Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
If You Don’t Understand Bonds, You Don’t Understand Investing - 25th Aug 19
Gold's Next Move - 25th Aug 19
Fresh Water Crisis Unfolding - 25th Aug 19
Newbie Guide to Currency Pairs in Forex Trading – Review - 25th Aug 19
When A 16-Year-Old Earns $3 Million, You Know It's Not A 'Silly Fad' - 24th Aug 19
The Central Bank Time Machine - 23rd Aug 19
Stock Market August Breakdown Prediction and Analysis - 23rd Aug 19
U.S. To “Drown The World” In Oil - 23rd Aug 19
Modern Monetary Theory Could Destroy America - 23rd Aug 19
Seven Key Words That Explain "Stupidly High" Bond Market Prices - 23rd Aug 19
Is the Fed Too Late Prevent A US Housing Bear Market? - 23rd Aug 19
Manchester Airport FREE Drop Off Area Service at JetParks 1 - Video - 23rd Aug 19
Gold Price Trend Validation - 22nd Aug 19
Economist Lays Out the Next Step to Wonderland for the Fed - 22nd Aug 19
GCSE Exam Results Day Shock! How to Get 9 A*'s Grade 9's in England and Maths - 22nd Aug 19
KEY WEEK FOR US MARKETS, GOLD, AND OIL - Audio Analysis - 22nd Aug 19
USD/JPY, USD/CHF, GBP/USD Currency Pairs to Watch Prior to FOMC Minutes and Jackson Hole - 22nd Aug 19
Fed Too Late To Prevent US Real Estate Market Crash? - 22nd Aug 19
Retail Sector Isn’t Dead. It’s Growing and Pays 6%+ Dividends - 22nd Aug 19
FREE Access EWI's Financial Market Forecasting Service - 22nd Aug 19
Benefits of Acrobits Softphone - 22nd Aug 19
How to Protect Your Site from Bots & Spam? - 21st Aug 19
Fed Too Late To Prevent A US Housing Market Crash? - 21st Aug 19
Gold and the Cracks in the U.S., Japan and Germany’s Economic Data - 21st Aug 19
The Gold Rush of 2019 - 21st Aug 19
How to Play Interest Rates in US Real Estate - 21st Aug 19
Stocks Likely to Breakout Instead of Gold - 21st Aug 19
Top 6 Tips to Attract Followers On SoundCloud - 21st Aug 19
WAYS TO SECURE YOUR FINANCIAL FUTURE - 21st Aug 19
Holiday Nightmares - Your Caravan is Missing! - 21st Aug 19
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

The Best “Pick-and-Shovel” Play for the Online Grocery Boom

Companies / Retail Sector Jul 18, 2019 - 01:49 AM GMT

By: John_Mauldin

Companies

By Justin Spittler :Everyone knows online shopping revolutionized how we buy clothing, electronics, and other merchandise.

Many malls across the country have closed their doors because people simply don’t shop at malls like they once did. Instead they buy things online. After a few days, the things show up at their doorstep.

The media nicknamed this phenomenon the “Retail Apocalypse.” And it has led to…


The “Rewiring” of American Real Estate

Amazon (AMZN) alone ships 5 billion packages a year. That’s more than 13 million packages per day.

To ensure these packages make it to their destination, a whole new network of infrastructure was built out. Industrial warehouses and distribution centers form the heart of this network.

These facilities store, process, and ship the packages you order online.

You might drive by an industrial warehouse on your way to work. They’re generally non-descript cement buildings, located off highways. They can stretch over a quarter mile long. And they usually have dozens of trucks docked outside.

Without these centers, online shopping would be impossible. And the stocks of companies that operate them have been great investments. Just look at the returns you could have made…  

Terreno Realty (TRNO)—a company that owns a portfolio of warehouses—has surged 187% since the start of 2014.

First Industrial Realty (FR), another warehouse operator, is up 111%. Prologis (PLD) is up 117%. And Duke Realty (DRE) is up 105%. The S&P 500 rose just 67% over the same period.

If You Missed Out on This Run, It’s Not Too Late

There’s a second real estate transformation happening now… thanks to the boom in online grocery shopping.

In just the last five years, online grocery sales have tripled. By 2023, the market is expected to quadruple again.

It’s easy to see why. Visiting the grocery store is a chore. The typical American family spends over a hundred hours a year shopping for groceries. A lot of that time is spent in the car and waiting in the checkout line.

Online shopping eliminates all that. It leaves you with more time to spend with your family, friends, and doing things you like.

This might surprise you, but…

The US Lags Behind Many Countries in Online Grocery Shopping

Last year, groceries accounted for just 1.6% of total US online sales. In China, they accounted for 3.8%. In Japan and South Korea, they accounted for 7.1% and 8.3% of total online sales.

You don’t see this often. Normally, the US is a leader in tech trends. In this case, it has some catching up to do.

There’s every reason to believe online grocery shopping will catch on soon in the US. The Food Marketing Institute and Nielsen predict 70% of consumers will try buying groceries online within the next four to six years. This should push grocery sales to 3.5% of total online sales by 2023.

Will Grocery Stories Disappear?

We’re not necessarily headed for a “Grocery Store Apocalypse.” But much like retail did, the industry will evolve.

Grocery stores will shrink because there will be fewer people walking up and down the aisles. They’ll store more food and beverage offsite.

As you can imagine, regular warehouses aren’t adequate for storing and processing groceries. Unlike most of the things you might buy on Amazon, groceries go bad.

A grocer can’t place a frozen chicken or a bunch of broccoli in a box and mail it to you. They have to keep the food fresh.

Cold storage warehouses store frozen and fresh food before it reaches a supermarket. About 96% of frozen food stops by one of these warehouses before reaching the grocery store.

Cold storage warehouses are specialized facilities. They aren’t cheap or easy to build. They require extensive piping, large HVAC systems, and a whole lot of refrigeration.

So, it’s unlikely Amazon, WalMart, or any other online grocer will build their own. Instead, they’ll leave cold storage to the pros.

I Like Americold Realty Trust (COLD)

Americold is a leader in cold storage. It owns and operates 156 warehouses and about 928 million cubic feet of temperature-controlled storage.       

The company has been around for decades. But it went public back in January 2018… and it’s been on a tear since then, as you can see here:



Americold’s stock has rocketed 112% since its IPO. I expect it to climb much higher as online groceries catch on.

About 82% of Americold’s sales come from the United States. And Americold commands a 23% market share in the US. Lineage Logistics is the only bigger player in the space, and it’s private. You can’t buy its stock.

Americold serves some of the biggest players in the food and beverage space. I’m talking Walmart, Kroger, Trader Joe’s, and Beyond Meat.

Finally, Americold pays a 2.5% dividend. The S&P 500, for perspective, yields 1.9%.

Americold is a unique and safe way to capitalize on the emerging online grocery market. But it also offers plenty of upside. I wouldn’t be surprised if its stock doubles over the next two to three years as online groceries take off.

Download our free report The Great Disruptors: 3 Breakthrough Stocks Set to Double Your Money. These stocks will hand you 100% gains as they disrupt whole industries.

By Justin Spittler

© 2019 Copyright Justin Spittler - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules