VDC Files $100M Countersuit, IHOP Launches New Virtual Brands
BrightDrop heads to Mexico, delivery giants face off against climate change, Amazon beats expectations
Did you miss us? We take a few days off, and the world of delivery gets thrown into turmoil! VDC launches a $100M countersuit over MrBeast Burger; Amazon blows past expectations; GM’s record-setting EV delivery van comes to a new market; and the 3PDs have a plan for combatting that hot, hot heat.
VDC Fires off $100M Lawsuit, IHOP Doubles Down on Virtual Brands
BrightDrop’s Electric Vans Head to Mexico
Chart Time | Amazon Musters New Quarterly Strength
How Delivery Giants Are Responding to Rising Temps
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GHOST KITCHENS | VDC Files $100M Suit, While IHOP Launches New Brands
Just when it seemed like ghost kitchens were done acting scary, we’ve got another round of drama. After last week’s warning shot, Virtual Dining Concepts officially fired back at MrBeast and Beast Investments, filing a $100M lawsuit over its MrBeast Burger partnership. Countering MrBeast’s original claim, VDC’s countersuit “alleges that Mr. Donaldson’s and BI’s actions have materially damaged the reputation of MrBeast Burger and VDC, turned away customers, and shattered hard-won relationships with vendors and suppliers, damaging the bottom lines of hundreds of restaurants across the country and around the world, and causing damages to VDC that, according to VDC’s evidence and Mr. Donaldson’s own estimations are in the nine-figure range.”
The Big Picture: VDC going scorched earth against its one-time partner shows just how high the stakes are for this suit. Even if VDC prevails, potential partners are going to think twice about lending their names to virtual brands once they see the turmoil it can involve. That’s not to say the sector is totally DOA — it just comes down to not stretching yourself too thin and working with restaurant operators that can maintain the brand’s standards. Case in point: IHOP just announced it was launching two new virtual brands, using its existing restaurants as ghost kitchens. If you’ve ever had eggs and flapjacks from one of the Glendale, CA-based chain’s nearly 2,000 locations, you know this company has figured out consistent execution. That’s good news for its existing virtual brands, which include VDC’s Pardon My Cheesesteak and C3/Nextbite’s Tender Fix.
VEHICLES | Mexico Says “Hola” to BrightDrop’s Electric Vans
BrightDrop, the commercial electric van subsidiary of General Motors, announced it’s heading south of the border — its Zevo 400 and 600 vans will be available in Mexico by year’s end. TBD is if the company’s innovative Trace Cart will be available internationally as well. This marks a continued rapid expansion for the brand, which launched in the U.S. in 2021, made it to Canada late last year, and is on track to produce 50,000 vehicles a year by 2025.
The Big Picture: While EVs have not yet turned into money makers for GM or its sparring partner Ford, both are seeing better profitability and growth from their commercial van segments (GM Envolve and Ford Pro, respectively.) The BrightDrop van line has been a superstar, as its been the fastest growing brand in all of GM’s history — take that Corvette. The move to LatAm shows a path forward for electrification in developing economies. While most consumers in Mexico can’t yet afford an EV (last year EVs made up only one half of one percent of Mexican car sales) — big corporations like DHL, Ryder and FedEx certainly can; hopefully local players like Estefeta and Correos de Mexico join in, the reduced operating costs should make electrification a no brainer.
CHART TIME | Amazon Surprises With Strengthened Rev Growth
What a difference a few days make! Last week, analysts were feeling gloomy about Amazon’s growth prospects, projecting 8.5% growth and feeling like its double-digit-days were behind it. Not so! Amazon hit an impressive 11% increase in revenue, powered by an 11% rise in N. America, 10% internationally, and 12% at AWS. Company stock reached its highest price in about a year in response… guess delivery’s not dead!
LABOR | 3PDs Tweak Policies to Protect Workers in Heatwaves
Classically, the inclement weather that most associate with delivery worker misery is a pounding rainstorm, or knee-deep snow. But as the Earth warms, high temperatures are becoming a bigger and bigger concern for couriers. Now European governments are starting to act, passing legislation to get workers out of harm’s way. DoorDash-owned Wolt, which is active in Southern Europe, reports that in Greece “we called off deliveries between 12pm and 5pm, for the days that that the temperature reached over 40 degrees.” (40° C is 104° F.) Regulators in Cyprus have promulgated similar rules.
The Big Picture: Even in territories where it’s not yet the law, the 3PDs are adapting their services to stay in regulators and workers’ good graces. Deliveroo and Delivery Hero’s Glovo are both encouraging workers to take breaks when it heats up, and are working with their restaurant partners to ensure deliverers get adequate water. In the U.S., UPS’ new contract with workers includes protections like mandatory air conditioning in trucks. While the U.S. Postal Service’s motto may be “Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds,” things were a lot less hot when that was written 100+ years ago.
Bonus: Do you know any delivery companies adapting their policies in the face of climate change? Reply back to this email with the details!
A Few Good Links
Glovo and Chicken Republic partner in Nigeria. Lyft Q2 due at EOD. Consumer suit against Kroger-Albertsons merger dismissed. Deliveroo looks for workers aged 50+. Private equity giants look to team up to wrap up Subway acquisition. Cloud kitchen player Kitopi launches local ingredient sourcing tool. CarParts.com talks benefits of BNPL. Grubhub partners with The Hatchery to empower culinary entrepreneurs. Hub Group beefs up through acquisition. Get ready for even more boneless chicken. Fiesta Restaurant Group sells to Authentic Restaurant Brands for $220M. DoorDash-Staples partnership shows promise of non-food delivery. FTC meets with Amazon ahead of potential antitrust suit.
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