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Speaker 1: Hi everyone, Happy Thanksgiving and welcome to the Bloomberg Business
Speaker 1: Week Weekend Podcast. We are normally so focused on bringing
Speaker 1: you everything from Wall Street and politics and anything from
Speaker 1: the world of business, that we're always grateful when we
Speaker 1: can take a step back and focus on other important issues,
Speaker 1: especially on this Thanksgiving weekend.
Speaker 3: In this hour, we bring you to Boston and to
Speaker 3: the work that's being done at the Boston Children's Hospital.
Speaker 3: It's really a healthcare hub for all of New England.
Speaker 3: It's at the forefront of medical research and treatment and
Speaker 3: that includes cutting edge tech for orthopedic surgery and also
Speaker 3: using AI in medicine.
Speaker 1: That's all coming up in the first hour. It's some
Speaker 1: really great conversations. We were Tim and I were both
Speaker 1: blown away by our visit there. Then coming up in
Speaker 1: our second hour, Well, it's a little bit of a
Speaker 1: holiday special. We've got some travel, hosting and drinks. We
Speaker 1: also get an update on the domestic travel market with
Speaker 1: the CEO of Travel and Leisure.
Speaker 3: Plus a CEO who you can count on to be
Speaker 3: candid when she stops by, Christina Stembel, the founder and
Speaker 3: CEO of farm Girl Flowers. She joined us on getting
Speaker 3: ready for the holiday season and the health of the consumer.
Speaker 1: Also, we have a drink with the CEO of the
Speaker 1: spirit's company, Kraftco. At a time when the industry's facing
Speaker 1: a lot of headwinds.
Speaker 3: That's coming up a drinker too. I saw the way
Speaker 3: you poured that.
Speaker 1: All right, All that's coming up in the second hour.
Speaker 3: Two all that to come. First though, we head to
Speaker 3: Boston Children's Hospital. It's the leading recipient of pediatric research
Speaker 3: funding from the National Institutes of Health. It's also the
Speaker 3: primary pediatric teaching hospital for Harvard Medical School.
Speaker 1: We're so grateful to them for hosting us. And first up,
Speaker 1: we've got a conversation around medical advancements using artificial intelligence
Speaker 1: and the importance of providing a comforting environment for patients
Speaker 1: and staff alike.
Speaker 3: That's what doctor Joan La Rovere is trying to achieve.
Speaker 3: She's senior vice president. She's also interim Chief Medical Officer
Speaker 3: of Boston Children's She's also the co founder and president
Speaker 3: of the NGO, the Virtue Foundation. It's delivering healthcare to
Speaker 3: over twenty five countries. We began our conversation with the
Speaker 3: description of the room where we broadcasted from earlier this month.
Speaker 4: We're in the hail Roof garden on the tenth floor
Speaker 4: of the Hale Building. The Cardiac I See You that
Speaker 4: I work in is two and three floors below us,
Speaker 4: because we cover two floors our Cardiac I See You,
Speaker 4: And we need spaces like this for families to be
Speaker 4: able to step away and really, you know, think and decompress,
Speaker 4: and for staff. You know, these very challenging complex patients
Speaker 4: that we're taken care of in this building. Are the
Speaker 4: anatal Intensive care unit is here or Cardiac I See
Speaker 4: You is here. We have operating rooms in this building.
Speaker 4: You know, there's a lot of the cath labs are here.
Speaker 4: So it's wonderful that we can have these magical spaces
Speaker 4: where you can just feel that you're in a PEDIAFTERC
Speaker 4: hospital and there's a place to relax and think.
Speaker 1: Can I just say, it's like you're sitting on a tree,
Speaker 1: like a tree bench. There's like, I don't know, is
Speaker 1: this a rainbow. It feels like above us. It's pretty
Speaker 1: it's pretty cool, you know.
Speaker 3: Carol mentioned the energy that we feel when we walk
Speaker 3: into a space such as Boston Children's and we're reminded
Speaker 3: that it's it's not just a teaching hospital, a research hospital,
Speaker 3: it's also a place that treats kids from really all
Speaker 3: over the world. I'm wondering how you prioritize where resources go,
Speaker 3: whether it goes to treating patients right now versus thinking
Speaker 3: about research, thinking about development, thinking about ways to actually
Speaker 3: help patients in the future, versus working with them right now.
Speaker 3: How do you allocate those resources?
Speaker 4: Well, that has always been part of the DNA of
Speaker 4: Boston Children's Hospital. It's been our mission. We deliver the highest,
Speaker 4: best quality clinical care. Really that is the foundation of
Speaker 4: it all. And you see that, you know the motto
Speaker 4: of where the world comes for answers. There's a lot
Speaker 4: of complex patients from the Boston area of Massachusetts, New England. Obviously,
Speaker 4: we provide primary services for all levels of care for
Speaker 4: children in this community, However, there are many from across
Speaker 4: the United States and across the world who really seek
Speaker 4: that type of care and come to us, usually the
Speaker 4: most complex cases, and I think that's really where we thrive.
Speaker 4: And the other piece of our DNA is the science
Speaker 4: we as you talked in the beginning.
Speaker 1: That makes a difference, right when there's science involved. I
Speaker 1: feel like it's practition. Yes, you're dealing with patients, but
Speaker 1: it's people who are like, I want to understand how
Speaker 1: this works.
Speaker 4: That's everybody here. Yeah, that's the doctors, that's the nurses,
Speaker 4: that's the social workers, that's the physical therapists, that's the
Speaker 4: respiratory therapist, it's the pharmacist. I just could keep going.
Speaker 4: So I think that's what draws people to work here
Speaker 4: and to stay here, because that purpose that we're gonna
Speaker 4: actually change things and we're going to be able to
Speaker 4: find newer ways of doing things. We're going to help
Speaker 4: more children survive but also thrive, and that takes a
Speaker 4: real concerted effort, and you need the science here with
Speaker 4: the clinical.
Speaker 1: One of the things I think when you joined Tim
Speaker 1: and I back in New York and listen, everybody's talking
Speaker 1: about AI and I know that but I think we
Speaker 1: all are thinking about what it could do for medicine
Speaker 1: and R and D and innovation. And I guess what
Speaker 1: we're trying to understand too is what's the reality of
Speaker 1: what AI is used within the medical community or R
Speaker 1: and D specifically? Where is it today? And you, as
Speaker 1: someone who understands this space so well, and I'm curious
Speaker 1: the conversations you guys have, where do you think you
Speaker 1: could go? Well?
Speaker 4: AI has been a very important part of Boston Children's
Speaker 4: Hospital for a long time. This isn't something new. We
Speaker 4: have incredible research groups and an incredible innovation team here
Speaker 4: who've been really standing up AI initiatives for a very
Speaker 4: long time. We talked about some of the work I
Speaker 4: personally have done in terms of you know, Virtue Foundation
Speaker 4: and the Global Health AI mapping and being able to
Speaker 4: match resource and need.
Speaker 1: You work with Yeah, firms that are like specifically in AI.
Speaker 4: Yes, with data breaks and data robak. I you're building
Speaker 4: those real platforms that people can use. But I think about,
Speaker 4: for example, when chat GPT first came out, we had
Speaker 4: Boston GPT immediately we were looking to get that behind
Speaker 4: our firewalls. How can we integrate that, How can we
Speaker 4: use that for real purpose and improving both the care
Speaker 4: that we get to pay since but how can we
Speaker 4: use AI to also discover new things? I think the
Speaker 4: levels of data that we have, and I think you
Speaker 4: talked upon in the beginning in terms of rare diseases,
Speaker 4: genetic diseases, we are the epicenter of that, and we've
Speaker 4: already been extremely successful in bringing new therapies to market
Speaker 4: for children. But when I look at the infrastructure that
Speaker 4: we're building, and I think you've had doctor Wendy Chung
Speaker 4: come and speak, and she's heating up.
Speaker 1: A lot of that work.
Speaker 4: I think her best days are ahead of us, and
Speaker 4: AI is unlocking that type of potential.
Speaker 3: I like hearing that the optimism about our best days
Speaker 3: being ahead of us. And I think about, just even
Speaker 3: during your career, how much treatments have changed in a
Speaker 3: pretty short time. I'm curious about the connection between kids
Speaker 3: and adults and treating children. And of course, if kids
Speaker 3: are healthy, then they turn into healthy adults. But this
Speaker 3: is a children's hospital that does a lot of research,
Speaker 3: it does a lot of teaching. Also, are there learnings
Speaker 3: that can be taken from what works with kids and
Speaker 3: even applied to a larger population as not just those
Speaker 3: kids grow up, but as adults also need treatment.
Speaker 4: I think there's two points that strike me there. One
Speaker 4: is that the decisions they were making early in life
Speaker 4: have long term impact. It's something I've thought about my
Speaker 4: entire career in the cardiac space and cardiac intensive care.
Speaker 4: The decisions to have surgery on day two or day four,
Speaker 4: the decisions to use this drug or that drug, all
Speaker 4: of those things are shaping your long term self. But
Speaker 4: it was very hard to be able to look at
Speaker 4: and analyze that type of data until you've opened up
Speaker 4: big data AI. So I think again along the lines
Speaker 4: of our best days are ahead of us, that we're
Speaker 4: going to be able to see so much more through that.
Speaker 4: And then you said the innovations. Now many patients that
Speaker 4: I took care of are adults. Right, we have this
Speaker 4: huge growing adult population that we provide care for. Science
Speaker 4: is that's discovered here, it's in a pediatric hospital, but
Speaker 4: it's bringing forth therapies that are actually treating adults. So
Speaker 4: I think it's it's incredible to see how this innovation
Speaker 4: engine drives so much.
Speaker 1: If you could change one thing just got about thirty seconds.
Speaker 1: If you could change one thing in terms of the
Speaker 1: work that you guys are doing and the R and
Speaker 1: D that would maybe make it easier.
Speaker 4: What would it be, make it easier?
Speaker 1: Okay backward. If you could change one thing though that
Speaker 1: would help you guys and what you're working on. It
Speaker 1: sounds like you don't need it. Sounds like you've got
Speaker 1: a great team, and we have.
Speaker 4: A great team, but we're always needing, you know, support
Speaker 4: and engagement and we're just trying to drive the next
Speaker 4: level and partnerships to move in that direction. We are
Speaker 4: the leading children's hospital, so we're doing well, but we're
Speaker 4: always trying to push the envelope of what we can do.
Speaker 1: Yeah, it's fast. You could feel it. I felt, you know,
Speaker 1: like walking in.
Speaker 4: You can write the purpose.
Speaker 1: It was busy, it was lots of families, lots of kids,
Speaker 1: and yeah, everybody on a mission.
Speaker 4: It's a privilege to be part of that mission.
Speaker 1: Well, thank you so much, thank you, thank you for
Speaker 1: inviting us, and good to get some more time with you.
Speaker 1: Doctor Joan la Rovere. She is an interim Chief Medical
Speaker 1: Officer at Boston Children's Hospital, Director of Innovation and Outcomes.
Speaker 1: So delighted to talk with you.
Speaker 2: You're listening to the Bloomberg Business Weekdaily Podcast. Catch us
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Speaker 1: Now, we know AI has been the talk of here.
Speaker 1: Actually it's been the talk of is it almost three
Speaker 1: years already here? Yeah? Yeah, it's really nuts. It's nunds
Speaker 1: up a lot of AI when it comes to moving markets,
Speaker 1: analyzing data and automating simple tasks, but it may also
Speaker 1: impact neurosurgery in kids.
