Speaker 1: This is Bloomberg Business Week Inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news as it happened. Bloomberg
Speaker 1: Business Week with Carol Messer and Bloomberg Quick Takes. Tim
Speaker 1: Stinovic on Bloomberg Radio. Hi, everyone, Welcome to the weekend
Speaker 1: edition of Bloomberg Business Week. Retail earnings and sales data
Speaker 1: this past week gave us more clues on the health
Speaker 1: of the US consumer. Tim. Evidently we're all still spending
Speaker 1: the opening our wallets, that's for sure. And the latest
Speaker 1: FED minutes tell us that officials agreed last month on
Speaker 1: the need to eventually quote unquote at some point. Right,
Speaker 1: that's an important phrase. We're gonna obsess over that. Yeah,
Speaker 1: dial back the pace of interest rate hikes even as
Speaker 1: they continue to gauge how monetary policy tightening is working
Speaker 1: towards curbing inflation. Coming up, we're gonna look at how
Speaker 1: rising costs are affecting a key line item in corporate budgets,
Speaker 1: I T spending. It's great read on the economy. Also
Speaker 1: ahead on the broadcast, two players in the alt energy space.
Speaker 1: One is profiled in this week's international cover story will
Speaker 1: explore how China's electric automaker b y D became the
Speaker 1: world's third most valuable automaker by going against Tesla's playbook.
Speaker 1: And what about turning your e V into a backup
Speaker 1: power source? What do you think to him? Yeah, I
Speaker 1: mean if I had an e V, if I had
Speaker 1: a garage, if I had a house. Details details. Well,
Speaker 1: we're going to check in with the founder and CEO
Speaker 1: of Decibel. He'll be stopping by. Plus our domestic cover
Speaker 1: story on a mc CEO, Adam Aaron's quest to keep
Speaker 1: his company a meme forever. All of that to come.
Speaker 1: We begin with an up close look at the state
Speaker 1: of the I T market. We got some insight into
Speaker 1: corporate spending on computing infrastructure from Cisco out with an
Speaker 1: earnings beat and an upbeat forecast on Wednesday, and then
Speaker 1: right after Cisco reported, we checked it with Crawford del Prette.
Speaker 1: He is president at International Data Corporation i d C.
Speaker 1: They are a global market and advisory analysis firm. They
Speaker 1: check in on technology, telecom and consumer tech markets, just
Speaker 1: all that's going on there. Crawford joined us in studio
Speaker 1: with a look at the big picture for i T.
Speaker 1: What we see is that even though we're sort of
Speaker 1: getting closer and closer to a global recession, we're gonna
Speaker 1: likely see the scenario where in past cycles, i T
Speaker 1: drops below the rate of GDP, so people sort of
Speaker 1: snap back and they just clamped down on spending. In general,
Speaker 1: we expect, like we saw in the last downturn, which
Speaker 1: was in that you know, let's just say we get
Speaker 1: GDP down to about maybe two percent this year, we
Speaker 1: expect i T we should be in the five to
Speaker 1: six percent range. So what that kind of says is
Speaker 1: that unlike these past historical cycles were all the way
Speaker 1: back to the mid eighties, i always was slammed lower
Speaker 1: than GDP, we're going to see people lean into tech
Speaker 1: and invest in tech in order to modernize their business
Speaker 1: and frankly get through these down cycles. And I think
Speaker 1: what you saw in someone to be more productive or
Speaker 1: just because they have to happen because there's a disruptor
Speaker 1: around every corner, because they have to keep their business
Speaker 1: models modern and um oh, by the way, you know,
Speaker 1: they're stomers are demanding it. Um so there's just no
Speaker 1: check is really your only way out. It reminds me
Speaker 1: of I think you know what we've heard from Goldman
Speaker 1: Sachs right right, Katie Kotch at Goldman Success that management.
Speaker 1: When we're at milk In, It's like in a downturn,
Speaker 1: people will cut back on things perhaps that are discretionary,
Speaker 1: like marketing people, if they're not going to pull back
Speaker 1: on tech, Crawford, I mean, is that the difference between
Speaker 1: this potential downturn and downturns of past. I think where
Speaker 1: tech is and how tech is the central nervous system
Speaker 1: of a company is a big, big part of how
Speaker 1: this downturn could be different. You can't uncommit or decommit
Speaker 1: from software as a service right once you're in, it
Speaker 1: becomes a core part of your business. So fine, the
Speaker 1: incremental pack you might buy on a SAS platform that
Speaker 1: can be up for debate, but you're not going to
Speaker 1: rip your instance of salesforce, your your instance of work day.
Speaker 1: You're not going to take those things out of the organization.
Speaker 1: So they become very, very sticky. And that's why we
Speaker 1: see stained demand and we're gonna see double digit demand
Speaker 1: for things like SASS. Software is a service or a
Speaker 1: platform is a service. Now talk about personal computers, those
Speaker 1: are one of the first things you can say, you
Speaker 1: know what, workforce, go an extra year, go an extra
Speaker 1: eighteen months. We'll clamp down on that stuff. But the
Speaker 1: stuff that tends to be really sticky is that as
Speaker 1: a service. But if a company is faced with making
Speaker 1: a decision of hiring more, paying more, versus spending doing
Speaker 1: the I T spend, my gut from what you're saying
Speaker 1: is that they're going to do the spend. They're gonna
Speaker 1: do the parts of the I T span that are
Speaker 1: critical to the business. And what's changed in the last
Speaker 1: decade is more and more and more services are critical
Speaker 1: to inventing those new services that your customers are going
Speaker 1: to depend upon. Given the choice, you've got to spend
Speaker 1: on core I are we seeing, Crawford, any of this
Speaker 1: being pulled forward, And we talked about this being pulled
Speaker 1: forward during the pandemic, But are we see any of
Speaker 1: it pulled forward right now for reasons over concerns of
Speaker 1: inflation When companies are saying, Okay, I don't want to
Speaker 1: wait a year to do this because if we wait
Speaker 1: a year, it's gonna cost ten percent more. We saw
Speaker 1: some of that in the software Older people basically said look,
Speaker 1: software prices are very, very high, and companies are passing
Speaker 1: those those expenses down to end customers, so people did
Speaker 1: tend to do a little forward buying. Probably the best
Speaker 1: example of forward buying we saw was during the pandemic work.
Speaker 1: We believe we pulled, you know, maybe a quarter of
Speaker 1: a year a PC shipments forward when people went home
Speaker 1: and we saw, yeah, that was more hardware based, software based.
Speaker 1: It's a little bit harder to say some of the
Speaker 1: project based work in the services world, there's a little
Speaker 1: bit of that where we've seen some of the service
Speaker 1: of our you know, able to pass those costs onto
Speaker 1: customers and customers having to accept them. How how is
Speaker 1: inflight inflation impacted by I T spending? Is it a
Speaker 1: pressure or is it a reliever? There was a lot
Speaker 1: of cynicism over the last few years about the productivity
Speaker 1: gains associated with tech um. I think what we learned
Speaker 1: during COVID was that they're absolute, massive productivity gains associated
Speaker 1: with tech So I would say that in a lot
Speaker 1: of ways, it isn't a relief valve for companies to
Speaker 1: be able to say I can serve my customers in
Speaker 1: a new way. Now having said that, the costs. Inflation
Speaker 1: costs are absolutely being passed on to customers in the cycle,
Speaker 1: whether that's in supply chain constraints and availability of parts,
Speaker 1: or whether that's in pure labor costs in the professional
Speaker 1: services space, or the software costs have been passed on.
Speaker 1: And we've seen that right down the line. Okay, so
Speaker 1: we're on the verge, as you said, potentially of a
Speaker 1: global recession. What are the data points that you're looking
Speaker 1: at so so so what we're spending a lot of
Speaker 1: time on is basically what's happening in China right now.
Speaker 1: China is you know, one of the second largest I
Speaker 1: T markets. We're clearly seeing a cool down there. Are
Speaker 1: we going to continue to see sustained spend? Is the
Speaker 1: government frankly more okay with reduced spend and it reduced
Speaker 1: spend going forward and reduced outlook for the overall economy.
Speaker 1: And we think that that is absolutely a possibility. That
Speaker 1: was Crawford del Predd, President at I d C International
Speaker 1: Data Corporation. Up next, we turn our attention to the
Speaker 1: gender gap in the C suite, where men still far
Speaker 1: outnumber women. Our next guest has a plan to level
Speaker 1: the playing field. You're listening to Bloomberg Business Week. This
Speaker 1: is Bloomberg. This is Bloomberg Business Week with Carol Messer
Speaker 1: and Bloomberg Quick Takes Tim Stinnoby from Bloomberg Radio. Well,
Speaker 1: our next guest is on a mission to centralize the
Speaker 1: role of women as economic, environmental and social change makers
Speaker 1: who are creating a high growth future. Patients. Merrimai Ball
Speaker 1: is founder and CEO of Women of the World Endowment.
