Fruitas purchased 'advanced kitchen technology' from Foodpanda

Fruitas [FRUIT 1.16, up 3.6%; 131% avgVol] [link] disclosed that its cloud kitchen subsidiary, Fly Kitchen, purchased “advanced kitchen technology” that used to be owned by Foodpanda. With the new equipment, FRUIT said that Fly Kitchen will be “able to expand its menu with new methods, processes, and flavors,” and will allow the company to “streamline every aspect of its operations.” FRUIT also said that the purchase will “open the door” for Fly Kitchen to “prepare third-party brands”. FRUIT did not disclose the price paid for the equipment, but said that the payment would be made from the company’s internal cash. Foodpanda’s parent company, Delivery Hero, is in the process of a “partial withdrawal” from Singapore, Malaysia, Thailand, Cambodia, Myanmar, Laos and the Philippines.

MB bottom-line: I absolutely love this move by FRUIT. It checks a lot of boxes. It lets FRUIT expand the menus of its existing brands. It lets FRUIT do what it’s already doing more efficiently. And most importantly (to me), it upgrades FRUIT’s capacity to act as a white-label / toll-packing producer of other brands and restaurants. This tells me that FRUIT is taking its online presence very seriously and that it has plans to eat further into the value chain in the direction of third-party aggregators like Grab Food (60% market share) and Foodpanda (40% market share). Instead of doing it from the top down, FRUIT has built its aggregator from the ground up. FRUIT started with its own brands and products, but soon began to acquire brands just for their inclusion in its online delivery service, then began the process of signing tie-ups with other brands to appear on the service. Now, with this purchase, FRUIT would be able to sign deals with larger, more established brands, and provide prep-to-door delivery of the food itself. It’s frustrating that the vision and execution of FRUIT’s management team has not translated directly to shareholder success, because I honestly have nothing but praise for what this group has been able to do since their great call-to-action which was the pandemic.

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