WEBVTT - Big Tech, Markets, Energy, and Streaming (Podcast) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.759 at Bloomberg dot com slash podcast. Big Big Earnings Week 0:00:22.800 --> 0:00:27.400 really focus on technology. Some disappointments out there for sure, 0:00:27.800 --> 0:00:29.880 although Apple kind of maybe saved the day a little 0:00:29.880 --> 0:00:31.760 bit at the at the end here with some decent numbers. 0:00:31.960 --> 0:00:34.559 Let's kind of bring it all into perspective tied altogether, 0:00:34.600 --> 0:00:37.120 We're gonna round table at today with Cameron christ macro 0:00:37.200 --> 0:00:41.559 strategists with Bloomberg News, plus Punum Goyle, senior e commerce 0:00:41.600 --> 0:00:46.000 analysts with Bloomberg Intelligence, covers all things retail. Cameron, let's 0:00:46.000 --> 0:00:48.320 start off with you here, just you know, stepping back 0:00:48.400 --> 0:00:52.280 from the Microsoft's, the Google's, the metas of the world. 0:00:53.159 --> 0:00:55.920 Do you still consider or should the market still consider 0:00:56.400 --> 0:01:00.440 big tech as a driver as a market leader for 0:01:00.480 --> 0:01:04.000 this global equity market. Well, I think you have to 0:01:04.240 --> 0:01:07.920 just given the waiting in various indices. I mean, if 0:01:07.920 --> 0:01:11.160 you look at the SNP or even m s c 0:01:11.400 --> 0:01:14.400 I Old Country World Index. I mean, who do you have? 0:01:14.920 --> 0:01:20.440 It's it's the familiar names, uh, most of which are 0:01:20.640 --> 0:01:25.120 directly or tangentially technology related. I mean, technically Amazon is 0:01:25.160 --> 0:01:27.600 considered discretionary these days, but I think we all know 0:01:27.680 --> 0:01:31.680 that they're valued as a as a technology stock. So 0:01:31.760 --> 0:01:35.640 I think, of course, um, when you're talking about anything 0:01:35.720 --> 0:01:39.880 but very ephemeral, short term moves, you you have to 0:01:40.440 --> 0:01:43.880 you have to consider the tech sector as as sort 0:01:43.880 --> 0:01:47.080 of the hegemonic driver almost, And when it comes to 0:01:47.120 --> 0:01:50.200 the tech sector, it's interesting you look at Apple, you 0:01:50.200 --> 0:01:55.200 look at Amazon to opposite reactions. They're basically Apple canceling 0:01:55.200 --> 0:01:58.080 out Amazon's loss on a points basis. If you look 0:01:58.080 --> 0:02:00.400 at the SMP five hundred and potam, when you think 0:02:00.400 --> 0:02:03.160 about the Amazon earnings that we've gotten, the wipe out 0:02:03.200 --> 0:02:05.360 that we're seeing in the stock, what do you think 0:02:05.600 --> 0:02:08.880 is the bigger issue here? Was it the warning about 0:02:08.919 --> 0:02:12.040 the holiday period or is it what's happening in a 0:02:12.280 --> 0:02:15.519 w S. I think it's a WS more so. We 0:02:15.520 --> 0:02:18.000 we know that holiday will be weaker than it has 0:02:18.040 --> 0:02:22.360 been just because of inventories being high and inflation curving. 0:02:22.360 --> 0:02:24.919 Consumers fund. But on the A W S front, that 0:02:25.040 --> 0:02:28.240 was a surprise. Um, really just at the big delta 0:02:28.320 --> 0:02:31.480 that we saw versus estimates largely as you know, they 0:02:31.520 --> 0:02:33.840 also said that they were exiting the quarter at a 0:02:33.880 --> 0:02:37.800 mid twenties run rate, which is pretty weak considering the 0:02:37.840 --> 0:02:40.320 thirty one percent that they've been tracking for the past 0:02:40.360 --> 0:02:44.000 four quarters. Cameron, I'd love to get your sense here. 0:02:44.040 --> 0:02:48.080 We're at about halfway through earnings here, any takeaways for 0:02:48.160 --> 0:02:49.880 you here? I mean, I know the big question for 0:02:49.919 --> 0:02:51.920 a lot of investors is, as I listened to some 0:02:51.960 --> 0:02:54.600 of these conference calls, is kind of the forward guidance 0:02:54.639 --> 0:02:58.200 and how bad will a recessionary environment be for some 0:02:58.240 --> 0:03:01.839 of these businesses? What? What? What have you learned so