Restaurants
DASH & GRUB Under fire
The City of Chicago files two lawsuits against DoorDash and GrubHub (GRUB -7.4%), claiming that the two companies misled customers and using dishonest business methods. Chicago lawyers claim that the two delivery platforms advertised delivery services for some restaurants without their consent and hid lower prices that customers could have received if they ordered directly through the restaurant. The city also claims that the two companies used "bait-and-switch" techniques by advertising low delivery fees before adding additional charges immediately before consumers placed their orders. GrubHub is further charged with deceptive marketing during the pandemic and violating Chicago's 15% restaurant commission cap. At the same time, DoorDash is alleged to have misled customers about who would receive their tips for drivers. DoorDash stopped adding restaurants to its app that it didn't have contracts within November and said they changed their tipping system ahead of a Washington D.C. lawsuit for the same reason. DoorDash and Grubhub both called the allegations "baseless." "Every single allegation is categorically wrong," said a GrubHub spokesperson. "We look forward to defending ourselves in court and are confident we will prevail." Yesterday, the NYC Council voted to permanently cap fees that food delivery companies could charge restaurants for delivery at 15%.
Plant-based meat shift takes time (BYND)
According to IRI, the percentage of vegan or vegetarian Americans has changed little in over 20 years at 7%. According to the 2021 Power of Meat study conducted by 210 Analytics, 5% of respondents consider themselves vegetarians and 3% vegans. A slightly higher percentage say they aspire to be vegetarian at 7% and vegan at 5%. 69% of respondents self-identify as meat-eaters, and 53% aspire to be meat-eaters in the future. 14% of respondents identify as flexitarian, and 22% aspire to be in the future.
In the first half of 2021, 85.6% of shoppers who purchased refrigerated plant-based meat alternatives also purchased processed meat, while 70.3% purchased ground beef, and 65.4% purchased chicken breast. Plant-based meat had a 10% household penetration in the first half of 2021, and 47% of that penetration was with one-time buyers. The challenge for plant-based meat producers is repeat purchases. Eating shifts take time. In comparison, organic produce has a household penetration of about one-third and a sales mix of 11% after about two decades. In the first half of 2021, refrigerated plant-based meat sales were $249M, or 0.6% of meat department sales.
Consumer Staples
UTZ Foods Black Book
We are hosting a Black Book on Utz on September 1 at 2 PM ET.
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At-home meal occasions (KR)
During the pandemic, nearly 90% of meals were sourced from in the home at the peak. There is currently a recovery of away from home meals, but fully returning to pre-pandemic levels may be difficult with more people working from home. Another long-term headwind to at-home meal consumption is that they tend to eat at home more often as people age. The following chart shows that as the Baby Boomer and Millennial generation get older, they will be shifting into age groups that tend to eat out less frequently.
On-premise slows (SAM)
Sales velocity in on-premise establishments is up 45% YOY for the week ended August 21. Compared to the same week in 2019, sales velocity is up 15%, as seen below. The average store sales trends have trended slightly down for the past month. Traffic has remained steady, but the average check has trended slightly lower. California is the best performing of the large states on a one-year basis, with a velocity of 69% YOY. Compared to 2019, California is up 14% YOY and down 3% from the prior week.
