WEBVTT - Peloton's Biggest Turnaround, Ways to Stay Alive 0:00:02.920 --> 0:00:10.719 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business. 0:00:10.720 --> 0:00:13.960 Wait inside from the reporters and editors who bring you 0:00:14.000 --> 0:00:18.360 America's most trusted business magazine, plus global business, finance and 0:00:18.400 --> 0:00:22.840 tech news. The Bloomberg Business Week podcast with Carol Messer 0:00:23.040 --> 0:00:25.800 and Tim Stenebeck from Bloomberg Radio. 0:00:27.520 --> 0:00:29.800 All right, everybody check it out. Shares a Peloton Man 0:00:29.800 --> 0:00:32.720 investors peddling fast to snap them up. The stock soaring 0:00:33.120 --> 0:00:36.080 the most ever, although shares, I should point out, still 0:00:36.159 --> 0:00:39.080 down about thirty percent year to date. They're off about 0:00:39.200 --> 0:00:42.040 ninety seven percent from their all time high that was 0:00:42.080 --> 0:00:44.199 back in January of twenty twenty one. Let me just 0:00:44.200 --> 0:00:45.760 put it up on the Bloomberg because the stock is 0:00:45.840 --> 0:00:48.720 right now up thirty six percent. Let's get to it, though, 0:00:48.880 --> 0:00:52.440 because there's stuff going on. Bloomberg News Chief Technology correspondent 0:00:52.440 --> 0:00:54.600 Mark German is with us in the La Bureau. 0:00:54.640 --> 0:00:54.840 Mark. 0:00:56.200 --> 0:00:59.360 We're usually talking Apple and we might get there. Peloton 0:00:59.520 --> 0:01:04.280 the latest results earnings beat. It seems significant. This is 0:01:04.319 --> 0:01:06.919 a company that has continued to struggle since the pandemic. 0:01:07.840 --> 0:01:09.560 What's your take on kind of what we got and 0:01:09.600 --> 0:01:11.920 does it mean that a corner has turned for Peloton. 0:01:13.440 --> 0:01:19.039 Investors clearly are happy about the showcase of some better profitability, right, 0:01:19.160 --> 0:01:22.440 more free cash flow, more savings. But let's not forget 0:01:22.640 --> 0:01:26.880 last quarter their CEO resigned because clearly he didn't like 0:01:26.959 --> 0:01:29.080 the road he was seeing ahead of him. You had 0:01:29.120 --> 0:01:33.000 another fifteen percent of jobs cut. That followed three or 0:01:33.040 --> 0:01:36.200 four rounds of layoffs in the prior two years. They've 0:01:36.240 --> 0:01:40.520 completely destroyed this business, right, They've taken it from this 0:01:40.760 --> 0:01:44.399 hardware darling that made these popular bikes and treadmills and 0:01:44.440 --> 0:01:47.680 have re architected it into an app business. I know 0:01:47.800 --> 0:01:51.920 investors are seeing the potential of profit here, and they 0:01:51.960 --> 0:01:54.880 saw that beat in this in this fourth quarter, But 0:01:54.920 --> 0:01:57.040 if you look ahead to the first quarter, you're going 0:01:57.080 --> 0:02:01.360 to see a dramatic revenue tanking on paid app subscriptions 0:02:01.800 --> 0:02:05.680 as well as their hardware purchases. So I'm not entirely 0:02:05.720 --> 0:02:09.799 sure why investors are so optimistic about this company. I 0:02:09.840 --> 0:02:13.800 personally think that a long term future for Peloton is 0:02:13.919 --> 0:02:16.760 far fetched. I think that the best approach for them 0:02:16.800 --> 0:02:19.760 would be to try to sell themselves to a Netflix 0:02:19.960 --> 0:02:23.000 or an Amazon and convince Netflix or Amazon for a 0:02:23.040 --> 0:02:26.680 few billion dollars to buy their very strong arsenal of 0:02:26.800 --> 0:02:30.720 content right and their application in that brand and make 0:02:30.760 --> 0:02:34.040 that part of a Netflix subscription an Amazon Prime subscription 0:02:34.800 --> 0:02:37.160 to make that more valuable and get more people to 0:02:37.160 --> 0:02:39.120 sign up for their monthly services. 0:02:39.200 --> 0:02:42.520 I mean, the whole company is worth less than what 0:02:42.639 --> 0:02:45.880 Apple paid for Beats headphones that you don't even see 0:02:45.880 --> 0:02:49.560 anymore because Apple decided they don't even care about the brand. 