far? Yeah, 0:03:01.960 --> 0:03:04.880 I mean the there's a couple of a couple of 0:03:04.880 --> 0:03:08.520 things to unpack. Uh, you know, there's the the actual 0:03:08.560 --> 0:03:12.640 earnings we've seen relative to expectation. I mean, they've beaten, 0:03:12.760 --> 0:03:15.799 but they always beat, right, I mean, under promise and 0:03:15.840 --> 0:03:18.960 over deliver is sort of the business model of Wall Street. Um, 0:03:19.000 --> 0:03:22.280 the magnitude of surprise has been the more or less 0:03:22.320 --> 0:03:25.280 the slowest m on both the top and bottom line 0:03:25.320 --> 0:03:28.520 basis since the advent of COVID, so that probably tells 0:03:28.600 --> 0:03:33.240 us something. UH. I I do think that forward looking 0:03:33.960 --> 0:03:38.320 UH guidance is significant UM, and I take what was 0:03:39.000 --> 0:03:40.960 take on board what we said about a WS. But 0:03:41.040 --> 0:03:44.680 the fact is is that Amazon guidance UH for the 0:03:44.720 --> 0:03:48.080 fourth quarter puts its overall year on your revenue growth 0:03:49.040 --> 0:03:54.160 UH the second lowest in the company's history UH less 0:03:54.160 --> 0:03:55.920 than five percent. If you take the midpoint of the 0:03:55.920 --> 0:04:01.200 guidance range UM, that's less than inflation UM. And that's 0:04:01.240 --> 0:04:04.480 pretty significant because we're these companies at the top of 0:04:04.520 --> 0:04:08.960 the pyramid have valuations that are consistent with secular growth. 0:04:09.720 --> 0:04:14.280 And I think what Amazon and Meta in particular are 0:04:14.360 --> 0:04:18.120 saying is that these companies are actually significantly exposed to 0:04:18.240 --> 0:04:22.159 cyclical vulnerability. And the question we have to ask is 0:04:23.040 --> 0:04:27.200 should these companies have a secular valuation premium if they're 0:04:27.240 --> 0:04:33.039 turning into more secularly cyclically vulnerable companies. I think that 0:04:33.120 --> 0:04:36.159 you can make a good argument that that no, there 0:04:36.200 --> 0:04:39.400 there's some of this premium that has been given to 0:04:39.440 --> 0:04:42.760 these firms over the last ten years maybe should should 0:04:42.760 --> 0:04:47.360 be withdrawn. Well, there's some key differences between Meta and Amazon, 0:04:47.440 --> 0:04:50.560 one of them being that Meta is just funneling billions 0:04:50.600 --> 0:04:53.159 of dollars into the metaverse. I am so excited to 0:04:53.160 --> 0:04:55.800 see how that turns out. Amazon, on the other hand, 0:04:56.000 --> 0:05:01.920 PUNA is really looking at cutting costs here. What magnitude 0:05:01.960 --> 0:05:05.440 are we talking about and where? Sure, the costs are 0:05:05.520 --> 0:05:09.039 largely going to be cut on the retail side, um 0:05:09.400 --> 0:05:13.240 really when you look at technology as well as investments 0:05:13.240 --> 0:05:17.200 in fulfillment, logistics, transputation. So we heard from them that 0:05:17.279 --> 0:05:19.720 they were expected to cut a billion and the one 0:05:19.760 --> 0:05:22.320 point five billion dollars from two Q to three Q. 0:05:22.920 --> 0:05:26.800 They only cut one billion, largely because they couldn't cut 0:05:26.839 --> 0:05:30.320 the costs and their productivity due to fulfilling demand for 0:05:30.640 --> 0:05:33.799 the additional prime day sales and early acts of sales 0:05:33.839 --> 0:05:36.600 that they had in three Q and four Q. UM. 0:05:36.640 --> 0:05:38.880 It's going to be hard for them to cut costs. 0:05:38.880 --> 0:05:41.039 It will not come easy. They're going to have to 0:05:41.120 --> 0:05:45.040 look at some of their strategic initiatives as well as 0:05:45.080 --> 0:05:48.640 some of those experimental initiatives that they have to really 0:05:48.880 --> 0:05:51.920 um expand those margins. But at the end of the day, 0:05:51.960 --> 0:05:55.600 the margins are driven by a w S seven more 0:05:55.640 --> 0:05:58.280 than seventy of the margins on an manual basis, or 0:05:58.320 --> 0:06:00.320 the profits, I should say come from it up us 0:06:00.400 --> 0:06:03.359 and in the latest quarter three Q over a hundred percent. 