WEBVTT - Bloomberg Businessweek Weekend - December 6th, 2024 0:00:00.160 --> 0:00:10.600 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business 0:00:10.600 --> 0:00:13.840 Week Inside from the reporters and editors who bring you 0:00:13.880 --> 0:00:18.240 America's most trusted business magazine, plus global business, finance and 0:00:18.280 --> 0:00:22.560 tech news. The Bloomberg Business Week Podcast with Carol Messer 0:00:22.920 --> 0:00:25.720 and Tim Stenebeck from Bloomberg Radio. 0:00:26.800 --> 0:00:30.400 Hi, everyone, Welcome to the Bloomberg Business Wee Weekend Podcast. Well, 0:00:30.440 --> 0:00:33.440 we've officially entered the final month of twenty twenty four 0:00:33.800 --> 0:00:35.960 and with that the last jobs report of the year 0:00:36.280 --> 0:00:38.280 that will now weigh on the Fed's rate cut decision 0:00:38.360 --> 0:00:41.080 later on this month. For the latest on that, head 0:00:41.080 --> 0:00:42.800 over to Bloomberg dot com or check it out. 0:00:42.760 --> 0:00:44.200 On the Bloomberg Now. 0:00:44.320 --> 0:00:45.920 Tim and I we got our own read on the 0:00:46.000 --> 0:00:48.600 US economy and really the housing economy here in the 0:00:48.720 --> 0:00:51.479 United States, courtesy of the team over at the asset 0:00:51.520 --> 0:00:54.600 and real estate investment company Walton Global. More in just 0:00:54.640 --> 0:00:55.080 a moment. 0:00:55.480 --> 0:00:58.120 Also this week, more records on Wall Street on that 0:00:58.280 --> 0:01:01.000 we have a consistently top performing fund manager who has 0:01:01.040 --> 0:01:04.160 returned on average twenty five percent annually over the past 0:01:04.200 --> 0:01:06.959 five years, all by investing in thirty stocks. 0:01:07.040 --> 0:01:09.040 You're gonna want to take notes on that one plus. 0:01:09.080 --> 0:01:11.720 As the auto industry tries to retool for the electric 0:01:11.800 --> 0:01:15.400 vehicle era, we see increasingly that road is paved with 0:01:15.440 --> 0:01:17.600 a few bumps along the way. We saw this this 0:01:17.640 --> 0:01:20.760 past week after the surprise departure of the CEO of Stilantis. 0:01:21.120 --> 0:01:23.600 Our take on the ev industry came courtesy of the 0:01:23.640 --> 0:01:27.360 CEO of the EV charging management software company Drives. 0:01:27.600 --> 0:01:30.040 Also from the alt energy space, how to build out 0:01:30.120 --> 0:01:33.480 nuclear energy in the US with the chief nuclear officer 0:01:33.560 --> 0:01:34.959 of the nuclear company. 0:01:35.200 --> 0:01:37.240 All of that to come, we begin with one often 0:01:37.360 --> 0:01:40.800 overlooked investment group, small and mid cap stocks. They just 0:01:40.840 --> 0:01:43.479 don't get any respect sometimes, although they. 0:01:43.360 --> 0:01:43.920 Get talked about it. 0:01:43.920 --> 0:01:44.960 You're Rodney Dangerfield. 0:01:45.319 --> 0:01:47.080 I was going to go there, all right. 0:01:47.120 --> 0:01:49.360 While all the attention has been focused on large cap 0:01:49.400 --> 0:01:52.960 tech stocks for a good reason, they've really fueled market gains, 0:01:52.960 --> 0:01:57.360 such as Nvidia, small caps finally, finally, finally seem to 0:01:57.400 --> 0:01:59.440 be making up for lost ground with the Russell two 0:01:59.440 --> 0:02:02.480 thousand trade your an all time high. WITCH hit a 0:02:02.560 --> 0:02:05.120 record about one week ago for the first time since 0:02:05.120 --> 0:02:06.000 twenty twenty one. 0:02:06.320 --> 0:02:09.240 Ryan Kelly is the chief investment officer and portfolio manager 0:02:09.240 --> 0:02:12.120 at Hennessy Funds and invest in the small and MidCap space. 0:02:12.400 --> 0:02:14.799 It's got a pretty impressive track record to show for it. 0:02:15.160 --> 0:02:18.519 Ryan Co manages the Hennessy Cornerstone MidCap thirty Fund. It's 0:02:18.840 --> 0:02:21.400 return on average about twenty five percent annually for the 0:02:21.440 --> 0:02:24.480 past five years, putting the fund in the ninety eighth percentile, 0:02:24.840 --> 0:02:27.120 so beating pretty much just about everyone in the sector. 0:02:27.360 --> 0:02:29.600 He's stopped by to talk about strategy and picks. 0:02:30.040 --> 0:02:32.960 So much of the large cap stocks are just dominated 0:02:33.000 --> 0:02:36.880 by the Magnificent seven still and in Vidia, you know, 0:02:36.960 --> 0:02:39.120 so far this year, twenty five percent of the S 0:02:39.160 --> 0:02:42.240 and p's returns have been from in Vidia. So one 0:02:42.320 --> 0:02:46.639 stock doing that much good and maybe sometimes that much 0:02:46.720 --> 0:02:50.040 damage right to one particular index is a lot. So 0:02:50.480 --> 0:02:53.280 we like the small and MidCap space because it's not 0:02:53.400 --> 0:02:57.280 as susceptible to a lot of you know, there's not 0:02:57.440 --> 0:03:01.440 megacaps that'll take over the index. It's traded in a 0:03:01.560 --> 0:03:07.280 better valuation. Certainly some changes that are supposedly upcoming with 0:03:07.680 --> 0:03:10.800 less regulation, better corporate tax rate, that's going to benefit 0:03:10.880 --> 0:03:12.079 some of these companies as well. 0:03:12.200 --> 0:03:12.960 Tariff policy. 0:03:13.520 --> 0:03:17.320 Tariff policy could actually eat into some of their earnings. 0:03:17.639 --> 0:03:19.800 For some of these MidCap stocks. 0:03:19.520 --> 0:03:22.280 What's of those things you mentioned, what's actually priced in 0:03:22.360 --> 0:03:24.000 right now in your view? And we'll talk about some 0:03:24.000 --> 0:03:28.480 of these individual names soon. But the administration is in transition, yes, so, 0:03:29.560 --> 0:03:32.560 but we know the makeup of Congress pretty much. What 0:03:32.600 --> 0:03:34.440 do you think they'll be able to get done? So, therefore, 0:03:34.440 --> 0:03:35.200 what is priced down? 0:03:35.560 --> 0:03:36.480 Very tough question. 0:03:36.600 --> 0:03:39.400 I would say that tariffs are not completely priced in 0:03:39.520 --> 0:03:42.040 because I think there's still a disbelief that we can 0:03:42.080 --> 0:03:44.040 get to some of the levels that have been talked about. 0:03:44.760 --> 0:03:47.400 I think that personally it would be a very detrimental 0:03:47.400 --> 0:03:50.440 to the economy overall, and I hope that sort of 0:03:50.640 --> 0:03:54.000 more level heads come up with maybe a better plan. 0:03:54.520 --> 0:03:56.880 But if that is the case, we're getting the kind 0:03:56.920 --> 0:03:58.760 of tariffs we're talking about that really could hurt I 0:03:58.800 --> 0:04:00.800 think some of the longer term earnings of some of 0:04:00.880 --> 0:04:01.280 these company. 0:04:01.280 --> 0:04:02.640 All right, let's get to it, because I want to 0:04:02.680 --> 0:04:03.240 talk names. 0:04:03.640 --> 0:04:06.120 Your fund is up thirty seven percent year today, ninety 0:04:06.160 --> 0:04:07.000 eighth percentile. 0:04:07.480 --> 0:04:09.760 You've had a great five years for the fund as well. 0:04:09.760 --> 0:04:12.080 You pretty much are beating your peers, so kudos, kudos. 0:04:12.080 --> 0:04:14.720 We like to talk to people who perform your strategy. 0:04:14.720 --> 0:04:17.080 It's a one year rebalance. You reminded me when you 0:04:17.120 --> 0:04:19.599 sat down here in our studio, you just finished a rebalance. 0:04:20.400 --> 0:04:23.000 Tell us about that rebalance. It's thirty names and you said, 0:04:23.040 --> 0:04:25.920 only two have stayed in the portfolio from the past year. 0:04:26.120 --> 0:04:26.360 Yeah. 0:04:26.400 --> 0:04:28.120 So what we do is we really want to make 0:04:28.160 --> 0:04:30.640 sure that we're just going to continue to follow the 0:04:30.640 --> 0:04:32.560 same formula year in and year out. So this fund 0:04:32.640 --> 0:04:34.680 is twenty one years old. It has been done the 0:04:34.720 --> 0:04:39.000 exact same way since inception. We use a very disciplined process. 0:04:39.200 --> 0:04:42.080 That's actually on our website. It's the formula is listed 0:04:42.120 --> 0:04:44.359 there on how we do it. But the idea is 0:04:44.360 --> 0:04:46.600 that once a year, we'll look at all the portfolio 0:04:47.400 --> 0:04:48.479 and we'll look at the universe of. 0:04:48.480 --> 0:04:50.920 Stocks out there, and we really a lot to look 0:04:50.960 --> 0:04:51.320 at it. 0:04:51.320 --> 0:04:53.880 It's a lot, and so it's it's a quantitative based 0:04:53.920 --> 0:04:56.640 it's a formula based fund, okay, but it's based on 0:04:57.160 --> 0:04:59.680 fundamentals going back for many, many many decades when this 0:04:59.720 --> 0:05:02.200 was first put together. They look back at three four 0:05:02.240 --> 0:05:05.040 decades worth of data to see what really works. 0:05:04.960 --> 0:05:07.720 On Wall Street. And so what we've what we. 0:05:07.760 --> 0:05:11.039 Do is we look for companies in the one to 0:05:11.080 --> 0:05:13.760 ten billion market cap range. We look for a low 0:05:13.800 --> 0:05:16.320 price to sales, which is an interesting metric because most 0:05:16.320 --> 0:05:19.479 people use PE or to EBITDA or whatever. We look 0:05:19.480 --> 0:05:21.160 for a low price to sales of less than one 0:05:21.160 --> 0:05:22.000 point five times. 0:05:22.040 --> 0:05:24.920 It almost thinks about some valuation that hasn't been recognized right. 0:05:24.960 --> 0:05:27.400 As a result, a lot of times of the top line. 0:05:27.480 --> 0:05:30.320 Get you'll get companies that are are in a bad 0:05:30.360 --> 0:05:33.520 part of the cycle or that are underperforming, that are 0:05:33.560 --> 0:05:36.440 about to turn. And the reason why we're okay doing 0:05:36.480 --> 0:05:39.840 that is that another important part of the metrics is 0:05:39.880 --> 0:05:42.840 we're looking for momentum, so we already want stocks that 0:05:42.880 --> 0:05:46.600 have turned. We don't want to buy an undervalued company 0:05:46.720 --> 0:05:48.880 that has a lot more to go on the downside, 0:05:48.880 --> 0:05:51.240 but rather buy a company that's a good company that's 0:05:51.279 --> 0:05:53.000 out of favor, that's on its way up. 0:05:53.040 --> 0:05:55.400 So you're one of your old holdings that was one 0:05:55.440 --> 0:05:58.159 of your biggest holdings. With sprouts, Farmer's market uptically twenty 0:05:58.240 --> 0:06:00.560 two percent year to date, it's treading your time high. 0:06:00.560 --> 0:06:01.400 You said bye bye. 0:06:01.880 --> 0:06:04.400 Yes, so that in this most recent rebalance, it then 0:06:04.480 --> 0:06:07.039 moved way above our price to sales of one point 0:06:07.080 --> 0:06:07.640 five times. 0:06:07.960 --> 0:06:09.240 Only about a third. 0:06:09.040 --> 0:06:11.880 Of companies out there that are publicly traded trade below 0:06:11.960 --> 0:06:14.520 one point five times, so it's a pretty restrictive number, 0:06:14.880 --> 0:06:15.840 and that one way above it. 0:06:16.080 --> 0:06:18.320 It performed very well for us, but now it's gone. 0:06:18.400 --> 0:06:20.520 Okay, let's talk about some of the names that you're adding. 0:06:21.600 --> 0:06:23.040 One name that I think a lot of people would 0:06:23.040 --> 0:06:25.200 be surprised to hear would be Peloton. Yes, this is 0:06:25.240 --> 0:06:29.000 a company that has faced incredible pressure since the pandemic. 0:06:29.600 --> 0:06:31.160 Why are you optimistic? Why are you bullish? 0:06:31.640 --> 0:06:33.599 It comes down to the formula first and foremost. 0:06:34.160 --> 0:06:34.680 It fits. 0:06:35.120 --> 0:06:38.000 It trades at zero point seven times price to sales. 0:06:38.080 --> 0:06:40.920 We bought it around we're buying it around the five 0:06:40.960 --> 0:06:43.840 to six dollars mark. It's now approaching eight. So it 0:06:43.920 --> 0:06:46.280 has had to bounce back. You know, they're starting to 0:06:46.360 --> 0:06:50.719 improve on their cost side. You know, a new CEO 0:06:50.880 --> 0:06:56.080 is always an important and potentially beneficial it's certainly challenging, 0:06:56.480 --> 0:06:59.240 but we've seen that type of turnaround before, believe it 0:06:59.320 --> 0:07:02.200 or not. Crock we owned Crocs when nobody wanted Crocs, 0:07:02.240 --> 0:07:04.040 and now all my children wear them. You know, we 0:07:04.160 --> 0:07:07.920 owned h We owned restorators hardware when people were not 0:07:08.080 --> 0:07:10.280 going nobody's going to go to a store. Yeah, yeah, 0:07:10.280 --> 0:07:12.920 and then they became. You know, it was an incredible 0:07:12.920 --> 0:07:16.000 turnaround story. So there's a lot of it may not 0:07:16.080 --> 0:07:18.160 come down to this particular name working the best, but 0:07:18.240 --> 0:07:20.040 it's just a representative. 0:07:19.440 --> 0:07:20.800 Holding of what we'll own. 0:07:21.320 --> 0:07:24.240 And the idea is you'll get something that's completely out 0:07:24.240 --> 0:07:27.320 of favor, that's beat down, that maybe has a second life. 0:07:27.600 --> 0:07:29.200 Tell us about HERK. 0:07:29.920 --> 0:07:32.840 So HERK holdings is this is so when we did 0:07:32.920 --> 0:07:34.640 the rebalance this year, we did find that there was 0:07:35.080 --> 0:07:37.160 a whole lot of consumer discretionary and a whole lot 0:07:37.200 --> 0:07:41.240 of industrials. And HERK is an equipment rental company essentially. 0:07:41.200 --> 0:07:45.200 So as hri I and it's up about forty this year. 0:07:45.320 --> 0:07:48.080 Mm hm. So that you know, this is typically what 0:07:48.160 --> 0:07:50.120 we do. We catch something as it's already gone up. 0:07:50.160 --> 0:07:51.600 We don't want to try to buy it on its 0:07:51.640 --> 0:07:52.080 way down. 0:07:52.320 --> 0:07:54.360 Yeah, and with the idea you're okay that you've lost 0:07:54.400 --> 0:07:55.760 some of the momentum. 0:07:55.440 --> 0:07:58.760 We're okay, we'd rather not try to time the bottom 0:07:58.840 --> 0:07:59.800 but participate once it. 0:08:00.360 --> 0:08:02.520 Are you using AI at all now in your analysis? 0:08:02.960 --> 0:08:03.000 No? 0:08:03.120 --> 0:08:05.640 AI, this is wait or not. 0:08:07.040 --> 0:08:09.600 I have to say this is so simple that it's 0:08:09.720 --> 0:08:13.000 almost almost too so, you know, and I come from 0:08:13.040 --> 0:08:16.160 a I come from an analyst background, where you don't know. 0:08:16.280 --> 0:08:18.000 For the last year and a half, that's all we 0:08:18.440 --> 0:08:20.360 talk about is AI. But go ahead. 0:08:21.000 --> 0:08:22.560 I came from the background where I covered banks. 0:08:22.600 --> 0:08:24.440 I didn't know how old the CEO was, where he 0:08:24.480 --> 0:08:26.560 went to you know, where they went to play golf, 0:08:26.680 --> 0:08:29.160 all these kind of intricate pieces of data. 0:08:29.920 --> 0:08:32.440 But this is really it's it's fundamental quant is. 0:08:32.440 --> 0:08:34.040 What it's called in the idea is you really just 0:08:34.080 --> 0:08:37.199 want to boil it down to very simple metrics and 0:08:37.480 --> 0:08:39.120 just stay with it year in and year out. 0:08:39.160 --> 0:08:41.240 And it's it's worked. Tim. 0:08:41.480 --> 0:08:43.640 If you don't know loves to eat a lot, he 0:08:43.840 --> 0:08:48.840 just finished a sandwich, it will come up. Brinker International 0:08:48.920 --> 0:08:50.719 is another name that you like. Eat is a tick er. 0:08:50.880 --> 0:08:52.959 Love that it's up one hundred and eighty three percent, 0:08:53.240 --> 0:08:56.000 but you've got it in the portfolio for the coming year, 0:08:56.160 --> 0:08:57.800 so there's more momentum to the app side. 0:08:58.080 --> 0:09:02.920 Yeah, so Eat Chili is the name brand. Also Cake 0:09:03.040 --> 0:09:05.960 Cheesecake Factory. Both of those are two restaurants that are 0:09:06.040 --> 0:09:10.280 now in the portfolio. Again, it's it's the same sort 0:09:10.280 --> 0:09:12.120 of situation we've looked for all these companies. 0:09:12.240 --> 0:09:13.439 Cake is up thirty three percent. 0:09:13.520 --> 0:09:16.839 This yeah, and you know, you look at these. 0:09:16.840 --> 0:09:20.360 Names that we add in and an example that worked 0:09:20.360 --> 0:09:22.880 really well is super micro Computers. We owned and we 0:09:22.960 --> 0:09:24.800 owned it as it went completely up until it didn't, 0:09:24.880 --> 0:09:26.160 and we actually got rid of it because it was 0:09:26.200 --> 0:09:26.880 too expensive. 0:09:27.120 --> 0:09:28.320 So who needs AI. 0:09:28.480 --> 0:09:31.079 We just need Ryan Kelly Brian good to see you 0:09:31.120 --> 0:09:33.360 with you have a great holiday season. He is the 0:09:33.440 --> 0:09:35.480 chief investment officer at Hennessy Funds. 0:09:36.320 --> 0:09:39.840 You're listening to the Bloomberg Business Week podcast. Catch us 0:09:39.920 --> 0:09:43.199 live weekday afternoons from three to six Eastern Listen on 0:09:43.320 --> 0:09:47.320 Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, 0:09:47.640 --> 0:09:49.320 or watch us live on YouTube. 