0:02:49.880 --> 0:02:51.679 It's got to be the smallest company that I've ever 0:02:51.720 --> 0:02:56.079 heard you, Mark German talk about. They only grew revenue 0:02:56.120 --> 0:02:58.959 one percent, and as you said, it's expected to fall. 0:02:59.040 --> 0:03:01.679 The only reason they're getting fatter margins is because they're 0:03:01.680 --> 0:03:07.560 cutting costs at the same time. It kind of reminds 0:03:07.560 --> 0:03:10.040 me of Apple in the sense that the market is 0:03:10.160 --> 0:03:13.560 just saturated for these very expensive devices and they need 0:03:13.600 --> 0:03:17.119 to find other ways to get revenue. Do they have 0:03:17.280 --> 0:03:18.320 any other leads? 0:03:20.000 --> 0:03:20.240 Yeah? 0:03:20.280 --> 0:03:25.080 I wouldn't be surprised if Peloton, as one last ditch effort, 0:03:25.560 --> 0:03:29.799 winds down their Harbor business completely right, tries to take 0:03:29.840 --> 0:03:32.399 a loss on that on their balance sheet and completely 0:03:32.400 --> 0:03:36.280 gets rid of it. There's nothing proprietary about their hardware. 0:03:36.720 --> 0:03:39.440 If I'm being completely honest, right, this is something that 0:03:39.480 --> 0:03:42.840 any company in America or China or wherever can probably 0:03:42.920 --> 0:03:46.400 replicate really quickly. It burns a hole in their pockets 0:03:46.400 --> 0:03:51.200 and their margins. They've destroyed this business. Barry McCarthy drove 0:03:51.240 --> 0:03:54.040 this business into the ground. He really had no choice 0:03:54.160 --> 0:03:56.680 after what John Foley did to it, thinking that this 0:03:56.840 --> 0:04:00.440 was going to become a trillion dollar company out of 0:04:00.480 --> 0:04:02.760 COVID and that people would never leave the house again. 0:04:03.560 --> 0:04:06.080 So I certainly think that the saving grace here is 0:04:06.080 --> 0:04:09.160 their content and their application, and I wouldn't be surprised 0:04:09.200 --> 0:04:11.360 in two to three years from now if Peloton hasn't 0:04:11.360 --> 0:04:14.520 sold itself that it's an app only business, and you 0:04:14.520 --> 0:04:17.720 could have a nice business as an application. We've seen 0:04:17.760 --> 0:04:20.680 so many companies be app driven businesses. 0:04:20.720 --> 0:04:21.560 You have Uber. 0:04:22.440 --> 0:04:26.120 Netflix obviously is an app in many respects built around content. 0:04:26.200 --> 0:04:29.240 So the potential is there. But to your point, the 0:04:29.279 --> 0:04:32.160 only reason they're showing better profitability and cost savings is 0:04:32.160 --> 0:04:35.160 because they keep firing people and cutting costs. Now back 0:04:35.200 --> 0:04:37.960 to my harbor point for a second. When their chief 0:04:38.000 --> 0:04:40.799 product officer, this was one of their few co founders, 0:04:40.880 --> 0:04:43.440 left about a year and change ago, he was not 0:04:43.480 --> 0:04:46.479 replaced by a hardware person. He was replaced someone with 0:04:46.600 --> 0:04:50.920 someone who's an expert in software and content and server infrastructure, 0:04:51.240 --> 0:04:53.359 And I think that gives you some sort of indicator 0:04:53.440 --> 0:04:55.800 where this company is going all in on that app. 0:04:56.000 --> 0:04:59.200 If they can turn that strong brand into a strong application, 0:04:59.560 --> 0:05:02.080 they have the future. But that's not a multi billion 0:05:02.120 --> 0:05:04.000 dollar public company mark. 0:05:04.040 --> 0:05:07.240 Where did they go wrong? Where was the Because they 0:05:07.240 --> 0:05:09.360 came out of the gate a hardware company, right, and 0:05:09.400 --> 0:05:11.080 there was a lot of fanfare, there was a lot 0:05:11.080 --> 0:05:14.640 of ads. I know, we as a media organization did 0:05:14.720 --> 0:05:19.360 multiple stories and conversations. I know you you were covering them. 0:05:19.400 --> 0:05:21.440 Where did they go wrong? Is it that they just 0:05:21.520 --> 0:05:23.960 thought too big the spend? What was it? 0:05:24.080 --> 0:05:25.880 Or was it just coming out of COVID. I mean, 0:05:25.920 --> 0:05:27.880 everybody was riding this bike in COVID. 