Speaker 1: It's a global endowment focused on what's known as gender
Speaker 1: lens investing. She currently leads the fixed income business with
Speaker 1: a current portfolio of more than three billion dollars. Her
Speaker 1: new book is called The Double X Edge, Unlocking higher
Speaker 1: returns and Lower Risk and of course to him that
Speaker 1: double X represents the two chromosomes, the two X chromosomes,
Speaker 1: noting the female gender. Now, Patients help build out the
Speaker 1: banking on a women platform at the International Finance Corporation,
Speaker 1: which is a member of the World Bank Group that
Speaker 1: works to accelerate private sector growth in developing countries. She's
Speaker 1: also a member of Apollo Global Management's Impact Advisory Committee.
Speaker 1: Carol and Bloomberg Market Senior editor Mike Reagan recently caught
Speaker 1: up with Patients and They began by asking why she
Speaker 1: thinks the world undervalues one of its greatest resources women.
Speaker 1: So we know that nine eight percent of capital is
Speaker 1: that is under management today is managed by men. Yet
Speaker 1: we also know that when you have gender diverse teams
Speaker 1: allocating capital or making any decision, you're twenty one percent
Speaker 1: more likely to actually get out performance in profitability. You'd
Speaker 1: likely to mitigate downside this better, you're likely to have
Speaker 1: your dollar doing more than one thing at any given
Speaker 1: time because women prioritize, yes, making financial returns that are
Speaker 1: really important, but also the opportunity to drive for other
Speaker 1: types of changes. And so why do we not see
Speaker 1: change to get to a point where we're talking about
Speaker 1: current what has been happening in legislation currently, for instance,
Speaker 1: the Inflation Reduction Act, it's looking to solve inflationary problems
Speaker 1: that are leading to potential for recession in et cetera.
Speaker 1: But it's also looking to so climate climate issues, climate
Speaker 1: related issues. And here we know that when women are
Speaker 1: in these decision making rooms, whether it's ceased with positions
Speaker 1: or on boards, we actually get better upcomes all around.
Speaker 1: Companies have better policies and standards to adea to we
Speaker 1: have better disclosures with better tracking, and we also have
Speaker 1: better performance. It is interesting that with the numbers telling
Speaker 1: us that it is you are going to make more money.
Speaker 1: And mckinson did a study in which show that if
Speaker 1: we just if we had every every country in the
Speaker 1: study that they had of ninety countries just doing better
Speaker 1: to improve gender gender diversity in in decision making, the
Speaker 1: world could actually have a twenty five trillion dollar gained
Speaker 1: to global GDP, even their conservative studies pointed to twelve
Speaker 1: trillion dollar games. But it's true though, I think, you know,
Speaker 1: if you want to affect change in the world through
Speaker 1: the capital markets, you have to go hand in hand
Speaker 1: with positive change and uh something on the P and
Speaker 1: L state, you know, good returns uh to back it up.
Speaker 1: And so the focus a lot of times patients obviously
Speaker 1: goes to E s G. We're investing through a sort
Speaker 1: of environmental, social and governance lens. What's kind of alarming
Speaker 1: this year's we've seen a big backlash to that from
Speaker 1: a lot of politicians, you know, the quote unquote anti
Speaker 1: woke type of politicians. Do you think it's leaving a
Speaker 1: mark on the industry? Is is there any damage being
Speaker 1: done to the notion of e S g from all
Speaker 1: this backlash we've seen. Well, unfortunately, yes there is a
Speaker 1: backlash and it is resulting in some headwinds. But here's
Speaker 1: what I have to say. Nature, Mother nature is doing
Speaker 1: what it needs to do. We have fires in California,
Speaker 1: you know, floods in Australia, fires in Europe, etcetera. Nature
Speaker 1: is telling us that we need to do something and
Speaker 1: e S investing has a place and it is a
Speaker 1: place that can be both financial and impact related. One
Speaker 1: of the things I wonder is the role of women,
Speaker 1: Like what do we lose by not doing so incorporating
Speaker 1: more women into our world in terms of growth, opportunity,
Speaker 1: political progress, climate change, I mean, some of the it's amazing.
Speaker 1: These are the things we talked to on a daily
Speaker 1: basis with so many of our guests. So what are
Speaker 1: we losing by not bringing more women into the fold?
Speaker 1: You know, in the book that we just wrote, we
Speaker 1: looked at what it is that makes men and women different.
Speaker 1: They're not an equal unit of productivity and what are
Speaker 1: those things that are different? And it is one the
Speaker 1: long view. Women tend to prioritize the long view over
Speaker 1: short term gains. They tend to have collaborative leadership styles
Speaker 1: and tend to be more risk aware when it comes
Speaker 1: to the challenges that we're facing. They also tend to
Speaker 1: be more approximate to those challenges. That's an opportunity set
Speaker 1: that we're losing when we don't have them in decision
Speaker 1: makes rooms, because that ability to see around the corners
Speaker 1: is just as needed as the ability to you know,
Speaker 1: to six short term gains. What it leads to is
Speaker 1: really a loss in you know, art performance over time
Speaker 1: in terms of profitability, but also the ability to mitigate
Speaker 1: risk in a much more structured and thoughtful way. If
Speaker 1: if you had a few minutes to talk to my daughters, uh,
Speaker 1: based on your twenty plus years, I believe of experience
Speaker 1: in capital markets UM in a very competitive, male dominated field.
Speaker 1: I know my one daughter is thinking about majoring in
Speaker 1: finance and maybe getting into the industry. What's the secret
Speaker 1: to success for a woman? So so, Mike, the first
Speaker 1: thing that I would actually say is a conversation with you,
Speaker 1: and then I would have a conversation with your daughters.
Speaker 1: Conversation with you would go like this, that you know,
Speaker 1: the way that you believe your daughters are rock stars
Speaker 1: at home, whether it's your wife, Um, and the fact
Speaker 1: that you're very comfortable with this decision is being made
Speaker 1: by them and you following. You know, we need to
Speaker 1: have men taking that into the workplace. It is incredibly
Speaker 1: interesting how men are very comfortable with women taking over
Speaker 1: all kinds of things in one realm of their lives,
Speaker 1: but not as comfortable in another realm and in the workplace.
Speaker 1: That is that's part of the opportunity that the world loses.
Speaker 1: You know that your your daughter has all the traits
Speaker 1: that I just um elaborated on, why would you know
Speaker 1: a business not want that in the room? And to
Speaker 1: your daughter, I would say that if she wants to
Speaker 1: come into financial markets, you know I've been in it
Speaker 1: for more more than twenty five years, and you know
Speaker 1: I'm now in my fifties. The world is so much
Speaker 1: better today. Where we need to be in capital markets
Speaker 1: is to create spaces where we're not just sticking boxes.
Speaker 1: So we have this many women come in and and
Speaker 1: we take that box, but really be very intentional about
Speaker 1: what seats we're putting them in. The case we make
Speaker 1: in our book, the ex ext edge is that when
Speaker 1: you put them in acid allocation seats. When you put
Speaker 1: them in those decision making seats, you actually are going
Speaker 1: to have our performance and over time greater economic pie
Speaker 1: for ever for everybody. That's what you That's the magic
Speaker 1: that your daughter will bring to whatever company she ends
Speaker 1: up joining. That was patients marrymi Ball, founder and CEO
Speaker 1: of Women of the World Endowment, her new book, The
Speaker 1: Double X Edge, Unlocking Higher Returns and Lower Risk. Well,
Speaker 1: I'm just gonna put out for you, tim women we
Speaker 1: can solve the problems that els at this point. I
Speaker 1: know I'm not arguing with it, okay, but you know,
Speaker 1: I don't know why I got so defensive. I don't
Speaker 1: know either or thanks to Mike Reagan for joining us
Speaker 1: on that conversation as well. Still ahead of Bloomberg Business Week,
Speaker 1: the company looking to shake up the global electric vehicle landscape.
Speaker 1: Most people sort of think that the way Tesla has
Speaker 1: developed itself is the model for auto companies of the future,
Speaker 1: and by d sort of stands an example of it
Speaker 1: doesn't have to be that way. More on why a
Speaker 1: Chinese TV giant is steering clear of Testla's tactics. This
Speaker 1: is Bloomberg broadcasting from the financial capital of the World,
Speaker 1: Bloomberg eleven Frio in New York to Washington, d C.
Speaker 1: Bloomberg to Boston, Bloomberg one oh six one to San Francisco,
Speaker 1: Bloomberg nine sixty to the country Sirius XM Chado one
Speaker 1: nine team, and around the globe the Bloomberg Business app
Speaker 1: and Bloomberg Radio dot Com. This is Bloomberg business Week.
