Speaker 1: This is Bloomberg Business Week. I'm Charle Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanibek. We're here every day bringing
Speaker 1: you the latest news from the world of business and finance,
Speaker 1: plus technology, politics, economics, all purtnising the power of Business
Speaker 1: Week reporters and editors, not to mention our journalists and
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Speaker 1: download Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot Com.
Speaker 1: You can also listen to our radio show at two
Speaker 1: pm Eastern Time on Bloomberg Radio, or watch us on
Speaker 1: YouTube search Bloomberg Global News. President Biden saying in a tweet,
Speaker 1: the US would excel his or what exceed excuse me,
Speaker 1: his goal of administering a hundred million vaccine doses in
Speaker 1: his first one hundred days in office. Tim also we
Speaker 1: saw US cases and hospitalizations dropping dramatically, suggesting that measures
Speaker 1: to interrupt transmission they are working, at least for now.
Speaker 1: Fingers cross Yeah, for now, fingers crossed. The big question
Speaker 1: is are we sort of out of the woods at
Speaker 1: this point from the latest peak. That's something I've been
Speaker 1: thinking about a lot and a lot of people saying
Speaker 1: it could be another rough twelve to fourteen weeks because
Speaker 1: of variants. Let's check in with Dr Peter alp In,
Speaker 1: VP of a Doximity. It's a professional medical network for physicians,
Speaker 1: he joins us on the phone in San Francisco. That's
Speaker 1: where he has a private practice. Dr Alpern, good to
Speaker 1: have you here with Tim and myself. How are you
Speaker 1: What are you seeing in terms of the number and
Speaker 1: severity of cases as well as the rollout of vaccines.
Speaker 1: Nice to be on the show, Thank you so much. Yeah,
Speaker 1: in San Francisco, we are seeing a decrease in general,
Speaker 1: so a decrease in the number of hospitalizations and also
Speaker 1: importantly improved UM, I see you capacity, as well as
Speaker 1: the death rates from COVID starting to decrease. But of
Speaker 1: course death from the illness is a lagging indicators, so
Speaker 1: that's something that does take, you know, several weeks to
Speaker 1: sort of start to come down after we see the
Speaker 1: number of patients being admitted come down. In terms of vaccinations, UM,
Speaker 1: we were had set up many vaccine sits here in
Speaker 1: San Francisco and in the Bay Area, but like most
Speaker 1: of the country, we are also prisoners to the UH
Speaker 1: the amount of vac scene it's made available to us,
Speaker 1: and so just recently, UM San Francisco has had to
Speaker 1: temporarily pause on vaccinating UM the citizens of the city
Speaker 1: and county simply because of a lack of vaccine. So
Speaker 1: so here we are at the at the where daily
Speaker 1: levels are basically at their lowest levels in months, um doctor,
Speaker 1: Does this have to do with vaccine? Does it have
Speaker 1: to do with the fact that we're weeks after a
Speaker 1: holiday and the post holiday bump that happened is now
Speaker 1: going down? Why are we seeing the decline here? All
Speaker 1: of the above? Yeah, exactly, it really isn't all of
Speaker 1: the above. M situation. So obviously, as people have the
Speaker 1: gatherings of around Thanksgiving and Christmas have sort of wound
Speaker 1: their way through the system and we and people were
Speaker 1: pretty good about not trying to get together for the
Speaker 1: Super Bowl, we seem to have experienced UM sort of
Speaker 1: the decline that we expected. And absolutely vaccinations are having
Speaker 1: an effect. If you really think about what vaccination does,
Speaker 1: it's really about reducing that really severe illness and making
Speaker 1: it so that people who do catch the COVID catch
Speaker 1: coronavirus and leading to COVID will end up having more
Speaker 1: of a flu like illness, but will not have those
Speaker 1: extremely severe reactions which of course can ultimately and unfortunately
Speaker 1: lead to death. What are you thinking as far as
Speaker 1: timeline for when we will see widespread inoculation, given that
Speaker 1: the Biden administration made this announcement today and that, you know,
Speaker 1: despite early speed bumps where it seems to be like
Speaker 1: we are on a relatively good trajectory here. Yeah. So, um,
Speaker 1: that's a great question, you know, on on doximity, what
Speaker 1: we're seeing is, you know, we have the advantage of
Speaker 1: being able to see the conversations among hundreds of thousands
Speaker 1: of physicians, and what we're seeing is a general belief
Speaker 1: that with the new vaccines coming online, with Astra Zeneca
Speaker 1: and some of the other producers UM bringing on supply
Speaker 1: of vaccine UM, that we should be able to make
Speaker 1: a dent over the next several weeks to months with
Speaker 1: just an increase in supply. So that's the hope. But
Speaker 1: as they say, um, you know, vaccines don't prevent the illness.
