🥼 Can CVS capitalize on the vaccine rollout?


January 13, 2021

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January 13, 2021
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Per CNET, “John Deere is creating a new virtual reality experience that lets you tour the 8RX tractor and planter from the comfort of your own home.”

On behalf of The Hustle (and all our readers), thank you, John Deere.

The Big Idea
South Park Pharmacy gif

Whatever this South Park “pharma” joke is…it’s def hilarious (Source: Giphy)

Will pharma chains capitalize on the vaccine surge?

Have you ever thought to yourself, “Huh, there’s a CVS on every block”? 

That intuition is actually not too far off. With ~10k stores across America, CVS has a store within 5 miles of 71% of the US population (220m+ people).

As pharma increasingly moves online — from D2C brands like Ro and Hims to a sleepy startup called Amazon — CVS has bet its future on brick ‘n’ mortar.

The walk-in business was hit hard in 2020

But with the vaccine rollout promising millions of people in foot traffic, CVS (along with Walgreens and Rite Aid) are pursuing strategies to woo customers, per CNBC:

  • CVS — which acquired insurer Aetna in a $69B deal in 2018 — wants to become a total health destination that sells drugs, treats chronic conditions, and even offers yoga
  • Walgreens is rolling out 100s of primary clinics and upping curbside pickup for its ~9k stores
  • Rite Aid is restocking its inventory with “holistic” health items (sleep aids, essential oils) and partnering with Instacart on deliveries

These changes come at a tumultuous time for the pharma brands

CVS and Walgreens are both transitioning to new CEOs.

Meanwhile, Rite Aid is the minnow of the group (it has ~2.5k stores and is valued at $1B vs. $100B for CVS, $41B for Walgreens) and has had a number of acquisitions from larger suitors — including Walgreens — fall through.

In addition to the online threat…

… these pharma chains have to contend with big-box stores like Target and Walmart encroaching on their turf.

Further, the vaccine rollout process itself (only in the first of 3 phases) has been bumpy, according to the Wall Street Journal:

  • Miscommunication between federal and state authorities is causing confusion about the vaccination scheduling
  • Pharmacies are receiving far fewer vaccines than they could feasibly give out (e.g., Kroger has given 4.5k COVID-19 doses versus 200k it delivers per week during flu season)

We don’t know if these pharma chains can capitalize from the vaccine rollout, but — at the very least — we know where to find them.

Check out related coverage:

  • 50 new health care billionaires were minted in the pandemic
  • How Ro built a $1.5B telehealth powerhouse
  • Amazon’s pharmacy biz, explained
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Snippets
  • Uber and Lyft want to chip in on the vaccine rollout by shuttling passengers to vaccination sites while also lobbying to get early access to doses for their riders…
  • Crypto news: Bakkt — a crypto exchange — announced it’ll go public in a SPAC deal valued at $2.1B. Combined with Coinbase’s upcoming IPO, these listings are being called crypto’s “Netscape moment”… referencing the mid-1990s IPO of the browser that made the internet more mainstream.
  • Checkout.com — a one-stop shop for all things payments (transactions, processing, detecting fraud) — is raising $450m… and check out its new valuation: $15B.
  • Antitrust win: Visa is abandoning efforts to acquire fintech firm Plaid after the Department of Justice (DOJ) filed a case arguing the tie-up would stem competition in the debit card space.
  • File this under “PE will buy everything”: Silver Lake is looking to take a 15% stake in the legendary New Zealand All Blacks rugby team for ~$2B.
  • Samsung phone sales are surging. Why? Sanctions have slowed one of its main competitors, China’s Huawei.
 
Streetwear
Crocs

Crocs had a massive 2020. How?

Crocs are like the Uggs of summer. No one actually thinks they look good, but Crocs’ comfort and creativity have driven sales of 600m+ pairs.

The company is now watching double-digit growth, partnerships with A-list celebrities, and the Supreme-ization of its brand take flight.

Crocs was the only major footwear brand to see sales rise last spring…

… piggybacking on the trend of not caring about how legs look on Zoom.

This is per NDP Group, which specified that between March and October, while dress shoe sales sunk 60%, slipper and clogs sales surged 70% and 22% respectively, the latter driven by Crocs.

Crocs’ recent success can be attributed to CEO Andrew Rees

Rees’ strategy to improve manufacturing, close underperforming stores, and make Crocs “cool” again turned the company into one of the world’s largest and fastest-growing athletic footwear brands:

  • Q4 2020 revenue was up ~55% to $407m+
  • Anticipated 2021 revenue growth is expected to be +20-25%

Revenue from Jibbitz — the $4 insertable charms for Crocs’ 26 holes that parents used to buy for kids but are now worn by the likes of LeBron — doubled in 2020 and could account for 6.5% of revenue in 2022.