Speaker 1: Earlier this week, President Joe Biden signed into law the
Speaker 1: Inflation Reduction Act, committing four hundred thirty seven billion dollars
Speaker 1: to a range of initiatives from combating climate change to
Speaker 1: learning the cost of prescription drugs. One major beneficiary the
Speaker 1: electric transportation industry are Bloomberg business Week International cover story
Speaker 1: this week examines China's ev giant b y D and
Speaker 1: why it's being very un Tesla as it makes waves
Speaker 1: in the international market. Business Week Assistant Managing editor Jim
Speaker 1: Allis is here to break it down. Most people sort
Speaker 1: of think that the way Tesla has sort of developed
Speaker 1: itself is the is the model for um, you know,
Speaker 1: auto companies of the future, and by D sort of
Speaker 1: stands in as an example of it doesn't have to
Speaker 1: be that way. I mean, b by D is not
Speaker 1: just a startup and it's a very successful company. It's
Speaker 1: the largest EV maker in China. It's also the third
Speaker 1: most valuable by market cap auto company in the world,
Speaker 1: after Tesla and Toyota, though a lot of people here
Speaker 1: probably don't know it much other than that it's a
Speaker 1: big investment by who else, Warren Buffett, who bought into
Speaker 1: this company back in the you know, early two thousands
Speaker 1: and put in with two eight million dollars. It's now
Speaker 1: a stake worth eight billion dollars. And um, this is
Speaker 1: a company very that believes in vertical integration. They've come
Speaker 1: in and they've said, everybody's talking about chips shortages, and
Speaker 1: everybody's talking about battery deals. They make their own batteries.
Speaker 1: They're now the third largest maker of EV batteries in
Speaker 1: the world. They also make their own chips. They use
Speaker 1: them in their cars. They are probably going to be
Speaker 1: a battery supplier to Tesla. They're already a battery supplier
Speaker 1: to Toyota. They also, um, you know now I've invested
Speaker 1: in lithium, minds, all the things you need for batteries.
Speaker 1: They are just very different. The other thing that's really
Speaker 1: different is that they are making cars for the sort
Speaker 1: of middle class person. I think that's huge, and that's
Speaker 1: that's a big market. But it's a very different approach
Speaker 1: with the Tesla came in and Tesla said they were
Speaker 1: doing Model three at what thirty k, right, and the
Speaker 1: average price for that it's now about forty six. So
Speaker 1: what would it be y D set you back? Right now?
Speaker 1: You can't get one, and you can't get one in
Speaker 1: the you can't get one in the US. But it
Speaker 1: would probably be about a third less than comparable Tesla
Speaker 1: in China where they sell Hit to Hit. Their Otto
Speaker 1: three um was about half the price of the Tesla
Speaker 1: Model Why, which would be comparable? It should be sort
Speaker 1: of e V car. It's a different marketplace though, because
Speaker 1: when you're saying I'm going to make cars for I
Speaker 1: don't wanna call it Middle America, it's Middle China and
Speaker 1: Middle Asia. You're not going to be able to charge
Speaker 1: as much, but you're also not going to be able
Speaker 1: to have the same sort of level of profitability. And
Speaker 1: right now, about two percent of every of revenues goes
Speaker 1: to profit at b y D, about ten percent of
Speaker 1: profit goes to um UM. You know, a revenue goes
Speaker 1: to profit at Tesla. Ultimately we will be able to
Speaker 1: get these cars in the United States and and I
Speaker 1: do think about what that means for some of the
Speaker 1: competition and specifically, Yeah, I mean that that is the
Speaker 1: goal there. I mean one of the big things about
Speaker 1: the ideas it's been expanding global. It means in Australia
Speaker 1: now they're they've got deals now for Germany. They view
Speaker 1: themselves as a global company. They just got then they're
Speaker 1: going to use this period now when everybody wants to
Speaker 1: have evs but everybody doesn't have the capacity to produce
Speaker 1: enough evs. They're using that as an opportunity to sort
Speaker 1: of build into the market. Also, Um they have UM,
Speaker 1: you know, they're they're doing something that China wants to do,
Speaker 1: which is to become more of a producer, global producer
Speaker 1: of autos and um. Just this morning, um, the Chinese
Speaker 1: Premier Leko King went to be at b y d
Speaker 1: S headquarters and to say, you guys, hey at a
Speaker 1: boy you know, get out there and you know, sort
Speaker 1: of do this for us for the future. I mean,
Speaker 1: they view that as one of the big potential consumer
Speaker 1: products of the future. And China must have a much
Speaker 1: bigger piece of that and a company like b y
Speaker 1: D gives them a beachhet than that. And I just
Speaker 1: want to point out, I mean, the eight rs do
Speaker 1: trade on the New York Stock Exchange. They're up for
Speaker 1: the year just shy of ten percent. But I do
Speaker 1: think about, you know, the access for investors ultimately, especially
Speaker 1: when you're President ge it feels like, you know, really
Speaker 1: honing in, homing in on certain industries and either restricting
Speaker 1: what they can do or whether they can be listed
Speaker 1: on the New York Stock you know, on US exchanges.
Speaker 1: And I do wonder what the futures are, how investors
Speaker 1: ultimately will continue to be able to tap into this well,
Speaker 1: I mean, the the idea at least the Chinese would like, um,
Speaker 1: you know, the rest of the world to be able
Speaker 1: to help them fund this transition. But um, a lot
Speaker 1: of countries increasingly reviewing, you know, sort of the auto
Speaker 1: business as it's a potentially protected industry something because it's
Speaker 1: going to be one of the biggest consumer products forever.
Speaker 1: I mean, it's it's trans transit is just that, and
Speaker 1: so's It'll be interesting to see just how dependent do
Speaker 1: we want to become on foreign automakers who aren't German
Speaker 1: or Japanese. I gotta say it does feel like the
Speaker 1: EV market there's gonna be a lot more competition to him,
Speaker 1: and things could be changing, not just here in the
Speaker 1: US with Ford, you know in GM, but also with
Speaker 1: the international companies a lot more players. All right. That
Speaker 1: was Business Week Assistant Managing editor Jim Ellis. On this
Speaker 1: week's international cover story are Bruce Eronhorn and Dentedly put
Speaker 1: it all together out of Hong Kong. You're listening to
Speaker 1: Bloomberg Business Week. Coming up next, evs from a different angle.
Speaker 1: Find out how your electric vehicle can actually help power
Speaker 1: your house. This is Bloomberg. You're listening to Bloomberg Business
Speaker 1: Week with Carol Messer and Bloomberg Quick Takes Tim Stinovich
Speaker 1: from Bloomberg Radio. All right. In our last segment, we
Speaker 1: talked about China's rising power in the electric vehicle business
Speaker 1: and when we think about e vs, we generally think
Speaker 1: about an energy efficient way to power our rides, but
Speaker 1: what about our houses. Well, this past week we spoke
Speaker 1: with Mark andre fo J, He's founder and CEO at
Speaker 1: the Montreal, Canada based Decibel. The company produces what it
Speaker 1: calls a home energy station and what that does is
Speaker 1: it turns your EV into a backup power source for
Speaker 1: the home. Mark Andre began by explaining why a regular
Speaker 1: power generator can be a big investment. The second largest
Speaker 1: asset purchase for any family is or car, and the
Speaker 1: car sets into driving most of the time. And right
Speaker 1: now California takes this Florida with hurricanes, we have lots
Speaker 1: of blackouts. So the concept is very simple, how to
Speaker 1: use the energy from the EV to power the home
Speaker 1: during a blackout. I already pay for that energy. I
Speaker 1: already pay for that EV, so I want to leverage it.
Speaker 1: It's looked at simples some papers, but now we need
Speaker 1: to combine the technology from EV that is still in
Speaker 1: this infancy, and of course the world of regulation inside
Speaker 1: homes to make it universally compatibles. And this is really
Speaker 1: what we have achieved with our discabel technology and our
Speaker 1: Discabled platform. We create a universally compatible solutions that can
Speaker 1: take the energy from the evy to power your home
Speaker 1: during the blackout. Is this essentially you know people by
Speaker 1: generators right just in case? Is this essentially kind of
Speaker 1: forward looking alternative energy generator? Is that basically how we
Speaker 1: should look at it? I think it's one of the
Speaker 1: use case. But Discabel is a for in one device.
Speaker 1: We do much more than this. The discabel is a
Speaker 1: home energy stations. It's also your solar energy. It's your
Speaker 1: blackout power using your EV, your station, your battery. It's
Speaker 1: also your home energy management system, all combined into a
Speaker 1: single unit. So not only we can use we can
Speaker 1: charge your car fasters, we can use the energy from
Speaker 1: the evy to power your home during a blackout, but
Speaker 1: also we can charge your EV using your the solar
Speaker 1: energy that so far is still free and nontaxable. Help
Speaker 1: me imagine what this looks like here, because you said
Speaker 1: it's also for use for solar How do you? How
Speaker 1: do you? How does that work? I mean, is the
Speaker 1: idea that you have a solar power You have solar
Speaker 1: panels at your home and those charge your your e V,
Speaker 1: and the e V is that power station in your home.
Speaker 1: Absolutely correct. You put solar panel on the roof of
Speaker 1: your home and it's going to generate absolutely enough energy
Speaker 1: to charge your EV and some leftover of the energy
Speaker 1: for your home or vice versa. And the car here
Speaker 1: is used as a battery to start this excess energy
Speaker 1: are for examples to use this energy to reduce your
Speaker 1: energy invoice as the time of high costs like dinner time.