0:06:03.600 --> 0:06:05.679 So we need to see those a w S margins 0:06:05.680 --> 0:06:08.240 extand again, and we think they will. It'll just be 0:06:08.279 --> 0:06:11.440 a matter of time. The next few quarters are challenging, 0:06:11.440 --> 0:06:14.640 but a WS does have potential to expand again, both 0:06:14.640 --> 0:06:17.760 from revenue and a margin standpoint. All right, put him 0:06:17.800 --> 0:06:20.159 great stuff as always, put him boil. She's a senior 0:06:20.240 --> 0:06:23.960 retail analysts Bloomberg Intelligence covering all the e commerce uh 0:06:24.040 --> 0:06:26.240 stuff as well. She's been there since the beginning of 0:06:26.279 --> 0:06:30.040 that evolution in retail. Plus Camraon Christ macro strategists with 0:06:30.200 --> 0:06:32.560 Bloomberg News, giving us kind of just a holistic view 0:06:32.560 --> 0:06:35.760 of here of what we've seen from these tech earnings. UM, 0:06:35.960 --> 0:06:38.960 some disappointments kind of across the board, maybe the exception 0:06:38.960 --> 0:06:41.560 of Apple, but according to Camera, no reason to think 0:06:41.600 --> 0:06:45.480 that they will no longer be market leaders, just given 0:06:45.520 --> 0:06:54.599 their propensity and their big size in the indexes. Said Oakley. 0:06:54.760 --> 0:06:57.440 He's a founder managing partner to Oxbell Advisors. We've talked 0:06:57.440 --> 0:07:00.000 to him for a long time. He's down in Austin, Texas, 0:07:00.040 --> 0:07:03.120 US UM, but we've got them in our studio today 0:07:03.120 --> 0:07:05.000 for the first time ever. How cool is that? Ted? 0:07:05.160 --> 0:07:08.719 Thanks so much for joining us here. Um, you know, 0:07:08.920 --> 0:07:11.560 I don't know. We've we're coming through earnings here. I 0:07:11.600 --> 0:07:14.840 got a market that's down, my fixed income portfolios down 0:07:14.840 --> 0:07:17.320 double digits. What do I do from here? Is this 0:07:17.360 --> 0:07:19.520 the bottom? Can I start just loading in some stocks 0:07:19.520 --> 0:07:23.320 and bonds here? Well, I would say, Well, I would 0:07:23.400 --> 0:07:27.040 not do that. I think, Uh, I think what what 0:07:27.160 --> 0:07:29.640 the Fed has given you is a little by time 0:07:29.920 --> 0:07:32.320 with the one in one year and maybe eighteen month 0:07:32.440 --> 0:07:34.960 treasury at four and a half percent, now you can 0:07:35.000 --> 0:07:38.840 afford to hold it, you know. And somebody tells me, now, hey, 0:07:39.000 --> 0:07:41.200 I can get a five percent dividend on something. I said, 0:07:41.200 --> 0:07:43.280 wait a minute, how about four and a half on 0:07:43.360 --> 0:07:45.520 a treasury? We have no risk on it? And so 0:07:45.840 --> 0:07:48.440 I think that's what's going on. But I wouldn't step 0:07:48.480 --> 0:07:52.040 into that. We really feel like this has probably two 0:07:52.080 --> 0:07:55.200 or three quarters to go, maybe a little longer. Well, 0:07:55.320 --> 0:07:57.720 explain that timeline. What's going to happen in these two 0:07:57.760 --> 0:08:00.120 to three quarters. Are you waiting for the Federals or 0:08:00.280 --> 0:08:03.800 to take their foot off the gas a little bit? Well, Katie, 0:08:03.840 --> 0:08:06.200 they could, but I think people if they look at history, 0:08:06.240 --> 0:08:08.680 it always goes to show the market keeps on going down. 0:08:09.320 --> 0:08:12.360 But here's why. For us, we think that earnings, if 0:08:12.560 --> 0:08:15.360 you look at deceleration, they're up, but it's been really 0:08:15.400 --> 0:08:18.440 decelerating now for four quarters in a row. We think 0:08:18.480 --> 0:08:22.360 that's going to continue into negative territory over the next 0:08:22.400 --> 0:08:24.760 three quarters. And as that happens, I think people have 0:08:24.840 --> 0:08:28.080 to readjust the level of what they're willing to pay 0:08:28.120 --> 0:08:30.880 for stocks. You know they talk about multiples, Well, the 0:08:31.000 --> 0:08:33.840 multiple is going gonna go up because your earnings are 0:08:33.880 --> 0:08:35.560 gonna need to go down, and I think they forget 0:08:35.559 --> 0:08:39.400 to factor that in here. All right, Ted, you're from Texas. 