0:05:27.880 --> 0:05:29.840 But what I'm trying to understand is COVID did I've 0:05:29.839 --> 0:05:32.520 got one? I canceled my membership just recently because I'm 0:05:32.560 --> 0:05:34.160 just you know, it's a cote rack. But I had 0:05:34.160 --> 0:05:36.920 it exactly, but I had it before COVID. Having said that, 0:05:36.960 --> 0:05:40.400 though if COVID hadn't happened, would they have still had 0:05:40.440 --> 0:05:41.479 problems and issues? 0:05:41.720 --> 0:05:45.320 Potentially they were this nice high end brand, small company 0:05:45.680 --> 0:05:50.479 prior to COVID. COVID hit, they exploded. Everyone wanted one, right. 0:05:50.760 --> 0:05:54.080 They were growing so quickly. They continued to hire, they 0:05:54.080 --> 0:05:57.120 made major investments, they rolled out new products, they doubled 0:05:57.120 --> 0:06:00.200 down on their content. But the worst thing they did 0:06:00.800 --> 0:06:04.719 was try to open this facility in Ohio to manufacture 0:06:04.760 --> 0:06:07.760 their own equipment in the United States. And they spent 0:06:07.839 --> 0:06:10.840 billions of dollars to do this. Right, they're only now 0:06:10.839 --> 0:06:14.520 writing that all down, and they really, you know, put 0:06:14.600 --> 0:06:18.359 themselves in a bad position. Fundamentally. They made a terrible 0:06:18.400 --> 0:06:24.440 bet that COVID would last for the foreseeable future, maybe forever. People, 0:06:24.680 --> 0:06:27.120 and I hate to be exaggerating here, but this is 0:06:27.160 --> 0:06:28.760 really what they thought. People weren't going to leave the 0:06:28.760 --> 0:06:30.560 house again. People weren't going to go to gym's again. 0:06:30.720 --> 0:06:32.640 They were going to only work out from home. And 0:06:32.680 --> 0:06:36.000 they didn't double down. They quadrupled down on that idea, 0:06:36.080 --> 0:06:39.960 spent too much money, Jim started reopening. The world returned 0:06:40.000 --> 0:06:43.000 to some semblance of normalcy, and they were stuck with 0:06:43.040 --> 0:06:46.200 all this excess inventory that nobody was buying because people 0:06:46.200 --> 0:06:49.159 wouldn't need it. On top of that, they had crisis 0:06:49.200 --> 0:06:53.279 after crisis, including launching a treadmill that didn't have proper 0:06:53.360 --> 0:06:57.960 safety protections that ended up killing a baby, hurting pets, 0:06:58.000 --> 0:07:01.080 and hurting people. And then they're bike had issues too 0:07:01.080 --> 0:07:03.680 where people were falling off of the bike, so their 0:07:03.680 --> 0:07:06.240 harbor wasn't safe and their harbor wasn't very good. So 0:07:06.279 --> 0:07:08.960 it was just this multitude of issue after issue after 0:07:09.040 --> 0:07:12.680 issue on top of really bad bets that drove this 0:07:12.800 --> 0:07:15.120 company to a place where a new CEO had to 0:07:15.120 --> 0:07:18.440 come in. Fire half the company wind down much of 0:07:18.440 --> 0:07:21.080 the harbor business, and now they're left with an application 0:07:21.360 --> 0:07:24.080 that then ran into marketing issues that then ran into 0:07:24.120 --> 0:07:27.280 cost issues. So they're not really in a great place 0:07:27.360 --> 0:07:30.440 right now. Despite the new profitability they're showing. 0:07:30.760 --> 0:07:32.880 Kind of sounds like next stop. You know, the CEO 0:07:32.960 --> 0:07:34.720 has to be an expert and how to sell a company. 