Friends of Branded!
Happy Saturday and I hope you had a great week!
There’s a saying that I love, “If you want to make God laugh, tell Him about your plans.” I first heard this expression by the one and only Allan Konigsberg. Who is Allan Konigsberg you ask? You might know him better by his more famous name – Woody Allen.
Woody’s version of the above quote is actually taken from the Yiddish expression, “Der Mench Tracht, Un Gott Lacht,” which translates to “We plan, God laughs.” The saying means that while we go about planning our days and lives, we sometimes learn that God or the universe or whatever we call our higher power, has another plan for us. While I don’t mean to beat this to point to death, the message is that we’re not in control of our lives as much as we’d like to think we are.
While I attribute this quote to Woody Allen, Public Enemy’s 13th studio album, released in 2015, was titled “Man Plans God Laughs.” The album is a critique of the corporate domination of the recording industry and what the Public Enemy frontman, Chuck D called a “corporate plantation.”
Whether you want to give attribution of this quote to Woody, Public Enemy, or anyone else, is of course your business. This quote means something to me b/c it puts a much-needed spotlight on the importance of humility, self-awareness, and kindness (to oneself and to others).
I’ve always found confidence to be an extremely attractive quality, but arrogance or hubris to be an ugly one. The above expression has power and the unique ability to knock anyone back to reality and certainly be a most humbling reality-check to those that might carry themselves with a sense of self-proclaimed superiority.
I felt the need to kick off the Top of the Fold section with this quote b/c this week, unlike most weeks, I had my act together! I planned and was prepared with my topic for the Top of the Fold section of the Hospitality Headline. I planned. God laughed.
I subscribe to the theory of the “5 Ps.”
No, NOT the 5 P’s of marketing: Product, Price, Promotion, Place and People.
No, NOT the 3 P’s of Colonial Penn Life Insurance: Price, Price, Price.
I’m talking about the 5 P’s of Secretary of State, James Baker (President George H. Bush’s former Chief of Staff). Secretary Baker wrote a book about his grandfather starting a law firm. Baker’s grandfather gave all the young attorneys five points to remember - Proper Preparation Prevents Poor Performance.
While I don’t mean to undercut Secretary Baker or my knowledge of President George H. Bush’s cabinet, I didn’t learn about the 5 P’s from Secretary Baker. I learned about them for a gentlemen born and raised in North Carolina and who I was fortunate to work with for over 20 years, Mr. Edwards. If you told Mr. Edwards “To get ready,” he’d respond, “I don’t need to get ready, I’m always prepared.” (I appreciate you Mr. Edwards).
Despite my giving attribution of the 5 P’s to Mr. Edwards, every search of these words attributed authorship to Secretary Baker.
My favorite ‘read’ about the 5 P’s came from Mr. Ben McKibbens, the former CEO of Valley Baptist Health System in south Texas. Mr. McKibbens loved and respected the 5 P’s, but when he shared the 5 P’s with his colleagues, he would do so with the addition of a 6th and most destructive "P" that has the unique power to destroy all the other P’s – Procrastination.
Mr. McKibbens would say that “we wait till the last minute and then there is a rush that minimizes our thoughtful, careful planning, and most importantly creates pressure and stress that can be very frustrating and even unhealthy. It suggests that we must address issues and prepare as far in advance as possible. You can always go back and adjust and revise, but to wait until the last minute; you NEVER get it right.”
None of the above is to suggest that I think I’ve been performing poorly with my Top of the Fold contributions (at least I hope that's the case), but only that this week, I decided to jump on it early and I was ready. Did you hear God laugh (at me?). 😊
So what was it specifically that made me pivot from my intended and prepared topic in exhange for this new one?
Late this week, it was announced that our portfolio company, TapRm, sold its white label e-commerce platform to Branded’s new besties and partners at LiquidData. The transaction itself was something we were very aware of, but not the timing of the news drop, and all the wonderful and appreciated attention it drove from our friends throughout the adult libation industry.
My H^2 partner in crime, Julia Suchocki, seized the moment and you can find her article below on Revolutionizing Alcohol Sales: LiquidData acquires TapRm’s white label e-commerce platform.