Speaker 3: On that, we were joined by doctor Lisa Baird, director
Speaker 3: of Neurosurgical Oncology and co director of the Brain Tumor
Speaker 3: Center at Boston Children's Hospital.
Speaker 5: I take care of kids that have branch tumors and
Speaker 5: it's all ages. All ages, yeah, from infants to really
Speaker 5: young adults, but all through childhood and work with a
Speaker 5: phenomenal team here. Requires a huge team to take care
Speaker 5: of these kids. They're very complex diseases and we work
Speaker 5: on all aspects of them, so active treatment. We do
Speaker 5: a lot of scientific research, we run clinical trials. We
Speaker 5: really support these kids not only through their therapeutic journal journey,
Speaker 5: but through survivorship and surveillance afterwards. So it's a long
Speaker 5: journey for them and we really try to support them
Speaker 5: at every stage.
Speaker 3: How are clinical trials involving children different than clinical trials
Speaker 3: involving other age populations.
Speaker 5: Well, cancer in children is very very different. The diseases
Speaker 5: are different, the implications are different, especially with brain tumors.
Speaker 1: Why is that? Is it development because of where the
Speaker 1: brain is or what?
Speaker 5: Partially? I mean we're dealing with patients that have developing brains.
Speaker 5: I mean there are very different implications for that. But
Speaker 5: also the diagnoses vary quite a bit. You know, the
Speaker 5: common diseases we see in childhood brain cancer are very
Speaker 5: very different than that in adult cancer, and they require
Speaker 5: different treatments and the support and you know, network needs
Speaker 5: to be different. We have to support these kids through
Speaker 5: developmental stages, through hormonal development, through cognitive development, emotional development.
Speaker 5: You know, the family needs are different, and you know,
Speaker 5: the diseases require very specific therapies. One thing historically that
Speaker 5: has happened is because pediatric cancer has not been as
Speaker 5: well supported. Historically, we have had to extrapolate data and
Speaker 5: treatments from the adult world and it just doesn't work,
Speaker 5: you know.
Speaker 1: I have a good friend in the same her son
Speaker 1: went through it and unfortunately it didn't work out well.
Speaker 1: But when she started doing research, she realized there's just
Speaker 1: no money, no funding. And they actually started a foundation
Speaker 1: to kind of but selling kids, selling cookies and like,
Speaker 1: just to try and drum up money and interest and attention.
Speaker 1: And we talk about it with women that R and
Speaker 1: D like you just don't see it as much and
Speaker 1: it's getting slowly better. But with kids, why is it
Speaker 1: that it's lagged in terms of time and money and effort,
Speaker 1: Not here obviously, but elsewhere.
Speaker 5: Yeah, I mean, we definitely rely on philanthropy hugely to
Speaker 5: make advancements in the field. But I think you know,
Speaker 5: historically the numbers are lower. The financial support from government
Speaker 5: has been different. It follows volume, as does industry. You know,
Speaker 5: there's a complex, you know, complex reasons for that. But yeah,
Speaker 5: there needs to be a shift and focus and and
Speaker 5: more attention on specific pediatric treatments.
Speaker 3: We are talking a lot about treatments, and it makes
Speaker 3: me wonder about if we understand what causes this stuff
Speaker 3: in the first place. And certainly treatments in recent years
Speaker 3: have gotten so much better. In gene therapy, has gotten better,
Speaker 3: but I'm wondering if we have an understanding in the
Speaker 3: medical community about why some kids get sick and why
Speaker 3: some don't.
Speaker 5: Yeah, there have been huge advancements in pediatric brain tumors.
Speaker 5: It's really one of the most exciting fields right now
Speaker 5: because of how many things have really moved forward in
Speaker 5: the field. And so we know so much more about
Speaker 5: the biology of these tumors and the genetic underpinnings to them,
Speaker 5: and can really drill down with each individual tumor to
Speaker 5: find out what the molecular change has been in the
Speaker 5: cells that is driving tumor growth. And that's really helped
Speaker 5: us understand them and opened up a whole new field
Speaker 5: of individual treatments. And so, you know, every tumor is different.
Speaker 5: In some tumors, we've discovered that there may be a
Speaker 5: cell of origin that the child is born with a
Speaker 5: lot of tumors. We don't understand why some kids are
Speaker 5: getting them and some don't. Some may have familial implications
Speaker 5: and some may have environmental We don't understand everything, but
Speaker 5: we're learning more and more every day, and we know
Speaker 5: so much more about the individual genetics of the tumor.
Speaker 3: Could we get to a point within our lifetimes where
Speaker 3: there is some sort of screening for kids when they're
Speaker 3: born or in their early days that helps identify what
Speaker 3: they could be susceptible too, and then we could allow
Speaker 3: for different different treatments ahead of that to prevent it
Speaker 3: actually from happening.
Speaker 5: Definitely, I think so. And it may not be for
Speaker 5: every tumor, but I think we're already getting close to
Speaker 5: that for certain diagnoses where we know specific things that
Speaker 5: you know, we can potentially screen for, and we're finding
Speaker 5: certain you know, germline mutations that are you know, familial hereditary.
Speaker 5: So yeah, I think we may get to that point
Speaker 5: where we're screening is better for all tumors, but we're
Speaker 5: very close for certain types of tumors.
Speaker 1: Is there differences in boys and girls when it comes
Speaker 1: to either tumors or what impacts.
Speaker 5: For some Yeah, for some diagnoses and some have you know,
Speaker 5: greater percentages with boys and some with girls. It really
Speaker 5: just depends on the diagnosis and many many its equivalent.
Speaker 1: I am also curious about, like you guys seem to
Speaker 1: certainly take a family approach, and you have to when
Speaker 1: it's kids, Like what's involved when you've got specific therapies,
Speaker 1: and it's not it's leading up to the surgery or
Speaker 1: whatever the treatment is.
Speaker 5: In now, the treatment of these kids takes a village.
Speaker 5: We have a huge multi disciplinary team. I mean we
Speaker 5: have neurosurgeons, neurooncologists, neurologists, the neuropathologists, geneticists, neurorediologists, and we
Speaker 5: also have you know, the rehabilitation experts with physical occupational therapy,
Speaker 5: the neuropsychologists and endochronologists. I mean, there are so many
Speaker 5: different expertise, you know, fields that are required to take
Speaker 5: care of these kids because brain tumors really affect every
Speaker 5: single aspect of their life and have the potential to
Speaker 5: affect every aspect of their physical and neurodevelopment. And so
Speaker 5: you know, we are really fortunate here to have so
Speaker 5: much expertise that we're able to really individualize the team
Speaker 5: needed for each specific child.
Speaker 1: Thank you so much. This is heavy stuff. Thank you
Speaker 1: so much. Really appreciate it. Doctor Lisabert, Director of Neurosurgical
Speaker 1: on collegen co Director of the Brain Tumor Center at
Speaker 1: Boston Children's Hospital. This is Bloomberg.
Speaker 2: This is the Bloomberg Business Week Daily Podcast. Listen live
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Speaker 1: Neurological development and research is so key, especially in children,
Speaker 1: because healthy brain development can influence outcomes for the rest
Speaker 1: of our lives.
Speaker 3: Doctor Ellen Grant is Director of Fetal Neonatal Neuroimaging and
Speaker 3: Developmental Science at Boston Children's Hospital. There, she leads to
Speaker 3: seventy person Neuroimaging and Computation no science center that's working
Speaker 3: to develop tools to better detect and understand brain physiology
Speaker 3: and development. The goal improve cognitive behavior and neurological outcomes
Speaker 3: and fetuses, infants and toddlers, brain imaging, and children. If
Speaker 3: we have a better understanding of the brain and fetal
Speaker 3: development and for babies and toddlers, what will that allow
Speaker 3: us to understand what does it prevent, what does it treat?
Speaker 6: Well, everything begins in uterul pretty much, so your life
Speaker 6: is an arc from infancy or one you're conceived through
Speaker 6: to adulthoods So the more we can understand the early development,
Speaker 6: the more we can start to understand how we make
Speaker 6: sure children are on the right trajectory. So the goal
Speaker 6: is to characterize brain development very early on, so we
Speaker 6: tell the very earliest point when to start to deviate
Speaker 6: from a normal trajectory so we can get things back
Speaker 6: on tracked early as possible. And ideally we want in
Speaker 6: future to be able to prevent diseases from happening, not
Speaker 6: just try to deal with them and try to correct
Speaker 6: them later on when the damage is partly done.
Speaker 1: So how early can we do it today and detect
Speaker 1: that there's something wrong? How early realistically do you think
Speaker 1: we can get it too?
Speaker 6: Yeah, we start looking at fetuses at about eleven fifteen
Speaker 6: weeks something around there, at the earliest, right closer to
Speaker 6: around eighteen weeks, we start to characterize brain development, you know,
Speaker 6: eighteen nineteen weeks or so, So it begins quite early
Speaker 6: when we start to see and look at early brain development.
Speaker 3: Well, you and your team did a study a few
Speaker 3: years ago that gave your results to argue for earlier
Speaker 3: MRI during pregnancy. Yeah, is that study enough to actually
Speaker 3: change the standard of care?
Speaker 6: Well, we do use it early here at Boston Children,
Speaker 6: So when there's an indication we do it as early
Speaker 6: as we can to better characterize the entire fetus, because
Speaker 6: it's not just the brain, it's the body it's attached to too,
Speaker 6: So we won't understand not just the brain develop but
Speaker 6: how that brain is developing the context of the other
Speaker 6: organ systems.
Speaker 1: So we can do because it doesn't necessarily run hand
Speaker 1: in hand, like it can be very different, right or
Speaker 1: like in terms of what's going on with brain development
Speaker 1: versus the rest of the system. They can disconnect.
Speaker 6: No, they're intimately connected life.
Speaker 1: So there's one. Yeah, So that's why we won't understand it.
Speaker 6: So say, for example, we with a lot of congenital
Speaker 6: heart disease here that has effects from brain development. We
Speaker 6: deal with congenital dive fromatic hernias that have effects on
Speaker 6: brain development. So everything that's happening in the fetus, whether
Speaker 6: there's a brain or not, is it has the potential
Speaker 6: to have subtle effects on brain development.
Speaker 1: Why do kids, I mean kids do need specialized tools
Speaker 1: her brain imaging to ask us about that one.
Speaker 6: Yeah, that's the whole reason that it came to Boston
Speaker 6: Children's is industries not interested in fetuses in prints and
Speaker 6: young children. So it's really hard to get devices that
Speaker 6: are built specifically for these age range. So that's why
Speaker 6: I brought a team of technical people. So they're engineers, physicists,
Speaker 6: computer scientists, data scientists that help to either develop the
Speaker 6: devices or come up with better ways to analyze the
Speaker 6: data that we get with an ion trying to understand
Speaker 6: pediactors actric disorders. So for example, we want to monitor
Speaker 6: and we're developing optical devices for the NICKU to monitors
Speaker 6: freequal bloodflow. But the heart of a heart rate of
Speaker 6: a neonate is one hundred, so we have to sample
Speaker 6: at a much higher rate than you would in an
Speaker 6: adult to get the same information. So we have to
Speaker 6: build specifically devices to the physiology. And then if can
Speaker 6: think of ahead of a premature baby, it's very very small,
Speaker 6: so I can't take a probe that we use in
Speaker 6: adults and just put it on a pre term, so
Speaker 6: we have to develop the devices to fit the size
Speaker 6: of the infants.
Speaker 1: I want to just go and I feel like we
Speaker 1: touched on this earlier. I mean, we are Bloomberg Business Week.
