Consumer journeys have grown more complicated amid the rise of e-commerce, making options like BOPIS (buy online, pick-up in store) table stakes for any retailer looking to serve both in-store and online shoppers. To fulfill orders quickly and accurately, retailers must prioritize efficient distribution, inventory visibility, and last-mile flexibility. 

Striking this balance is especially crucial in grocery, where thin margins raise the stakes on profitability. A well-executed omnichannel fulfillment strategy can yield strong customer loyalty and repeat visits, while serving a wider customer base.

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Jokr over-expanded out of LatAm (came to the USA) and then retrenched to its roots.

It took a 38% valuation haircut in its September 2023 financing round.

And it’s been bringing down its headcount in the face of a more austere financing market.

The LatAm last mile/quick delivery market has already consolidated:

• iFood was acquired fully by Prosus in August 2022 for $5.4B
• Cornershop was acquired by Uber in 2021

Rappi last raised in 2021 at a $5.25B valuation.

That valuation is unlikely to hold in today’s market so consolidation with Jokr to gain scale and operational efficiencies makes sense, especially to battle iFood.

Find our next M&A prediction in this series — Globalization Partners, Papaya Global, and Remote merge — here.

The post 2024 prediction: Rappi acquires Jokr appeared first on CB Insights Research.

Historically, uptake of reusable packaging has been slow due to logistical complexities, affordability, and worries about customer adoption. However, consumers are also ready for a switch: A 2023 pilot study conducted by the WWF found that one-third of consumers opt for reusable packaging when given the option. 

It’s important to note that for reusable packaging to actually be sustainable, companies need to ensure its return and reuse. For instance, plastic reusable packaging typically needs to be used 50+ times before its environmental impact outperforms paper packaging.

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The post The reusable e-commerce packaging value chain market map appeared first on CB Insights Research.

As a result, success in the field has been varied: Walmart has made 10K+ drone deliveries with its partners, but Amazon’s Prime Air program, once the poster child for the technology, saw significant layoffs early in 2023. 

But the market has seen some promising activity in recent months.

In August, Walmart announced its fourth drone partnership: drones from Alphabet’s Wing will deliver orders from 2 Walmart stores in Dallas. 

That announcement came a few months after another Walmart drone partner, Zipline, raised a $330M Series F round, marking the biggest retail tech deal in Q2’23.

Largely driven by Zipline’s mega-round, drone delivery startups have raised $354M in 2023 so far. This marks a more than 4x increase from 2022.

So what’s going on? Is drone delivery ready to take off — or will there be a failure to launch? 

The answer remains mixed. 

Few drone operators have emerged as leaders. In our drone delivery ESP Ranking — which identifies and ranks leading companies in the landscape — only Zipline has separated itself from the pack. 

Zipline leads among drone delivery providers when it comes to valuations as well.

Notably, the company has grown through several successful proofs of concept. 

In 2016, it started with medical delivery in Rwanda and other markets in Africa with less regulatory pressure. Now, the company is expanding across verticals in the US, including grocery and meal delivery, via partnerships with major players like Walmart and Sweetgreen. 

But there’s still potential for other players in the market.

For instance, besides Zipline and Wing, Walmart has partnered with DroneUp and Flytrex.

When we look at the CB Insights drone delivery scorecard, both companies share a key highlight: full-service solutions that allow for broader tracking and management of deliveries and drones. 

The takeaway: in this nascent and heavily regulated market, customers are prioritizing execution and ease of use. Consistent pilots and partnerships as well as full-service operations are driving wins for the leaders. 

Dig into more metrics on this market — including employee headcount and valuations — using our drone delivery market report.

The post What is helping drone delivery leaders take flight? appeared first on CB Insights Research.

But Logan Paul or KSI are the more likely contenders.

Why?

Because of their equity in sports drink Prime.

Given its rapid growth, Prime may be worth $3.1B to $8.4B — making Logan Paul and KSI both potentially billionaires.

We break it down in this valuation deep dive, covering:

• Prime comps
• Comparable revenue, valuation, and multiples
• The secretive CPG incubator behind Prime
• How Coca-Cola and PepsiCo protect their market
• Prime valuation ranges and potential acquirers
• How much Logan Paul’s and KSI’s stakes are worth
• Further reading

All of the commercial and financial transaction data in this valuation deep dive is from CB Insights. Learn more here. 

Prime comps

For the purposes of this analysis, we will use a wide-ranging set of comparables to arrive at a valuation for Prime.

These competitors include athletic drinks, energy drinks, and even one water company.

Here are the 16 comps analyzed and considered in this analysis:

1. BodyArmor
2. Gatorade
3. Powerade
4. Celsius
5. Monster Energy
6. Rockstar Energy
7. Fuze Beverages
8. Ghost Energy
9. Nutrabolt
10. Lucozade Ribena Suntory
11. Bang Energy
12. Alani Nu
13. Liquid Death
14. Red Bull
15. Pedialyte
16. Liquid I.V.

