🛒 Alibaba goes Beyond
Hey Snackers,
Since 2020 couldn't get any weirder anyway, Coca-Cola seized the moment to launch Coke-flavored cappuccinos (through Costa Coffee, which it acquired). Because 14 years of Coke + coffee flops must mean this is finally the one.
The S&P 500 ticked up and the tech-heavy Nasdaq closed at a record high Wednesday thanks to positive COVID-19 vaccine data from Pfizer and BioNTech's trials.
BTW, this is our last newsletter of the week since markets are closed tomorrow for (early) July 4th — Enjoy this Independence Day weekend 🇺🇸
Constellation snaps up 1-year-old online wine delivery company for bcommerce gains
What do you call boozy ecommerce?... Let's go with bcommerce. If there's one thing you want showing up at your door mid-pandemic, it's wine. Bcommerce sales soared almost 400% in mid-April when lockdowns were on and bars were shut. Then we had a brief reopening stint, but now bars are getting re-shut in some of America's largest cities.
- Booze giant Constellation Brands thinks it's the perfect time to invest in bcommerce. Constellation owns alcohol classics like Robert Mondavi wine, Svedka vodka, and Ballast Point beer. Now it wants some direct-to-consumer action...
- Empathy Wines: The D2C wine company Constellation just acquired. The 1-year-old startup was launched by Gary Vaynerchuk, who founded Resy (later sold to Amex). Its 2K subscribers have bought 15K cases of "vineyard-to-table" CA wine. Sounds empathetic.
Constellation isn't just buying a startup... It's buying the whole bcommerce biz model.
- Over 90% of Constellation's wine sales happen through wholesalers and bars/restaurants (not pandemic-friendly).
- Yet 46 states allow alcohol to be delivered right to your door, which could cut out the restaurant and liquor store middle men for Constellation.
- Empathy does exactly this. And tricks Constellation learns through Empathy could be applied to its other alcohol brands.
In a fragmented industry, brand matters extra... Many young drinkers can’t name/pronounce a wine label besides whatever sits next to Two-Buck Chuck at Trader Joe's. But brands like White Girl Rosé by Josh Ostrovsky (@TheFatJewish) stand out because of the personality they're built on (so AB InBev acquired it). Constellation is hoping Empathy Wines' brand can bring some of that personal touch to its liquor portfolio.
Alibaba brings Beyond Meat to its futuristic, Amazon-beating grocery stores
Beyond borders... Alibaba is "the Amazon of China," with one key difference: Alibaba.com is a marketplace that connects over 1B buyers and sellers — it doesn't actually own any of the merch (no "Baba Basics"). While Alibaba trails Amazon in many respects, it has it beat on grocery stores. Before we get into the meat of that, let's talk alt-meat:
- Beyond Meat will start selling its meatless patties in Alibaba's Freshippo grocery stores.
- Back to Freshippo. Think of them as those human-free, cashier-less Amazon Go stores, but kicked up a dozen notches.
More like "the Amazon of the Future"... Alibaba launched Freshippo in 2016 to pioneer the "New Retail" concept. Think: mobile-order products, unmanned checkouts, and hot food lockers. Now it has over 200 Freshippos, all aimed at creating a world where: "the boundary between online and offline disappears" (would watch that movie).
- Freshippo locations serve as both store and warehouse — 30-minute delivery is available for online orders (if you're within a 2 mile radius). Conveyor belts on the ceiling carry your bagged goods out for delivery.
- Online orders make up over 60% of Freshippo's total sales — you can order a sandwich from your phone in a subway car, and pick it up in a hot locker at the next stop.
- The offline experience is wild too: Robots deliver food in some of Freshippo's restaurant spots. Customers can pick live lobster out of fish tanks. There's also the option to pay with your face (maybe stick with the app).
It's all about the daily touch points... The more touch points you have with a company's products each day, the more intimate that customer-company relationship is. Companies like Apple and Amazon have high daily touch points. But operations like Freshippo bring that daily interaction to another level. That intense interconnectedness is what Amazon is trying to achieve with its Go stores (and everything else it does), but Alibaba is far ahead.
What else we’re Snackin’
- Pinning: Pinterest stock jumps after Facebook says it's shutting down its unpopular Pinterest rival app Hobbi (#unZucked).
- Closed: Google postpones its US office reopenings to at least September as COVID cases spike.
- Cheerio: General Mills' sales soared 16% for the quarter as corona-consumers turn to hoardable big brands like Cheerios and Betty Crocker.
- Deliver: FedEx jumped after the package giant posted expectation-topping earnings (Amazon wasn't the only one delivering).
- Shutdown: Apple will close 30 more US stores as COVID-19 cases spike, for a total of 77 re-closed stores.
- Odd: Coca-Cola is ending its struggling Odwalla Juice business because "we couldn't make it work."
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Thursday
- Weekly jobless claims, the monthly jobs & unemployment report for the month of June.
Disclosure: Authors of this Snacks own shares of Alphabet, Amazon, Alibaba, Apple (lotta A's), and Beyond Meat
ID: 1232984