DoorDash Opens New Ghost Kitchen
Amazon Prime's speed record, Walmart buys Flipkart, Daily Harvest stumbles
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Today:
DoorDash Opens New Ghost Kitchen in NorCal
Amazon Plans Prime Footprint Domination
Chart Time | Flipkart’s Growth Attracts Walmart’s Cash
Daily Harvest Reaped What It Sewed
3PD | DoorDash Doubles Down on Ghost Kitchens
Maybe things are turning around for ghost kitchens and virtual restaurants… DoorDash just opened a new DoorDash Kitchen, its fourth nationwide, in an open-air power retail center near central San Jose, CA. Customers will be able to order in-person via kiosk and QR code, or for delivery via the DoorDash app. The brand mix is both new local concepts and familiar nationwide chains: Aria Korean Street Food, Ivan’s Chicken Shokudo, Koi Palace, Little Spoon, Nekter Juice Bar, Plentiful, Sweet Street, The Melt, Milk Bar and Souvla.
The Big Picture: DoorDash Kitchens’ other locations are New York City, Los Angeles, San Francisco and Redwood City; with that latter location about a 30 minute drive from the just-opened San Jose location. That concentration in the SF Bay Area puts it in head-to-head competition with Local Kitchens, which has at least eight of its own delivery-friendly food courts in the region. As we’ve seen other ghost kitchen operators struggle as of late, one can see the upside of having them be operated by the 3PD; you don’t have two middle men trying to live off a restaurateur’s margins, and there’s an existing customer relationship to promote to. But from the kitchen’s perspective; is that enough to make it worth giving up visibility on the two other major delivery services?
ECOMMERCE | Prime Hits New Speed Record, Plots for Continued Domination
Amazon touted the continued expansion of its Prime membership program, reminding us that before it became a way to stream The Marvelous Mrs. Maisel and get discounted Grubhub, its raison d’etre was getting products into customers’ hands at super-fast speeds. What started as free two-day shipping on one million items is today same-day or one-day delivery on a whopping 300 million SKUs. Less than eight months into the year, Amazon has already made 1.8 billion domestic Prime deliveries, 4x its 2019 run-rate.
The Big Picture: Bezos & Co certainly aren’t content to rest on their laurels. To keep up the pace, the company is continuing to regionalize its operations network; now 76% of orders come to a customer from a warehouse in their own region. AZ is continuing to invest in its same-day network, where orders are packed and ready for fulfillment 11 minutes after a customer clicks the check-out button. Available in 90 metro areas today; that number will double in the next few years. While building out these capabilities have been a costly drag on the company’s bottomline; it’s now predicting that it will see reduced operating costs thanks to fewer employee touchpoints and reduced delivery miles. With kingly sums plowed into building these capabilities; it’s clear why going head-to-head with Amazon is a tough act for other ecommerce players.
CHART TIME | Flipkart’s Un-flipping-believeable Growth
India’s Flipkart continues to attract wold-wide attention, as the ecommerce and delivery co cranks out growth. After a brief stumble during the pandemic, revenue is back on a tear, hitting $6,222,777,449 in 2022, up from $345,348,260 in 2014 (all numbers converted from INR to USD at current-day exchange rates.) That growth compelled Walmart to snap up an additional four percent of the company for a whopping $1.4 billion dollars, bringing its total holdings to 77%. Flipkart has continued to push into new verticals, including resale and personal loans; driving gains for other co-owners that include Tencent, SoftBank, Microsoft and eBay.
MEAL KITS | How Daily Harvest Fell from Grace
It’s been a tough few years for the meal kit industry, as the dry ice dinner delivery segment saw stalwarts like Blue Apron lose almost 99% of their market value, and other players like Freshly and Plated closed up shop entirely. Daily Harvest seemed to be the one exception to the rule, as the 2015-founded company rocketed to growth on the back of its healthy superfood menu, combined with savvy social media marketing. But when a food safety issue hit the company last October, those very same qualities doomed the NYC-based brand to a particularly intense drubbing.
The Big Picture: Many now know that the company’s French Lentil + Leek Crumbles meal was the root of the issue; adverse reactions to either its tara flour or sacha inchi seed caused at least 393 illnesses, including potentially severe liver injuries. Still, many a brand has survived a food safety recall relatively unscathed; for Daily Harvest, the problem was that they didn’t exactly treat it like an all-hand-on-deck RECALL. Bloomberg BusinessWeek documents how the company was hosting a social media-friendly retreat as the issue unfolded, and even once the company knew it had a problem it decided to use verbiage like “out of stock” and accused customer’s of mis-cooking ingredients, instead of following FDA guidelines. Those same socially savvy customers and influencers that once powered the company’s growth have since turned on the brand, creating a stream of negative sentiment that has forced the company to cut ~40% of its headcount.
A Few Good Links
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