Speaker 1: To use your car as a battery, use solar to
Speaker 1: charge it, reducing your costs and protecting your ass So okay,
Speaker 1: so it's not just for emergencies now, it's the idea
Speaker 1: is to offset the higher costs that you have of
Speaker 1: power to so it takes you off the grid. So
Speaker 1: it takes you off the grid a little bit, right, Well,
Speaker 1: it's it's a combinations. It's a combinations. Right. The grid
Speaker 1: right now require massive infrastructure investment. So we cannot go
Speaker 1: without the grid. We we need the grid in the
Speaker 1: in North America. Remember something, there's one billion dollars a
Speaker 1: day of fuel. Let's go to the gas station every
Speaker 1: single day to power passenger car. Now, imagine all those
Speaker 1: cars charging at home in the near futures. In a
Speaker 1: decade or a decade or so, we're gonna need major
Speaker 1: investment in energy generation at the home levels. This is
Speaker 1: where this about home energy stations makes so much sense.
Speaker 1: We can differ infrastructure costs for the utilities, luring the rates,
Speaker 1: therefore leveraging your assets in the derived ways, enerating more
Speaker 1: clean energy and being more resilient energy Marte, isn't this
Speaker 1: where out the battery? The answer is very likely. I
Speaker 1: can say that to you when you drive your cars
Speaker 1: on on on the highways right now. You're using your
Speaker 1: battery right now to move your cars to power your home.
Speaker 1: It's impressive, but we only use a fraction of that
Speaker 1: energy power to power your home. It's funny, but it's
Speaker 1: take less energy to power your home then pushing your
Speaker 1: t V on the highway. Therefore, the usage of the
Speaker 1: battery is way less than driving your car on the highway,
Speaker 1: and still it's to your own benefits. Is to power
Speaker 1: your home during a blackout is to reduce your energy invoice,
Speaker 1: and therefore it makes sense. Where are you, what's the
Speaker 1: growth of the business, what's your plans for coming into
Speaker 1: the US market. Well, I'm happy to announce that about
Speaker 1: a month ago, we just got our certification on our platform,
Speaker 1: one of the most stringent certification for our platform to
Speaker 1: allow us now to communicate with utilities in real times.
Speaker 1: Following the certification of this platform later this fall, also
Speaker 1: we're gonna start to roll out device and we're gonna
Speaker 1: start with California, following by Texas, Florida in New York.
Speaker 1: When when does that happen? So this fall. Later this falls,
Speaker 1: we're gonna announce a different pilot project and collaboration with
Speaker 1: different partners in California. So the first unit is going
Speaker 1: to be delivery and owns in California this fall. Texas
Speaker 1: may follow in Quan with Florida and Texas in Quan.
Speaker 1: Three Do utilities hate you though, because aren't you basically
Speaker 1: making it so? And forgive me? I go extreme occasionally,
Speaker 1: you know, aren't you making it so? Individuals can kind
Speaker 1: of be independent? Right, there's solar panels on your roof,
Speaker 1: it's recharging everything, and then they're tapping into that power.
Speaker 1: You can be surprised that I still have friends in
Speaker 1: the in the utility business. The fact is no, uh.
Speaker 1: We may say a love eight relationship, but most of
Speaker 1: the utilities really appreciate what this a belt can offer.
Speaker 1: Lets me explain when the utilities want to interact with
Speaker 1: homes today, nobody takes the call. There's no engineers, there's
Speaker 1: no CFO at home, right, So if the utilities want
Speaker 1: to have the support of homes today to maintaining the
Speaker 1: energy cost, a device need to exist inside your homes.
Speaker 1: This is exactly what the discipl home energy station is.
Speaker 1: So if the price of electricity go very high on
Speaker 1: the market and they want to support and want to
Speaker 1: give you back money, for example, to use a little
Speaker 1: bit of energy from your e V, the disciplit and
Speaker 1: energy station is going to basically automatically react to that call,
Speaker 1: and if you agree to it can push back energy,
Speaker 1: reducing the stress on the infrastructures, reducing the energy cost.
Speaker 1: This is really where the complimentaryity when the grid happen.
Speaker 1: But wait, what am I missing? Because I'm just thinking
Speaker 1: you're then taking essentially money away from utility. No, right,
Speaker 1: because you're not, because you because it gives an individual
Speaker 1: or a homeowner the ability to pop off the grid. Right. Well,
Speaker 1: the price of electricity vary during the day, of course,
Speaker 1: when you have a lot of for example, renewable generations
Speaker 1: solar generation. At noon, the cost of energy on the
Speaker 1: all sales market is quite low. However, at dinner time
Speaker 1: we all cook dinners, we have the path. We have
Speaker 1: a high demand for electricity, putting the grid at stress.
Speaker 1: Utilities want to try to level up or flat this curve.
Speaker 1: This is exactly where the home energy station come at
Speaker 1: play for them, right, we use it and re resell
Speaker 1: it at dinner time. Okay, let's talk Tesla here, because
Speaker 1: this is a company that has a power wall, it's
Speaker 1: a battery for your home. Got solar small part of
Speaker 1: the business, to be sure, compared to the vehicles that
Speaker 1: it sells. But what's going to stop Tesla from building
Speaker 1: exactly what you're doing at decibel and including that as
Speaker 1: part of a supercharger. Because I look at this on
Speaker 1: your website and it looks like it's a supercharger. But
Speaker 1: couldn't Tesla incorporate the technology you have and therefore leap
Speaker 1: frog you bypass you. Well, we we share a common
Speaker 1: passion with Tesla is to serve their homeowners with more
Speaker 1: cost effective, renewable and relable energy. The difference is Tesla,
Speaker 1: of course, is virtically integrated through technolog the Tesla technology,
Speaker 1: where Discabel is a universal for in one devices. We
Speaker 1: support all e vs, we support all solar installers, and
Speaker 1: we support multiple brand of storage. So it's kind of
Speaker 1: an open eco system versus a closed ecosystem maybe, but agree.
Speaker 1: The second point is also we have seventeen families of
Speaker 1: patents that we basically passionately developed over the last seven years.
Speaker 1: That also provided we can build this Discabel at the
Speaker 1: price point of the market. Compare today, what's the cost
Speaker 1: the cost for right now the discabel are sixteen If
Speaker 1: you look at our website at discabel dot energy. We
Speaker 1: this is an upscale unit is designed for solar storage
Speaker 1: evy and minds mounted US three thousands per feet and up.
Speaker 1: And this unit, if you fully install, is an average
Speaker 1: twenty less expensive than the competitions. So the discabelue and
Speaker 1: it's start at five thousand dollars and after that the
Speaker 1: cost is vary according to the number of solar poun's
Speaker 1: gonna put on your house, the installation costs and if
Speaker 1: you decide or not to put permanent storage into your home.
Speaker 1: So a typical installation can go as high as thirty
Speaker 1: thousand dollars, can be as low as seven thousand dollars,
Speaker 1: according to your need, according what is good for your family.
Speaker 1: What is important to remember here return and of an
Speaker 1: investment for your system is usually between three to five years,
Speaker 1: and this system is designed to last ten to fifteen years,
Speaker 1: so it's going to generate more money than you're gonna
Speaker 1: pay for it. Are there any tax incentives in place
Speaker 1: now in different states in the US or as part
Speaker 1: of the Inflation Reduction Act, and that will help offset
Speaker 1: some of these costs. Absolutely in the Biden Inflation Reddiction
Speaker 1: Act of three d and sixty nine billions or something,
Speaker 1: there's a large aspect. Uh, it's can go as of
Speaker 1: as twenty eight thousand dollars cash back per house in
Speaker 1: Dusk program if you consider everything that was Mark Andre Fourge,
Speaker 1: founder and CEO of Decibel, And that wraps up our
Speaker 1: first hour of the weekend edition of Bloomberg Business Week
Speaker 1: from Bloomberg Radio. I'm Carol Masser and I'm Tim Stanovick.
Speaker 1: Ahead in our next hour, we talked to the chief
Speaker 1: executive from one of America's biggest privately held pizza chains,
Speaker 1: Marcus Pizza, and we'll dig into a plant based meat
Speaker 1: substitute that's making its way onto menus at a Michelin
Speaker 1: starred restaurant. Plus our domestic cover story, Have the head
Speaker 1: of a MC created an army of meme loving fans
Speaker 1: and why it's getting harder to hold onto them. This
Speaker 1: is Bloomberg. This is Bloomberg Business Week inside from the
Speaker 1: reporters and editors who bring you America's most trusted business magazine,
Speaker 1: plus global business finance and tech news as it happened,
Speaker 1: Sloomberg Business Week with Carol Messer and Bloomberg Quick Takes
Speaker 1: Tim Stinovik on Bloomberg Radio. Plenty ahead in our second
Speaker 1: hour of the weekend edition of Bloomberg Business Week, including
Speaker 1: We're talking pizza with the CEO of Marco's Pizza and
Speaker 1: how the chain is now peddling one billion dollars worth
Speaker 1: of pizza pies a year. And you might recall how
Speaker 1: our Bloomberg Pursuits team detailed the many qualities of mushrooms
Speaker 1: in a recent edition of the magazine. I love that issue.
