You’ve had another long working day or week and are exhausted. Why would you bother to go out when you can just stay at home with Netflix and Uber Eats?

That’s a difficult question, even for businesses that should be able to solve them. Over 50 ASX small caps are in the food, drink and entertainment sectors and there have been plenty of losers, and just a handful of winners.

Logic would suggest they cannot compete but the success of some (not to mention history) suggests otherwise.

Here are four ways businesses can compete with streaming and food delivery.

1. Offer something worth leaving home for

If you cannot make your way into your customers’ homes, you need them to come to you. If you’re a casino, this is a given but Reef Casino Trust (ASX: RCT) and Aquis Entertainment (ASX: AQS) clearly haven’t had difficulty with gains of 2% and 25% respectively in the past 12 months.

While there are betting apps, casinos take it to the next level offering dining, hotels and shopping options. If you’re just there for a punt, there are more options than any app could offer – for now.

In spite of this, the biggest loser of these stocks is Indoor Skydiving (ASX: IDZ), down 91% following a deteriorating financial position. Evidently, you need to reach to markets beyond all but the most brave of people.

2. Be truly unique

Even if you do have the flexibility to ship goods right to your customers, you still need to stand out. It is not enough to be a generalist.

The best performing stock is pond to plate cod producer Murray Cod (ASX: MCA), up 179% in 12 months. Murray cod is one of the world’s rarest luxury seafoods and is unique to their the Murray-Darling basin.

One recent concern was the Darling River fish kills although because Murray Cod – the company – has its own ponds they weren’t affected.

The second best performer is the Food Revolution Group (ASX: FOD). They are the owner of several drink brands such as Bucha Shop, the Juice Lab, Replenish, Fruit Farm and Thirsty Bro’s.

It also helps to be present in multiple markets. In addition to Australian supermarkets, Food Revolution have begun to ship their drinks to China – in supermarkets and high end hotels.

3. Be frictionless

The second largest loser on Stockhead’s list is Oliver’s (ASX: OLI), down 85% after a series of sell-offs following repeated poor financial results.

The healthy fast food chain operates nearly 20 outlets around Australia, mainly along highways – where they’re directly up against cheap, fast food giants such as KFC and McDonald’s.

Another poor performing stock is Marley Spoon (ASX: MMM). At first glance they may seem competitive with Uber Eats, being a meal delivery service.

But they only deliver the recipes and ingredients, leaving the customer to make it themselves.

Now, compare the above to Netflix and Uber Eats. There’s no walking, cooking or reading, just tapping and clicking with only seconds of waiting.

One genuine alternative is recently listed Candy Club (ASX: CLB). It offers candy directly to your door through an app.

The problems? It’s not yet available in Australia and even in active markets it only delivers monthly. It has shrunk by nearly a quarter since its listing.

4. Be an alternative to Netflix

Netflix may be convenient, but it is not the only form of entertainment. One example is live sport, with the NRL’s biggest club the Brisbane Broncos (ASX: BBL) being listed on the ASX. While the stock is slightly down in the last year it has returned 70% in the last five years.

While of course you can watch them on TV, their match day experience, club events and leagues club is a cut above what you see on your screen.

Although Hot Copper (ASX: HOT) probably wouldn’t see themselves as an alternative to Netflix, for some, chatting about stocks is their downtime hobby. Their stock is up 15% in the last year.

Don’t want you children watching Netflix? Kneomedia (ASX: KNO) and Readcloud (ASX: RCL) are two businesses with e-educational products.

While the companies evidently believe children can be entertained and educated, investors beg to differ, sending these stocks down 81% and 14% in the last year.

 

The Risk?

Unfortunately its possible that Netflix, Uber Eats or even another competitor will come after any competitive advantage they see they lack.

Already there has been speculation streaming services will buy live sport rights. A big tech firm launching its own gaming software is not imminent but it’s not impossible either.

And even premium food and drink brands could soon find themselves at a disadvantage if they aren’t on Uber Eats. Why Google and click when you can just look and tap?

However, some food and entertainment stocks have been performing better than others and they have distinctive features that make them viable alternatives to streaming and food delivery – at least for now.

Here’s a table of ASX food, beverage and entertainment small caps and their performance in the last 12 months…

