🥑 Chipotle's eFarmers Market
Hey Snackers,
Berlin has come up with an ingenious way of getting people to wear masks on public transport: Forbid them from wearing deodorant. BO = more masks = less COVID spread. Try leaving your nose uncovered in that subway car.
Markets rallied even as COVID-19 cases soared to record highs. The tech-heavy Nasdaq gained over 2% on the wings of Amazon stock, which hit a record high and crossed the $3K mark for the 1st time.
Chipotle launches a Virtual Farmers Market for its sustainable food suppliers
Can I get an e-sample of that orange slice?... The Sunday Farmers Market has an online cousin. Guac legend Chipotle launched a digital farmers market for its food suppliers (the same ones that grow the organic rice for your bowl):
- Direct-to-consumer farm: Chipotle is starting with four farmers that it's been working with for over a decade. It'll pay for their new Shopify-powered digital storefronts for two years. It's also helping them develop the four websites.
- DIY Chipotle bowl: The Farmers Market homepage tells you which Chipotle product each farmer supplies (e.g. Petaluma Creamery makes the shredded Monterey cheese for your burrito, Niman Ranch grows the pork for your Carnitas bowl).
No such thing as a free (Chipotle) lunch... Chipotle is shelling out guac to cover its suppliers' Shopify fees. The benefit to farmers is clear — the benefit to Chipotle is more nuanced:
- Farmers get: A free way to sell food online while the pandemic decimates in-person sales at the restaurants they normally supply. American farmers have had to destroy millions of pounds of fresh food on fallen demand from restaurants, hotels, etc.
- Chipotle gets: Good PR. Chipotle's whole thing is "Food with Integrity.” With these online shops, Chipotle is tackling the problem of food waste while propping up sustainable farms. But that's not all...
Chipotle wants supply chain insurance... Chipotle’s competitive advantage is its ability to scale with sustainable ingredients at fast-casual prices. Without a reliable supply, Chipotle suffers — During its last food-born illness outbreak, Chipotle had to completely change its pork supplies (carnitas bowls were literally canceled temporarily). Now, it's helping suppliers survive corona-conomy by bankrolling websites.
Warren Buffett drops $10B on gas pipelines while fossil fuels' future is extra-uncertain
Big splurge after months of holding out... Warren Buffett's Berkshire Hathaway just made its 1st big investment since the pandemic started (over a decade ago, in corona years). Buffett's legendary holding company hoarded up a record $137B in cash and held off on money moves...until now:
- Berkshire is acquiring Dominion Energy's natural gas assets (gassets?) in a deal worth nearly $10B — Berkshire's biggest deal since 2016. Dominion's gassets: 7.7K miles of natural gas pipelines and massive storage facilities.
- With this gassy splurge, Berkshire will control 18% of all US interstate natural gas transmission (up from 8%). With its gassets sold, Dominion gets to shift its focus from gas to clean utilities (like renewable energy).
Fossil fuels aren't hot right now... While natural gas pollutes less than crude oil (which is refined to make gasoline), it's still a fossil fuel. Natural gas generates electricity and heats our homes, but pollutes in the process. Now that corona-conomy is accelerating the transition to clean energy, fossil fuels are facing more uncertainty than ever:
- On Sunday, Dominion said it's scrapping its Atlantic Coast pipeline project due to regulatory scrutiny.
- On Monday, a Federal Court ordered the Dakota Access Pipeline to close pending an environmental review. So why is Buffett dropping $10B on pipelines?
Buffett's all about the "value investment"... like that $98 Gucci bag from Marshalls. Warren buys companies that he believes are undervalued. His MO: "Be fearful when others are greedy and greedy when others are fearful.” With so much negative buzz around pipelines, he sees Dominion as a good deal — The increased scrutiny around building new pipelines could actually be a boon to Dominion's existing ones.
What else we’re Snackin’
- Posted: Uber acquires Postmates in a $2.65B all-stock takeover — the Postmates app will keep running separately for consumers.
- Hamilton'd: Disney gets a 74% bump in Disney+ app downloads following the streaming release of hit musical "Hamilton."
- Chat: Gamer messaging platform Discord raises $100M at a reported $3.5B valuation — now it wants to become the "Slack for users' social lives" (not just for gaming fans).
- Rollback: The UK will phase out Huawei gear from its 5G networks this year, following US sanctions on the Chinese tech giant.
- Operator: Intel will invest $253M in India's top telecom company Jio Platforms — Facebook invested almost $6B for a 10% stake in June.
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Tuesday
- Earnings expected from Paychex and Levi Strauss
Disclosure: Authors of this Snacks own shares of Uber, Lululemon, Amazon, Shopify, Chipotle, and Berkshire Hathaway
ID: 1235949