Revenue, valuation, and multiple comps

If you are more interested in Prime’s valuation, Logan Paul and KSI’s ownership stake and the secretive incubator behind Prime, skip to the following section.

• Since many of the players above are private, data availability can be mixed but what is below is the best and most comprehensive data out there.
• The numbers below are inclusive of “whisper” valuations and revenue, which CB Insights picks up on.
• Pay particular attention to the multiple and growth rates as they’ll be important as we think about Prime’s valuation.

Data source: CB Insights

1. BodyArmor

• Valuation: $8B (2021)
• Revenue: $1.4B (2021)
• Multiple: 5.7x (valuation/revenue aka price/revenue multiple)
• Revenue growth rate: 63.4% (CAGR 2014-2021)
• Status: acquired
• Current owner: Coca-Cola

BodyArmor was acquired by Coca-Cola for up to $8B in 2021. Coke previously had a minority stake in the company as did Keurig Dr Pepper.

2. Gatorade

• Valuation: $8.3B (2000)
• Revenue: $1.8B (1999)
• Multiple: 4.6x
• Growth rate: 6.3% (2019-2020)
• Status: acquired
• Owner: Pepsi

As a historical reference point, Gatorade was part of Quaker Oats which Pepsi acquired in 2000 for $13.8B when it had revenue of $3B. At the time, Gatorade was $1.8B of the $3B in revenue and so we’ve allocated the total valuation in line with Gatorade’s revenue contribution. This is likely giving Gatorade too low a valuation given that it was the growth engine of Quaker Oats.

3. Powerade

Powerade was created by and is sold by Coca-Cola.

• Revenue: $1.66B (2020)
• Growth rate: 0.61% (2019-2020)
• Owner: Coca-Cola

4. Celsius

• Market cap: $13.1B
• Revenue: $952M — trailing twelve months (TTM)
• Multiple: 13.8x
• Growth rate: 108% (2021-2022)
• Status: publicly traded (ticker: CELH)
• Investors: Pepsi invested in 2022 at a $6.5B valuation

5. Monster Energy

• Market cap: $55.6B
• Revenue: $6.7B (2022)
• Multiple: 8.3x
• Growth rate: 13.9% (2021-2022)
• Status: publicly traded (ticker: MNST)
• Investors: Coca-Cola invested in 2015 at a $12.9B valuation

6. Rockstar Energy

• Valuation: $3.85B (2020)
• Revenue: $487M (2021)
• Multiple: 7.9x
• Status: acquired
• Owner: Pepsi

7. Fuze Beverages

• Valuation: $250M (2007)
• Revenue: $90M (2006)
• Multiple: 2.8x
• Status: acquired
• Owner: Coca-Cola

8. Ghost Energy

• Revenue: $262M (2023)
• Status: private
• Investor: AB InBev

9. Nutrabolt

• Valuation: $2.8B (current)
• Revenue: $654M (2022)
• Multiple: 4.3x
• Status: private
• Investor: Keurig Dr Pepper

Nutrabolt is the creator of brands such as C4 and Cellucor.

10. Lucozade

• Valuation: $2.1B (2013)
• Revenue: $775M (2012)
• Multiple: 2.7x
• Status: acquired
• Owner: Suntory

11. Bang Energy

• Valuation: $362M (2023)
• Revenue: $300M (2019)
• Multiple: 1.2x
• Status: acquired
• Owner: Monster Beverage

Monster bought Bang Energy out of bankruptcy after Bang Energy lost a legal case that required it to pay Monster $293M for false advertising.

12. Alani Nu

• Valuation: $3B (2023) — rumored
• Revenue: $343M (2023)
• Multiple: 8.7x
• Status: private
• Investor: Congo Brands

Note: Alani Nu’s valuation is rumored as the company was reportedly for sale. It was incubated by Congo Brands.

13. Liquid Death

• Valuation: $700M (2022)
• Revenue: $130M (2020)
• Multiple: 5.4x
• Growth rate: 259.4% (CAGR 2019-2022)
• Status: private
• Investors: Live Nation Entertainment, Science Ventures

Liquid Death is the sole water brand on this list of comps.

14. Red Bull

• Revenue: $10.2B (2022)
• Growth rate: 27.5% (CAGR 2021-2022)
• Status: private
• Owners: Yoovidhya family (51%), Mateschitz family (49%)

15. Pedialyte

• Revenue: $102M (2013)
• Owner: Abbott Labs

16. Liquid I.V.

• Revenue: $251M (2022)
• Owner: Unilever

Notes:

• Limited data is available on 5-hour Energy. It’s doing $1B in revenue and $300M net, but beyond that, founder Manoj Bhargava keeps info about the company quite limited.
• BioSteel is another player worth highlighting that recently shut down. It was majority owned by cannabis company Canopy Growth and also backed by the likes of Patrick Mahomes but was shuttered in September 2023 after Canopy decided it would no longer fund the business.

The secretive incubator behind Prime

While the faces of Prime are influencers/YouTubers like Logan Paul and KSI — and also now JiDion who is part of the Prime Squad — the company behind Prime and other beverages keeps a lower profile.