0:07:35.080 --> 0:07:38.640 Right, to be fair, Maybe at the time, many of 0:07:38.760 --> 0:07:41.960 us thought nobody would leave the home again, right, and 0:07:42.600 --> 0:07:45.480 a lot of workers are still working from home. 0:07:45.760 --> 0:07:47.000 You didn't think you'd go back to work. 0:07:47.200 --> 0:07:49.400 No, I'd never spent a day at home. Yeah, I 0:07:49.440 --> 0:07:51.840 was in the office every day. But there were people 0:07:51.880 --> 0:07:55.840 who thought, you know, this was a structural change, not 0:07:55.960 --> 0:07:58.560 that we wouldn't literally leave the home, but that we 0:07:58.600 --> 0:08:01.680 would work from home, we would exercise from home, we 0:08:01.720 --> 0:08:03.520 would only watch movies at home. And a lot of 0:08:03.560 --> 0:08:04.360 that has happened. 0:08:04.760 --> 0:08:07.880 Yeah, there's a balance, yes, But Matt, and you've seen 0:08:07.920 --> 0:08:10.560 so many other companies face this, right, You've seen other 0:08:10.640 --> 0:08:13.400 companies like the tech giants over investing and having to 0:08:13.440 --> 0:08:17.240 pull back. But what Peloton should have done right with 0:08:17.480 --> 0:08:21.880 scale as needed? They refuse to scale as needed. They 0:08:22.040 --> 0:08:25.040 went from zero to one hundred to prepare for demand 0:08:25.080 --> 0:08:28.720 that they were anticipating that never came. The smarter thing 0:08:28.760 --> 0:08:31.360 would have been to follow the Dell and Apple model 0:08:31.440 --> 0:08:36.640 of supply chain and build to a necessary degree. Now 0:08:36.720 --> 0:08:38.600 under this new leadership, they've done a lot of smart 0:08:38.600 --> 0:08:41.720 things to unwind the troubles of the prior management team. Okay, 0:08:41.880 --> 0:08:44.360 and they could have a pretty good app. But and 0:08:44.600 --> 0:08:46.200 one last thing I will say on this, because. 0:08:45.960 --> 0:08:46.520 It's just quick. 0:08:46.679 --> 0:08:49.679 Yeah, there's no stronger brand in fitness than Peloton. So 0:08:49.800 --> 0:08:51.360 there is something still interesting. 0:08:51.040 --> 0:08:53.440 There, right, It's a value you say, Peloton people know, 0:08:53.480 --> 0:08:55.520 all right, interesting And we figure they'll at least be 0:08:55.679 --> 0:08:57.640 at least one more chapter to this and he'll be 0:08:57.679 --> 0:09:00.800 covering a Bloomberg News chief technology correspondent Marker out there 0:09:00.840 --> 0:09:03.079 on the West coast, you're. 0:09:02.920 --> 0:09:06.480 Listening to the Bloomberg Business Week podcast. Catch us live 0:09:06.559 --> 0:09:09.600 weekday afternoons from two to five pm Eastern. Listen on 0:09:09.640 --> 0:09:12.199 Apple car Play and then brought auto with a Bloomberg 0:09:12.240 --> 0:09:14.720 Business act or watch us live on YouTube. 0:09:16.240 --> 0:09:18.840 I got some numbers for you. A Bloomberg News team 0:09:18.840 --> 0:09:22.240 put this out that wellness it's a big global business. 0:09:22.320 --> 0:09:25.720 It's about five point six trillion in rev revenue back 0:09:25.760 --> 0:09:28.360 in twenty twenty two. This is from the Global Wellness Institute. 0:09:28.360 --> 0:09:31.959 It's a big industry group, and they say research from 0:09:31.960 --> 0:09:34.640 the nonprofit organization says the industry has grown from three 0:09:34.679 --> 0:09:37.240 point four trillion in twenty thirteen. I'm throwing a lot 0:09:37.280 --> 0:09:39.880 of numbers, and by twenty twenty seven it's expected to 0:09:39.880 --> 0:09:42.840 grow an additional fifty seven percent to eight point five trillion, 0:09:42.920 --> 0:09:45.400 about twice's largess Germany's gross domestic product. 0:09:45.480 --> 0:09:46.720 Okay, there'll be a test. 0:09:46.600 --> 0:09:47.160 Year's end of this. 0:09:47.320 --> 0:09:49.440 Well do you know that seventy six point one percent 0:09:49.440 --> 0:09:50.439 of stats are made up? 0:09:53.240 --> 0:09:54.200 Why do you say that? 0:09:54.320 --> 0:09:57.040 I mean, how do you classify what people spend on 0:09:57.080 --> 0:10:00.400 wellness or not well by? By water is it wellness. 