Speaker 1: We are Bloomberg and very entrenched in financial markets, and
Speaker 1: I feel like the more I've been doing this, money
Speaker 1: just follows everything money is why people do things or
Speaker 1: don't do things. Is that really it is just the
Speaker 1: market I hate to even make it that way, the
Speaker 1: market size, and so you don't have medical equipment companies
Speaker 1: building the things because they just don't think the market
Speaker 1: size is big enough.
Speaker 6: That is a big problem, and I think it's that's
Speaker 6: where we're trying to get into more of a business perspective.
Speaker 6: Like if we start to do a small startup that
Speaker 6: starts to answer those questions and a bigger company might
Speaker 6: buy it. But if we stay in the research realm,
Speaker 6: then it's sometimes really hard to go that last mile
Speaker 6: and get something into clinical practice.
Speaker 1: So how do you do that? How do you cross that?
Speaker 1: So what do you do?
Speaker 6: Yeah, this is what we're strategy strategizing on right now
Speaker 6: is trying to figure out how we do those small
Speaker 6: startups get industry interested I and a lot of things
Speaker 6: we're doing right now. Actually, one of the projects we're
Speaker 6: working on is you know AI strategies, right, and if
Speaker 6: we can get enough data on infants or thetses and
Speaker 6: so on, we can start to build models that predict
Speaker 6: not just group outcomes, but we want to get to
Speaker 6: individual outcomes because that's what parents care about, right, so
Speaker 6: if we can figure out get those models together. So
Speaker 6: that's what we're working on now, is trying to create
Speaker 6: these AI models that are specialized for pediatrics and hoping
Speaker 6: to do startups around that particular concept.
Speaker 1: I have to ask a more questiondent our venture capitalist
Speaker 1: is interested.
Speaker 6: I don't know because we haven't really talked about that.
Speaker 6: I've heard about, but I think they always want something
Speaker 6: that's almost ready. So we're hoping to go further along. Yeah,
Speaker 6: a little bit further along.
Speaker 1: Okay. Interesting?
Speaker 3: Can what we learn and what you understand through imaging
Speaker 3: about the brain's development be applied to how adult brains
Speaker 3: are treated.
Speaker 6: Everything in adult life has its genesis in infants, right.
Speaker 3: So we were all there once.
Speaker 1: Yeah, yeah, exactly.
Speaker 6: And some of the ways of adult brain response is
Speaker 6: more prominent in a pediatric brain. So in some disorders
Speaker 6: you go to pediatric models to see a physiologist. More
Speaker 6: prominent in neonates or infants, but also occurs in adults.
Speaker 3: You know, there was in doing the research. In the
Speaker 3: prep for our interview with you, there is a picture
Speaker 3: of a physician or a therapist doing some what's I
Speaker 3: think is called therapeutic hypothermia too a brand new baby's head.
Speaker 3: And my understanding is that oxygen deprivation around birth is
Speaker 3: one of the leading reasons that you actually see babies
Speaker 3: come into the Nike.
Speaker 6: You, yes, that was one of the main reasons.
Speaker 1: Yes.
Speaker 3: And the therapy for this is as simple as.
Speaker 6: Yeah, you cool them down or can be down there normal, Yeah,
Speaker 6: at least some normal thermic because when they have injuries,
Speaker 6: a response to that sort of the whole physiological response
Speaker 6: to an injury is to have a fever, and that
Speaker 6: is detrimental. So we want to keep them cool so
Speaker 6: that they don't set off these cascades of brain injury.
Speaker 6: And that's partly why we build this one device, because
Speaker 6: we want to be able to monitor through the NICK
Speaker 6: you stay and optimize management. But it's interesting, we don't
Speaker 6: even know what the great blood pressure for a newborn is.
Speaker 1: So this is.
Speaker 6: Why we wanted to have a probe that could measures
Speaker 6: reable blood flow to the brain because there is no
Speaker 6: way to monitor whether there's enough brain or oxygen getting
Speaker 6: to the brain with the tools that we have right now.
Speaker 1: I feel like we don't even talk about blood pressure
Speaker 1: when it comes to like infants, right, Yeah, we just don't.
Speaker 1: But you need to know. You did your residency and
Speaker 1: fellowship in the nineteen nineties. Curious how imaging has changed
Speaker 1: since then, and then where do you think, how will
Speaker 1: it improve in the next I don't know, ten years.
Speaker 1: You know what's a smart benchmark? Yeah, yeah, I know.
Speaker 6: When I was in training, netmark was just starting and
Speaker 6: it was very slow. So where we come now is
Speaker 6: the acceleration position is just incredible. What used to take
Speaker 6: us an hour to do we can do in ten
Speaker 6: minutes now, So there was creed. The speed of acquisition
Speaker 6: is huge. Were also developing a lot of analysis that
Speaker 6: we can do after the images are acquired to give
Speaker 6: us more quantitative metrics, because the whole thing in medicine
Speaker 6: to get past the qualitative read of a radiologist, which
Speaker 6: is helpful, but we want to put more numbers on
Speaker 6: it so we can have a more dynamic range on
Speaker 6: how we describe each child and this therefore we can
Speaker 6: get into better precision medicine and help prediction. So we're
Speaker 6: getting more to that quantitative aspect of imaging now, and
Speaker 6: not just bringing but all body parts of course, and
Speaker 6: you know down to fetel age.
Speaker 1: Is it for kids too? Every case is very personal
Speaker 1: and individual? Or are there trends and things that you
Speaker 1: can help in so that one case can help another.
Speaker 1: Is there a body of knowledge that gets built off
Speaker 1: of this?
Speaker 6: Yes, there's body that of knowledge gets built off of this.
Speaker 1: But this is where we come back to AI.
Speaker 6: I only can remember some, you know, even though I've
Speaker 6: been in practice for a long time.
Speaker 1: Things follow out crap.
Speaker 6: So this is where I'm really excited about AI because
Speaker 6: I can, you know, mine oor databases to find where's
Speaker 6: an individual child just like that one I'm treated. Now,
Speaker 6: what did they respond to, what worked for them, and
Speaker 6: how are these two similar? So I can mind the
Speaker 6: databases to start to come up with individual outcome prediction,
Speaker 6: which is what we're doing right now.
Speaker 1: With databases.
Speaker 6: We've got some from some of the major trials for hypothermia,
Speaker 6: and so we can use this large database to start
Speaker 6: try to take individual outcomes. You can say, well, I
Speaker 6: have a newborn with this pH that had these you know,
Speaker 6: and I'm a mother of this age and put in
Speaker 6: features and they could give you from that database an
Speaker 6: outcome prediction. So working on that and also working on
Speaker 6: making data more available to parents because I think a
Speaker 6: lot of parents are very frustrated with trying to read
Speaker 6: the literature, even if you're using chat, GPT or really hard.
Speaker 1: It's really hard.
Speaker 6: And then you get group statistics and then where does
Speaker 6: my kid fit in between the twenty five to seven
Speaker 6: five percent, you know, good outcome or something like that.
Speaker 6: To get chatbots that can work with some of our databases,
Speaker 6: so people anybody can talk to, you know, a physician,
Speaker 6: so to speak, to give the answers that they want.
Speaker 3: That's that's pretty remarkable because you know, I just think
Speaker 3: about the tone of these chatbots and if there's a
Speaker 3: way that they can be you know, we talked about
Speaker 3: we talked earlier this week about what a challenge it
Speaker 3: can be for people to actually interact with them in
Speaker 3: an you quote unquote normal way. But is there a
Speaker 3: way for them to actually be empathetic and work with patients,
Speaker 3: work with parents and with families.
Speaker 1: If you give us we've got about forty second.
Speaker 6: Yeah, yeah, no, we're working on that. But I can't
Speaker 6: tell you all the secrets because we're.
Speaker 1: Hang know, you go over the that. Can I ask you,
Speaker 1: when you guys do use AI in chat? Do you
Speaker 1: have hallucinations? Like do the AI hallucinations. Do you or
Speaker 1: how do you? Especially when you're dealing with medical y prevention.
Speaker 6: There was a lot of safeguards who put around that,
Speaker 6: so it's we have again. This is sort of more
Speaker 6: the secret sauce that I can't talk about yet, but
Speaker 6: there are ways to constrain chatbots to give you reasonable
Speaker 6: answers that are statistically found.
Speaker 1: All right, so when you can, when you come back,
Speaker 1: yes it will Okay, good stuff. So appreciate Doctor Ellen Grant,
Speaker 1: Director of Fetal Neonatal, Neuroimaging and Developmental Sciences here at
Speaker 1: Boston Children's Hospital. Thank you again. Thank you. You guys
Speaker 1: are all amazing, They're all behind us.
Speaker 2: You're listening to the Bloomberg Business Weekdaily Podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern Listen
Speaker 2: on Apple CarPlay and Android Auto with the Bloomberg Business app,
Speaker 2: or watch us live on YouTube.
Speaker 1: We continue with more of our conversations from Boston Children's Hospital.
Speaker 1: It was a broadcast we did earlier this month of
Speaker 1: Remote where we spoke with some of the nations leading
Speaker 1: doctors on matters related to health, health policy and innovation
Speaker 1: when it comes to medical care, especially for kids.
Speaker 3: Well a fixture at my high school in college was
Speaker 3: torn acls volleyball, across soccer, field hockey. That's torn ACL,
Speaker 3: the surgery to reconstruct it, weeks on crutches, and then
Speaker 3: months of recovery. This is doctor Martha Murray's world. She's
Speaker 3: orthopedic surgeon in chief of Boston Children's Hospital. She joined
Speaker 3: us from the hospital. Why do ACL tears affect women
Speaker 3: more than men?
Speaker 7: Well, it's a really interesting question, and it's been one
Speaker 7: of much debate for the last few decades, and there
Speaker 7: have been things like, well it must be a hormone cycle,
Speaker 7: or it's the shape of women's hips and their valgus
Speaker 7: angles to their knees. But a really interesting study came
Speaker 7: out very recently from the Harvard School of Public Health
Speaker 7: as well as Harvard University with doctor Danielson and doctor Richardson,
Speaker 7: where they actually showed that the studies that say that
Speaker 7: women tear their ACL more frequently than men were often
Speaker 7: based when the women's teams were smaller than the men's teams,
Speaker 7: and the way they calculated exposures was the number of
Speaker 7: practices or games you played in, not necessarily your playing time.
Speaker 7: So if you're a man, who's on a hockey team
Speaker 7: versus as a woman who's on a hockey team. The
Speaker 7: women's teams were smaller, so those women were playing more
Speaker 7: so they were planting and hockey that's a bad example.
Speaker 7: Soccer would be better, but if the team is smaller,
Speaker 7: the women are going to be planting and pivoting and
Speaker 7: playing much more time per game or practice.
Speaker 1: Some more stress, more use more stress, more use more TEK.
Speaker 3: So maybe it's not Maybe women in all things equal,
Speaker 3: Maybe women and men don't have a different rate of
Speaker 3: torn ACL correct.
Speaker 7: When when they corrected for unit of exposure, so kind
Speaker 7: of game time playing rather than just a game, the
Speaker 7: injury rates look very similar.
Speaker 3: Wow, that's totally different than what's I mean, do you
Speaker 3: is that? Do you is this the standard now? I
Speaker 3: mean do you think this is?
Speaker 7: It's relatively new work that's coming out, but it resonates
Speaker 7: with most of us who take care of women and
Speaker 7: men on their on their athletic teams.
Speaker 5: Yeah.
Speaker 1: I want to ask about your background material science and engineering.
