Blair Welch, co-founder of Slate Asset Management, was recently on Institutional Real Estate's podcast talking about grocery-anchored real estate. In it, he talks about the role that this asset class plays in last-mile food logistics, why ecommerce might actually be strengthening its importance, and why it needs to be considered as being distinct from other kinds of retailing. This is a topic that we have covered a few times before on the blog and I think many of you might find it interesting. To have a listen, click here.
I was picking up food the other night on Bloor Street (via Uber Eats) and the lineup of delivery drivers outside of the restaurant was at least ten people deep when we arrived. While we were waiting, another handful of drivers pulled over to quickly pickup their deliveries. This is what is happening in our cities right now, especially here in Toronto while we live through another stay-at-home order. And the numbers certainly reflect it.
Last month in March, Uber's delivery business (which is separate from the company's mobility business) recorded a 150% year-over-year increase in annualized gross bookings. The company's run-rate as of March is now $52 billion. To put this number into perspective, the company's mobility business also had its best ever month in March with an annualized gross bookings run-rate of $30 billion.
Delivery > mobility right now. Makes sense.
To further put this into perspective, total restaurant spending across the entirety of the United States was $670 billion in 2019 (figure from Benedict Evans). So Uber Eats has quickly become a meaningful part of how we eat. I obviously believe that people are dying to get out and eat at restaurants again, but these figures are still interesting nonetheless.
. After 8 very productive and exciting years at the company, it was time.
I joined Slate in 2016 to help start the development group. Here is the post that I wrote back then. And it all came about because of a coffee meeting at Starbucks at the corner of Yonge & King.
At the time, Lucas Manuel was looking to hire someone, and so our mutual friend, Kieran Boyd, connected us with the expectation that I would make some industry introductions. But at the end of our meeting, Lucas was quick to say, "actually, I think you should come join Slate."
And obviously, that's what I did.
Fast forward to today, and Slate has grown into a global investment and asset management company with $13 billion of assets under management across Canada, the US, and Europe. And within this platform is a supremely talented development group with an awesome portfolio of sites and projects.
Thankfully though, this is not a goodbye. Myself and the Globizen team will still be working very closely with Slate on a handful of development projects, including One Delisle and Corktown. And the intent is that we will continue to work on new projects together in the future.
I learned a lot during my time at Slate, and I have so much respect for Blair and Brady Welch and the rest of the partners. They have built an incredible global company and assembled some of the most creative, entrepreneurial, and smartest people I have ever worked with.
Thank you for everything over the last 8 years.
So what's the plan for Globizen? This will be the topic of a follow-up post.
It's also interesting to think about the above trendline from a broader logistics perspective. Alongside the rise in Uber Eats, we are seeing
move toward "rapid delivery apps." These are platforms that allow meals, groceries, and other stuff to be delivered, in some cases, almost right away, which aligns with where I think consumers are moving. Rather than making lists and doing weekly shops, it's now about just-in-time delivery.
It's arguably a lazier way of going about things, but water will always find the path of least resistance.
Many, or perhaps most, of these platforms have adopted an asset light approach. Instacart, which partners with existing grocers, would fall into this category. Their model revolves around gig workers going into existing stores, picking orders directly from the shelves, and then delivering those orders. And it is what Blair Welch was getting at in his recent RENX interview when he reasoned that grocery shopping is still being done, almost exclusively, at local stores.
This approach is enough for Instacart to be valued at nearly $40 billion, according to the Financial Times. So something seems to be working.