0:09:50.200 --> 0:09:53.000 From a model portfolio to modeling what is going on 0:09:53.240 --> 0:09:56.360 in the US housing market? US Census Bureau and Department 0:09:56.400 --> 0:09:59.599 of Housing and Urban Development data show that sales of 0:09:59.679 --> 0:10:01.559 new home in the US slumped in October to the 0:10:01.600 --> 0:10:04.120 lowest in almost two years, as two hurricanes hit the 0:10:04.160 --> 0:10:07.280 South and affordability challenges continued to weigh on buyers. 0:10:07.640 --> 0:10:10.080 On top of that, new single family home sales decreased 0:10:10.120 --> 0:10:12.600 seventeen percent last month to a six hundred and ten 0:10:12.760 --> 0:10:16.120 thousand annualized rate. The media estimate of economists surveyed by 0:10:16.160 --> 0:10:19.800 Bloomberg called for seven hundred and twenty five thousand. Meantime, 0:10:19.920 --> 0:10:22.480 home price gains in the US slowed in September as 0:10:22.559 --> 0:10:24.960 buyers gained more negotiating power in the housing market. 0:10:25.120 --> 0:10:27.400 Katie Hubbard has a front seat to the housing market. 0:10:27.520 --> 0:10:30.240 She is the executive VP of Capital Markets of the 0:10:30.320 --> 0:10:33.400 privately owned acid and real estate investment company Walton Global, 0:10:33.520 --> 0:10:36.000 which has nearly four point four billion dollars of land 0:10:36.080 --> 0:10:39.160 under management and over ninety thousand acres under management in 0:10:39.160 --> 0:10:42.360 the United States. The company operates in the retail, industrial, 0:10:42.440 --> 0:10:43.560 and commercial sectors. 0:10:43.800 --> 0:10:46.559 Our clients are typically the largest public homebuilders in The 0:10:46.679 --> 0:10:49.719 rate environment obviously is affecting all of the homebolders, but 0:10:49.840 --> 0:10:52.680 the large ones that have the scale and the ability 0:10:52.760 --> 0:10:55.520 to buy down rates have been doing just that and 0:10:55.679 --> 0:10:58.800 been gaining market share in a rising rate environment. It's 0:10:58.840 --> 0:11:01.560 been good for the large home builders who are are 0:11:01.640 --> 0:11:02.360 more competitive. 0:11:02.840 --> 0:11:06.360 So it's it's okay, that's that's what's That's what's hard 0:11:06.360 --> 0:11:08.800 to understand, because you know, the idea is when rates 0:11:08.840 --> 0:11:10.840 go down, people can afford to buy more homes. 0:11:10.840 --> 0:11:11.960 Hopefully that's the idea. 0:11:12.080 --> 0:11:14.920 We haven't really seen that play out necessarily just because 0:11:14.920 --> 0:11:17.079 of the demand element here. But but how does it 0:11:17.120 --> 0:11:18.959 affect the way that home builders then come to you 0:11:19.080 --> 0:11:19.800 to purchase land? 0:11:20.040 --> 0:11:22.840 Yeah, I mean it definitely, just because we're typically feeding 0:11:22.960 --> 0:11:26.240 the land to the largest public homebuilders and they're less 0:11:26.520 --> 0:11:30.040 rate sensitive. The smaller builders that that don't have the 0:11:30.120 --> 0:11:32.360 ability to bite down the rates are are more effective 0:11:32.400 --> 0:11:34.800 and can't really compete in the land space as well 0:11:34.880 --> 0:11:38.360 as the large builders. We're also purchasing land ahead of 0:11:38.920 --> 0:11:40.760 needing it right now, so they're keeping an off balance 0:11:40.800 --> 0:11:44.320 sheet where smaller builders who are also affected by the mortgages, 0:11:44.360 --> 0:11:47.040 they don't have the ability to land bank like the 0:11:47.160 --> 0:11:50.319 larger competitors do. But obviously when rates go down, you 0:11:50.360 --> 0:11:52.800 know in that sweet spot when it goes below six percent, 0:11:52.920 --> 0:11:54.440 I mean there's a lot of people on the sidelines 0:11:54.480 --> 0:11:56.719 right now that are waiting for that, and we think 0:11:56.760 --> 0:11:59.320 that that's going to be coming up into the next 0:11:59.600 --> 0:12:02.800 next probably won't be hitting below six percent this year, 0:12:02.880 --> 0:12:05.120 but next year could get a lot of consumers off 0:12:05.160 --> 0:12:05.720 the sidelines. 0:12:05.960 --> 0:12:07.839 Katie, one thing I'm curious about and I want to 0:12:07.880 --> 0:12:09.679 get your take on this, and we want to get 0:12:09.720 --> 0:12:12.560 into kind of what people want in homes going forward. 0:12:12.640 --> 0:12:14.240 I mean, I don't know if the mega mansion or 0:12:14.280 --> 0:12:17.040 the MC mansions are gone. But before we do that, 0:12:18.000 --> 0:12:20.439 we talk about the housing shortages in the United States. 0:12:20.520 --> 0:12:22.280 It's not just a one or two or three year thing. 0:12:22.480 --> 0:12:24.520 It's at least ten years, if not more, and that 0:12:24.840 --> 0:12:27.559 you don't have affordable housing in great cities, be it 0:12:27.640 --> 0:12:31.199 New York or elsewhere for those people who work in 0:12:31.240 --> 0:12:33.640 the city but can't afford to live there. So it's 0:12:33.720 --> 0:12:38.079 not just about building housing, but building housing, affordable housing. 0:12:37.880 --> 0:12:40.280 Where it needs to be. So when you guys are 0:12:40.320 --> 0:12:41.600 acquiring land, is. 0:12:41.600 --> 0:12:45.240 It in major cities, is it suburbs? Like, is it 0:12:45.520 --> 0:12:48.240 really feeding the demand that needs to be met? 0:12:48.760 --> 0:12:52.240 Yeah, good question. So it's really it's regionally based. But 0:12:52.400 --> 0:12:55.120 we are typically on the outskirts of the cities where 0:12:55.160 --> 0:13:00.400 home bolders can build larger scale communities versus those infilocas 0:13:00.400 --> 0:13:04.240 because we're dealing on a larger scale land land supply. 0:13:04.640 --> 0:13:07.719 But yeah, absolutely, the homebuilders have adjusted the type of 0:13:07.840 --> 0:13:11.840 product mixes that they're building to just for that affordability factor. 0:13:11.880 --> 0:13:15.360 They're building more efficient floor plans. Everything is getting smaller, 0:13:15.440 --> 0:13:19.199 smaller kitchen, smaller garages, smaller storage to build a smaller 0:13:19.240 --> 0:13:20.679 home just to make them more affordable. 0:13:20.920 --> 0:13:22.120 What's considered doing higher. 0:13:21.960 --> 0:13:24.959 Density to your point, Carol, less big bangs, and more 0:13:25.480 --> 0:13:28.560 amenities geared towards the people that are able to purchase 0:13:28.600 --> 0:13:30.679 the homes. So you're seeing more pickleball courts out there. 0:13:31.559 --> 0:13:34.240 It's kind of funny what's considered affordable, Like, what do 0:13:34.280 --> 0:13:36.600 you guys consider affordable housing? 0:13:37.120 --> 0:13:39.240 So the average new home is just hitting around in 0:13:39.280 --> 0:13:42.480 the four hundred and sixty seven thousand dollars range, and 0:13:42.720 --> 0:13:45.400 people are moving to the Northeast now for affordability. I 0:13:45.480 --> 0:13:48.400 mean you can Youngstown, Ohio, you can get a house 0:13:48.440 --> 0:13:50.480 for one hundred and seventy one thousand dollars. It's one 0:13:50.480 --> 0:13:53.319 of the most affordable markets. And then they're going to 0:13:53.400 --> 0:13:56.880 where their jobs are located. So for example, Syracuse, New 0:13:56.960 --> 0:13:59.680 York has a huge influx of people because Micron's building 0:13:59.679 --> 0:14:02.559 on hundred billion dollar chip manufacturing plant. So if the 0:14:02.679 --> 0:14:06.400 jobs are there, then you know it's relative to that market. 0:14:06.760 --> 0:14:08.719 But Southern California, I mean it's still one of the 0:14:08.760 --> 0:14:11.480 most expensive markets and one of the most difficult places 0:14:11.520 --> 0:14:13.800 to build because land is so expensive, So it is 0:14:14.000 --> 0:14:14.640 very relative. 0:14:14.840 --> 0:14:17.040 Like you said, well, that said, you do have quite 0:14:17.040 --> 0:14:19.320 a few assets in the state of California, quite a 0:14:19.320 --> 0:14:21.000 few in the San Diego area, a few in the 0:14:21.040 --> 0:14:23.600 Bay Area as well. What is attractive to you about 0:14:23.640 --> 0:14:26.080 that area given how expensive it is and how difficult 0:14:26.080 --> 0:14:28.280 it is for some home builders to actually build in California. 0:14:28.320 --> 0:14:29.640 Doesn't scream affordable to. 0:14:29.720 --> 0:14:32.920 Me, right, It's just it's the overall fundamentals of people 0:14:33.080 --> 0:14:35.800 wanting to be in southern California. So the demand is there, 0:14:36.440 --> 0:14:40.400 and you have a scarcity of land that's available for development. 0:14:40.960 --> 0:14:43.000 You used to have this mentality of you know, people 0:14:43.080 --> 0:14:45.920 didn't want things built in their backyards and nimbi mentality, Well, 0:14:46.320 --> 0:14:48.600 in California goes a step further. It's now called the 0:14:48.640 --> 0:14:52.520 Banana mentality, which is build absolutely nothing anywhere near anything. 0:14:53.040 --> 0:14:57.120 So it makes it before I've never heard that that's 0:14:57.160 --> 0:14:59.320 the banana build absolutely nothing anywhere near. 0:14:59.280 --> 0:15:03.320 Anything, exactly, and that is the California. It can be 0:15:03.360 --> 0:15:06.359 the California mentality. And so if you have the expertise 0:15:06.400 --> 0:15:08.440 and the boots on the ground to buy the land 0:15:08.520 --> 0:15:11.200 for the builders, the demand for people wanting to live 0:15:11.240 --> 0:15:11.720 there is there. 0:15:12.480 --> 0:15:15.920 Nuts looking at the map of your website in terms 0:15:15.960 --> 0:15:18.720 of where you, guys, I guess have land and land assets, 0:15:18.720 --> 0:15:22.360 specifically Atlanta. Is it still on fire for you guys, 0:15:22.520 --> 0:15:25.560 or is that property land just sitting kind of empty 0:15:25.640 --> 0:15:26.560 and demand is cooled? 0:15:27.160 --> 0:15:29.960 There definitely is demand there, but you are seeing less 0:15:30.520 --> 0:15:32.720 demand in the South. Like I mentioned the October numbers 0:15:32.760 --> 0:15:36.080 for the Southeast, we're down, but I mean it's still 0:15:36.160 --> 0:15:39.920 a good place for migration for the affordability. 0:15:39.360 --> 0:15:42.160 Factor Texas too. Are people still fly to Texas? 0:15:42.360 --> 0:15:46.320 Texas? Texas continues to be a stronghold. Almost all of 0:15:46.400 --> 0:15:49.840 the top public builders have a very large presence in Texas. 0:15:50.440 --> 0:15:52.880 But we're moving to places in the Northeast, like Delaware, 0:15:52.920 --> 0:15:55.320 where the public builders have told us they will take 0:15:55.400 --> 0:15:56.800 all of the land that we can bring them in 0:15:56.800 --> 0:15:59.960 a place like Delaware because you've got low property taxes, 0:16:00.120 --> 0:16:05.040 is no social Security income tax, strong employment, great schools, 0:16:05.480 --> 0:16:07.800 and the surrounding cities are just much more expensive. 0:16:08.080 --> 0:16:10.800 You basically, in thirty seconds, just tell us you basically 0:16:10.880 --> 0:16:14.640 have no assets in the sort of northwest quadrant of 0:16:14.800 --> 0:16:17.000 the United States. I mean all the way from Iowa 0:16:17.120 --> 0:16:18.520 to Washington and Oregon. 0:16:18.760 --> 0:16:23.200 Why is that we're going to be expanding our acquisition strategy, 0:16:23.280 --> 0:16:26.200 So we're going to be entering the Idaho market. We 0:16:26.360 --> 0:16:28.880 do land bank for d R. Horton in the Northwest, 0:16:28.920 --> 0:16:32.080 so we do have some assets holding land off balance 0:16:32.080 --> 0:16:34.600 sheet for them. So those are markets that worksploring. 0:16:35.040 --> 0:16:37.000 Where's the most expensive place to buy land right now? 0:16:37.120 --> 0:16:37.840 Just ten seconds? 0:16:38.400 --> 0:16:41.800 Southern California, I mean California markets are the most expensive 0:16:41.840 --> 0:16:42.840 and the most difficult. 0:16:43.720 --> 0:16:46.080 That sun is perfect weather is going to cost you, 0:16:46.160 --> 0:16:47.200 Carol Master, of. 0:16:47.240 --> 0:16:47.800 Course it does. 0:16:48.000 --> 0:16:49.200 Katy is expensive. 0:16:49.400 --> 0:16:52.440 Yeah, Katie Hebard, thank you so much, executivevice president Capital 0:16:52.480 --> 0:16:54.720 Markets at the privately owned asset and real estate investment 0:16:54.760 --> 0:16:56.160 company Walton Globble. 0:17:00.320 --> 0:17:03.800 You're listening to the Bloomberg Business Week podcast. Catch us 0:17:03.880 --> 0:17:07.880 live weekday afternoons from three to six Easter on Bloomberg Radio, 0:17:08.119 --> 0:17:11.359 the Bloomberg Business App, and YouTube. You can also listen 0:17:11.480 --> 0:17:14.560 live on Amazon Alexa from our flagship New York station, 0:17:15.040 --> 0:17:17.800 Just say Alexa play Bloomberg eleven thirty. 0:17:19.480 --> 0:17:20.600 This past week, news. 0:17:20.480 --> 0:17:22.840 That General Motors is selling at stake in an electric 0:17:22.960 --> 0:17:26.399 vehicle battery plant in Lansing, Michigan, to South Korean partner 0:17:26.520 --> 0:17:30.240 LG Energy Solution, recouping about a billion dollars in investment 0:17:30.280 --> 0:17:33.159 from a facility that will still supply energy sales to 0:17:33.200 --> 0:17:34.440 the automaker's evs. 0:17:34.800 --> 0:17:37.520 The move reflects a realization by the carmaker that it's 0:17:37.560 --> 0:17:40.639 battery cell plants in Ohio and Tennessee, along with some 0:17:40.800 --> 0:17:43.680 supplies from the new plan in Lansing, will be enough 0:17:43.800 --> 0:17:47.200 to meet near term demand for evs without additional capital investment. 0:17:47.520 --> 0:17:50.240 GM continues to grow EV sales, but a slowdown in 0:17:50.320 --> 0:17:53.240 demand and political uncertainty over the future of federal ed 0:17:53.400 --> 0:17:56.440 tax credits have made the future prospects for all electric 0:17:56.560 --> 0:17:58.760 vehicles less certain, and the push. 0:17:58.640 --> 0:18:01.280 To accelerate EV adoption in the US is experiencing a 0:18:01.400 --> 0:18:04.800 massive roadblock, and that is the lack of charging infrastructure. 0:18:05.240 --> 0:18:07.880 In twenty twenty one, the Biden administration announced it would 0:18:07.920 --> 0:18:12.000 invest seven point five billion dollars toward charging infrastructure, with 0:18:12.119 --> 0:18:15.320 the aim of building five hundred thousand electric vehicle chargers 0:18:15.480 --> 0:18:16.520 by twenty thirty. 0:18:16.960 --> 0:18:19.919 That move could experience an even bigger roadblock if President 0:18:19.960 --> 0:18:23.320 Electroump follows through on his campaign promise to scrap incentives 0:18:23.359 --> 0:18:27.560 for EV adoption, like the Biden Administration's National Electric Vehicle 0:18:27.640 --> 0:18:31.080 Infrastructure Program in the seventy five hundred dollars federal EV 0:18:31.240 --> 0:18:34.480 tax credit. California Governor Gavin Newsom is already preparing for 0:18:34.560 --> 0:18:36.840 a showdown with Donald Trump over the subsidy. 0:18:37.119 --> 0:18:39.840 One company that was recently recognized as a leader in 0:18:39.880 --> 0:18:44.280 worldwide electric vehicle charging management solutions is Drives Drives as 0:18:44.320 --> 0:18:46.920 part of the five point eight billion dollar market cap 0:18:47.040 --> 0:18:52.000 publicly held company Vntier Corporation. Drive CEO is Andy Bennett. 0:18:52.280 --> 0:18:55.080 In general, we think about batteries in two ways. Right, 0:18:55.080 --> 0:18:57.439 of course, host the batteries are in the car, right, 0:18:57.520 --> 0:19:00.200 so you have a battery management system that optimize is 0:19:00.240 --> 0:19:03.919 the use of that energy. But batteries are becoming more 0:19:03.960 --> 0:19:07.320 and more important for EV charging. In places like the 0:19:07.480 --> 0:19:09.639 United States. You have lots and lots of areas that 0:19:10.800 --> 0:19:14.440 you know effectively are constrained from an energy perspective, and 0:19:14.520 --> 0:19:17.080 so you can put large batteries in those areas. You 0:19:17.160 --> 0:19:20.360 can control the flow of energy, so you can increase 0:19:20.400 --> 0:19:23.280 the number of cars you can charge. So batteries, when 0:19:23.280 --> 0:19:25.600 you're thinking about EV charging, there's really two parts of 0:19:25.640 --> 0:19:28.520 the equation, and the first is that battery in the car, 0:19:28.760 --> 0:19:31.800 how it's behaving, how it's being utilized. And then those 0:19:31.880 --> 0:19:34.760 batteries that are going to be at gas stations all 0:19:34.800 --> 0:19:36.639 around the country that are going to give us extra 0:19:36.760 --> 0:19:41.240 capacity to really keep that charging experience as quick as possible. 