But Congo Brands has developed a formula for launching influencer-led beverages.

What is Congo Brands?

Per CB Insights,

“Congo Brands is a full-service product CPG product incubation firm. It helps organizations with talent management, logistics, branding, merchandising, and product development services. It was founded in 2014 and is based in Louisville, Kentucky.

They are described as a white-label beverage manufacturer. Generally, their playbook is to partner with influencers who they work alongside to create beverages that they can jointly create and market to the influencer/content creator’s audience who the influencer then markets to in exchange for equity in the entity.”

Its most notable brand is Prime, but Cong Brands also incubated Alani Nu, an energy drink targeting women and has worked with the likes of Kim Kardashian to launch limited-edition flavors. Alani Nu as you can see in the valuation & revenue data above was rumored to be on the block for $3B recently.

Congo Brands was founded by and is owned & operated by Trey Steiger and Max Clemons. It appears to have built a playbook for incubating and launching beverage brands. Their other incubated brand per CB Insights is 3D Energy Drinks.

Coca-Cola & Pepsi: Keep friends close, keep enemies closer

While PepsiCo has a clear lead in the athletic drink market (via its ownership of Gatorade) and the Coca-Cola Company has a solid lock on the #2 spot (via Powerade), both are incredibly nimble and aggressive when it comes to protecting their market share.

As the list of comps above highlights, 7 of the 16 players in the market are owned by or have been invested in by Pepsi or Coca-Cola.

• Pepsi owns Gatorade and Rockstar Energy and invested in rocketship Celsius.
• Coca-Cola owns Powerade, BodyArmor, and Fuze and invested in energy drink behemoth Monster.

Coca-Cola and Pepsi will be aware of companies making moves in the athletic drinks market — and they may eventually be a capital and distribution source via an equity investment or even via acquisition. Until then, Coca-Cola and Pepsi will be formidable competitors for new entrants.

Prime valuation estimates

So what is Prime actually worth?

The first important thing to settle on is Prime’s revenue.

• Reports put Prime’s 2022 revenue at $250M.
• Based on run rate trend data from CB Insights, Prime may be on track for $540M to $672M of revenue in 2023. For simplicity, we’ll take the average of $606M.
• Given whisper revenues by private companies are often overstated for PR benefit, we’ll apply a 25% discount to this $606M to be conservative, giving us revenue of $455M.

Now the question is, what multiple should we use?

If we look at the multiples from above for publicly traded companies or deals done since 2020, we’d use the multiples of Body Armor, Monster Beverage, Rockstar Energy, Nutrabolt, Celsius, and Liquid Death.

The median revenue multiple of those companies is 6.8x.

The high valuation multiple to use would be that of Celsius Holdings which trades at a 13.8x multiple.

It’s not unrealistic to assume Prime could trade at a Celsius multiple given growth rates are significantly above market and revenues are in a similar neighborhood.

So we’ll use those 2 multiples and the revenue estimates to come up with a range of valuations for Prime.

Scenario 1: Median industry multiple + conservative revenue

Valuation: $3.1B

(6.8x multiple x $455M revenue)

Scenario 2: Median industry multiple + aggressive revenue

Valuation: $4.1B

(6.8x multiple x $606M revenue)

Scenario 3: Celsius multiple + conservative revenue

Valuation: $6.3B

(13.8x multiple x $455M revenue)

Scenario 4: Celsius multiple + aggressive revenue

Valuation: $8.4B

(13.8x multiple x $606M revenue)

Keeping things simple, the average of the above 4 gives us a valuation for Prime of $5.5B.

This may be conservative.

Prime’s ability to lock down major sponsorship deals with the likes of Arsenal, the UFC, FC Barcelona, and BASE Sports Group, among others and its rapid growth make it very possible that it trades at the high end of those valuation scenarios.

These commercial transactions are also taken from CB Insights.

Potential acquirers

The beverage market for energy and athletic drinks is large and messy. That is good news for Prime as it means there are multiple potential suitors.

The obvious choices are, of course, Pepsi and Coca-Cola. They’re aggressive and nimble when it comes to protecting and growing their share of the market either via investment, distribution partnerships, or outright acquisitions.

But there are several other players who’d love to find a way to make a splash in this market including:

• Keurig Dr Pepper
• AB InBev
• Unilever
• Beam Suntory

Celsius and Monster seem less likely to be potential acquirers of Prime because of their existing tie-ups with Pepsi and Coca-Cola.

How much are Logan Paul and KSI worth?

Given Congo Brands is behind Prime, it is unclear how much Logan Paul and/or KSI own of Prime.

However, media reports suggest Paul owns 20% of Prime.

At $5.5B, that would make Logan’s stake worth $1.1B. It may also mean KSI is on track to be a billionaire.

And those are your first YouTube billionaires — not Mr. Beast.

These are also the players that Coca-Cola, Pepsi, or any number of others hoping to enter the market should be tracking closely.

