House Lannister – Lagavulin 9 Year Old | Source: Diageo
Game of Thrones House Lannister – Lagavulin 9 Year Old; SRP: $64.99 for 750ml; ABV 46%
The distillery of Lagavulin officially dates from 1816, when John Johnston and Archibald Campbell constructed two distilleries on the site. One of them became Lagavulin, taking over the other—which one is not exactly known. Records show illicit distillation in at least ten illegal distilleries on the site as far back as 1742 [Wikipedia]
Meanwhile, Pepsi Co has made a series of investments and acquisitions. The most recent move is to buy SodaStream for $3.2 billion.
Source: sodastream.com
I feel like consumers’ tastes in China need to catch-up…. at least a certain percentage of people should look for heathy brands. There is no well-recognized Chinese brand in this category (at least to me).
Following California’s ban in November 2016, New York State will begin a similar ban of single use plastic bags in March 2020, according to its FY2020 budget agreement.
According to the New York State Department of Environmental Conservation, an estimated 23 billion plastic bags are used by residents across the state annually. New York City alone uses more than 10 billion single-use plastic bags a year. [National Geographic]
If 5 billion recycled paper bags are used in the new program with a 5-cent fee, New York City will generate an additional $250 million. [40 percent will be supporting local programs to buy reusable bags for low and fixed income consumers, and 60 percent will be supporting programs in the State’s Environmental Protection Fund]
When e-commerce breaks the limits of physical location and moves everything online, some will say restaurant businesses are safe, since people need to dine locally.
But that’s not entirely true. If there are companies eager to learn consumers’ purchasing behavior (via all the data generated from browsers), they won’t let go the valuable data on people’s dining behavior. And of course, wherever there is an opportunity for recommendations, there is an opportunity for ads.
So first step: collecting data.
There are several formats.
Purchasing through brands’ apps. That’s what we have seen in the past few years: nearly all major restaurant/coffee groups built their own system that at least integrate customer management, online order and promotion. Starbucks, McDonald’s, Subway, Shake Shack, etc.
Ordering on iPad when dining-in. That makes taking orders less labor-intensive. It can also let diners order ahead and improve the overall efficiency/utilization including kitchen process optimization.
Take-out & food delivery. This is where most money is in right now. DoorDash, Postmates, UberEats… [See more in a previous post (Chinese)] It is a more comprehensive study at user’s preferences, integrating most dining choices.
Booking tables. This is a cheaper/lighter operating model than format 3 while also getting a big picture of users’ preferences. Sometimes it is combined with format 3 like Yelp’s offering.
Restaurant table management. This is usually a back-end system for employees to use, but could be combined with format 2/4 to create a streamline management experience.
Just a few days ago, the dining data issue escalated as companies are fighting for its “ownership” or “commercial/economic potentials”.
OpenTable is a restaurant reservation service that allows patrons to book tables from the Web. Restaurants pay OpenTable $1.50 for every seated diner who reserves a table through its service. OpenTable also operates a guest-services platform to help restaurants run more smoothly.
SevenRooms charges restaurants $500 per month for its offering, takes the guest information from OpenTable and assists restaurants with table management. Under the new policy, some restaurateurs had featured, that practice would be banned.
Essentially, OpenTable will now require a fee if the restaurants are giving other companies access to diners’ data. OpenTable will now charge restaurant operators $250 if they use both systems.
Both companies are resourceful; OpenTable is more established and mature. OpenTable is acquired by Priceline (Booking Holdings) in 2014 for $2.6 billion and behind SevenRooms is Amazon (Alexa Fund invested in October 2018).
While I believe in the improved management efficiency and dining experiences, I am also concerned with personalization. It is possible that personalized menu will include personalized bundle of foods and different mark-ups. And dining information could be more personal than most people understand. It includes timing, location, frequency, spending… Think about a database of how much drinks you ordered with different group of friends.. When combined with other datasets, powerful predictions and precise understandings of the diners could be built. [A similar comment on this: users being programmed on social medias]
Again, the privacy issue and the access/user/process of data should be paid more attention to before bad things could happen…
It seems to some that the Pokemon GO fever was in 2016-ish and has lost the momentum.