The entire Branded Team is incredibly excited about LiquidData and TapRm joining forces as we remain enthusiastic about the e-commerce for alcohol space and feel the demand for personalization, direct-to-consumer solutions and the need for there to be a digital ally for emerging brands, is only going to grow even more important.
Long-time readers of the H^2 know that a key part of our investment thesis is consumer preference data, which we feel the hospitality industry is loaded with. I rank Hospitality Data as the third most valuable data set behind only Financial Data and Healthcare Data (that of course is my ranking and I respect you may rank them differently). Branded has expressed our view on the criticality of hospitality (consumer preference) data with investments in Brizo Foodmetrics and Ingest. We’re now super excited to bring LiquidData into the Branded family!
I had the privilege of spending a few hours yesterday with Will Hench, Co-Founder and CEO at LiquidData. Exciting times ahead and I’d like to ask all the members of the Branded Bunch and the Branded community to please extend a Laurel and Hardy welcome to this fine crew.
This news about one of Branded portfolio companies got me thinking about some of our other holdings and specifically the questions I’ve been getting about “vintage.”
In the world of investing (along with the world of wines), vintage refers to the year in which a fund has made investments and specifically the date in which capital was deployed in a particular investment. This metric is useful for benchmarking, identifying trends, estimating the holding period, and controlling returns for the effect of business cycles.
It is NOT remotely a coincidence that the winemaking industry also uses the term “vintage” as a most meaningful metric to divide wines in comparable classes. Vintage in investing is borrowed from the wine industry. Portfolio returns need to be compared to investments that share the same vintage or timing the investments made.
As Branded is advancing with its 3rd emerging technology and innovation fund (Branded Hospitality Venture Fund III or “BHV-III”), I’ve been repeatedly asked about the comparisons or any conclusions I can draw from the vintage of our BHV-I and BHV-II, along with my thoughts about the current vintage.
A question I’ve been asked most recently is about how the portfolio companies that did NOT access the market BEFORE the dramatic pull back in venture capital funding occurred. I think this is a great question with the overarching topic really being about a vintage of investments that secured capital in a market that was more flush with capital versus one where capital scarcity ruled the day.
I’m a lover of lists (a big-time lover of lists), so this question allowed me dig-in and pull together a list of some of the activity of our portfolio companies and specifically what these companies have done, year-to-date, with respect to accessing the capital markets.
We’ve previously highlighted some of these “wins” in the H^2, but I admit I love the way they come together on a list (kind of like the way an area rug can really tie a room together).
Consider the below links a humble brag, a boast or even a toast to these Branded portfolio companies that are delivering value to hospitality operators and as a result, demonstrated that they could access the market for capital in good times and in more challenging times. None of this is meant to suggest that the media hasn’t captured the pullback in venture funding correctly. The media got this right and the data has been correctly captured.
My point is that when the investment community turned on a dime and told emerging companies to focus on the roadmap to profitability as opposed to unbridled enthusiasm for growth (which is what the investment community had been asking for just prior to its change of heart), emerging technology and innovation companies that are addressing the most important issues, challenges and opportunities for operators rose to the top of the prioritization stack, not for operators (they already knew what was most important), but for investors.
- Standing Among Giants, Chowly Scales Up
- MarginEdge Redefines Payment Efficiency for Restaurants with New Mobile Bill Payment Offering
- Branded Hospitality-Backed GoTab Raises $18 Million
- Recruiting automation startup Humanly lands $12M as it doubles down on AI
- Leasecake Named Overall Lease Management Company of the Year
- Ovation Raises $4 Million Series A
- Incentivio lands $10M in Funding to Grow AI Capabilities
- Brizo Data Raises $12M in Series A Funding
- Valyant AI raises additional funding to enhance drive-thru ordering experience
- Ecotrak Announces Latest Funding Round
- Mighty Quinn’s Barbeque Sauce Earns Gold Award
Nothing is easy and I don’t want to remotely suggest with the above list that we haven’t made our share of mistakes or missteps. My mom always told her family to take joy where we can find it. I found great joy in the acquisition that took place this week by LiquidData of TapRm’s white label e-commerce platform. I took joy in raising a glass (yes, an afternoon beer yesterday) with my new partner Will Hench. And I took joy in putting the above list together of some of Branded’s portfolio companies that have worked tirelessly to make 2023, thus far, nothing less than an outstanding year.