Code Name Price (Friday 1pm) Market Cap Return (1 year) % Sector
MCA MURRAY COD AUSTRALIA LTD 0.17 $71,292,488.00 179 Food - Seafood
FOD FOOD REVOLUTION GROUP LTD/TH 0.1 $48,280,756.00 144 Food - Holding company
SFG SEAFARMS GROUP LTD 0.105 $175,061,824.00 91 Food - seafood
MGC MG UNIT TRUST (Murray Goulburn) 0.305 $172,584,336.00 69 Food - agriculture
AB1 ANIMOCA BRANDS CORP LTD 0.1 $73,701,280.00 43 Entertainment - mobile
GRB GAGE ROADS BREWING CO 0.1 $105,683,264.00 32 Beverages
AQS AQUIS ENTERTAINMENT LTD 0.05 $9,257,052.00 25 Entertinment - Casino
AHF AUSTRALIAN DAIRY NUTRITIONAL 0.13 $34,748,732.00 18 Food - dairy
ESH ESPORTS MOGUL ASIA PACIFIC L 0.015 $20,522,468.00 15 Entertainment - Mobile
BYI BEYOND INTERNATIONAL LTD 0.87 $55,816,640.00 14 Entertainment - TV & films
RGP REFRESH GROUP LIMITED 0.073 $19,065,084.00 4 Beverages - Water
FFI F.F.I. HOLDINGS LTD 4.07 $43,591,192.00 3 Food - baking & pastries
EM1 EMERGE GAMING LTD 0.022 $11,164,278.00 2 Entertainment - mobile
RCT REEF CASINO TRUST 2.97 $150,126,768.00 2 Entertainment - casino
OGA OCEAN GROWN ABALONE LTD 0.17 $31,339,846.00 0 Food - Seagood
DFM DONGFANG MODERN AGRICULTURE 0.92 $382,524,544.00 -1 Food - fruit
EBG EUMUNDI GROUP LTD 0.88 $33,534,772.00 -4 Entertainment - Hotels
AWY AUSTRALIAN WHISKY HOLDINGS L 0.044 $73,376,072.00 -6 Beverages
YOW YOWIE GROUP LTD 0.086 $18,508,664.00 -7 Food - chocolate
BBL BRISBANE BRONCOS LTD 0.46 $45,098,692.00 -10 Entertainment - sport
AS1 ANGEL SEAFOOD HOLDINGS LTD 0.165 $21,755,190.00 -11 Food - seafood
MTM MARETERRAM LTD 0.24 $38,633,800.00 -11 Food - seafood
RCL READCLOUD LTD 0.275 $24,131,250.00 -14 Entertainment - education
DBF DUXTON BROADACRE FARMS LTD 1.44 $63,181,432.00 -16 Food - agriculture
CSS CLEAN SEAS SEAFOOD LTD 0.95 $79,740,648.00 -17 Food - seafood
AVG AUSTRALIAN VINTAGE LTD 0.51 $137,546,960.00 -18 Beverages - wine
SKT SKY NETWORK TELEVISION LTD 1.36 $509,773,120.00 -24 Entertainment - TV & films
FRM FARM PRIDE FOODS LTD 0.685 $37,798,424.00 -28 Food - agriculture
TFL TASFOODS LTD 0.125 $25,824,884.00 -29 Food - agriculture
WNR WINGARA AG LTD 0.235 $24,699,754.00 -32 Beverages - wine
AAP AUSTRALIAN AGRICULTURAL PROJ 0.018 $2,742,451.00 -40 Food - agriculture
BFC BESTON GLOBAL FOOD CO LTD 0.125 $55,414,484.00 -40 Food - various
JJF JIAJIAFU MODERN AGRICULTURE 0.071 $6,048,063.00 -41 Food - agriculture
BUG BUDERIM GROUP LTD 0.21 $18,064,590.00 -42 Food - ginger
BAH BOJUN AGRICULTURE HOLDINGS L 0.15 $18,226,802.00 -50 Food - agriculture
ICI ICANDY INTERACTIVE LTD 0.075 $24,128,078.00 -53 Entertainment - mobile
EXP EXPERIENCE CO LTD 0.3 $163,964,496.00 -53 Entertainment - tourism
AGI AINSWORTH GAME TECHNOLOGY LT 0.88 $299,746,592.00 -55 Entertainment - mobile
SHO SPORTSHERO LTD 0.073 $19,459,396.00 -58 Entertainment - mobile
WLD WELLARD LTD 0.055 $27,625,016.00 -61 Food - Beef Exports
WHA WATTLE HEALTH AUSTRALIA LTD 0.86 $170,190,240.00 -66 Food - dairy
DNA DONACO INTL LTD 0.067 $54,357,124.00 -71 Entertainment - casino
MRG MURRAY RIVER ORGANICS GROUP 0.1 $45,544,916.00 -75 Food - dried fruit
LON LONGTABLE GROUP LTD 0.2 $23,930,798.00 -78 Food - various
TBH BETMAKERS HOLDINGS LTD/THE 0.033 $7,843,688.50 -80 Entertainment - betting
KNM KNEOMEDIA LTD 0.019 $11,782,342.00 -81 Entertainment - education
SVH SILVER HERITAGE GROUP LTD 0.01 $12,612,198.00 -82 Entertinment - Casino
RFG RETAIL FOOD GROUP LTD 0.185 $35,635,376.00 -83 Food - various
BEE BROO LTD 0.027 $18,547,498.00 -84 Beverages - beer
OLI OLIVER'S REAL FOOD LTD 0.034 $9,778,545.00 -85 Fast food - Health
IDZ INDOOR SKYDIVING AUSTRALIA G 0.018 $2,460,537.25 -91 Skydiving
WOA WIDE OPEN AGRICULTURE LTD 0.18 $12,704,265.00 -10 Food - agriculture
KTD KEYTONE DAIRY CORP LTD 0.405 $58,500,000.00 100 Food - dairy
MMM MARLEY SPOON AG-CDI 0.48 $69,532,648.00 -66 Food delivery
CLB CANDY CLUB HOLDINGS LTD 0.155 $22,949,970.00 -23 Food delivery

Note: Stocks in italics have been listed less than 12 months. In these cases their performance is since their listing.