0:19:42.600 --> 0:19:46.120 So okay, so I'm just curious about you know, it's 0:19:46.119 --> 0:19:47.879 interesting I'm listening to you talking. I'm thinking about when 0:19:47.880 --> 0:19:50.879 we talk about the ev world, Andy, A lot of 0:19:50.920 --> 0:19:54.280 what comes up is about range anxiety or people being 0:19:54.320 --> 0:19:57.080 able to find a place to recharge. You know, if 0:19:57.160 --> 0:19:59.920 I pop on a highway out to Connecticut, I see 0:20:00.200 --> 0:20:02.119 the rest stops, they all have them, but in New 0:20:02.160 --> 0:20:06.320 York City it's still really challenging. So I understand what 0:20:06.440 --> 0:20:08.040 you guys are doing, but I feel like, is this 0:20:08.119 --> 0:20:11.680 the cart before the worse in terms of having enough 0:20:11.800 --> 0:20:15.000 places just where people can charge before we kind of 0:20:15.040 --> 0:20:17.359 take it to the optimization level, which sounds like what 0:20:17.480 --> 0:20:18.160 you guys are doing. 0:20:19.119 --> 0:20:20.520 Yeah, No, we do a little bit of both. So 0:20:20.920 --> 0:20:26.200 we build the software behind the world's largest charge point operators, 0:20:26.200 --> 0:20:28.680 so we call them CPOs. So think about evygo as 0:20:28.680 --> 0:20:32.760 a great example or shell, and that software is looking 0:20:32.840 --> 0:20:35.440 after the health of all those chargers out there. Is 0:20:35.480 --> 0:20:38.720 the network working, is it running? Energy is just one 0:20:38.760 --> 0:20:41.520 part of that total equation. Are you able to build? 0:20:41.600 --> 0:20:43.240 Are you able to show up to a charger? And 0:20:43.359 --> 0:20:46.680 actually you use your credit card to go make that work? 0:20:47.040 --> 0:20:50.439 So without that, without that fundamental software, there is no charging, right. 0:20:51.480 --> 0:20:54.200 It's the infrastructure software that makes it work. But you're 0:20:54.240 --> 0:20:57.119 absolutely right. When you think about the frustration that folks 0:20:57.200 --> 0:21:01.400 have today, it kind of comes into sort of flavors. 0:21:01.440 --> 0:21:04.240 The first is, when I get to a charger, is 0:21:04.320 --> 0:21:08.720 it available? Right? And then if it's available, is everything working? 0:21:09.080 --> 0:21:11.560 And as we've seen in over the last couple of years, 0:21:11.920 --> 0:21:14.240 reliability is going up and up and up and up, 0:21:14.280 --> 0:21:17.359 which is great. But then you nailed it. The second 0:21:17.400 --> 0:21:21.000 part is we just don't have enough charging today in place, 0:21:21.119 --> 0:21:24.000 enough public charging. So if you think about the United States, 0:21:24.520 --> 0:21:26.800 you know today we have roughly, let's say, about two 0:21:26.880 --> 0:21:30.679 hundred thousand available chargers to people. Most of those are 0:21:31.600 --> 0:21:34.159 what we call AC chargers, so they're lots slower than 0:21:34.200 --> 0:21:36.359 the DC fast chargers that you might. 0:21:36.280 --> 0:21:37.119 See on the highway. 0:21:37.680 --> 0:21:41.040 And if we were to keep up with really just 0:21:41.240 --> 0:21:44.159 the current sales that we have in evs right now 0:21:44.840 --> 0:21:46.879 by the end of next year, we would still need 0:21:46.960 --> 0:21:51.200 to build four times more charging infrastructure in the United 0:21:51.240 --> 0:21:54.920 States to meet that demand. Some of those projections say, 0:21:55.000 --> 0:21:58.119 by twenty twenty seven, twenty twenty eight, we would need 0:21:58.160 --> 0:22:00.600 to build eight times more than what we currently have 0:22:01.160 --> 0:22:03.840 just to satisfy that what you just mentioned, of course, 0:22:03.880 --> 0:22:05.600 which is range anxiety. 0:22:06.040 --> 0:22:11.240 So a Trump administration, are we going to then ramp 0:22:11.320 --> 0:22:13.399 up the building of these because it does sound like 0:22:13.480 --> 0:22:16.600 we need them. Like, what are your expectations around policies 0:22:16.640 --> 0:22:18.280 in the EV world and what it means for the 0:22:18.359 --> 0:22:19.560 industry and your business? 0:22:20.960 --> 0:22:24.720 Yeah, I mean, look, clearly there's some headwinds with some 0:22:24.800 --> 0:22:27.560 of the administrative changes. Some of the things that could 0:22:27.600 --> 0:22:30.359 be changed is you know, we could get a drop 0:22:30.520 --> 0:22:34.760 in passenger EV adoption, right, so if we don't have 0:22:35.080 --> 0:22:37.880 you know, the incentives, then some folks just aren't going 0:22:37.960 --> 0:22:41.320 to go buy those cars. Now, having said that, for 0:22:41.400 --> 0:22:44.960 a company like ourselves that is building the software for 0:22:45.160 --> 0:22:48.960 the charge point operators, there's still such a huge gap 0:22:49.480 --> 0:22:52.600 between having enough of those chargers out there to deal 0:22:52.680 --> 0:22:56.120 with the current requirements, you know, versus what's actually there 0:22:56.720 --> 0:22:59.240 that we kind of some of us in the industry 0:22:59.240 --> 0:23:00.840 are happy to kind and get a little bit of 0:23:00.880 --> 0:23:04.240 a catch up time there, So no doubt I think 0:23:04.240 --> 0:23:08.359 if you think about, you know, right now, where are 0:23:08.440 --> 0:23:11.600 we in terms of charging infrastructure growth for the year. 0:23:12.200 --> 0:23:14.480 Most of the projections at the beginning of the year said, look, 0:23:14.600 --> 0:23:17.440 we'll probably end up at around thirty percent year of 0:23:17.520 --> 0:23:21.000 a year growth in public charging. We actually know it's 0:23:21.200 --> 0:23:24.400 it's probably closer to thirty six or thirty eight percent growth. 0:23:24.440 --> 0:23:27.240 It's just an incredible cater I think about that, that's 0:23:27.280 --> 0:23:30.879 a massive amount of infrastructure. The big CPOs are building 0:23:30.960 --> 0:23:35.000 as quickly as they can, and I think often we 0:23:35.080 --> 0:23:39.639 spend a little bit too much time maybe associating that 0:23:39.840 --> 0:23:42.600 build out with the Navy funding, the federal funding that 0:23:42.680 --> 0:23:46.720 came out. Most of that infrastructure spending happened way before 0:23:46.800 --> 0:23:50.640 the federal government ever started to step in and incentivize. 0:23:51.040 --> 0:23:53.720 So look, we still have a ton of demand. The 0:23:53.840 --> 0:23:56.760 big CPOs are still building at just breakneck speed. 0:23:57.640 --> 0:23:58.440 That's going to happen. 0:23:58.640 --> 0:24:00.480 It may it may get a little bit and press 0:24:00.640 --> 0:24:02.480 of course, but it's still going to happen at a 0:24:02.680 --> 0:24:08.400 very very fast rate, independent of the whole Navy funding pathway. 0:24:08.880 --> 0:24:13.080 I'm wondering about just some basic question, Andy, if we 0:24:13.119 --> 0:24:16.200 think about where all the gas stations are in this country, 0:24:17.359 --> 0:24:21.320 why is it cost prohibitive for these gas station owners 0:24:21.400 --> 0:24:28.280 to just add one or two EV charging systems to 0:24:28.520 --> 0:24:32.200 their existing gas stations, Like why doesn't why why is 0:24:32.280 --> 0:24:33.200 this so difficult to do? 0:24:34.160 --> 0:24:35.920 Yeah, I got you know, Tim, that's that's a really 0:24:35.960 --> 0:24:39.040 great question, you know, for me, I kind of to 0:24:39.240 --> 0:24:40.119 look for that answer. 0:24:40.400 --> 0:24:41.120 One of the best. 0:24:40.960 --> 0:24:43.160 Places to go look is in the Nordics, right where 0:24:43.320 --> 0:24:46.240 we know today over ninety percent of all new cars 0:24:46.600 --> 0:24:50.159 are evs. Look at the UK, Look at Europe, which is, 0:24:50.280 --> 0:24:52.440 by the way, one of the places my company has 0:24:52.520 --> 0:24:55.879 been for years helping charge point operators. You know, what 0:24:56.080 --> 0:24:59.920 you see as some gas stations are really well suited 0:25:00.520 --> 0:25:04.480 for electrification and some some aren't. Maybe a couple quick 0:25:04.480 --> 0:25:08.000 comments about that, because you know, no matter what, we 0:25:08.240 --> 0:25:11.800 believe that the winners in this marketplace are going to 0:25:11.880 --> 0:25:16.959 be the fueling stations that also have other things, other amenities, 0:25:17.359 --> 0:25:20.760 other conveniences. So when you're in Oslo or outside of Oslo, 0:25:20.800 --> 0:25:22.760 whether you're in the urban area or you're you know, 0:25:22.960 --> 0:25:26.080 on the highways, what you see is EV charging stations 0:25:26.160 --> 0:25:29.560 that you know, have outdoor gyms, they have incredible food, 0:25:29.720 --> 0:25:33.320 clean bathrooms, really nice amenities. The second you show up 0:25:33.320 --> 0:25:35.040 at one of these stations, you connect to their Wi 0:25:35.200 --> 0:25:38.120 Fi and you start to get coupons to go inside 0:25:38.200 --> 0:25:40.520 and save ten percent on a cup of coffee. It's 0:25:40.560 --> 0:25:44.440 a really really integrated experience, and we certainly see some 0:25:44.560 --> 0:25:48.320 of the larger retailers here in the United States starting 0:25:48.440 --> 0:25:51.440 down that pathway Apple Green. You've ever driven on Route 0:25:51.520 --> 0:25:53.680 ninety five is a perfect example as you go through 0:25:53.720 --> 0:25:57.720 New Jersey, extremely innovative around what that experience will look like. 0:25:58.160 --> 0:26:01.359 But having said that, some of those places just aren't 0:26:01.359 --> 0:26:05.040 great spots, right. They may not have the ability to 0:26:05.359 --> 0:26:07.280 they might not have just the real state to bring 0:26:07.359 --> 0:26:10.520 that in, they may not have the conveniences. And remember 0:26:10.680 --> 0:26:13.040 the average weight time is probably about twenty two minute 0:26:13.080 --> 0:26:16.280 minutes today as you're charging on a DC fast charger, 0:26:16.640 --> 0:26:18.240 so you generally want to get out of the car. 0:26:18.320 --> 0:26:21.119 You're going to expect other amenities. But when you go 0:26:21.240 --> 0:26:24.360 back to the European example, what we do see, especially 0:26:24.480 --> 0:26:29.520 in their urban environments is a slower, more methodical transfer, 0:26:29.720 --> 0:26:32.920 so over time they don't just go one hundred percent electric. 0:26:32.960 --> 0:26:36.440 At those stations. They may have ten fueling pumps and 0:26:36.600 --> 0:26:40.280 two DC chargers to start with, and then they slowly 0:26:40.400 --> 0:26:44.320 pull out those pumping stations. Circle K is a great 0:26:44.440 --> 0:26:48.120 example in Europe where they have done this really fluid 0:26:48.240 --> 0:26:52.680 transition as the economics makes sense that DC fast charge 0:26:52.800 --> 0:26:55.320 is expensive. So just the way to think about it 0:26:55.480 --> 0:26:59.920 is break even on that investment probably close to about 0:27:00.000 --> 0:27:04.159 eleven percent utilization. It has to be being used eleven percent. 0:27:03.960 --> 0:27:05.280 Of the time that it's there. 0:27:05.800 --> 0:27:08.680 I will say, Carol, my trip to Norway a few 0:27:08.760 --> 0:27:11.800 years ago, the infrastructure just makes you cry when you 0:27:11.920 --> 0:27:13.320 compare it to US infrastructure. 0:27:13.359 --> 0:27:16.040 The tunnels, the tunnels are incredible. 0:27:16.680 --> 0:27:21.320 Just drill right through these mountains, miles long, totally well lit, 0:27:21.480 --> 0:27:22.159 not crowded at all. 0:27:22.440 --> 0:27:22.960 Unbelievable. 0:27:22.960 --> 0:27:24.879 Maybe Elon's onto something with the boring company. 0:27:26.640 --> 0:27:30.119 I'm just saying, Hey, just got thirty seconds. Andy in 0:27:30.200 --> 0:27:32.520 a nutshell or word or two, how do you describe 0:27:32.520 --> 0:27:33.480 the EV market today? 0:27:35.520 --> 0:27:38.560 You know, look, we make software behind these these charging companies. 0:27:38.600 --> 0:27:41.240 We we can barely keep up with the demand. And 0:27:41.320 --> 0:27:44.159 the growth that's taking place has been incredible. We're a 0:27:44.280 --> 0:27:46.600 company that's doubling year over year and just you know, 0:27:47.280 --> 0:27:49.879 building the things these folks need to be successful. 0:27:51.000 --> 0:27:51.400 For us. 0:27:51.880 --> 0:27:54.600 Your huge portion of the market still remains in Europe, 0:27:54.640 --> 0:27:57.800 the United States is is just starting to grow. I 0:27:57.880 --> 0:27:59.119 think we're going to see a little bit of a 0:27:59.200 --> 0:28:02.679 dent taken out of passenger EV charging. Nothing is going 0:28:02.760 --> 0:28:06.240 to stop the electrification of large scale fleets, though, that 0:28:06.480 --> 0:28:09.359 is picking up at a pace that is really fantastic. 0:28:09.440 --> 0:28:12.840 And why that's relevant is as that continues to be successful, 0:28:12.920 --> 0:28:15.240 we're going to see whether it's a passenger or a 0:28:15.320 --> 0:28:18.960 truck co charging at these different places so the infrastructures 0:28:19.000 --> 0:28:21.320 can continue to roll out. At the end of the day, 0:28:21.320 --> 0:28:23.639 if you build a car, right, there's two things for 0:28:23.760 --> 0:28:25.320 you to go. Get people to buy an EV car, 0:28:25.720 --> 0:28:27.720 cut the costs of the battery, and get more EV 0:28:27.840 --> 0:28:28.840 infrastructure out there. 0:28:29.000 --> 0:28:29.760 Totally makes sense. 0:28:29.840 --> 0:28:32.879 Andy Bennett really enjoyed the CEO of drives joinining us 0:28:32.960 --> 0:28:34.440 right here on Bloomberg Business. 0:28:34.359 --> 0:28:35.840 That's at drivz. 0:28:36.280 --> 0:28:36.640 Very cool. 0:28:37.200 --> 0:28:41.840 I love that you're listening to the Bloomberg Business Week podcast. 0:28:42.160 --> 0:28:45.320 Catch us live weekday afternoons from three to six Eastern 0:28:45.520 --> 0:28:48.760 Listen on Bloomberg dot com, the iHeartRadio app, and the 0:28:48.840 --> 0:28:52.040 Bloomberg Business app, or watch us live on YouTube. 0:28:53.280 --> 0:28:56.280 Last month of Bloomberg News, colleague Jennifer de Louis reported 0:28:56.320 --> 0:28:58.840 that the Biden administration is setting out plans for the 0:28:58.960 --> 0:29:02.920 United States to triple nuclear power capacity by twenty fifty, 0:29:03.240 --> 0:29:06.160 with demand climbing for the technology as a round the 0:29:06.160 --> 0:29:08.280 clock source of carbon free power. 0:29:08.720 --> 0:29:10.880 Under a roadmap being unveiled a few weeks ago, the 0:29:11.000 --> 0:29:14.160 US would deploy an additional two hundred gigawatts of nuclear 0:29:14.320 --> 0:29:18.040 energy capacity by mid century through the construction of new reactors, 0:29:18.440 --> 0:29:22.320 plant restarts, and upgrades to existing facilities. In the short term, 0:29:22.360 --> 0:29:24.680 the White House aims to have thirty five gigawatts of 0:29:24.720 --> 0:29:27.520 new capacity operating in just over a decade. For a 0:29:27.520 --> 0:29:30.480 little bit of context, nuclear accounted for about one hundred 0:29:30.480 --> 0:29:34.080 gigawatts of installed electricity generation capacity in the US. That 0:29:34.240 --> 0:29:36.240 was in twenty twenty three, so this would be a 0:29:36.320 --> 0:29:36.800 big jump. 0:29:37.160 --> 0:29:39.640 Joe Clutches hoping to help the US get there. He's 0:29:39.760 --> 0:29:42.320 chief nuclear officer of the Nuclear Company, which is looking 0:29:42.360 --> 0:29:44.840 to build a series of nuclear power plants across the 0:29:45.000 --> 0:29:45.719 United States. 0:29:45.960 --> 0:29:49.680 We aim to really develop and deploy new nuclear at 0:29:49.760 --> 0:29:54.200 large scale. We're aiming to help deliver in a way 0:29:54.280 --> 0:29:58.720 that we've never seen before, which is bringing clean, firm, 0:29:58.960 --> 0:30:02.640 sustainable power to the grid that will help solve some 0:30:02.760 --> 0:30:04.600 of these the issues we're going to see with the 0:30:04.680 --> 0:30:09.080 growth of AI, the growth of electrification related to vehicles 0:30:09.200 --> 0:30:15.720 and manufacturing. And we believe that doing new nuclear construction 0:30:15.880 --> 0:30:19.040 in a way that is design, once, rense, and repeat 0:30:19.160 --> 0:30:22.200 many times at scale will get us into a position 0:30:22.240 --> 0:30:25.280 where we can really drive down the costs and create 0:30:25.320 --> 0:30:27.920 a product that is much needed for national security. 0:30:27.960 --> 0:30:28.920 Frans, how do you do this? 0:30:29.040 --> 0:30:31.320 And you can answer this question in a way that 0:30:31.360 --> 0:30:33.920 other people can't because you worked at Southern Company as 0:30:34.000 --> 0:30:36.240 operations director for the vocal units one and two, and 0:30:36.320 --> 0:30:39.200 then you also transitioned oversee vocal units three and four. 0:30:39.400 --> 0:30:43.280 So these are very expensive. They took years, decades, they 0:30:43.320 --> 0:30:45.080 were billions of dollars over budget. 0:30:45.600 --> 0:30:48.320 How do you not repeat that at the nuclear company? Like, 0:30:48.480 --> 0:30:49.760 how are you going to do that differently? 