It seems to me though, the game has never been dead and might be the first AR mobile game platform with a massive user base [and to introduce a new way of social interaction/entertainment]
2. Gym system reworked to encourage team play (June 2017) + raid boss introduced at gym (July 2017). Gyms are where trainers use Pokémon’s to defend/attack and essentially defending a gym will need more legitimate teamwork. (Less of a broken gym system before) The raid system is a smart design. Legendary Pokémon raids reengaged many players. The most recent Rayquaza raid is high expected (should give Pokémon Go some good statistics to show growth/relevance).
3. Battle system. Although introduced before, it was improved recently. All skill sets now have two numbers: damage in gyms and damage in battle. It will be much more raiser to design a balanced battle system now. And that will be the basis of Pokémon tournament/E-sport.
4. AR photos. The system is working well and has a lot more features to add. I could imagine many fun photos can be taken with Pokémon’s in real world settings. Also, taking a selfie with legendary Pokémon’s will give a sense of achievement and more purpose of playing. Moreover, it could be fun with multiple players/pokemons at the same place and more natural interactions implemented.
Strong IP is such a valuable asset.
Pokemon GO park (like a Disneyland, smaller) would be very doable. It might be the first AR park to be built. More fun in the park with AR glasses and phones.
Some more social community events could be designed. It has already incorporated events that celebrate holidays around the world. Pokémon GO could be a lifestyle. (A healthy one in terms of all the walking)
E-sport is a very hot growing industry with the future format of living embedded in. It is the intersection between gaming, technology, social, media and entertainment.
There are some related concepts, e.g. streaming gaming, and they share some similar fundamental building blocks.
Future of gaming will be mostly based on cloud. Just like Office Suite and Adobe Suite is moving to the subscription model, the computer gaming industry is making that transition as well and this might be the next growth opportunity for Microsoft (with its cloud computing services, Hololens and Xbox, etc.) and other companies. In fact, most of the mobile games today have already relied on continuous connections, instead of a publisher model like movie/music (buy, download and play).
As certain games (now and in the future) would be considered as “sports”, they inherently include related business opportunities – worldwide competitions, leagues, sale of tickets, game watching and ads, etc. It is very similar to today’s sports and is able to provide a more authentic experience as games are born to be digital (unlike traditional sports that are recorded and digitalized for TV/videos). The concerns here include: 1. the watchableness of players playing games is hard to improve. Players are just sitting in front of the PC or even holding phones. (It is the characters they are playing are watchable) 2. Compared to traditional sports, games usually need a certain level of understanding to enjoy, while sports are commonly understandable and may have some natural beauty to watch.
From the technology perspective, the increasing power of cloud is definitely the driver here. Additionally, the coming 5G (low latency, faster transmission of larger data) and AR/VR (actually bringing sports alive; and to solve the watchableness issue maybe) will revolutionize our view on gaming and e-sports. That will even redefine what is “living” and “socializing” in the future (say 25-50 years).
The concept of “playing video games with friends” will be barely used. The line may be so blur that the following concepts are true “life is a real game” and “living on the net”.
And then virtual goods will be huge market. It’s not only buying on the internet (which is e-commerce) but also using on the internet. The virtue clothing on a virtual character we control would have value. Many people are buying or will buy virtual luxury goods. It doesn’t matter if a product’s actually cost is $100 or $0 – they can be sold at $3000. Clothings have already gone far beyond keeping us warm anyway.
E-sports is part of the test field or connection between our current world and the future living.
* BV (Buena Vista) was the brand name which was historically often used for divisions and subsidiaries of The Walt Disney Company, whose primary studios, the Walt Disney Studios, are located on Buena Vista Street in Burbank, California
Top 3 are all from Disney, as are #9 & #10, making Disney occupy half of the Top 10 seats of best-selling movies in US.
