Price: ¥198 / a set of ten
Price: ¥9 / 1 pc; ¥16 / 2 pc; ¥38 / a set of 5
Price: ¥88 / a set of 6, the second set half-priced
The localization efforts for brands that don’t have Zongzi..
While Starbucks is probably the No.1 coffee brand in China, its position has constantly been challenged. Luckin Coffee, (briefly covered in a previous post) is cutting into the mass market with lower pricing.
Many people are eyeing on China’s growing coffee market, which will be huge and many are betting on the growth in average coffee consumption.
On the global capital market, Starbucks’ China push and Blue Bottle’s exciting/interesting movements (Jun 2015 $70 million series C; Sep 2017 acquired by Nestle, $425 million for ~68%) may as well push Chinese counter-parties to think about aggressive expansion or building boutique brands.
Listed here are 3 shops I visited recently. Will add more during the summer.
Costa is in direct competition with Starbucks, pricing its coffee at exactly the same level – grande latte @ ¥32.
Started in 2014 in Kyoto, Japan, % arabica is a young brand. It opened the first store in China in Shanghai in Feb 2018 in a trendy (网红) way. It already has opened 4 store in Shanghai alone, including a roastery at the Bund (7 in mainland China and 4 in Hong Kong as of May 2019).
% arabica is a premium brand with latte price starting @ ¥35 (but in short size), @ ¥45 for a tall size (or a little bigger than tall.. cant’ tell exactly), @ ¥40 for tall ice latte.
A trendy (网红) brand, 鹰集 is a little pricer than Starbucks, with its flagship store opened in January 2017 at Xintiandi, Shanghai.
While its office website only lists 3 locations right now, its has 6 places listed on Meituan in Shanghai. Growing very fast.
Pricing is in line with (or a little lower than) boutique coffee shops. Americano @ ¥28 and latte @ ¥36 (¥38 for ice latte). There is only one size (tall); a fair amount of cups are served in reusable cups.
Back in October 2018, HBO and DIAGEO unveiled 9 GOT co-branded whiskies – the new White Walker by Johnnie Walker Blended Scotch Whisky and The Game of Thrones Single Malt Scotch Whisky Collection (8).
Let’s look into some of those whiskies…
White Walker by Johnnie Walker SRP: $36 for 750ml; ABV 41.7%
Game of Thrones House Stark – Dalwhinnie Winter’s Frost; SRP: $39.99 for 750ml; ABV 43%
Game of Thrones House Targaryen – Cardhu Gold Reserve; SRP: $39.99 for 750ml; ABV 40%
Game of Thrones House Lannister – Lagavulin 9 Year Old; SRP: $64.99 for 750ml; ABV 46%
La Croix may or may not be a one-time thing, but consumers’ tastes are shifting towards beverages that have less sugar and looks more healthy.
The overall market of carbonated & flavored bottled water is steadily growing.
Established companies are preparing for the shift, which started decades ago when obesity became a thing in the US.
Diet Coke was introduced almost 100 years after the original coke (1886 -> 1982). Coke Zero was introduced in 2005.
The pursuit for “healthy”, “organic” and “natural” has never stopped.
In 2008, The Coca-Cola Company purchased a 40% stake in Honest Tea at $43 million, and acquired the company in 2011.
Coca-cola also invested in ZICO Coconut water in 2009, and purchased a majority stake in ZICO Coconut water in 2012.
In 2017, Coke Zero has become Coke Zero Sugar with minor modifications (taste more like original coke).
Meanwhile, Pepsi Co has made a series of investments and acquisitions. The most recent move is to buy SodaStream for $3.2 billion.
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.
While California also imposed a minimum & mandatory 10 cents fee if a recycled paper bag is provided to the customers, New York State makes it an optional 5-cent charge.
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]
In China, nation-wide restrictions on certain plastic bags started in 2008 and a mandatory fee is imposed. More recently, with services including food deliveries growing increasingly popular, the use of single-use plastic bags becomes harder to regulate.
