Because I do not live necessarily in those rural parts. So it's going to take some time. We need these test flights to prove this out. And I'm all for it.

JULIE HYMAN: Guys--

MYLES UDLAND: I--

JULIE HYMAN: --tweet at us-- anyone who's watching right now, tweet at us if you have ever seen a drone in real life delivering anything.

MYLES UDLAND: The lesson from self-driving cars for the drones is just because something can happen doesn't mean it's going to happen. That's all.

BRIAN SOZZI: You guys are really done on drones today. You're all down on drones today.

JULIE HYMAN: We just-- we let-- I admire your optimism, your-- you know. You like to look to the future. Myles and I live in the real world, in the present. But I like your dreaming. I love it. I love that about you, Brian Sozzi.