Speaker 1: I know Tim said it not typical for a surgeon,
Speaker 1: but I think it's it's a really smart combination. Well,
Speaker 1: I have a doctor, a foot doctor, same thing. Engineering
Speaker 1: and like he is and just deal with my foot.
Speaker 1: He thinks about, Okay, what are you doing? What else
Speaker 1: is going on in your body? Tell me about that
Speaker 1: mix and why it's kind of unique and smart and
Speaker 1: ties things together.
Speaker 4: Well.
Speaker 7: For me, it was actually a necessity.
Speaker 5: Right.
Speaker 7: So I was an engineering graduate student and a friend
Speaker 7: of mine came into a party one night and then
Speaker 7: on crutches as Tim was saying and who had torn
Speaker 7: his ACL? And I said, oh, are they going to
Speaker 7: go sew it back together? And he was a med student.
Speaker 7: He was like, you, stupid engineer, We can't sew it
Speaker 7: back together. You have to take it out and replace
Speaker 7: it with the graft of tenant that they're going to
Speaker 7: take from the back of my leg. And then it's
Speaker 7: all this rehab. And I thought that seems kind of excessive, right,
Speaker 7: Like that's a lot to have to go through. And
Speaker 7: so I spent the next six months or so in
Speaker 7: the medical school library just reading everything I could about
Speaker 7: why didn't the ACL heal? And I realized nobody really
Speaker 7: had figured out why it didn't. He know, they tried
Speaker 7: it sewing back together didn't work. So then went to
Speaker 7: grafts and we've been doing graphs for fifty years and
Speaker 7: nobody really asked why doesn't it heal? And so for
Speaker 7: me then there was no biomedical engineering at that time,
Speaker 7: and so my choices were to continue on with my project,
Speaker 7: which was developing airplane wings were invisible to you know,
Speaker 7: to radar, and I thought, well, that's a really cool project,
Speaker 7: but I really want to figure out this ACL thing.
Speaker 7: And my advisor was like, well, I guess you could
Speaker 7: go to medical school.
Speaker 1: This is a Netflix series.
Speaker 3: Okay, Well, the advisor obviously had an impact in your
Speaker 3: friend obviously had an impact. But fast forward, you know,
Speaker 3: thirty years plus and you have actually invented a new
Speaker 3: way to treat ACL tears. The bear mackod you did
Speaker 3: figure out that there's a reason why acls don't heal
Speaker 3: like an MCL would actually heal. Why is that, Well,
Speaker 3: it's really interesting.
Speaker 7: So both the medial collateral ligament and the anti a
Speaker 7: cruciate ligament are ligaments. When you look at them under
Speaker 7: the microscope, they look very similar. But interestingly, when the
Speaker 7: MCL tears, you can go on to brace in it
Speaker 7: about six weeks that ligament will heal fine in your
Speaker 7: back playing soccer. In contrast, the ACL. When it tears,
Speaker 7: even if we try to sew it back together, it
Speaker 7: doesn't heal, and so we wondered why, and so we
Speaker 7: did a series of studies where we looked and we
Speaker 7: compared the two tissues in their response to injury. And
Speaker 7: what we found was that actually the response to injury
Speaker 7: is very similar in the two ligaments. So the tissue
Speaker 7: and the cells and the tissue were doing exactly what
Speaker 7: they were supposed to do in both tissues. But the
Speaker 7: difference was in the MCL. When it tears, the ends bleed,
Speaker 7: and that blood clots informs what we call a hematoma
Speaker 7: between the two torn ends of the ligament. And then,
Speaker 7: in contrast, in the ACL, because it lives in this
Speaker 7: fluid environment of the joint, the ends bleed, but instead
Speaker 7: of making a clot or hematoma between the torn ends
Speaker 7: of the ligament, the blood disperses through the fluid of
Speaker 7: the joint, and so the two ends never have that scaffolding,
Speaker 7: that biologic scaffolding to hold them back together. So once
Speaker 7: we discovered that, then it was a fairly logical step
Speaker 7: to say, is there some way we could immobilize the
Speaker 7: blood in between those two torn ligament ends and get
Speaker 7: that biologic signal where it needs to be to encourage
Speaker 7: healing of the ACL, and that's really what Bridge Enhanced
Speaker 7: ACL repair or BEAR is. So the magic is kind
Speaker 7: of the sponge that we've developed that can absorb the
Speaker 7: patient's blood. You can place that blood laden sponge in
Speaker 7: between the torn ends of the ACL, so the acal
Speaker 7: back together.
Speaker 1: But now you have the.
Speaker 7: Biology plus the sutures and the repair and the ligament
Speaker 7: will heal.
Speaker 3: So what is done in terms of numbers or percentage
Speaker 3: with the method that you pioneered, what you invented, versus
Speaker 3: actual reconstruction and using other ligaments.
Speaker 7: That's a great question. So this is still fairly new.
Speaker 7: So we got FDA approval for this product in twenty
Speaker 7: twenty and so it's only been in practice for a
Speaker 7: few years now. There's studies coming out of Children's here,
Speaker 7: which is where we did the first studies, of course,
Speaker 7: but now other centers are coming along and doing follow
Speaker 7: on studies and those results are starting to come out
Speaker 7: and it's very exciting to watch it grow.
Speaker 1: I'm also curious you mentioned but like FDA approval, like
Speaker 1: the approval process, is it a smart one? Is it
Speaker 1: the right one? In terms of making sure that what's
Speaker 1: being done and studied, the R and D, that it's
Speaker 1: safe for when it's finally done on patients, or is
Speaker 1: it preventing things from maybe putting put into you sooner?
Speaker 1: Like I'm just curious where you guys weigh in. You're
Speaker 1: in it, You're in it every day. Yeah, I think
Speaker 1: it's a delicate balance. But I would say in our
Speaker 1: personal experience, the Fday was an amazing partner. Okay, So
Speaker 1: we were able to get into an early adoption program
Speaker 1: where they actually met with us and helped us and
Speaker 1: put together a panel of experts that would help us
Speaker 1: figure out how to make this the safest possible product
Speaker 1: and the most effective product before we went to patients,
Speaker 1: and we found their advice incredibly valuable. There was a
Speaker 1: lot of conversation and back and forth and just having
Speaker 1: them it felt like it was a team effort because
Speaker 1: we were in alignment. I mean, as a physician, I
Speaker 1: was going to be shaking the hands of these patients
Speaker 1: that my partners were, and we wanted to make sure
Speaker 1: things were as safe as possible.
Speaker 4: So they helped us with that.
Speaker 3: Do we have data yet on long term impact or
Speaker 3: long term outcomes. Yet when it comes to the bare procedure.
Speaker 7: Yeah, our longest data that we have is at about
Speaker 7: six years, and it's only in the small number of
Speaker 7: patients in those first studies that we did. But the
Speaker 7: reason that we want to study at longer term is because,
Speaker 7: as you may know, many of these patients will develop
Speaker 7: arthritis early in life, and as a pediatric orthopedic surgeon,
Speaker 7: I want to make sure we have a procedure that's
Speaker 7: going to last my patients for sixty or seventy years,
Speaker 7: not have the knee breakdown in ten or twenty years.
Speaker 7: And so we're very interested in this arthritis question with
Speaker 7: bear and in our preclinical studies we were able to
Speaker 7: see that arthritis was actually much less in the subjects
Speaker 7: that we treated with an acl repair with the sponge
Speaker 7: versus a reconstruction. So we're interested in seeing if that
Speaker 7: same thing plays out in patients, and the early data
Speaker 7: suggest that it will it is true, but again that's
Speaker 7: very early data on small numbers of patients, so we're
Speaker 7: excited to see how that pans out.
Speaker 1: We're talking with doctor Martha Murray. She's orthopedic surgeon and
Speaker 1: CHI for Boston Children's Hospital that's where we are Tim
Speaker 1: and me on this Friday. Preventive care. Like, so much
Speaker 1: of what we talk about often when we're doing interviews
Speaker 1: is preventive care. And I feel like the whole health
Speaker 1: community has been thinking about this for a long time.
Speaker 1: So what's the preventive care so that as much as
Speaker 1: we don't want you unemployed, like, how do we think
Speaker 1: about taking better care if we're living longer? Like, how
Speaker 1: do we think about this?
Speaker 7: So there's a couple questions on that. So one is
Speaker 7: how do we help our teenagers reduce their risk of injury?
Speaker 7: And I think the main thing for that for our
Speaker 7: athletes when they're in it.
Speaker 1: If we push kids when they're younger. I think a
Speaker 1: lot of parents really push kids.
Speaker 7: So some things we can do to help them is
Speaker 7: help them work on strengthening in addition to just play time.
Speaker 7: And another thing is cross training, So not playing the
Speaker 7: same sport all year round or playing the same sport
Speaker 7: every day, giving their body a chance to rest and
Speaker 7: heal between exposures to sport.
Speaker 1: Does it's as simple as that?
Speaker 4: I think?
Speaker 3: So, Wow, does ACL tear happen more in kids than adults?
Speaker 3: Or and if yes, is it because kids are the
Speaker 3: ones who are playing sports, and you know we're just
Speaker 3: sitting at computers.
Speaker 7: I think that's probably part of it. Again, it gets
Speaker 7: to this exposure question. How many times do you plant
Speaker 7: and change direction? And so the peak of a c.
Speaker 7: Andrews is really the high school athlete because there's so
Speaker 7: many everybody's playing a sport and so we see a
Speaker 7: lot of them there.
Speaker 1: I want to ask you at social media and all
Speaker 1: of us sitting on phones, are sitting in front of screens,
Speaker 1: like I just I keep thinking that we're going to
Speaker 1: one day. I don't know whether it's fifty years from
Speaker 1: now we're going to have a neck that basically goes
Speaker 1: over there or maybe not because we're going to have
Speaker 1: glasses on. And that's like, how do you think about
Speaker 1: this digital world? You're laughing?
Speaker 3: But can we surgically remove my phone from my hand?
Speaker 3: That's what That's what.
Speaker 1: But I do think about what it's doing to us.
Speaker 7: Well, I look at it not just one fixed for you.
Speaker 7: I don't know if I can fix the social media.
Speaker 1: But physically, like I'm just thinking like how you know
Speaker 1: kids are in their phones constantly and stuff, and like
Speaker 1: the shape like like do we need to be thinking
Speaker 1: about what this is doing kind of to our spine
Speaker 1: and different things. I think so.
Speaker 7: But I also think things come in cycles, right, And
Speaker 7: we see now if you walk down the street, you
Speaker 7: see everybody's on their phone. I think we're gonna five
Speaker 7: years from now, we're going to look at back at
Speaker 7: that and say why are we doing that? You know,
Speaker 7: maybe we'll start looking up at the sky more, I hope. So, yeah,
Speaker 7: that's what I hope too.
Speaker 4: Yeah.
Speaker 3: I mean, gosh, that's like your open air.
Speaker 1: I know. I just I look around on the subway
Speaker 1: and just everybody and I'm just thinking the curvature and
Speaker 1: I don't know, whatever, what's the next thing you're working
Speaker 1: on or that you're excited about.
Speaker 7: I'm really excited about a product that we' working on
Speaker 7: for rotator cuff injuries. And it's a product that's injectable,
Speaker 7: so that potentially.
Speaker 3: It is great.
Speaker 7: Yeah, you can have ultras on your shoulder, see where
Speaker 7: the tear is, and then inject the product into the tear,
Speaker 7: maybe in an office visit. So that's what we're going on,
Speaker 7: but very early day on that.
Speaker 3: Again, a challenge with pediatric patients as well.
