🧪 Disney's great experiment

... and Taco Bell reinvents drive-thru
 

Inside Disney's streamer lab [Erik Isakson via GettyImages]

 
Yesterday's Market Moves
 

Dow Jones
35,500 (0.04%)		S&P 500
4,461 (0.30%)		Nasdaq
2,744 (0.67%)

Dow Jones
35,500 (0.04%)
S&P 500
4,461 (0.30%)		Nasdaq
2,744 (0.67%)

Hey Snackers,

To the 10% to 12% of Snackers who live life lefty — Happy Left-Handers Day. The world wasn't made for ya (looking at you, notebooks), but today's newsletter is.

Stocks barely budged Thursday, but more good jobs data helped inch the S&P 500 up to another record high.

Experiment

Disney jumps 5% as theme parks return to profits — but its focus is on the Great Media Experiment

The force is strong… Disney shares surged 5% on word its theme parks division enjoyed their first profitable quarter since the pandemic started. Disney World, Disneyland, etc. powered Mickey's $17B in quarterly revenue, beating expectations. But Disney also runs a media business, which it's treating like a lab.

Netflix only releases movies on Netflix... But Disney distributes their movies all over, from streaming to theaters to cable. And over the last three months, Disney's been experimenting:

  • "The Falcon & Winter Soldier": The Marvel series streamed exclusively on Disney+ – not in theaters.
  • "Free Guy": The Ryan Reynolds movie is premiering only in theaters – no Disney+ streaming.
  • "Luca": The coming-of-age newbie was streaming on Disney+ and hit a physical Disney theater in LA.
  • "Black Widow": She premiered in theaters and Disney+, but streamers had to cough up $30 extra to watch (Disney++).
THE TAKEAWAY

All this confusion could lead us back to the bundle… It can be annoying to toggle between Disney+, Netflix, Amazon Prime, Hulu, and Peacock – and the slew of debut strategies can leave viewers feeling like guinea pigs as Disney and others experiment for profits. Another company, FuboTV, said this week they think your mounting pile of streamer accounts and bills could leave you craving a bundle. As the streaming world gets more complex, a cord – or a single service for your streaming needs – may not seem so bad.

Chutes

With its taco toll booth, Taco Bell bets that people want their queso contactless

Thinking outside of the bun… Your Crunchwrap Supreme may soon be airborne. Taco Bell just unveiled plans for "Defy," its new four-lane drive-thru model that delivers food via vertical chutes down to your car. Taco Bell plans to activate its first QR scanner-powered Defy in Brooklyn Park, Minnesota next summer. It's faster than OG drive thrus – and even more pandemic-friendly – it eliminates human-to-human burrito handoffs.

We're in a drive-thru renaissance… and Taco Bell just built the Sistine Chapel. Drive-thrus were big pre-pandemic, but lockdown made them huge. Drive-thru orders grew 26% in the spring quarter of 2020 year-over-year, as dining rooms limited their capacity or full-stop closed. But as in-person dining returned, drive-thru lines didn't shrink — they got even longer. Taco Bell wasn't the only chain that noticed. Since the pandemic started:

  • Smaller: Burger King unveiled a "Restaurant of Tomorrow" concept that's 60% smaller than normal BK's to add extra drive-thru lanes and more contactless options.
  • Faster: Chipotle launched drive-thru "Chipotlanes" to accelerate its mobile order pick ups.
  • Casual-er: Fast-casual chains like Sweetgreen and Shake Shack that didn't have drive-thrus made plans to build their own, opening this year.
  • But… Not everyone got the memo. Even before the pandemic, fast-casual chains with few, or zero, drive-thrus like TGI Friday's have struggled. Meanwhile, Taco Bell's profit rose in 2020, and this year, its first quarter sales increased 9% from a year ago.
THE TAKEAWAY

Sometimes the queue matters just as much as the product… By re-imagining its drive-thrus, Taco Bell recognized that customers care about more than just taste — they also care about convenience and safety. Some states have revived mask mandates and other restrictions as the Delta spreads, and people start to scale back on dining IRL. But Taco Bell's burrito chutes could help keep sales flowing.

What else we're Snackin'
  • Pfizzle: A new study suggests mRNA vaccines offer limited protection against Delta — in a July spike, Moderna was 76% effective against variant infection, and Pfizer was just 42% effective.
  • Mixed: Airbnb shares fell 4% after the company warned it expects Covid variants to affect travel behavior, even though sales 4X'd last quarter from a year ago.
  • Pump: President Biden urged OPEC to boost oil production after recent price swings, arguing planned increases won't be enough to support global reopenings.
  • Viral: TikTok overtook Facebook as the most-downloaded app in the world last year, also beating WhatsApp, Insta, and Messenger, according to App Annie.
  • Booted: Adidas laced up a deal to sell Reebok for $2.5B to Authentic Brands Group, a retail conglomerate known for buying bankrupt brands like Brooks Brothers and Forever 21.
  • Funded: Reddit raised a fresh $410M funding round at a $10B valuation, as the company focuses on building out its ad business, which competes with Google and social media apps.

🍪 Thanks for Snacking with us! Want to share the Snacks? Invite your friends to sign up here.

Friday
  • Earnings expected from 23andMe

Authors own shares of Disney, Netflix, Amazon, Moderna, Google. Some authors own Bitcoin.

ID: 1758920

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