DoorDash Opens New Ghost Kitchen
Amazon Prime's speed record, Walmart buys Flipkart, Daily Harvest stumbles
Happy Monday! Before we get to today’s delicious mix of stories, we were wondering if you could spend 30 seconds filling out this survey? We swear that’s how long it takes, and it’ll help us improve the mix of stories we bring you every day. Win-win!
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
Uber Eats signs Co-op, UK’s sixth largest grocer, to its membership rewards program. Instacart Business is gunning for restaurant supply chains. J.B. Hunt orders Nikola hydrogen trucks. Class-action suit accuses Taco Bell of skimping on beef and veggies. Kroger revamps rx subscription program. End of the road: Yellow officially ceases operations. What does Uber’s dominance mean for drivers? GM to bring back Bolt EV, will we see new Domino’s variants? VinFast SPAC OKed to proceed. Uber Freight names new head of intermodal.
Got a tip, feedback, or just want to say hi? Reply back to this email.