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Dec. 23, 2020, 8:02 a.m. EST

Wall Street Is Banking Billions On The Food Delivery Boom

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Dec 23, 2020 (Financial News Media via COMTEX) -- FN Media Group Presents Oilprice.com Market Commentary

London - December 23, 2020 – With the pandemic shuttering thousands of businesses in 2020, the food industry rolled back the clock, turning to a trend made popular in the 1960s to save it. It may be the most revolutionary change in the food business in decades, creating an unprecedented boom in this projected $154 billion industry. And it led to one of the biggest IPOs of the year, with DoorDash coming to market in a $71.3 billion IPO. Mentioned in today's commentary includes: Uber Technologies, Inc. /zigman2/quotes/211348248/composite UBER -4.21% , Grubhub Inc. /zigman2/quotes/210404212/composite GRUB +0.75% , Domino’s Pizza, Inc. /zigman2/quotes/201587798/composite DPZ +0.99% , DoorDash, Inc. /zigman2/quotes/222973991/composite DASH -11.93% , Yum! Brands, Inc. /zigman2/quotes/209029767/composite YUM -0.18% .

Since strict limits have been placed on indoor dining, restaurants are seeing nearly a 50% drop in customers dining in this year. In 2020 alone, over 100,000 restaurants have been forced to shut their doors. But while it's hit many restaurants hard, others are surviving thanks to a booming trend...

One that's already taken off in recent years and is now catapulting to new heights. It's the trend that started nearly 60 years ago, when Dominos made the promise of delivering food to its customers' homes in "30 minutes or less." But now that's spread to thousands of restaurants, all fueled by companies making up a projected $154 billion industry by 2023.

That’s why CNN is saying, “The pandemic boosted food delivery companies.“

The New York Times is saying, “Food delivery apps are booming.“

And Marketwatch is saying, “The pandemic has more than doubled Americans’ use of food delivery apps.“

This meteoric rise in the food delivery industry helped DoorDash catch the attention of major investors everywhere earlier this month with their IPO. And it’s helped smaller companies like the Canadian ESG investment platform Facedrive (FD, FDVRF) become an up-and-comer in a booming industry.

Most folks know them as the eco-friendly ridesharing company, but they caught onto this food delivery trend early this year as they saw the pandemic lead to an unprecedented sales surge in the industry. That's why they've looked to grow their vertical in Facedrive Food quickly through major acquisitions and with key partners. And by acquiring hundreds of thousands of new customers quickly, they've seen their food delivery business grow an incredible 25% in just the last month.

This Mega-Trend is Saving the Restaurant Industry in 2020

The shift to move everything completely digital during the pandemic has helped save countless businesses. And it's changed the face of everything from the workplace and schools to how people spend their leisure time. That's why in recent years, a whopping 60 to 70% of Pizza Hut's business has come from delivery.

The trend has been building now for years, but the seismic shift that's happened in the restaurant industry over the last year is unprecedented.

DoorDash has seen their sales triple since last year. And the amount of money switching hands should give investors an idea of how confident businesses are that a fundamental shift has taken place in the restaurant industry.

UberEats just paid $2.65 billion to acquire Postmates, helping them challenge DoorDash for the restaurant delivery industry crown. But that's pocket change compared to what happened with Grubhub.

They were acquired in a massive $7.3 billion all-stock deal this month when Uber lost out to Dutch food delivery company Just Eat Takeaway.com. And this shift has caused up-and-coming players to get in on the action too.

That's why Facedrive (FD, FDVRF) has been making big moves in the space with several acquisitions of their own this year.

In May, they acquired Foodora Canada, a subsidiary company of the $20-billion multinational food delivery service, Delivery Hero, which itself operates in 40 countries and services more than 500,000 restaurants. With this move, Facedrive added hundreds of thousands of new customer names and over 5,500 new restaurant partners.

Then a few months later, they acquired Food HWY, a leading "ethnic and student focused" food delivery service, which added thousands more restaurants and tens of thousands of users to their service. And in September, they acquired the electric vehicle subscription service Steer.

Food Delivery and Ride Sharing

This bonanza in the food delivery market has led to some incredible gains that have paid off handsomely for investors. DoorDash saw their stock jump 86% in the first day of trading after their IPO this month. Grubhub has soared for 138% gains since March. And ride-share giant Uber skyrocketed for 242% gains since then with their UberEats food delivery service seeing a major boost in sales.

But with these giants looking to capitalize on the food delivery trend taking off. Many have started looking to alternatives like Facedrive because of the rampant complaints of price-gouging from drivers and ridiculous fees for customers in the ride-share market. There's no shortage of stories of upset drivers accusing Uber of price-gouging, even taking over 50% of the cut for themselves at times.

Compare that to Facedrive, who lets their drivers keep 85-90% of the fare and 100% of their tips. That’s why Facedrive has seen their shares soar 605% in just the last year.

When Uber came on the scene over a decade ago, it sparked a revolution in the taxi industry and changed how people get around town each and every day…Now food delivery may be ready to spark the same kind of change in the restaurant industry, taking the dining experience to the comfort of users' homes with the touch of a button.

The Biggest Change in the Restaurant Industry in Decades

CBS News has touted, “Food delivery apps are changing the way we eat, and raking in billions.” And this sales boom in food delivery is just beginning.

According to Marketwatch, most people say they still won’t dine in, even after restaurants fully open again. That could mean even more sales for food delivery as customers have made it clear they still have an appetite for the food they love from their favorite restaurants.

This has all meant a major boost for the big names in food delivery that most folks already recognize…But with this pandemic stretching on, the real winners could turn out to be the up-and-comers like Facedrive working to benefit both the customers and the drivers alike.

Big Names Paved The Way, But They Aren't Out Of The Race Just Yet

Uber Technologies (UBER) is one of the most diversified companies in the new transportation-as-a-service industry. But nothing is doing as well in this crisis as its Uber Eats brand. The company's food delivery platform has been booming as stay-at-home orders across the globe close down restaurants. In fact, in the second quarter of 2020, the company reported more than double gross bookings for its delivery business than its mobility business.

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US : U.S.: NYSE
$ 53.20
-2.34 -4.21%
Volume: 19.80M
March 8, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$103.21 billion
Rev. per Employee
$488,553
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/zigman2/quotes/210404212/composite
US : U.S.: NYSE
$ 60.64
+0.45 +0.75%
Volume: 930,046
March 8, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$5.61 billion
Rev. per Employee
$640,613
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/zigman2/quotes/201587798/composite
US : U.S.: NYSE
$ 333.51
+3.27 +0.99%
Volume: 988,273
March 8, 2021 4:00p
P/E Ratio
26.91
Dividend Yield
1.13%
Market Cap
$12.82 billion
Rev. per Employee
$285,931
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/zigman2/quotes/222973991/composite
US : U.S.: NYSE
$ 133.41
-18.07 -11.93%
Volume: 6.86M
March 8, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$48.12 billion
Rev. per Employee
N/A
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/zigman2/quotes/209029767/composite
US : U.S.: NYSE
$ 104.14
-0.19 -0.18%
Volume: 2.04M
March 8, 2021 4:03p
P/E Ratio
35.37
Dividend Yield
1.92%
Market Cap
$31.30 billion
Rev. per Employee
$148,737
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