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. Sloomberg
Speaker 1: Business Week with Carol Messier and Bloomberg Quick Takes Tim
Speaker 1: Stinovic on Bloomberg Radio. Hi, everyone, Welcome to the weekend
Speaker 1: edition of Bloomberg Business Week. A volatile week for markets,
Speaker 1: to say the least, headline by the Federal Reserves first
Speaker 1: policy meeting and him, it looks like the devish side
Speaker 1: of Jerome Powell is no more. He's definitely gone more hawkets. Yeah,
Speaker 1: you can see that again, the Fed chair saying that
Speaker 1: he's open to more interest rate increases than forecast if
Speaker 1: needed to help curb inflation. Those hikes almost certain to
Speaker 1: begin in mid March. Risk assets taking big hits so
Speaker 1: far this year, and there's a big chill settling over
Speaker 1: market sentiment these days. It is the subject of this
Speaker 1: week's cover story of More than That in just a Moment.
Speaker 1: Also ahead in the broadcast, how the US is preparing
Speaker 1: for a major attack on its power grid, the next
Speaker 1: big breakthrough in genetic testing, and we'll also to hear
Speaker 1: how monetary policy and inflation are affecting main Street. We're
Speaker 1: gonna do that with Jeff Jones. He's the CEO of
Speaker 1: H and R Block. All of that to come first up, though,
Speaker 1: let's welcome the editor of Bloomberg Business Week magazine, Joel
Speaker 1: Webber and Joe. We're gonna go in depth on the
Speaker 1: cover story in our next segment. Um, we know a
Speaker 1: big sell office underway. Your team, though, was all over
Speaker 1: it was it almost impossible not to do the markets
Speaker 1: as the cover story this week. Yeah, sometimes you just
Speaker 1: have to recognize that something is happening and that um,
Speaker 1: it's involving the markets and and uh, that's where we
Speaker 1: kind of went to with this one. And we just
Speaker 1: have this had a spiky sense that there's this change
Speaker 1: that's underway um uh, and that markets are trying to
Speaker 1: figure out what what to make of a rising rate environment. Um.
Speaker 1: And you know, we had this statement from Jay Pal
Speaker 1: that really took the markets in another direction. Um. And
Speaker 1: to see the boomerang that started at the beginning of
Speaker 1: the week where things were read and then rebounded, that
Speaker 1: was it was just really funny and we were like,
Speaker 1: what's going on here? And who can we talk to
Speaker 1: to get it right, and that's what led us to
Speaker 1: Mike Creagan. And we're gonna hear much more from Mike
Speaker 1: Reagan in just a few minutes with details on that
Speaker 1: cover story from cold Markets though to hot Sauce, because
Speaker 1: we did hear Joel and look, this is how the
Speaker 1: sausage is made right, we heard that there was another
Speaker 1: candidate in the running for this week's cover story. Had
Speaker 1: it not been for the big dip in markets, we
Speaker 1: likely be talking more about Austin Carr's great feature on
Speaker 1: big Hot Sauce. Um. I'm a big hot sauce guy
Speaker 1: and I do my I do my part to support
Speaker 1: big hot sauce. What do we need to know? Yeah,
Speaker 1: we can still talk about hot sauce. Um. So there's
Speaker 1: a company called McCormick and I think for the most
Speaker 1: part you probably know McCormick as a spice company. Yeah, um,
Speaker 1: you know you. I opened my spice s rawer and
Speaker 1: there's a bunch of red capped little little containers of spices.
Speaker 1: That's McCormick. Um. But in the last few years, and
Speaker 1: under a new CEO, they've really um doubled down on
Speaker 1: a growth strategy, which is hot sauce UM and it
Speaker 1: actually started. The first acquisition they made was Fringes the
Speaker 1: mustard Um, and then they went for Frank's Hot Sauce
Speaker 1: and then and they recognized that that was going well,
Speaker 1: and so they decided they needed more hot sauce and
Speaker 1: they went for Cholula. That's my Yeah, that's a lot
Speaker 1: of people feel that same way. So they've really turned
Speaker 1: into this little it's like a hot sauce roll up almost,
Speaker 1: and that's giving the company new growth, new markets, UM
Speaker 1: and it could you know, unlock some There's the condiment
Speaker 1: rivalry is just priceless. There's the catch up world, there's
Speaker 1: the mayonnaise world, and the hot sauce one. You know,
Speaker 1: people just keep coming back for more and more and
Speaker 1: more UM and it could give them a leg up
Speaker 1: in terms of what the next kind of condiment breakthroughs
Speaker 1: might look like. Okay, well, we can't talk about McCormick
Speaker 1: though without talking about you know that the surge in
Speaker 1: at home cooking at the beginning of the pandemic. And
Speaker 1: I thought you were gonna say you can't talk about
Speaker 1: it without talking about pet prikup. But well, we'll talk
Speaker 1: about that later. We will talk about that later. And
Speaker 1: I'm just wondering about how the company sees Hot Sauces
Speaker 1: sort of getting them through and pass the pandemic and
Speaker 1: beyond beyond spices that they're known for. Well, the the
Speaker 1: spice thing is really interesting, just to kind of take
Speaker 1: a moment with that. Um And And Austin Carr writes
Speaker 1: about this Tamaric shortage, which is I think one of
Speaker 1: the kind of great things in the story, just like
Speaker 1: thinking through logistics of like, you know your main source
Speaker 1: of tamaric, suddenly you're not gonna be able to rely
Speaker 1: on them. It's one of the ingredients. And in the
Speaker 1: mustard American give became very close to having this massive
Speaker 1: mustard shortage that people probably didn't realize. People really have
Speaker 1: these brand affinities, right, and we think about that through
Speaker 1: consumer goods a lot. Um and Hot Sauce is sort
Speaker 1: of like a way that I think people um have
Speaker 1: an affinity for brands. And so McCormick is moving in
Speaker 1: behind the scenes. You don't necessarily know that in the
Speaker 1: same way that their Red Cap spices. You don't know
Speaker 1: that Cholula even owns is owned by McCormick. McCormick's name
Speaker 1: shows up. Now we're on the bottle, and yet they
Speaker 1: get all the goodness that comes from a brand that
Speaker 1: people have affinity for. You know, it was really cool
Speaker 1: about this story. It was such a deep dive into
Speaker 1: the company's history and understanding, like its origins. But it
Speaker 1: also I had no idea about the work that McCormick
Speaker 1: does for a lot of other well known brands in
Speaker 1: terms of developing products. Yeah, you won't get a whole
Speaker 1: lot of details from this because flavor since fragrances, all
Speaker 1: of that stuff, it's pretty uh covert, top secret stuff
Speaker 1: because people don't wanna let it be known that they
Speaker 1: partner with others. So one of the things that McCormick
Speaker 1: is it's pretty quiet about this side of its business.
Speaker 1: But it basically consults with a lot of different brands
Speaker 1: and food manufacturers on the flavoring side, and that is
Speaker 1: another opportunity for growth. Part of that has been driven
Speaker 1: by tech um. For instance, one of the sources that
Speaker 1: we talked to is said that basically, you know, not
Speaker 1: so long ago, there was not that many types of
Speaker 1: cherry flavoring, and now there's kind of hundreds of them
Speaker 1: because of what they've been able to unlock. Yeah, and
Speaker 1: who knew that snack espionage was a threat? I think
Speaker 1: about cyber so cybersecurity and other things. Um. It is
Speaker 1: a great deep dive and a really great read by
Speaker 1: Austin carr Um. Joel. Thank you so much, Burg Business.
Speaker 1: We get her Joel Webber and he's gonna stick around
Speaker 1: with us. For our next segment, we're gonna talk about
Speaker 1: this week's cover story. Yeah, we're gonna break down the
Speaker 1: stock markets ugly start too and why investors might want
Speaker 1: to have the CFO put on their radar. You're listening
Speaker 1: to Bloomberg Business Week. This is Bloomberg. This is Bloomberg
Speaker 1: Business Week with Carol Messer and Bloomberg Quick Takes Tim
Speaker 1: Stinovik from Bloomberg Radio. As we mentioned at the top
Speaker 1: of our program, this week's cover story zeroing in on
Speaker 1: the sharp downturn in markets to start off this year.
Speaker 1: It was also Bloomberg big take by the way this week,
Speaker 1: and it couldn't have been time to any better. Talk
Speaker 1: about the magazine just hitting it right on the money. Yeah,
Speaker 1: shout out to Joel Webber and the team at Bloomberg
Speaker 1: Business Week. This story Carol coinciding with the Federal Reserve
Speaker 1: Chair Jerome Powell, saying that the Central Bank its poised
Speaker 1: to move away from what he called quote highly accommodative
Speaker 1: policy definitely a much more hawkish jay back to help
Speaker 1: investors find out what's real and what's not in a bid.
Speaker 1: All the talk of bubbles and high flyers is Bloomberg
Speaker 1: Business Week editor Joe Weber and the individual who wrote
Speaker 1: the piece we're talking about, Bloomberg Market Senior editor Mike Reagan.
Speaker 1: You know, the so called uh FED put the notion
Speaker 1: that the Fed would sort of come to the rescue
Speaker 1: of the stock market if their plans to tighten policy. Uh,
Speaker 1: you know, cause some volatility that is not exactly alive
Speaker 1: and healthy right now, you know, and if it is,
Speaker 1: you know, it's certainly going to take a lot more
Speaker 1: than what we've seen. It's going to take enough flatility
Speaker 1: in the market that it really starts to threaten the economy.