Speaker 1: Vaccination does, and um, so it is going to still
Speaker 1: be incumbent on all those local jurisdictions and health plans
Speaker 1: and insurance companies and everybody pitching in to be able
Speaker 1: to get those vaccines and everybody's arms. Dr Alpern, are
Speaker 1: you in favor of dose stretching policies, so stretching out
Speaker 1: the interval between the first and second doses. Yeah, so
Speaker 1: there's been a lot of discussion around that. Um, that's
Speaker 1: not something that I'm absolutely an expert on. I I
Speaker 1: believe I follow what's being um uh you know, broadcast
Speaker 1: and written down by the CDC, and at this point
Speaker 1: that is not something that's it's in favor. And I
Speaker 1: know that there's a lot of experts and vaccines who
Speaker 1: are having a very um uh you know, robust discussion
Speaker 1: about this, and really for my position, UM, as a
Speaker 1: person who is delivering care, what I would basically do
Speaker 1: is just really follow their guidance. What about schools and
Speaker 1: opening schools, Yeah, opening schools is um is obviously on
Speaker 1: the forefront of every everybody's mind and every parent's mind. Um.
Speaker 1: You know what we really need to do for schools
Speaker 1: is getting is you know, get our teachers vaccinated. Um.
Speaker 1: And I know that a lot of places are doing
Speaker 1: that as well. UM. I know there is a lot
Speaker 1: of data to suggest that bringing people bringing kids back
Speaker 1: to schools. UM is actually very you know, a lot
Speaker 1: safer than than people may think. UM. But I do
Speaker 1: know that uh, um, you know, getting teachers and other
Speaker 1: school personnel vaccinated is really the key to that whole process.
Speaker 1: I want to just end talking a little bit about
Speaker 1: variants here. UM. How concerned are you about the spread
Speaker 1: of mutations variants that we've seen already exist here in
Speaker 1: the United States? UM, So I think the variant UM
Speaker 1: is situated that the issue with variances is interesting. So
Speaker 1: most of the variants that we've seen don't seem to show, um,
Speaker 1: an increased virulence or severity. What they show is an
Speaker 1: increasability to you know, cause UM contagion and so UM.
Speaker 1: I think all the studies so far that have been
Speaker 1: done on the existing vaccines show that these vas existing
Speaker 1: vaccines are effective. UM. But but I think that the UM,
Speaker 1: I think that we're gonna have to wait and see.
Speaker 1: Obviously this is very new to everybody else as well. UM.
Speaker 1: I do know that patients are concerned, and I do
Speaker 1: know that patients are asking all about these kinds of things,
Speaker 1: and I think what they need to do is to
Speaker 1: try to interact with their physicians by any means necessary,
Speaker 1: make an appointment or get a tellhelp, got it, got it,
Speaker 1: gotta run. Dr Peter Alper and Vice President Do Simity
Speaker 1: on the phone from San Francisco. This is Bloomberg Business
Speaker 1: Week with Carol Masser and Bloomberg Quick Takes Tim Stinovic
Speaker 1: on Bloomberg Radio. No doubt about it. Tim. A top
Speaker 1: story on this Tuesday, the energy crisis, gribbling power grids
Speaker 1: across the US and we're seeing blackouts leaving about finally
Speaker 1: in customers without electricity. Uh, it's all because of unprecedented
Speaker 1: coal weather across Texas and other states that are normally
Speaker 1: pretty warm this time of year. And get this, there
Speaker 1: are global links to this. Briank Sullivan is Bloomberg News
Speaker 1: Weather reporter and he joins us now on the phone
Speaker 1: from Boston. M Brian, Let's start out with just the
Speaker 1: big question, right, like, how did this happen? The wet weatherwise?
Speaker 1: Why is it so cold in so many parts of
Speaker 1: the country that doesn't don't usually see temperatures like this.
Speaker 1: So during the first week of January, there was a
Speaker 1: burst of warm air over the North Pole and that
Speaker 1: may sound um a bit of a paradox. But warm
Speaker 1: air will come in over the north pole, and what
Speaker 1: this does is it displaces the colder air up there.
Speaker 1: The you have the pole of vortex, which is like
Speaker 1: a girdle of wind that keeps the cold in the
Speaker 1: north pole. This warm air will weaken that and it
Speaker 1: allows the cold to spill out. So this has been
Speaker 1: weeks in the making, but it's you know, it finally
Speaker 1: got here at the end of last week and it's
Speaker 1: really dug in now, all right. So that on top
Speaker 1: of how come the power grid couldn't deal with it? Well,
Speaker 1: that's good, that's a good question. And that's one of
Speaker 1: the ones that things that a lot of people are
Speaker 1: looking into. And part of it is that the cold
Speaker 1: was just so severe when it got into Texas. Um
Speaker 1: a lot of these places just aren't equipped in you know,
Speaker 1: the infrastructure isn't equipped to deal with such bitter cold.