Speaker 1: It's a great issue. I was recommending it to a
Speaker 1: friend last night. The CEO of one of the featured company's,
Speaker 1: Nature's Fine, stops by to explain how a fungus born
Speaker 1: out of a Yellowstone hot spring is finding a new
Speaker 1: home in supermarkets and on high priced restaurant menus. Yeah
Speaker 1: not yet, I had to hold back. I know, I know.
Speaker 1: Plus elite personal trainers reveal what it's really like to
Speaker 1: be a Jim Junkie. First up this hour, though this
Speaker 1: week's US cover story, It's all about how AMC Entertainment
Speaker 1: CEO Adam Aaron has cultivated an army of followers who
Speaker 1: sent the stock soaring in a retail trading frenzy last year.
Speaker 1: Unique tactics in looting MIMI membership schemes, free for all learnings, calls,
Speaker 1: the comical stock ticker ape That's Ape, and the bizarre
Speaker 1: acquisition of a seventy acre goldmine have grown at the
Speaker 1: company's profile. The next challenge turning the increased exposure into
Speaker 1: profits with more. We're joined by BusinessWeek Media Entertainment and
Speaker 1: Telecom editor Felix Gillette and the editor of Bloomberg business Week,
Speaker 1: Joel Weber. In the time that um, we were sort
Speaker 1: of initially talking about this idea for the story. We're
Speaker 1: in the middle of the pandemic, people who were like, hey, movie,
Speaker 1: movie theaters, that's not going to work out. And then
Speaker 1: lo and behold, AMC became this meme stock and Adam
Speaker 1: Aaron was the CEO of the company, and it sort
Speaker 1: of was like, you couldn't have imagined a more theatrical
Speaker 1: ceo to be in charge of a publicly traded company
Speaker 1: happened to be the world's biggest theater chain. And he
Speaker 1: kind of met the moment in this amazing way where
Speaker 1: a c became a meme stock and he was very flamboyant,
Speaker 1: very amazing on social media. It really kind of made
Speaker 1: him endearing to all these retail traders. In the middle
Speaker 1: of all that, we realized that who is this guy?
Speaker 1: We did we had no idea, We had no idea
Speaker 1: what his backstory is. And he ends this amazing backstory
Speaker 1: because he came up through like loyalty programs. So so
Speaker 1: Felix um Analyza did this amazing job reporting this story. Felix,
Speaker 1: you know you guys, you guys dug into his back
Speaker 1: story so much like why was he the right person
Speaker 1: for this company at this moment? Well, I think to
Speaker 1: an incredible degree, his entire career was really building up
Speaker 1: to this. Meme stocks come and go. So you have
Speaker 1: to like keep these four million retail investors somehow engaged,
Speaker 1: and you have to keep them, you know, involved, you
Speaker 1: have to keep them on your side, you have to
Speaker 1: keep them loyal basically, right. And the thing about Adam's
Speaker 1: fascinated that he spent his entire career engineering these loyalty
Speaker 1: reward programs. And if you go back to the nine.
Speaker 1: His first jobs at PanAm, he did World Pass, the
Speaker 1: airlines first loyalty rewards program. Back then, the whole thing
Speaker 1: was like, Okay, if we want to talk to our customers,
Speaker 1: we're either going to have to die. A really expensive
Speaker 1: ad on one of the three broadcast TV networks or
Speaker 1: in the national magazine is going to cost a lot.
Speaker 1: And suddenly there was this new way. Computers are getting
Speaker 1: more expensive, less expensive, more powerful. We can keep track
Speaker 1: of our customers. We can talk to them directly. Adams
Speaker 1: did their first program. Then he went to Western Airlines
Speaker 1: to the loyalty program for them, then Hyatt Hotel, you know,
Speaker 1: Norwegian Cruise Line, the seventies six ers. Everywhere he's gone,
Speaker 1: he's kept working on these programs. Suddenly you get to
Speaker 1: the present day and using social media, you know, he
Speaker 1: can talk directly to his customers. The fact that's amazing
Speaker 1: to me is that he managed to somehow extend this
Speaker 1: whole tradition to investors. Like if you you know, invest
Speaker 1: in US, you have AMC stock, you buy stock, you
Speaker 1: hold on the stock, We're going to give your rewards.
Speaker 1: You know, We're going to give you a free cub
Speaker 1: a popcorn, which sounds insane, right, it just sounds completely
Speaker 1: made up, But actually that's kind of what he's done,
Speaker 1: and to remarkable degreed through some combination of his own
Speaker 1: charisma on Twitter and his own ability to kind of
Speaker 1: give this sense of exclusivity to this large group of
Speaker 1: retail investors. That's a part of something special he's managed
Speaker 1: so far to hold onto them. Let's talk about gold mining. Yeah,
Speaker 1: because we all kind of heard it when they announced
Speaker 1: it and they said, you know, AMC's you know, just
Speaker 1: acquiring of this gold mine in the body. Everyone was like, what, Like,
Speaker 1: what are you talking about? Literally is no, it's a metaphor, right,
Speaker 1: there's a crypto mining operation. Like, no, it's actually a
Speaker 1: golden silver mine out there in the Black Rock desert.
Speaker 1: So for months we were like just we're dying to know,
Speaker 1: like how did this whole thing go down? And one
Speaker 1: of the fun parts of the article, of the fun
Speaker 1: parts of reporting that was kind of doing the TikTok
Speaker 1: of like these guys, you know, showing how this deal
Speaker 1: came together. Um, Jason Mudrick Mudrick Capital really brought it
Speaker 1: to amc um you know, Adam talking about why he
Speaker 1: wanted in on it. Then jumping on an airplane, you know,
Speaker 1: flying you know, picking everybody up, going out to this
Speaker 1: tiny little airport and win a Muka Nevada and then
Speaker 1: you know, driving up to this gold mine at dawn.
Speaker 1: I mean, the whole thing is just incredible the way
Speaker 1: it went down and hilarious on many different levels. And
Speaker 1: then just like the thought of like what it's like
Speaker 1: they get the kind of like pile into this trailer
Speaker 1: at this gold mine in the middle of nowhere, it's
Speaker 1: only places WiFi for like hundreds of miles, and then
Speaker 1: have to like jump on the phone and sell this
Speaker 1: to all the AMC board members like this is why,
Speaker 1: you know it makes sense for a you know, the
Speaker 1: world's largest movie theater chain in two thousand twenty two
Speaker 1: to be invested in the gold mine. Felix ud Goman,
Speaker 1: you really made me scratch my head. I remember when
Speaker 1: that crossed the Bloomberg reading your story. What made me
Speaker 1: scrap to my head is Nicole Kidman, the first Lady
Speaker 1: of AMC. Like like every aspect of the story, you
Speaker 1: just kind of like what well, I mean, there are
Speaker 1: theater chains out there's done an incredible job of branding themselves,
Speaker 1: and you know, I think this is kind of like
Speaker 1: the AMC version of that, which is like, we have
Speaker 1: an opportunity before the movies come on to do something
Speaker 1: that makes it feel like special somehow. That was business
Speaker 1: Week Media and Entertainment editor Felix Gillette, along with Business
Speaker 1: Week editor Joe Weber on this week's domestic cover story.
Speaker 1: You're listening to Bloomberg business Week coming up. The CEO
Speaker 1: of Nature's Fine on his mission with mushrooms. We have
Speaker 1: to deliver and taste, then we have to deliver on nutrition,
Speaker 1: and then we have to deliver for the planet. This
Speaker 1: is Bloomberg. This is Bloomberg business Week with Carol Messer
Speaker 1: and Bloomberg Quick Takes. Tim Stinovik from Bloomberg Radio Well
Speaker 1: featured recently as part of a takeover the Bloomberg business
Speaker 1: Week Pursuit section, a set of stories about the growing
Speaker 1: economy underground economy for various types of mushrooms. As part
Speaker 1: of that coverage, Bloomberg business Week Food editor Cake Crater
Speaker 1: introduced us to Nature's Fine, which is producing a meat
Speaker 1: alternative that has origins from a microscopic fungus in a
Speaker 1: Yellowstone National Park hot spring. You can't make this up, No,
Speaker 1: it's pretty incredible. The company has raised roughly half a
Speaker 1: billion dollars with backing from the likes of Bill Gates
Speaker 1: and Michael Bloomberg, who is of course the founder of
Speaker 1: Bloomberg LP, parent of Bloomberg business Week and Bloomberg Radio.
Speaker 1: Carol and I caught up with Nature's Fine co founder
Speaker 1: and CEO Thomas Jonas to ask him how it all
Speaker 1: came to be. So we started the company really from
Speaker 1: a research project from NASA on extreme forms of life,
Speaker 1: and the goal of the initial research was to try
Speaker 1: to figure out if NASA was going to set approve
Speaker 1: to a moon of Settern, what would be the environment
Speaker 1: in which it would make sense to look for life.