Speaker 1: And I think that's the underlying tension here. Uh, for
Speaker 1: a lot of investors, is okay. You know this easy
Speaker 1: money monetary policy really and low interest states really sort
Speaker 1: of boosted valuations, lifted all boats among the boats that
Speaker 1: were left at the most clearly though we're highly speculative,
Speaker 1: you know, innovative but not yet profitable companies in the market.
Speaker 1: So I think it's just a down draft that is
Speaker 1: that is infected the blue chips as well. But I
Speaker 1: do think, you know, the comparison everyone likes to make
Speaker 1: is to the dot com bubble, because it was very
Speaker 1: much UH evaluations got out of hand and then you know,
Speaker 1: the fall was much harder as a result. I think
Speaker 1: the big difference is those blue chips this time, they're
Speaker 1: just so healthy, They're so integral to UH, you know,
Speaker 1: the backbone of the economy. Your Amazon's, your Microsoft, your Apple, um,
Speaker 1: and there's just so much cash on their balance sheets
Speaker 1: that I think, rather than thinking about the FED put,
Speaker 1: I tend to think about sort of we call it
Speaker 1: the CFO put. You know, the notion that there's so
Speaker 1: much cash sitting UH in accounts at these firms that
Speaker 1: what are they gonna do about it if their own
Speaker 1: stocks get caught up in this down draft. Well, maybe
Speaker 1: they'll increase buybacks, Maybe they'll buy up some of the
Speaker 1: weaker names that are getting hit the hardest. I want
Speaker 1: to bring in Bloomberg Busines, we get it, or Joel
Speaker 1: Webber Chris Joel. You know, Tim and I were talking
Speaker 1: about what we're thinking about Mike's story back in December.
Speaker 1: A wild emotional year has changed investing maybe forever. And
Speaker 1: the wild emotional year continues in UM markets, no doubt
Speaker 1: about it. It is the big story this week. That
Speaker 1: was really good radio voice that thank you very much. UM. Yeah,
Speaker 1: so you look like we uh we we kind of
Speaker 1: spooled this one up. I like it to picking up
Speaker 1: a bat or putting a bat light up in the
Speaker 1: the sky for for Mike to see. And after last
Speaker 1: week and heading into this week, I was we knew
Speaker 1: we needed to do something big in the magazine about it.
Speaker 1: UM We called it the Big Chill as the cover story,
Speaker 1: and then of course we publish it in the morning.
Speaker 1: Markets go up and with like holding my breath about
Speaker 1: like wow, did I just make a mistake, And then
Speaker 1: on behold uh j Pal speaks and and things turn red,
Speaker 1: and and you know, I feel like it's all worked out,
Speaker 1: except rooting for Red can be slightly weird. I want
Speaker 1: your crystal ball, That's all I'm gonna say. But it
Speaker 1: does feel like there's this kind of just mood change.
Speaker 1: It feels like the winds have really changed, Mike, that
Speaker 1: that you know, this euphoria that um, and this big
Speaker 1: punch bowl where everybody was having a good time suddenly
Speaker 1: like maybe the party's really ending here, right, Yeah. Absolutely,
Speaker 1: And I think you know, we've grown so accustomed in
Speaker 1: the decade after the financial crisis to sort of, you know,
Speaker 1: rely on the FED to kind of you know, pause
Speaker 1: or to get a little more stimulative whenever ever we needed,
Speaker 1: you know, the market needed it. It's just such an
Speaker 1: different different environment this time. I mean, obviously cp I
Speaker 1: at seven percent unemployment rate, near those pre pandemic lows,
Speaker 1: you know, some of the lowest unemployment readings of our lifetime.
Speaker 1: So you know, you just get back to the basics.
Speaker 1: What's the FEDS role, what's their duty? Well, it's to
Speaker 1: keep inflation reasonable around two not seven, and it's to
Speaker 1: keep the job market strong. So um, you know, the
Speaker 1: job markets fine, there's no need to keep you know,
Speaker 1: keep stimulating the economy with the job market the way
Speaker 1: it is. But that inflation, and you know, I think
Speaker 1: probably a hundred years from now, we'll be able to
Speaker 1: figure out how much of it was just the supply
Speaker 1: chain problems, how much of it was the easy monetary
Speaker 1: accommodations umal talked about in the press conference, you know,
Speaker 1: in terms of I hope I'll be here to look
Speaker 1: back and see how we assess everything exactly. But certainly,
Speaker 1: you know, their back is sort of to the wall
Speaker 1: that um, they have to they have to do whatever
Speaker 1: they have in their tool kit to attain this inflation, um,
Speaker 1: regardless of the of the cause of it, because they,
Speaker 1: you know, put their money, put all their chips on
Speaker 1: it being transitory. Uh. That's clearly transitory. Has clearly turned
Speaker 1: out to be a lot longer than anyone realized. And
Speaker 1: look the market. The U S stock market has been
Speaker 1: up in average of twenty four percent per year for
Speaker 1: the last three years, uh, two thousand twenty. So it's
Speaker 1: really hard to make the case that this temper cent
Speaker 1: dip in the SPI is enough to cause the FED
Speaker 1: to to reverse course. Um. And I think that was
Speaker 1: hammered home in the market action. But the third part
Speaker 1: of the FED mandate is to reduce my four A
Speaker 1: one came. I didn't hear that from didn't get that memo. Well,
Speaker 1: but Mike, how you mentioned the CFO put earlier, which
Speaker 1: I thought was just a genius part of the story.
Speaker 1: How how big and how did that compare? So like
Speaker 1: you know with the fed put has looked like and
Speaker 1: like just break that down for for folks are well,
Speaker 1: you know it's not going to be the type of thing.
Speaker 1: I mean, the fed put can get exercised, uh in
Speaker 1: the blink of an eye if if pal says, you know,
Speaker 1: gives a speech or the statement indicates that they're they're pausing.
Speaker 1: I think you know this CFO put that we made up,
Speaker 1: it's something that is gonna play out over time, you know, uh,
Speaker 1: and not all at once. It's uh, you know what
Speaker 1: does a company and that The example I used in
Speaker 1: the story was, um, Microsoft's takeover of Activision Blizzard. You know, uh,
Speaker 1: a stock that just went through the roof during the pandemic.
Speaker 1: Everyone was Stockholm playing video games and then that you
Speaker 1: for your faded fast and the stock crashed and then
Speaker 1: Microsoft comes in and swoops in and says, you know,
Speaker 1: we've got a lot of cash on the bounce sheet.
Speaker 1: This is a company that fits in perfectly as a
Speaker 1: bolt on acquisition, uh for US. So um, you know
Speaker 1: they took a big swing at that, a big premium
Speaker 1: on what the stock was trading at. That's those type
Speaker 1: of things. You know, they'll support the target company obviously,
Speaker 1: but they kind of have a halo effect on the
Speaker 1: whole space. Now everyone's thinking, Okay, what's the next company
Speaker 1: like that that these tech shians are gonna be shopping for? So,
Speaker 1: you know, I think we'll have to see it play
Speaker 1: out over time. That was Bloomberg Market Senior editor Mike
Speaker 1: Reagan and the editor of Bloomberg Business Week, Joel Weber.
Speaker 1: I feel like I'm not kidding that crystal ball that
Speaker 1: Joel has so right on. How does he know? I
Speaker 1: don't know. He's just smart, all right. Coming up next,
Speaker 1: the power and influence a big tech on Capitol, what
Speaker 1: lawmakers are investing in, and whether a stock trading band
Speaker 1: for members of Congress could be in the offing. Finally,
Speaker 1: haven't they been talking about this for a long time?
Speaker 1: They have, but now we're finally hearing more and more
Speaker 1: public calling for it. This is Bloomberg Broadcasting from the
Speaker 1: financial capital of the World, Bloomberg eleven Rio in New
Speaker 1: York to Washington, d C. Bloomberg to Boston, Bloomberg one
Speaker 1: O six one does San Francisco, Bloomberg nine six to
Speaker 1: the country, Sirius XM, Chamber one nine and around the globe,
Speaker 1: the Bloomberg Business and Bloomberg Radio dot Com. This is
Speaker 1: Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes
Speaker 1: Tim Stenovan on Bloomberg Radio. So we talked a lot
Speaker 1: about the influence of America's largest tech companies have on
Speaker 1: the stock market, and some feel they also have sway
Speaker 1: of the members of Congress as well. In the politics
Speaker 1: section this week, Bloomberg Business Week National correspondent Josh Green
Speaker 1: takes a look at a brewing antitrust fight on Capitol Hill.
Speaker 1: It's getting a bit awkward, Carol, for lawmakers to own
Speaker 1: big tech stocks. One of the things that sort of
Speaker 1: launched this piece was, you know, there's just a lot
Speaker 1: of talk in Washington, a lot of joking among congressional
Speaker 1: staffers that if somebody wanted to start a hedge fund
Speaker 1: and opening ETF, what they ought to do is just
Speaker 1: mimic Nancy Pelosi's trade to make some of the money.
