Daisy Intelligence (No. 118 on Growth 2020) implements AI to help supermarkets select and price products for weekly promotions
Daisy Intelligence’s Gary Saarenvirta dismisses the hype behind the ‘data-is-the-new-oil’ approach when it comes to AI (Photograph by Christie Vuong)
In the world of grocery retailing, the first months of the pandemic will go down as a kind of Battle of Waterloo moment, when all supermarkets had to face off against radically unpredictable consumer behaviour. The behaviour ranged from panic buying (toilet paper) to comfort cooking (flour, yeast) and stockpiling (beans, pasta).
For some chains, swaths of shelf space continued to present a troublingly gap-toothed look long after the reopening began, while others seemed to have worked the knots out of the supply chain. For the latter, their capacity to roll with the pandemic punches may be tied to the effectiveness of their recently installed artificial-intelligence systems’ ability to anticipate buying patterns in a crisis.
Daisy Intelligence (No. 118 on Growth 2020), one of the fastest-growing contenders in this space, says its clients adapted to the volatility thanks in part to its software. “Every week, new patterns emerged,” observes founder and CEO Gary Saarenvirta, a hard-driving engineer who boasts that his firm’s software is based on inviolable mathematical principles instead of the nebulous statistical models that drive most AI algorithms.
The pandemic outed the “pretenders”—those AI firms touting systems that couldn’t predict their way out of the frozen foods section, he says. “COVID was good for Daisy. Our system could see all the dynamism.”
The 48-person firm, founded in 2003 and now based in a brick-and-beam warehouse in downtown Toronto, has partners in nine countries and operates in two verticals: it helps supermarkets select and price products for weekly promotions, and it spots fraudulent claims for large insurers. In both cases, the company uses two years of its clients’ sales or claims data to build mathematical models that generate automated recommendations. Saarenvirta says its software “can bump revenues by 3% to 5%.”
He describes Daisy’s analytics—marketed (and trademarked) as its “Theory of Retail”—as an automation tool that’s meant to remove intuition and guesswork from decisions about those weekly, featured sale items, such as those that appear in the paper flyers that clog mailboxes. The system works through a granular analysis of how the purchase of one item produces a kind of domino effect.
For example, a flat of ground beef on special during a balmy stretch of summer may lead someone to buy buns, condiments, tomatoes, onions and pickles. “Our math finds the optimal combination of products [to promote],” he says, pointing out that in a supermarket with 100,000 SKUs (stock keeping units) and 2,000 products on special at any given time, the number of permutations is staggeringly high. “Every week in retail is unique.”
Yet unlike many AI entrepreneurs, he does not bow down to the computer-science gurus behind AI innovations that have yielded technologies like the Alexa voice-recognition software.
An aerospace engineer who spent years with LoyaltyOne (Aeroplan) and IBM’s data-mining group, Saarenvirta says Daisy’s algorithms aren’t designed to generate statistical guesses but, rather, to identify connections. In other words, under what conditions does the purchase of one item trigger the purchase of others? He rejects the idea that these relationships, and the predictions that flow from them, can simply be culled from reams of transactions records.
“We got all hopped up on ‘data-is-the-new-oil,’ ” he states provocatively. “Total bulls–t. We’re doing conventional AI. The computer-science version is totally off-base.”
For further evidence of Saarenvirta’s math-geek outlook, look no further than the name Daisy, selected because the flower’s yellow core has a pattern that can be described using a famous mathematical sequence of Fibonacci numbers.
The firm’s publicly acknowledged customers include a regional U.S. chain, Harps; an organic food chain based in North Carolina; Earth Fare, which succumbed to Whole Foods this spring; and Walmart. (Daisy declined to provide further details.)
Dalhousie University professor of food distribution policy Sylvain Charlebois observes that in a high-volume/low-margin business that’s been historically resistant to automation, dominant companies play their cards close to the vest when adopting new technologies. But, he says, most chains are now looking at AI-based systems, which perform tasks from automatically selecting promotional products (Daisy’s specialty) to managing supply chains and developing futuristic innovations such as “smart” shopping carts.
The pandemic, and the surge of interest in e-commerce grocery shopping, has drastically accelerated this transition, Charlebois adds. He points to Sobeys’ new Voilà e-commerce service, and Ocado, a U.K.-based online shopping platform that relies on smart systems. “COVID has built a case for predictive analytics,” he says.
Amazon is taking the revolution one step further with Amazon Go. The bricks-and-mortar supermarket has abandoned checkouts in favour of an extensive deployment of scanners and sensors that tally up what consumers have purchased, and also track how they move through the store and what they look at. The first Canadian location opened in Toronto’s Eaton Centre.
