Instacart Fresh Funds Taps into Chicago
Marco's vs Papa Johns, McDonald's Free Fries Friday, Grocery stats
Today we’ve got some big news from the big chains — Papa Johns, Marco’s Pizza and McDonald’s — these are the companies you should be watching closely as they battle for the future of delivery and digital sales. And we’ve got some huge grocery news as well, starting with Instacart and ending with some interesting McKinsey stats.
This week’s edition is brought to you by Cambridge Mobile Telematics.
lnstacart Brings Fresh Funds to Chicago
Pizza Wars - Papa Johns vs Marco’s Pizza
Chart Time | Grocery Shoppers Head Online
McDonald’s Free Fries Friday
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3PD | Instacart Adds Wellness West to Food Health Program
Instacart is partnering with Wellness West, a coalition of Chicago-area health and safety-net providers, to launch a new Food Connections program. The partnership offers users a $79 monthly grocery stipend towards fresh and frozen produce for Instacart delivery. The program can be combined with other benefits — like SNAP — to further expand shoppers’ food budgets in-app. The program reaches an estimated 200,000 uninsured or Medicaid-insured Chicagoans. In metro Chicago, 16% of households overall and 22% of households with children suffer from food insecurity; 29% percent of Black households experience food insecurity. Over 500,000 Chicagoans live in food deserts, with the vast majority of those living in the city’s West and South Sides.
The Big Picture: Instacart keeps rolling out its health and nutrition benefits programs, adapting its infrastructure in a way that traditional grocers cannot. The 3PD expanded its SNAP integration to all 50 states back in August, launched Medicaid and Medicare payments in early October and on top of that quickly rolled out a similar Health Fresh Funds partnership with Mount Sinai Health Systems. Fresh Funds allow health / wellness providers to fund category-specific stipends, such as fresh or frozen produce, for redemption via digital codes. Funds can be one-time, auto-reload, or expire at a specific date.
PARTNER | Save Money and Make Drivers Safer
Insurance costs are skyrocketing for gig companies. Companies are turning to telematics to reduce expenses by making their drivers safer. With real-time coaching and driving feedback about risky behaviors, telematics programs have a direct impact on driver safety. Telematics can reduce distracted driving by 25% and make drivers 65% safer overall.
PIZZA | Marco’s Aims to Dislodge Papa Johns as 4th Largest Pizzeria
Toledo, Ohio-based Marco’s Pizza has been on an expansion spree; last year it opened 90 stores and awarded 140 franchise units, so far this year it’s inked another 50 franchise agreements while 200 stores work their way through the development pipeline. That growth has been spearheaded by Chief Development Officer Gerardo Flores — who previously led franchise growth at Jersey Mike’s, Quiznos, Cold Stone Creamery, Tropical Smoothie and PetSmart — and the company thinks it will close out the year with 1,200 units in operation and a whopping 4,200 potential locations identified, as it seeks to become the country’s fourth largest pizza chain. Last year the company broke $1 billion in revenue.
The Big Picture: The pizza wars are sadly rather zero-sum, if Marco’s is rising then someone else is sinking, and in this case it’s Papa John’s. The company, originally founded in Indiana (remember, delivery pizza is Midwestern, not Italian) has seen its annual revenue flatline at around $2B since founder John Schnatter was ousted in 2018. While that leaves a big gap for Marco’s to jump, the company has been on a tear for years: back in 2016 the company was only the 10th largest pizzeria in the country, this past year it had already grown to fifth largest. Of course, if Marco’s hopes to ever catch up with the big three delivery kings — Domino’s, Pizza Hut, Little Caesars — it’ll need to improve its digital presence: currently its app has an embarrassing 1.4 stars on the Google Play store.
CHART TIME | The State of Grocery in North America
McKinsey has charted out the continued rise of online grocery sales, as more shoppers opt for delivery or parking lot pickup. But even as prices have climbed, grocers are facing continued downward pressure on margins, leading more to turn to labor saving automation and robotic delivery. 28% of grocers cite “labor shortages” as their biggest challenge in 2023.
PROMOS | McDonald’s Launches Free Fries Fridays
Mickey D’s is launching a new promotion — Free Fries Fridays — set to run from October 27th until EOY (the offer is good on Fridays only, if that part wasn’t clear from the name.) The promo is good for free medium french fries (normally $3-4, depending on location) and is offered to anyone that spends at least $1 via the fast food giant’s mobile app.
The Big Picture: At face value, this promotion looks like a good way for McDonald’s to reclaim customers who are ordering less often in the face of rising prices and tightening budgets, without resorting to a full-scale repricing of its menu. But the real goal is incentivizing app downloads, moving customers off of 3PD and into its own higher-margin loyalty system. Digital sales represent ~40% of systemwide sales in the company’s top six markets and loyalty members shop about 15% more frequently than average Joes and Janes.
A Few Good Links
Primanti Bros partners with Instant Financial to provide on-demand pay. Orders.co unveils AI-powered SMB onboarding tool. Understanding Calif’s new carbon disclosure law. Playa Bowls hires new CMO from Focus Brands. Sweetgreen heats new meats. Uber launches balloon service in Turkey, no word on if they can drop off a kebab while overhead. Funky delivery vehicle maker URB-E rebrands as Llama. Pizza Hut launches $7 “girl math” special (how do you do, fellow kids…) Papa John’s launches “Shaq-a-Roni” in Portugal (how do you say “why couldn’t you make those damn free throws” in Portuguese?) Subway’s new Connecticut headquarters gives off strong “please keep working from home” vibes. NEOM and DSV announced $10 billion logistics JV. Ex-Deliverr and Shopify workers kinda relieved to be laid off by mismanaged Flexport. California meets ZEV trucking sales benchmark two years ahead of schedule. USPS unveils new stamps for 2024, the space one is honestly rad.
Join us Thursday for a webinar on the proper pricing and customer willingness to pay for restaurant delivery technologies.
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