0:08:39.720 --> 0:08:42.320 Texas Tech was your underground. I'm just gonna profile you, 0:08:42.360 --> 0:08:45.240 Ted and assume that you have a call on oil, 0:08:45.480 --> 0:08:47.959 on energy, I got w TR crew to oil about 0:08:47.960 --> 0:08:51.480 eighty eight dollars a barrel. Here. What's your calling oil? 0:08:51.520 --> 0:08:53.920 And what's what are your I know you're good friends 0:08:53.920 --> 0:08:56.720 when you're sitting around chatting down in Texas, you're talking oil. 0:08:56.760 --> 0:09:00.640 What's the call there? Well, you know oil companies can 0:09:00.640 --> 0:09:03.280 make money at eight and they can make money at eight, 0:09:03.520 --> 0:09:07.360 so you know, we own uh energy one production companies 0:09:07.360 --> 0:09:10.880 on pipelines that sort of thing too. But what's happening is, 0:09:10.920 --> 0:09:14.440 you know, the large companies really have cut so far 0:09:14.520 --> 0:09:18.199 back on capex so that it's changed the industry industry, 0:09:18.200 --> 0:09:20.680 and it has helped the independence quite a bit. I 0:09:20.720 --> 0:09:23.200 think to do more. But for us, if you just 0:09:23.360 --> 0:09:26.800 look out over the next two years, we think it 0:09:27.840 --> 0:09:31.520 moves higher over time. Um, you know, we're we're getting 0:09:31.520 --> 0:09:34.040 to a point where it's supply to man is is 0:09:34.080 --> 0:09:37.720 fairly equal. So uh and I understand it. And by 0:09:37.720 --> 0:09:40.800 the way, I'm all for taking care of that, you know, 0:09:40.880 --> 0:09:43.400 the environment of green I really am. I just think 0:09:43.400 --> 0:09:47.600 the timeline is all a bit so that's that's where 0:09:47.600 --> 0:09:49.760 I think. So I think it it does go higher. 0:09:49.800 --> 0:09:52.319 The only thing would would thwart it in the short run, 0:09:52.360 --> 0:09:55.400 which we think could happen, by the way, is if 0:09:55.400 --> 0:10:00.400 your economy is slow enough all over the world, there 0:10:00.440 --> 0:10:02.640 will be a short period in there three to six 0:10:02.679 --> 0:10:05.320 months where oil can can foll back. Something we'll see. 0:10:05.600 --> 0:10:08.199 And if we think about the energy sector for so 0:10:08.280 --> 0:10:12.680 long it was winning by so much. When you translate 0:10:12.720 --> 0:10:16.480 that oil call into the stock market, has the energy 0:10:16.600 --> 0:10:20.680 trade run its course? You know, Kedy probably has to 0:10:20.760 --> 0:10:23.360 a degree. I think you're you're onto something there. I 0:10:23.400 --> 0:10:25.959 think a lot of people really focused on it, and 0:10:26.000 --> 0:10:29.040 they were too they had too much oil and their portfolios, 0:10:29.160 --> 0:10:32.720 particularly on the professional side. And what's happening if you 0:10:32.920 --> 0:10:36.360 look at the companies, they've sort of been trading those 0:10:36.440 --> 0:10:38.559 highs now for you know, they had a high, they 0:10:38.559 --> 0:10:41.439 fell off, came back, but they haven't made significant new 0:10:41.520 --> 0:10:44.440 highs here. And so I think you, I think you 0:10:44.440 --> 0:10:47.680 you could be very right on that. It ted You've 0:10:47.880 --> 0:10:52.560 You've had a heck of a career here founding Oxbow Advisors. Uh, 0:10:52.679 --> 0:10:56.160 you've written nine books. You're also the chairman emeritus and 0:10:56.200 --> 0:10:59.720 founder of Foster Angels of South Texas, the largest foster 0:10:59.800 --> 0:11:03.200 child foundation in South Texas. Talk to us about that, 0:11:03.280 --> 0:11:05.840 how's it, how's the environment down there as it relates 0:11:05.880 --> 0:11:08.520 to foster care and things like that, because there's always 0:11:08.559 --> 0:11:10.280 so much discussion. We hear in York, we hear about 0:11:10.280 --> 0:11:12.040 the border and all those types of things. What's it 0:11:12.120 --> 0:11:16.120 really like feeds boots on the ground in South Texas well, 0:11:16.240 --> 0:11:19.440 we have to the two foundations are both the same side. 0:11:19.480 --> 0:11:22.680 There two separate foundations, but we also did Foster Angels 0:11:22.679 --> 0:11:25.480 of Central Texas, which is out of Austin. So between 0:11:25.480 --> 0:11:28.920 the two we cover about sixty five counties in Texas. 