Meet the Instacart Mafia
FTC Sues Amazon, Local Kitchens Launches Michelin-loved Thai wings, Grubhub + Snoop Dogg
Today’s a great day if you’re a lover of spicy Thai chicken wings, Snoop Dogg brand collaborations, or new startups founded by former Instacart leaders. It’s a less good day if you’re Amazon; read on to learn why…
Meet the Instacart Mafia
FTC Sues Amazon for Illegal Monopoly
Chart Time | Grubhub Turns to Snoop Dogg to Revive Sales
Local Kitchens Tries Michelin-Winning Virtual Brand
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3PD | Ex-Instacart Execs Start New Delivery Ventures
Watch your knee caps, here comes the Instacart mafia! 14 of the freshly-public delivery company’s former higher ups have launched promising startups of their own, and now that they’ve scored a big payday with the IPO - expect these new ventures to soar even higher. Among the most promising of the batch are: Forage, which helps merchants accept SNAP payments online, started by Instacart’s former head of payments; Monocle, which uses AI to assist merchants in running promotions, started by Instacart’s former Direct of Engineering; and Umamicart, an online grocery store for Asian food products, started by a former Instacart General Manager.
The Big Picture: With the IPO going well enough (the stock has recovered above the initial listing price,) Instacart’s current and former workers are flush enough to set out on their own. And even more importantly, some of the company’s highest higher ups did particularly well; founder Apoorva Mehta walked away with over a billion dollars that he needs to do something with. He’s an investor in a number of the aforementioned companies, and will likely continue to keep deploying capital. In time, we’ll see if this “mafia” becomes as influential in founding new companies as say the former execs of PayPal or Facebook.
LITIGATION | FTC Sues Amazon Over Illegal Monopoly
After telegraphing its moves for a number of months, the government has finally unveiled its mega-lawsuit against Amazon: the Federal Trade Commission and 17 states are accusing the $1.3 trillion retailer of operating an illegal monopoly over online retail. The heart of the gov’s claims are that the company, now the country’s second largest employer, squeezes its merchants and favors its own services. The agency claims that Amazon punishes sellers who offer lower priced products on other platforms, restricts which merchants are eligible for Prime’s discounted shipping, charges merchants fees amounting to 50% of a seller’s revenue, and biases search in favor of its own products.
The Big Picture: Once upon a time you could imagine that if anyone were going to be mad at Amazon, it was the mom and pop “main street” retailers that it put out of business; nowadays it seems that the companies that do business WITH Amazon are those that it hurts the most, and that the company is potentially increasing prices for consumers as opposed to pushing them down further. The FTC concurrently has another suit against Amazon contending that it makes it too difficult to cancel Prime subscriptions; the agency is also pursuing enforcement against Meta and Google. Folks with a long enough memory may remember that after the government eked out some concessions from Microsoft in the early 2000s, it resulted in an improved software environment (who here is still using Internet Explorer?) while still allowing the corporation to earn massive profits…
CHART TIME | Can A Real G Restore Grubhub’s Flagging Sales?
Just Eat Takeaway.com-owned Grubhub is kicking off a new ad campaign, starring Snoop Dogg. Called “Did Somebody Say,” the new ads include a 60-second TV spot and features the iconic rapper lyrically listing his favorite edible delights, and also asking if you “want to get delivery like a G?” While it’s a star studded campaign, the real question is how much firepower Grubhub can put behind it. The Chicago-based 3PD has seen its marketshare continue to drop (see our hard-to-read chart above) from a one-time high of 70%, further exacerbated since it was bought by the European conglomerate. Pump a few hundred million into this ad campaign and maybe we can get those numbers going back up!
GHOST KITCHENS | Can High Quality Thai Make Virtual Brands Work?
SF Bay Area-based Local Kitchens is teaming up with chef Andy Ricker to launch a new brand: Tam Sang. If the cook’s name is familiar, that’s because his acclaimed Pok Pok restaurant group was one of the hottest brands of the 2010s, slangin’ Northern Thai style chicken wings from Portland to NYC, winning a Michelin star and some James Beard awards along the way. Now he’s back, starting with the micro food halls and delivery hubs located in Mill Valley, Palo Alto, Lafayette and Cupertino. The menu looks rather limited: a salad, two curry dishes and of course that famous chicken.
The Big Picture: If there’s one thing that’s felled the ghost kitchen and virtual restaurant industry, it’s an inability to consistently churn out high quality food across multiple locations. Local Kitchens looks to solve that, both by controlling their real estate, and by turning to up-market brands; other partners include Sweetfin, The Melt, Milk Bar, and Pressed Juicery. Pok Pok previously experimented with ghost kitchens by teaming up with REEF during the pandemic. Also worth noting is that while Pok Pok would regularly have lines around the block in Portland and NYC, the company had trouble filling tables in markets like LA where there is much stiffer competition for good Thai food. Given that Local Kitchens has its own expansion to SoCal planned, it’ll be worth keeping an eye on which menus come with.
A Few Good Links
Walmart GoLocal teams up with SmartKargo to offer next and two-day delivery, including air-cargo. Sweetgreen adds in-store loyalty rewards. FedEx reports most shippers too small to worry about holiday surcharges. Farmer Boys expands in Central Valley. Hong Kong restaurants turn to National Day discounts to boost sales. May Mobility inches closer to full autonomy. Restaurant meal kit brand EatMise hits 30 brand partners in NYC.
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