Partnerships with celebs and brands like Post Malone, Justin Bieber, Balenciaga, and KFC led to a 750% increase in Crocs sales on StockX, with the shoes selling for 125% over retail.

Crocs stock was up +12% Monday and is valued at $5B+. In the wise words of Post Malone — “Wow.”

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Caliber is a pretty unique opportunity — just check out their numbers:

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Obituary
Sheldon Adelson

Sheldon Adelson in the Venetian Macao before its 2007 opening (Source: Getty Images/Mike Clarke)

Casino billionaire Sheldon Adelson dies at 87

Sheldon Adelson was the founder and CEO of Las Vegas Sands, one of the world’s largest casino operations.

With a net worth of $35B+, the Boston-born business magnate was an active philanthropist and had gained notoriety in recent decades as a kingmaker for the US Republican Party and the Israeli political scene.

Born in 1933, he started his career young

In his mid-teens, Adelson borrowed the equivalent of $100k+ (in today’s dollars) from his uncle to launch a candy vending machine operation.

While he would become a millionaire in his 30s from various ventures, his major score was Comdex. Created in the 1970s, Comdex became the world’s leading computer trade show and made Adelson a Las Vegas staple.

In 1995, he sold Comdex’s parent company to SoftBanks, netting $500m.

Adelson bought the Las Vegas Sands for $110m in 1988

His gaming empire — including convention centers — blew the world away in 1999 with the opening of The Venetian, a 120k-square-foot casino-resort that cost $1.5B to build.

From the 2000s on, Adelson made a huge bet on China, including the $2.4B Venetian Macao (the world’s 7th-largest building by floor area). His dealings with the Chinese government brought no shortage of controversy.

In 2016, the casino billionaire would make his most controversial gamble yet… when he backed a Republican candidate by the name of Donald Trump to become the President of the United States.

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Crazy Stat

Netflix’s content spend vs. national GDPs (Source: Jacob Cohen)

Netflix is spending A LOT of money on content

If you thought “watch less TV” was going to be a successful New Year’s resolution, you’re wrong.

Netflix announced Tuesday that it’ll release new (mostly original) movies every week of 2021. This comes as no surprise to analysts that anticipate Netflix’s content budget to reach $19B this year.

Some potential bangers include:

  • Bruised: Halle Berry’s directorial debut about a “a former MMA fighter struggling to regain custody of her son and restart her athletic career.”
  • Don’t Look Up: Adam McKay (creator of “Succession”) cast Leonardo DiCaprio and Jonah Hill as 2 low-level astronomers who need to warn the world about an incoming comet.
  • Red Notice: An action comedy starring — wait for it — Ryan Reynolds, The Rock, and Gal Gadot. TAKE OUR SUBSCRIPTION MONEY, ALREADY!

To put the Netflix spend in perspective, PCMag says “that’s the equivalent of (or much higher than) the gross domestic product of many countries on earth.” In fact, that just about puts it in line with Afghanistan.

SPONSORED
The future of jeans →
CVS fun fact of the day
long CVS receipts

CVS receipts as tall as adults and as long as belts (Source: Know Your Meme)

The comically long length of CVS receipts is probably the greatest pharmacy-related meme ever.

Even when buying a single item from the pharmacy, customers have long received multi-foot long CVS receipts.

Why?

According to Vox, all that paper real estate is a way for CVS to target customers with ads, surveys, and instructions on how to use their rewards program.

The company responded to the criticism by cutting down the length of the receipt by 25% in 2013 and using more digital receipts thereafter.

Whatever CVS does with its receipts moving forward, we’ll always have this:

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TRENDS

5 Trends reports, one video…

2021 is the year of Trends.

Right before New Years, our friend Noah Kagan partnered with us here at Trends to present “The 5 Most Profitable Business Ideas to Start in 2021.”

In the video, Noah breaks down 5 Trends reports, walks through the data, and gives some ideas for how anyone can get started on each opportunity.

(If you comment on the video, you might win $500 to actually get that idea off the ground)

Check it out, and subscribe to Noah’s channel for more great business breakdowns.

TRENDS

5 Trends reports, one video…

2021 is the year of Trends.

Right before New Years, our friend Noah Kagan partnered with us here at Trends to present “The 5 Most Profitable Business Ideas to Start in 2021.”

In the video, Noah breaks down 5 Trends reports, walks you through the data, and gives some ideas for how anyone can get started on each opportunity today.

(If you comment on the video, you might win $500 to actually get that idea off the ground)

Check it out to get a free glimpse into 5 Trends reports (and subscribe to Noah’s channel for more great business breakdowns).

If you’re not already a member of Trends, sign up today for a $1 trial to get access to those and dozens of other reports & ideas that will give you a huge head start for 2021.

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