0:10:00.400 --> 0:10:03.320 Every time you buy something, you know, there's data collection, 0:10:03.720 --> 0:10:05.600 like there's stuff. Anyway, let's get to somebody who's got 0:10:05.600 --> 0:10:09.200 their own report on wellness and health and what consumers 0:10:09.240 --> 0:10:11.680 are actually thinking about their own state of health. The 0:10:11.720 --> 0:10:14.679 Carney Institute Consumer Institute has done somewhere. Katie Thomas is 0:10:14.720 --> 0:10:17.240 with us. She's lead at the Carnee Consumer Institute with 0:10:17.800 --> 0:10:20.240 us from Pittsburgh, Pennsylvania. I don't know if you have 0:10:20.280 --> 0:10:22.640 some comments on data, but let's go to your research. 0:10:22.800 --> 0:10:23.520 How are you. 0:10:24.720 --> 0:10:27.040 I'm doing well, Carol? How are you? Matt already scooped? 0:10:27.240 --> 0:10:29.840 You know, basically my whole brief by saying that is 0:10:29.920 --> 0:10:32.240 water wellness or not? Those are the exact kind of 0:10:32.320 --> 0:10:33.280 questions we were asking. 0:10:33.360 --> 0:10:35.280 So I played pickle wall the last two nights and 0:10:35.360 --> 0:10:38.560 it was fifteen dollars a session. Was that thirty dollars 0:10:38.600 --> 0:10:39.880 spent on wellness this week? 0:10:40.120 --> 0:10:40.360 Yes? 0:10:40.520 --> 0:10:40.679 Right? 0:10:40.720 --> 0:10:43.760 Well, yes, yes, I would say so. Yeah. So I 0:10:43.800 --> 0:10:46.680 think you're asking the exact right questions, which is, you know, 0:10:46.760 --> 0:10:49.800 our motivation going into this was to understand a little 0:10:49.800 --> 0:10:53.199 bit more how actual people talk about health and wellness 0:10:53.200 --> 0:10:55.600 as opposed to how we tend to bucket it when 0:10:55.600 --> 0:10:58.040 we talk about it from sort of a consumer trend 0:10:58.400 --> 0:11:01.960 or spend perspective. Well, when we talk to people about health, 0:11:02.000 --> 0:11:05.160 it's a lot more higher order than these like simple 0:11:05.240 --> 0:11:08.280 decisions that we're talking about here. Whether it's pickleball or 0:11:08.320 --> 0:11:11.840 even GLP ones or the sober curious movement, people have 0:11:12.000 --> 0:11:15.320 much heavier ways of thinking about health. But they also 0:11:15.400 --> 0:11:17.960 feel like they know how to make healthy decisions. So 0:11:18.360 --> 0:11:20.320 that's an area where as we look at these health 0:11:20.320 --> 0:11:22.920 and wellness trends and we keep kind of hammering home 0:11:22.960 --> 0:11:26.080 the communication of this is how to be healthier. Most 0:11:26.120 --> 0:11:29.120 people don't actually need that messaging. They either are defining 0:11:29.160 --> 0:11:31.760 it for themselves or they already know how to do it. 0:11:31.840 --> 0:11:33.200 Wait, so why did you do this? 0:11:34.200 --> 0:11:34.360 What? 0:11:34.559 --> 0:11:36.040 Like, how do you guys take this and then I 0:11:36.080 --> 0:11:40.760 either help your clients or find productive material and you know, 0:11:40.840 --> 0:11:42.600 help to make productive decisions out of it. 0:11:43.280 --> 0:11:46.040 Yeah, So what we really do is, honestly, it's in 0:11:46.160 --> 0:11:48.760 response to the fact that everyone feels like they have 0:11:48.840 --> 0:11:51.040 to kind of jump at every little blip you see 0:11:51.040 --> 0:11:55.120 on the radar. So whether it's electrolyte powders or you know, 0:11:56.320 --> 0:11:58.760 gut health or like, oh I've got to move and 0:11:58.800 --> 0:12:01.240 make these small shifts to all these little tiki taki 0:12:01.320 --> 0:12:03.640 health and wellness trends. And what we found is if 0:12:03.679 --> 0:12:06.920 you have a better understanding of a consumer's overall lifestyle, 0:12:07.000 --> 0:12:08.920 that will be a lot more impactful. So I think 0:12:09.120 --> 0:12:12.520 a great recent example of this is McDonald's actually taking 0:12:12.559 --> 0:12:16.240 salads off the menu right because they realize that when 0:12:16.280 --> 0:12:19.480 people go there, they're probably not looking for a salad, 0:12:20.000 --> 0:12:22.920 and there may just be other ways they define health 0:12:22.960 --> 0:12:24.720 from McDonald So it's