Speaker 1: You know, I went through painstakingly congressional disclosure filings to
Speaker 1: look at how many members of Congress own the four
Speaker 1: big tech stocks that I wrote about, and I chose
Speaker 1: the four Apple, Amazon, Google Alphabet, and Facebook Meta because
Speaker 1: they're the ones targeted by an anti trust build. It's
Speaker 1: moving through the Senate that that, unlike most things in Washington,
Speaker 1: actually has some biports and support. And yeah, I mean
Speaker 1: the numbers that come out that we shown the new
Speaker 1: issues that big, we are just shocking. I mean they are.
Speaker 1: We found ninety five congressmen and senators to collectively own
Speaker 1: um tens of millions, if not over a hundred millions
Speaker 1: of dollars of these just these four tech stocks alone.
Speaker 1: And of course these are the same members of Congress
Speaker 1: they're ultimately going to be designing these companies regulatory fate
Speaker 1: when it comes time to vote on this bill. Do
Speaker 1: you think it could possibly sway them in any way?
Speaker 1: Just say something? I have to say. We talked about
Speaker 1: this so much in the newsroom and it's been something
Speaker 1: that our team we've really been thinking a lot about. Like,
Speaker 1: I am amazed that there isn't already something um uh
Speaker 1: in terms of the Laura are on the books already
Speaker 1: that says no, of course you can't own them. It's
Speaker 1: it's absolutely insane and I think it's right in the
Speaker 1: piece you know, I did a little research, a little
Speaker 1: reporting on like like how did we get to this state?
Speaker 1: And one of the answers I got from people in
Speaker 1: Congress is that, look, it's actually kind of hard. A
Speaker 1: Comress doesn't make it easy to find this stuff. They
Speaker 1: do have to publish disclosure of filings, but like some
Speaker 1: of them are handwritten, like in pen you know what
Speaker 1: I mean. It's not the kind of thing we can
Speaker 1: easily be searched for and rogated. And then it's also
Speaker 1: difficult to figure out from legislation moving through Congress, like
Speaker 1: to be able to connect the dots will center so
Speaker 1: and so owned this company and this bill is going
Speaker 1: to affect it. What makes the current moment so interesting
Speaker 1: is that there's a nanti trust will going through the Senate.
Speaker 1: It really only affects four big companies that are all
Speaker 1: hot tech stocks, and so it was this rare moment
Speaker 1: of convergence what was unusually easy to see and the
Speaker 1: fact that the ownership is so extreme and the public
Speaker 1: has begun to notice this. Uh, you know, there's a
Speaker 1: center from North Carolina, Richard Burr, who was just investigated
Speaker 1: by the SEC. They're not pressing charges, but for his
Speaker 1: ample stock trading. David Produce, a Georgia senator who lost
Speaker 1: his reelection last November in part because of stock trades
Speaker 1: and the impression that he was doing inside of trading.
Speaker 1: So I think the public is finally kind of cottoning
Speaker 1: onto their realization that, oh my gosh, there's so much
Speaker 1: money at stake here, should they really be allowed to
Speaker 1: do this? Most people, if you look at Pole City,
Speaker 1: answer is no. Well it's so interesting, Josh, and I
Speaker 1: remember Senator Kelly Leffler falling under similar criticism in about
Speaker 1: her stock trades. Former senator, everyone's always surprised when I
Speaker 1: tell them that business journalists, if you work for, you know,
Speaker 1: a respectable media outlet, you are not allowed to hold
Speaker 1: individual stock and companies that you follow, Like no brainer.
Speaker 1: Like it's a no brainer because there could be an
Speaker 1: appearance of a conflict of interest, and I'm including myself
Speaker 1: in that category. Right, So it's like it's just I
Speaker 1: think mind blowing to a lot of people that the
Speaker 1: people who are making the rules can also benefit uh
Speaker 1: because of information that they know about what they're going
Speaker 1: to do. Not just that though, but it's about the
Speaker 1: regulatory part of this, right, So okay, take us now
Speaker 1: to where we are because they're The tone has shifted
Speaker 1: a little, even coming from Nancy Pelosi, who has said
Speaker 1: recently that you know, it's a free market, that she
Speaker 1: doesn't think that she should not be allowed to trade stocks. Um,
Speaker 1: what has she said lately? Well, so she said, it's
Speaker 1: just a couple of day reporters went to her and said, hey,
Speaker 1: should this really be allowed? And like, you know, you
Speaker 1: just have ungodly amounts of money any stock that you're regulating,
Speaker 1: and she she kind of haughtily dismissed the idea. Today,
Speaker 1: it's the free country. I should be litist. I mean,
Speaker 1: since then, there has been all sorts of criticism, not
Speaker 1: just a Pelosi um about members of Congress and generally,
Speaker 1: but it's it's just such an easy um. It's so
Speaker 1: easy to the public to see the conflict of interest,
Speaker 1: and it really did draw criticism. Pelosi yourself was criticized
Speaker 1: quite vocally by a former President Trump who who said, look,
Speaker 1: an enormous conflict of interest here. That's coming from a
Speaker 1: guy who knows a thing or two about conflicts of interest.
Speaker 1: I need Pelosi decided that it was just impossible to
Speaker 1: keep up that guy until last week she came out
Speaker 1: and said, well, you know, look, if if Congress decides
Speaker 1: they wants to pass rules, you know, that's up to them.
Speaker 1: And in speaking to kind of good government types who
Speaker 1: are usually very down on this kind of thing, there
Speaker 1: really is some optimism that that these rules are finally
Speaker 1: going to pass and there may finally be um some
Speaker 1: kind of a ban on congressional stock rating. But we'll
Speaker 1: just ratching it back to like what we had Bloomberger
Speaker 1: allowed to do. Right, we can invest our foreign case
Speaker 1: and index funds. No reason that members of the Congress
Speaker 1: shouldn't have to do that too. That was our national
Speaker 1: correspondent for the magazine, Josh Green, also joining as Bloomberg
Speaker 1: Business Week editor Joel Webber. You're listening to Bloomberg business Week.
Speaker 1: Coming up a company well known for its assist come
Speaker 1: tax time, it's now lending a helping hand to its
Speaker 1: main street base. We'll speak with H and R. Blocks
Speaker 1: Yo Jeff Jones on the other side. This is Bloomberg.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes. Tim Stinovik from Bloomberg Radio in Environment
Speaker 1: with there are so many questions about the outlook. It
Speaker 1: is always great when we can catch up with today's
Speaker 1: leaders in the corporate world, and one that we talked
Speaker 1: with this week was Jeff Jones. He's the president CEO
Speaker 1: at H and R Block. Jeff I spend time in
Speaker 1: the c suite at the likes of Gap and Target
Speaker 1: as well as at Uber, and now he has a
Speaker 1: front row seat to the trends that affected consumers in
Speaker 1: a time of growing financial uncertainty, particularly on main street. Well,
Speaker 1: I don't know if any of us know what normal
Speaker 1: means anymore, I think, is the honest answer. I certainly
Speaker 1: don't think that going backwards is what's going to happen.
Speaker 1: When I think about the consumer, and especially the consumers
Speaker 1: financial health, we think about in twenty nineteen, we were
Speaker 1: all talking about the fact that of Americans struggled to
Speaker 1: deal with a four dollar surprise FEDS that we all
Speaker 1: knew and cited it. Then jumped to the pandemic, personal
Speaker 1: savings rates at record high, media and check balances up
Speaker 1: more than fifty people, you know, lockdown, they can't spend,
Speaker 1: and now child tax credit payments have ended for tens
Speaker 1: of millions of people. Inflation is here we seek consumers
Speaker 1: potentially about to get refund surprises on the negative. So,
Speaker 1: you know, I think we're in an unstable world and
Speaker 1: the consumers trying to find the the new normal and balance,
Speaker 1: just like companies are. Well, how do we how do
Speaker 1: we reconcile that? With what we heard this week from
Speaker 1: FED chair J Powell. He was asked a question about
Speaker 1: inflation and it affecting Americans differently at different elements of
Speaker 1: the income spectrum, and he said it was less about
Speaker 1: inflation affecting some people more than others, but the issue
Speaker 1: was that people were who were living paycheck to paycheck.
Speaker 1: We're now spending so much on gas, so much on
Speaker 1: food that it was becoming an issue, and it is
Speaker 1: an issue. Explain that, Yeah, Well it's here's what we see.
Speaker 1: And you know, there's a great stat from the Financial
Speaker 1: Health Network that two thirds of Americans are not financially healthy.
Speaker 1: And I can tell you in our business. You know,
Speaker 1: when I travel around the country and I visit our
Speaker 1: offices and I here are consumers talk. We serve Main
Speaker 1: Street America, and I consistently hear that this tax refund
Speaker 1: is the most important check they get all year. But
Speaker 1: it's already spent um. They're using it to pay bills
Speaker 1: and reduce debt um. We here way too often that
Speaker 1: they're relying on payday lending or overdraft fees or other
Speaker 1: things just to get by in short term cash. So
Speaker 1: on the ground in communities across this country where we operate,
Speaker 1: we see every day our clients still struggling managing cash
Speaker 1: flow day to day, and you guys are working on
Speaker 1: helping those individuals. I'm curious about how that's going. And
Speaker 1: I also do wonder in this macro environment and be
Speaker 1: it FED strategy or what the FED says, how does
Speaker 1: that impact some of the business strategies that you've got
Speaker 1: out there, Jeff, and being able to implement them this year. Yeah. Absolutely.