Speaker 7: No, this is more adults but we were just we
Speaker 7: thought we could make this work for a ligament. Maybe
Speaker 7: we could try it for the rotator cuff ten And and
Speaker 7: the nice thing about the rotator cuff is it is
Speaker 7: accessible by ultrasound and injection and it's a pretty easy
Speaker 7: model for us to study if we can make that
Speaker 7: injectable work there, and there's lots of other places we
Speaker 7: could apply a meniscus other things.
Speaker 3: Did you ever figure out the invisible airplane wings?
Speaker 4: No?
Speaker 1: Not too late?
Speaker 7: Well, social media Visible Airplane Wings ACL wrote that you guys.
Speaker 1: Are killing me.
Speaker 3: Well, we are glad you ended up going into pediatric
Speaker 3: orthopedic surgery app.
Speaker 1: Is there another career like to add on after this?
Speaker 1: You could do it. You could do it. This was
Speaker 1: so much fun. It was fun. Thank you guys very much,
Speaker 1: Doctor Martha Murray, she's orthopedic surgeon chief for Boston Children's Hospital.
Speaker 2: This is the Bloomberg Business Week Daily Podcast. Listen live
Speaker 2: each weekday starting at two pm Eastern on Apple car
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Speaker 2: You can also listen live on Amazon alone from our
Speaker 2: flagship New York station, just Say Alexa played Bloomberg eleven
Speaker 2: thirty blendy ahead.
Speaker 1: In our second hour of the weekend edition of Bloomberg
Speaker 1: Business Week, a special holiday edition, as we dig into travel,
Speaker 1: spirits and more. We're going to catch up with the
Speaker 1: founder and CEO farm Girl Flowers on running her multimillion
Speaker 1: dollar business. We'll hear about the consumer from her, and yes,
Speaker 1: we're going to talk even a little AI.
Speaker 3: Plus we talk bourbon jen Rye ready to drink cocktails
Speaker 3: and changing consumer habits with the CEO of the US
Speaker 3: spirits brand Craft Co.
Speaker 1: First up this hour, Thanksgiving weekend. No surprise, it is
Speaker 1: one of the busiest holiday weekends for travel. Triple A
Speaker 1: projects nearly eighty two million people will travel at least
Speaker 1: fifty miles from home over the Thanksgiving holiday period, which
Speaker 1: goes from Tuesday November twenty fifth to Monday, December first.
Speaker 1: This year's domestic travel forecast includes an additional one point
Speaker 1: six million travelers compared to last Thanksgiving, and if so,
Speaker 1: that would set a new overall record.
Speaker 3: Travel is less subject to in flation pressures, but if
Speaker 3: consumers are feeling the squeeze, they still may cut back
Speaker 3: their travel spending. Somebody who's got a pulse on travel spending,
Speaker 3: as Mike Brown, who's president's CEO of travel and Leisure.
Speaker 3: It's got close to twenty resort, travel, club and lifestyle brands,
Speaker 3: including Margaritaville, Vacation Club, Club, Windom and more.
Speaker 8: Well, ultimately we're one hundred percent leisure travel company and
Speaker 8: our demographic is around one hundred and ten thousand dollars
Speaker 8: of average income, average FIICO over seven hundred and thirty
Speaker 8: average FICO score, age group upper forties, low fifties. And
Speaker 8: really what when you start to think about who likes
Speaker 8: to travel with us, no matter the brand, They want
Speaker 8: bigger accommodations, they want consistency of brands, and they want
Speaker 8: good value for their money. And that's really the space
Speaker 8: that we operate in. And if you think about these
Speaker 8: last five years, where inflation is running high and you've
Speaker 8: already locked in your vacation dollars, the value component has
Speaker 8: been really strong.
Speaker 9: This propelled our growth here in the last five years.
Speaker 3: How much of your business is sales of new memberships
Speaker 3: versus people actually just using what they bought maybe years ago.
Speaker 8: Right, It's actually one of the best endorsements of people's
Speaker 8: love of the product is that every year about sixty
Speaker 8: five percent of our incremental purchases are from people who
Speaker 8: already own with us and want either more space or
Speaker 8: more vacation time. The rest are from our new owner
Speaker 8: base who are dipping their toe in the water and
Speaker 8: seeing what this type of vacation travel is all about.
Speaker 8: So not only are we getting two thirds of our
Speaker 8: sale roughly from people who already own with us, what
Speaker 8: we also see is the people who've paid for their
Speaker 8: ownership already.
Speaker 9: There's a ninety eight percent retention rate.
Speaker 8: So two massive validations that once people own, they really
Speaker 8: love the product and keep buying more.
Speaker 3: So, you know, timeshares, they get a bad rap, and
Speaker 3: they have a bad rap. I mean, if you like,
Speaker 3: just Google, get out of time share, there are legal
Speaker 3: companies that specialize in getting you out of time shares
Speaker 3: is yeah, I mean you know this. You know the industry.
Speaker 3: Is your product different than what people know as time shares?
Speaker 3: And why that?
Speaker 9: Yeah?
Speaker 8: Wrap, Look, it's interesting because I can even feel the
Speaker 8: a little bit uncomfortableness of asking the question because it
Speaker 8: has a history that predates the Great Financial Crisis. But
Speaker 8: I think the untold story here and why I love
Speaker 8: coming on shows like yours, beyond it being a great show,
Speaker 8: is that the industry has dramatically changed. Eighty five percent
Speaker 8: of the sales today are by companies that you might
Speaker 8: book your business day, whether it's Marriott, Hilton, Wyndham, Margaritaville,
Speaker 8: Holiday and Disney. All of these are the brands that
Speaker 8: have come to the forefront in the last ten years.
Speaker 8: And the value proposition, the way of vacationing with a
Speaker 8: brand you trust, is not the reputation that it gained
Speaker 8: great financial crisis, where it was independent real estate developers.
Speaker 8: And I would just encourage everyone to do your own
Speaker 8: research about these type of advertisements. There's a lot of
Speaker 8: press out there that's shown some really negative stories about them.
Speaker 8: That's for your people to do their own research. But
Speaker 8: what I will tell you is that our retention rate,
Speaker 8: as I mentioned, ninety eight percent, two thirds buy more.
Speaker 8: And this is now a massively branded industry that it
Speaker 8: wasn't when it gained that reputation you're referring to.
Speaker 1: So what's like the trickiest component of your business? Is
Speaker 1: it properties? Management, labor? I'm just curious.
Speaker 9: Yeah, it's a complicated business.
Speaker 8: We run a sales and marketing business, we run a
Speaker 8: management business.
Speaker 9: We operate the club.
Speaker 8: So that we can get people from one of our
Speaker 8: two hundred and eighty resis orts to another, and we
Speaker 8: access the ABS market three times a year to sell
Speaker 8: our notes and gain cash flow. I think it's the
Speaker 8: management of all of that together when you look at
Speaker 8: our company's performance, the satisfaction of our customer base, and
Speaker 8: the growth of our brands. We've been highly successful and
Speaker 8: shown growth and showed a way to grow, and it's
Speaker 8: shown through in our equity. But it's the experienced leadership
Speaker 8: to combine several very complicated businesses together to make sure
Speaker 8: that it's seamless for the consumer and that we're also
Speaker 8: ultimately fulfilling our mission, which is getting people on great vacations.
Speaker 8: So I would say it's the complexity of the management
Speaker 8: as opposed to an individual component that's.
Speaker 9: Really hard to operate.
Speaker 8: I would just add that one component that has become
Speaker 8: more complex is the development of real estate has become
Speaker 8: a lot more expensive ground ups, so we've moved to
Speaker 8: a conversion strategy and a lot of our new resorts.
Speaker 3: So I want to talk a little bit more about
Speaker 3: the demographics here of your clientele, and certainly you know
Speaker 3: with twenty different brands, it depends on what actual brand
Speaker 3: we're talking about. You did give us some age demographics
Speaker 3: and where people are generationally, but in terms of spend,
Speaker 3: what are they spending? What do you know about where
Speaker 3: you know in terms of their other demographics like household
Speaker 3: net worth and what part of the economy you're able
Speaker 3: to get.
Speaker 8: Right Well, what we find in our product is the
Speaker 8: vast majority, irrespective of the brands, are going to want
Speaker 8: to be in a situation where they want to know
Speaker 8: what they can expect from their vacation and a Margaritaville
Speaker 8: guest is going to want a sand, a drink in
Speaker 8: your hand, that type of lifestyle, Whereas our newest brand,
Speaker 8: Eddie Bauer, these are people that want to hike in
Speaker 8: Zion National Park or get to the great outdoors and
Speaker 8: enjoy a family reunion. Either way are financial demographics or
Speaker 8: what I explained earlier, But what we see as the
Speaker 8: travel trend is people want experiences that match their personal
Speaker 8: lifestyle as opposed to four walls, and then they have
Speaker 8: to go find their experience outside of the resort. So
Speaker 8: that's why we're launching sports illustrated brand Eddie Bauer. We
Speaker 8: have Margaritaville Club Windham you mentioned, we see an opportunity
Speaker 8: to customize your experience inside the resort and outside as
Speaker 8: opposed to over separating the financial demographics. I will say
Speaker 8: one of our big focus is to pull the average
Speaker 8: age down as we launch new brands over the upcoming years.
Speaker 1: You know, it's interesting, like I do, think about how
Speaker 1: consumers relate to a specific brand. I mean that really
Speaker 1: moves the needle, doesn't it, whether it's Sports Illustrated. I'm
Speaker 1: just curious, And how do you guys think about what
Speaker 1: brands you want to affiliate yourselves with?
Speaker 8: Right if if you know, I've I've I have two
Speaker 8: children that are children young men that are at a university.
Speaker 9: Kids.
Speaker 8: Yeah, they really are, they really are. But I'll tell
Speaker 8: you if I were to go go up to ann
Speaker 8: Arbor and I have the option to stay in an
Speaker 8: unbranded hotel with four walls or something that affiliates itself
Speaker 8: closer to the university, there's a natural pull to it.
Speaker 8: And you know, I can apply that. If you're going
Speaker 8: to go to a beach destination, you have a chance.
Speaker 8: And if you're a parent head and you want to
Speaker 8: be in that Margaritaville environment versus a resort that's a
Speaker 8: brand that has thousands of resorts everywhere from the highways
Speaker 8: to the resort destinations. You're going to go to the
Speaker 8: Margaritaville location, and our club Windom has a similar type
Speaker 8: of affiliation. So we just find that people are moving
Speaker 8: more and more to the lifestyle that attracts them, and
Speaker 8: we are therefore developing brands that allow them to just
Speaker 8: do that naturally, to enjoy their lifestyle inside of the
Speaker 8: resort and outside. And it's it's already been received with
Speaker 8: a lot of great reception and we're excited about what
Speaker 8: we can do going forward.
Speaker 3: What's the brand? You have so many different brands. You
Speaker 3: mentioned Marguerite, we talked about wind Eddie Bowers. What what
Speaker 3: are you missing?
Speaker 8: Yes, I think there's a few things that that we
Speaker 8: have to consider. We don't have any anything in the
Speaker 8: luxury space today, what I would say pure luxury. There's
Speaker 8: a lot of opportunities to tie our type of product
Speaker 8: to the crew to.
Speaker 9: Cruise type of companies.
Speaker 8: And then, as is always the case, someone you know,
Speaker 8: uh five years ago would have said, well, Eddie Bauer
Speaker 8: is not a hospitality name, but you immediately put that
Speaker 8: to an outdoor.
Speaker 9: Outdoor living lifestyle.