Further reading

Prime Energy CB Insights profile

Congo Brands CB Insights profile

Links

• https://cstoredecisions.com/2022/04/05/energy-drink-sales-surge-as-innovation-continues/
• https://www.lifestyleasia.com/bk/culture/people/red-bull-family-net-worth
• https://huddleup.substack.com/p/patrick-mahomes-backed-sports-drink
• https://www.beverage-digest.com/articles/843-unilever-owned-liquid-iv-focused-on-1b-brand-status
• https://www.wsj.com/articles/pedialyte-sales-growinto-an-adult-market-1431560650
• https://www.wired.co.uk/article/congo-prime-sports-drink
• https://frontofficesports.com/logan-paul-ksi-prime-hydration-youth-sports/
• https://www.coca-cola.com/za/en/media-center/sprite-limelight
• https://www.cnbc.com/2022/11/26/liquid-death-ceo-mike-cessario-we-chose-the-dumbest-possible-name-for-water.html
• https://www.foodnavigator-usa.com/Article/2014/08/14/Coca-Cola-enters-strategic-partnership-with-Monster-Beverage-Corp
• https://www.reuters.com/markets/deals/energy-drink-maker-alani-nu-explores-options-including-sale-2023-07-18
• https://www.therichest.com/rich-powerful/the-prime-hydration-story-how-it-became-a-big-name-in-the-beverage-business/

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In his most recent letter to shareholders, CEO Andy Jassy announced that the e-commerce behemoth has shifted from national to regional fulfillment networks to reduce costs and speed up deliveries. This new strategy could make an acquisition of Ocado more compelling to the tech giant, given Ocado’s position as a leader in localized grocery microfulfillment centers (MFCs) and robotics. 

But would Amazon be getting value for money were it to buy the company?

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For example, Coca-Cola launched a generative AI marketing campaign to connect with younger consumers this year. In fashion, H&M has partnered with Snap to create a virtual try-on filter.

By using AI-powered tools to deepen and broaden customer engagement, brands can open the door to a wide variety of additional benefits, such as increased loyalty and conversion, reduced returns, and new data to inform brand strategy.

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The post 103 companies powering AI-driven digital experiences for CPG & fashion brands appeared first on CB Insights Research.

Incredo’s products have captured the attention of both investors and CPG brands, who are keen to cater to the growing desire for sugar-free alternatives. A staggering 72% of consumers claim they want to reduce sugar from their diets. 

Responding to this demand, CPG leaders like Nestle have partnered with companies developing sugar alternatives on new product lines, while ingredient manufacturers like Kerry have begun to introduce their own solutions in the space.  

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The post A leading sugar alternatives vendor just raised $30M. How much momentum does the space have? appeared first on CB Insights Research.

In 2021, Kroger launched its first Customer Fulfillment Center to serve e-commerce shoppers outside its geographical footprint. Then, in late 2022, the grocer made moves to acquire Albertsons — which is one of its largest competitors and has a stronger presence in the West and Northeast — for $24.6B. 

Kroger’s ambitions to grow its supermarket empire don’t stop there.

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With 90% of Americans living near a Walmart, the retailer has been leveraging its vast store footprint and distribution systems to provide customers with flexible and convenient fulfillment options. Its e-commerce business grew by 23% from 2020 to 2022. 

The retail giant has been playing catchup with Amazon through in-house experimentation, investments in emerging solutions, and acquisitions of leading tech providers. We used the CB Insights platform to benchmark Walmart’s activity across key areas of omnichannel fulfillment.

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The post How Walmart’s omnichannel fulfillment investments drove its e-commerce revenue to $70B+ appeared first on CB Insights Research.

After raising billions of dollars in funding in 2021 and seeing sky-high valuations, stalling growth and widening losses have led to several companies shutting down or being acquired. 

For example, ultrafast delivery leader Getir is reportedly in talks to acquire rival Flink. This comes just 6 months after it purchased Gorillas, another big player in the space, at a significant discount to the company’s last valuation. 

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However, these solutions — which help shoppers quickly checkout without scanning individual items — have had a slower rollout than expected due to challenges with hardware implementation, consumer acceptance, and capital costs. 

Even Amazon, an early-mover in the space, has closed a number of its autonomous checkout stores this year. (It still intends to sell the tech as a white-label service.)

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While Andreessen Horowitz’s total annual deals fell in 2022 — by 17% year-over-year — the firm still participated in 22 investment rounds in the consumer & retail sector. Its bets spanned a range of categories that serve the travel, food, beauty, and retail industries. 

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The post Analyzing a16z’s investment strategy in consumer & retail tech: Where did the VC place its biggest bets in 2022? appeared first on CB Insights Research.

This is pushing players across the food value chain — like grocery retailers, restaurants, and CPG brands — to increasingly rely on tech solutions to automate processes, improve traceability, and reduce food waste. In doing so, they can mitigate the risk of shortages and recalls, which negatively impact profitability.

