RESTAURANTS
JPMorgan Chase is acquiring Infatuation, a website best known for restaurant and bar recommendations, city food guides, and related events, from Jeffrey Katzenberg's WndrCo. News of the acquisition was first reported by The Wall Street Journal. The deal's financial terms are unclear, but the Journal reports that JPMorgan is buying all of the Infatuation, including Zagat, which it acquired from Google in 2018. WndrCo held a roughly 80% stake in Infatuation, which raised $30 million from the technology and media investment firm in 2018, the person familiar said. The deal comes amid a flurry of acquisitions and mergers—and deal talks of such exits—within digital media. The person said that the Infatuation and its investors sought a sale or investment in recent months. JPMorgan is seen as a strategic buyer, with the ability to integrate the Infatuation's business and services similar to how American Express integrated Resy after acquiring the restaurant-reservation service in 2019, the person added. Some Chase cardholders, for example, could get perks such as special access to the company's events, such as its Eeeeeatscon music and food festival.
CONSUMER STAPLES
Return to the office (ACI)
According to Kastle Systems, its 10 cities’ average occupancy rate for office buildings fell to 31.6% for the week ended September 1, down 150bps from the prior week, as seen in the chart below. Kastle, which provides control systems for buildings, maintains an occupancy barometer to reflect access swipes to offices nationwide. It has customers in more than 2,600 buildings in 138 cities. Three of the largest drops in occupancy were in Texas, which has had the highest occupancy rates of the top cities.
The return to the office will determine how permanent the food consumption shift is from on-premise to off-premise. Many companies have delayed plans to return to the office with the Delta variant. Yesterday, Microsoft canceled plans to fully reopen its headquarters and offices in other cities due to COVID-19. Microsoft did not set a new date given the uncertainty. The return so far has been at a modest pace. The headwind for grocers is lessened currently, but it will stretch at least into late 2022.
Primary grocer (KR)
According to the FMI U.S. Grocery Shopper Trends 2021 report, in early 2020, 44% of shoppers considered a supermarket to be their primary store, while only 26% considered a mass merchandiser to be their primary store. In 2021 only 39% of grocery shoppers considered the supermarket their primary store, while mass merchandisers increased to 33%. In addition, 48% of shoppers at mass merchandisers have placed an online order at the store in the past three months compared to only 31% of supermarket shoppers at supermarkets. The mass merchandisers have the highest customer ratings for online shopping, tied only with online-only retailers. The customer satisfaction ratings seem to be boosting online shopping at mass merchandisers, which could be behind the increased share of customers considering mass merchants to be their primary store.
Indoor grow agreement (APPH)
VetaNova, a builder and operator of solar-powered greenhouses, and Mastronardi Produce, one of the largest produce distributors, announced a long-term exclusive distribution agreement for all products from VetaNova’s solar-powered greenhouse development in Colorado. VetaNova recently acquired and began development on 157 acres in Pueblo County, Colorado, to fulfill the agreement's requirements. The location will supply locally-grown Sunset tomatoes, peppers, and leafy greens in the Colorado area.
AppHarvest signed a letter of intent to form a JV with Mastronardi to develop indoor grow facilities last month. The JV has a goal to build more than 750 acres of facilities. AppHarvest needs Mastronardi’s distribution network, but apparently, Mastronardi can find other indoor grow operators. So AppHarvest is on our shortlist.