Summer 2023 is coming to an end, and we’ll all embark on the sprint to year end. I can’t wait to see what happens over the course of the last few months of this year.
As always, it takes a village.
Answer also revealed at the end of the newsletter
By: Julia Suchocki, Partner at Branded Hospitality Ventures
In the restaurant industry, where every detail plays a crucial role, the distinction between managing and leading becomes even more significant.For those who have had the privilege of working in a kitchen, you're likely no stranger to the whirlwind of chaos, the clash of distinct personalities, and the relentless high-stakes atmosphere that envelops such an environment. If this world is foreign to you, I recommend preparing a bowl of popcorn and immersing yourself in Hulu's latest sensation, "The Bear."
MAXIMIZE VALUE, IMPROVE PERFORMANCE
Learn how the Hospitality Industry advisors from CohnReznick can put you at the forefront of advanced financial, operational, and risk management strategies.
By: Julia Suchocki, Partner at Branded Hospitality Ventures
Online sales of beverage alcohol reached $6.1 billion in 2021 and have more than doubled their share of all off-premise dollar sales since 2019. This phenomenal progression led e-commerce sales of beer, wine, and spirits to lay claim to a substantial 4% of the entire category's off-premise sales in 2021, a striking surge from the modest 1.9% recorded in the year 2019.
Robert Irvine Foundation
Supports and strengthens the physical and mental well-being of our service members, veterans, first responders, and their families.
FINANCE & DEALS
By: Noah Stern, Associate at Branded Hospitality Ventures
Whether it is completing overhauling design to accommodate an increase in digital ordering or something smaller like a double-sided grill, big brands continue to look for any type of competitive advantage.
Restaurant Industry Movers in the Market
—Data as of 8/18/2023
By: Rev Ciancio, Head of Revenue Marketing at Branded Strategic Hospitality
You need a marketing system. You need tools that lead new guests to you. You need channels to communicate to current guests and you need to be using them and be consistent in using them. They have to align with your customer journey so that you are always right there when they are thinking about what to eat for lunch. Learn more about the marketing ecosystem that EVERY food service business should using.
Hospitality Hangout with Kep Sweeney, CEO at PDQ
IN THE NEWS
Hospitality Tech and F&B Innovation IN THE NEWS:
We love to highlight Food Service & Hospitality news, especially when it’s Partners & Friends making it!
- TapRm: LiquidData acquires TapRm’s white label e-commerce platform
- MarginEdge: MarginEdge Recognized by the 2023 Inc. 5000 as One of the Fastest Growing Companies in America for the Second Straight Year
- MarginEdge: MarginEdge Debuts B2B Mobile Pay for Restaurants
- Incentivio: Savoring Solo: The Joys and Benefits of Dining Alone
- Leasecake: Leasecake Promotes Former JLL Technologies Executive to CEO, Accelerating Rapid Growth and Brand Expansion
- Ovation: Communication and Crisis Management With Tim McIntyre
- Brizo: 3 Things to Consider While Selling Your Technology to Restaurants
And in other News…please see some of the stories that caught our attention and that we’re paying attention to. This week was loaded with headlines and news!!
- Restaurant Dive: Serve Robotics raises $30M, goes public in reverse merger
- Progressive Grocer: ALDI Acquiring Winn-Dixie, Harveys Supermarket From Southeastern Grocers
- Restaurant Dive: Brinker moves virtual brand It’s Just Wings to Chili’s menu
- FSR: Why Delivery Tech is Essential for Full-Service Restaurants
Research from the National Restaurant Association has found that in an average year, about a third of U.S. adults visit a restaurant to celebrate on Mother's Day. That often makes Mother's Day the busiest day of the year for restaurants.
ASK THE HEADLINE
🔍 Got Questions? We've Got Answers! 🌟
Satisfy your thirst for knowledge? Look no further! It's time to dive into our brand-new segment: "Ask The Headline"! 🎉
📅 We'll be answering YOUR questions every week. And here's the best part: you can choose to stay anonymous or receive a fabulous shout-out when we feature your question!
That’s it for today!
See you next week, (about the) same bat-time, same bat-channel.