Speaker 1: You know, in the north or the northern Great Plains
Speaker 1: for instance, they're used to see and temperatures go down
Speaker 1: to single digits and whatnot. But in Texas now you
Speaker 1: have equipment failing and you know, it just turned into
Speaker 1: a cascade. So is there a climate change connection here?
Speaker 1: Is it too early to tell. Um, It's more a
Speaker 1: question of too early to tell. I mean, there are
Speaker 1: people who study the Arctic, and they've been studying the
Speaker 1: warming up there, the fact that there's a lack of
Speaker 1: sea ice and uh, for instance Judico and at a
Speaker 1: R and he says that there's definitely a climate change
Speaker 1: connection here. Other scientists want to look at it longer,
Speaker 1: want to take more studies before they make a commitment. Hey, bron,
Speaker 1: what was to ask you about? Is the Texas Railroad
Speaker 1: Commission g Jim Right or a commissioner. He told Bloomberg
Speaker 1: TV that renewable energy sources such as wind turbines are
Speaker 1: diverting resources away from reliable fossil fuel sources like natural gas.
Speaker 1: So I want to ask you you study this is
Speaker 1: alternative energy sources partly to blame. We have a story
Speaker 1: on a system right now by our colleagues, and I
Speaker 1: you know that that wasn't The conclusion I drew after
Speaker 1: reading the story was that, you know, I I didn't
Speaker 1: really see that in their reporting, So I wouldn't I
Speaker 1: wouldn't want to comment on that further. Is it more
Speaker 1: that the power grid problems and limitations and aging of
Speaker 1: you know, which is not a new story. Brian, you
Speaker 1: know this well, you know, is it just I mean,
Speaker 1: we've been talking about this for years, for decades, right, Well,
Speaker 1: I mean, you know it's not just Texas either. I
Speaker 1: mean we're all the summer where it was extreme temperatures
Speaker 1: in the other direction, hot weather that caused all these
Speaker 1: problems in calif Fornia where they had issues, and there
Speaker 1: have been other issues in the Northeast as well. I
Speaker 1: believe in Long Island a few years ago had some
Speaker 1: severe issues out to some severe weather events. So I think,
Speaker 1: you know, we're seeing the chickens are coming home to roost.
Speaker 1: I guess is what I would say, Hey, Brian, Um,
Speaker 1: what needs to happen with the grid, with infrastructure in California,
Speaker 1: in Texas and other parts of the country to make
Speaker 1: sure that this type of thing doesn't keep happening. The
Speaker 1: scientists tell me, we have to accept the fact that
Speaker 1: we live in a changing climate, in a changing world,
Speaker 1: and we have to prepare for it. Um. Insurers tell
Speaker 1: me this as well. I talked to a lot of
Speaker 1: different insurance companies and they're always saying the same thing.
Speaker 1: The world is changing. Its changing at a very fast rate.
Speaker 1: And we have to prepare for it. Um. Every insurer
Speaker 1: I ever talked to they say, prepare, prepare, prepare, prepare,
Speaker 1: And you know, none of them dispute climate change. They
Speaker 1: say that it's coming, it's here, it's now, and it's
Speaker 1: a problem. It's why I really climate change. For such
Speaker 1: a long time people are like, well, it's you know,
Speaker 1: not a financial story, it's not an economic story. And
Speaker 1: yes it is, and we have definitely seen it, you know, Brian,
Speaker 1: just quickly over the last few years, how much so
Speaker 1: it is. Oh, I totally agree with you. I mean,
Speaker 1: I think the climate change is a financial story and
Speaker 1: to look at it from any differently is the wrong
Speaker 1: concon to take, all right, because it's going to affect
Speaker 1: the banks and everyone else. Totally all right, Brian, thank
Speaker 1: you so much. We'll appreciate your reporting. Brian K. Sullivan
Speaker 1: of Bloomberg News joining us on the phone from Boston.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stanovic on Bloomberg Radio. You're listening
Speaker 1: to Bloomberg Business Week Carol mass along with Tim Stanovic.
Speaker 1: Impossible foods cutting It suggested retail prices by twent at
Speaker 1: US grocery stores. This move seen as key by the
Speaker 1: company's president Tim to get people to try the brand
Speaker 1: and keep on coming back. That's disclosure. Two pounds over
Speaker 1: the weekend. Two pounds all right, So let's get into
Speaker 1: it and let's see what he has to say. Impossible Foods.