On province level, Jilin Province is the first in China to ban sing-use plastic bags overall in 2015. Shoppers can bring their own reusable grocery bags or they can use biodegradable bags. In Hainan, the province will begin by banning non-biodegradable plastic bags and eating utensils by the end of 2020 and ban the material completely before 2025.
EU member states will have until 2021 to implement a ban on plastic straws, cutlery, cups, drink stirrers, and sticks for balloons. [Quartz]
A worldwide map
On the other hand, more efforts are needed than an executive/legislative order. Less expansive and environmental-friendly alternatives are needed.
A recent study from Denmark’s ministry of environment and food (agreeing with other studies) has found that no all seemingly “good” bags are ultimately good enough. A conventional cotton bag might need to be used more than 7,000 times before making a smaller cumulative environmental impact (water use, energy use, etc.) than a classic plastic bag does.
There is no easy answer. Problems not solved by a few regulatory decisions.
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.
Just a few days ago, the dining data issue escalated as companies are fighting for its “ownership” or “commercial/economic potentials”.
At the spotlight: OpenTable (format 4) and SevenRooms (format 5), reported in WSJ: Who Controls Diners’ Data? OpenTable Moves to Assert Control.
Background:
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]
Actually the company behind the game, Niantic, just raised $245 million at a nearly $4 billion valuation in January.
So what is new for Pokémon GO if it is not dead.
Social features.
1. Pokémon GO introduces friends features that can send daily gifts to each other and trade pokemons. Making friends and leveling up the friendship level will earn lots of exp. In September 2018, Niantic said “more than 113 million Friend connections have been made and 2.2 billion Gifts have been sent to friends” since the end of June (in two month total)
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.
The leading games that are run like “sports” include LOL (League of Legends), Dota2, Overwatch, etc. The Dota2 international competition in 2018 (TI8) has $25.5 million prize pool. Another major company to “sportify” gaming it Amazon, with its Twitch platform, on which there are 140 million monthly active users. [Netflix has 139 million subscribers globally]
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.
Here is the list by gross sales in US, according to boxofficemojo.com
| Rank | Movie Title (click to view) | Studio | Total Gross / Theaters | Opening / Theaters | Open | Close | ||
| 1 | Black Panther | BV | $700,059,566 | 4,084 | $202,003,951 | 4,020 | 2/16 | 8/9 |
| 2 | Avengers: Infinity War | BV | $678,815,482 | 4,474 | $257,698,183 | 4,474 | 4/27 | 9/13 |
| 3 | Incredibles 2 | BV | $608,581,744 | 4,410 | $182,687,905 | 4,410 | 6/15 | 12/13 |
| 4 | Jurassic World: Fallen Kingdom | Uni. | $416,769,345 | 4,485 | $148,024,610 | 4,475 | 6/22 | 10/4 |
| 5 | Deadpool 2 | Fox | $318,491,426 | 4,349 | $125,507,153 | 4,349 | 5/18 | 10/18 |
| 6 | Aquaman | WB | $270,596,781 | 4,184 | $67,873,522 | 4,125 | 12/21 | – |
| 7 | Dr. Seuss’ The Grinch (2018) | Uni. | $269,848,350 | 4,141 | $67,572,855 | 4,141 | 11/9 | – |
| 8 | Mission: Impossible – Fallout | Par. | $220,159,104 | 4,395 | $61,236,534 | 4,386 | 7/27 | 10/18 |
| 9 | Ant-Man and the Wasp | BV | $216,648,740 | 4,206 | $75,812,205 | 4,206 | 7/6 | 11/1 |
| 10 | Solo: A Star Wars Story | BV | $213,767,512 | 4,381 | $84,420,489 | 4,381 | 5/25 | 9/20 |
* 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)
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).
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.
Universal has been under Comcast since 2011.
Paramount is under Viacom and has teamed up with Netflix.
Movie is not a studio business anymore.
From Vegetarians to non-animal meat-like food, we are entering an age of synthetic foods going mainstream.
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.
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.