Speaker 1: And that's really what took us on the path to
Speaker 1: explore ring the life forms that adapted into the acidic
Speaker 1: volcanic springs of Yellowstone, where we discovered this very unique
Speaker 1: phonal organism. And it's very interesting because first of all,
Speaker 1: it's an extreme of file, which is more specifically, it's
Speaker 1: an acidophile. It's survived in extraordinary acidic environment. Actually, the
Speaker 1: place where we found it has a pH level of
Speaker 1: acid D equivalent to your car battery. In order to
Speaker 1: survive in this environment. This organist had to learn to
Speaker 1: do something which is very meaningful for us today. It
Speaker 1: had to learn to do more with less. It had
Speaker 1: to figure out how to survive with a limited amount
Speaker 1: of resources that you can find in this sort of
Speaker 1: extreme environment in these volcanic springs, and it managed to
Speaker 1: do that in a in an extraordinary efficient way. And
Speaker 1: it creates this fabulous protein. So the quality of the
Speaker 1: protein is really iron there. Um it's better than pretty
Speaker 1: much any sort of non animal protein. It has all
Speaker 1: the essential amino said, it's really a parody with soy
Speaker 1: that would be the only plant based that would be
Speaker 1: a source of complete amino acid. So what kind of
Speaker 1: protein alternative does it present consumers? Ultimately learning to do
Speaker 1: more with less, it's really the call of our generation.
Speaker 1: You know, no, there's no way around it. We're going
Speaker 1: to have to reinvent the way provide energy, the way
Speaker 1: we provide transportation, and the way we provide food. Um.
Speaker 1: I think what we saw in the past few weeks
Speaker 1: with the war and in the past few months with
Speaker 1: the war in Ukraine was really how easily it was
Speaker 1: for this food system to get off balance. It's we're
Speaker 1: really subject to this sort of fructuation in a way
Speaker 1: that's much more important that I think most people had
Speaker 1: perceived before. So the way we can bring a solution
Speaker 1: here through our protein called five is by growing it
Speaker 1: using a fraction of the resources, and we're talking less water,
Speaker 1: less land, and in it in percent less greenhouse gas
Speaker 1: than you can. Once we've grown that protein and we're
Speaker 1: doing that in Chicago in a warehouse, we can then
Speaker 1: turn it into a wide range of product. And the
Speaker 1: first product that we launched, and we were actually the
Speaker 1: first one to ever do that, we launched with both
Speaker 1: a meat alternative and a dairea alternative, and that really
Speaker 1: reflects the fact that fires a platform. It's not just
Speaker 1: another burger alternative. It's really a new protein platform that
Speaker 1: can do all of these things. Give us an idea
Speaker 1: of taste here and sort of how malleable it is.
Speaker 1: It took us a lot of work to develop a
Speaker 1: protein platform that is actually neutral in taste, and it
Speaker 1: sounds like something pretty trivial, but it's actually very important.
Speaker 1: A lot of people are trying to work on alternative
Speaker 1: protein have to mask some flavor that you probably don't
Speaker 1: really want to feel when you're eating something that are
Speaker 1: not very good. So it was important for us to
Speaker 1: give up something that is very mutual as the basis,
Speaker 1: and that neutral basis is enables us to go through
Speaker 1: a very wide range of flavors. So we are able
Speaker 1: to do things that range from a strawberry yogurt to
Speaker 1: a cream cheese, to a chicken neckgets to a breakfast patty,
Speaker 1: and all of these are products that we have developed
Speaker 1: and we can really hit the flavor in a way
Speaker 1: that we think is it's very good. And it's not
Speaker 1: just us. Actually we are on the money of the Bernarda,
Speaker 1: the French restaurant in New York are prepare the best
Speaker 1: chef in America. And and food is about taste first
Speaker 1: and foremost. And really the way we think about this
Speaker 1: is we have to deliver and taste, then we have
Speaker 1: to deliver on nutrition, and then we have to deliver
Speaker 1: for the planet. Talk to me about nutrition and that
Speaker 1: matters to me because there's a lot of sodium in
Speaker 1: in so many of those products that are out there.
Speaker 1: So to me, that isn't a solution because we have
Speaker 1: to be healthier as we do this. Talk to me
Speaker 1: about you talked about taste, I am also curious about texture.
Speaker 1: I'm a texture not when it comes to my food.
Speaker 1: UM texture nutrition tell us about that. The texture that
Speaker 1: we have is actually really interesting and we get that
Speaker 1: from the fact that it's a filamentous microgenis, so it
Speaker 1: has naturally filaments that kind of mimics muscle filaments. It's
Speaker 1: not exactly the same thing, but it it creates a texture.
Speaker 1: So it's not like tofu at all in that regard.
Speaker 1: It is neutral in flavor and it absorbs flavor just
Speaker 1: like tofu. But in terms of texture, it has a bite.
Speaker 1: We are able to do what we call play the
Speaker 1: texture piano and go from a range of texture literally
Speaker 1: from yogurt to to cream cheese to to chicken legget
Speaker 1: or breakfast paddy. So the nutritional aspect is also something
Speaker 1: that's obviously very important for consumers UM. And what's interesting
Speaker 1: is when you when you design these products, you can
Speaker 1: really design them in a way that as much much
Speaker 1: better for the consumer as well. You can evolve much
Speaker 1: faster than the cow can evolve, so to speak. So
Speaker 1: what does that mean as far as our products are concerned.
Speaker 1: If you take our breakfast paddy for instance, we UM
Speaker 1: did some work around consumers expectation, and we found out
Speaker 1: that people love the taste of breakfast patty, people love
Speaker 1: the protein of breakfast patty, but people hate the fat
Speaker 1: of breakfast patty because there's actually more fat in a
Speaker 1: regular breakfast patty than there is protein. So we designed
Speaker 1: it in a way that we matched the protein of
Speaker 1: the leading animal breakfast patty competitor, but we have less fat,
Speaker 1: so that means no cholesterol. So on sodium we are
Speaker 1: at about five milligram, which would be below the animal
Speaker 1: and kind of slightly below most of the competitor out there.
Speaker 1: In addition to that, I think what's important to to
Speaker 1: realize is because we control the environment, we're able to
Speaker 1: grow our microorganism without homewards, without pesticide, without insecticide. You
Speaker 1: can have a much cleaner food. That's Nature's Fine. Co
Speaker 1: founder and CEO Thomas Jonas Carol, I gotta tell you,
Speaker 1: I'm you're going to try this stuff out. Maybe I'll
Speaker 1: swing by Whole Foods and grab some of the products.
Speaker 1: I am too, and I'm really impressed, first of all
Speaker 1: about the amount of funding. I am also impressed about
Speaker 1: how they seem to be able to produce more food
Speaker 1: without um costing so much to the environment, So looking
Speaker 1: forward to hearing more as they grow this thing out,
Speaker 1: No pun intended. Gotta get a little dad joke there
Speaker 1: for me is a fun guy to be with. Ye
Speaker 1: there we go, and I was just waiting for alright,
Speaker 1: So his company has been an innovator in the world
Speaker 1: of fun guy. Our next guest probably prefers a more
Speaker 1: old fashioned mushroom, perhaps paired with mozzarella, tomato, sauce, maybe pepperoni,
Speaker 1: maybe even my favorite egg plant. They are looking for value.
Speaker 1: They are trying to feed their families on fewer dollars,
Speaker 1: and pizza is a great place for them to do that.
Speaker 1: We check in on the health of the American consumer
Speaker 1: with the CEO of Marcos Pizza. Stick around. We're about
Speaker 1: to get cheesy. Another dad another dad joke. I can't
Speaker 1: be responsible for that one, though, yes you are. This
Speaker 1: is Bloomberg broadcasting from the financial capital of the world. Bloomberg.
Speaker 1: He Love in Frio in New York to Washington, d C.
Speaker 1: Bloomberg to Boston, Bloomberg one six one does San Francisco,
Speaker 1: Bloomberg nine sixty to the Country Sirius XM Chado one
Speaker 1: nine team and around the globe, the Bloomberg Business app
Speaker 1: and Bloomberg Radio dot com. This is Bloomberg Business Week.
Speaker 1: Founded in nine and headquartered in Toledo, Ohio. Marcus Pizza
Speaker 1: now has over one thousand stores across the thirty four states,
Speaker 1: with locations in Puerto Rico and the Bahamas as well,
Speaker 1: and the company recently reported crossing the one billion dollar
Speaker 1: mark in annual sales, an important metric for them. With
Speaker 1: more on the business and what's next with high input
Speaker 1: costs and wage pressures continuing, Bloomberg News senior markets reporter
Speaker 1: Katie Greifeldt and I spoke with Tony Lobardi. He's the
Speaker 1: president and co CEO of Marcus Pizza. Well, really, Mark,
Speaker 1: the Marcos brand is doing incredibly well during some very
Speaker 1: difficult time the last two and a half years. As
Speaker 1: you know, it's has been challenging, but we continue to grow. Um.
Speaker 1: We continue to see the same store sales growth, unit growth,
Speaker 1: average unit volume growth year after year, and we're pretty
Speaker 1: excited about it. Why do you think you're growing? Is
Speaker 1: it price en is it your demographic? What is it? Well,
Speaker 1: I think it's all of that. We We've had an
Speaker 1: opportunity just recently to become the fifth largest pizza chain.