not going all the way to 0:12:24.760 --> 0:12:27.559 a salad. Maybe it's grilled chicken tenders things like that. 0:12:27.640 --> 0:12:30.640 So it's really starting to kind of translate some of 0:12:30.679 --> 0:12:34.400 the overall lifestyle considerations and where people make trade offs 0:12:34.400 --> 0:12:36.959 and kind of couch things as health, like we said, 0:12:37.160 --> 0:12:41.000 as opposed to feeling like you have to overcorrect just 0:12:41.000 --> 0:12:44.720 because some small health and wellness, you know, little trend 0:12:44.760 --> 0:12:45.439 is bubbling up. 0:12:45.679 --> 0:12:48.640 I've been buying asa e bowls lately, Aggie loves My 0:12:48.720 --> 0:12:50.640 daughter loves assabols. 0:12:50.640 --> 0:12:52.000 Although they're packed with sugar. 0:12:52.080 --> 0:12:54.079 So I'm not sure that it's much different than I I've. 0:12:53.920 --> 0:12:55.880 Known you for such a long time when you weren't 0:12:55.880 --> 0:12:58.360 an asaya ball kind of guy. 0:12:58.480 --> 0:13:01.000 Yes, well, I mean, look, I'm leaning more into it 0:13:01.160 --> 0:13:02.360 because I'm getting older. 0:13:02.600 --> 0:13:04.520 Is that why you've done it out of it? 0:13:04.600 --> 0:13:07.040 I mean, yeah, of course I want to live longer, 0:13:07.800 --> 0:13:09.560 you know, I don't want to die of a heart 0:13:09.559 --> 0:13:13.560 attack and get diabetes. And but you know what, I'm 0:13:13.679 --> 0:13:16.520 in a very large cohort, right, I mean we're seeing 0:13:16.880 --> 0:13:19.920 I was talking to Alan Patrick Hov today, famous VC. 0:13:20.000 --> 0:13:21.800 Investor invests in longevity. 0:13:21.880 --> 0:13:26.400 In longevity his new company, Prime Time invest In trying 0:13:26.400 --> 0:13:28.880 to make life better for people who are older. And 0:13:28.920 --> 0:13:32.520 there are more people over sixty than there are under eighteen, 0:13:32.679 --> 0:13:38.120 So we're definitely directionally that's where we're headed, right, Katie. 0:13:37.040 --> 0:13:39.800 Yeah, absolutely, And that's part of what we're seeing here 0:13:39.880 --> 0:13:44.200 is just like a preference for preventative health as opposed 0:13:44.200 --> 0:13:46.960 to some of the other, again smaller things we've seen 0:13:47.000 --> 0:13:48.920 as a response to health lately. And then also of 0:13:48.960 --> 0:13:51.480 course factoring in mental health, and that's where some of 0:13:51.520 --> 0:13:54.680 this really starts to blur. And sometimes there's this inherent 0:13:54.800 --> 0:13:58.520 conflict with health of what's traditionally physically healthy as it 0:13:58.600 --> 0:14:01.720 relates to perhaps diet and exercise, and then what's sort 0:14:01.720 --> 0:14:04.480 of that self care bucket, right, Like, oh, I you know, 0:14:04.559 --> 0:14:06.560 having ice cream once a week or a glass of 0:14:06.600 --> 0:14:08.760 wine is sort of taking care of myself. It's good 0:14:08.760 --> 0:14:11.360 for my mental health. And so it's really that's part 0:14:11.400 --> 0:14:14.320 of the journey is figuring out for consumers and each 0:14:14.400 --> 0:14:18.000 brand's individual consumers, what are those trade offs people are making, 0:14:18.040 --> 0:14:21.160 how are they defining health, What is what matters most 0:14:21.200 --> 0:14:24.160 to them, like where they're gonna kind of make a sacrifice, 0:14:24.160 --> 0:14:26.440 Like a lot of people still don't eat healthy things 0:14:26.440 --> 0:14:29.240 because simply they don't taste good. And then there's a 0:14:29.280 --> 0:14:31.600 lot of products like some of those electrolyte powders that 0:14:31.600 --> 0:14:34.160 that's exactly why they're doing well is because people don't 0:14:34.240 --> 0:14:36.520 like plain water. So it's really just like trying to 0:14:36.520 --> 0:14:39.600 bring all those things together and strike the right balance 0:14:39.800 --> 0:14:41.760 to figure out what health really means to consumer. 