Speaker 1: President A. Woodside is with us, joining us on the
Speaker 1: phone in Menlo Park, California. Denist by the way, former
Speaker 1: CEO of Dropbox, was the CEO of Motorola Mobility, put
Speaker 1: in charge of leading its transition after its acquisition by Google. Dennis,
Speaker 1: So nice to have you here with us. How are
Speaker 1: you and tell us about the strategy. What was the catalyst? Well,
Speaker 1: first of all, thanks for having me Tim, thanks for
Speaker 1: being a customer. So the the catalyst. Look, you know,
Speaker 1: our mission is to completely replace animals in your diet,
Speaker 1: and for us to do that, we have to produce
Speaker 1: the product that tastes great. We have that, but it
Speaker 1: has to be priced right and people consumers are very
Speaker 1: price sensitive when it comes to their meat and the
Speaker 1: meats that they purchased in grocery stores. We've scaled so
Speaker 1: quickly over the last year. We've done from two hundred
Speaker 1: grocery stores over seventeen thousand. That we've been able to
Speaker 1: get a lot of efficiencies in our supply chain and
Speaker 1: uh drive our costs down. So we we've passed those
Speaker 1: costs onto our consumers in the form of price decrease.
Speaker 1: We don't think this will be our last we have
Speaker 1: to peat with animal animal products, that we're going to
Speaker 1: do that. So when will it be as cheap as
Speaker 1: ground beef? Well, if you think about what we what
Speaker 1: we do. We take plants and we turn them directly
Speaker 1: into meat. And what the animal does, it's the animals
Speaker 1: kind of an intermediary that uh that that requires a
Speaker 1: lot more land, a lot of water, a lot of labor,
Speaker 1: a lot of transportation oil gas to move cows around,
Speaker 1: that sort of thing. So in theory our products should
Speaker 1: be much lower priced than than cows over time, but
Speaker 1: it just takes time for us optimize the supply chain
Speaker 1: to scale up. Uh. You know, animal based meat today
Speaker 1: is less than one percent of total meat consumed in
Speaker 1: the US. But that's gonna change pretty rapidly. And as
Speaker 1: that does, the cost for the whole industry, including ups
Speaker 1: will come down and we'll be able to compete much
Speaker 1: more aggressively on price. But timeline wise, though, is there
Speaker 1: are you thinking you know in years that you can
Speaker 1: count on one hand, or or is this like a
Speaker 1: decades long progression absolutely years that you can count on
Speaker 1: one hand. There are poor of our product now or
Speaker 1: elements of our product now that are are at the
Speaker 1: cost of the cow. But there's a lot of Uh,
Speaker 1: there's a lot of processing costs and transportation costs, packaging,
Speaker 1: all those things that we have not yet fully optimized
Speaker 1: and that take that just take time and scale to
Speaker 1: get right. So the packaging, what what the actual products
Speaker 1: shows up in on shelf, that's expensive. But as you
Speaker 1: get bigger that those costs come down. So that's what
Speaker 1: I was going to ask you. Is it just a
Speaker 1: case of when you're selling more Dennis, the math just changes.
Speaker 1: When you're selling more product, the cost go down. Is
Speaker 1: that what it comes down to? Or is it is
Speaker 1: it a case of being able to squeeze even more
Speaker 1: costs out of the current systems. It's a little of both.
Speaker 1: So what we do, what we've been able to do
Speaker 1: over the last year is go back to our suppliers
Speaker 1: UH and negotiate better prices. Because we're we're driving a
Speaker 1: big part of their growth. We've also been able to
Speaker 1: get better utilization out of our factory, so we're running
Speaker 1: three shifts today instead of two. Uh. And you advertize
Speaker 1: that fixed costs of the factory over more products and
Speaker 1: that allows you to take your take your price down
Speaker 1: over time time. Hey, I'm curious see that stopping, that's
Speaker 1: just going to continue. I'm curious to Dennis, have you
Speaker 1: guys done some focus groups with customers are just like,
Speaker 1: it's too expensive right now. We just I can't do it.
Speaker 1: I want to do, but I can't. So people, So
Speaker 1: first of all, over people who are trying impossible for
Speaker 1: the first time, they're coming their meat eaters, so so
Speaker 1: they are they are substituting impossible for for all kinds
Speaker 1: of meat products, not just ground beef. But and when
Speaker 1: we when they try it, the number one thing that
Speaker 1: they say they love about the product is the taste.
Speaker 1: It tastes just like beefs defa same nutritional profiles beef.
Speaker 1: The one thing that they say that they don't like
Speaker 1: as much as the price, and that is absolutely a
Speaker 1: barrier to to repeat and repeat purchase and frequency of purchase.