0:11:29.160 --> 0:11:32.040 And but you know, having done that, have really helped 0:11:32.040 --> 0:11:36.480 foster children for twenty five years. Our problem is is 0:11:36.559 --> 0:11:41.320 that since their wards of the state, foster children are 0:11:41.920 --> 0:11:46.720 unfortunately out of sight and so you you can't get 0:11:46.840 --> 0:11:50.640 people to understand really apply to a foster child and 0:11:51.480 --> 0:11:53.880 what we do at Foster Angeles and we try to 0:11:53.920 --> 0:11:56.920 give them things very quickly within forty eight hours that 0:11:57.160 --> 0:11:59.280 will help their staff to esteem if they want something. 0:11:59.320 --> 0:12:01.320 But the problem in the state, to answer your question, 0:12:01.559 --> 0:12:04.199 is we have a lot of people who don't understand 0:12:04.240 --> 0:12:07.280 the system. They don't pay the people in the system, 0:12:07.640 --> 0:12:11.319 the CPS any money they have about at turnover rate 0:12:11.400 --> 0:12:16.600 if you can imagine, and so uh, everything compounds on itself, 0:12:16.720 --> 0:12:20.520 and so you have the problem with foster families. We 0:12:20.559 --> 0:12:23.560 don't have near enough and part of the ones we 0:12:23.600 --> 0:12:26.320 do have are actually not that good. Who have a 0:12:26.320 --> 0:12:28.640 lot of great ones, don't get me wrong, but a 0:12:28.679 --> 0:12:30.640 lot of them just do it for the money. And 0:12:30.679 --> 0:12:33.120 then you have a lot of CPS workers that it's 0:12:33.160 --> 0:12:36.000 a tough job and that's just a turnover. We have 0:12:36.120 --> 0:12:38.360 those two things going on. Then they've had a lawsuit 0:12:38.520 --> 0:12:43.640 from UM that I don't agree with it necessarily, but 0:12:43.920 --> 0:12:47.280 what's happened is it's really put a lot of pressure 0:12:47.280 --> 0:12:49.480 on the system because they am to respond to lawsuit 0:12:49.559 --> 0:12:52.559 instead of helping instead of helping children. So it sounds 0:12:52.600 --> 0:12:54.800 like a lot of red tape like we have here 0:12:54.920 --> 0:12:57.200 and you have in Texas and every state. And I 0:12:57.200 --> 0:12:59.640 am very familiar with the New York's floor is all 0:12:59.679 --> 0:13:04.240 the big state, right California. We all have the same problem. 0:13:04.280 --> 0:13:05.880 You have the same problem here too. All right, well, 0:13:05.880 --> 0:13:08.000 we appreciate you doing all anything you can do to 0:13:08.000 --> 0:13:10.079 help there. That that's great stuff. Ted Oakley, Founder and 0:13:10.120 --> 0:13:15.160 managing partner Oxbow Advisers. I want to get to rate 0:13:15.200 --> 0:13:17.520 the our next guest because she is in studio. So 0:13:17.559 --> 0:13:19.960 that's two guests in a row in studio. These are 0:13:20.000 --> 0:13:22.439 folks that we've talked to before, but we have them 0:13:22.440 --> 0:13:26.360 in the studio. Solday, it's a Friday. There's no Bloomberg 0:13:26.440 --> 0:13:29.800 employees here today, but other folks are coming in. Allison. 0:13:30.200 --> 0:13:33.880 Right now, our CEO of Seventh Generation joins us in 0:13:33.920 --> 0:13:36.400 our Bloomberg Interactive Broker studio. Allison, thanks so much for 0:13:36.480 --> 0:13:39.319 joining us. Tell us just give us the overview what 0:13:39.559 --> 0:13:41.960 seventh generation is? What are you guys up to? Yeah, first, 0:13:41.960 --> 0:13:43.480 thank you so much for having me. It's great to 0:13:43.520 --> 0:13:46.319 see you all. Yeah, and a little bit about seven generations. 