🌮 Taco Bell goes full iPhone

Thursday, March 25, 2021 by Robinhood Snacks | Disclosures

Taco Bell's Tim Fry Cook moment

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Hey Snackers,

A headline that the world doesn't need right now: "Facebook says Instagram for kids is coming."

Markets dipped yesterday as investors continued to pull back from tech stocks.

Crunch
1. KFC-owner Yum Brands just made its biggest move in a year: Taco Bell 2.0

Crunchy on the outside... techy on the inside. Yum Brands is the fast-food icon that owns KFC, Pizza Hut, and Taco Bell (aka: Ken-taco-hut). Since digital orders surged during the pandemic, Yum is becoming less fry cook, more Tim Cook. It just made its second tech acquisition in less than a month:

  • Tictuk: Not a typo. Tictuk is the hilariously-named Israeli startup that lets you order food from social media and messaging apps (but is there a TikTok integration?).
  • Yum bought Tictuk to capitalize on “conversational commerce," which makes ordering a Crunchwrap Supreme as easy as sending a text (or a FB message).

Techy and I know it... Yum's digital sales in 2020 hit a record of $17B, up ~45% from 2019. Now it's doubling down on tech. We know that because its CFO said "omnichannel" and "frictionless" in the same sentence (describing its ordering strategy). It's also apparent in Taco Bell's futuristic makeover:

  • "Go Mobile": Taco Bell's digital-focused new restaurant design. It includes: dual drive-thrus, smaller dining rooms, curbside pickup, and "bellhops" taking orders on digital tablets. TB is planning to expand "Go Mobile" nationwide, for at least 30 locations by the end of 2021.
THE TAKEAWAY

iPhone architecture is here... We've all seen apps designed for iPhone. But Taco Bell's techy restaurant is one of the first physical stores designed for iPhone. Chipotle did something similar in November with digital-only, table-free restaurants (see: Chipotlanes). As ecommerce eats everything, we'll likely see more mobile-optimized store formats. AKA: iPhone architecture.

Chip

Major throwback... The Intel sound logo when your PC turned on. Intel used to be one of the 10 most valuable companies in the world. But it lost its mojo: its current stock price is lower than it was during its peak in 2000. Intel's new boss wants to get the mojo back...

  • Reboot: According to Intel's new CEO Pat Gelsinger: "Intel is back. The old Intel is now the new Intel." Soo metaphysical.
  • The plan: More outsourcing, but also more manufacturing. Intel isn't abandoning its status quo of both designing and producing its own chips. Case in point...
  • $20B: How much Intel will invest into two new chip factories in Arizona. ICYMI, chips are a hot commodity right now (see: The Great Chip Shortage).

The real kicker... Intel plans to lean into making chips for other companies, too (aka: "foundry" services) — that got investors excited. Intel has primarily manufactured only its own chips. Now, it's going to use its factories for other companies' chips, too — even its competitors'. This is also a revenge move...

  • Intel used to provide chips for Macbooks and iPhones. Then Apple broke the relationship and replaced Intel laptop processors with its own chips (and Intel’s smartphone chips with Qualcomm's).
  • Now Intel is courting Microsoft, Google, Qualcomm, and others with its foundry services. The equivalent of a "thriving without u in Hawaii" Insta post.
THE TAKEAWAY

Intel thinks it can be Captain America... In February, President Biden signed an exec order to address critical shortages in the US supply chain — including chips. The Great Chip Shortage is shutting down American car factories and disrupting global production. But more than 80% of chip production happens in Asia. By investing $20B into US chip manufacturing instead of outsourcing to other counties, Intel hopes it can become the Captain America of chips once more.

What else we’re Snackin’
  • Greener: New York State is ready to legalize recreational marijuana under an agreement reached by Gov. Cuomo and legislators.
  • Traffic: Egypt's Suez Canal got blocked by a massive container ship — problem, since ~12% of global trade passes through the Suez.
  • Crypto: London-based crypto service Blockchain.com raises $300M at a ~$5.2B valuation. It's the third-largest fundraise ever for a crypto company.
  • Divan: Restoration Hardware stock popped 8% after the fancy furniture retailer posted expectations-beating sales growth (#HauteHouseHype).
  • TuPrivate: San Diego’s self-driving truck startup TuSimple filed to go public through a traditional IPO.
  • Tescoin: Elon Musk (aka: the Technoking of Tesla) says people in the US can now buy a Tesla with bitcoin.
Snacks Daily Podcast

Just as your March Madness bracket broke, Fanatics hit a $12.8B valuation.

The fan apparel retailer for professional sports just raised $300M to crank out more jerseys. Tune in to hear how Fanatics scored big despite a sport-less year.

Thursday

Authors of this Snacks own shares of: Tesla, Google, Microsoft, and Apple

ID: 1578195