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DoorDash Suspends Service for Hurricane Hilary
Favor launches new campaign, Lucky Cat Poke Co waves hi, fast food profits grow
Well, that was interesting. Here at Modern Delivery HQ, we rode out SoCal’s hurri-quake in style. Others weren’t so lucky, especially those that headed outdoors during the worst of the deluge. While the Postal Service promises that neither “rain nor snow” will get in the way of your mail delivery, does the guy bringing you some soggy McDonald’s owe you that same level of service?
DoorDash Suspends Service for Hurricane Hilary
Favor Looks to Lasso Hungry New Texans
Chart Time | Fast Food Profits Soar
Who’s Craving Virtual Poké?
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SAFETY | 3PD Reactions Diverge to SoCal Hurricane
In the aftermath of Hurricane Hilary, Southern California looks to have made it out relatively unscathed. Some washed out roads and bridges here and there, but so far the impacts look fortuitously tame. Part of that good luck is due to residents heeding warnings, and staying inside during the brunt of the storm. While iPhone alerts and government tweets implored Californians to stay indoors, now all the 3PDs took that same approach. DoorDash did however, as it suspended operations in Southern California around 3:45 PM Sunday, with operations just resuming this morning.
The Big Picture: It appears that DD was the only deliverer to make this move. Amidst the intense rainfall of Sunday evening, the Modern Delivery team tested the order flow for restaurants / markets on Uber Eats, Grubhub and Instacart - each platform appeared to still be accepting and dispatching orders. That put them at odds with the government, which had explicitly asked that people “STAY HOME AND OFF THE ROADS.” While liability may be limited in a legal sense due to the nature of independent contracting, there’s still a moral obligation to keep couriers out of the deep and rapid water that accumulated on some roads. Nevertheless, some folks on social media thought that the 3PDs should still offer couriers the option to work, but reward them hazard pay for doing so. Is it time to bring back visible surge pricing, but for natural disasters?
LOCAL | Favor Launches New Ad Campaign To Reclaim Texas Market
Austin-based Favor launched a new ad campaign this week, as it fights back against the big three to claim the mantle in the fast-growing Texas market. The deliverer has been owned by San Antonio-based H-E-B, the nation’s top rated grocer, since 2018. That doesn’t mean Favor is only good for groceries though; its bread and butter is restaurant delivery: independent operators, regional favorites like Torchy’s Tacos, and of course the chain restaurateurs that are common in any fast-expanding subdivision.
The Big Picture: Texas may be large and growing, but is a single state strategy enough to build a viable business off of? Maybe not, as Favor never shows up on Second Measure’s marketshare charts, despite Texas account for 9% of the country’s population. Parent company H-E-B seems to have acknowledged the constraints of a single-state brand, as it expanded into Mexico in 1997. While it might be hard to swallow pushing Favor into new states after launching such a brashly “Texas, yeehaw!” ad campaign, it might look to parts of the South that are culturally compatible. The region is full of smaller 3PDs ripe for acquisition: ASAP is based one state over in Louisiana and is sitting on a puny $2.3M market cap, while the Regional Marketing Delivery Association seems to have a preponderance of privately owned couriers that are based in the Southeast.
CHART TIME | Fast Food Profit Soars
Evidently we aren’t the only ones feverishly following quarterly reports. Over at Chartr, they note the bumper profits that America’s quick service competitors have been churning out. Starbucks’ big bucks are partially due to the company outpacing the industry in store openings: 429 last year alone. (Subway slimmed down by a record 571.)
GHOST KITCHENS | Lucky Cat’s Poké Growth Ambitions Aren’t So Poky
Has virtual dining and ghost kitchen-ing put its troubles in the rear view mirror? Craveworthy Brands sure thinks so, as the Illinois-based restaurant group launches its latest growth-oriented brand: Lucky Cat Poke Co. The raw fish and rice bowl concept just opened its first in-person location in a Chicago suburb, but already plans to hit 55 virtual kitchens by EOY, powered by continued demand for poké, a cuisine that’s expected to grow 8% annually.
The Big Picture: Craveworthy Brands was founded last year by the former CEO of Papa John’s, and it quickly added on an impressive roster of leaders with experience from groups like Yum!, McDonald’s and FAT Brands. While the heart of the company’s stable of brand is three Mongolian BBQ concepts it rolled up to re-franchise, its growth relies on more ambitious and delivery-friendly concepts like Wing It On, Budlong Hot Chicken, Krafted Burgers and the aforementioned poké concept. But with Lucky Cat set to be mostly virtual, how happy will customers be if they figure out their raw fish has been sitting in a commercial fridge next to the chicken and stir-fry?
A Few Good Links
DoorDash teams up with Petco. More details on Amazon Shipping. McDonald’s launches a streetwear collab at original Downey location with Britain’s Palace, receives lukewarm reception. Dollar General opens dual distribution center that prioritizes fresh food. Sweetgreen hires new marketing, culinary heads. Chinese ecommerce players move down market. Demand for truck / tractor trailers declines. Failed restaurant group denies PPP cheating allegations. New research paper shows big chain restaurants have largest positive impact on cross-crass encounters. ICYMI: the state of delivery robotics in 2023.
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