Speaker 1: But we can get the price right. You know, that's
Speaker 1: a pretty pretty obvious lever to pull to to grow
Speaker 1: our our volume and continue to scale. How do the
Speaker 1: habits of how people are are eating this type of product,
Speaker 1: how do they change or have they changed during the pandemic. Well,
Speaker 1: you know, so a year ago we weren't even available
Speaker 1: in retail, and when the pandemic hit, we realized that
Speaker 1: the retailer, we were available in two stores. We realized
Speaker 1: that we needed to scale up really quickly. And what
Speaker 1: we noticed was that consumers we were uh flocking to
Speaker 1: plant based products. They were cooking more at home, and
Speaker 1: they were willing to try something different. They had a
Speaker 1: little maybe a little bit more time to cook or
Speaker 1: they were cooking and in the past they were would
Speaker 1: have been eating out. Uh, So they were open to
Speaker 1: trying new products. And that's why our sales have really
Speaker 1: taken off at retail. And what we're also noticing, obviously
Speaker 1: there's a lot more delivery activity. Consumers buying impossible on
Speaker 1: digital platforms, whether it's direct delivery from grocery through instatcart
Speaker 1: or they're buying uh finished uh entrees through dordash. So
Speaker 1: so we're seeing growth across all of those areas. The
Speaker 1: one area that's obviously been impacted quite a bit are
Speaker 1: the smaller restaurants, which was really suffered. They talked us
Speaker 1: to Dennis about collaborations. I'm curious what lasting traction you
Speaker 1: are finding from some of the collaborations and partnerships that
Speaker 1: you have been doing. We know all the folks in
Speaker 1: kind of the alt food space have been linking up
Speaker 1: with the likes of whether it's a Taco Bell, McDonald's
Speaker 1: and you guys, I know had teamed up last year, No,
Speaker 1: in twenty nineteen, I think it was with Burger King
Speaker 1: for Impossible Whoppers. So I'm just curious how those are
Speaker 1: helping you in your mission. Yeah, so we we have
Speaker 1: apostles now available pretty broadly in the U. S p K.
Speaker 1: You know you mentioned Burger King, Whitecastle, rever Rob and
Speaker 1: Kidoga are just a handful. We added Starbucks Starbucks Breakfast
Speaker 1: Sandwich in the middle of the pandemic in June of
Speaker 1: last year, and we've and we've seen that product do
Speaker 1: incredibly well, exceeding both of our expectations. So these these
Speaker 1: partnerships are very important, and every restaurant operator is realizing
Speaker 1: they need to have a plant based meat option on
Speaker 1: the menu. Consumers are are asking for for for choices
Speaker 1: and asking for alternatives, and so it's at the top
Speaker 1: of the top of agenda of every executive in the
Speaker 1: UH in the two SR space that I that I
Speaker 1: talked to for sure, UH and those who don't have
Speaker 1: a plant based meat option now are absolutely considering one.
Speaker 1: And Dennis, what is the difference between beyond meat and
Speaker 1: impossible foods in terms of in terms of taste of
Speaker 1: In terms of taste of product, I should say, yeah.
Speaker 1: The two things that consumers tell us is, first of all,
Speaker 1: taste our product taste just like me. And survey after
Speaker 1: survey shows that the the liking scores of preference scores
Speaker 1: for our product versus animal based meat are relatively even,
Speaker 1: so people have a hard time telling the too apart.
Speaker 1: The second thing that that steps tell us is the
Speaker 1: product handles just like ground beef. The color when it
Speaker 1: comes in raw, the way it transitions from a pink
Speaker 1: or a reddish raw state to a cooked state, the
Speaker 1: way it sizzles, the way it smokes, all those things,
Speaker 1: and and and that's UH mostly due to the intellectual
Speaker 1: property we have around an ingredient called hem which is
Speaker 1: found in every animal, but we've been able to, uh
Speaker 1: to to ferment it from plants and use that as
Speaker 1: the key ingredient that aids in the transition of of
Speaker 1: the product and the color of the product. So it's
Speaker 1: meteor like, it's more like me. It's much meteor That's
Speaker 1: what we're trying to do. We're we are simply trying
Speaker 1: to replicate the animal in every sense, the nutritional profile
Speaker 1: over time, better the animal. We need to beat the
Speaker 1: beat the cows. What we say, well, and I have
Speaker 1: to say that in our lunch offerings here at Bloomberg,
Speaker 1: like often comes up some alternatives, right, and I'm not
Speaker 1: quite sure who who they are, um so, so I
Speaker 1: can't speak to that. What I am curious though, to
Speaker 1: Dennis is you guys have been spending a lot on
Speaker 1: R and D and you plan to double the size
Speaker 1: of your R and D team. From what I understand,
Speaker 1: what's the R and D focusing on and does it
Speaker 1: include anything like three D meat, which is something we've
Speaker 1: started to talk about. You hear the Bloomberg Yeah, yeah,
Speaker 1: so so so what we're trying to do is replicate
Speaker 1: every animal protein that you consume. Uh, there's well over
Speaker 1: a trillion pounds of animal protein consumed every year, So
Speaker 1: this market is absolutely massive. It's one of the largest
Speaker 1: technology markets, if you call the technology UH in the world,
Speaker 1: and there hasn't been a whole lot of innovation. We're
Speaker 1: eating kind of the same products our grandparents date prepared
Speaker 1: kind of the same way, with the same nutritional profile.