0:30:50.160 --> 0:30:52.280 Yeah, it's I think it's a great question. I get 0:30:52.320 --> 0:30:55.120 asked this question a lot. And Yes, my career started 0:30:55.160 --> 0:30:57.760 in the US Navy as a sub mariner working on 0:30:57.840 --> 0:31:02.480 nuclear submarines, and I've progressed through any utilities operating and 0:31:02.600 --> 0:31:05.960 maintaining nuclear facilities, and as you mentioned, had the great 0:31:06.040 --> 0:31:09.360 opportunity to help with the Vogel project, which was a 0:31:09.520 --> 0:31:14.480 monumental effort by Southern Company, many lessons learned. The simplest 0:31:14.560 --> 0:31:17.520 way to help people understand this is this was a 0:31:17.640 --> 0:31:20.720 first of a kind build in our country with a 0:31:20.800 --> 0:31:24.960 first of a kind technology. We need to continue to 0:31:25.160 --> 0:31:28.000 use the lessons learned from projects like Vogel and many 0:31:28.080 --> 0:31:31.560 others that have occurred around the world to move us 0:31:31.600 --> 0:31:33.920 from a first of a kind project into what we 0:31:34.040 --> 0:31:36.080 call enth of a kind. So we got to get 0:31:36.120 --> 0:31:39.360 through the early stages of capturing lessons learned on what 0:31:39.520 --> 0:31:42.040 is a really, really great design, and there's many others 0:31:42.080 --> 0:31:46.200 out there. You continue to use this same design, develop 0:31:46.320 --> 0:31:48.600 use those lessons learned. We think we can get forty 0:31:48.640 --> 0:31:52.400 percent efficiencies through lessons learned. We also believe there's twenty 0:31:52.440 --> 0:31:55.560 to thirty percent savings in the use of digital technologies, 0:31:56.440 --> 0:32:00.880 whether those be digital twins, three D scans, drones, technologies 0:32:00.920 --> 0:32:04.239 that are available today that weren't necessarily available when these 0:32:04.320 --> 0:32:07.600 nuclear projects were occurring in the past. That is our 0:32:07.760 --> 0:32:11.880 path to really getting the costs of nuclear down and 0:32:11.960 --> 0:32:13.840 getting it in a position where it can provide what 0:32:13.960 --> 0:32:16.320 a lot of other forms of energy cannot provide, and 0:32:16.440 --> 0:32:19.800 that's the security to the grid. To provide that firm 0:32:20.200 --> 0:32:24.640 ninety three percent plus capacity factor of clean energy. 0:32:25.160 --> 0:32:28.320 The plants that were started by Southern Company, I just 0:32:28.360 --> 0:32:31.880 want to go back to right considered a milestone in 0:32:32.040 --> 0:32:35.360 US nuclear power construction, but they were seven years later 0:32:35.520 --> 0:32:37.840 that originally plan and a budget of more than double 0:32:38.560 --> 0:32:42.720 the preliminary projected cost of over thirty billion dollars. I 0:32:42.760 --> 0:32:46.920 would assume making nuclear power plants is difficult forgive by starcasm, 0:32:46.960 --> 0:32:49.920 but we know that this is not it. And you know, 0:32:50.000 --> 0:32:51.480 Tim and I were talking before we got going. I 0:32:51.520 --> 0:32:53.480 had a dad who's an engineer who worked in the 0:32:53.560 --> 0:32:55.640 early space program and putting men on the Moon, and 0:32:55.760 --> 0:33:01.040 guidance systems and the system of government contracts of like 0:33:01.360 --> 0:33:04.520 low cost provider often being at the top of the 0:33:04.640 --> 0:33:07.760 list as a priority makes me a little hinky when 0:33:07.760 --> 0:33:11.160 we're talking about nuclear power. How do we get it right? 0:33:11.600 --> 0:33:13.680 How do we do it safely? How do we do 0:33:13.760 --> 0:33:15.120 it without the cost overruns? 0:33:15.720 --> 0:33:15.960 Yeah? 0:33:16.160 --> 0:33:18.120 So I think those are all great points, and there 0:33:18.160 --> 0:33:20.960 are obviously something There are problems that we are trying 0:33:21.040 --> 0:33:23.360 to solve at the Nuclear Company, and I believe we 0:33:23.400 --> 0:33:26.640 will we will solve again. The number one thing is, 0:33:26.760 --> 0:33:30.720 let's design a technology that works extremely well, and let's 0:33:30.800 --> 0:33:34.560 continue to rebuild the rebuild that technology many times so 0:33:34.680 --> 0:33:37.600 we can really capture the lessons learned and then get 0:33:37.640 --> 0:33:39.840 the cost benefits out of capturing those lessons. 0:33:39.920 --> 0:33:42.480 So what is the different technology from maybe what was 0:33:42.520 --> 0:33:44.560 done by the Southern Company versus what you guys are 0:33:44.600 --> 0:33:45.040 looking to do. 0:33:45.200 --> 0:33:46.120 Break it down for us. 0:33:46.960 --> 0:33:49.600 Yeah, so we are not a technology provider. We are 0:33:49.680 --> 0:33:52.360 a developer and we are a deployer. So we're going 0:33:52.400 --> 0:33:54.680 to we're going to develop these projects, whether you know 0:33:54.880 --> 0:33:57.400 related to where they're going to be cited, which partners 0:33:57.440 --> 0:33:59.440 we're going to work with, and then we have the 0:33:59.520 --> 0:34:02.240 team going to come in and perform the project management 0:34:02.360 --> 0:34:06.120 and deployment to get these from the numbers that you 0:34:06.760 --> 0:34:10.640 estimated down to half of what those have historically been 0:34:11.120 --> 0:34:13.880 through what I said before, the use of technologies, get 0:34:13.920 --> 0:34:16.520 in the right systems in place, locking that design down. 0:34:17.440 --> 0:34:19.680 Remember when you're doing a first of a kind project, 0:34:20.280 --> 0:34:22.200 there are a lot of lessons that come out of that, 0:34:22.360 --> 0:34:24.480 and if you don't capture those lessons and continue to 0:34:24.560 --> 0:34:26.760 do it, then you've just thrown away all the value 0:34:27.160 --> 0:34:29.239 you get out of doing a technology. It'd be like 0:34:29.280 --> 0:34:32.440 if Henry Ford developed a model T built one and 0:34:32.520 --> 0:34:34.120 said that was way too hard to do. I'm not 0:34:34.160 --> 0:34:36.520 going to build anymore. You've got to keep iterating on 0:34:36.640 --> 0:34:39.080 that process to get it to a point that you 0:34:39.200 --> 0:34:41.959 get to the end of a kind cost on these technologies. 0:34:42.520 --> 0:34:46.000 It's a very capital intensive process to say the least 0:34:46.040 --> 0:34:50.239 building a nuclear power plant. In terms of where your 0:34:50.320 --> 0:34:52.600 role is and just where the money is coming from. 0:34:52.760 --> 0:34:54.640 Give everyone an update and you guys are a startup, 0:34:54.640 --> 0:34:57.160 but give everyone an update on how much you've raised 0:34:57.400 --> 0:34:59.640 and how you think you'll be able to get there. 0:35:00.800 --> 0:35:01.000 Yeah. 0:35:01.080 --> 0:35:03.960 So we have investors on the company side, specific to 0:35:04.040 --> 0:35:09.400 the nuclear company that are investing to really fund our company. 0:35:10.480 --> 0:35:13.520 We'll continue through the process of a startup company to 0:35:13.640 --> 0:35:16.960 do our rounds of funding as needed. Specific to projects. 0:35:17.480 --> 0:35:21.480 We leverage public private partnerships, and then we'll be pulling 0:35:21.520 --> 0:35:25.960 in different investors associated with the public private investor partnerships 0:35:26.719 --> 0:35:30.600 to drive the funding of the projects themselves. So we 0:35:30.760 --> 0:35:33.200 plan to roll up more information in the first quarter 0:35:33.400 --> 0:35:36.239 of next year related to where that funding is coming 0:35:36.320 --> 0:35:39.160 from and who those potential partners are, But for now, 0:35:39.200 --> 0:35:41.040 we don't want to share any more detailed information. 0:35:41.160 --> 0:35:43.520 Can you tell us where some of the projects you're 0:35:43.560 --> 0:35:44.239 looking at would go. 0:35:44.880 --> 0:35:45.080 Yeah. 0:35:45.120 --> 0:35:47.920 At a high level, our theory is we're going to 0:35:48.080 --> 0:35:50.959 focus on projects that we can build quickly. We believe 0:35:51.080 --> 0:35:53.160 we need to bring we need to be building now. 0:35:53.760 --> 0:35:56.560 We don't need to be waiting on technologies. There's technologies 0:35:56.560 --> 0:35:58.759 available that can be built now. So with that said, 0:35:59.200 --> 0:36:01.799 we are looking at sites, and we have an algorithm 0:36:02.440 --> 0:36:05.440 that helps with our site selection process that focuses on 0:36:05.600 --> 0:36:10.160 sites that already have some form of licensing and environmental 0:36:10.200 --> 0:36:13.160 work already completed, so we could start these projects sooner 0:36:13.280 --> 0:36:14.000 rather than later. 0:36:14.400 --> 0:36:17.799 So Joe, help me understand something. So, as you said, 0:36:18.040 --> 0:36:20.480 you're a project management company, you're not a technology company, 0:36:20.560 --> 0:36:21.799 so you're not actually building them. 0:36:21.840 --> 0:36:24.640 It's like you're a middleman. It sounds like right in 0:36:24.760 --> 0:36:27.120 terms of getting these done. Why do we need a middleman? 0:36:27.600 --> 0:36:31.160 Want to just ultimately come through the government or utilities 0:36:31.239 --> 0:36:34.120 or states or power companies. 0:36:33.719 --> 0:36:35.480 Figuring it out? Why do we need a middleman? 0:36:35.600 --> 0:36:39.000 Is this more of an investor play, which is certainly 0:36:39.000 --> 0:36:41.200 of interest to the Bloomberg audience who are always looking 0:36:41.239 --> 0:36:43.960 for a different ways of investing, But is that what 0:36:44.080 --> 0:36:45.280 this is mostly about? 0:36:46.480 --> 0:36:48.640 Yeah, I would say we're more of an orchestrator than 0:36:48.680 --> 0:36:53.160 a middleman. We certainly want to work the front end 0:36:53.200 --> 0:36:56.200 from an investment perspective and a financial perspective to make 0:36:56.239 --> 0:36:59.640 sure there's models where large utilities don't have to take 0:36:59.680 --> 0:37:01.880 this apple to risk all on their balance sheet. So 0:37:01.960 --> 0:37:04.160 that's part of the problem we're solving. But we've also 0:37:04.800 --> 0:37:07.239 pulled together a team of experts that have built these 0:37:07.360 --> 0:37:12.280 projects recently in the United States and elsewhere that we're 0:37:12.440 --> 0:37:16.040 building the best project management team around to be able 0:37:16.120 --> 0:37:19.239 to go and really help the utilities and partner through 0:37:19.320 --> 0:37:23.359 our consortium to drive down these costs quicker. What we've 0:37:23.480 --> 0:37:26.200 seen in the past in the seventies and eighties, when 0:37:26.280 --> 0:37:29.760 these facilities were being built, every utility would go about 0:37:29.800 --> 0:37:31.400 this on their own and they'd all want to do 0:37:31.440 --> 0:37:33.920 it a different way, so you never truly got to 0:37:34.040 --> 0:37:36.959 that end of a kind cost. We believe by using 0:37:37.040 --> 0:37:43.399 our consortium of utilities OEMs hyper scalers, we can bring 0:37:43.560 --> 0:37:45.960 more power to this and we can really use the 0:37:46.040 --> 0:37:49.360 rinse and repeat method to drive these costs down quickly. 0:37:49.719 --> 0:37:51.759 No, I kind of understand the model, but let me 0:37:51.840 --> 0:37:53.800 just ask you then, who takes the capital risk and 0:37:53.840 --> 0:37:57.560 who actually takes the responsibility of making. 0:37:57.360 --> 0:37:59.920 Sure that it's a safe plant. Ultimately. 0:38:00.520 --> 0:38:03.720 Yeah, so again public private partnership. So we'll be working 0:38:03.800 --> 0:38:06.520 with the government on part of the capital risk. Will 0:38:06.560 --> 0:38:10.080 also be focusing with our investors to take on that 0:38:10.200 --> 0:38:13.560 capital risk, so it's not put directly onto utilities or 0:38:13.640 --> 0:38:16.840 rate base, with more of a build transfer. 0:38:16.760 --> 0:38:17.640 Model, if you will. 0:38:18.280 --> 0:38:20.760 As far as who controls the safety. 0:38:20.480 --> 0:38:24.080 The excent So does that also mean that taxpayer risk? 0:38:24.120 --> 0:38:27.520 If the government's involved, it's also taxpayer risk, right, potentially 0:38:28.560 --> 0:38:29.040 it could be. 0:38:29.280 --> 0:38:32.800 Now again, we'll release more information on the actual programs 0:38:32.840 --> 0:38:35.279 we're looking to use in the first quarter of next year, 0:38:35.360 --> 0:38:37.680 but I'll just leave it at public private partnerships for 0:38:37.800 --> 0:38:42.480 now and then yeah, go ahead, Yeah, the safety aspects. 0:38:42.520 --> 0:38:44.560 So part of our consortium is going to be large 0:38:44.640 --> 0:38:48.040 utilities that have historically operated these facilities for years. They 0:38:48.040 --> 0:38:51.480 would be the licensee and the ultimate owner of these 0:38:51.600 --> 0:38:53.640 projects once the build is complete. 0:38:53.800 --> 0:38:55.960 Is this a model just twenty five seconds that really 0:38:56.080 --> 0:38:58.480 is for the US or I mean we're Europe and 0:38:58.880 --> 0:39:01.560 elsewhere outside the US already kind of all in on 0:39:01.680 --> 0:39:04.279 nuclear Is that part of it? And forgive me, I 0:39:04.320 --> 0:39:05.640 only got about twenty seconds here. 0:39:05.880 --> 0:39:06.919 Yeah, yeah, I'll be quick. 0:39:07.000 --> 0:39:09.880 So we initially, you know, we're building this company to 0:39:09.920 --> 0:39:13.440 help support the US market, but we are receiving a 0:39:13.520 --> 0:39:16.880 lot of interest overseas with all of the new nuclear 0:39:16.960 --> 0:39:18.520 projects going on there, and there was a lot of 0:39:18.560 --> 0:39:19.640 help needed in those areas. 0:39:19.760 --> 0:39:22.480 Interesting stuff. Stay in touch as you can share more 0:39:22.520 --> 0:39:25.480 with us. Joe Kletcha, chief nuclear officer of the Nuclear Company. 0:39:31.480 --> 0:39:35.000 You're listening to the Bloomberg Business Week podcast. Catch us 0:39:35.080 --> 0:39:38.040 live weekday afternoons from three to six Easter here on 0:39:38.200 --> 0:39:41.920 Bloomberg Radio, the Bloomberg Business App and YouTube. You can 0:39:41.960 --> 0:39:45.200 also listen live on Amazon Alexa from our flagship New 0:39:45.280 --> 0:39:49.279 York station, Just say Alexa play Bloomberg eleven thirty. 0:39:50.520 --> 0:39:51.160 Plenty ahead in. 0:39:51.160 --> 0:39:53.919 Our second hour of the weekend edition of Bloomberg Business Week, 0:39:54.200 --> 0:39:57.440 including America's favorite food group a patty in two buns 0:39:57.480 --> 0:40:00.640 with some stuff thrown on top from Humble backyard barbecues 0:40:00.680 --> 0:40:04.400 to Michelin starred menus, why the Hamburger continues to thrive 0:40:04.480 --> 0:40:07.320 with American consumers really global consumers. 0:40:07.520 --> 0:40:10.000 Plus the twelve Days of Christmas may need a thirteenth 0:40:10.120 --> 0:40:14.759 verse about my true love going broke because of Christmas gifts, Carol, 0:40:14.760 --> 0:40:17.640 They're actually getting pretty expensive. And it's not because of 0:40:17.880 --> 0:40:19.040 you know, gold rings. 0:40:19.560 --> 0:40:20.840 Yeah, this is so confused. 0:40:21.160 --> 0:40:22.279 It's fine, it's fine. 0:40:22.320 --> 0:40:23.160 I'm not bitter about it. 0:40:23.280 --> 0:40:24.000 He is a little bit. 0:40:24.040 --> 0:40:26.120 We'll explain later on First Up this hour. As many 0:40:26.160 --> 0:40:28.160 of us gathered with family around a table filled with 0:40:28.280 --> 0:40:31.640 trays of food for Thanksgiving, millions of Americans worry about 0:40:31.640 --> 0:40:34.759 where their next meal will come from. In twenty twenty three, 0:40:34.840 --> 0:40:37.560 about thirteen point five percent of households in the US, 0:40:37.760 --> 0:40:41.400 that's about eighteen million people were food insecure. This is 0:40:41.440 --> 0:40:44.680 according to the USDA, which defines food insecurity as quote. 0:40:45.080 --> 0:40:47.759 At times during the year, these households were uncertain of 0:40:47.840 --> 0:40:50.640 having or unable to acquire enough food to meet the 0:40:50.719 --> 0:40:53.959 needs of all their members because they had insufficient money 0:40:54.120 --> 0:40:55.520 or other resources for food. 0:40:55.880 --> 0:40:58.399 The picture is actually worse for households with children. We're 0:40:58.480 --> 0:41:01.520 nearly eighteen percent were effect by food and security and 0:41:01.640 --> 0:41:05.160 it's something that Claire Babinot Fontano is all too familiar with. 0:41:05.600 --> 0:41:08.120 She's the CEO of Feeding America. It's the US based 0:41:08.200 --> 0:41:10.600 nonprofit that has a network of more than two hundred 0:41:10.640 --> 0:41:13.719 food banks. Last year, Feeding America distributed more than five 0:41:13.880 --> 0:41:16.759 billion meals. So are things actually getting better? 0:41:17.080 --> 0:41:20.960 Unfortunately, things are worse. I know that might be difficult 0:41:21.080 --> 0:41:23.600 or for any of us to wrap our heads around, 0:41:24.080 --> 0:41:28.200 but it's true. Food and security rates were lower during 0:41:28.239 --> 0:41:31.000 the peak of the pandemic than they are today are 0:41:31.000 --> 0:41:34.640 at their highest rates since the two thousand and eight 0:41:34.719 --> 0:41:36.480 two thousand and nine economic downtow. 