While behemoths like Walmart and Amazon invest heavily in tech, traditional supermarkets are more staid and see their business as unique—a culture that may take some time to overcome, says Charlebois. “Daisy’s very rational and Cartesian way of seeing a grocery store is upsetting to some people in grocery.”
But Daisy’s early-stage investors clearly agree that the company has plenty of runway. The firm has completed two financings, a $5-million debt round in 2018 with Espresso Capital, and then a $10-million equity infusion led by Framework Venture Partners (FVP) in September 2019. Saarenvirta says he plans to do more fundraising in the coming year, with net proceeds going toward international expansion, sales and marketing. He expects the firm to double in size within a year.
FVP partner Peter Misek says his analysts put Daisy’s algorithms through their paces to confirm the company’s claim that its system drives top-line growth. “We tore apart their code base and looked at all the algorithms and looked at the data pre and post,” he says. “We got comfortable that there was real effectiveness.”
Misek adds that FVP’s confidence in its investment in Daisy has only grown through the upheaval of the past several months. Grocery shopping, he contends, “will never go back. There’s been a fundamental acceptance of online [grocery shopping], and also the scope and style of physical retail. The future will not look like the present.”
St. James Gold up 23% on financing news
St. James Gold Corp. [LORD-TSXV; LRDJF-OTCQB; BVU3-FSE] said Thursday May 13 that it has struck a deal with an underwriting syndicate in connection with a brokered private placement of up to 2.17 million units at $3 per unit, which is expected to raise $6.51 million. Each unit will be comprised of one common share and…
St. James Gold Corp. [LORD-TSXV; LRDJF-OTCQB; BVU3-FSE] said Thursday May 13 that it has struck a deal with an underwriting syndicate in connection with a brokered private placement of up to 2.17 million units at $3 per unit, which is expected to raise $6.51 million.
Each unit will be comprised of one common share and one common share purchase warrant. Each warrant is good to buy one additional share at an exercise price of $3.90 for three years.
The company granted the underwriters the option to increase the size of the offering by up to 500,000 units, potentially raising additional proceeds of $1.5 million.
St. James shares jumped 23.2% or 82 cents to $4.35. Shares are currently trading in a 52-week range of $6.50 and $0.055.
St James holds an option to acquire a 100% interest in 28 claims covering 1,730 acres in the Gander district in north-central Newfoundland adjacent to New Found Gold Corp.’s [NFG-TSXV] Queensway Project, and an option to acquire a 100% interest in 1,730 acres in central Newfoundland adjacent to Marathon Gold Corp.‘s [MOZ-TSX; OTC-MGDPF] Valentine Lake Gold Project.
Back in April, 2020, Marathon released a pre-feasibility study for the Valentine Lake Project. It envisages an open pit mining operation over a 12-year mine life with average gold production of 175,000 oz/year in years 1-9 from the processing of high-grade mill feed.
St James recently signed an option and joint venture agreement to acquire up to a 100% interest in the Florin gold project covering nearly 22,000 contiguous acres in the historic Tintina gold belt in the Yukon, subject to regulatory approval.
The company intends to use net proceeds of the offering to close the initial payment on the Florin project acquisition. Proceeds will also be used to finance drilling on the Florin gold project and Newfoundland properties.
The Florin Gold project contains an inferred resource of 2.47 million oz gold contained in 171 million tonnes of 0.45 g/t with a cut-off of 0.30 g/t at a gold price of US$1,650/oz.
The Florin property is 55 km northwest of Mayo and 130 km east of Dawson City.
Blue Lagoon drills 0.98 metres of 36.7 g/t gold at Dome Mountain, British Columbia
Blue Lagoon Resources Inc. [BLLG-CSE; BLAGF-OTCQB; 7BL-FSE] provided a drilling update and results from the 2021 phase 1 drill program on its Dome Mountain gold project, an all-year accessible property located a short 50-minute drive from Smithers, British Columbia, which holds both an Environmental Management Act (EMA) permit and a mining permit providing for up…
Blue Lagoon Resources Inc. [BLLG-CSE; BLAGF-OTCQB; 7BL-FSE] provided a drilling update and results from the 2021 phase 1 drill program on its Dome Mountain gold project, an all-year accessible property located a short 50-minute drive from Smithers, British Columbia, which holds both an Environmental Management Act (EMA) permit and a mining permit providing for up to 75,000 tonnes production annually.
Highlights included hole DM-21-164 that returned 36.7 g/t gold and 580 g/t silver over 0.98 metres. DM-21-165 returned 11.08 g/t gold and 34.39 g/t silver over 4.13 metres, including 22.80 g/t gold and 42 g/t silver over 1.37 metres. DM-21-168 returned 25.8 g/t gold and 74 g/t silver over 1.45 metres.