Speaker 1: And So to two things that I'm thinking a lot
Speaker 1: about right now. One is our launch of Spruce, which
Speaker 1: is our mobile banking platform, and it is it is
Speaker 1: designed and built with that insight in mind that we
Speaker 1: hear from our customers this struggle. And so Spruce is
Speaker 1: really a product help people be good with their money,
Speaker 1: to save a little more UH, to make their dollar
Speaker 1: go father further with rewards um. You know, we think
Speaker 1: that product is right for the times given the real
Speaker 1: financial struggles that we know people have no fees, no
Speaker 1: minimum balances, no hidden fees, those kinds of things. That's
Speaker 1: that's one part of our business that we're very excited about.
Speaker 1: With this product, you and you can move forward no
Speaker 1: matter what the outlook this year. Absolutely, and we think
Speaker 1: in an environment where people are looking for tools to
Speaker 1: help them be better with money, that Spruce is even
Speaker 1: more right for the times because it is you know,
Speaker 1: no hidden fees, no minimum balances, and they're able to
Speaker 1: you know, set up really easy savings accounts. When they
Speaker 1: use the card at thousands of major retailers, they automatically
Speaker 1: get cash back into savings. So we think, you know
Speaker 1: that we know there's a large problem in America. That
Speaker 1: problem seems to still be real, and we think Spruces
Speaker 1: is right for the time. So, Jeff, what are your
Speaker 1: ambitions with Spruce? What firms are you try and to replace?
Speaker 1: Are you're trying to become a full replacement for a bank? Yeah,
Speaker 1: So when we looked at the landscape, this was this
Speaker 1: was very interesting for us because most people don't know
Speaker 1: that H and R Block used to be a federally
Speaker 1: chartered bank and we sold that charter years ago, but
Speaker 1: we've been offering multiple different financial products in the meantime.
Speaker 1: But as we looked at the at the banking landscape,
Speaker 1: you know, we see the traditional banks that that obviously
Speaker 1: have stability, um depending on the brand, they have questionable trust.
Speaker 1: We know banks are not widely trusted and they generally
Speaker 1: have have have been missing the modern user experiences in
Speaker 1: digital features. And then on the other side, those challenger
Speaker 1: banks are our feature rich, but we see the technology
Speaker 1: becoming less and less of a differentiator now and it's
Speaker 1: really about relationship and trust and brand and we know
Speaker 1: that that Block has that combination. So we think Spruce
Speaker 1: can be a really viable product in the market because
Speaker 1: it has the latest tech in features, but it's from
Speaker 1: a brand that people come to every single year, you know,
Speaker 1: when they're sharing their most intimate financial details. So talk
Speaker 1: a little bit, Jeff about you know, we talked a
Speaker 1: little about ambitions, but can you can you clarify to
Speaker 1: what extent you want H and R Block to be
Speaker 1: viewed as a bank. You talked about the banking charter
Speaker 1: that H and R Block sold off years ago, but
Speaker 1: what does the ultimate what does Spruce ultimately look like. So, Tim,
Speaker 1: we we are absolutely building H and R Block to
Speaker 1: be a financial services company for Main Street America. What
Speaker 1: does that mean a bank? Does that include a bank charter? No,
Speaker 1: it doesn't, you know. I mean we we have been
Speaker 1: down that path, UM, and we believe today with the
Speaker 1: partnership we have with Meta Bank, we have very favorable
Speaker 1: economics with them. They're a great partner and as a
Speaker 1: program sponsor, we can deliver the customer experience, the product,
Speaker 1: the customer service without having to be a bank ourselves.
Speaker 1: And so we feel very good about that relationship, not
Speaker 1: only with Spruce, but that's how we've been operating our
Speaker 1: Emerald Card and our Emerald Advance and other products now
Speaker 1: for many years. It's something that we see with a
Speaker 1: lot of fintech players. We see it with Wealth Front,
Speaker 1: we see it with other companies like Chime for example.
Speaker 1: We've got Chris Britt, the founder and CEO on our
Speaker 1: show here before UM, Why is that a route that's
Speaker 1: the right route to take? I think what we've learned
Speaker 1: from the customer is many many times they don't know
Speaker 1: who the bank actually is, UM, and what they're focused
Speaker 1: on in today's world is the customer experience, and I
Speaker 1: think that's how the fin techs really launched their disruptive
Speaker 1: start versus traditional banks by building wonderful mobile apps that
Speaker 1: were fitture, feature rich, and you know, just really elegant
Speaker 1: to use. I think technology is caught up, and you know,
Speaker 1: we're now launching the same kind of tech um. But
Speaker 1: you know, the bank is what's on the back of
Speaker 1: the card. It's very important to us as a business partner.
Speaker 1: But in this context, you know, the customer knows their
Speaker 1: relationship with Block and Spruce. How do you look more
Speaker 1: broadly at everything that's going on, Jeff. In the financial industry,
Speaker 1: we talking this week about UBS buying the robo advisor
Speaker 1: wealth Front, and it's interesting to see kind of older
Speaker 1: banks are older financial companies who kind of maybe you know,
Speaker 1: turned away from some of the up starts a few
Speaker 1: years ago, are now saying, wait a minute, because there's
Speaker 1: a lot of money to be made in these alternative
Speaker 1: platforms and a lot of money being managed, how do
Speaker 1: you think about it against your business? Obviously not apples
Speaker 1: to apples, but I'm just curious from a big picture
Speaker 1: of view, there's no question that technology is playing a
Speaker 1: role in everything we do UM. That could be how
Speaker 1: we've digitized our assisted tax preparation business, so you can
Speaker 1: get full expert help from somebody, but you do it
Speaker 1: all virtually. Or with our company Wave, which is a
Speaker 1: small business UM SASS software company, banking, account seeing, payroll, invoicing,
Speaker 1: all completely integrated into one product. And it's a d
Speaker 1: I Y product obviously spruce, but even at a maybe
Speaker 1: a more simple level. You know, the way we think
Speaker 1: about our machine learning models and AI to enable our
Speaker 1: tax professionals to have more specific and relevant tax advice.
Speaker 1: It doesn't replace them in their relationship, but allows them
Speaker 1: to focus on serving the client, not on data entry.
Speaker 1: And and we absolutely see that and we embrace it
Speaker 1: as a company. So I am curious. We talked a
Speaker 1: little bit at the beginning about outlook and what you're seeing,
Speaker 1: and there was this was a crazy week in the
Speaker 1: financial markets, certainly with a FED meeting one and done,
Speaker 1: but a lot more to come in terms of specifics
Speaker 1: of running your business, Jeff, whether it's access to labor,
Speaker 1: the labor labor costs in particular, which we know J
Speaker 1: Powell of the Federals I've talked about a lot in
Speaker 1: his meeting. This week. Um, what's what's the biggest things
Speaker 1: that you find difficult managing or difficulty managing you and
Speaker 1: your team. Well, there's no question we're we're focused on
Speaker 1: transformation and growth and so you know, there are many
Speaker 1: things that are hard about that. With respect to labor,
Speaker 1: we're an interesting company because on one hand, we are
Speaker 1: a retailer with a lot of retail footprint, but those
Speaker 1: that work in our offices are tax professionals and the
Speaker 1: way they're paid is based on the service they provide
Speaker 1: in their level of certifications, so they're not an hourly worker.
Speaker 1: Uh and on average, we have about ten years of
Speaker 1: tenure with our tax bros. So they come back year in,
Speaker 1: year out. We obviously, you know, compete heavily for the
Speaker 1: best engineering and data science talent, but I think that's
Speaker 1: more that's more common across companies that are doing what
Speaker 1: we're doing. So it's manageable. It sounds like knit net.
Speaker 1: It has been manageable for us because us our labor
Speaker 1: model is just different from how people view, you know,
Speaker 1: retailers in general. That's Jeff Jones, president CEO at H
Speaker 1: and R Block. That company, by the way, set to
Speaker 1: report earnings on Tuesday, and that reps up the first
Speaker 1: hour of the weekend edition of Bloomberg Business Week from
Speaker 1: Bloomberg Radio. I'm Carol Masser and I'm Tim Stanivik. Coming
Speaker 1: up in our next hour, we may be on the
Speaker 1: cusp of the next big breakthrough in precision medicine. We're
Speaker 1: going to explore the promise of genomic testing and analysis
Speaker 1: with the CEO of gene d X and a new
Speaker 1: player in the market for baby food, one that's projected
Speaker 1: to approach a hundred billion dollars in the next five
Speaker 1: years that entire market. We're going to catch up with
Speaker 1: the co founders of you Me and Up next on
Speaker 1: Bloomberg Business Week, the US government has been using a
Speaker 1: remote island to simulate hacks on the electrical grid. Here's
Speaker 1: the question, are we truly prepared for the real thing?