Speaker 1: So we're we're one of the first companies that's focused
Speaker 1: at the molecular level on re engineering UH meat all
Speaker 1: from plats and so that's starting with ground beef because
Speaker 1: it's such an iconic product for most Americans. But focusing
Speaker 1: on pork. We have a pork product that we shared
Speaker 1: at c Yes last year. UH we sausages. We have
Speaker 1: lab prototypes of basically every meat imaginable, including steak UH
Speaker 1: and we see a day when we'll be able to
Speaker 1: offer any protein on the menu in a plant based form.
Speaker 1: It might take it will take a while for us
Speaker 1: to get there, but that's what we're why we're investing
Speaker 1: so heavily. And are you going to go into also fish?
Speaker 1: And I know we've got somebody we've been planning to
Speaker 1: get on the show that's got plant bas shrimp. So
Speaker 1: I'm just curious. Is it just you can't go anywhere
Speaker 1: and do and will you? Yeah? Well, well, we believe
Speaker 1: that the technology, we have, the intellectual property around him,
Speaker 1: which is in every single type of meat in the world,
Speaker 1: as well as all we've learned in building Impossible Burger,
Speaker 1: gives us the opportunity to compete in all those spaces.
Speaker 1: You know, for now it's our primary product is ground beef,
Speaker 1: but that's going to change very rapidly. What's the what's
Speaker 1: the exit plan here for for investors? You and I
Speaker 1: were both thinking about this. Well, I mean, look, you're
Speaker 1: you know beyond me. The the I would argue the
Speaker 1: the chief rival UM is a publicly traded company. UM.
Speaker 1: You've raised a lot of money from a lot of
Speaker 1: significant investors. What's the I p O plan? Yeah, Well,
Speaker 1: Pat Brown, our our founder and CEO, he has said
Speaker 1: that eventually you know that we will we will need
Speaker 1: to go public. We will want access to the public
Speaker 1: market financings, will want to access to credit markets as well,
Speaker 1: but we'll do that on our own timeline. We're well funded,
Speaker 1: as you mentioned, We've got plenty of cash in the bank.
Speaker 1: We have a number of big investments that we're gonna
Speaker 1: be making over the next year in capacity, so in
Speaker 1: manufacturing facilities UH and UH, and in new products that
Speaker 1: we'll be launching. UM. At some point in time, it
Speaker 1: will be the right time to make that kind of
Speaker 1: public decision, But for now, we're we're we're pressing ahead
Speaker 1: as a private company and continuing to scale our scale
Speaker 1: the business. Well, it's safe to say, Dennis, there's some
Speaker 1: upside to that to not have to do this R
Speaker 1: and D and expansion and kind of experiment a little
Speaker 1: bit with maybe some new areas, to be able to
Speaker 1: do it without being public. Well, we are. Our shareholders
Speaker 1: are very supportive of us being very aggressive. They see
Speaker 1: the size of the market UM. Bill Gates is recently
Speaker 1: talking about the importance of developed economies moving to more
Speaker 1: of a plant based diet or plant based meats, and
Speaker 1: how that's so important for the environment and for the
Speaker 1: sustainability of the planet. That there's there's a wave of
Speaker 1: consumer sentiment, government sentiment all behind supporting this this industry,
Speaker 1: and so our investors earned it for the long game.
Speaker 1: If we are sitting here in ten years, I I
Speaker 1: believe a large percentage of all Americans diets will have
Speaker 1: moved to a plant based product and UH, and that's
Speaker 1: a very big business opportunity for us. And that's what
Speaker 1: our investors see, so they can be patient and UH
Speaker 1: and give us some time for that to happen. Is
Speaker 1: it becoming healthier though, like I look at sodium and
Speaker 1: all those different things. Is it getting better? Absolutely? So.
Speaker 1: If you look at the sausage in the UH Starbucks
Speaker 1: Impossible Breakfast sandwich as an example, UH, that contains about
Speaker 1: a third fewer calories, meaningfully lower satiurated fat, no cholesterol whatsoever.