Speaker 1: Um congratulations to our franchisees. We've seen about a thirty
Speaker 1: six percent sales growth in the last two and a
Speaker 1: half years. Um uh. And really it started with our
Speaker 1: national advertising. We we became a national brand on TV
Speaker 1: this year as an example, or on TV for thirty
Speaker 1: two weeks. Uh. We really focused on our digital footprint
Speaker 1: by rolling out a new app and working on our
Speaker 1: web page, and and we were able to take our
Speaker 1: digital our digital orders from twenty five percent just three
Speaker 1: years ago to now sixty today. Um uh. And of
Speaker 1: course we've got a great product and we're really the
Speaker 1: brand that very few people knew about. But as as
Speaker 1: we continue to tell our story and we're out there
Speaker 1: with a great value proposition getting people to try our pizza,
Speaker 1: we seem to be winning the fight. And let's talk
Speaker 1: about delivery a little bit more. I've seen the notes
Speaker 1: that you passed over that you've made big bets on
Speaker 1: the future with a third party delivery platforms. Talk to
Speaker 1: me a little bit about that decision to go that route.
Speaker 1: We actually were earlier adopters of the third party. We
Speaker 1: felt pretty strongly that that was a creative to our business.
Speaker 1: Those were different customers. When somebody was deciding whether or
Speaker 1: not they were gonna have lunch or dinner and they
Speaker 1: went to a door Dash or an uber each, they
Speaker 1: weren't thinking about Marcos UH, and so we thought that
Speaker 1: it would it would help us, and it has. In fact,
Speaker 1: we've grown that part of our business by six percent
Speaker 1: between one UH and it's up thirty six percent this year,
Speaker 1: so we'll do over eighty million dollars and thirty part
Speaker 1: third party aggregated sales and UH. It's been a big win.
Speaker 1: It's introduced our brand to a whole set of customers
Speaker 1: that didn't know who we were. One of the big
Speaker 1: things that we talked about with anybody who runs a company. UH,
Speaker 1: and certainly in your space inflation. We did see inflation
Speaker 1: prints that were much more positive, coming in less than expected,
Speaker 1: but they're still high. What are the inflation pressures that
Speaker 1: you're seeing when it comes to aber costs and the
Speaker 1: food costs, Well, we're seeing what the rest of the
Speaker 1: industry is seeing. When we rolled through Q two, we
Speaker 1: had about increase in overall food costs in in in
Speaker 1: Q two and P seven at peaked at pcent, and
Speaker 1: you're right, we didn't see it go higher here in
Speaker 1: the recent uh P eight, but is still too high.
Speaker 1: It's about five basis points pressure on the bottom line
Speaker 1: for us. And while we've been taking some pricing to
Speaker 1: try to mitigate the inflation, we've really been focused on
Speaker 1: trying to just take modest increase increases to ensure that
Speaker 1: we continue to grow our market share and that that
Speaker 1: that's been difficult, trying to balance the two of staying
Speaker 1: profitable for our franchisees, but at the same time trying
Speaker 1: to be there for our customers in our communities as
Speaker 1: a real value for them during some times. Well, let's
Speaker 1: talk about the franchisees. Like Carol said, you know, you
Speaker 1: have many stores across the US thirty three states, so
Speaker 1: you really see a lot of the country there. And
Speaker 1: I'm curious, what is sort of the common denominator when
Speaker 1: you think about the biggest problem right now. Well, you know,
Speaker 1: it's funny, um uh it is. Every year is challenging,
Speaker 1: but two is proven to be a more difficult year
Speaker 1: than one. If you remember we started with COVID that
Speaker 1: was challenging, just getting stores open being essential, trying to
Speaker 1: keep your team safe, and and and and and keep
Speaker 1: keep the business moving. In one, we had great, great
Speaker 1: resignation period. We're trying to find help through the summer
Speaker 1: months and through the through the fall and winter was
Speaker 1: extremely challenging just again to keep normal operating hours. And
Speaker 1: so we've rolled that into two. And then here we
Speaker 1: go with wage increases and and and inflation. And I
Speaker 1: would tell you that the two biggest challenges for our
Speaker 1: franchise DAST today, One is retaining and finding good help
Speaker 1: to help them continue to grow their businesses and then
Speaker 1: again managing their p and l um uh to a
Speaker 1: point where we can continue our growth. We've got about
Speaker 1: two hundred and forty years so news stores and development
Speaker 1: as we speak, we got about another hundred and fifty
Speaker 1: of those right behind it. And so we'll be a
Speaker 1: store brand and no time. So really we need people.
Speaker 1: We often talk about recession no recession based on what
Speaker 1: you're seeing and what consumers are doing. What would you say,
Speaker 1: um in terms of consumer spending, what the economy looks
Speaker 1: like here in the US, Well, I would tell you
Speaker 1: that they are looking for value. I will tell you
Speaker 1: that they are trying to feed their families on on
Speaker 1: fewer dollars and pizza is a great place for them
Speaker 1: to do that. That's Tony Lobardi, President and co CEO
Speaker 1: of Marcos Pizza. You're listening to Bloomberg Business Week. Coming up,
Speaker 1: the sweaty, salacious secrets of elite personal fitness trainers. Don't
Speaker 1: go anywhere. This is an incredible story. Yeah, you're not
Speaker 1: gonna want to miss it. This is Bloomberg. You're listening
Speaker 1: to Bloomberg Business Week with Carol Messer and Bloomberg Quick
Speaker 1: Takes Tim Stinovik from Bloomberg Radio ton Now for a
Speaker 1: weekly dive into the Pursuit section of the magazine, and
Speaker 1: our undercover reporting expert is at it again. We're talking
Speaker 1: about none other than Bloomberg Pursuits contributing writer Brandon press Or.
Speaker 1: He's previously embedded himself with some of the world's most
Speaker 1: prestigious lifestyle brands everywhere from New York's Plaza Hotel to
Speaker 1: the Las Vegas Strip all to the cipher what goes
Speaker 1: on behind the scenes when it comes to their services,
Speaker 1: and this week, Brandon reveals what it takes to be
Speaker 1: an in demand personal trainer. To do that, he gathered
Speaker 1: intel from an all star team at the world famous
Speaker 1: Techno Jim and once again the elite experience proves to
Speaker 1: be a little bit of a strange one, including what
Speaker 1: a little mini pig was involved. All right, we'll get
Speaker 1: that things were harmed in the making of this story. Okay,
Speaker 1: we'll get to it. Brandon joins us along with Bloomberg
Speaker 1: Pursuits editor Chris Rouser. So, Chris, where do we start
Speaker 1: on this one? Well, Brandon has done so many of
Speaker 1: these at this point, going behind the scenes at Disney
Speaker 1: and on super yachts, and I always like, we're not
Speaker 1: gonna be able to think of another thing to do.
Speaker 1: And he came up with the idea for celebrity or
Speaker 1: you know, fitness trainers for the rich and famous, and
Speaker 1: I said, oh god, this is perfect because I know
Speaker 1: the times that I've had a trainer, how I have
Speaker 1: like treated that person as a therapist, placed all my
Speaker 1: hopes and dreams with that person, maybe been a little
Speaker 1: in love with that person. And totally we've all been there. Uh,
Speaker 1: And so Brandon was Brandon got hooked up with Technogym,
Speaker 1: which is a great company and it really is a
Speaker 1: backbone of the fitness industry. In a way that a
Speaker 1: lot of people don't realize, and it was off to
Speaker 1: the races. All right, Brandon, come on in here, because
Speaker 1: you've got, you know, a host of things that you've
Speaker 1: learned from the celebrity personal trainers. I want to start
Speaker 1: out with, though, who these people are and how Technogym
Speaker 1: recruits them because it's an elite group. Yeah, so um
Speaker 1: so Techer Jim uh, you know, has all of this
Speaker 1: incredible hardware. They were first out of the gate was
Speaker 1: software in the nineties, and now they're pivoting to have
Speaker 1: a media arm of their company, which essentially means they're
Speaker 1: creating a lot of video content social media content. So
Speaker 1: they did a worldwide search for the best trainers around
Speaker 1: the world, and they whittled it down to these six
Speaker 1: all star talent trainers, and basically what they were looking
Speaker 1: for was actually sort of a lack of hubrit. I think,
Speaker 1: you know, a lot trainers are on social media and
Speaker 1: they have muscles, and you know, they're taking selfies, and
Speaker 1: they were looking for people, you know, who are physically
Speaker 1: fit but humble. Well you said specifically in the story
Speaker 1: about um I guess they did an audition and then
Speaker 1: they had to watch themselves back and those who actually
Speaker 1: cringed at seeing themselves, Um, those are the ones that
Speaker 1: they liked. Yeah, that was one of my favorite anecdotes
Speaker 1: from all of my interviews. So chatting with the head
Speaker 1: of content, I loved that little idea, and he said,
Speaker 1: there were so many people that they thought they were
Speaker 1: going to hire, and then when they watched them watching
Speaker 1: the tapes, they had the big smile on their face
Speaker 1: and to turn off. So okay, so we know that
Speaker 1: some of these people love themselves, let's talk about how
Speaker 1: their clients love them. Some of the best parts of
Speaker 1: this story are are the relationship between the clients and
Speaker 1: the trainers. So I think one of the things that
Speaker 1: was a big takeaway for me is that physical fitness
Speaker 1: is a non drug high. So there is this level
Speaker 1: of addiction you have. You know when the endorphins are
Speaker 1: going and you feel really good, and so a lot
Speaker 1: of people kind of transpose that obsession onto their trainers,
Speaker 1: like their trainers their dealer, and so there is this
Speaker 1: level of of obsession that occurs. In one of the
Speaker 1: couples that one of these CORENT trainers teaches, they got
Speaker 1: divorced and they actually had to put it in their
Speaker 1: custody papers that they had to share d the of
Speaker 1: their trainer like other opposite days of the week. It's
Speaker 1: absolutely insane. Okay, speaking of divorce, there are some other
Speaker 1: anecdotes that you share and here about couples that are
Speaker 1: still together that perhaps maybe shouldn't be based on what
Speaker 1: they're doing and what they're telling their personal trainers. Yeah,
Speaker 1: one of the big takeaways for me as well was
Speaker 1: that trainers are basically therapists, and a lot of the
Speaker 1: trainers are getting paid, you know, two or three or
Speaker 1: four or five hundred dollars an hour to train these people,
Speaker 1: and they only spend about half of the class engaged
Speaker 1: in physical physical fitness. The other half is hearing about
Speaker 1: their client's problem um and usually that involved training a
Speaker 1: husband for an hour who's talking about hiring prostitutes when
Speaker 1: they're on their international business trips, and then the next
Speaker 1: hour there with their wife, the stories they could tell.