Speaker 1: Stick around to find out. This is Bloomberg. This is
Speaker 1: Bloomberg Business Week. Inside from the reporters and editors who
Speaker 1: bring you Americas is trusted business magazine plus global business,
Speaker 1: finance and tech news As it happened, Sloomberg Business Week
Speaker 1: with Carol Messer and Bloomberg Quick Takes. Tim Stinovic on
Speaker 1: Bloomberg Radio. I am Carol Masser and plenty ahead in
Speaker 1: our second hour of the weekend addition to Bloomberg Business Week,
Speaker 1: including a look at the promising and increasingly competitive world
Speaker 1: of genetic testing. We'll do that with the CEO of
Speaker 1: gen d X. We're also going to be joined by
Speaker 1: the co founders of the baby food startup you Me.
Speaker 1: They're looking to crack a fast growing market and blaze
Speaker 1: a trail for women and venture capital. You know a
Speaker 1: little bit about baby food? Yeah too much actually, alright.
Speaker 1: Plus our Bloomberg Pursuits team it's out with its special
Speaker 1: wellness section, everything from prehab and hitting monks. Yep, that's
Speaker 1: a thing. It is a thing to help avocado oil
Speaker 1: and blueberries as food and perhaps even skincare. It's kind
Speaker 1: of getting fluid back and forth there. Yeah, but you know,
Speaker 1: not necessarily you want to don't want to eat the
Speaker 1: stuff that you're supposed to put on your face, right,
Speaker 1: I don't know, alright. First up this hour, this week's
Speaker 1: Technology section takes a look at the potential devastation of
Speaker 1: a cyber attack on America's power infrastructure and what the
Speaker 1: federal government is doing to get us ready for such
Speaker 1: an event. A large part of what it's been doing
Speaker 1: is running drills on a small island that's actually not
Speaker 1: too far from where we are right now. These exercises
Speaker 1: have been taking place on Plumb Island. It's an isolated
Speaker 1: spit of land just off of the northeastern tip of
Speaker 1: Long Island, New York. Let's bring in Bloomberg new cybersecurities
Speaker 1: are Mike Riley. He wrote the story with help from
Speaker 1: William Turton and Jordan Robertson. Mike joins us. Now, So, Mike,
Speaker 1: I have passed Plumb Island, gone through Plumb Gut. Uh
Speaker 1: in Long Island sound? Um, I'm glad you're okay now
Speaker 1: suffering from Plumb Gut. Well, it comes up on maps
Speaker 1: and it's like you cannot go there, if you're if
Speaker 1: somebody who spends time in the waters, you're not allowed
Speaker 1: to stop there. Tell us about Plumb Island. Um, Yeah,
Speaker 1: it's got a long and interesting history. It's also an
Speaker 1: object of curiosity for people who live in the area
Speaker 1: because you're not allowed to access that. There's a private
Speaker 1: ferry that's run by the government that's behind the guard post.
Speaker 1: That's the only way that you can get to the
Speaker 1: island what and you if you get too close to
Speaker 1: it as a boat like you, you're told about it
Speaker 1: because another boat will come out and shoot you away.
Speaker 1: And what's on the island is a lab for studying
Speaker 1: animal diseases. UM. One of the reasons why this is
Speaker 1: so isolated is because they're worried that terrorists might attack
Speaker 1: a lab like that and use the diseases for for
Speaker 1: bio terrorism. But the other thing that they've been doing
Speaker 1: on and is running these exercises of UH to try
Speaker 1: and understand and get better at responding to a major
Speaker 1: hack on the grid. And so they literally built out
Speaker 1: a small version of a grid with substations and transmission lines,
Speaker 1: and over a period from UH they would run these
Speaker 1: exercises that involved the National Guard and utility crews from
Speaker 1: some of the major utilities, and they would practice what
Speaker 1: happens trying to recover from a major cyber attack. And
Speaker 1: it suffice to say that it's a it's a really
Speaker 1: really hard thing to do and and you too, these
Speaker 1: are not trained well enough to do it, and so
Speaker 1: often things went badly wrong. Okay, So so talk to
Speaker 1: us a little bit about that, because what exactly is
Speaker 1: the worst case scenario here that the DARPA and other
Speaker 1: authorities are actually trying to plan for, and why aren't
Speaker 1: we in a great position to actually respond to it. Well,
Speaker 1: it turns out the the grid is a unique kind
Speaker 1: of target for a cyber attack, very different than just
Speaker 1: about anything else you know, gas pipeline or uh, you know,
Speaker 1: other upport other infrastructure because of the physics involved in
Speaker 1: operating the grid. So even though we don't think much
Speaker 1: about it, there's a very delicate balance that has to
Speaker 1: go on of electricity going onto the grid and electricity
Speaker 1: coming off of the grid. And usually this is like computerized,
Speaker 1: and they do a lot of planning for this, and
Speaker 1: usually it all goes swimly well, but in very unique cases,
Speaker 1: if they gets out of balance and that balance uh
Speaker 1: disturbs the physics of the grid enough, the entire grid
Speaker 1: or large section of it i should say, can collapse
Speaker 1: the power essentially that that that is and then and
Speaker 1: that can lead millions of people without power. The last
Speaker 1: time this really happened in a significant scale was interesting, Yeah,
Speaker 1: where where basically the whole grid went down in the
Speaker 1: Northeast and millions of people were without power. So getting
Speaker 1: it back up from that state is really really hard,
Speaker 1: and if hackers are already in the system, it's especially hard.
Speaker 1: And so they practiced doing that, trying to recover a
Speaker 1: system from from the grid after it's been depowered and
Speaker 1: it's and and the hackers were able to create all
Speaker 1: sorts of chaos and make that that recovery very difficult.
Speaker 1: Bottom line is the attackers could extend a blackout from
Speaker 1: what might have been a few hours to days or
Speaker 1: even weeks under these circumstances. Well, and what's interesting, Mike,
Speaker 1: and you remind us hackers are in the system, and
Speaker 1: thank the United States, go back to what was uh
Speaker 1: and you guys were doing the hacking when it comes
Speaker 1: to what was going on in Iran. That's right. There's
Speaker 1: a special kind of of hacking that sort of is
Speaker 1: meant to impact actual the real world that packs physical
Speaker 1: systems and a it's hacking of industrial computers. And the
Speaker 1: big example of your citing is stuck net that where
Speaker 1: hackers from you know, thousands of miles away, we're able
Speaker 1: to destroy centrifuges in Iran's nuclear development program. But it's
Speaker 1: that exactly that kind of of hacking, in that approach,
Speaker 1: which is hitting these industrial computers that can also do
Speaker 1: things like shut down airports or shut down the electrical grid,
Speaker 1: and so cyber warriors. The people like Russia has, in
Speaker 1: the US has and China has, they have some pretty
Speaker 1: unique tools to make these kinds of things happen in
Speaker 1: the circumstances where there's a either an active conflict or
Speaker 1: even less than that. I mean, there's U s Intelligence
Speaker 1: is worrying more and more that we'll see that Russia
Speaker 1: might try one of these hacks. Not and when there's
Speaker 1: an actual shooting more going on, but in a situation
Speaker 1: like what we're seeing in Ukraine. So I've seen Plumb
Speaker 1: Island before, but I didn't know what it was used
Speaker 1: for before. Right from Afar, it probably looks like, wow,
Speaker 1: this would be a nice island to go to. R Yeah,
Speaker 1: minus the fences. It's interesting, as you heard. I mean,
Speaker 1: I've spent a lot of time in the water, and
Speaker 1: it's on nautical charts, but it's also said like don't
Speaker 1: go there in your previous life as a pirate, I
Speaker 1: told you that was okay, Okay, anyway, it's a great story,
Speaker 1: so highly recommend you read all of its in its entirety.
Speaker 1: You're listening to Bloomberg Business Week, Still Ahead, How advanced
Speaker 1: genetic testing methods are being used to uncover complicated disease
Speaker 1: causing DNA changes. I gotta say, I love this field.
Speaker 1: How a company called gene d X is unlocking this
Speaker 1: field's vast potential by turning data into diagnoses. You're listening
Speaker 1: to Bloomberg Business Week. This is Bloomberg. This is Bloomberg
Speaker 1: Business Week with Carol Messer and Bloomberg Quick Takes Tim
Speaker 1: Stinovik from Bloomberg Radio. So you might recall a November
Speaker 1: Bloomberg Business Week cover story about the company twenty three
Speaker 1: and Me and how it's looking to leverage all the
Speaker 1: genetic information it collects to enable it to make and
Speaker 1: sell its own therapies, basically become a drug maker. Yeah,
Speaker 1: far cry from what it was, you know, at least
Speaker 1: starting out to do right well. The world of genetic
Speaker 1: testing and its applications as a diagnostic tool, it continues
Speaker 1: to grow, Carol, You and I recently caught up with
Speaker 1: Katherine Steulin. She's spent more than two decades in healthcare.
Speaker 1: Now she serves as president and CEO of the genetic
Speaker 1: testing and genomic company gene d X. Kavin joined us
Speaker 1: with an up close look at the company's history and
Speaker 1: how it's solidifying its place on the cutting edge of
Speaker 1: precision medicine. I had to share with you what I
Speaker 1: think is really a new era in terms of delivering
Speaker 1: on the promise of the Human Genome Project, as well
Speaker 1: as UM something that we've been talking about quite a bit,
Speaker 1: which which is precision medicine. Um gen d X was
Speaker 1: fun out of the n i H twenty years ago
Speaker 1: and really was known as a company that was who
Speaker 1: doctor has relied on to the hardest to diagnose patients.