“We are very pleased with the results to date from our 2021, 20,000-meter drill program, which continue to confirm the hi-grade nature of the Boulder Vein,” said Rana Vig, President and CEO of Blue Lagoon Resources. “With the first phase now complete with 7176.5 meters drilled in 31 holes, we’re getting ready to recommence drilling once all the snow melts and break-up is complete with ground conditions becoming more favorable for our drill crew to mobilize,” he added.
The first phase of this drill program at Dome Mountain also included three drill holes targeting the Forks Vein zone, located 500 metres south of the Boulder Vein. The Forks Vein zone is a shallow dipping structure to the north.
Hole DM-21-154 returned 3.0 metres of 0.95 g/t gold and 14.5 g/t silver and 3.0 metres of 8.3 g/t gold and 14.5 g/t silver, including 1.5 metres of 15.4 g/t gold and 26 g/t silver. DM-21-156 returned 1.7 metres of 4.02 g/t gold and 21 g/t silver.
The mineralized structure is shallow dipping to the northeast and remains open along strike and down dip. Holes 154 and 156 hit the down-dip segment 150 metres from historic workings where a shaft and drifting encountered the mineralized zone at 35 metres depth.
“These holes targeted mineralization identified from holes drilled in the 1980s and confirmed the high-grade nature and trend of the mineralized Forks Structure,” said William Cronk, Chief Geologist for Blue Lagoon. “Further drilling will test for continued mineralization to the NE along the down dip trend with a goal to follow this mineralized structure to its intersection with the Boulder Vein System,” he added.
Santacruz produces 706,978 oz AgEq in Q1 in Mexico
Santacruz Silver Mining Ltd. [SCZ-TSXV; 1SZ-FSE] reported operating results from the 100%-owned Zimapan Mine located in Zimapan, Hidalgo, Mexico, and the 100%-optioned Rosario Project in Charcas, San Luis Potosi, Mexico, for the first quarter 2021. The company is not including production from the Veta Grande Project in this report as operations at Veta Grande were…
Santacruz Silver Mining Ltd. [SCZ-TSXV; 1SZ-FSE] reported operating results from the 100%-owned Zimapan Mine located in Zimapan, Hidalgo, Mexico, and the 100%-optioned Rosario Project in Charcas, San Luis Potosi, Mexico, for the first quarter 2021. The company is not including production from the Veta Grande Project in this report as operations at Veta Grande were suspended during Q1 2020.
Production highlights include silver equivalent ounces produced 706,978 in Q1. Silver head grades increase 9.4% at Zimapan Mine as compared to Q1 and Q4 2020. There was increased tonnage throughput from Lomo del Toro zone of the Zimapan Mine from 4,000 during January and February to 6,000 tonnes for the month of March. A new mining method introduced in late March at Rosario that is expected to significantly reduce costs by less handling of waste material
Carlos Silva, Santacruz’s COO, stated, “As we keep advancing our workings deeper into the higher-grade Lomo del Toro manto and increase the tonnage mined from this zone, we are seeing a corresponding increase in head grades at our Zimapan Mine. We are progressing well towards our objective of reaching 15,000 tonnes per month of mill feed from this higher-grade area by the end of the second quarter.” Silva continued, “We expect further efficiencies at our Rosario Project during Q2 as a result of a revised mining plan which results in less waste material being handled. These very encouraging improvements were unfortunately partially offset by an unstable power supply from Mexico’s Comision Federal de Electricidad (Mexico’s power supply company). The unstable power supply impacted the mill throughput at both mines in February as motors for the ball mills were damaged. The matter was resolved in early March but mill throughput was materially reduced for eight days.”
The company continues to take all appropriate measures to prevent COVID-19 among the work force and local communities and to monitor the effectiveness of these measures in mitigating any potential impact on business activities. The company’s actions have been successful to date and the pandemic has not had any material impact on the business.
National24 hours ago
Government of Canada taking steps with partners in Ontario to improve education for First Nations students
Canadian17 hours ago
Ottawa Senators owner took Caribbean superyacht vacation during pandemic — and it went horribly, lawsuits say
Recent News17 hours ago
B.C. money laundering inquiry testimony ends today with reappearance of Rich Coleman
Business9 hours ago
Filo Mining drills 858 metres of 1.8% CuEq at Filo del Sol, Argentina
Business9 hours ago
St. James Gold up 23% on financing news
Business9 hours ago
Santacruz produces 706,978 oz AgEq in Q1 in Mexico
National12 hours ago
MacDonald hits high-grade gold at SPJ project, Ontario
Canadian12 hours ago
Burnaby shooting: 1 dead, 2 injured in latest act of violence police say isn’t random