In particular, AI is delivering impact across every stage of the value chain. AI-powered solutions are helping accelerate product development, reduce manufacturing downtime, better predict demand for products, monitor food freshness, and more.

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With more than 10,500 stores in 24 countries and global annual revenues exceeding half a trillion dollars, Walmart has long shaped the world of brick-and-mortar commerce. 

Now, it’s establishing itself as a tech provider — similar to the likes of Amazon — by launching high-margin, high-growth-rate tech businesses for the retail industry. This could change financial markets’ perception of the company’s growth potential and help it achieve a higher valuation than traditional grocery retail.

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Get up to speed with our explainer video — and read on for the full report.

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We covered all of these developments and many more across the food & beverage space to help affected players make informed tech-buying decisions.

For example, grocery retailers focused on omnichannel enablement can discover relevant tech solutions in our omnichannel enablement market map for grocery leaders, determine which markets to prioritize with our corresponding MVP framework, and decide which companies are ideal for partnerships or investments using our market-specific ESP Vendor Rankings, including this one covering grocery microfulfillment. 

Our predictions for the upcoming year include:

• Companies will continue to invest in AI and robotics to increase customer engagement as well as address both labor shortages and increased labor costs. For example, these technologies will help fast food chains leverage automation to make kitchen operations more efficient and cost-effective.
• Restaurants, food & beverage brands, and grocery retailers will shift more of their focus toward managing costly food waste and meeting their climate goals. Expect these players to turn to tech such as food monitoring hardware, surplus food marketplaces, and more.
• To build more resilient food supply chains, farmers will likely continue to deploy easy-to-install precision agriculture tech, like farm management software, which improves farm efficiency at a relatively low capital cost.

To kick off 2023, we brought together our top food & beverage research in the curated list below.

GROCERY RETAIL TECH

• The Future of the Supermarket: How technology is making grocery shopping more personalized, efficient, and sustainable
• [Client Research] 157 companies helping grocery leaders adapt to the omnichannel shopper journey
• [Client Research] How grocery retailers should prioritize these 11 technologies supporting omnichannel enablement
• [Client Research] What are Walmart, Kroger, and Albertsons doing in microfulfillment?
• [Client Research] Analyzing Ocado’s growth strategy: How the grocery tech giant is shaping the future of the supermarket
• [Client Research] What this $37B grocery giant is doing to optimize its inventory management
• [Client Research] Tech Market Map Report: Supply Chain Optimization in Grocery
• [Client Research] MVP Technology Framework: Supply Chain Optimization for Grocery Retailers
• [Client Research] Analyzing Carrefour’s growth strategy: How the retailer is digitizing its operations to improve profitability

RESTAURANT TECH

• Unbundling McDonald’s: How the traditional fast food industry is being disrupted
• The Future of Fast Food: How robot chefs, virtual ordering, and autonomous delivery will feed us in 2030
• How restaurants can increase profitability and reduce food waste using robotic food preparation
• How restaurants can reduce the cost of R&D using AI tongues and social listening
• How restaurants can increase check size using conversational AI and AI-powered recommendation engines
• How restaurants can capture high-value customers using NFT loyalty programs
• How restaurant chains can use the metaverse to create a new digital channel for orders
• How restaurants can reduce reliance on gig workers using autonomous delivery
• [Client Research] 160 companies helping food service leaders to automate and digitize their restaurants
• [Client Research] Prioritizing the 12 technologies automating and digitizing the restaurant and food service industry

SUSTAINABILITY & FOOD WASTE MANAGEMENT

• [Client Research] 88 companies reducing food waste across the supply chain
• [Client Research] Analyzing Nestlé’s growth strategy: How the company is prioritizing health & sustainability across its portfolio
• [Client Research] Analyzing Danone’s growth strategy: How the CPG giant is creating a more sustainable food supply chain
• [Client Research] Analyzing PepsiCo’s growth strategy: How the CPG giant is improving supply chain sustainability and reducing emissions

FOOD & MEAL DELIVERY

• [Client Research] Analyzing DoorDash’s operational strategy: How the delivery leader is investing in local commerce
• [Client Research] 60+ early-stage companies reshaping food & meal delivery
• [Client Research] 40+ early-stage companies transforming food & beverage product development and distribution

AGTECH

• [Client Research] The Future of the Farm: How technology is making farms more connected, efficient, and sustainable
• [Client Research] 107 companies developing precision agriculture tech to enhance farm operations and environmental impact
• [Client Research] Prioritizing 12 precision agriculture technologies streamlining farm operations
• [Client Research] Analyzing John Deere’s growth strategy: How the American manufacturing giant is betting on agtech

The post Our top food & beverage research and trends to watch appeared first on CB Insights Research.

For example, those focused on reducing the cost of the last mile can discover relevant tech solutions in our last-mile market map, understand where delivery leaders like DoorDash are making strategic bets, and get an idea of what last-mile delivery might look like in 2030.