0:41:36.520 --> 0:41:37.000 Why is that. 0:41:38.760 --> 0:41:44.400 Well in part because food and security captured the attention 0:41:44.560 --> 0:41:48.080 of the American publican policy makers dudent the pandemic, people 0:41:48.160 --> 0:41:51.839 saw those very long lines of cars on the road, 0:41:51.960 --> 0:41:55.040 or saw parking lots build with ten thousand cars, each 0:41:55.160 --> 0:41:59.200 car representing four to five families, and it got our attention. 0:42:00.120 --> 0:42:01.040 When we are. 0:42:01.320 --> 0:42:03.960 Intent on something, we tend to do something about it. 0:42:04.120 --> 0:42:07.680 So a lot of resources were directed toward food and 0:42:07.719 --> 0:42:12.240 security during that time. Since then, the lines have simply 0:42:12.320 --> 0:42:15.040 returned to the insides of buildings, but I think people 0:42:15.120 --> 0:42:18.319 think they've gone away. That makes opportunities like this one 0:42:18.400 --> 0:42:20.560 all the more important for the people that I sign 0:42:20.680 --> 0:42:21.560 up to serve every day. 0:42:22.080 --> 0:42:26.520 Clear Why though, are people hungry in America? We're a 0:42:26.680 --> 0:42:32.680 rich nation, and I guess I wonder why that exists still. 0:42:32.840 --> 0:42:38.320 Yeah, so that's a really complex question with complex answers 0:42:38.400 --> 0:42:41.319 and nuanced answers. But I will tell you one thing 0:42:41.640 --> 0:42:46.120 as an example. The largest are the fastest growing population 0:42:46.280 --> 0:42:48.520 of people who are showing up at food banks are 0:42:48.560 --> 0:42:52.520 people who do not currently qualify for any federal nutrition 0:42:52.680 --> 0:42:58.000 program so SNAP normally known as food stamps. They can't 0:42:58.200 --> 0:43:02.920 get SNAP. We have systems in the country that simply 0:43:03.160 --> 0:43:07.080 don't work well. They don't think about how each could 0:43:07.160 --> 0:43:11.120 relate to each other, and how sometimes they perpetuate people 0:43:11.960 --> 0:43:16.400 staying down. We talk about it a lot. It's sometimes characterized, 0:43:16.400 --> 0:43:20.680 for instance, as benefits cliffs, where it is truly it 0:43:20.800 --> 0:43:25.000 happens all the time throughout the country that a person 0:43:25.200 --> 0:43:28.800 might get a one dollar an hour raise and lose 0:43:29.360 --> 0:43:33.759 all of their childhood care benefits. I get put away 0:43:33.880 --> 0:43:36.640 in extra one hundred dollars in the bank, and now 0:43:36.680 --> 0:43:39.640 they no longer qualify for their housing. So it's a 0:43:39.800 --> 0:43:44.359 combination of things, and I'm hopeful that the Trump administration 0:43:44.520 --> 0:43:47.000 is going to sit down and bring in all of 0:43:47.080 --> 0:43:49.759 the different parts of the government, bring them together, and 0:43:49.920 --> 0:43:52.200 have them work together to come up with some effects. 0:43:52.320 --> 0:43:54.560 You know, we talk about margins a lot here. Certainly 0:43:54.560 --> 0:43:57.200 when it comes to like an earnings are balance sheet 0:43:57.239 --> 0:43:59.560 and a company. But I just think about the slim 0:43:59.640 --> 0:44:03.600 margin or no margin that so many American families are 0:44:03.960 --> 0:44:08.400 trying to exist or you know, and live on, and 0:44:08.840 --> 0:44:11.279 it's just too fragile, Claire, I. 0:44:11.280 --> 0:44:13.440 Was thinking as I was preparing for this segment. I 0:44:13.520 --> 0:44:16.719 mentioned USDA data at the top about thirteen point five 0:44:16.760 --> 0:44:20.120 percent of households in the US eighteen million homes were 0:44:20.200 --> 0:44:23.359 food and secure in twenty twenty three. This data come 0:44:23.480 --> 0:44:27.960 from the USDA's Economic Research Service, and I was thinking 0:44:28.000 --> 0:44:32.000 to myself, is this how valuable this information is because 0:44:32.000 --> 0:44:34.200 it gives us sort of a place to start our 0:44:34.239 --> 0:44:36.719 conversation with you, But also it's important to people like 0:44:36.800 --> 0:44:38.960 you because it gives you a baseline of how to 0:44:39.040 --> 0:44:42.080 understand food and security in this country. We also know 0:44:42.200 --> 0:44:44.759 that the Trump administration, the incoming Trump administration, wants to 0:44:44.840 --> 0:44:48.600 cut two trillion dollars from the federal budget. I'm wondering 0:44:48.680 --> 0:44:53.320 if you think programs such as these important Economic Research 0:44:53.440 --> 0:44:57.279 Service data or other programs at the USDA are at 0:44:57.360 --> 0:44:59.760 risk as a result of the new administration incoming. 0:45:00.400 --> 0:45:03.160 Well, I certainly hope not. I wish I had a 0:45:03.239 --> 0:45:06.400 crystal ball, but I don't. What I can say is 0:45:06.520 --> 0:45:09.640 that Beating America's network has been successful in working with 0:45:09.960 --> 0:45:13.760 every administration since our inception. We worked with the Trump 0:45:13.760 --> 0:45:21.120 administration during trade mitigation, for instance, that incredibly nutritious food 0:45:21.200 --> 0:45:24.920 that was being produced by US farmers, growers and producers, 0:45:25.680 --> 0:45:29.360 so much of it was actually sent into the charitable 0:45:29.400 --> 0:45:33.000 food system, where people received more access to nutrition than 0:45:33.040 --> 0:45:39.360 they ever have. We have worked vigilantly as a network 0:45:39.840 --> 0:45:42.399 to make certain that we maintain a status of being 0:45:43.000 --> 0:45:46.560 non partisan, not bipartisan, which I say we reduce you 0:45:46.800 --> 0:45:51.359 to the lowest common denominator, but non partisan. We stand 0:45:51.440 --> 0:45:53.719 with people experiencing hunger. They tell us what they need, 0:45:54.400 --> 0:45:57.520 and when we get them what they need, communities thrive. 0:45:58.600 --> 0:46:02.280 When communities thrive build, since is thrived, the whole country thrives, 0:46:02.719 --> 0:46:06.040 and it's simply not possible for people. If they can't 0:46:06.320 --> 0:46:09.680 they don't have enough food at home, it has a 0:46:09.840 --> 0:46:15.359 negative impact on everything that we value, and when they 0:46:15.480 --> 0:46:17.840 get what they need, it as a positive impact on 0:46:18.000 --> 0:46:22.239 everything that we value. So we're hopeful that we're going 0:46:22.280 --> 0:46:25.040 to continue to be able to get people to walk 0:46:25.520 --> 0:46:30.400 work across whatever those divides are that we've created between 0:46:30.520 --> 0:46:34.240 us and work with us as we work in communities 0:46:34.280 --> 0:46:35.000 across the country. 0:46:35.400 --> 0:46:38.279 So, Claire, I think it's pretty honorable what you guys 0:46:38.320 --> 0:46:40.480 are doing and have been doing for years. Personally, I'd 0:46:40.560 --> 0:46:42.120 like to put you out of business and I would 0:46:42.120 --> 0:46:46.120 love to see no American go hungry. So tell me 0:46:46.280 --> 0:46:49.960 what is the root cause of why Americans are hungry 0:46:50.000 --> 0:46:51.120 in America today? 0:46:51.320 --> 0:46:54.000 Is it? And you know, and help me fill out 0:46:54.520 --> 0:46:57.280 the picture here? Is it people that you are providing 0:46:57.280 --> 0:46:57.960 assistance for. 0:46:58.360 --> 0:47:01.439 One, two, three, four, five, five years? Are they often 0:47:01.480 --> 0:47:04.120 getting assistants for a long time? Is it because they 0:47:04.160 --> 0:47:06.719 can't get a job that pays? Is it because they're 0:47:07.320 --> 0:47:10.000 a mom with kids and raising young kids? 0:47:10.080 --> 0:47:10.120 Like? 0:47:10.280 --> 0:47:10.800 What is it? 0:47:10.920 --> 0:47:12.840 Why do we go hungry in America today? 0:47:13.719 --> 0:47:16.160 Yeah, it's all of the above. So there are a 0:47:16.239 --> 0:47:19.040 group of people who come to us and it's just episodic. 0:47:19.320 --> 0:47:24.680 They had a big medical expense that they had difficulty addressing, 0:47:24.760 --> 0:47:28.360 and we're there to be helpful in that moment of crisis. 0:47:28.960 --> 0:47:32.439 There are others who have come to us because they're 0:47:32.600 --> 0:47:35.520 in college. I, for instance, was food and secure when 0:47:35.560 --> 0:47:37.560 I was in college. I had to turn to the 0:47:37.800 --> 0:47:39.920 very system that I'm so privileged that I get the 0:47:40.080 --> 0:47:44.120 chance to help lead. And for me, it was during 0:47:44.719 --> 0:47:48.600 a period of transition when I was working really hard 0:47:48.880 --> 0:47:51.600 to create a different kind of path for myself. My 0:47:52.000 --> 0:47:54.360 parents hadn't had the chance to graduate high school, and 0:47:54.440 --> 0:47:56.879 here I was in college and I wanted to make 0:47:56.920 --> 0:47:59.680 good and I just couldn't make ends meet. So there 0:47:59.719 --> 0:48:02.800 was a lot of college hunger in the country. And 0:48:02.880 --> 0:48:07.120 they're also has generational hungry in this country. People who 0:48:07.200 --> 0:48:10.720 turn to us every year and who have many generations 0:48:10.920 --> 0:48:14.560 turned to the charitable food system. We've asked them, so 0:48:14.800 --> 0:48:17.279 what is it that puts you in that line? And 0:48:17.480 --> 0:48:20.880 they've been answering. We follow a report every year in September, 0:48:21.000 --> 0:48:24.680 which is Hunger Action Month. It's called Elevating Voices to 0:48:24.880 --> 0:48:28.080 End Hunger Together, and it's where people experience and hunger 0:48:28.120 --> 0:48:30.000 tell us while they're in the line. So here's what 0:48:30.080 --> 0:48:34.920 they tell us. They say, it's because of things like 0:48:35.920 --> 0:48:41.200 housing that's not affordable. Is because they don't have access 0:48:41.360 --> 0:48:45.640 to great health care and they care about their health. 0:48:46.840 --> 0:48:49.360 It's because of things like the benefits clip, which I 0:48:49.400 --> 0:48:52.759 alluded to in the earlier segment, where when they start 0:48:52.840 --> 0:48:57.960 getting ahead, the system actually pulls them backwards. So it's 0:48:58.000 --> 0:49:00.480 a lot of things. And we as Speeding America, we 0:49:00.600 --> 0:49:03.239 know that to solve hunger, we can't simply food bank 0:49:03.320 --> 0:49:05.919 our way out of it. So, like you, we want 0:49:06.000 --> 0:49:08.600 to put ourselves out of business, and the way to 0:49:08.680 --> 0:49:13.320 do it is to be comprehensive and thoughtful and nonpartisan 0:49:14.360 --> 0:49:16.840 and do what's best for the whole country by lifting 0:49:16.880 --> 0:49:18.280 people up for experience in hunger. 0:49:18.760 --> 0:49:21.480 Claire Carol and I were talking just a few moments 0:49:21.520 --> 0:49:25.239 ago and sort of asking the question of supporting a 0:49:25.360 --> 0:49:30.960 charity such as yours versus working closer to our own communities. 0:49:31.640 --> 0:49:35.080 How do you communicate that to people supporting Feeding America 0:49:35.640 --> 0:49:37.680 versus supporting a food bank in your hometown. 0:49:38.840 --> 0:49:42.920 What's so beautiful is there is no versus. Feeding America 0:49:43.160 --> 0:49:46.400 has a national is a national infrastructure, but it is 0:49:46.480 --> 0:49:53.000 an intensely local organization. Those food banks are in local communities. 0:49:53.360 --> 0:49:57.440 If anyone listening and watching or to go to Feeding 0:49:57.480 --> 0:50:00.320 America dot org, all that you'd have to do is 0:50:00.440 --> 0:50:04.120 type in the soap the zip code for the community 0:50:04.280 --> 0:50:06.839 you care about the most, and there is a member 0:50:06.920 --> 0:50:10.719 of the Feeding America network that's serving that very community. 0:50:11.480 --> 0:50:15.040 Having a national infrastructure allows us to have a lens 0:50:15.440 --> 0:50:18.560 of pulse, if you will, on where the greatest needs are, 0:50:18.600 --> 0:50:22.000 where the hotspots are. We provide funding to food banks 0:50:22.120 --> 0:50:25.360 and pantries. Again, there are over sixty thousand agency partners 0:50:25.400 --> 0:50:27.840 for Feeding America. Some of them are big, some of 0:50:27.960 --> 0:50:30.080 medium sized, and some of them are little bitty church 0:50:30.200 --> 0:50:34.680 pantries throughout the country, especially in rural America, where without 0:50:34.800 --> 0:50:37.960 those church pantries, there's so many people who would be 0:50:38.080 --> 0:50:42.320 devastated because of the implications of hunger. So with Feeding America, 0:50:42.520 --> 0:50:46.680 you don't have to make a choice shows local. That's 0:50:46.719 --> 0:50:48.520 what we want you to do. We want you to 0:50:48.560 --> 0:50:51.480 support your local community, and what we do as a 0:50:51.560 --> 0:50:54.279 national organization is put you in the best position to 0:50:54.360 --> 0:50:54.880 be able. 0:50:54.719 --> 0:50:57.200 To do that, all right, So appreciate getting some time 0:50:57.719 --> 0:51:00.279 with you as we get ready for the holidays, and 0:51:00.440 --> 0:51:02.360 we know it'll be season that is going to be 0:51:02.440 --> 0:51:03.440 tough for a lot of Americans. 0:51:03.520 --> 0:51:05.160 So appreciate checking in with you. Claire. 0:51:05.680 --> 0:51:08.920 Happy holidays and nice to talk with you again. Claire 0:51:08.960 --> 0:51:13.600 Babinot Fontano, CEO Feeding America, joining us there in New Orleans. 0:51:13.800 --> 0:51:15.759 I was just looking for my local zip code to 0:51:16.760 --> 0:51:19.239 food pantries that are not at all affiliates, Like they 0:51:19.280 --> 0:51:22.880 don't look like you know, Feeding America branding at all. 0:51:23.160 --> 0:51:25.239 But are they filling Yes, City Harvest is one of them, 0:51:25.480 --> 0:51:26.759 very prominent one here in New York City. 0:51:26.840 --> 0:51:28.800 Probably makes sense. I was looking at the list of partners. 0:51:28.840 --> 0:51:31.160 It's a who's who of those in the food industry, 0:51:32.040 --> 0:51:34.279 and so they probably work together in filling that out. 0:51:34.440 --> 0:51:36.240 Or you're listening and watching Bloomberg. 0:51:36.360 --> 0:51:39.880 You're listening to the Bloomberg Business Week podcast. Catch US 0:51:39.960 --> 0:51:43.360 Live weekday afternoons from three to six Eastern Listen. 0:51:43.200 --> 0:51:46.040 On Bloomberg dot com, the iHeartRadio app. 0:51:45.920 --> 0:51:49.360 And the Bloomberg Business app, or watch US Live on YouTube. 0:51:50.719 --> 0:51:53.560 Here's the beat, Americans. We all love fanburgers. 0:51:53.760 --> 0:51:56.840 According to a USDA study from twenty twenty, Americans consume 0:51:56.880 --> 0:51:57.400 an average of. 0:51:57.520 --> 0:51:59.120 Two No, that's not true. 0:52:00.000 --> 0:52:01.279 They're four burgers per day. 0:52:01.360 --> 0:52:02.040 It's not true. 0:52:02.280 --> 0:52:03.759 Oh my god. I can't tell you how much we've 0:52:03.800 --> 0:52:05.319 debated over the statistic this week. 0:52:05.480 --> 0:52:09.920 No, Americans consume the equivalent of meat that would add 0:52:10.120 --> 0:52:12.440 up to two point four burgers per day if they 0:52:12.480 --> 0:52:16.480 were just hamburgers, but that stat includes all meat anyway. 0:52:16.719 --> 0:52:20.560 It's about fifty billion burgers per year. I'm just gonna say, 0:52:20.640 --> 0:52:22.239 we eat a lot of burgers. Can we just think 0:52:22.280 --> 0:52:23.280 we're still make any sense? 0:52:23.440 --> 0:52:26.640 He yeah, I got a lot of beef with this. Okay, funny. 0:52:26.800 --> 0:52:29.160 Here's some more juicy facts that won't make your of 0:52:29.239 --> 0:52:31.120 mouth water when it comes to costs. In the second 0:52:31.160 --> 0:52:33.239 quarter of twenty twenty four, the average price of a 0:52:33.320 --> 0:52:36.600 fast food restaurant burger was eight dollars and forty one cents, 0:52:36.640 --> 0:52:40.080 up sixteen percent from five years ago. Even at McDonald's, 0:52:40.120 --> 0:52:42.799 the average price of a big Mac we're talking no fries, 0:52:42.880 --> 0:52:45.120 no drink, just the sandwich. Back in June it was 0:52:45.160 --> 0:52:47.279 five dollars and twenty nine cents. That's a twenty one 0:52:47.360 --> 0:52:48.800 percent increase from twenty nineteen. 0:52:48.920 --> 0:52:50.200 That's a lot and you got to get the fries 0:52:50.200 --> 0:52:51.560 because that's why you go to McDonald's. 0:52:51.560 --> 0:52:52.520 I'm just gonna put that out there. 0:52:52.680 --> 0:52:55.640 Hey, someone who watches beef prices closely is Pat Conlin. 0:52:55.960 --> 0:52:58.520 He's the president of way Back Burgers, the fast casual 0:52:58.640 --> 0:53:01.560 chain that yes special is in burger's, fry shakes, and. 0:53:01.800 --> 0:53:02.319 A lot more. 0:53:02.680 --> 0:53:04.560 They've got about one hundred and fifty locations in the 0:53:04.640 --> 0:53:08.480 United States. Another twenty in countries including South Africa, Japan, Canada, 0:53:09.120 --> 0:53:09.720 and elsewhere. 