Speaker 1: But over time, our scientists have been quietly pioneering the
Speaker 1: next generation of genetic testing that looks deeply at the
Speaker 1: totality of the human genome to be able to provide
Speaker 1: a faster diagnosis for patients and in turn be able,
Speaker 1: based on the results of our genetic test, be able
Speaker 1: to tell you what therapeutics might be able to help
Speaker 1: you get on a healthier path sooner. Well, help me
Speaker 1: understand where patients use this and at what point in
Speaker 1: their lives they use it, because up till now, and
Speaker 1: you know, I don't want to give away too much
Speaker 1: of my medical history. I'm talking on you know, national
Speaker 1: radio here. Uh. But my only encounter with genetic testing
Speaker 1: personally has has been when my wife got pregnant with
Speaker 1: our son. And I think that's where a lot of
Speaker 1: people first interact with it, when you know the person
Speaker 1: who's pregnant and then the partner get tested. But that
Speaker 1: was it for me, that that's true for so many people. UM.
Speaker 1: Right now, genetic testing is being used in in that setting. UM.
Speaker 1: You know, frequently when a woman is thinking about having
Speaker 1: a baby, or she's pregnant and she will she'll do
Speaker 1: a test, she and her partner will do a test
Speaker 1: called carrier screening. UM. But then what we're able to
Speaker 1: do on the other side, once there is hopefully a
Speaker 1: healthy baby, is be able to ensure that when there
Speaker 1: is a symptom um that that child may be displaying
Speaker 1: if God forbid, the babies in the neonates neonatal intense
Speaker 1: of care unit or as a toddler UM, we're able
Speaker 1: to provide based on that baby's genome um rapid information
Speaker 1: that helps get to a diagnosis, a definitive diagnosis sooner,
Speaker 1: which is critically important when you're thinking about neurological conditions.
Speaker 1: That could be impassing that child and then getting them
Speaker 1: on that treatment. UM. The other time that people are
Speaker 1: utilized in genetic information often is when they have a
Speaker 1: cancer diagnosis. So right now it really is being used
Speaker 1: UM in the symptomatic setting UM. But genetic information can
Speaker 1: actually be used in a preventive way UM to be
Speaker 1: able to get ahead of UM developing symptoms and being
Speaker 1: able to keep people healthy versus diagnosed a disease. It's
Speaker 1: already in progress. So I think about things, you know, UM, Katherine,
Speaker 1: that are just like diabetes, right, which is really we
Speaker 1: talk about pandemics, right, you know, it's really becoming a
Speaker 1: global pandemic in terms of the amount of people who
Speaker 1: have diabetes. How can we use genetic testing. How are
Speaker 1: we maybe already in terms of anticipating it or somehow
Speaker 1: getting better control of it, because it really just seems
Speaker 1: like it's out of control. So genetic testing right now
Speaker 1: is really best utilized UM and and settings such as
Speaker 1: cardiovascular disease in oncology and the pediatric setting for neurological
Speaker 1: disorders or autism UM, as well as, as you mentioned earlier,
Speaker 1: in the prenatal setting when when we're trying to assess
Speaker 1: risk when it comes to a pregnancy. For for more
Speaker 1: common conditions that are metabolic in nature, like diabetes, there's
Speaker 1: still a lot of work that needs to be done
Speaker 1: from a technology standpoint to really help us better understand
Speaker 1: the specific role of genetics that might predisposite, predispose somebody
Speaker 1: to to being uh, somebody who will have a more
Speaker 1: severe condition. Um. So there's a lot of work going
Speaker 1: into that. You'll hear in the future more about something
Speaker 1: called polygenic risk risk scores, which is for the broader
Speaker 1: um more common conditions like diabetes UM. And I think
Speaker 1: that that's going to be on the horizon over the
Speaker 1: next five to ten years. We're still in the earlier
Speaker 1: stages for those sorts of cons And Catherine, I want
Speaker 1: to talk more about the business here because I think
Speaker 1: when it comes to products such as yours, the customer
Speaker 1: isn't necessarily the end patient. The customer is the provider
Speaker 1: who is prescribing it or who is actually um telling
Speaker 1: the patient that they should get it. How do you
Speaker 1: how does that, how does that sales process work? And
Speaker 1: how do you get your product more in the hands
Speaker 1: of more providers. So it's it's a really important partnership
Speaker 1: that we have with a provider a patient as well
Speaker 1: as with a payer UM and and we very much
Speaker 1: believe that it is the most responsible approach to be
Speaker 1: working UM in that partnership because we're delivering information that
Speaker 1: is actionable UM, meaning we're providing a genetic report that
Speaker 1: is saying whether or not somebody may have a health
Speaker 1: condition that they may need to, you know, go undergo
Speaker 1: some sort of therapy for UM or change another aspect
Speaker 1: of their life. So it's really important that we are
Speaker 1: working in partnership there. UM. The way that we work
Speaker 1: today is we we sell our testing directly to clinicians.
Speaker 1: Mainly this has been to medical geneticists, who are kind
Speaker 1: of the the experts experts when it comes to genetics,
Speaker 1: but we're seeing a broader group of clinicians. As we
Speaker 1: mentioned earlier, OBEs are using it in terms of assessing
Speaker 1: risk for pregnancy on collogists are using it to assess
Speaker 1: risk overall as well as what treatment might be best
Speaker 1: for a patient. So we're starting to see a shift
Speaker 1: from UM the expert setting of medical geneticist into broader
Speaker 1: mainstream medicine. And so we educate providers about our services
Speaker 1: and we work with them to ensure that they have
Speaker 1: all the tools that they need to inform their patient
Speaker 1: as clearly as possible. That's Katherine Steln, She's President CEO
Speaker 1: of gen d X. We should mention that earlier this month,
Speaker 1: the publicly traded health intelligence company Semaphore are agreed to
Speaker 1: acquire gen d X for about six and twenty three
Speaker 1: million dollars. So once that deal has completed, Catherine will
Speaker 1: service co CEO still to come. On Bloomberg Business Week.
Speaker 1: They call themselves nerds on a mission. How a pair
Speaker 1: of longtime friends are looking to reshape the multibillion dollar
Speaker 1: baby food market. I thought we were nerds on a mission.
Speaker 1: Yeah we are. Okay, well we're just nerds. This is
Speaker 1: Bloomberg Broadcasting from the financial capital of the world, Bloomberg
Speaker 1: eleven Frio in New York to Washington, d C, Bloomberg
Speaker 1: to Boston, Bloomberg one oh six one, to San Francisco,
Speaker 1: Bloomberg nine sixty to the country Sirius XM Channel one nine,
Speaker 1: and around the globe the Bloomberg Business and Bloomberg Radio
Speaker 1: dot Com. This is Bloomberg Business Week with Carol Messer
Speaker 1: and Bloomberg Quick takes Tim Stenovan on Bloomberg Radio. But
Speaker 1: what estimate? The baby food market is forecast to reach
Speaker 1: more than ninety six billion dollars by the compound annual
Speaker 1: growth rate of six percent. That's a lot of most
Speaker 1: string beans and corn. Yea, definitely well. One of the
Speaker 1: newer participants in that world is the organic food company
Speaker 1: you Me. The company recently raised nearly sixty seven million
Speaker 1: dollars from investors, all of whom were women. Love that.
Speaker 1: Former journalist Evelyn roose Lee and one time financial analyst
Speaker 1: Angelis Sutherland, they co founded the Director consumer brand. Evelyn
Speaker 1: explained why the two decided to leave their prior careers
Speaker 1: behind in pursuit of healthier food choices for kids. That's
Speaker 1: where we started our conversation. We are on a mission
Speaker 1: to change transparency and baby food and what it actually
Speaker 1: represents and what it means and so how nutritious it
Speaker 1: can be and making sure it's clean of heavy metals,
Speaker 1: and so we're reaching it's money to take on big baby.
Speaker 1: So Evelyn, come on in on the conversation because it's
Speaker 1: a massive market. We've all been there where we're you know,
Speaker 1: looking at the shelves and when once you have a kid,
Speaker 1: everything you put in their mouth, you wanted to be
Speaker 1: like perfect. You want to keep them safe, you want
Speaker 1: to make sure they're eating. Well, how did you guys
Speaker 1: approach this and how did you know that there was
Speaker 1: a need for what you guys are doing. Yeah? Absolutely so,
Speaker 1: I guess we could start at the beginning in terms
Speaker 1: of the origin story, because that definitely informed how we
Speaker 1: built a company. UM. So, just as a brief background,
Speaker 1: I used to be on the other side of the table.
Speaker 1: I used to be actually a journalist like you guys. UM.
Speaker 1: I was a journalist for about a decade or so,
Speaker 1: and I've been friends with Angela for years that predate
Speaker 1: the company. Um Angela her background I love to brag
Speaker 1: about her, which she's sort of this this math nerd
Speaker 1: math savant was in a career in finance and also
Speaker 1: worked at Toyota working on algorithms on their actual risk
Speaker 1: and such. And you know, when Angela had her first child.
Speaker 1: As friends, we were kind of nording out on all
Speaker 1: the research that she was discovering, and there was one
Speaker 1: theme that she kept coming back and back to again.