Our predictions for the upcoming year include:

• As retailers continue to invest in their own supply chain operations, we expect to see them increasingly experiment with new retail formats that position brick-and-mortar locations for distribution and fulfillment. Retailers that are early movers in supply chain investments could tap into B2B services as an additional revenue stream. 
• CPG brands will invest more heavily to scale their sustainability efforts — such as those related to production and waste management  — to meet previously set benchmarks, regulatory frameworks, and consumer demands. 
• With supply chain security top of mind, big tech companies will leverage their expansive data lakes to provide B2B offerings that make the supply chain more connected, efficient, and traceable.

To kick off 2023, we brought together our top supply chain & logistics research in the curated list below.

RETAIL

• [Client Research] Tech Market Map Report — Supply Chain Optimization In Retail
• Unbundling SHEIN: How fast fashion is being disrupted
• [Client Research] How American Eagle and Gap are entering the third-party logistics space
• [Client Research] Analyzing Walmart’s growth strategy: How the retail giant is building e-commerce and boosting profits
• [Client Research] Unbundling Sephora: How the beauty retail experience is being disrupted
• [Client Research] Analyzing Alibaba’s growth strategy: How the tech giant is reimagining retail to drive its global ambitions
• [Client Research] Market Trend Report: Delivery Management Software for Retailers

FOOD & GROCERY

• [Client Research] Tech Market Map Report: Supply Chain Optimization in Grocery
• [Client Research] MVP Technology Framework: Supply Chain Optimization for Grocery Retailers
• The Future of the Supermarket: How technology is making grocery shopping more personalized, efficient, and sustainable
• [Client Research] 40+ early-stage companies transforming food & beverage product development and distribution
• [Client Research] Analyzing Carrefour’s growth strategy: How the retailer is digitizing its operations to improve profitability
• [Client Research] What this $37B grocery giant is doing to optimize its inventory management
• [Client Research] Analyzing Ocado’s growth strategy: How the grocery tech giant is shaping the future of the supermarket
• [Client Research] What are Walmart, Kroger, and Albertsons doing in microfulfillment?
• The Future of Fast Food: How robot chefs, virtual ordering, and autonomous delivery will feed us in 2030

SUSTAINABILITY

• [Client Research] Analyzing PepsiCo’s growth strategy: How the CPG giant is improving supply chain sustainability and reducing emissions
• [Client Research] Tech Market Map Report: Sustainability in the Supply Chain for Retailers
• [Client Research] 13 technologies making the supply chain more sustainable — and the ones that retailers should prioritize now
• [Client Research] 107 companies helping advanced manufacturers make their operations more sustainable
• [Client Research] 88 companies reducing food waste across the supply chain
• [Client Research] Analyzing Nestlé’s growth strategy: How the company is prioritizing health & sustainability across its portfolio
• [Client Research] Analyzing Danone’s Growth Strategy: How the CPG giant is creating a more sustainable food supply chain
• [Client Research] Analyzing Unilever’s growth strategy: How the CPG giant is doubling down on sustainability and digital transformation

LAST-MILE FULFILLMENT 

• The Future of Last-Mile Delivery: How technology is tackling the complexity and cost of fulfillment
• [Client Research] 60+ early-stage companies reshaping food & meal delivery
• [Client Research] 218 companies helping retail leaders make last-mile operations faster, cheaper, and more efficient
• [Client Research] Analyzing DoorDash’s operational strategy: How the delivery leader is investing in local commerce
• How restaurants can reduce reliance on gig workers using autonomous delivery

FLEET & FREIGHT MANAGEMENT

• [Client Research] Unbundling Maersk: How one of the world’s largest shipping companies is being disrupted
• [Client Research] The Future of the Fleet: How technology is making transporting freight more efficient and sustainable
• [Client Research] Tech Market Map Report: Fleet & Freight Optimization in Retail
• [Client Research] MVP Technology Framework: Fleet & Freight Optimization for Retail
• [Client Research] Analyzing Amazon’s growth strategy: How the tech giant is shaping the future of transportation and logistics
• [Client Research] Analyzing Ryder’s growth strategy: How the transportation giant is becoming a leader in supply chain & logistics tech 

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• Autonomous tractors capable of tilling, plowing, and fertilizing fields without a human operator in the tractor cabin  
• Connected farm platforms that will allow farm operators to remotely track and manage operations 
• Agricultural drones that can map, spray, and spread across fields and orchards autonomously
• Harvesting robots that have the ability to carefully pick and transport produce
• Automated weed control, which consists of robots that can identify and then remove or treat weeds in fields 
• Soil optimization tech that allows farm operators to understand their soil at a granular level, analyze how to optimize yields, and measure carbon storage in soil 
• Crop biologicals that deploy natural means to treat and protect crops 

Below, we dive into these technologies: how they work, who has an edge, and how they’re shaping the farms of the future.

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Grocery microfulfillment centers (MFCs) are small fulfillment centers, often located in warehouses or within grocery stores themselves. These centers help grocery retailers quickly fulfill online grocery orders.

Many microfulfillment options use robotics to automate the process of picking up orders and preparing them for delivery. Currently, MFCs are most efficient with consumer-packaged goods, which tend to be relatively uniformly shaped and durable, making them easier for robots to handle.