0:13:46.400 --> 0:13:50.520 So we are a household cleaning company that focuses on 0:13:50.559 --> 0:13:54.040 our mission of transforming the world into a healthy, sustainable, 0:13:54.080 --> 0:13:58.160 and equitable place for the next seven generations. So yeah, like, 0:13:58.240 --> 0:14:02.600 no small goals for us. So I give us a 0:14:02.640 --> 0:14:05.040 sense of kind of like some of your products, who 0:14:05.080 --> 0:14:07.120 you do business with, how you get your products at 0:14:07.160 --> 0:14:09.680 here in the marketplace. Yeah, great, So I think you 0:14:09.720 --> 0:14:13.480 will likely see us walking down any grocery store aisle, 0:14:13.679 --> 0:14:17.440 Target aisle on Amazon dot Com, Walmart aisle in the 0:14:17.440 --> 0:14:22.880 categories of laundry, detergent, household cleaners, and dish products and so. Um. 0:14:22.880 --> 0:14:28.120 We really have distribution in you know, most everyday stores. Um, 0:14:28.200 --> 0:14:31.240 and so we're we're really part of everyone's households. This 0:14:31.320 --> 0:14:34.120 is Bloomberg Radio. So I have to ask you about 0:14:34.200 --> 0:14:38.080 the supply chain it's always been talking about for two years. 0:14:38.400 --> 0:14:40.200 Tell us how the past two years have been for 0:14:40.240 --> 0:14:42.680 you in terms of managing that. Oh, my goodness, it's 0:14:42.720 --> 0:14:45.400 been a wild ride. So UM we are we do 0:14:45.520 --> 0:14:48.680 operate in the categories of cleaning and paper products. So 0:14:48.800 --> 0:14:52.240 you know, over the course of we saw record growth 0:14:52.880 --> 0:14:56.920 behind those products and record inability to meet the demand 0:14:56.960 --> 0:14:59.280 of both our retailers and our consumers. And so that 0:14:59.320 --> 0:15:01.480 was a pretty wild ride for us to just really 0:15:01.800 --> 0:15:04.640 make sure that we could deliver on what consumers and 0:15:04.680 --> 0:15:07.360 retailers were asking us for UM And then on the 0:15:07.360 --> 0:15:08.760 other side of it, I think it has been a 0:15:08.800 --> 0:15:12.400 combination of both figuring out how consumers are going to 0:15:12.440 --> 0:15:16.600 be cleaning UM in today's world, and then also making 0:15:16.600 --> 0:15:18.920 sure that we have a supply chain that is future 0:15:19.000 --> 0:15:21.520 fit for this type of volatility, because I will tell 0:15:21.560 --> 0:15:24.320 you that even today, while the demand is not as 0:15:24.400 --> 0:15:27.440 high as it was, I think we're still working on 0:15:28.600 --> 0:15:31.120 back tracking a lot of the supply chain decisions and 0:15:31.400 --> 0:15:33.560 retrofitting our supply chain to make sure that we can 0:15:33.800 --> 0:15:36.000 can meet the day to day demands. So how did 0:15:36.040 --> 0:15:38.440 your business and how did demand for your products kind 0:15:38.440 --> 0:15:41.320 of evolved during the pandemic, Because it seemed like for 0:15:41.360 --> 0:15:45.320 a while there we were cleaning everything, including the groceries 0:15:45.320 --> 0:15:48.760 we brought home from the supermarket and then leave them outside. 0:15:51.280 --> 0:15:54.400 God what we didn't know. Amazing, But anyway, here we are. 0:15:54.640 --> 0:15:57.320 How did that impact your business? Yeah? Sure, so I think, 0:15:57.360 --> 0:16:01.080 like like our our peers in the category, I think 0:16:01.120 --> 0:16:05.120 we just saw unprecedented demand for anything that cleans, and 0:16:05.160 --> 0:16:08.440 so we do operate in the disinfecting cleaning category, So 0:16:08.520 --> 0:16:11.040 we do create a line of products that are UM 0:16:11.080 --> 0:16:14.920 that killed of germs, and so we really saw that 0:16:15.040 --> 0:16:18.480 range of products UM flying off the shelves as soon 0:16:18.520 --> 0:16:21.440 as literally as soon as they were set UM. So 0:16:21.760 --> 0:16:23.600 you know, it was really it was really challenging for 0:16:23.680 --> 0:16:26.680 us to track how high is high and bring us 0:16:26.960 --> 0:16:29.240 to now and bring us into the future. You know, 0:16:29.280 --> 0:16:34.160 you mentioned how people clean have has changed. How are 0:16:34.200 --> 