Speaker 1: That was the importance of nutrition and how it really
Speaker 1: does impact every prison of health right from neurological development,
Speaker 1: physical development, metabolic health, like even your caste preferences are
Speaker 1: largely set by the age of three, and what impacts
Speaker 1: that is everything that you're consuming or even in the womb,
Speaker 1: what you're getting from your mother. And so what we
Speaker 1: found so astounding was that if you can really control
Speaker 1: for the interventions, the nutrition that you're getting during these
Speaker 1: first years of life, you know, you can really change
Speaker 1: the state of metabolic health in this country and change
Speaker 1: the state of you know, health outcomes in general, so
Speaker 1: whether for the individual for an entire generation. So we
Speaker 1: always say that our mission is to build a health
Speaker 1: your resperation. And yeah, I mean, you know, I think
Speaker 1: what was so interesting, like, you know, obviously we know
Speaker 1: kind of where the food system is today, and we
Speaker 1: realize that there was such innovation needed, particularly in the
Speaker 1: category of baby in terms of you know, really focusing
Speaker 1: on foods that are nutrient dens that are you know,
Speaker 1: really built for the massive needs that a child has
Speaker 1: during this period. And so at the end of the day,
Speaker 1: and we kind of stepped back, we realized this wasn't
Speaker 1: about just replacing a product on the shelf. It really
Speaker 1: was a question of what should the future food be.
Speaker 1: So it's it's one thing to go from an idea
Speaker 1: of evalent to uh, actually building a company, Angela. So
Speaker 1: I'm wondering, Angela, how you then take that idea and
Speaker 1: you find the farmers to partner with, you find the
Speaker 1: way to produce it. And look, we're talking baby food here.
Speaker 1: I mean there's a little room for error, right, You
Speaker 1: can't you can't get a contaminant in there. I mean,
Speaker 1: we know what happens if if God forbid, that were
Speaker 1: to happen with something that we were to give our children. Angela. Yeah, absolutely.
Speaker 1: I Mean one of the things we did really early
Speaker 1: on was bringing some like a list people to our
Speaker 1: teams we run our CEO from Beyond Me to build
Speaker 1: up their entire supply chain there manufacturing, and we knew
Speaker 1: that was really important internally to do the same thing.
Speaker 1: I mean, again to your point, safety there number one
Speaker 1: concern is always like our number one priority, and so
Speaker 1: we've always focused on quality control and around like who
Speaker 1: our suppliers are and how many how much testing we
Speaker 1: can do. We do weekly testing as well as you know,
Speaker 1: seasonal testing on suppliers, were testing our finished goods as
Speaker 1: well as like our product forehand, I mean we are
Speaker 1: you know, like laser focused on making sure that this
Speaker 1: is the safest and best products four children your director
Speaker 1: consumer right, Yes, correct. So so in order to actually
Speaker 1: even see the prices, you have to log in and
Speaker 1: create some sort of plan. Um, how much does it
Speaker 1: cost to get a baby on on the UNI plan?
Speaker 1: The alex places around four dollars with jar and there's
Speaker 1: seven different stages that I see, So to help us
Speaker 1: understand how that work works, Yeah, you can get small
Speaker 1: box unifax or large boxes is one a day? At
Speaker 1: two a day or three a day? Um, we average
Speaker 1: around like four dollars a jar um, depending obviously on
Speaker 1: the side and how like the frequency of you're getting it.
Speaker 1: But that's sort of how it works. That was Evelyn
Speaker 1: Rooseley and Angela Sutherland, the co founders of the Baby
Speaker 1: Food Company. You mean you're listening to Bloomberg Business Week
Speaker 1: coming up a guide to wellness by our Bloomberg Pursuits team.
Speaker 1: We're talking to prehab, not rehab, Carol. We're also talking
Speaker 1: delicious foods that are also subtly healthy. You're gonna sneak
Speaker 1: some help in there too. Also, the most expensive yoga
Speaker 1: ball you've never heard of until now. This is Bloomberg.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovich from Bloomberg Radio. This week,
Speaker 1: our Bloomberg Pursuits team is out with its special Wellness Section.
Speaker 1: It's a series of stories dedicated to helping you take
Speaker 1: charge of your well being, both physically and mentally. I
Speaker 1: don't know about you, Tim, but I need all of it.
Speaker 1: You know, kind of makes sense for the new year.
Speaker 1: I think, I think this is the timing of this
Speaker 1: is really good. People are kind of, you know, off
Speaker 1: of their New Year's resolutions already, but they're still thinking, Okay, well,
Speaker 1: how can I make get it off to at least
Speaker 1: a better start than the stock market. Well, here to
Speaker 1: give us an overview of the section and maybe help
Speaker 1: give us a few tips on how to approach a
Speaker 1: more healthy lifestyle and year is Bloomberg Pursuits Editor Chris
Speaker 1: rouser Um. Chris, I want to start with just the
Speaker 1: how how you thought about these? Right? Because it's it's
Speaker 1: kind of like wellness with a twist. It's the influence
Speaker 1: of the pandemic and the idea of people not necessarily
Speaker 1: going to gym's and still working out at home. Um,
Speaker 1: how can we be healthier coming out of it? Yeah,
Speaker 1: this past year we people really looked at what they
Speaker 1: were doing and their lives because they had nothing else
Speaker 1: to do, and really got into wellness and figuring out
Speaker 1: what was working and what wasn't working for them. Um.
Speaker 1: And so wellness is a huge buzzword. It has been
Speaker 1: for a few years, but never and more than now.
Speaker 1: It's something like a four trillion dollar global industry and
Speaker 1: it's only growing. So every year around this time we
Speaker 1: like to look around and what's out there, tell people
Speaker 1: kind of what's real, what not to worry so much about,
Speaker 1: and what you can actually do that will help in
Speaker 1: in a realistic way. So I have to worry about prehab.
Speaker 1: What the heck is that rehab? We're trying to make
Speaker 1: you go to prehab? Carol said, no, no, no, it's
Speaker 1: and lovely Dulce. Atone that you're hearing is Kate Crater,
Speaker 1: our food editor. She's going to join us in on
Speaker 1: this conversation. So what is prehab though? So, prehab is
Speaker 1: the the art and practice of training yourself to work
Speaker 1: out better. To live better and to be more physically
Speaker 1: prepared for everything that you go through in your life.
Speaker 1: So I'm I'm a person that loves Barry's boot Camp, right,
Speaker 1: but when I started doing it, I didn't prepare myself
Speaker 1: at all. I just threw myself in. And if you're
Speaker 1: if you're on your own these classes, you can kind
Speaker 1: of build imbalances and you cannot be doing it right
Speaker 1: because you're not working one on one with a personal trainer,
Speaker 1: or if you're just sitting at home at your work
Speaker 1: from home space and you're hunched over your little laptop,
Speaker 1: which I was for a long time, and your posture
Speaker 1: gets screwed up. It really can help to go see
Speaker 1: someone who can train you how to train and like
Speaker 1: teach you how to sit and exercises and even how
Speaker 1: to think about your posture. Uh, And that sets you
Speaker 1: up better for healthy living in the long term and
Speaker 1: you feel better. What about when it comes to stretching,
Speaker 1: I mean, I think a lot of people don't even
Speaker 1: they struggle to fit in the time of working out,
Speaker 1: let alone prehab or stretching. But in this issue of
Speaker 1: Bloomberg Pursuits, you give us some some stretches. Actually, it
Speaker 1: looks like I'm at the physical therapist right now. Through
Speaker 1: this We don't you know this our in our section,
Speaker 1: we don't always have those little drawings of people doing
Speaker 1: different stretches or gestures or exercises. But you know, we
Speaker 1: talked to groups like MYO D Talks in l a
Speaker 1: UM and Body Evolved in New York to tell to
Speaker 1: sort of give us certain stretches and exercise that that
Speaker 1: are generally helpful for everyone. So if you go to
Speaker 1: the Pursuit section week this week, uh, there are six
Speaker 1: that are really great, some of which I already do.
Speaker 1: Foam rolling. You may know about the world's Greatest stretch
Speaker 1: rolling hurts me too much, but that's because I need it. Yeah,
Speaker 1: And you're just shaking your head and you're saying it's no,
Speaker 1: I'm I believe it, um. And these are just things
Speaker 1: that you can do every day to really set yourself
Speaker 1: up for success and just to feel better generally. You know,
Speaker 1: it's interesting. I had to do some physical therapy for
Speaker 1: like this next thing, and it was all because of
Speaker 1: working at home, and I feel like everybody should do
Speaker 1: like at that point that physical therapy and work out,
Speaker 1: like it made sense to me in turn of that
Speaker 1: combination of having somebody who understood the body and how
Speaker 1: things interact, but also then including some work out. It
Speaker 1: just made sense to me, and it helps if you
Speaker 1: have a goal actually honestly like because then that makes
Speaker 1: you do it every you know, every morning. If it's
Speaker 1: going to take ten I have to do it. Well,
Speaker 1: then you're you're like, Okay, I want to run a
Speaker 1: marathon or you know, I wanna I want to have,
Speaker 1: you know, be able to do this thing with my kids,
Speaker 1: like take an adventurous trip or something, and that actually
Speaker 1: really makes you do it rather than you're like, I'm
Speaker 1: doing the stretching. I don't really know what the difference
Speaker 1: it's making. Um, So it helps us set those goals
Speaker 1: for the future. Speaking of running, can we talk about
Speaker 1: running on neutral? Yeah, let's do it. Do you know
Speaker 1: about monk? Hey? Do you know about mung? Am? I
Speaker 1: saying it? Ready? Tell me about it all right, Chris,
Speaker 1: tell us about So hitting mung is this craze in
Speaker 1: South Korea. Um, And basically what you're trying. Mung is
Speaker 1: basically a state it's a slang term for like a
Speaker 1: state of blankness in your mind. And what hitting mong
Speaker 1: is is basically meditation or contemplation combined with nature. So
Speaker 1: you know, there's a movie that's running in theaters in
Speaker 1: South Korea where you just sit and watch forty minutes
Speaker 1: of clouds going by an airplane window. Um or okay, creater,
Speaker 1: was that an ey roll? I was gonna say, that's
Speaker 1: a decompress after squid Games? Right, how do you reconcile hat?
