Why You'll Never Look at Food the Same Way Again

Lou Basenese

Thursday, February 18, 2021

Forget complaining about all the negative repercussions of the coronavirus...

For months, I’ve been telling you all about the positives. (Sorry, but I refuse to make Trend Trader Daily one of those perpetual doom-and-gloom type newsletters.)

And I’ve been particularly focused on the positives of forced adoption of technologies and services.

Like mobile and contactless payments, which has led to a 125% rise for the ETFMG Prime Mobile Payments ETF (IPAY) since the start of the pandemic.

Yes, I told you about that opportunity in advance. But on the heels of such an impressive profit, I know what’s coming next:

“What do you have for me now, Lou?”

Well, in brief, it’s another forced adoption investment opportunity. This time, in the most basic and vital of all industries – food!

But before I explain more, let’s make sure everyone understands the dynamics at work here…

Forced Adoption for Future Profits

One of the most important things I look for when evaluating an investment opportunity is whether we're approaching a moment of forced adoption.

Forced adoption is when customers have no choice but to use a product or service.

If you’ve read Malcolm Gladwell’s best-seller, “The Tipping Point,” perhaps you understand this basic concept already…

Essentially, a tipping point is some incremental increase that triggers an acceleration in adoption — the type of adoption that all but guarantees mainstream acceptance.

The thing is, the idea of a tipping point doesn’t do justice to the concept of forced adoption.

You see, when it comes to investing, forced adoption can come about for a variety of reasons. It doesn’t just happen when enough consumers buy a certain product and then it becomes a “must-have.”

For example, consider a government mandate. Airbags, for instance, didn't become “must-haves” until the U.S. government required them.

Or consider the discovery of a new use for an existing product. This often happens in the pharmaceutical industry, where drugs are shown to work for new indications. But it happens in other industries as well.

Take the mattress industry. The explosion in popularity for foam mattresses came about thanks to the repurposing of a 60's-era material designed to cushion astronauts during re-entry.

Of course, geopolitical forces like wars and pandemics can force adoption, too. And that’s precisely what’s happening today in the grocery sector.

Supermarket Sweep

The trip to the grocery store is quickly being eliminated. Worldwide!

Instead, our food is being delivered. Take a look at the recent data:


(click image to enlarge)

As McKinsey and other research firms have pointed out, the pandemic has accelerated the adoption of all manner of e-commerce businesses dramatically. We’re talking about five to ten years’ worth of market adoption happening in less than a year’s time.

Online grocery sales are no exception. Such sales more than doubled in almost every country within a matter of weeks.

And rest assured — this change in customer buying behavior is permanent. And adoption rates will only head higher from here.

This, of course, is propelling shares of publicly traded companies with grocery and food delivery services higher.

Consider…

Grubhub Inc. (GRUB) soared almost 200% before consummating a deal to be acquired by Dutch company, Just Eat Takeaway.com N.V., which itself is a mash up of two other leading food delivery companies.

Even more amazing, Uber Technologies, Inc. (UBER) is up over 300% thanks to its UberEATS division.

Think about that: the company’s main business of ride-hailing is suffering dramatically because of the pandemic. But the uptick in food delivery has been so significant that it’s more than making up for it. At least in investors’ minds.

So how do we invest in this trend today?

As I told you before, keep an eye out for this year’s IPO of Instacart.

And if you don’t want to wait, you can invest right now in Just Eat Takeaway.com

It just started trading over-the-counter a few days ago. Its ticker is TKAYY.

Ahead of the tape,
Lou Basenese
Lou Basenese

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