Speaker 1: So sausage is a is a really indulgent product. It
Speaker 1: tastes amazing, but it's got it's got a lot of
Speaker 1: saturated fat, it's got a lot of you know, a
Speaker 1: lot of cholester a lot of calories. So you know,
Speaker 1: in our first iteration we've been able to reduce that
Speaker 1: quite meaningfully. And as we can see to innovate, we'll
Speaker 1: get better. So the product will get healthier, will have
Speaker 1: different nutritional profiles. UH. That as we respond to consumer
Speaker 1: demand and also as we just continue to improve upon
Speaker 1: our own technology. It really is a technology business, and
Speaker 1: in the past food has not been thought of that way.
Speaker 1: That's fascinating, Like to think about it that way, and
Speaker 1: I agree. Dennis, Thank you so much and thanks so
Speaker 1: much for giving us such a large trunk chunk of time.
Speaker 1: We really appreciate it. Dennis Woodside, he's president and impossible
Speaker 1: Foods on the phone from Menlo Park, California, Brother macro
Speaker 1: a journal. Yeah but you let me drive? Oh no, no, no, no,
Speaker 1: drive home, honey, please, I'll do the right gravel. Excuse me,
Speaker 1: I want to drive. Just drive, baby, it's the questions trying.
Speaker 1: This is the drive of the close radios. All right,
Speaker 1: just got about thirteen minutes left in today's trading session.
Speaker 1: It is time for the drive to the closed duck
Speaker 1: Cioco back with us CEO on partner at Cavar Capital
Speaker 1: Partners roughly million dollars in assets under management, and they're
Speaker 1: based in Leewood, Kansas, and Doug joining us once again
Speaker 1: from there. Doug, Hey, good to have you here. How
Speaker 1: are you hey? I'm great, Thank you, thank you for
Speaker 1: having me on. Do you have Kansas? Is it? I mean,
Speaker 1: do you have Kansas? Is it? Do you have snow?
Speaker 1: Is it cold? What's going on? It is beyond cold.
Speaker 1: It is we are in the middle of the polar
Speaker 1: bar tex We woke up this morning was minus ten
Speaker 1: now plus eight, so we really flipped at the scripts
Speaker 1: and the sun's out, which is helpful. But it's gonna
Speaker 1: be with us below freezing, I think for at least
Speaker 1: another four or five days. But blow zero all weekend.
Speaker 1: That is crazy. But you've got power right and you're safe.
Speaker 1: It's rolling. Yeah, the first time I've been here twenty
Speaker 1: some years, I've never seen it happen before. They're rolling
Speaker 1: the grids around town with some regularity. I hope I
Speaker 1: always stay connected for the extent of this conversation. He so,
Speaker 1: So what does that mean though, for for you moving forward?
Speaker 1: I just I mean, if this is like the first
Speaker 1: time in decades that you've experienced this, I mean, does
Speaker 1: that mean that you're going to go out and buy
Speaker 1: a generator? Does it mean that you're going to make
Speaker 1: changes to your home? Uh? Probably neither, Tim, But that
Speaker 1: might consider either if I actually owned any tools. But
Speaker 1: the reality is just such an outlying event I don't
Speaker 1: think will make much in the way of lifestyle adjustments,
Speaker 1: you know, an anticipation of it being more regular, But
Speaker 1: how does it make you think about climate change and
Speaker 1: the financial impact? It is having the economic impact it
Speaker 1: is having on our world. I mean, I go back
Speaker 1: a few years and people are like climate change, it's,
Speaker 1: you know, we don't have to think about it, and
Speaker 1: increasingly it's it's much more of a story that impacts
Speaker 1: all of us on an economic level and a financial level. Yeah.
Speaker 1: I think that's a great thought, Carol, and I do
Speaker 1: think it is not inconsistent with the way a lot
Speaker 1: of information is transmitted, I mean, with its immediacy intensity,
Speaker 1: and then you know, whatever we feel it's appropriate reactivity.
Speaker 1: But you know, I think that it's it's so dispersed
Speaker 1: and hopefully what we learned or what what other cities
Speaker 1: and communities have learned and dealing with something like this
Speaker 1: will be something that can be leveraged in more widespread
Speaker 1: elevation of people, knowledge based and preparedness in the future.
Speaker 1: But it's just it is undeniable that it's something that's
Speaker 1: going to have an impact on cash flows, profitability, dispersion
Speaker 1: of assets. And if you don't take it into consideration
Speaker 1: as an investor, I think it's to your own peril.
Speaker 1: So to that end, Doug, where are you seeing opportunity
Speaker 1: in the markets right now? Yeah, we we see a
Speaker 1: lot of opportunities to him. I mean, I think if
Speaker 1: you look at the market and in hitting new highs
Speaker 1: and and you know, it seemingly each day and each week.