0:16:37.040 you adapting to that and what trends have you noticed? Yeah, 0:16:37.080 --> 0:16:39.560 so there's there's kind of two big things that are 0:16:39.560 --> 0:16:42.040 emerging in our business right now. So one, I think 0:16:42.560 --> 0:16:45.520 UM consumers first of all, are still sitting on quite 0:16:45.520 --> 0:16:48.840 a bit of product that they bought, and so I think, UM, 0:16:48.880 --> 0:16:52.800 we're still working through the tail end of product on hand. UM. 0:16:52.840 --> 0:16:55.440 They're also thinking about cleaning differently. I think the role 0:16:55.480 --> 0:16:59.240 of efficacy in what is clean has become much more prevalent. 0:16:59.360 --> 0:17:03.720 Given our conversations around germs and safety even past COVID, Right, So, 0:17:03.760 --> 0:17:05.280 I think there's a lot of things happening in the 0:17:05.280 --> 0:17:08.400 news now from a health perspective. Um this on top 0:17:08.440 --> 0:17:10.639 of the fact that we are a sustainable business, right, 0:17:10.680 --> 0:17:13.960 so we really focus on the environmental aspect of the 0:17:13.960 --> 0:17:17.200 products that we make. And the challenging thing right now 0:17:17.600 --> 0:17:20.639 is that there's some very real concerns for the U. 0:17:20.720 --> 0:17:26.480 S consumer between financial insecurity, UM inflation, or health and safety. 0:17:26.520 --> 0:17:29.840 And so we are seeing the environment slip a little 0:17:29.840 --> 0:17:32.119 bit from what's the top of mind for consumers in 0:17:32.160 --> 0:17:35.399 their day to day and so we've really had to pivot, right. So, 0:17:35.480 --> 0:17:37.199 I think one of the things that we're working on 0:17:37.240 --> 0:17:39.200 as a team is how do we make sure our 0:17:39.240 --> 0:17:43.199 communication is super sharp from an efficacy perspective, so we 0:17:43.280 --> 0:17:46.240 work as well as our conventional counterparts, So how do 0:17:46.280 --> 0:17:49.119 we make that point really clear? And then also how 0:17:49.160 --> 0:17:52.679 do we dial up the urgency around the environmental concerns 0:17:52.760 --> 0:17:55.960 like the earth is burning, we must do something about it, 0:17:56.000 --> 0:17:57.760 and so how can we just make sure that stays 0:17:57.760 --> 0:18:00.520 top of mind. You mentioned inflation. Uh, it seems like 0:18:00.760 --> 0:18:02.960 we just we're getting through a big earning cycle here 0:18:02.960 --> 0:18:04.800 we're hearing from a lot of companies report earnings in 0:18:04.800 --> 0:18:09.080 their inflation is right there. How has it impacted your business? Yeah, so, 0:18:09.119 --> 0:18:12.159 I think we certainly have not been immune to a 0:18:12.160 --> 0:18:14.560 lot of the challenges that most companies are facing in 0:18:14.640 --> 0:18:18.280 terms of rising costs for materials, and so we, like 0:18:18.400 --> 0:18:21.480 the categories, have had to adjust our pricing. But the 0:18:21.560 --> 0:18:23.560 one thing that I'm super proud to talk about is 0:18:23.600 --> 0:18:26.000 the fact that you know where we make our biggest 0:18:26.000 --> 0:18:28.600 investment is in our product So we use a hunt 0:18:28.800 --> 0:18:31.280 as much as plant based materials as we can, up 0:18:31.320 --> 0:18:33.680 to a hundred percent, and most of our products we 0:18:33.760 --> 0:18:37.120 also focus on using as much better plastic as we can, 0:18:37.240 --> 0:18:41.080 so we use a hundred percent post consumer recycled plastic 0:18:41.560 --> 0:18:45.320 in our packaging. UM and so those are expensive right there, 0:18:45.160 --> 0:18:48.399 are expensive before the pandemic. Right. It's the quality that 0:18:48.440 --> 0:18:51.199 we're investment that we're making, and so the thing that 0:18:51.240 --> 0:18:53.560 we've had to really work for is how do we 0:18:53.600 --> 0:18:57.840 make sure that we maintain committed to that quality of ingredient, 0:18:57.880 --> 0:19:02.960 to that equality of environmental standard and make adjustments around that. UM. 0:19:03.040 --> 0:19:04.919 So I think we really focus as a team