Speaker 8: And I think our challenge is there's the typical hospitality verticals,
Speaker 8: which would include luxury, but there's also just niche, niche
Speaker 8: lifestyle opportunities that we will look for. But you know,
Speaker 8: if I could just step back a second, the key
Speaker 8: to our success is whatever we do, we execute against
Speaker 8: it and we deliver on what we promised the street,
Speaker 8: and that success allows us more and more access to
Speaker 8: more and more brands. So I would expect that to
Speaker 8: allow us to move into these spaces that we currently
Speaker 8: aren't in.
Speaker 1: Well, I'd love to be sitting at Margaritaville Vacation, a
Speaker 1: Margarita vacation club with the Margarita in my hand. But
Speaker 1: having said that, before we go, Mike, any signs of stress,
Speaker 1: any signs of you know, economic you know, concerns as
Speaker 1: you look at your business, or maybe what it tells
Speaker 1: you about the outlook here.
Speaker 8: Well, I would say my personal sentiment and what I'm
Speaker 8: seeing in our business is very similar to it was
Speaker 8: thirty days ago, which was there's still uncertainty out there,
Speaker 8: which causes us to be looking intently every day with
Speaker 8: any metric internally that would signal the economies.
Speaker 9: Going one way, or the other.
Speaker 8: Thirty days on from our earnings call, I would say
Speaker 8: that our performance and our outlook on the economy looks
Speaker 8: very similar than it did at the end of October
Speaker 8: when we reported our leisure travel demand is looking good
Speaker 8: for Q four. With the sound that the shutdown is
Speaker 8: coming to an end, I was starting to worry that
Speaker 8: we might start to see changes in behavior between air
Speaker 8: and drive to traffic.
Speaker 3: Are you seeing that at all? Just very briefly, we.
Speaker 8: Have not, And in fact, it looks like our twenty
Speaker 8: five bookings here in Q four are at or slightly
Speaker 8: above where they were last year, and we haven't seen
Speaker 8: a dramatic change. We've seen ever so slightly that changed
Speaker 8: from fly to drive to but I'm really confident that
Speaker 8: it hadn't gone on another week or two into the
Speaker 8: Thanksgiving season, we would have saw a noticeable shift of
Speaker 8: people in New York saying, look, let me just get
Speaker 8: to a drive to destination as opposed to flying to Orlando.
Speaker 8: I don't want to deal with the hassle with my
Speaker 8: free time. Fortunately, it looks as if we will avoid that.
Speaker 8: But at this point we have not seen an indication
Speaker 8: that that has caused changing leisure Travel.
Speaker 1: Mike Brown, President CEO of Travel and Leisure Company, joining
Speaker 1: us from Orlando.
Speaker 2: You're listening to the Bloomberg Business Weekdaily podcast. Catch US
Speaker 2: live weekday afternoons from two to five pm Eastern. Listen
Speaker 2: on Apple CarPlay and Android Auto with the Bloomberg Business app,
Speaker 2: or watch US Live on YouTube.
Speaker 1: US consumer confidence led in November by the most in
Speaker 1: seven months, on growing anxiety about the labor market and
Speaker 1: the US economy.
Speaker 3: Now.
Speaker 1: Survey by the Conference Board, released this past Tuesday also
Speaker 1: found that confidence fell across nearly all income levels after
Speaker 1: several months of increasing.
Speaker 3: For most groups, A gauge of expectations for the next
Speaker 3: six months declined to the lowest level since April, while
Speaker 3: measures of present conditions slumped to ing more than one
Speaker 3: year low. The ongoing slide in consumer sentiment reflects lingering
Speaker 3: concerns about the impact of persistently high prices and a
Speaker 3: cooling labor market on Americans finances as well as the
Speaker 3: broader economy.
Speaker 1: The health of the US consumer is something we always
Speaker 1: focus on. With Christina Stembel, she's the founder and CEO
Speaker 1: of farm Girl Flowers. We've been talking to her for
Speaker 1: several years now that firm by the way she bootstrapped
Speaker 1: starting back in twenty ten making bouquets from her San
Speaker 1: Francisco apartment. I got to say, it's come a long way.
Speaker 10: It's the first year that we're actually seeing any growth
Speaker 10: since twenty twenty, but very small a couple of points,
Speaker 10: and that's very intentional. We're really focused on the bottom line,
Speaker 10: you know, we want to make sure all these companies
Speaker 10: are doing layoffs. I want to make sure we're not that.
Speaker 10: You know, we're actually we have I don't know, ten
Speaker 10: or twelve open positions right now, which for a company
Speaker 10: our size.
Speaker 11: Is a lot.
Speaker 10: So we're just growing at a clip that we can
Speaker 10: do while maintaining our profit margins. Is the opening We're
Speaker 10: about thirty five million, you know, plus a little bit.
Speaker 11: But yeah, and how many people right under thirty.
Speaker 3: So you have like a third of your positions are
Speaker 3: open right now. Basically, are you having trouble finding those.
Speaker 11: Employees or just going slow?
Speaker 10: We're looking for the right people. So we have a
Speaker 10: lot of applicants, but we're just making sure we're bringing
Speaker 10: the right people. Yeah, I think I've learned that having
Speaker 10: the wrong people is actually worse than just not having anyone.
Speaker 11: So that's a lesson, it's.
Speaker 1: It is a good lesson. So in terms of fifteen years,
Speaker 1: tell us about like how you look back at the
Speaker 1: beginning and where you were in some of the stages
Speaker 1: you've gone through, and then where you are today. Yeah.
Speaker 10: I just sat down and wrote, like, you know, fifteen
Speaker 10: lessons in fifteen years. You know, I might share them
Speaker 10: at the end of the year. I was just trying
Speaker 10: to think about, like, you know, where I'm at now
Speaker 10: versus you know, I feel much healthier right now personally
Speaker 10: and professionally.
Speaker 11: And like why do I feel that way?
Speaker 10: And I think the biggest lesson that I had written
Speaker 10: down was that nothing is as it seems like when
Speaker 10: I started, I wanted that founder story in Silicon Valley,
Speaker 10: I started in San Francisco. I wanted to be the
Speaker 10: cover of Ink or ch one of the big magazines,
Speaker 10: and you know where everybody was like she did it?
Speaker 10: Look at that, you know, and it was like all
Speaker 10: my ego. I finally realized it was my ego. And
Speaker 10: we grew really really fast, and that like played into
Speaker 10: my ego and I felt like that was my entire identity,
Speaker 10: was that you know, all the press we were getting
Speaker 10: in with our you know, fast growth, and yet twenty nineteen,
Speaker 10: we did thirty four million in revenue and I did
Speaker 10: thirty six thousand in profit and I paid myself sixty
Speaker 10: thousand dollars.
Speaker 11: Like this is not a success story.
Speaker 10: But the outward you know, outward rule thought I was
Speaker 10: like so successful, and I'm like, I'm barely scraping by
Speaker 10: eating ramen. You know, so I think, you know, really
Speaker 10: figuring out that you know, I needed to be smaller,
Speaker 10: like we talked about before, you know, and focusing on
Speaker 10: profit margin being a smaller company doesn't feed your ego anymore.
Speaker 10: But I finally figured out that, like everything I thought
Speaker 10: the business world was isn't like all these sales, all
Speaker 10: these like glossy pictures of people that made it. I'm like, yeah,
Speaker 10: it was like a fire sale most of the time.
Speaker 10: And it was like all these people I wanted to
Speaker 10: be that are the girl bosses that made it. I'm like,
Speaker 10: they don't own their companies anymore, and they're you know.
Speaker 1: Well yeah, And it's you know, it's interesting because we've
Speaker 1: talked a lot, and I'm sure like through your head
Speaker 1: you went through some journeys about like where do I
Speaker 1: want to go. Do I want to keep doing this?
Speaker 1: Do I want to bring in partners? Do I want
Speaker 1: to do whatever? You know what I mean? And I'm
Speaker 1: just curious, you know, Tim, Like I think about all
Speaker 1: the folks that kind of think about that kind of thing.
Speaker 1: Did you go through some of that?
Speaker 11: Absolutely?
Speaker 10: I mean I built this to sell, Like I wanted
Speaker 10: to sell it in ten years. I mean, how many
Speaker 10: years can you work one hundred hours a week.
Speaker 11: And not die?
Speaker 10: You know?
Speaker 11: So I wanted to sell it so bad.
Speaker 1: That's hard and the reality.
Speaker 10: Right really, and then we got an offer from one
Speaker 10: of our big competitors, like this big company, and I thought, yes,
Speaker 10: we're going to make it, and it was a horrible offer.
Speaker 10: And so now I'm building to keep in building to sell,
Speaker 10: and it's a completely different thing. Like we're making, we're
Speaker 10: investing in, you know, things for five years from now.
Speaker 3: You're able to build to keep rather than build to
Speaker 3: sell because you built this company yourself and you didn't
Speaker 3: take on any financing, any funding, which is so strange
Speaker 3: for a startup that was built in Silicon Valley.
Speaker 10: Absolutely. Absolutely, you know, I'm very fortunate. I'm in a
Speaker 10: CEO group with lots of CEOs that you know, are
Speaker 10: constantly telling me how lucky I am, even though I
Speaker 10: have never felt lucky in this because I don't go
Speaker 10: into every board meeting being where I'm going to be
Speaker 10: fired right now because there's the boss.
Speaker 11: Yeah, I'm the boss.
Speaker 10: I'm like, you know, we just you know, we bought
Speaker 10: a farm. You know, nobody, no investors would ever let
Speaker 10: you buy a farm. We you know, are farming. Now
Speaker 10: that's a lot term.
Speaker 3: Well, I was gonna say, last time you're on with us.
Speaker 3: We're going to get to the consumer in a second,
Speaker 3: but last time you we're on with us, we talked
Speaker 3: about two things that that really stuck out. One was
Speaker 3: the effect of tariffs. Did you buy a farm to
Speaker 3: offset the effective terraffs?
Speaker 1: No?
Speaker 10: Absolutely not, but it's going to help us, it is.
Speaker 10: I mean, we bought the farm because we're like, let's
Speaker 10: let's do this because it's hard to get this type
Speaker 10: of flower at this time of year where we think
Speaker 10: we can get it where where we're at. We also
Speaker 10: built it because we're like, we're farm real flowers, Like
Speaker 10: let's actually we have ahouldn't we have a farm and
Speaker 10: do that?
Speaker 1: You know?
Speaker 10: But I mean that we're we're investing in you know,
Speaker 10: we do think long term, this spertical integration will allow
Speaker 10: us to keep a couple of million dollars more in
Speaker 10: our pockets every year.
Speaker 1: Wow. Yeah, it's like you gave us such an education.
Speaker 1: I think about where flowers come from, and I think
Speaker 1: there's just as a subtion we go buy flowers. I
Speaker 1: don't know whether we thought they were all in the
Speaker 1: and there wasn't right, so much of the flowers.
Speaker 3: Where's the farm south?
Speaker 10: Well, the oregan We bought the farm in Washington, so
Speaker 10: we have a small farm in Washington. We also put
Speaker 10: in about forty thousand plants in Oregon last year as well.
Speaker 3: And will you be able to cultivate those flowers yearly
Speaker 3: like throughout the year.
Speaker 10: It takes three years for your first harvest. So again
Speaker 10: that's why investors would never let you put the money
Speaker 10: into it.
Speaker 3: Now and the flowers that you produce at those farms
Speaker 3: on that land only go to you or do you
Speaker 3: sell them to others?
Speaker 10: Yeah, we'll keep it, you know right now, the amount
Speaker 10: that we're growing, we can we can use that every year.
Speaker 10: If we decide to keep going, then we can wholesale it.
Speaker 10: It's another revenue chain for us.