0:53:10.120 --> 0:53:13.359 We play in the fast casual segment and shake Schat 0:53:13.440 --> 0:53:14.600 Burger Shake Shaft. 0:53:15.160 --> 0:53:15.440 Guys. 0:53:15.600 --> 0:53:17.760 Okay, we're still waiting in Manhattan. 0:53:17.800 --> 0:53:19.960 I'm just telling you, yep, very soon, you won't have 0:53:20.000 --> 0:53:20.760 to wait much longer. 0:53:21.320 --> 0:53:23.719 We're going to open up our first restaurant, first Way 0:53:23.800 --> 0:53:26.520 Back Restaurant in Manhattan on Seventh Avenue in twenty Seventh 0:53:26.560 --> 0:53:29.560 Street should be in January, right across from f T. 0:53:30.440 --> 0:53:33.239 So then you you'll be able to get one of 0:53:33.320 --> 0:53:35.000 those two point four burgers per day. 0:53:36.560 --> 0:53:38.120 I don't know what that means. I'll have to double 0:53:38.200 --> 0:53:38.560 check on that. 0:53:38.960 --> 0:53:43.280 But talk fast casual, because you know, we talk about Chipotle, 0:53:43.600 --> 0:53:47.919 who is often credited with really creating it many years ago. 0:53:48.000 --> 0:53:50.480 In terms of fast casual, it wasn't just the fast 0:53:50.520 --> 0:53:52.279 food places that we got in customed to. It was 0:53:52.360 --> 0:53:53.480 a little bit of an experience. 0:53:53.719 --> 0:53:55.800 Right when I grew up, it was really fast food 0:53:55.960 --> 0:53:59.239 and now fast foods called QSR quick service restaurants. Yeah, 0:53:59.600 --> 0:54:04.400 fast asual started really with Chipotle, Panera Bread. Higher quality, 0:54:04.520 --> 0:54:11.040 elevated food, elevated experience in the restaurant, more fresh people, 0:54:11.440 --> 0:54:15.480 wanted a better quality burger, better quality salad to go to, 0:54:15.760 --> 0:54:19.400 and they're willing to pay more for that, for that quality, 0:54:19.760 --> 0:54:22.279 but also for the overall experience in the atmosphere of 0:54:22.280 --> 0:54:22.840 the restaurants. 0:54:23.040 --> 0:54:24.920 How do you replicate that atmosphere of the restaurant in 0:54:25.000 --> 0:54:29.360 New York where rent is super high, spaces are small, 0:54:30.800 --> 0:54:32.320 and crowds are plenty. 0:54:33.360 --> 0:54:34.120 You have to be fast. 0:54:34.560 --> 0:54:38.799 So even though we do the order, we don't pre 0:54:38.880 --> 0:54:42.359 cook any burgers. We make the burger when you order 0:54:42.440 --> 0:54:46.239 it at the at the point of sale system. But 0:54:46.680 --> 0:54:50.040 it's really nowadays the digital ordering process is a big 0:54:50.120 --> 0:54:51.040 portion of our business. 0:54:51.080 --> 0:54:53.560 So people order ordering head on the edge, on the app. 0:54:53.719 --> 0:54:56.960 How much of your business line it's about between the 0:54:57.239 --> 0:54:59.040 app and online ordering and delivery. 0:54:59.040 --> 0:55:01.560 It's about forty percent of our businesses digital orders. 0:55:01.719 --> 0:55:03.520 How much is that up? Just in the last few wait? 0:55:03.760 --> 0:55:07.120 Online app and delivery are forty percent of the business. Okay, 0:55:07.200 --> 0:55:07.960 forgive me go ahead. 0:55:08.080 --> 0:55:08.560 And when you do. 0:55:08.600 --> 0:55:10.280 Delivery, are you doing third party delivery? 0:55:10.440 --> 0:55:13.080 Third party through Uber Eats, grub hub door. 0:55:13.120 --> 0:55:14.839 Do you hate that and paying all those fees? Can 0:55:14.920 --> 0:55:16.480 I just put it out of the fees we pay this? 0:55:16.640 --> 0:55:18.080 I know both of us pay the fees. 0:55:18.239 --> 0:55:21.640 The restaurant tour pays commissions to those services, but we don't. 0:55:21.760 --> 0:55:23.800 I mean, if you had to start a delivery service 0:55:23.880 --> 0:55:26.359 of your own, there's a cost involved in that as 0:55:26.400 --> 0:55:31.040 a restaurant tour delivery guys, insurance cars, things like that. 0:55:31.200 --> 0:55:35.160 So there is a value to having them, and they 0:55:35.320 --> 0:55:39.200 bring certain guests to maybe not to the restaurant, but 0:55:39.280 --> 0:55:42.040 they bring them. They bring those sales into the restaurant 0:55:42.080 --> 0:55:43.400 because there are certain people. 0:55:43.560 --> 0:55:45.000 That are only going to order delivery. 0:55:45.560 --> 0:55:47.360 And when I was a kid, the only thing you 0:55:47.360 --> 0:55:50.120 can get on delivery was Chinese food a pizza. Now 0:55:50.160 --> 0:55:51.359 you can get everything under the sun. 0:55:51.560 --> 0:55:52.200 It is so true. 0:55:52.280 --> 0:55:54.320 Right in terms of diversity, I have to say some 0:55:54.400 --> 0:55:56.600 excuse me as I blow my nose, sorry, getting called 0:55:56.920 --> 0:55:59.560 five guys in and out way back Burger, smash burg 0:55:59.640 --> 0:56:02.400 or Burger Fat Burger, Johnny Rockets, what a Burger? 0:56:02.520 --> 0:56:05.960 Red Robin's Heart, E's Jack in the Box, Wendy's. 0:56:06.000 --> 0:56:07.640 Well, now you're getting into some fast foods. 0:56:07.440 --> 0:56:11.040 Okay, But I'm just gonna say, there are so many 0:56:11.120 --> 0:56:14.319 Burger joints out there. How do you I understand fast 0:56:14.360 --> 0:56:17.160 casual and experience, but how do you stand out, Like, 0:56:17.440 --> 0:56:19.800 what's your fear about coming into a New York market 0:56:20.200 --> 0:56:22.359 when I can also go to PJ. Clark's and get 0:56:22.400 --> 0:56:24.200 a burger with brenets and be a like kind of 0:56:24.200 --> 0:56:25.600 an old speakeasy. 0:56:25.080 --> 0:56:27.520 And have a really cool experience. But tell me how 0:56:27.560 --> 0:56:27.920 you do it. 0:56:28.400 --> 0:56:29.480 Well, it has to be done. 0:56:29.960 --> 0:56:32.000 I mean in the fast casual segment and even in 0:56:32.080 --> 0:56:34.720 the in the qs R a quick service restaurant service. 0:56:34.840 --> 0:56:37.399 Now quality everybody has quality food. 0:56:37.719 --> 0:56:39.680 Okay, So now everybody doesn't have quality food. 0:56:40.680 --> 0:56:43.880 Everybody has some semblance of quality or people expect. 0:56:45.400 --> 0:56:48.120 People expect quality for the level of price they're paying. 0:56:48.239 --> 0:56:49.040 Yeah, okay, fair. 0:56:49.239 --> 0:56:54.040 So you have to have something other than just quality food. 0:56:54.120 --> 0:56:55.719 You have to have the atmosphere. You have to have 0:56:55.800 --> 0:56:58.160 that guest service. We don't call the people that come 0:56:58.200 --> 0:57:01.320 into our restaurant customers. We call them guests because we 0:57:01.400 --> 0:57:03.200 really believe that they're coming into our dining. 0:57:03.040 --> 0:57:06.600 Room at our home. When you order at the POS station, 0:57:06.840 --> 0:57:08.799 we don't give you a number. We take your name. 0:57:09.280 --> 0:57:11.600 So it may sound a little bit goofy, but it's 0:57:11.640 --> 0:57:15.000 a little bit different personalization. So then when we walk 0:57:15.040 --> 0:57:18.400 the food out to your table, we say pat double cheeseburger, 0:57:18.520 --> 0:57:20.439 not number twenty one, number twenty seven. 0:57:21.520 --> 0:57:24.280 So it just makes you feel a little bit better 0:57:24.360 --> 0:57:26.800 as a guest. And then if you walk in and 0:57:26.920 --> 0:57:29.400 that person behind the pos system. 0:57:29.200 --> 0:57:32.000 Remembers your name or maybe they remember that you get 0:57:32.440 --> 0:57:35.480 a bacon double cheeseburger all the time and an Oreo 0:57:35.560 --> 0:57:37.920 milkshake and they say that, and you're in with somebody 0:57:37.960 --> 0:57:39.720 and they catch your name or that, hey, you're getting 0:57:39.760 --> 0:57:42.120 that thing that same order makes you feel like a 0:57:42.200 --> 0:57:43.040 king is the guest. 0:57:43.640 --> 0:57:46.840 So that's how you have to differentiate yourself today in 0:57:46.880 --> 0:57:48.520 the market. We know we have a great burger. 0:57:48.960 --> 0:57:52.080 We know we have great hand dipped milkshakes made the 0:57:52.120 --> 0:57:56.000 old fashioned way in a metal tin spun, not pulled 0:57:56.000 --> 0:57:56.640 out of a machine. 0:57:57.000 --> 0:57:59.360 So we know we have quality of food. It's that 0:57:59.600 --> 0:58:02.320 other atmosphere and that sense of nostalgia that's going to 0:58:02.360 --> 0:58:02.919 set us apart. 0:58:03.160 --> 0:58:06.440 You're a franchise guy, Yes, that's all my life, your 0:58:06.480 --> 0:58:10.640 whole life, Yeah, your whole career. What's the franchise model here. 0:58:13.000 --> 0:58:14.600 In terms of so how does it work? 0:58:14.600 --> 0:58:16.440 I mean, are these all independently owned and operator? Are 0:58:16.440 --> 0:58:17.320 they company stores? 0:58:17.400 --> 0:58:17.440 No? 0:58:17.560 --> 0:58:19.640 There were one hundred percent franchise. 0:58:19.320 --> 0:58:21.560 Okay, one hundred percent franchise, So an asset light model 0:58:21.600 --> 0:58:24.000 for you on the corporate side. 0:58:24.880 --> 0:58:27.520 How do fees work? The franchise fees. 0:58:27.640 --> 0:58:31.040 Initial franchise fee a license, so nump A restaurant is 0:58:31.200 --> 0:58:35.240 thirty five thousand dollars. You're ongoing royalties or five percent, 0:58:35.760 --> 0:58:38.680 and the advertising fee is four percent. 0:58:38.920 --> 0:58:41.720 It's pretty typical to the industry. 0:58:42.000 --> 0:58:42.360 Correct. 0:58:43.440 --> 0:58:45.320 So all you need is thirty five thousand dollars up 0:58:45.360 --> 0:58:47.520 front in order to do it, plus the capex that 0:58:47.600 --> 0:58:48.880 you need to build out your location. 0:58:49.000 --> 0:58:52.040 Yeah, the total investment is between five fifty to six 0:58:52.160 --> 0:58:54.440 fifty including the franchise. 0:58:54.520 --> 0:58:56.680 How do you explain the footprint where restaurants are right 0:58:56.720 --> 0:58:59.680 now in the US? Is that because of who you 0:58:59.720 --> 0:59:04.120 found as franchisees? Is that deliberate? It's it's definitely. There 0:59:04.160 --> 0:59:06.880 are a lot, but they're concentrated in certain areas. 0:59:07.440 --> 0:59:11.080 Yeah, we concentrate except for the one that we're doing 0:59:11.160 --> 0:59:14.720 in Manhattan. We really started we started in nineteen ninety 0:59:14.760 --> 0:59:18.400 one in Newark, Delaware. We've always been very successful in 0:59:18.480 --> 0:59:22.480 small towns. We are opening up the one in Manhattan, 0:59:22.680 --> 0:59:25.760 opening up one in New Orleans, so those are really 0:59:25.800 --> 0:59:31.720 our first forays into downtown areas, and that's we've been successful. 0:59:31.800 --> 0:59:35.920 But now through that downtown, through that was those small markets, 0:59:36.200 --> 0:59:39.600 now we're growing into the cities. 0:59:39.680 --> 0:59:42.160 Who are you seeing as your typical franchisees. Are there 0:59:42.720 --> 0:59:44.760 a handful of people who have like ten of them 0:59:45.000 --> 0:59:46.240 or are they sort of one offs? 0:59:46.400 --> 0:59:49.320 Now we're a little bit different than some other franchise companies. 0:59:49.520 --> 0:59:53.280 We look to award one franchise at a time where 0:59:53.360 --> 0:59:54.600 many other companies want you to. 0:59:54.680 --> 0:59:57.840 Come in and do five or ten or take down 0:59:57.920 --> 1:00:00.640 a whole county. Want to be in. 1:00:00.680 --> 1:00:03.280 Business with you first, See how you do. See if 1:00:03.320 --> 1:00:04.800 you're happy with us. We're happy with you. 1:00:04.880 --> 1:00:06.600 We're all about growth, but we want to make sure 1:00:06.600 --> 1:00:08.280 we're growing with the right people. They do one of 1:00:08.320 --> 1:00:08.560 the time. 1:00:08.600 --> 1:00:10.760 Does that mean you do have some franchise operators who 1:00:10.760 --> 1:00:11.360 have more than one. 1:00:11.800 --> 1:00:14.720 So now over those years since we've been franchising, since 1:00:14.760 --> 1:00:17.120 two thousand and eight, we're about forty five percent of 1:00:17.160 --> 1:00:20.080 our system or multi unit franchisees. So they've reinvested in 1:00:20.160 --> 1:00:22.200 the brand and themselves. They know that it's working and 1:00:22.240 --> 1:00:23.560 they're happy and we're happy with them. 1:00:23.920 --> 1:00:28.960 And you do stuff over internationally too, like woud I Ireland, 1:00:29.080 --> 1:00:31.000 South Africa, Japan, Canada. 1:00:31.520 --> 1:00:34.240 Yeah, you're and you're continuing that, like, how do you like? 1:00:35.560 --> 1:00:36.800 What's that model and. 1:00:36.920 --> 1:00:39.480 That models that model is a little bit different than 1:00:39.560 --> 1:00:42.720 the than the franchisee in the US. It's done by 1:00:42.840 --> 1:00:47.120 a master franchise and that person or that company actually 1:00:47.200 --> 1:00:50.840 becomes really the parent company in that country or that 1:00:51.040 --> 1:00:53.720 territory or that province, so they have to do everything 1:00:53.760 --> 1:00:55.160 that we do in the US. 1:00:55.640 --> 1:01:01.760 Interesting, how quickly does somebody who sets up a restaurant 1:01:01.880 --> 1:01:04.520 a franchise and how quickly do. 1:01:04.560 --> 1:01:07.080 They get their money back really depends upon how they 1:01:07.160 --> 1:01:09.560 set up if they're an owner operator and they're taking 1:01:09.600 --> 1:01:12.600 a salary and there, or if they are multi unit owners, 1:01:13.560 --> 1:01:16.240 it's a it's a different payback and how they set 1:01:16.320 --> 1:01:19.400 it up financially, whether they're paying all cash for it 1:01:19.600 --> 1:01:21.120 using their own money or if they're going to the 1:01:21.280 --> 1:01:23.760 SBA or a lending institution for financing. 1:01:24.000 --> 1:01:26.360 Is the model such that the franchise e is actually 1:01:26.640 --> 1:01:28.720 in the back working getting because or her hands dirty. 1:01:29.480 --> 1:01:33.400 No, that's there's something they need, notorious. 1:01:33.000 --> 1:01:34.080 For that they need to know. 1:01:34.560 --> 1:01:37.560 Yes, they need when we when you become a franchise e, 1:01:37.760 --> 1:01:39.680 you're going to have to learn how to flip burgers 1:01:39.760 --> 1:01:42.960 and drop fries and make milkshakes. The reason being not 1:01:43.120 --> 1:01:45.520 that that's going to be your function as a franchise. 1:01:45.720 --> 1:01:48.040 Your function is to grow your business and to get 1:01:48.040 --> 1:01:51.360 a new guest every day. But you need to know 1:01:51.560 --> 1:01:53.920 because when you walk in, or when you when you 1:01:54.000 --> 1:01:57.840 look on a videotape and you see that the that 1:01:57.960 --> 1:02:00.520 the side of the floor is dirty because they've been 1:02:00.560 --> 1:02:03.080 hitting it with the mop and not cleaning, that you 1:02:03.200 --> 1:02:04.880 need to walk in and be able to catch that. 1:02:05.480 --> 1:02:07.600 So you need to go through the full training process. 1:02:07.880 --> 1:02:10.320 But no, we don't expect our franchisees to be in 1:02:10.480 --> 1:02:12.520 behind the grill every day. That would be a waste 1:02:12.560 --> 1:02:13.640 of their talent and their training. 1:02:13.680 --> 1:02:15.360 We got about thirty four seconds, so they're gonna take 1:02:15.360 --> 1:02:17.760 a break and come back and talk some more. Do 1:02:18.000 --> 1:02:23.600 most franchises work out or are there a small percentage 1:02:23.680 --> 1:02:26.400 where it's just obvious Because you got to worry about 1:02:26.400 --> 1:02:27.440 the brand, the reputation. 1:02:27.680 --> 1:02:30.680 One bad one can bring it down. So I'm just curious. 1:02:30.720 --> 1:02:33.280 Do most of them, like ninety percent of them work out? 1:02:33.560 --> 1:02:35.720 Most of them, Yes, they do work out, and we 1:02:35.840 --> 1:02:40.080 have a great family of franchises across the across the 1:02:40.200 --> 1:02:43.640 US and across across the world. Yeah, there are some 1:02:43.840 --> 1:02:47.120 times where people either decide this isn't for them or 1:02:47.440 --> 1:02:49.080 it is a lot of work. The restaurant business is 1:02:49.080 --> 1:02:53.840 a lot of work. And you also have to have 1:02:54.000 --> 1:02:58.160 a personality to be in the restaurant business. You're not 1:02:58.240 --> 1:03:01.680 behind a desk. You have to be, you know, out 1:03:01.760 --> 1:03:05.400 there frontman. And if that's not for you, then then 1:03:05.440 --> 1:03:07.120 you shouldn't get into the restaurant pisins. 1:03:06.920 --> 1:03:08.640 Pat talked to us about some of the logistics of 1:03:09.280 --> 1:03:12.720 you know, as Tim rightly pointed out, it's franchise ease, 1:03:13.000 --> 1:03:16.160 so asset light. But I am curious about food costs, 1:03:16.360 --> 1:03:19.520 labor costs, you know, building out in as you said, 1:03:19.520 --> 1:03:21.680 you're getting ready to open up and or have one 1:03:21.960 --> 1:03:22.880 location New York City. 1:03:22.920 --> 1:03:25.200 It's expensive here in New York City. Talk to us 1:03:25.240 --> 1:03:26.800 about some of these dynamics. 