to 0:19:04.960 --> 0:19:06.919 say we have to keep the quality of the product 0:19:06.920 --> 0:19:10.600 intact during this time, to what degree have you passed 0:19:10.640 --> 0:19:14.119 on those higher costs? How much have you raised prices? Yeah, 0:19:14.160 --> 0:19:17.720 so it really does vary by category, right, So I think, um, 0:19:17.760 --> 0:19:19.920 it depends on the sub segment that you're looking at. 0:19:20.040 --> 0:19:23.159 But I think we do our absolute best to minimize 0:19:23.160 --> 0:19:25.679 the amount that we pass on. But at the end 0:19:25.680 --> 0:19:27.119 of the day, I need to make sure that this 0:19:27.160 --> 0:19:30.640 financial model continues to make a sense. So UM as 0:19:30.640 --> 0:19:33.359 a company, we have certainly made it our priority to 0:19:33.560 --> 0:19:38.359 ensure that sustainable products maintain as much accessibility from a 0:19:38.400 --> 0:19:42.080 price point as possible. So one of our biggest priorities 0:19:42.160 --> 0:19:45.240 is dispelling the myth that natural products have to be 0:19:45.280 --> 0:19:48.760 more expensive. Um. So, as a business, we always work 0:19:48.920 --> 0:19:51.879 to make sure that we keep our pricing as accessible 0:19:51.880 --> 0:19:53.800 as we can. But I think that you know that's 0:19:53.800 --> 0:19:57.720 really been tested during these times. Are you based? We are, 0:19:58.040 --> 0:20:00.840 and every company that we talked to for the last 0:20:01.000 --> 0:20:05.040 boy two and a half years site labor as a challenge. 0:20:05.600 --> 0:20:08.359 What's it like in Burlington, Vermont and the other places 0:20:08.359 --> 0:20:11.960 maybe where you operate? Yeah, great, so I think, um, 0:20:11.960 --> 0:20:13.840 you know, actually, one of the biggest changes that we've 0:20:13.840 --> 0:20:17.200 made from a working perspective UM as well. Our headquarters 0:20:17.320 --> 0:20:21.119 is based in Burlington, Vermont. We're really opening up a 0:20:21.160 --> 0:20:24.400 wide net of remote working for our company. So we're 0:20:24.440 --> 0:20:26.639 casting a wide net to make sure that we get 0:20:26.840 --> 0:20:29.840 you know, the most amazing talent into our company, no 0:20:29.880 --> 0:20:34.160 longer letting our headquarter location dictate that. And so it's 0:20:34.200 --> 0:20:37.040 actually been a great way for us to really rethink 0:20:37.160 --> 0:20:41.199 talent strategy. We've got I've got a hundred um. But 0:20:41.320 --> 0:20:44.000 remember we are owned by Unilever, so I think there's 0:20:44.000 --> 0:20:47.560 a much larger ecosystem that supports us. So UM, I 0:20:47.680 --> 0:20:49.720 like to think that there's millions of people out there 0:20:49.760 --> 0:20:53.240 working for us. Alison, thank you so much for joining us. 0:20:53.280 --> 0:20:56.560 Allison written now our CEO of seventh Generation joining us 0:20:56.600 --> 0:21:00.000 live in our Bloomberg Interactive Broker studio, which we appreciate 0:21:00.080 --> 0:21:03.000 making a trip down from Burlington and Yorth, home of 0:21:03.040 --> 0:21:06.199 the University of Vermont cat amounts. How about that? My 0:21:06.280 --> 0:21:08.720 knowledge is my knowledge is just all over the past, 0:21:08.960 --> 0:21:16.040 worthless trivia. I've got it. It's a big oil companies 0:21:16.080 --> 0:21:19.240 reporting um some numbers, and boy, when those guys make money, 0:21:19.840 --> 0:21:23.679 they make a lot. Yeah. So I mean, you know, 0:21:23.760 --> 0:21:25.600 when we talk big energy. When we talk big oil. 0:21:25.640 --> 0:21:27.920 We talked to Fernando Valet. He's a senior oil and 0:21:27.960 --> 0:21:31.480 gas analyst at Bloomberg intellig just another guest of ours 0:21:31.600 --> 0:21:33.840 in the Bloomberg Interactive Broker Studio. I don't know what's 0:21:33.840 --> 0:21:35.840 going on to it. I think we're being punked. Are 0:21:35.840 --> 0:21:38.320 we giving something out at the door or something to 0:21:38.320 --> 0:21:43.800 get we haven't gotten waiting for. Fernando's talked to us 0:21:43.800 --> 0:21:46.680