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In the future, conversational AI and AI-powered recommendation engines will make ordering food more human-friendly, accessible, and convenient. These technologies will be able to integrate with drive-thrus, smart speakers, apps, and even metaverse avatars, allowing customers to simply speak their order using a convenient channel while the restaurant makes hyper-relevant recommendations that can increase order value.

This is one of the key technologies that will shape the future of the fast food experience. Below, we dive into this technology: how it works, who has an edge, and how it’s changing the future of fast food.

WHAT are CONVERSATIONAL AI AND AI-POWERED RECOMMENDATION ENGINES?

Conversational AI allows customers to interact with software using their voice or text (via chatbots), with natural language processing (NLP) allowing for human-like communication. AI-powered recommendation engines use data to develop personalized recommendations for customers. 

By pairing these technologies, restaurants can create virtual ordering assistants that can take orders, upsell, integrate loyalty, and answer questions from guests, allowing restaurants to prioritize staff for other tasks like food prep or order fulfillment.

FIRST MOVERS

In a rare move for the fast food giant, McDonald’s acquired AI-powered recommendation engine Dynamic Yield in 2019. While McDonald’s ended up selling the company to Mastercard 2 years later so Dynamic Yield could scale to other industries, McDonald’s still has a partnership that integrates Dynamic Yield’s software into its drive-thrus and app. Through this collaboration, McDonald’s can dynamically change menu boards to make smarter suggestions to customers based on time of day, weather, restaurant traffic, and trending items. 

Meanwhile, the applications of conversational AI for restaurants are not limited to just drive-thrus — the tech could also be used for customer-facing interfaces like phone and SMS orders, voice assistants, and mobile apps. Domino’s has partnered with ConverseNow which provides conversational AI for phone orders. After an order is placed through ConverseNow’s software, which is integrated with the existing point-of-sale system, employees can immediately see the order and prepare it. ConverseNow also provides conversational AI for drive-thrus and has raised an $11M Series B round in Q3’22.

Recently, Panera announced a partnership with OpenCity to begin testing their conversational AI in select drive-thrus. 

Finally, one key instance of a quick-service restaurant combining these two technologies is Wendy’s partnership with Google Cloud. Through Google’s speech-to-text technology, Wendy’s can take drive-thru and phone orders and then in future instances use voice recognition to make personalized recommendations for the customer.

IMPLICATIONS 

• For restaurants with drive-thrus, conversational AI can help reduce labor costs and increase average order size. AI tools can also personalize order recommendations based on local preferences, weather, and item availability. Using this technology to cross-sell during order flows has been shown to increase sales by upwards of 10%.
• To best facilitate consumer adoption, these solutions should initially be positioned in scenarios where guests aren’t expecting to interact face-to-face with employees, like at the drive-thru speaker. Conversational AI solutions can also be integrated into smartphone apps, which can improve accessibility for disabled users. 
• Restaurants should keep in mind that potential challenges to conversational AI can come from unexpected requests or substitutions made by customers, meaning that some sort of human staff will need to be available in these situations. Additionally, programs will need to be updated with any menu changes or limited edition items. 
• The back-end data collected by conversational AI and AI-powered recommendation engines adds another layer of value that would be more difficult to synthesize with human employees. Integrating AI solutions throughout the order flow can help restaurants A/B test different strategies to help increase check size.

Read more in this report about how tech will shape the future of fast food, including:

• The metaverse, which will become an extension of the brand experience
• AI tongues and social listening to help brands quickly develop and test new menu items to meet changing consumer demands
• Robotic food preparation will automate cooking to increase profitability and reduce food waste
• Autonomous delivery will help reduce reliance on gig workers
• NFT loyalty programs will create unique experiences and boost customer loyalty

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In the future, brands will reward their most loyal customers with NFT-based collectibles and experiences to attract younger customers. They will also collect insightful first-party data through resales and trades of NFTs.

This is one of the key technologies that will shape the future of the fast food experience. Below, we dive into this technology: how it works, who has an edge, and how it’s changing the future of fast food.

WHAT ARE NFT LOYALTY PROGRAMS?

Non-fungible tokens, or NFTs, are a blockchain-based way to prove ownership of digital assets — which can range from images to songs to videos to clothes for avatars. NFT loyalty programs can be integrated into an existing digital loyalty program and can allow new ways for brands to interact with customers. 

NFTs that provide customers with more use beyond the digital asset itself, such as access to exclusive events or physical products, are called utility NFTs. Utility NFTs help brands build communities with consumers post-purchase and better connect virtual and IRL experiences.

FIRST MOVERS

In Q3’22, Starbucks announced that it will be rolling out an NFT loyalty program called Starbucks Odyssey. The coffee giant, which generates over half its sales from rewards members, wants to use the program to build deeper emotional connections with customers by creating an immersive brand experience that rewards participants with NFTs. 