0:14:41.760 --> 0:14:44.400 I mean, I spend six dollars, at least six dollars 0:14:44.440 --> 0:14:46.920 a week on a twelve pack of flavored Seltzer water, 0:14:47.320 --> 0:14:49.800 Like the flavored seltz water section that my grocery is 0:14:49.840 --> 0:14:51.000 now an entire aisle. 0:14:51.120 --> 0:14:52.840 I know, I know, it's like kind of crazy. I 0:14:52.880 --> 0:14:54.360 am just kind of blown away. I mean, and I 0:14:54.360 --> 0:14:56.000 feel like all we should do is be drinking water. 0:14:56.120 --> 0:14:59.800 To be quite honest, I actually quit drinking Katie too 0:15:00.040 --> 0:15:02.800 years ago. I've been California sober for two years. What 0:15:02.880 --> 0:15:03.800 do you think about weed? 0:15:05.680 --> 0:15:08.080 I mean, I think that's that's a great example of 0:15:08.120 --> 0:15:11.400 one way a consumer. Some consumers would claim that's not healthy, 0:15:11.440 --> 0:15:14.360 and some would say it is healthy. I think sort 0:15:14.360 --> 0:15:16.960 of in a similar vein Matt, we asked in our 0:15:17.040 --> 0:15:21.040 study what people think about GOP one's versus like having 0:15:21.080 --> 0:15:25.160 more of a body positivity self acceptance message. Ninety percent 0:15:25.200 --> 0:15:29.520 of people said self acceptance was actually healthier body positivity 0:15:29.560 --> 0:15:32.760 messages as compared to GLP one. So I mean, I 0:15:32.800 --> 0:15:35.400 think you see all these trade offs. Same goes with weed. 0:15:35.520 --> 0:15:39.200 Some people would say, hey, sober sober, not California sober. 0:15:39.320 --> 0:15:41.480 Others would say, do what you got to do that 0:15:41.560 --> 0:15:43.000 works for your lifestyle. All right. 0:15:43.040 --> 0:15:46.280 So we're in an economy that some would say that 0:15:46.280 --> 0:15:48.160 there are a lot of I think it's not even some. 0:15:48.320 --> 0:15:49.640 I think it's safe to say that there are a 0:15:49.640 --> 0:15:52.360 lot of Americans out there that are just struggling to 0:15:52.440 --> 0:15:55.320 kind of get by month to month. So having said that, 0:15:55.680 --> 0:15:57.040 you know, I don't know if something came up in 0:15:57.080 --> 0:16:01.400 your survey about you know, when the economies toky, it's 0:16:01.440 --> 0:16:03.680 harder to make those smarter, healthier decisions. 0:16:04.840 --> 0:16:07.880 Yeah, absolutely so some of what we saw about one 0:16:07.920 --> 0:16:10.880 in three consumers said that finances are one of the 0:16:10.920 --> 0:16:13.000 things that stand in the way of them being healthier, 0:16:13.040 --> 0:16:16.560 and then one and four said access, so maybe not 0:16:16.640 --> 0:16:18.880 being able to you know, get to the right foods 0:16:18.960 --> 0:16:20.440 or get to a gym or what have you. So 0:16:20.480 --> 0:16:23.800 there certainly are trade offs that happen there. But part 0:16:23.800 --> 0:16:25.840 of the other challenge that we're calling out with this 0:16:25.960 --> 0:16:28.440 brief is the issue with health washing, which is sort 0:16:28.480 --> 0:16:32.720 of similar to greenwashing, where everyone's throwing every claim on 0:16:32.880 --> 0:16:36.520 pack that they can it's just ultimately confusing consumers when 0:16:36.560 --> 0:16:39.280 really we should be looking at you know, public health 0:16:39.320 --> 0:16:42.320 and public policy for more consistent messages on like you know, 0:16:42.360 --> 0:16:45.120 fresh fruits and vegetables and all of that, and just 0:16:45.160 --> 0:16:48.120 like being thoughtful about what the whole lifestyle looks like 0:16:48.440 --> 0:16:50.800 and where consumers can kind of make those trade offs. 0:16:51.400 --> 0:16:55.240 You got your undergrad and ann arbor, right, you got 0:16:55.280 --> 0:16:58.360 your MBA in Chicago, You're in Pittsburgh right now, You're 0:16:58.480 --> 0:17:02.000 like a solidly Midwest That's right. 0:17:02.280 --> 0:17:03.040 Is it easier? 