Speaker 1: I do think about the pandemic has really made I
Speaker 1: think a lot more people lean into wellness because we
Speaker 1: could just do so much virtually, and I think we
Speaker 1: were all shocked at how much we could do. But
Speaker 1: it's also I think led to people maybe amping up
Speaker 1: their gyms at home. You got some insight into some
Speaker 1: of the kind of personal private gyms that people have. Yeah,
Speaker 1: one of the interesting things was that Technogym actually partners
Speaker 1: with all of these very famous design for ms all
Speaker 1: over the world. UM. And all these wellness spaces are
Speaker 1: increasing in size UM and you know, wellness bass and
Speaker 1: hotels even are sort of taking over places that would
Speaker 1: have like the rooftop bar, now it's the rooftop gym.
Speaker 1: And these personal training areas in people's homes are now
Speaker 1: five hundred thousand dollars one million dollars. People are investing
Speaker 1: UM in buying whole New York City apartments and turning
Speaker 1: them into Jim's my pelotons in my hallway, minds in
Speaker 1: my kitchen. That's because we live in New York City
Speaker 1: in New Jersey and we don't have room for well
Speaker 1: I guess some of these people do too, but they have,
Speaker 1: you know, entire apartments connected to one another. In the
Speaker 1: bedrooms are you know, no longer bedrooms there, Jem's Chris.
Speaker 1: I loved that that also that you learned that New
Speaker 1: York has the most intense relationship with fitness. I was
Speaker 1: kind of proud of that. I was proud of it too,
Speaker 1: but it was It's like it's people trying to be
Speaker 1: very healthy and maybe a not healthy way. One of
Speaker 1: the things, um, that I learned, was right before the pandemic,
Speaker 1: there was a fit tech bubble, so all these vcs
Speaker 1: were investing in all of these ridiculous ideas. Opening Bouci
Speaker 1: took us all over the city that is gone now.
Speaker 1: The pandemic totally put an end to that. But now
Speaker 1: what we're seeing is all of this rise and really
Speaker 1: intense sort of personal driven fitness. UM. So people are
Speaker 1: just going at it as hard as they were before. UM,
Speaker 1: but they're bringing in the personal trainers into their house,
Speaker 1: they're training outside, they're finding all these different ways to
Speaker 1: punish themselves. Wait, does that mean that no longer can
Speaker 1: we go into I don't know, workout place and be
Speaker 1: misted with rosewater or strapped into something like a bungee
Speaker 1: cord and crawl around in the dark like spiders? Is
Speaker 1: that we can't get that anymore? Brandon sadly, that's this
Speaker 1: is a real, right, These are all real. I think
Speaker 1: there was this era of quirky fitness that New York
Speaker 1: City had and you know, so many of the trainers
Speaker 1: told me it was like Sinatra, you make it here
Speaker 1: and you can make it anywhere. So every booty fitness
Speaker 1: concept came to New York City, you know, trying to
Speaker 1: have a go at it. You know, trainers yelling at
Speaker 1: you on video cameras, in altitude chambers, hiking on Everest,
Speaker 1: you know, different things like that. Okay, Brandon, what about
Speaker 1: when it comes to celebrities and athletes, because these to
Speaker 1: ask about DSM But okay, maybe I mean I don't
Speaker 1: want to talk about you want to talk about the feet? Alright,
Speaker 1: you go there. No, I mean it's a little triggering
Speaker 1: for me, Chris, you want to talk about the feed Well,
Speaker 1: as we said, the people get a real intense relationship
Speaker 1: with these trainers. A lot of the technogym trainers are
Speaker 1: doing virtual classes, so they so they get d m
Speaker 1: s and stuff, right, Brandon, from people asking for more contents. Indeed, indeed,
Speaker 1: and because working out is so physical, when people reach
Speaker 1: out over d MS on Instagram, um they want something physical,
Speaker 1: so that a lot of times turns to um B
Speaker 1: d s M requests to have a trainer watch as
Speaker 1: they give themselves a wedgie or have a trainer come
Speaker 1: over and put a dog caller on the client and
Speaker 1: shock them when they bark. There's a list somewhere at
Speaker 1: Bloomberg which is like Chris Rouser of Pursuits is responsible
Speaker 1: for bringing these stories onto Okay, okay, I got speaking
Speaker 1: of feet. Let's talk about a pair of socks that
Speaker 1: has never been washed, Brandon and how that fits into
Speaker 1: what these celebrity fitness trainers are doing. Oh yeah, So
Speaker 1: when you're training pro athletes, you're trying to eke out
Speaker 1: you know that one percent extra from them. You know
Speaker 1: they're already a tot performers, so you know with the
Speaker 1: regular person, it's with a pro athlete, it's one and
Speaker 1: often that looks at like optimize using their entire calendar.
Speaker 1: They need to be sleeping a lot, they need to
Speaker 1: be doing this a lot, and optimization turns into superstition
Speaker 1: because if you're an NBA player and you're having an
Speaker 1: incredible game, you're like, okay, what we're what was the setup?
Speaker 1: What did I do perfectly that gave me this amazing game?
Speaker 1: And for one of these pro athletes, it was a
Speaker 1: certain pair of socks and he wears those socks every day.
Speaker 1: Four years inside out. He's never washed them and you
Speaker 1: can smell them across the court. Come on, we all
Speaker 1: have our little quirks. Hey really quickly, the squealing teacup
Speaker 1: pig promise. Um. One of one of the trainers that
Speaker 1: technogym has a private client in London, and when he
Speaker 1: goes over to train that client, there is a separate
Speaker 1: trainer that is training the client's pet pig. Yeah, we
Speaker 1: gotta take care of our pets. I'm just gonna say,
Speaker 1: oh my god, Um, Brandon, another great read. There's also
Speaker 1: some cool stuff uh in Pursuits about the importance of
Speaker 1: breathing and a really unbelievable supercar ev Supercars two million bucks.
Speaker 1: Come on, ready takes the importance of breath work. By
Speaker 1: the way, we don't need to argue for the importance
Speaker 1: of breathing, folks. Breathe, breathe, breathe. All right, we gotta run, Brandon.
Speaker 1: Thank you so much, really appreciate it. Bloomberg Pursuits editor
Speaker 1: Chris Rouser, of course, along with Brandon Pressor. And that
Speaker 1: wraps up the weekend edition of Bloomberg Business Week from
Speaker 1: Bloomberg Radio. Thanks so much for joining us. I'm Tim
Speaker 1: Stanivik and I'm Carol Master. Be sure to tune into
Speaker 1: Bloomberg Business Week Monday through Friday, starting at two pm
Speaker 1: Wall Street Time right here on Bloomberg Radio. You can
Speaker 1: also watch our daily broadcast on YouTube. Just search Bloomberg
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Speaker 1: Find that at Bloomberg dot com, Apple, or wherever you
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Speaker 1: now at Bloomberg dot com and on the Bloomberg Terminal,
Speaker 1: and also check out Bloomberg Quick Take. It's available at
Speaker 1: Bloomberg dot com, slash Qt, and streaming platforms like Roku,
Speaker 1: Apple TV, Samsung TV, and more. Have a great weekend, everyone,
Speaker 1: Breathe a little bit, have a workout, yeah exactly, and
Speaker 1: wash your socks. This is Bloombergh.