Speaker 1: Tell me? Yeah. So the theory is that you know, um,
Speaker 1: our brains are were we used to live in nature.
Speaker 1: I don't know if none of us remember, but there
Speaker 1: was once a time, and you know, our brains are
Speaker 1: evolved to have a certain amount of downtime. So like
Speaker 1: you know, doing Crossford puzzles is sort of restorative in
Speaker 1: the way that you you exercise your brain. Yeah, but
Speaker 1: that's like active using your brain, and and meditation and
Speaker 1: hitting mong is passive, and that actually like clears out
Speaker 1: your thoughts. And people have done studies where if you
Speaker 1: take a walk in a city for fifty minutes and
Speaker 1: you take a walk in nature for fifty minutes afterwards,
Speaker 1: the people who took walks in nature had better short
Speaker 1: term memory capacity. So it really actually is this sort
Speaker 1: of necessary thing that people in modern life are realizing like,
Speaker 1: oh god, okay, so how do how do we do
Speaker 1: this Christ in an urban environment without access to nature?
Speaker 1: You you mean you a you can watch like videos
Speaker 1: that seems you know the time when we used to
Speaker 1: be in nature was when I wasn't staring at my
Speaker 1: phone for five hours a day. Go and walk by
Speaker 1: the East River, walk in a park, sit and look
Speaker 1: at a river. I mean, this sounds dumb. And you know,
Speaker 1: some scientists recommend, you know, two to five hours of
Speaker 1: this every week. I don't think any one of us
Speaker 1: are doing five hours. So let me get this straight. Um,
Speaker 1: we have to fit in time for prehab okay, okay,
Speaker 1: that's you. We have to stretch better, okay. Um, we
Speaker 1: got to exercise, yeah, but that's prehab is exercise. Prehab
Speaker 1: is exercise, okay. Um, and then we got to go
Speaker 1: mong yeah okay, so I'm I'm getting there. You're getting there.
Speaker 1: Were not even healthy eating yet. Okay, that's true, but
Speaker 1: eating your price eating with eating so you're not losing
Speaker 1: any time to it. Talking about is the first step though, right,
Speaker 1: They're almost there to him, thank you. Let's talk about
Speaker 1: clean food because we feel like you've been you follow
Speaker 1: this industry for so long, and I feel like people
Speaker 1: have been thinking more and more about what they put
Speaker 1: in their mouth. I feel like this is the next
Speaker 1: chapter of it a little bit. It really is like
Speaker 1: the big trend in two is healthy eating. And it's
Speaker 1: not a brand new situation. You know, people have been
Speaker 1: you know, on special diets for years and decades and
Speaker 1: all of it. But following the pandemic, when a lot
Speaker 1: of people I eat everyone was cooking for themselves and
Speaker 1: started to see what was in their food and how
Speaker 1: it made them feel directly when they were done with it.
Speaker 1: Now that people are going back out to eat, there's
Speaker 1: a lot of food hangovers going on because you're eating
Speaker 1: food that wasn't prepared by you and you don't know
Speaker 1: everything that goes in. And it goes from like saturated
Speaker 1: fats to the kind of oils the people are using,
Speaker 1: and they've become the public has become increasingly conscious of
Speaker 1: what is in their food and they want to pay
Speaker 1: more attention to it. The ideas of substitutes, right sweetening
Speaker 1: traditional condiments for example with maybe beat sugar or or
Speaker 1: something like that. And you describe in your subterfuge um
Speaker 1: so the idea. But the idea is it's it's transparency too, right,
Speaker 1: because it's it's replacing ingredients with ones that what are
Speaker 1: they healthier? Many it's a good question. Um, In many
Speaker 1: ways there are you should always look at the ingredient
Speaker 1: labels and that's something that's becoming increasingly popular, or something
Speaker 1: called clean labels that have minimal ingredients and then you
Speaker 1: can recognize and pronounce all of them instead of something
Speaker 1: like methyl cellulos run in the other direction. Very yeah,
Speaker 1: exactly put that back on the shelf. But um, but now,
Speaker 1: so that's been something that's happening a lot of the
Speaker 1: Whole Foods they've seen, um, a big trend in the
Speaker 1: blurring between supplement and grocery aisles. They called that out
Speaker 1: as one of their big trends for two. But it's
Speaker 1: also happening at restaurants, which is something that we hadn't
Speaker 1: really seen before. There was, I mean, with the exception
Speaker 1: of Los Angeles where you can really live that life,
Speaker 1: there were um, sort of you would go to one
Speaker 1: kind of restaurant after you went to Barry's boot camp.
Speaker 1: But if you're going on a date, then you hopefully
Speaker 1: going then you were probably going somewhere else and in
Speaker 1: a place like Austin, you know where. Maybe not Coincidentally,
Speaker 1: there's a whole big tech segment moving in. They are
Speaker 1: starting to open places that thread the needle, that where
Speaker 1: you can get your grain bowl, but you can also
Speaker 1: have a Texas wago. All right, can we also talk
Speaker 1: about superfoods for your skin? Chris? Chris? First of all,
Speaker 1: I want to know when they pitch this to you,
Speaker 1: because you do, you guys cover a lot of like
Speaker 1: products and skin car I love it, I love it,
Speaker 1: I love it, love and so can we eat like
Speaker 1: the creams we're putting on our face? Basically, YO, might
Speaker 1: be on your own with that one. Tell us you
Speaker 1: you try and tell us people's like products smell like
Speaker 1: fruits and roses, and some people smell like science and
Speaker 1: I usually smell like science. Um. But there is a
Speaker 1: big trend in superfoods being market being added into um,
Speaker 1: into skin products and also marketed as such. Okay, I
Speaker 1: want to end just with something for the body. Okay,
Speaker 1: because here I am hunched over in a chair with
Speaker 1: a microphone, hunched over computer with a couple of monitors.
Speaker 1: Should I be sitting on yoga ball? I mean, if
Speaker 1: you ask your luxury editor. Yes, uh, the one this
Speaker 1: week is a Christian do Your Yoga ball which you
Speaker 1: are meant to sit on and um, it's a it's
Speaker 1: a sort of a standard yoga ball that has this
Speaker 1: this very plush, cushy cover that's very beautiful. We suggest
Speaker 1: maybe you would want to sit on it and take selfies.
Speaker 1: It's part of a collaboration with Technogym, which actually the
Speaker 1: whole Do Your technologym partnership has these really cool, very
Speaker 1: useful tools like a little mini efficient work bench with
Speaker 1: weights built into it and a treadmill. Um, so we
Speaker 1: we wanted to showcase the yoga ball as a stand
Speaker 1: in for the whole set, which we actually really like.
Speaker 1: Do you have one? Do I have one? I do
Speaker 1: know I have a yoga ball. I don't have. This
Speaker 1: one looks really cozy. Can't you just write Christians? Do
Speaker 1: you are on it? Her? Yes you can, Yes you can.
Speaker 1: Thank you all right, guys, we gotta run. Thank you
Speaker 1: so hich really appreciate it. That's Kate Creator and Bloomberg
Speaker 1: Pursuits editor Chris Rose are. A big thanks to them
Speaker 1: for joining us with a look at this week's wellness special.
Speaker 1: In Bloomberg Pursuits and that reps up the weekend edition
Speaker 1: of Bloomberg Business Week from Bloomberg Radio. Thanks so much
Speaker 1: for joining us. I'm Carol Masser and I'm Tim Stunk.
Speaker 1: Be sure to tune into Bloomberg Business Week. It's Monday
Speaker 1: through Friday. It starts at two pm All Street time
Speaker 1: on Bloomberg Radio. You can also watch our daily broadcast
Speaker 1: on YouTube. Just search Bloomberg Global News. Also check out
Speaker 1: our Bloomberg Business Week podcast. You can find it at
Speaker 1: Bloomberg dot com, Apple, or wherever you get your podcast.
Speaker 1: Bloomberg Business Week is available on newstands now, at Bloomberg
Speaker 1: dot com and always on the Bloomberg terminal. You can
Speaker 1: also see me on Bloomberg Quick Take, available at Bloomberg
Speaker 1: dot com, slash qt, and streaming platforms like Roku, Apple TV,
Speaker 1: Samsung TV, and more. Have a great weekend everyone. I'm hungry.
Speaker 1: I want some facial products, some skincare cream, and I
Speaker 1: do not want to work out right now? What about yoga?
Speaker 1: Maybe little pricey? This is Bloomberg