Speaker 3: What percentage of the flowers that are grown there? Like,
Speaker 3: does that satisfy of the flowers that you use in it?
Speaker 11: A couple percent?
Speaker 3: Okay, so still it's still yeah really, but you would
Speaker 3: never get you would never be able to get to
Speaker 3: the point because of the global supply chain where you
Speaker 3: could actually grow all the flowers you would want.
Speaker 10: Never and we don't want to. It's too much of
Speaker 10: a risk, you know. I learned through COVID that I
Speaker 10: definitely need to diversify more than I have. I mean,
Speaker 10: having our facility that made ninety two percent of our
Speaker 10: bouquets closed down in one day in twenty Twentymber. You yeah,
Speaker 10: taught me that that wasn't very smart. Definitely making sure
Speaker 10: we're diverse by now talk.
Speaker 1: To us about tariffs in the environment, Like, I just think,
Speaker 1: what again?
Speaker 9: Why?
Speaker 1: We love many reasons we love talking to you, but
Speaker 1: you really give us an idea of what it's like
Speaker 1: to run a small business, although you've made it a
Speaker 1: bigger business over the years. But stuff coming out of
Speaker 1: Washington tariffs, how has that changed? Has it gotten any
Speaker 1: easier yet? No?
Speaker 10: We change, you know, and it actually hurts the consumers more.
Speaker 10: I mean, you know, because you raise prices, we raise prices,
Speaker 10: or we have to buy off the shelf instead of
Speaker 10: making custom things that are nicer for them.
Speaker 11: We have to do things like that.
Speaker 10: We have to make concessions because we don't want to
Speaker 10: price ourselves out of the market. Yeah, you know, we
Speaker 10: have to use different flowers even though they're not the
Speaker 10: ones that consumers want. You know, there are things like that.
Speaker 1: Way, hey, when floorers do that.
Speaker 11: Yeah, yeah, exactly, Like it's not what we want to do.
Speaker 4: Right.
Speaker 10: Also, I think we're the poster child for having tried
Speaker 10: to do this, like May in America grown in America.
Speaker 10: Like when we started, I only bought American grown flowers, right,
Speaker 10: and we ran out of flowers in twenty seventeen, just
Speaker 10: ran out. Now there's fewer farms than there were in
Speaker 10: twenty seventeen because labor's so high now with immigration issues,
Speaker 10: I mean there is. I mean I just came a
Speaker 10: couple of weeks ago. I was just down in our
Speaker 10: fields and we were just getting it ready for winter.
Speaker 10: I couldn't walk for three days after doing one week
Speaker 10: of work in the fields. Like, there are not people
Speaker 10: here that are wanting.
Speaker 11: To be farm workers. Let me just say, so, what
Speaker 11: would you.
Speaker 1: Say to folks who are like, no, pushing back an
Speaker 1: immigration it makes sense, like we have to be doing this.
Speaker 1: What would you say to folks who are listening or
Speaker 1: watching right now?
Speaker 10: I think that ship has sailed generations ago. There is
Speaker 10: no way, Like you know, we tried to buy American
Speaker 10: grown it wasn't possible. We're not going to bring farming
Speaker 10: back to this country unless we do something about immigration.
Speaker 10: There are too many ripple effects going on with why
Speaker 10: it won't work. Also, having production facilities of making bouquet
Speaker 10: in the United States, we do. We make about fifty
Speaker 10: percent in the United States and fifty percent outside of
Speaker 10: the United States. Can I ask you we're outside South
Speaker 10: America South and most of them are in the United States,
Speaker 10: but the flowers are coming from South America. You have
Speaker 10: a few in South Amarket that are making bookuts as well.
Speaker 10: And you know, it's it doesn't work like you know
Speaker 10: I think. You know, Ford Motor Company is a good
Speaker 10: example of this when they're talking about open jobs or
Speaker 10: you know, I talked to a guy that has an
Speaker 10: engine rebuilding plant in the Midwest that had forty percent
Speaker 10: open positions.
Speaker 3: We just don't have those people.
Speaker 10: Yeah, you know, we're telling people go to college so
Speaker 10: you don't have to work a factory job. Nobody wants
Speaker 10: to work a factory job.
Speaker 1: You also have an aging.
Speaker 3: Population, right, So we talked about terrorists, we talked about farming.
Speaker 3: We talked quite a bit about your story to the
Speaker 3: consumer and the American consumer. How's the consumer in your view?
Speaker 10: The consumer is definitely shifted. I think just like what
Speaker 10: you were talking about, you know, people right now, it's
Speaker 10: a little concerning with the economy where you know, people
Speaker 10: are still spending a lot of money, but people that
Speaker 10: can't spend a lot of money can't buy. Yeah, so
Speaker 10: you know, it's not the company I want to be
Speaker 10: where I'm only appealing to one type of consumer. So
Speaker 10: we're really trying to make sure that we're not doing that.
Speaker 10: But with tariffs and rising prices and everything that, you know,
Speaker 10: put kind of backsh you in a corner.
Speaker 12: What do you do?
Speaker 10: You know, I don't want every boquet to cost one
Speaker 10: hundred and fifty dollars because the only people can afford
Speaker 10: one hundred fifty dollar bocke to send to the restaurant
Speaker 10: for their birthday you know. So we're looking at it and.
Speaker 1: It's a consumer like I know, I definitely cut back.
Speaker 1: It's like you can't do as much as you would
Speaker 1: like to.
Speaker 10: Absolutely, we're in the gifting space, so you just cut
Speaker 10: gifts out and we don't want that. So we're looking
Speaker 10: at trying to find ways to get closer to the
Speaker 10: end consumer so we can cut it and shipping instead
Speaker 10: of the flower cost and things like that, that we
Speaker 10: can be a little bit creative with wreaths.
Speaker 1: How big, Like do you do a lot of wreaths?
Speaker 10: We wish we could do more. We sell out of
Speaker 10: them all the time. We're working with a lot of
Speaker 10: new producers. They're high labor, really high labor. Yeah, so
Speaker 10: we are constantly looking at We work with small farms
Speaker 10: on our wreath making program, so very proud of that
Speaker 10: and trying to get more for us.
Speaker 1: I love I would everything.
Speaker 3: It smells really good.
Speaker 1: It does not really get you booked into the studio.
Speaker 1: If you had to do a word to describe the outlook,
Speaker 1: how do you see it right now?
Speaker 11: Bleak but hopeful?
Speaker 1: Wow wow yeah yeah I think And this is with
Speaker 1: somebody who's got business going job openings.
Speaker 11: Yeah wow.
Speaker 3: In terms of the context of last fifteen years apart
Speaker 3: from COVID, whereas it like what year are we in
Speaker 3: ten seconds?
Speaker 11: Fifteen bleak?
Speaker 10: I would just say because of personally how I feel
Speaker 10: about what's going okay, but like we're doing okay, so
Speaker 10: I'm hopeful that we're going to make some change.
Speaker 11: And you bought a farm, Yeah, got a farm.
Speaker 1: I love that. I want to be able to say
Speaker 1: we bought a farm. Christina Stanbel, founder and CEO farm
Speaker 1: Girl Flowers always makes us feel good. This is Bloomberg.
Speaker 2: This is the Bloomberg Business Week Daily Podcast. Listen live
Speaker 2: each weekday starting at two pm Eastern on Apple car
Speaker 2: Play and Android Auto with the Bloomberg Business App. You
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Speaker 2: New York station Just Say Alexa played Bloomberg eleventh.
Speaker 1: All right, we've got something fun to talk about.
Speaker 3: Well, Bloomberg Intelligence team is out with a really interesting
Speaker 3: note that could add to the woes facing the spirits industry.
Speaker 1: Oh so not so fun.
Speaker 3: Well, use, yeah, maybe not. Use of weight loss drugs
Speaker 3: stand a deep in alcohol's demand slump in the US
Speaker 3: and Europe as moderation and wellness gains trends gained grounds.
Speaker 3: So by twenty thirty five, consumption of beer and spirits
Speaker 3: is expected to drop twenty point three percent and nineteen
Speaker 3: point two percent, respectively among GLP one users. That's here
Speaker 3: in the US. This according to an analysis from Bloomberg Intelligence.
Speaker 1: Yeah, total losses could reach twenty eight point five billion,
Speaker 1: translates to about a three to four percent sales drag
Speaker 1: in the US and two to three percent in Europe.
Speaker 1: There's that going on. The whole alcohol industry globally has
Speaker 1: had to deal with tariffs coming out of the United States.
Speaker 1: So that's going on, and so we'll see as the
Speaker 1: President and the administration has been looking at the cost
Speaker 1: of things, some rollbacks. I'm not quite sure how that
Speaker 1: will ultimately maybe impact the liquor industry, but we'll be
Speaker 1: keep ending in that.
Speaker 3: Well, it's the economic backdrop that informs our conversation with
Speaker 3: Ali Anderson. She's CEO at Kraftco. It's got a portfolio
Speaker 3: that includes more than two dozen spirits and liqueurs think Bourbon,
Speaker 3: jen Rye, Ready to Drink, Cocktails and more. The company
Speaker 3: also does co packing for other brands. She joins US
Speaker 3: from a distillery in Holland, Michigan. Last time you were
Speaker 3: on with us, we spent the whole time talking about
Speaker 3: tariffs and the effect of tariffs on your business. And
Speaker 3: that's just one element that's a headwind. Other headwinds include
Speaker 3: changing consumer tastes and how people think about GLP ones
Speaker 3: and increasingly people taking GLP ones and that leading people
Speaker 3: to drink less. What is the environment for you out
Speaker 3: there right now?
Speaker 12: Yeah, I mean, first of all, thank you for having
Speaker 12: me back.
Speaker 11: Good to see you guys.
Speaker 12: All of the headlines, they seem pretty bleak, right, but
Speaker 12: I think that's what business is today, especially in the
Speaker 12: spirits industry. So what's the name of the game. You
Speaker 12: have to pivot. You know, we certainly want to promote
Speaker 12: as much health as we can across all industries, but
Speaker 12: what we're looking at here is lifestyle shifts, and so
Speaker 12: the industry has to has to shift with it.
Speaker 1: You know.
Speaker 12: Anecdotally, I was out to dinner with a friend a
Speaker 12: couple of weeks ago who was who was on a
Speaker 12: you know, I said, healing great, and he said, I'm cheating.
Speaker 11: It's it's a shot.
Speaker 1: But we enjoyed two.
Speaker 12: Cocktails and I'll love reop so I think you see
Speaker 12: people making healthy choices when and where they can and
Speaker 12: what they're actually choosing. What my friend shows that night
Speaker 12: was quality over quantity, and so those are the pivots.
Speaker 1: And the shifts that we have to make industry as well.
Speaker 1: I'm super like that with chocolate, Like I just need
Speaker 1: a little piece of super good chocolate. I don't need
Speaker 1: a lot, and then I'm happy. And so yeah, same
Speaker 1: thing with alcohol. No, no, but let's go. Let's go there,
Speaker 1: because I do think price point is something increasingly. Yes,
Speaker 1: health diet that's certainly an aspect, but price point is
Speaker 1: certainly increasingly something that we know all consumers are looking at.
Speaker 1: We saw that play out in the recent elections in
Speaker 1: some of the states. Like the economy does matter, the
Speaker 1: money that is in or not in your pocketbook, it matters,
Speaker 1: It absolutely does.
Speaker 12: And you know, I've got premium brands, I have brands
Speaker 12: that cross the spectrum. And so what we're seeing is, yeah,
Speaker 12: our consumers down shifting just a little bit, sure, but
Speaker 12: we're also seeing tremendous growth with products that are, you know,
Speaker 12: over two hundred dollars.
