Spud Announces Commercial Agreement with Walmart Canada

Strategic Financial Advisory
Transaction Details

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Fort Capital Partners is pleased to announce the completion of an agreement between Food-X Urban Delivery Inc. (“Food-X”), a wholly-owned subsidiary of Sustainable Produce Urban Delivery Inc. (“SPUD”), and Walmart Canada whereby Food-X will provide Walmart Canada with food delivery services for walmart.ca customers in Metro Vancouver.

Food-X is a newly created platform that will allow SPUD, Walmart Canada and other retailers to provide online grocery delivery in an economic and environmentally friendly manner. Building on proprietary technology and sustainable logistics practices that SPUD has been refining for the past 20 years, Food-X will operate from a soon-to-be commissioned 74,000 sq. ft. state-of-the-art warehouse fulfilment center centrally located in Burnaby, B.C.  By coordinating fulfilment and aggregating the deliveries of multiple retailers, Food-X will be best positioned to fulfill last mile home delivery challenges.  Through better warehousing and consolidating orders, Food-X will reduce food waste and truck trips and lower GHG emissions. The facility will feature several bio-digesters used to compost meat, produce, and compostable packaging.

“Consumer demand for online grocery shopping is growing and that means more trucks on the road.” said Peter van Stolk, CEO at SPUD. “We have built a best-in-class platform to get food from the supplier to the kitchen while reducing waste, lowering emissions and lowering cost. Now we’re offering Food-X to other companies who share a commitment to sustainability, efficiency and strong customer service.”

Walmart Canada will be the first national customer for Food-X and will begin using the Food-X warehouse and delivery platform for online grocery shopping deliveries for Vancouver-area customers in summer 2018. Walmart customers will shop online at www.walmart.ca for a product assortment of fresh groceries including fruits and vegetables, 100% Canadian AAA Angus beef, pork and chicken, seafood, dairy, baked goods, deli and frozen foods. Customers will also have a selection of organic items to choose from.  A Food-X truck will deliver groceries directly to customers’ homes, as early as next-day.

Food-X is a central component of the larger SPUD ecosystem that includes home delivery, small store retail (Be Fresh and Blush Lane stores), commissary/food preparation services and distribution.

Fort Capital advised SPUD in the creation and development of the Food-X business plan and supported the company in negotiation of the commercial agreement with Walmart Canada. The Food-X advice was a component of a broader strategic engagement that included the $12.8 million private placement of common shares of SPUD arranged by Fort Capital in May 2017.