And according to ComScore, 2018’s movie business hit all-time benchmarks of $11.9 billion in North America and $41.7 billion globally, with Disney taking in nearly a fifth of that figure. (Variety)
Among Disney’s domestic box office of $3.09 billion, its top 3 got ~$1.99 billion (64.32%), top 5 got ~$2.42 billion (78.25%).
Besides, Disney’s movies in Top 10 all have rating of 7.0 or above, averaging at ~7.56 on IMDb (beating the Top 10 average of 7.35)
2018 US Top 3 Movies | Source: IMDb
Overall…
Total US movie sales is barely growing. The figures below are not inflation-adjusted.
But the number of movie productions is increasing, partially due to a lack of funding after financial crisis (bottomed in 2009 with 521 movies that year).
Yearly US Box Office 2008-2018 | Source: boxofficemojo.com
As streaming is disrupting the market, increasing the number of production seemed to be a way to make up for the total revenue?
Then expenses are up and industry margin is low. It is a sure thing that movies are hard to survive alone.
Then no wonder the consolidation kicked in.
Disney bought Marvel for $4 billion in late 2009, bought Lucasfilm for $4 billion in late 2012. Before the financial crisis, Disney also got Pixar in a $7.4 billion in stock.
With the completion of $71 billion acquisition of Fox, Disney will add X-Men and Avatar to its list of movie series.
Warner Bros. will be under a new umbrella – AT&T’s, together with HBO and Turner.
From Vegetarians to non-animal meat-like food, we are entering an age of synthetic foods going mainstream.
Beyond Meat – story and IPO
Beyond Meat (BYNd), a start-up who made the first 100% plant-based burger, filed IPO with SEC recently and will become the first of its kind to trade on Nasdaq.
The founder grew up in Maryland with a family farm business. The company was founded in 2009, with initial operation, and manufacturing in Maryland. The foundational technology was licensed from two researchers in nearby universities. And initially, the company built its presence with Whole Foods Market in mid-Atlantic.
Beyond Meat was funded by venture capitals, including Kleiner Perkins (16.1% pre-IPO stake), Obvious Ventures, among others, totaling $140+ million before IPO. The latest round valued the company at $550 million last year.
The IPO filing indicates a $100 million raise. Currently, the most important product is the Beyond Burger, selling through various grocery chains and other channels, representing 71% of 2017 sales.
Beyond Beyond Meat
Within this space, the most famous startup might be Impossible Foods, sold in many restaurants including The Counter. It raised $114 million this year from investors including Temasek.
Other initiatives include the new plant-protein-based drink by Starbucks, although not a popular offering.
I think for sure in the future food market, the overall percentage of plant-based food will increase and animal-killing will be decreased by a lot. Whether eventually most of the food will be entirely synthesized remains a question for now.
At least in 30-50 years, I think the benefits of non-plant-based food are non-obvious. But the non-animal trend will be more influential and be part of everyone’s life, not just for vegetarians.
Starbucks posted a stellar earnings result today, with net revenue at record level of $6.3bn, beating expectations in many aspects.
Starbucks up after hours with earnings beats | Source: CNBC
While a single beat doesn’t indicate a new stage of growth, in the long run there are three issues I think matter the most and should be watched closely.
1 | Problem: Frappuccino’s decline
It was an problem Starbucks facing over the years. People are leaning towards healthier products (at least a very obvious trend in Cali), which usually means less sugar and less calories. That’s a problem for Starbucks’ Frappuccino, as explicitly mentioned in CEO’s presentation in June.
How did/will Starbucks address this? Product Mix & Innovation
Strategy a) Big push for healthier product lines – Nitro Cold Brew & Refresher series etc.
