Hey Snackers,
Dunkin' and Harpoon teamed up to launch donut-infused beers like Boston Kreme and Pumpkin. Last week, we got a Dunkaroo-flavored beer from a Texas brewery (see: DunkAbroos). Guess you can have your cake and chug it, too.
The S&P 500 and the Nasdaq hit fresh record highs thanks to gains from Big Tech stocks. Meanwhile, US consumer confidence in the economy plunged to a 6-year low, reminding us (once again) that the stock market isn't the economy.
Best Buy's online sales more than triple in a surprise corona-comeback
The Return of the Geek Squad... While Amazon (the Regina George of Retail) was thriving, Best Buy (Cady Heron) was struggling when virus lockdowns hit. Best Buy's sales plunged 30% from March 21-April 15, after it was forced to close its ~1K stores and go curbside-only. It furloughed 51K of its 125K workers and cut pay for top execs. But Cady got her glow-up in the end...
- +242%: Best Buy's online sales more than 3X'd compared to the same quarter last year, its biggest digital growth ever.
- $432M: Best Buy's profit nearly doubled to $432M and sales jumped 6%. But the stock sank after the news because its CEO said growth is unlikely to continue at the same pace.
Best Buy wasn't expecting this... It brought back 60% of its furloughed employees to deal with the WFH/school-from-home demand rush. Its supply chain is currently running at "holiday level" — good luck getting a Chromebook or freezer on its website. But Best Buy was prepared on the most important front: digital.
- As the threat from Amazon (aka Regina) intensified over the years, old-school retailers like Target and Walmart spent heavily to build online clout. Think: ecommerce apps, delivery, and warehouses.
- Before the pandemic, Best Buy had already invested in curbside and delivery to compete with Amazon. That paid off big when the pandemic hit.
Small-box losses = big box wins... Big retailers have digital strategies and cash stashes to survive/thrive mid-pandemic. Smaller businesses don't. Walmart, Amazon, Target, Home Depot, Lowe’s and Costco made up a whopping 29% of all US retail sales in the 2nd quarter. Meanwhile, over 60K small business permanently shut from March 1-July 25, according to Yelp. 60% of large company CEOs are “more confident” now in the growth of their companies than they were pre-COVID. Less sales for small retailers means more for big ones.
The aluminum can shortage is upon us — that's great news for Ball Corporation
Aluminum is the new TP... Just don't try wiping with it. The latest corona-conomy shortage item is the aluminum can. You're not posting up at the bar with a freshly-poured pint of Heineken. Instead, you're posted on the couch with a six-pack of White Claws and premixed G&T cans. Instead of slurping up ramen from a glass bowl at your local spot, you're hoarding Campbell's Chicken Noodle Soup cans in the pantry.
- Sales of aluminum drink cans soared 24% in March at the height of lockdowns. They popped over 16% in April, May, and June as demand can-tinued.
That sound when you pop the lid off... Ball Corp is feeling it. Ball is the world's largest aluminum drink can maker. Not so sexy usually, but baller during an aluminum can shortage. Ball makes cans for massive companies like Coca-Cola, and also confusingly has an aerospace biz that makes up 16% of its sales.
- Ball is adding two new production lines in Texas and Georgia to keep up with demand. Both lines have the capacity to churn out over a billion cans a year. Even so, Ball will still have to import 2B cans from abroad to meet the "crazy" demand from the US.
Perfect business opportunities can be missed... if you're not ready to seize them. Molson Coors left a bunch of Coors Light unsold because it couldn't source enough 12-ounce cans. Coke had to suspend production of Minute Made zero sugar lemonade so it could use those precious cans for more popular drinks. Ball should be popping White Claws and celebrating the aluminum boom — but even the #1 can maker wasn't ready to meet the demand.
What else we’re Snackin’
- Cuts: American will make 19K involuntary job cuts when airline bailout aid expires in October. It's expecting to shed 40K employees by October 1st.
- Cheesy: Papa John's continues its pandemic growth streak with 24% quarterly sales growth. It's hiring 30K workers to meet corona cravings.
- Checks: Over half of US states are approved to send an extra $300/week unemployment benefit from Uncle Sam.
- IPO-Palooza: Task management service Asana files to IPO along with 4 other companies on the same day.
- GameOn: A judge says Apple is allowed to block Epic Games' Fortnite from the App Store, but not Epic’s Unreal Engine or developer tools.
- Bready: Google integrates Panera to let you order your carbs directly from Search or Maps — it's Google's latest push into restaurants.
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