Chewy’s Pet Project

Hi, today we're exploring: (1) Chewy’s booming autoship business, and (2) The price of orange juice is soaring. Good morning! If you want a break from reading about the Trump trial story... we’ve got you covered. Today we're exploring: - Autopet: Chewy rode the pandemic wave... and built a huge subscription business in the process. - Citrus test: Orange juice prices are soaring. Have feedback for us? Just hit reply — we'd love to hear from you! TOGETHER WITH Autopilot At some point in the last few years, you might have asked yourself: “why is everything a subscription these days?” The success of software, cable, phone contracts, streaming, and other products in the 2000s inspired entrepreneurs to try just about anything as a subscription, chasing the holy grail of predictable ‘recurring revenue’. From razors to glasses, toilet paper to your entire wardrobe, if you’ve bought it in a store, it’s probably been tried as a subscription business (or at least a direct-to-consumer business). Most efforts, it must be said, have struggled to make the economics work, despite millions of dollars in VC funding. Pet supplier Chewy, however, has bucked the trend. Indeed, shares in the company are up more than 30% this week after reporting a set of Q1 results that came in way ahead of expectations. Chewy’s “autoship” sales — an offering where customers can set up repeat deliveries for a discount — were up [6.4% year-on-year]( and its revenue per active customer rose to a whopping $562. The market lapped up that progress, with autoship sales now more than 75% of Chewy’s business, driving almost all of its growth since 2021... and investors seemed to like the announcement of a $500M share buyback. Pet project The uptick for Chewy comes after a difficult few years. A pandemic darling, Chewy’s sales soared during the pet boom of COVID, and — like so many other “[pandemic winners]( — the reality never quite matched up to the expectation. From its peak, CHWY is down 82%... with the shares loosely tracking the volume of Google searches for the phrase “puppies for sale”, which boomed throughout 2020’s lockdown days. But, while Chewy’s stock may have lost some of its bite, the pet product peddler remains a huge business, with revenues north of $10B. This makes it one of the most successful of a vintage of subscription / direct-to-consumer brands — such as Casper (mattresses), StitchFix (personal styling), Peloton (fitness), SmileDirectClub (oral care), Allbirds (shoes), Blue Apron (meal kits), and others — that have struggled, or even gone bankrupt since their Covid boom. Random consumer subscriptions may be for Christmas, but pet supply subscriptions are for life. Go fetch: Chewy’s founder, Ryan Cohen, is none other than the CEO of GameStop. [Read this on the web instead]( [Sponsored by Miso Robotics]( Aiming to Transform the Restaurant Industry with up to 4X Higher Profits The fast food industry is huge – $1 trillion to be exact. So with a 3 million-person labor shortage nationwide, restaurants are turning to automation to fill the gap. And Flippy, [Miso Robotics’ AI-powered kitchen robot]( is leading the charge with a first-mover advantage. Flippy’s already fried over 2m baskets of food for top brands like White Castle and Jack in the Box. Now, after being selected by NVIDIA to collaborate on integrating state-of-the-art AI vision technology into Flippy, Miso’s ready to scale in a major way. Miso’s targeting 170 fast food brands and 100,000+ US locations for expansion, potentially boosting industry profits up to 4X higher. [Tap into their potential alongside 34,000 investors by becoming a Miso shareholder](. [Become a Miso Robotics shareholder here.¹]( Outta juice There might soon be a vitamin C-shaped hole in many Americans’ breakfasts: orange juice prices are hitting all-time highs, as a series of [poor harvests]( strain the existing supply of frozen juice futures. Indeed, while the price of OJ has climbed at an alarming rate in recent years due to reduced production yields, this week saw frozen concentrated orange juice futures — which, with a two-year lifespan, usually help manufacturers to ease harvest shortcomings from season to season — reach a record price of $4.87 per pound. That’s roughly 5x where they were trading in 2020. These juiced-up figures have arisen from a blend of bad weather and disease that’s long plagued the world's orange groves. Brazil has now seen 3 consecutive heatwave-hampered harvests, squeezing the output of the world’s largest producer, which accounts for ~70% of all exports. Just 3 weeks ago, research center Fundecitrus reported that Brazil was set to produce 232M boxes of oranges in the 2024-25 season, a 24% decline on the previous cycle. And Florida, world-renowned for its oranges, won’t be able to pick up the slack. The Sunshine State has seen output decline steadily for more than 2 decades, thanks to [citrus greening]( hurricanes, falling yields, and a booming housing market that’s turned citrus farms into premium real estate. Superseed With the orange segment looking increasingly bleak, farmers are exploring [using alternative fruits]( — like mandarins, apples, and mangoes — to supplement diminishing supplies, as consumer demand for OJ remains as strong as ever. [Read this on the web instead]( More Data • Tough lovin’: In response to claims of a 100% price rise, a top [McDonald’s]( exec said that the average menu item now only costs 40% more than in 2019. • Another One Buys a Trust: Sony Music is considering acquiring the music catalog of rock royalty [Queen]( for £790M ($1B). • The state of crypto in [1 chart](. • Fast food’s future = automation. That’s why brands like White Castle and Jack in the Box use Miso Robotics. [Invest in Miso alongside 34k+ people (and get up to 10% bonus stock).]( • As America digests the guilty verdict of the [Trump trial]( the markets took less time to process, with shares of Trump Media & Technology Group falling 13% on the news. **This is sponsored content Hi-Viz • Look at this graph: A statistical analysis of why so many people [hate Nickelback](. Off the charts: Okay, since it’s Friday, here’s an easier version and a harder version of Off the charts today: Easier: What company have we redacted at (A)? Harder: What about this company at (B)? [Answer here](. Thanks for stopping by! Have some [feedback](mailto:daily@chartr.co?subject=Feedback&body=Hi%2C%0A%0AI%20like%20the%20newsletters%2C%20but%20I%20had%20a%20thought%20for%20you...) or want to [sponsor]( newsletter](mailto:james@sherwoodmedia.com?subject=Chartr%20NL%20Sponsorship%20Enquiry%20)? Not a subscriber? Sign up for free below. [Subscribe]( Advertiser’s Disclosures: ¹This is a paid advertisement for Miso Robotics Regulation A offering. Please read the offering circular and related risks at [invest.misorobotics.com](. Past performance is no guarantee of future results. Start-up investments are speculative and involve a high degree of risk. Those investors who cannot afford to lose their entire investment should not invest in start-ups. 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