Today’s Pickup: food is the next big thing to disrupt Amazon

  (Photo: Shutterstock)

(Photo: Shutterstock)

Good day,

The next big thing is food. Not just food, but hot food, and not just hot food, but hot--delivered--food. If a repeatable and reproducible ecosystem can be implemented for delivering fresh food and hot, cooked meals on-demand to customers at a low enough price point, consumers will change their shopping behavior, according to Forbes’ contributor, and author of Killing Amazon, Brittain Ladd.

Walmart, Kroger and Schwan's are the three companies best positioned to introduce direct-to-customer, on-demand hot meal deliveries. Also Cracker Barrel, Chick-fil-A, Applebee's and other restaurant chains could choose to enter the market, according to Ladd's research.

Walmart, by leveraging its supercenters and neighborhood grocery stores, can prepare meals for customers. Walmart can open food preparation kitchens in strategic locations around the U.S. and leverage its transportation knowledge to lease a fleet of mobile meal trucks. Or it can create a program whereby Walmart associates own and operate on-demand meal and grocery delivery trucks on behalf of the company.

Kroger especially has a tremendous opportunity to accelerate entry into this market. Kroger's recent acquisition of Home Chef provides Kroger with the ability to not only offer meal kits in its stores and online, but also explore options for cooking the meals sold by Home Chef and delivering the meals to customers.

Did you know?

With 80% of Mexico’s exports currently coming to the U.S., and with so many companies having their own Mexican entities for building or supplying components, the overall supply chain between the two countries has become highly integrated, making cross-border trade a significant part of the logistics market for both countries.

Quotable:

“If Starbucks cannot guarantee fast delivery and coffee quality during the process, its adoption of delivery would backfire on the brand.”

—Summer Chen, an analyst at research firm Mintel, discussing Starbucks new strategy in China against growing competition

In other news:

US foods to buy five food businesses for $1.8 Billion

SGA’s Food Group to sell the businesses for $1.8 billion in cash, boosting US Foods’ presence in the Northwest. (WSJ)

7 questions every shipper should ask about cross-border trade

How shippers can effectively leverage the powerful U.S.-Mexico trading environment with a solid logistics and transportation plan. (SupplyChain247)

Oil drives Canada's fastest economic growth spurt in a year

Canada’s economy grew at the fastest pace in a year with gains led by crude oil, further evidence of a solid expansion even as trade tensions with the U.S. remain a threat. (Bloomberg)

Brexit plans raise fears of food shortages and jammed ports

For a British public that has often tuned out from the mind-numbing complexities of Britain’s withdrawal from the European Union, recent government statements, amplified by raucous newspaper headlines, have finally become comprehensible — and alarming. (New York Times)

Honda resists U.S. tariff hit for now, first-quarter profit at 12-year high

Honda Motors said the impact of U.S. steel and aluminum import tariffs on its bottom line had so far been limited, as it posted a surprise jump in quarterly profits to their highest in more than a decade on improving North American sales. (Reuters)

Final Thoughts:

Lagging indicators like GDP growth, 4.1% for the second quarter, and business media are still painting a picture of a white-hot, overheated freight economy, even though turndown data is telling us that supply and demand have reached an equilibrium during the summer doldrums. 

It’s volatile moments like the one we’re currently experiencing where sophisticated freight brokers can widen their margins even further. If spot rates fall off faster than shippers anticipate, brokers can still command high prices for loads and pay out less to the carriers. The trick for the brokers is convincing carriers to move freight at lower rates.

“It’s been really slow. We’re doing well with spot freight but we haven’t bounced back fully making margins on our primary freight. But because it’s so slow, there’s not a lot of spot freight,” a broker at Coyote Logistics wrote to FreightWaves.

Hammer down everyone!

Stay up-to-date with the latest commentary and insights on FreightTech and the impact to the markets by subscribing.