Oct 20, 2020 (Financial News Media via COMTEX) -- FN Media Group Presents Oilprice.com Market Commentary
London - October 20, 2020 – There’s a new $4.2 trillion trend taking over wall street, and it’s very bad news for tech giants like Amazon. The world's e-commerce monolith isn't completely untouchable. It's lost market share before to at least two companies that specialize in things Amazon simply couldn't do better–or even bigger. Now, there's a third specialized e-commerce ecosystem that seems poised to do it again. Mentioned in today's commentary includes: Beyond Meat /zigman2/quotes/211617595/composite BYND +4.65% , Kellogg /zigman2/quotes/209631250/composite K -1.54% , Tyson Foods /zigman2/quotes/201117502/composite TSN +3.87% , Chewy Inc /zigman2/quotes/212690528/composite CHWY +1.52% , Amazon /zigman2/quotes/210331248/composite AMZN -0.15% .
The first two were diapers.com and Chewy Inc /zigman2/quotes/212690528/composite CHWY +1.52% . They both exploded on the scene, managing to steal half of Amazon's market share in those segments. Diapers.com became so successful that Amazon bought them out .
Chewy.com spectacularly rose out of a basement dotcom into a pet supplies beast that was sold by its creators for $3 billion to giant PetSmart and is now worth a stunning $26.4 billion. Chewy has cornered some 50% of the U.S. market, compared to Amazon's 45%. And it's growing faster, too. And the former 17-year-old co-founder of that basement dotcom that turned into Chewy is back ...
This time with something potentially much bigger than $26-billion dog food. This time, it's about a lifestyle megatrend that's got a dizzying number of revenue verticals. The megatrend is everything plant-based. The company is PlantX Life Inc (VEGA.CN). And this isn't a passing, vegan "hippie" fad.
It's a megatrend that's stealing market share from a global food services industry that could be worth as much as $4.2 trillion by 2024. It's trouncing the $950-billion global meat industry. And it's threatening to completely upend the players in the $26-billion food delivery sector.
Meat is being replaced, and there are billions of dollars of opportunity to be found in its alternatives. But only for the company that can create an entire plant-based ecosystem. In other words, only for a company that can become the Amazon of the megatrend. That's PlantX.
The Planet-Based Evolution
Mother Nature is back, and she's ready to mint millionaires. We've evolved, and so have our eating habits. And the pandemic has hastened that evolution far faster than the market could have imagined. Meat is now associated with poor health, shorter life-spans, and the spread of disease.
There's no going back now. Meat is now irrevocably associated with the potential for carrying disease, not to mention its growing association with a variety of health issues. The first five months of the pandemic led to widespread supply chain disruptions for food. In turn, farmers were forced to dump produce and milk and cull animals due to slaughterhouse slowdowns and closures as workers tested positive for COVID-19.
It's also an incredibly detrimental force to the environment. From the air we breathe to the nutrients we put in our body, meat is killing us. There's no going back now, even if it's still a long road to complete plant-based nourishment.
Meat is now irrevocably associated with the potential for carrying disease, not to mention its growing association with a variety of health issues. And plant-based is more than ever becoming not just something we eat, but a way of life.
Dizzying Verticals & Deal Flow
This isn't just a company–it's an entire community. It's an entire health lifestyle ecosystem.
PlantX Life Inc (VEGA.CN) has its own plant-based food products, house plants, cosmetics, decor, pet food, and even its own celebrity chef. You can shop online for just about everything you can imagine that is plant-based, shop in a smart store, order plant-based takeout or find the best places to dine vegan.
It's making plant-based meals for restaurants that have an urgent need to come up with more non-meat options for its pandemic-panicked clientele. And it's deliciously mainstream.
Plant X recently acquired one of the leading plant-based companies in the UK–Bloomboxclub.com. Bloombox is on a tear, with sales skyrocketing amid the pandemic and $20 million in sales to prove it. Bloombox handles the curation for PlantX, which deals only with the best-in-class. They don't hold inventory or maintain expensive warehouses. Ecommerce 2.0 is all about "curation", not waste.
In Canada, PlantX has teamed up with Vancouver-based UpMeals, which has a Grade A kitchen. UpMeals prepares the chef-designed meals from PlantX, making PlantX profitable right out of the gate. By early next year, we expect it to be happening in the United States, as well. But there's also a brick-and-mortar element. The PlantX flagship store, coming soon, isn't your typical brick-and-mortar establishment.
This store is cutting edge in every respect. There are no carts. No aisles packed with products. Instead, it's all scan QR codes, and payments by smartphone or tablet. That means that in a tiny retail space, PlantX ( VEGA.CN ) can sell thousands of products. And because it's an entire community ... it draws people into a digital plant-based space that gives them a sense of belonging at a time when that is urgently needed.
The deal flow has been extremely fast-moving. In early September, PlantX closed a $30-million deal with San Diego-based Liv Marketplace to build and operate PlantX's first brick-and-mortar retail location in California. That confirms a huge push into the United States, with a 4,515-square-foot store that will sell a line of over 5,000 plant-based products.
And a lineup of other deals ...
PlantX acquired UK-based Bloombox Club in late September, and it's now on target to hit $4 million in gross revenue.
That same month, PlantX cut a series of deals with specialty producers, grocers and even LA-based celebrity chef Gregg Drusinsky.
It launched its own glacial water brand in September.
On October 8th , PlantX jumped into the $38.4-billion North American pet food industry by launching yet another vertical with Kirtana Inc. products.
Plant-based home meal delivery services started delivering in April and have already hit 10,000 meals.
And it's just a healthy lifestyle and tons of verticals–we're looking at healthy margins, too.
PlantX says its plant sales have a 55% profit margin, followed by online food sales at 40% and delivery at 35%. This isn't a tech startup that's attracting investors on sheer growth runways without clear profit potential. This is the tech startup 2.0 generation of ESG-focused ecosystems with tons of verticals for making money.
Beyond Dog Food