Boxed lands DTC logistics deal with Colavita

In a lift for its technology business, online bulk-products retailer Boxed Inc. has entered an agreement with Italian specialty food manufacturer Colavita USA to manage its third-party, direct-to-consumer (DTC) logistics.

Plans call for Colavita to outsource logistics functions such as inventory management, warehousing and fulfillment to Boxed’s flagship automated fulfillment center in Union, N.J., the New York-based e-tailer said Monday. Colavita has its U.S. operations headquarters in Edison, New Jersey.

The deal stands to bolster the continental U.S. e-commerce distribution of Colavita, which Boxed also noted is a major partner and supplier for meal solutions provider HelloFresh.

For financially strapped Boxed, the partnership with Colavita could open the doors to a stream of new business for its Spresso software and services arm. Boxed said Monday that it’s exploring opportunities to offer its warehousing, order fulfillment and shipment technology expertise to other manufacturers.

“We have established relationships with hundreds of vendors like Colavita, and now we are in a position to provide them with all of their supply-chain and logistics operations needs,” Alison Weick, president of e-commerce at Boxed, said in a statement.

Spresso offers companies access to the same proprietary, enterprise-level technology—including robotics—that drives Boxed’s growing retail e-commerce business for B2C and B2B customers. Leveraging artificial intelligence, Boxed’s end-to-end, modular software stack provides storefront, marketplace, analytics, advertising, price optimization and fulfillment capabilities.

Boxed will provide Colavita with direct-to-consumer logistics services through its automated fulfillment center in Union, N.J. / Photo: Boxed Inc.

In early January, Boxed announced that it was exploring a range of strategic options—including a possible sale of the company—amid a dearth of financing. Boxed had received delisting warnings from the New York Stock Exchange in October and November as its stock price and market capitalization fell below required levels. To rectify the situation, Boxed said at the time that it would mull various alternatives, including a reverse stock split. Just weeks after announcing the strategic review, the company said it landed up to $20 million in new funding.

The high-margin Spresso software and services business is a linchpin of Boxed’s growth plan. CEO Chieh Huang told Winsight Grocery Business in a recent interview that the company has begun searching “outside our typical realm of grocery” to land new tech customers worldwide.

That includes Spresso’s first U.S. client, Jeffers Pet, one of the nation’s largest privately owned animal health supply companies. Boxed also has expanded its tech partnership with Asian retailer AEON Co. Ltd. into more regions. In addition, Boxed this year announced the availability of Spresso software-as-a-service modules on the Google Cloud Marketplace and on global enterprise e-commerce platform VTEX.

Building up a steadier pipeline of Spresso business stands to help Boxed not just drive sales and profitability but also provide more stability for investors. For the software and services unit, Boxed can report revenue only in quarters when deployments and implementation work were performed, which has produced some wide variations in quarterly revenue.

Huang told WGB that the difficult market for technology-focused companies has made it tougher for Boxed to secure more financing. Still, he said he remains bullish on Boxed’s positioning as a company, especially the full tech stack it offers “as both a retailer and a retail enabler.”

Colavita, a supplier for Boxed’s retail business, knows the e-tailer well. Its products reach over 80 countries and include extra virgin olive oil, vinegar, pasta, sauces and vegetables. In the U.S. market, Colavita distributes to grocery store chains, specialty food stores, wholesalers, restaurants, caterers and other foodservice operators.

“Our relationship with Boxed as a vendor has always been strong,” stated Colavita USA CEO Giovanni Colavita. “We are beyond excited to expand that synergy to include their supply-chain and fulfillment expertise.”