Speaker 1: So I think you are seeing.
Speaker 12: A disparity across all of the price tiers. But at
Speaker 12: the same time, like I said, you're seeing people redefine
Speaker 12: what premium really means. I think it's coming maybe less
Speaker 12: about price point and more about what the purpose driven
Speaker 12: value is, what the occasion in their life they're using.
Speaker 12: They're using alcohol to celebrate with. So I think, you know,
Speaker 12: at the end of the day, people want transparency. They
Speaker 12: want transparency in price, they want transparency and how we source,
Speaker 12: how we produce, how we give back, all.
Speaker 5: Of those things.
Speaker 3: In terms of the lineup that you have right now,
Speaker 3: you said people are choosing quality over quantity. Is there
Speaker 3: a certain you have a large range of what you do.
Speaker 3: I mean, dozens of different spirits and alcohols, liqueurs, ready
Speaker 3: to drink cocktails. Where's the strength.
Speaker 12: It's inconvenience, variety, innovation? I think people don't. What we're
Speaker 12: seeing is people don't mind spending a little bit more
Speaker 12: for something that they haven't seen before, right, And that
Speaker 12: could be with an RTD. So maybe it's maybe it's
Speaker 12: a little more expensive RTD, but it's a flavor combination
Speaker 12: they haven't quite had before. Or maybe it's a really
Speaker 12: luxury whiskey with a finish or a blending technique in
Speaker 12: our case that they haven't seen before. So again, I
Speaker 12: think people we vote with our dollars, right, and they'll
Speaker 12: consume what they think is new, interesting and what they
Speaker 12: can get information about what they connect with.
Speaker 1: So RTD obviously ready to drink. I've had certainly some
Speaker 1: of those. Hey, you sent over to our team so
Speaker 1: that we could share with the audience some of the
Speaker 1: stuff that you guys I actually have. Next to be
Speaker 1: copper Craft distillery made in the US, say Holland, Michigan.
Speaker 1: It's straight bourbon whiskey. Tell me about this one. I'm
Speaker 1: actually gonna be It's been quite a day, it's been
Speaker 1: quite a week, it's been quite a year. I'm gonna
Speaker 1: I join you. Yes, I join you. We're so sick.
Speaker 3: Yes, she's at You're you're here in the studio.
Speaker 1: I'm here, I'm here in our distillery. I don't want
Speaker 1: to wait wait maybe.
Speaker 9: Oh, there we go.
Speaker 1: Okay. I didn't want to see a la I didn't
Speaker 1: want to spill it. Okay, so tell me, but tell
Speaker 1: me about this because it isn't certainly a brand that
Speaker 1: I think I'm familiar with. But you're right, people are looking.
Speaker 1: I know when I go to buy a winder. I
Speaker 1: like to try different things.
Speaker 12: Right, right, So you know we're based out of Holland, Michigan,
Speaker 12: and you think I get this question all the time.
Speaker 12: Isn't whiskey just in Kentucky? And the great thing about
Speaker 12: an American spirit is that it can be in all
Speaker 12: fifty states. And so for us, we're in Holland, Michigan,
Speaker 12: on the west side of Michigan here on the Lake shore,
Speaker 12: and we create We've had this brand for for many,
Speaker 12: many years. And I think what you've got is it's
Speaker 12: a it's a straight bourbon.
Speaker 1: W I could smell the whiskey sour that could also
Speaker 1: be made out of this bay.
Speaker 3: This is finished in this is finished in rum casks.
Speaker 3: What does that mean?
Speaker 12: Well, it means we took an already amazing whiskey. I
Speaker 12: think the one you've got is eight years old and
Speaker 12: we put it in, Oh, I don't have any casts
Speaker 12: in this room. We put it in a rum cask
Speaker 12: that it used to hold rum, and we just let.
Speaker 3: It rest for about a year so it flavor. Then
Speaker 3: something that would be finished in a different type of cask.
Speaker 1: But I see what you say, like you don't mean what.
Speaker 1: It reminds me of my dad who used to make
Speaker 1: whiskey sours for all of us as kids, and most
Speaker 1: of the times it was a lot more oranges and
Speaker 1: cherries in it than whiskey. But you could also just
Speaker 1: the variety. I feel like the craft industry even in
Speaker 1: the car, like you just alone, it's just something really nice,
Speaker 1: right Like what did Kraft used to be?
Speaker 12: If we look back at beer, we think craft was
Speaker 12: small batch, craft, whiskey, small batch, and Kraft. Much like
Speaker 12: the way we'd redefined premium, craft has evolved too. So
Speaker 12: like you just said, up, you know, I've not heard
Speaker 12: of this before.
Speaker 5: What is this?
Speaker 12: And so craft is now evolving to be what is
Speaker 12: that experience? I can get? Who are the people that
Speaker 12: make it? How transparent are they about what they're doing?
Speaker 12: Can I go visit them?
Speaker 11: Who are you know?
Speaker 12: That's what craft is now. It's the process, the technique,
Speaker 12: the people, the story that you're telling about the whiskey
Speaker 12: right now.
Speaker 3: The distribution of this is a question that I have
Speaker 3: because at least here in New York City, I don't
Speaker 3: know how it works in other parts of the world,
Speaker 3: but in other parts of the country, but you walk
Speaker 3: into a liquor store and I've talked to some of
Speaker 3: these folks in there, and again it's changes depending on
Speaker 3: where you live. But it's a challenge to get smaller
Speaker 3: brands on the shelves, especially with the big brands, the
Speaker 3: large brands that own a good portion. They come in
Speaker 3: and say, okay, well, if you want to carry this,
Speaker 3: you have to carry this, and there's not much power
Speaker 3: that these small companies have. How do you make sure
Speaker 3: you get shelf space? And shelf space that's like premium.
Speaker 1: What a great question.
Speaker 12: Relationships, Like any business, any industry, it really does come
Speaker 12: down to relationships. And for a small you know craft right,
Speaker 12: We've got five brands, we cover forty two states and
Speaker 12: we're still crafts. What does that mean? We have to
Speaker 12: show up in market. You've got to show up at
Speaker 12: that retailer, You've got to show up with the distributors.
Speaker 12: Those distributors are still my customers. So it's built on
Speaker 12: relationships and making sure they know just like we connect
Speaker 12: with our consumers online and tell those stories, make sure
Speaker 12: they know who we are and that we are a
Speaker 12: small business that every single sale matters to us and
Speaker 12: much like them, you know, we're just trying to connect
Speaker 12: with consumers. So I think it's finding that common ground
Speaker 12: through relationships.
Speaker 1: Yeah, it always comes down to that. I feel like
Speaker 1: relationships for so many different industries. Hey, before you go,
Speaker 1: we've talked about copper craft and I actually sampled some,
Speaker 1: but you also shared with our team, just to kind
Speaker 1: of look at kind of the variety and different places
Speaker 1: you go. Elderflower. I'm a little obsessed with Elderflower right now.
Speaker 1: And you've got Thatcher's Organic, our tea Artisal Artisenal, Yeah,
Speaker 1: Artesian Artesian, Yeah, yeah, that's right. Sorry, Sorry, I couldn't
Speaker 1: read it. I'm looking off my because we took a picture.
Speaker 1: You've got fox and is it Odenny Odin Odin?
Speaker 12: Ok?
Speaker 1: Sorry, I'm ashually get a small picture, but tell us
Speaker 1: a little bit about some of the other ones. And
Speaker 1: then Thatcher's vodka. It's not as I've been drinking. I
Speaker 1: just couldn't read the picture because I took a picture,
Speaker 1: so I can read on air, I'll join you.
Speaker 12: No, it's a Thatcher's Organic, right, it's you know we
Speaker 12: think about spirits.
Speaker 1: Does it really matter?
Speaker 12: Yeah, sure it does. Something like Thattress is very culinary forward.
Speaker 12: So you mentioned Elderflower. I bet we're drinking the heck
Speaker 12: out of Hugo Sprits is right now with that elder
Speaker 12: flower totally amazing, right, yes, yeah, and again that's a
Speaker 12: that's a way to enjoy maybe a little bit of
Speaker 12: lower proof but still still feel great and be festive
Speaker 12: in all of those things. So you know, then we've
Speaker 12: got like sox and Odin is luxury whiskey, and that's
Speaker 12: we've got a beautiful double oaked that was just up
Speaker 12: for We had two of the top five finalists for
Speaker 12: the best special barrel finished Whiskeys in the world a
Speaker 12: couple sundays ago in San Francisco. So you know, we're
Speaker 12: super We're craft We're competing against all these big guys,
Speaker 12: but because of what we're able to do with our size,
Speaker 12: with our expertise, you know, we can deliver some really
Speaker 12: luxury things to the market as well, and we do.
Speaker 3: That was Ali Anderson, CEO of Craft Co.
Speaker 1: All right, so all of you who are maybe still
Speaker 1: leading some leftovers from Thanksgiving, it's kind of my favorite
Speaker 1: thing to have, like pecan pie, pecan pie for breakfast.
Speaker 3: It's okay, call it what you will, but just just
Speaker 3: eat it, you know whatever.
Speaker 1: But what you might have noticed over the holiday over
Speaker 1: Thanksgiving is that alcohol consumption. People are drinking less. Consumption
Speaker 1: here in the US when it comes to alcohol, has
Speaker 1: fallen to its lowest level in decades, driven by health
Speaker 1: fears GLP one, weight loss, drugs that can actually dull
Speaker 1: alcohol cravings, and of course rising cannabis use. About fifty
Speaker 1: one percent of respondents in a September Bloomberg Intelligence survey,
Speaker 1: so they now substitute cannabis for alcohol at least weekly,
Speaker 1: So up about five percentage points from last year. And
Speaker 1: that includes in the Thanksgiving feasts.
Speaker 3: Yeah, this is pretty wild. So the Wednesday before Thanksgiving, Yeah,
Speaker 3: some have started dubbing that Wednesday Green Wednesday. This is
Speaker 3: according to the BDSA, that's the cannabis Market tracker. Yeah,
Speaker 3: it's the second biggest day of the year for legal
Speaker 3: cannabis sales in the US.
Speaker 1: Maybe everybody just wants to kind of mellow out, you know,
Speaker 1: before they see all their family. Well, or why aren't
Speaker 1: you married, Why don't you have kids, Why don't you
Speaker 1: like why don't you finish that degree? Like anyway, all
Speaker 1: I'm gonna say is whether you had a happy Thanksgiving
Speaker 1: or happy Thanksgiving? You know, I just hope you had
Speaker 1: a good and safe holiday.
Speaker 3: I like that Thanksgiving.
Speaker 1: Check out this story. It's on the Bloomberg.
Speaker 3: There's a reason it was one of the most read.
Speaker 1: Charles Grevin of Bloomberg News wrote it, Americans ditching wine
Speaker 1: to get HI on gummies this Thanksgiving, So maybe that
Speaker 1: was your Thanksgiving as well. All right, that wraps up
Speaker 1: this Thanksgiving weekend edition of Bloomberg Business Week from Bloomberg Radio.
Speaker 1: Thank you so much for joining us.
Speaker 3: I'm tim Stennebeck.
Speaker 1: Haven't you ever done the cousin Walk?
Speaker 3: No, I don't even know what that.
Speaker 1: Is the story? You know, I guess you are our producer.
Speaker 1: It's okay, yeah, and I'm Carol Masser. Have a good
Speaker 1: and save holiday weekend. Enjoy the leftovers.
Speaker 2: This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify,
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