0:17:04.080 --> 0:17:06.439 Is it easier there because you're closer to the farms 0:17:06.440 --> 0:17:08.600 and natural food, or do you think on the coasts, 0:17:08.680 --> 0:17:11.600 I mean, is there a difference between like flyover Country 0:17:11.640 --> 0:17:12.760 and New York and LA. 0:17:13.600 --> 0:17:15.920 You know, just to clarify, those of us from Pittsburgh 0:17:15.960 --> 0:17:19.080 don't actually consider ourselves midwestern. So I never grew up 0:17:19.200 --> 0:17:24.760 being Midwestern. But no, just you know, just a nitpick, 0:17:24.880 --> 0:17:27.840 but no, but I am, well, let's be honest, No, 0:17:28.000 --> 0:17:30.119 I think you know, you do get a little bit 0:17:30.160 --> 0:17:32.760 of both. So it depends on what you're looking access to. 0:17:32.840 --> 0:17:35.360 The nice thing about you know, middle of the countries 0:17:35.800 --> 0:17:38.080 there it does tend to be a little bit more affordable, 0:17:38.720 --> 0:17:41.040 but it really just kind of depends on Again, it 0:17:41.040 --> 0:17:43.680 goes back to what people define as healthy. So is 0:17:43.760 --> 0:17:48.040 healthy local versus organic? And there are arguments to be 0:17:48.080 --> 0:17:50.440 made in either way. If you're getting meat that's organic 0:17:50.560 --> 0:17:54.760 versus something that's maybe not organic, But like hasn't you know, 0:17:54.800 --> 0:17:57.600 the supply chain is a lot shorter, so I think 0:17:58.080 --> 0:18:00.280 once again you get into those same sort of base. 0:18:00.320 --> 0:18:02.439 And that's the whole challenge with health and wellness is 0:18:02.560 --> 0:18:05.160 you can kind of call anything health and wellness. 0:18:05.200 --> 0:18:08.240 All right, Well, this was fun California's sober. 0:18:08.640 --> 0:18:09.200 I liked it. 0:18:09.280 --> 0:18:10.160 I know people are. 0:18:10.359 --> 0:18:12.680 I'm a Midwestern boy as well. I will point out 0:18:13.119 --> 0:18:14.800 go buck Eyes. I thought you were good. 0:18:14.880 --> 0:18:17.160 Oh no, I was gonna say go Blue. I haven't 0:18:17.200 --> 0:18:21.720 Jim Horba bobble Head behind me. Sorry, disagree the bane. 0:18:21.600 --> 0:18:22.280 Of my existence. 0:18:22.280 --> 0:18:24.639 They're good lately, you know I love it. 0:18:24.720 --> 0:18:26.200 Katie Thomas, thanks so much. 0:18:26.280 --> 0:18:26.600 Be well. 0:18:26.680 --> 0:18:29.560 Let She's a lead at the Carney Consumer Institute, joining 0:18:29.600 --> 0:18:33.920 us there in Pittsburgh. Organic natural, what do you buy? 0:18:34.040 --> 0:18:35.439 You know what? I will be honest. 0:18:35.600 --> 0:18:41.879 I was all about organic uh for years until I 0:18:41.960 --> 0:18:44.520 moved here and had kids and like money got tight. 0:18:44.600 --> 0:18:46.600 I used to have so much disposable income as a 0:18:46.640 --> 0:18:50.280 single guy. And now that I'm married and diffay Westchester 0:18:50.400 --> 0:18:54.280 taxes and I'm paying like you know, college administration prices 0:18:54.320 --> 0:18:56.880 for preschool. I just buy whatever's cheapest. 0:18:57.600 --> 0:18:59.760 I know it changes, right when you have everything's expensive. 0:19:01.160 --> 0:19:05.040 You're listening to the Bloomberg Business Week podcast. Listen live 0:19:05.119 --> 0:19:08.040 each weekday starting at two pm Eastern on Apple car 0:19:08.080 --> 0:19:11.040 Play and Android Auto with the Bloomberg Business App. You 0:19:11.080 --> 0:19:14.320 can also listen live on Amazon Alexa from our flagship 0:19:14.400 --> 0:19:18.200 New York station Just say Alexa play Bloomberg eleven thirty. 0:19:19.680 --> 0:19:23.080 All right, so from the Magic Kingdom to the platform 0:19:22.920 --> 0:19:25.520 formerly known as Twitter, ya hear thisss leader, there's a 0:19:25.560 --> 0:19:26.000 few things. 0:19:26.040 --> 0:19:28.600 Well, and Silicon Valley at large, right, I mean, there's 0:19:28.640 --> 0:19:33.760 so much going on out there, especially with Elon Musk's companies, 0:19:33.840 --> 0:19:37.840 not just Tesla and Twitter, but also Neurlink. Max Chafkin 0:19:38.640 --> 0:19:40.760