Starbucks Nitro Cold Brew | Source: Starbucks
– Nitro Cold Brew “is expected to be available in nearly 1,500 stores in 26 markets by the end of 2017″ (SBUX Jul. 2017 Press Release) -> “[Starbucks is] accelerating this platform to more than 2,800 stores by the close of fiscal year 2018, up to more than 6,000 stores by year-end fiscal year 2019″ (SBUX Q3 Earnings Call Transcript). A 4x availability expansion for cold brew in 3 years.
– Several new products in the Refresher category were introduced, e.g. “Dragonfruit” introduced Jun. 2018, “Pink Drink” introduced last year, etc.
Dragon Fruit | Source: StarbucksPink Drink | Source: Starbucks
Strategy b) Instagramable & limited edition within the Frappuccino category
– Unicorn Frappuccino (Apr. 19-23, 2017), Zombie Frappuccino (Oct. 26-31, 2017), Christmas Tree Frappuccino (Dec. 7 – 11, 2017), Crystal Ball Frappuccino (Mar. 22-26, 2018), Witch’s Brew Frappuccino (starting Oct. 25 for a limited time while supplies last)… among many others.
– Plus, Starbucks’ new Frappucino recipe has fewer calories and less sugar, part of its efforts to reduce sugar by 25% by 2020.
Starbucks Rewards could serve a similar role as Amazon Prime. In past last 3 month, loyalty program accounts for 14% of all transactions and US loyalty members contributed 40% of US sales. That’s what happened in the Amazon case, where its Prime members out-spend non-members significantly.
Digital relationship makes it easier to incentivize purchases, market new products/initiatives, bring in more collaborations (e.g. Spotify, Pokémon GO), expand membership offerings and more.
Starbuck’s push for afternoon consumptions is also facilitated by the digitalized promotions.
The room to grow digital relationships is still large – currently 15.3 million global active members, only representing ~22% of its 70 million global customers base. “Additionally, drive-thru, out-the-window and Mobile Order and Pay combined grew to more than 50% of the way customers are ordering, up more than 10 percentage points in just two years” according to COO.
3 | Opportunity – China Growth
It’s more debatable on Starbucks’ China future. Just want to highlight a few sure things.
Starbucks took full ownership in China East & opened flagship Roastery in Shanghai in 2017 – definitely the right moves here.
China’s coffee consumption will explode, even considering major cities alone. Younger generations will consume more coffee and they will represent an increasing proportion of the overall urban population.
China coffee consumption potential | Source: Starbucks 6/19 Presentation
Coffee even has a role to play in China’s GDP growth by boosting workers’ average productivity and the “culture” of working overtime.
Herding effect is stronger in China and “Instagramable & Limited” strategy may provide better outcomes if properly implemented.
Other things worth noticing – Starbucks’ food, packaged goods with Nestlé, next-generation store design, coffee supplies, SKU outside the Starbucks’ core products, etc…
Social network platforms such as Twitter and Weibo, are where we post our words/expressions, and is taking an essential role in todays’ Modern Communication.
Interestingly, but not surprisingly, they are also providing a feedback loop to change our ways of communication (and our thinking – but that’s another different story). After all, we are one of those animals with natural herding inclinations.
Taking a very simple example – as Twitter was becoming more popular, people started to lean heavily towards the use of new abbreviations, partially due to its 140-word limit. (Similarly, when Blackberries were popular, certain abbreviations were created, used and spread among professionals in texts & emails)
In 2017, Twitter officially made its “140-word limit” a history [Weibo ended the limit in 2016] and doubled the character limit to 280. One resulting impact is that people are spelling out abbreviations and acronyms more often, according to Twitter’s report.
Source: TwitterData
TwitterData also touted that “people are saying ‘please’ (+54%) and ‘thank you’ (+22%) more.” in the first year of doubling limit.
[Something worth noting on the data – 1) need to consider the difference in total number of tweets 2) need to consider other ways of saying ‘please’ and ‘thank you’…]
It is really nice that people could be more friendly and polite (not excessively tho). It would be even nicer if people could inherit their concise and efficient use of language in the 140-word era & all the other positive impacts Modern Communication made on us.