1:03:27.120 --> 1:03:29.160 Yeah, well, the food cost is again one of the 1:03:29.200 --> 1:03:32.200 reasons you get into a franchise model is we go 1:03:32.320 --> 1:03:35.280 out and we negotiate for one hundred and fifty restaurants 1:03:35.360 --> 1:03:37.840 for beef, for buns, for ice cream. 1:03:37.800 --> 1:03:39.840 For soda, for all the supplies. 1:03:40.200 --> 1:03:42.360 So you're not if you were going out and just 1:03:42.520 --> 1:03:45.280 negotiating for yourself, you wouldn't get that volume discount purchase. 1:03:46.160 --> 1:03:49.360 It also talks to the quality of the product, because 1:03:49.400 --> 1:03:54.000 we're getting the quality these consistency. So you get that 1:03:54.160 --> 1:03:57.160 same burger the McDonald's theory, whether you go to one 1:03:57.240 --> 1:03:59.560 in California or whether you come to one in New 1:03:59.640 --> 1:04:02.320 York or Florida, you get that same taste, same thing 1:04:02.400 --> 1:04:05.680 with way Back. It is the same product across the US, 1:04:06.240 --> 1:04:11.120 So you get the volume discount in the pricing, you 1:04:11.240 --> 1:04:14.160 get the same quality and the consistency which the guest 1:04:14.280 --> 1:04:16.520 is looking for when they walk into a way Back 1:04:16.640 --> 1:04:17.680 or any franchise model. 1:04:18.360 --> 1:04:21.360 And I forgot what the other part of your question was. 1:04:21.520 --> 1:04:24.040 Labor costs, labor quests and even overhead of like building 1:04:24.120 --> 1:04:25.840 out like it's not going to probably cost the same 1:04:25.920 --> 1:04:26.840 to build in New York. 1:04:26.800 --> 1:04:29.480 Versus maybe somewhere else across the unit or does it. 1:04:29.560 --> 1:04:31.320 I don't know, No, I mean New York City is 1:04:31.640 --> 1:04:36.040 a different animal to itself, but it was an existing restaurant. 1:04:36.120 --> 1:04:38.400 So those are some of the spaces that we look 1:04:38.480 --> 1:04:40.920 for around the country, as long as it can't compromise 1:04:41.000 --> 1:04:42.720 on the quality of the location. It has to be 1:04:43.360 --> 1:04:46.840 a number one location, triple A location, and if it 1:04:46.920 --> 1:04:49.400 was a restaurant location, great, You don't want to take 1:04:49.440 --> 1:04:52.000 a second generation restaurant that went out of business because 1:04:52.000 --> 1:04:53.600 it was a bad location, but it's going to save 1:04:53.680 --> 1:04:55.760 you fifty thousand dollars in build out costs. 1:04:56.280 --> 1:04:58.640 So you do research. You're like, okay, who is here beforehand? 1:04:58.760 --> 1:04:59.200 Right? Yeah? 1:04:59.200 --> 1:05:00.840 And why did they go out a business? Is it 1:05:00.960 --> 1:05:02.600 in the back end of the shopping center? Was it 1:05:02.640 --> 1:05:04.640 a bad shopping center? Can you make a left hand turn? 1:05:04.800 --> 1:05:06.240 Is there a light to get in to get out? 1:05:06.640 --> 1:05:08.600 Or you know, taking your life in your hands if 1:05:08.640 --> 1:05:10.400 you have to pull your car out of that shopping center. 1:05:10.880 --> 1:05:13.600 So we do all that research along with our broker networks. 1:05:13.640 --> 1:05:16.040 We have a real estate platform, a modeling platform that 1:05:16.680 --> 1:05:19.200 looks at the locations that that we're choosing with the 1:05:19.240 --> 1:05:23.040 franchisees and we hold their hand all the way through. 1:05:23.080 --> 1:05:25.720 That you asked earlier what type of people are coming 1:05:25.760 --> 1:05:30.520 into the system. It really spans the horizon. There are 1:05:30.560 --> 1:05:32.600 a restaurant people that come in, there are people that 1:05:32.720 --> 1:05:34.880 come out of corporate jobs, and there are people that 1:05:34.960 --> 1:05:39.080 come out of it. It's really all across the board, 1:05:39.720 --> 1:05:42.960 but we have the training programs and the systems to 1:05:43.040 --> 1:05:44.360 be able to make them successful. 1:05:45.040 --> 1:05:48.200 Okay, lots of questions here. You mentioned labor. 1:05:48.280 --> 1:05:50.360 Labor, Yeah, I want to hone on that a little 1:05:50.360 --> 1:05:52.960 bit because we've seen labor costs over the last few 1:05:53.040 --> 1:05:55.440 years go up quite a bit. It's been tough in 1:05:55.560 --> 1:05:58.240 some markets even finding the labor. What's the labor picture 1:05:58.280 --> 1:05:59.920 you're hearing from franchisees right now. 1:06:00.560 --> 1:06:03.120 One of our franchisees told me about six months ago 1:06:03.560 --> 1:06:06.320 that I said to you, and our first franchise opened 1:06:06.400 --> 1:06:09.320 up in Utah about a year ago, and I asked him, 1:06:09.440 --> 1:06:12.320 is there a labor any labor problems, labor issues finding 1:06:12.400 --> 1:06:15.080 labor in your market? And he said, Pat, there's no 1:06:15.320 --> 1:06:18.160 labor issues. That you have to pay what the what 1:06:18.320 --> 1:06:19.959 the going rate is in the area. 1:06:20.640 --> 1:06:22.720 And that's really what it comes down to. 1:06:22.960 --> 1:06:26.200 If a restaurant down the street is paying twenty five 1:06:26.280 --> 1:06:28.880 cents more an hour than what you're offering, you're going 1:06:28.920 --> 1:06:32.320 to have a labor problem. Minimum wage is a is 1:06:32.360 --> 1:06:34.720 a fictitious number. There is no yeah minuse the market 1:06:34.760 --> 1:06:38.760 determines that correct found. But if let's say your franchise 1:06:38.760 --> 1:06:41.280 e in a part of Utah, where the cost of 1:06:41.360 --> 1:06:44.360 living is higher, has to pay a higher wage than 1:06:44.440 --> 1:06:46.640 somebody based in Let's say this a sun belt state 1:06:46.640 --> 1:06:49.080 where you have a store where the cost of living 1:06:49.240 --> 1:06:52.440 is lower. Is that reflected in the actual menu price too? 1:06:52.800 --> 1:06:55.400 Do they have do they have discrepancy or do they 1:06:55.480 --> 1:06:59.040 have the ability to have discrepancies within many pricing? Absolutely, 1:06:59.680 --> 1:07:02.040 we we don't force them to charge X amount for 1:07:02.120 --> 1:07:05.400 a burger or a milkshake. Labor has to be taken 1:07:05.440 --> 1:07:07.800 into account, just like rent has to be taken into account. 1:07:07.800 --> 1:07:09.120 The rent in New York City is going to be 1:07:09.200 --> 1:07:11.680 much different than the rent in North Carolina. That has 1:07:11.760 --> 1:07:14.120 to go into the menu prices. The food costs goes 1:07:14.160 --> 1:07:16.480 into the menu prices. We were talking earlier about the 1:07:16.880 --> 1:07:20.680 price of beef and the price of proteins and how 1:07:20.720 --> 1:07:22.640 that has gone up over the last three four years. 1:07:23.400 --> 1:07:27.040 So that has to be accounted for, and you see 1:07:27.080 --> 1:07:30.439 that in menu prices and inflation and things of that nature. 1:07:30.480 --> 1:07:33.400 I was looking at the menu. The menu looks great 1:07:33.440 --> 1:07:36.440 by the way. It got to a part though, where 1:07:36.480 --> 1:07:36.960 it had. 1:07:37.560 --> 1:07:41.800 The non meat burgers. Carol I used to talk about 1:07:41.800 --> 1:07:44.360 these all the time. Does anyone order these anymore? 1:07:44.760 --> 1:07:49.320 They still do the Impossible, the impossible plant based. 1:07:49.720 --> 1:07:52.880 Yeah, the plant based. We carry the Impossible Burger and 1:07:53.800 --> 1:07:56.680 probably three four. It's just right around the pandemic is 1:07:56.760 --> 1:07:59.520 when we brought it on. That's when it was hot, yes, 1:07:59.640 --> 1:08:03.640 and it probably went up a couple of years after that. 1:08:03.800 --> 1:08:04.200 It's funny. 1:08:04.240 --> 1:08:06.120 We had it on as a limited time offer just 1:08:06.200 --> 1:08:09.200 before the pandemic hit and we weren't sure how it 1:08:09.320 --> 1:08:11.600 was going to go. And it was also going to 1:08:11.640 --> 1:08:14.640 be an expensive menu item, because that product was an 1:08:14.680 --> 1:08:18.920 expensive item to bring into the restaurant, and it turned 1:08:18.960 --> 1:08:21.840 out to sell very well, and we took it off 1:08:21.920 --> 1:08:24.120 because we had a limited amount of supply of it 1:08:24.680 --> 1:08:29.200 and never saw so many feedbacks four or five years ago, when. 1:08:29.080 --> 1:08:29.920 Are you bringing that back? 1:08:30.000 --> 1:08:31.960 The only reason I came into a Burger place was 1:08:32.040 --> 1:08:34.560 I saw that you had that online. Now that that 1:08:34.840 --> 1:08:40.120 has definitely waned and the plant based meat alternatives. 1:08:39.520 --> 1:08:42.040 Have gone down somewhat, and so I don't know about you, Carol, 1:08:42.080 --> 1:08:43.680 but I went from like I loved those things, and 1:08:43.720 --> 1:08:44.840 then I kind of realized what was in. 1:08:44.920 --> 1:08:47.040 On and I was never a fan for me, and 1:08:47.200 --> 1:08:49.720 I'm like, give me the cow. I was never the cow. 1:08:49.880 --> 1:08:51.760 No, because I thought the amount of salt that was 1:08:51.800 --> 1:08:53.719 in it, and I had so many conversations with folks 1:08:53.760 --> 1:08:55.679 that were in the industry, and I'm like, I should 1:08:55.680 --> 1:08:58.240 be your customer, but it isn't a healthier option. 1:08:58.640 --> 1:08:59.240 Yeah, we had. 1:08:59.760 --> 1:09:03.640 It's really for it's really for people who who are 1:09:03.720 --> 1:09:06.160 not they're not vegetarians. They like meat, they like the 1:09:06.200 --> 1:09:08.120 taste of to beat. They were looking to cut down 1:09:08.200 --> 1:09:11.880 their their consumption of meat and going that way so 1:09:12.120 --> 1:09:12.960 worked well for us. 1:09:13.560 --> 1:09:15.560 So I'm looking at a sweet bacon burger that's just 1:09:15.640 --> 1:09:19.400 oozing with bacon and cheese. Looks kind of yammy cheese fries. Yep, 1:09:19.520 --> 1:09:22.040 give me some fries, the bacon on the fries. I'm 1:09:22.120 --> 1:09:25.679 just saying, what happened to people wanting healthy or fair? 1:09:26.600 --> 1:09:29.320 It's I think this has looked at it's healthy now, 1:09:30.360 --> 1:09:34.880 No to be fair like RFK healthy. 1:09:35.200 --> 1:09:37.639 We've only got about thirty seconds like what people people 1:09:37.800 --> 1:09:40.360 looking and they want to eat healthy in January when 1:09:40.400 --> 1:09:43.080 they get their gym membership and when the calendar changes 1:09:43.560 --> 1:09:46.880 come February, everybody's back to eating those two three burgers 1:09:46.880 --> 1:09:47.160 a week. 1:09:47.680 --> 1:09:50.280 Sorry, go ahead, are two point five burgers today. 1:09:51.479 --> 1:09:52.639 They'll take the two point seven. 1:09:53.160 --> 1:09:56.800 I'm just saying Pat Collins still with us preserve way 1:09:56.840 --> 1:10:00.360 Back Burgers. Bloomberger Director Broker Studio. First of all, private 1:10:00.400 --> 1:10:03.240 equity money that keeps getting involved into different worlds, good 1:10:03.320 --> 1:10:03.559 or bad. 1:10:04.000 --> 1:10:05.880 Some of it's good, some of it's probably not good. 1:10:06.600 --> 1:10:10.439 We're very much about we're not private equity. We're owned 1:10:10.479 --> 1:10:12.560 by two partners. 1:10:12.800 --> 1:10:16.920 And no debt on the company which owned what like 1:10:17.040 --> 1:10:20.360 they they're the franchise where the franchise or Jake's Franchising 1:10:20.400 --> 1:10:24.400 they have a concept. Yes, they own the franchise franchising 1:10:24.439 --> 1:10:28.000 companies called Jake's Franchising, And we're the parent company for 1:10:28.520 --> 1:10:29.320 way Back Burgers. 1:10:30.040 --> 1:10:33.920 What do you think of the Jersey Micy purchase? Buying 1:10:34.040 --> 1:10:34.880 eight billion dollars? 1:10:35.880 --> 1:10:36.719 Huge amount of money? 1:10:38.720 --> 1:10:43.280 But we'll see what happens, you know, that's what the 1:10:43.360 --> 1:10:46.640 valuation if you look at it per per location is 1:10:46.760 --> 1:10:47.280 pretty high. 1:10:47.520 --> 1:10:49.040 So did Steve Schwartzman overpay. 1:10:49.840 --> 1:10:52.240 I don't know, we'll I guess we'll see in the 1:10:52.400 --> 1:10:53.000 years to come. 1:10:54.920 --> 1:10:58.680 The business, Like I think about margins, how tight is 1:10:58.720 --> 1:10:59.559 it in a restaurant? 1:10:59.640 --> 1:11:00.479 What are the margins? 1:11:00.600 --> 1:11:00.640 Like? 1:11:00.960 --> 1:11:01.320 It's tight? 1:11:01.400 --> 1:11:03.479 You have to watch your food costs. I mean there 1:11:03.560 --> 1:11:07.599 are burgers. I think you were asking what's changed over. 1:11:07.560 --> 1:11:09.960 The over the year eighteen ninety one. You guys started right. 1:11:10.880 --> 1:11:13.439 So it started originally with in Delaware. 1:11:13.520 --> 1:11:16.320 But when the beef came in, it came in in 1:11:16.560 --> 1:11:20.599 bulk and you had to roll. They called it rolling burgers, 1:11:20.800 --> 1:11:22.840 so you rolled them into little meatballs because it was 1:11:22.840 --> 1:11:25.160 all fresh burgers. So you did that in the back 1:11:25.200 --> 1:11:27.800 of the house and everybody you had to weigh each 1:11:28.400 --> 1:11:33.000 meatball before we pressed it. And the problem with that 1:11:33.439 --> 1:11:35.840 is like my mom did, but she kind of like, right, 1:11:35.880 --> 1:11:38.040 what you did, what you did at home, except your 1:11:38.080 --> 1:11:39.040 mom didn't put a lot of skin. 1:11:39.320 --> 1:11:41.439 She did, and if one was bigger then the other, 1:11:41.840 --> 1:11:43.160 it didn't make a difference. At home. 1:11:43.439 --> 1:11:45.080 My brothers got those. I got the smaller. 1:11:45.320 --> 1:11:48.080 In the restaurant industry, again, you want consistency. But the 1:11:48.479 --> 1:11:51.320 problem is if that burger goes out bigger than it's 1:11:51.400 --> 1:11:54.880 costing you more as a franchise e. If it goes 1:11:54.960 --> 1:11:58.880 out smaller, then the guest is not getting the right side. 1:11:58.920 --> 1:12:00.479 Stop that is burger small, That's right. 1:12:01.040 --> 1:12:04.240 So we went to our burger supplier after years of 1:12:04.320 --> 1:12:07.439 doing it, and it was a labor issue. Rolling beef 1:12:07.479 --> 1:12:10.840 and nobody wanted to do it, and it was the 1:12:10.960 --> 1:12:13.720 employees didn't didn't like doing it. So we went to 1:12:13.760 --> 1:12:16.600 our beef supplier and said, and quite frankly, it was 1:12:16.880 --> 1:12:20.000 a food safety issue having hands on it. And we 1:12:20.080 --> 1:12:22.000 went to the our manufacturer and. 1:12:22.080 --> 1:12:23.160 Said, is there a better way? 1:12:23.280 --> 1:12:25.360 And they said, yeah, you know what, We've just started 1:12:25.600 --> 1:12:29.640 doing this where we can make your proprietary beef in 1:12:29.760 --> 1:12:33.719 a loosely formed puck they call it, and at your weight, 1:12:33.920 --> 1:12:39.400 your your specifications, and it'll come into you cryovacked and 1:12:40.560 --> 1:12:43.120 each patty is already done, so you take it out 1:12:43.120 --> 1:12:43.920 of the back of the house. 1:12:44.439 --> 1:12:47.280 So that's a labor savings, it's a food cost savings 1:12:47.280 --> 1:12:49.519 because now i's a little bit more, don't cost the 1:12:49.560 --> 1:12:50.280 same amount of money. 1:12:50.439 --> 1:12:52.560 Really, they'll just measure it for you. 1:12:52.640 --> 1:12:54.720 They pre measured it saved us a lot of money 1:12:55.680 --> 1:12:59.720 and now there's you know, the team members loved it 1:12:59.800 --> 1:13:02.800 because and the franchise he's loved it because you're getting 1:13:02.880 --> 1:13:04.640 people out of the back of the house so you 1:13:04.840 --> 1:13:08.160 better able to serve guests in the restaurant. Same thing 1:13:08.240 --> 1:13:12.880 with our ice cream. We handscooped the milkshakes and the 1:13:12.960 --> 1:13:16.679 ice cream that we used to use was a French 1:13:17.160 --> 1:13:21.120 a vanilla bean ice cream. It sounds funny, very very hard, 1:13:21.400 --> 1:13:24.719 even though it's frozen at the same amount, and nobody 1:13:24.800 --> 1:13:26.240 wanted to do it. You had to take the tub 1:13:26.280 --> 1:13:28.080 of ice cream out and sit it on the counter 1:13:28.200 --> 1:13:29.960 in the back for a little while that it thaw 1:13:30.040 --> 1:13:31.920 out a little before the team member could scoop it. 1:13:32.280 --> 1:13:34.519 And you were scooping hard ice cream. 1:13:34.680 --> 1:13:35.760 It was tough. 1:13:35.840 --> 1:13:37.720 I think about that with folks who doing ice cream. 1:13:37.720 --> 1:13:40.240 It's a lot of work, it is, I'm getting So 1:13:40.280 --> 1:13:41.600 what were we going to say? Did you automate it? 1:13:41.840 --> 1:13:44.479 So we were eventually looking at that, but we went 1:13:44.520 --> 1:13:46.400 back to the ice cream guy and said, and he said, 1:13:46.400 --> 1:13:48.920 we can make an ice cream with a little more 1:13:49.000 --> 1:13:52.760 sugar content, and believe it or not, it's softer. It's 1:13:52.800 --> 1:13:56.000 still it's still at ten below zero, but it's softer. 