While Starbucks is one of the first quick-service restaurants to embed NFTs into their loyalty program, other national chains have experimented with the medium. In early 2021, Taco Bell sold 5 NFTs to raise money for its charity The Taco Bell Foundation. Similarly, Domino’s used the attention garnered from its NFT sales to sell merchandise for its nonprofit — Domino’s Partners Foundation.

Source: Rarible

IMPLICATIONS 

• As customers’ smartphones become increasingly crowded with apps dedicated to loyalty programs and a barrage of notifications, NFT loyalty programs give brands the opportunity to provide a differentiated value proposition by offering unique rewards and experiences, virtual or otherwise.
• Restaurants with customers that already value the brand’s digital assets (like Starbucks) will likely find more success with NFTs. Restaurants without this established digital presence need to consider how they can connect an NFT to substantive rewards, like award points or exclusive access, to make them meaningful for consumers.
• Restaurants can take advantage of the exclusivity and status that early adopters associate with NFTs. Because NFT owners derive value from the NFT’s scarcity, customers are more likely to display and share the branded token on a public platform like a social media account.
• Through NFTs, brands can also appeal to a younger demographic that is more likely to actively seek out and engage with these types of rewards. However, the size of the addressable audience could present a challenge as adoption among consumers remains low.

Read more in this report about how tech will shape the future of fast food, including:

• The metaverse, which will become an extension of the brand experience
• AI tongues and social listening to help brands quickly develop and test new menu items to meet changing consumer demands
• Conversational AI and AI recommendation engines will power online and in-store orders, allowing restaurants to upsell orders through personalized suggestions and prioritize labor for other customer service operations 
• Robotic food preparation will automate cooking to increase profitability and reduce food waste
• Autonomous delivery will help reduce reliance on gig workers

The post How restaurants can capture high-value customers using NFT loyalty programs appeared first on CB Insights Research.

In 2030, the metaverse will be a new digital channel for restaurants to offer engaging, interactive experiences that boost brand awareness and customer experience. In the metaverse, customers can step into a virtual restaurant to browse menus, meet friends, and even order real food that will then be delivered to their door. 

This is one of the key technologies that will shape the future of the fast food experience. Below, we dive into this technology: how it works, who has an edge, and how it’s changing the future of fast food.

WHAT IS THE METAVERSE?

The metaverse is the concept of shared worlds driven by virtual products and digital experiences that are highly immersive and interactive.

Clients can learn more about the companies building the metaverse in our metaverse Market Map.

In the context of the future of fast food, restaurants will be able to build virtual experiences, offer exclusive menu items or digital merchandise, and host virtual events for customers.

FIRST MOVERS

Chipotle was one of the first quick-service restaurant brands to create a virtual experience in the metaverse. In 2021, the fast-casual Mexican chain partnered with Roblox to digitize the brand’s famous Halloween promotion. Players could dress their avatars in Chipotle Halloween costumes, play mini-games, and receive codes for free burritos to redeem in person. 

During the campaign, the virtual restaurant was visited over 8M times and set a company record for digital sales in a single day. In 2022, the fast-casual giant even launched a new menu item on Roblox through an interactive game. 

McDonald’s also made an entrance into the metaverse with a Chinese Lunar New Year event. Partnering with AltspaceVR and Spatial, the brand designed a hall of Chinese zodiacs that players could explore through VR. The food giant has also filed trademark applications that suggest a virtual restaurant may be opening soon that sells both virtual and actual goods with home delivery.

Source: Wendy’s

Wendy’s is another fast food chain experimenting with the metaverse. Wendyverse opened in Horizon Worlds (Meta’s virtual reality world using the Oculus VR platform) in April 2022. Through this partnership with Meta, players were given a set of tasks to complete that would give them a promo code to redeem at a real Wendy’s restaurant.

IMPLICATIONS 

• The metaverse gives restaurant chains space to experiment with marketing and menus. Fast food chains investing in the metaverse can use the virtual space to try out new strategies that build brand awareness among new and existing audiences. This can include collaborations, virtual events, or even just experimenting with tweaks to existing considerations, like restaurant layout and menu items.
• The metaverse is still in its early stages. Restaurant brands and operators should pay attention to the successes and failures of other consumer industries — like fashion and grocery — that are further ahead in their metaverse efforts, to better understand what strategies work best with consumers.
• The metaverse will be an additional channel for facilitating delivery orders and can help drive consumers to stores, growing both revenue and customer loyalty for restaurant brands.

Read more in this report about how tech will shape the future of fast food, including:

• AI tongues and social listening to help brands quickly develop and test new menu items to meet changing consumer demands
• Conversational AI and AI recommendation engines will power online and in-store orders, allowing restaurants to upsell orders through personalized suggestions and prioritize labor for other customer service operations 
• Robotic food preparation will automate cooking to increase profitability and reduce food waste
• Autonomous delivery will help reduce reliance on gig workers
• NFT loyalty programs will create unique experiences and boost customer loyalty

The post How restaurant chains can use the metaverse to create a new digital channel for orders appeared first on CB Insights Research.