1:13:56.120 --> 1:13:57.800 You can take that out at ten below and you 1:13:57.920 --> 1:13:59.880 can scoop it, and you can almost scoop it to order. 1:14:00.000 --> 1:14:01.479 I'm getting Okay, we only have a couple minutes left, 1:14:01.479 --> 1:14:04.000 but I'm getting some questions from folks listening and watching 1:14:04.120 --> 1:14:08.439 right now, as as the person who's the president of 1:14:08.479 --> 1:14:11.840 the franchising firm do you have a view on unionization 1:14:11.960 --> 1:14:15.360 at all. We're seeing it happen at places like Starbucks, 1:14:15.439 --> 1:14:18.240 for example, Apple Store, Yeah. 1:14:19.240 --> 1:14:23.040 Okay, I mean we're in the hospitality business, in the 1:14:23.120 --> 1:14:24.240 restaurant business. 1:14:24.479 --> 1:14:26.040 And we want to make. 1:14:27.800 --> 1:14:30.800 We're also one hundred percent franchised, so it's a little 1:14:30.800 --> 1:14:32.240 bit different than Starbucks, where they're. 1:14:32.120 --> 1:14:33.240 All company owned units. 1:14:34.439 --> 1:14:37.840 So we want to make our team members, we want 1:14:37.920 --> 1:14:40.800 what we want them to be fairly paid. I don't 1:14:40.840 --> 1:14:42.800 know whether we would take a stance one way or 1:14:42.840 --> 1:14:44.560 another on a on unionization. 1:14:45.120 --> 1:14:49.000 All right, So if we're coming, is Tim mcgardenberger, is 1:14:49.160 --> 1:14:50.920 he Carolina? 1:14:51.120 --> 1:14:53.640 Is he a Cajun? I know I'm an a one steakhouse. 1:14:54.200 --> 1:14:56.120 I would do any of the above. I was looking 1:14:56.120 --> 1:14:56.920 at them any earlier. 1:14:57.640 --> 1:14:57.800 Well. 1:14:58.240 --> 1:15:01.920 Also, look at the cheesy, which is very plain. But 1:15:02.000 --> 1:15:04.519 it's four slizes of American cheese on a double patty 1:15:04.560 --> 1:15:08.240 burger with an inverted Butterbut that's magical. 1:15:08.479 --> 1:15:09.479 Yes, no offense. 1:15:09.479 --> 1:15:10.559 I've done that with hot dogs. 1:15:11.680 --> 1:15:14.920 But it's a grilled cheese with a hamburger in the 1:15:14.920 --> 1:15:15.320 middle of it. 1:15:15.520 --> 1:15:20.360 Okay, only thirty seconds. Technology, Kiosks and stores, what's going on? 1:15:21.560 --> 1:15:24.120 Kiosks and stores? We started again that came out of 1:15:24.160 --> 1:15:24.679 the pandemic. 1:15:25.360 --> 1:15:28.320 We have about fifty restaurants across the US today that 1:15:28.479 --> 1:15:30.960 have the kiosks. Every new restaurant that's being built and 1:15:31.040 --> 1:15:32.120 being built with kiosks. 1:15:33.720 --> 1:15:35.080 It again. 1:15:35.320 --> 1:15:38.400 It's it's not so much of a labor savings but 1:15:38.560 --> 1:15:41.280 redeploying the labor in the restaurants so they can better 1:15:41.320 --> 1:15:41.960 serve the guests. 1:15:42.160 --> 1:15:42.679 Five seconds. 1:15:42.720 --> 1:15:48.679 Consumer doing okay, yeah, consumer or consumer consumer, Yeah, shopper's 1:15:48.680 --> 1:15:50.479 restaurant person who comes to a restaurant, you think they're 1:15:50.479 --> 1:15:51.280 doing okay, they're. 1:15:51.120 --> 1:15:52.360 Not pulling back or anything. 1:15:52.760 --> 1:15:57.160 No, no, I mean we see that our sales haven't slipped. 1:15:57.760 --> 1:15:59.320 So staff knockwood. 1:16:00.000 --> 1:16:01.400 All right, Well, when New York opens, come on. 1:16:01.479 --> 1:16:03.880 Back definitely, all right, take you. We'll meet you there 1:16:03.960 --> 1:16:04.720 for Burger deal. 1:16:04.840 --> 1:16:07.400 Peconland President, way back Burgers, Thank you so much. Really 1:16:07.520 --> 1:16:07.840 enjoyed it. 1:16:13.080 --> 1:16:16.600 You're listening to the Bloomberg Business Week podcast. Catch us 1:16:16.680 --> 1:16:20.679 live weekday afternoons from three to six Easter on Bloomberg Radio, 1:16:20.880 --> 1:16:24.120 the Bloomberg Business app, and YouTube. You can also listen 1:16:24.280 --> 1:16:27.360 live on Amazon Alexa from our flagship New York station, 1:16:27.840 --> 1:16:30.599 Just say Alexa play Bloomberg eleven thirty. 1:16:32.280 --> 1:16:33.200 Before we wrap up. 1:16:33.240 --> 1:16:35.760 Our broadcast, we want to unwrap some data from the 1:16:35.880 --> 1:16:39.519 PNC Christmas Price Index. Now in it's forty first year, 1:16:39.640 --> 1:16:41.559 P and C has been keeping track of just how 1:16:41.680 --> 1:16:45.120 much the twelve days of Christmas cost, and spoiler alert, 1:16:45.600 --> 1:16:46.080 it's a lot. 1:16:46.520 --> 1:16:48.880 Inflation is to blame for the rising costs of decking 1:16:48.960 --> 1:16:53.439 the halls kind of. I mean, yes, it's a little complicated, though. 1:16:53.479 --> 1:16:56.200 We dive into it with Amanda Gotti, chief investment officer 1:16:56.240 --> 1:16:59.160 at PNC Asset Management Group, who broke it all down 1:16:59.200 --> 1:16:59.519 for us. 1:17:00.040 --> 1:17:04.400 The Christmas Price Indux is up really significantly and thankfully 1:17:04.520 --> 1:17:07.400 my favorite gift in the index, the Golden Rings, of course, 1:17:07.600 --> 1:17:10.200 is not the driver, as you said, It's really the 1:17:10.320 --> 1:17:13.639 services side of the equation, which we equate very much 1:17:13.680 --> 1:17:18.200 to the performers. That's really what's driving this year's calculation 1:17:18.360 --> 1:17:21.160 in terms of the Christmas Price Index, and also interesting, 1:17:21.880 --> 1:17:25.400 very much still a lot of services inflationary fire and 1:17:25.479 --> 1:17:29.040 the broader economy too. So the numbers may look eyepopping, 1:17:29.120 --> 1:17:30.880 but the trends are actually quite similar. 1:17:31.000 --> 1:17:33.360 But I don't understand the I don't understand the gold 1:17:33.560 --> 1:17:35.760 element here because gold is up thirty percent from a 1:17:35.840 --> 1:17:39.160 year ago. But in your analysis it's exactly flat from 1:17:39.160 --> 1:17:39.639 a year ago. 1:17:40.240 --> 1:17:44.400 It's not just purely about the cost of the gold itself, 1:17:44.520 --> 1:17:48.040 it's the production and the creation of the ring. And 1:17:48.240 --> 1:17:50.920 so every year we go back to the same jewelry 1:17:51.040 --> 1:17:54.200 store and talk to them about their prices, and they 1:17:54.760 --> 1:17:57.120 have not raised prices on a year over year basis. 1:17:57.160 --> 1:18:00.240 So their margin is certainly coming down because the put 1:18:00.320 --> 1:18:02.799 cost has gone up, as you said, but they haven't 1:18:02.920 --> 1:18:05.040 moved the needle in terms of the price for the 1:18:05.120 --> 1:18:08.760 ring in total itself. That's a nuance, but notable, I think. 1:18:09.040 --> 1:18:09.080 So. 1:18:09.200 --> 1:18:10.600 Wait, the trends remind me. 1:18:11.800 --> 1:18:14.200 Over the years, as we have talked to you about this, 1:18:14.880 --> 1:18:17.640 as we are a service led economy, has it increasingly 1:18:17.720 --> 1:18:20.680 been that the service side of the Twelve Days of 1:18:20.760 --> 1:18:22.960 Christmas is what kind of moves the needle when it 1:18:23.000 --> 1:18:23.759 comes to costs. 1:18:24.880 --> 1:18:27.519 You know, it hasn't always been the case, but as 1:18:27.720 --> 1:18:32.360 the broader economy has shifted from goods to more services, 1:18:32.720 --> 1:18:36.040 we've actually seen a similar trend. The Christmas Price index 1:18:36.160 --> 1:18:39.719 isn't leading it necessarily, but we are seeing that shift 1:18:39.800 --> 1:18:42.519 in the underlying data and the calculation of the index. 1:18:42.600 --> 1:18:45.360 And so when you look at the performers in particular. 1:18:45.479 --> 1:18:47.720 I mean, think about it, the Tailor Swift effect, the 1:18:47.800 --> 1:18:51.040 Beyonce effect. We're going to pay anything to get our 1:18:51.080 --> 1:18:54.000 hands on those tickets. And so the performers in the 1:18:54.080 --> 1:18:57.400 index are really garnering their big fair share of increases 1:18:57.479 --> 1:18:58.479 on a year over year basis. 1:18:58.520 --> 1:19:00.320 Hey, and I was seeing the twelve Ladies dance? Are 1:19:00.400 --> 1:19:01.880 the is it eleven ten lords of. 1:19:01.880 --> 1:19:03.960 Leaping, tenlors leading, ten lords of leader? 1:19:04.160 --> 1:19:05.920 They were they were doing backup work, you know, for 1:19:06.040 --> 1:19:07.800 Taylor Swift, So like could have driven up the. 1:19:07.800 --> 1:19:10.439 Cost that way six lane somewhere or another of the 1:19:10.520 --> 1:19:13.640 cost is way up. And consumers will pay anything for 1:19:13.760 --> 1:19:14.800 services these days. 1:19:14.880 --> 1:19:17.160 What's up with the six GISA laying of eight point 1:19:17.280 --> 1:19:20.200 nine percent from a year ago? I thought poultry prices 1:19:20.240 --> 1:19:22.679 were flattered down, you know, it's. 1:19:22.800 --> 1:19:25.559 It's sort of an interesting it's an interesting dynamic there. 1:19:25.600 --> 1:19:28.040 I have to say, you know, the backyard farming trend. 1:19:29.040 --> 1:19:31.719 Dare I say farm to table? Hopefully the geese aren't 1:19:31.760 --> 1:19:36.720 listening to me me here talking something about that. I 1:19:36.880 --> 1:19:38.880 know it is, isn't it? This is These are the 1:19:38.960 --> 1:19:42.559 cold hard analytical facts for you. But there are definitely 1:19:42.720 --> 1:19:47.280 some consumer oriented trends driving the demand for geese up 1:19:47.479 --> 1:19:49.920 relative to some of the other birds in the index. 1:19:50.000 --> 1:19:51.679 I mean, what are you going to do with turtle doves? 1:19:51.960 --> 1:19:53.960 What are you gonna do with calling birds? You know, 1:19:54.080 --> 1:19:57.040 they're not the greatest of gifts, but geese I could 1:19:57.080 --> 1:19:57.640 get used to that. 1:19:58.000 --> 1:19:59.880 You got to clean up after some of these gifts, 1:20:00.120 --> 1:20:03.920 which is never something that was encouraged in my home. 1:20:03.960 --> 1:20:08.280 And they fly like you you know, it's end of 1:20:08.320 --> 1:20:08.599 the day. 1:20:08.640 --> 1:20:11.080 I'm not I'm not sure what true love is really 1:20:11.240 --> 1:20:16.720 thinking buying all of these birds here. But nevertheless, we're 1:20:16.800 --> 1:20:19.479 not going to deviate from the classic holiday song. So 1:20:19.600 --> 1:20:20.360 this is what you get. 1:20:20.479 --> 1:20:21.320 Well, this is what happened. 1:20:21.360 --> 1:20:24.240 You know, we like to buy experiences these days, but 1:20:24.520 --> 1:20:26.000 they were more interested in things back then. 1:20:26.120 --> 1:20:26.400 Carol. 1:20:26.560 --> 1:20:28.160 Yeah, uh, that's so true. 1:20:28.360 --> 1:20:28.560 You know. 1:20:28.720 --> 1:20:31.000 I have sisters always like giving experiences, which I always 1:20:31.000 --> 1:20:32.479 thought was a kind of a cool thing. But I 1:20:32.600 --> 1:20:36.519 do think about that, right, experiences versus stuff. I wonder, uh, 1:20:36.800 --> 1:20:38.200 the Eight Maids of Milking. 1:20:38.520 --> 1:20:39.759 Is it raw milk. 1:20:42.120 --> 1:20:43.920 To get political political at all? 1:20:44.040 --> 1:20:44.479 Oh? Boy? 1:20:44.720 --> 1:20:47.799 Exactly? The fifth that could be a different cost equation. 1:20:47.960 --> 1:20:50.040 I'm just going to point that out, it. 1:20:50.120 --> 1:20:54.240 Could be very different. Agreed, the underlying data as it 1:20:54.360 --> 1:20:57.320 relates to the maids of milking really ties very much 1:20:57.400 --> 1:21:00.759 to the minimum wage. And because the minimum age hasn't 1:21:00.880 --> 1:21:04.519 changed at all in many, many years, that one has 1:21:04.600 --> 1:21:07.759 been holding pretty steady. We could talk all day long about, 1:21:07.920 --> 1:21:11.720 you know, the philosophical aspects of you know, wages and 1:21:11.800 --> 1:21:14.960 the minimum wage and where we are from an inflationary perspective, 1:21:15.040 --> 1:21:19.760 But until the minimum wage moves from a policy perspective, 1:21:19.840 --> 1:21:21.200 that one, unfortunately is holding. 1:21:21.280 --> 1:21:21.599 Study. 1:21:21.800 --> 1:21:25.360 We said, the cost of all gifts across the two 1:21:25.400 --> 1:21:27.840 hundred thousand dollars threshold for the first time last year 1:21:27.880 --> 1:21:30.360 today settles in three point six percent hire a two 1:21:30.479 --> 1:21:32.720 hundred and nine two hundred and seventy two hundred and 1:21:32.760 --> 1:21:34.280 nine thousand, two hundred and seventy two dollars. 1:21:35.120 --> 1:21:38.280 Help me understand. Does this say to you though, in general, 1:21:38.400 --> 1:21:40.360 that we are living in a little bit of an 1:21:40.400 --> 1:21:41.519 inflationary environment? 1:21:41.560 --> 1:21:43.479 Like, what does it tell you about if we step 1:21:43.600 --> 1:21:46.040 back about what it means in terms of the US 1:21:46.120 --> 1:21:46.880 inflation picture. 1:21:47.240 --> 1:21:51.839 Well, I think we're certainly living in an elevated inflationary environment. 1:21:51.920 --> 1:21:54.960 I mean we're gaining on it relative to the peak 1:21:55.080 --> 1:21:58.160 of you know, nine percent in terms of CPI that 1:21:58.280 --> 1:22:02.280 we saw sort of in the of the pandemic trends 1:22:02.360 --> 1:22:04.920 that we saw there. But we haven't seen prices come down. 1:22:05.040 --> 1:22:08.560 We're not in a deflationary environment. It's really just that 1:22:08.680 --> 1:22:11.840 the rate of change on inflation is slowing, and so 1:22:12.000 --> 1:22:15.280 we are seeing some elements of the Christmas Price Index 1:22:15.720 --> 1:22:19.440 flowing in terms of that rate of change increase. But nevertheless, 1:22:19.640 --> 1:22:22.720 things are on balance more expensive this year than they 1:22:22.760 --> 1:22:25.040 were last year, and it's just a reflection of the 1:22:25.120 --> 1:22:26.360 traditional economy as well. 1:22:26.560 --> 1:22:28.600 Yes, Carol Masser, what's up with the partridge in a 1:22:28.680 --> 1:22:31.479 paar tree? I mean partridge on change? What my understanding 1:22:31.560 --> 1:22:34.120 is a seventeen point one percent jump in the price. 1:22:33.920 --> 1:22:34.320 For a pair. 1:22:34.600 --> 1:22:38.000 That's that's the traditional buying, that's not the Internet buying. 1:22:38.439 --> 1:22:40.840 Okay, that's Mortar Absolutely right? 1:22:41.720 --> 1:22:42.160 Is that there? 1:22:42.560 --> 1:22:44.840 Can I get get back up here, Amanda Gotti. 1:22:46.760 --> 1:22:50.160 Yes, absolutely. Last year we were teasing that we're going 1:22:50.240 --> 1:22:53.040 to make the partridge sit on a cardboard cutout because 1:22:53.120 --> 1:22:55.839 the tree was so darn expensive to try and control 1:22:55.920 --> 1:22:58.280 for prices. We should be saying the same thing this year. 1:22:58.560 --> 1:23:00.920 But the reality with the tree is we use that 1:23:01.080 --> 1:23:04.360 as a proxy for housing costs. And even though mortgage 1:23:04.439 --> 1:23:07.360 rates are moderating in the wake of some of the 1:23:07.439 --> 1:23:11.040 Fed policy actions we've seen these last few months, demand 1:23:11.200 --> 1:23:14.439 for housing continues to be really, really strong. We're net 1:23:14.520 --> 1:23:18.160 short housing supply in this country. So house prices are 1:23:18.320 --> 1:23:21.880 really elevated, certainly, just like they were last year. 1:23:22.040 --> 1:23:24.000 So if you want to buy the entire cost of 1:23:24.160 --> 1:23:26.559 the Christmas Song, if you buy it the traditional way, 1:23:27.439 --> 1:23:29.559 two hundred and nine thousand dollars, up three point six 1:23:29.600 --> 1:23:31.240 percent from last year. If you want to buy it online, 1:23:31.640 --> 1:23:33.640 close to two hundred and fifty thousand dollars. The rate 1:23:33.720 --> 1:23:38.880 of change for inflation was slower, was lower on the internet, 1:23:39.000 --> 1:23:42.280 but more expensive overall. To do this you can buy 1:23:42.360 --> 1:23:43.439 out pay later, yeah. 1:23:44.840 --> 1:23:47.879 Which would be another sign in terms of how the economies. 1:23:48.040 --> 1:23:52.040 Amanda Gotti over at PNC. Always fun when you join us, 1:23:52.040 --> 1:23:54.800 even if it is during the month of November and 1:23:54.920 --> 1:23:57.479 we're already not even a Thanksgiving yet, but talking about 1:23:57.560 --> 1:23:59.120 Christmas a couple days. 1:23:59.200 --> 1:24:01.840 I know, did you see the decorations of around But. 1:24:01.960 --> 1:24:03.120 Did if the trees are out? 1:24:03.320 --> 1:24:03.880 What's happening? 1:24:04.160 --> 1:24:04.920 This is Bloomberg. 1:24:06.320 --> 1:24:10.920 This is the Bloomberg Business Week podcast, available on Apple, Spotify, 1:24:11.080 --> 1:24:14.799 and anywhere else you get your podcasts. Listen live weekday 1:24:14.800 --> 1:24:18.280 afternoons from three to six Eastern on Bloomberg dot com, 1:24:18.479 --> 1:24:21.760 the iHeartRadio app, tune In, and the Bloomberg Business App. 1:24:21.880 --> 1:24:24.799 You can also watch us live every weekday on YouTube 1:24:25.040 --> 1:24:27.280 and always on the Bloomberg journalone