Speaker 1: It was so funny a couple of weeks ago and
Speaker 1: three and a half percent downturn of the market and
Speaker 1: the worst week since October, and I really thought that
Speaker 1: might have some traction until the following week and was
Speaker 1: the best week since October. And then we returned at
Speaker 1: all time high last week. And you know, we do
Speaker 1: still think that there's a lot of opportunity in certain
Speaker 1: sectors of the market if those rotation, which is the underway,
Speaker 1: continues to demonstrate some traction. Because we're very bullish on
Speaker 1: the economy in two thousand twenty one, it's just a
Speaker 1: function of finding the appropriate assets to have that reflected
Speaker 1: in areas of the market that are not overvalued. Well,
Speaker 1: and I know we don't normally talk specific stocks, but
Speaker 1: what about areas because we've spent a lot of time
Speaker 1: Doug talking about the small cap space. We talked about
Speaker 1: microcaps which are really outperforming, Uh this year. Where do
Speaker 1: you see the opportunities, Yeah, a few areas. You know,
Speaker 1: we are big believers in that there are going to
Speaker 1: be some very permanent and positive, positive residual impacts from
Speaker 1: the pandemic, and finding those opportunities should provide some pretty
Speaker 1: interesting and outsized return potential opportunities. And within that um
Speaker 1: uh intro, like we love fintech, right, if you think
Speaker 1: of it's really amazing just a year ago, how much,
Speaker 1: how many what percentage of all transactions were still consummated
Speaker 1: in cash in this country? Right? And then you flashboard
Speaker 1: where no one wants to touch cash of their own
Speaker 1: and wants to touch someone else's cash, and wants eavening
Speaker 1: their homes, and it's just ushered in this this this
Speaker 1: incredible opportunity for digital exchange of goods and services. So
Speaker 1: that's one area. You know, healthcare and life sciences did
Speaker 1: very well as a sector last year. We think it's
Speaker 1: not even scratched the service of its potential. You know,
Speaker 1: hopefully the hurdles to get life saving products and formulas
Speaker 1: to market have now been permanently and positively lowered, and
Speaker 1: that's gonna usher in kind of a whole new generation
Speaker 1: of interesting life sciences and biotechnology companies. And then certainly
Speaker 1: even within emerging market, especially talking about this I think
Speaker 1: when I was on in December and seeing e M
Speaker 1: gained prominence this year because of the labor, intellectual capital outsource,
Speaker 1: and it's taking place with no barriers, right because if
Speaker 1: you can't go across town, there's really no difference between
Speaker 1: going across an ocean. And we think they're going to
Speaker 1: continue to enhance margins, introduce new opportunities. The weakening dollar
Speaker 1: as a is a big part of that, as is
Speaker 1: sort of that the the the demand that tend up
Speaker 1: for the consumption of a lot of natural resources that
Speaker 1: it didn't missed a certain parts of the M world.
Speaker 1: Are you planning for some sort of correction here, Doug?
Speaker 1: You did say a few moments ago that you know,
Speaker 1: the sell off that we saw a couple of weeks ago,
Speaker 1: you thought it might have some legs. Are you expecting
Speaker 1: some sort of correction, some sort of sell off in
Speaker 1: the near future. I mean, I don't know tim anymore
Speaker 1: than we would typically be expecting such in any given year.
Speaker 1: And I think I saw a couple of weeks ago
Speaker 1: that the average pullback in any twelve months or counter
Speaker 1: years about fourteen and a half percent, going back to
Speaker 1: night and last year, we had obviously the lopper of
Speaker 1: all pullbacks. We also had to know a little aftershocks
Speaker 1: one in September, one in October, and two thousand nineteen
Speaker 1: had none in two thousand eighteen had a big one
Speaker 1: in the fourth quarter. It would be hard pressed for
Speaker 1: us to escape a draw down. I think this year
Speaker 1: that wouldn't be honor around that average pullback because the market,
Speaker 1: as I said earlier, is reasonably overvalued if you just
Speaker 1: consider the market, and that's the big part of its
Speaker 1: composition is because of the mega caps and the text sestors,
Speaker 1: tech sectors, pre text sectors, pre evidence. But we still
Speaker 1: think if you consider some of the other areas that
Speaker 1: have not taken place and not that that participated last year,
Speaker 1: there's still areas in the market that will command opportunities
Speaker 1: to put dry powder if we do get that, do
Speaker 1: you hey, what do you make? Um Doug of Treasury
Speaker 1: yields up to the highest since February of our story
Speaker 1: says that these stimulus impacts still kind of getting priced
Speaker 1: into that trade. But do those higher rates still low
Speaker 1: historically start to get pro you know, problematic any time?
Speaker 1: Or are are they an indicator of something that we
Speaker 1: need to be concerned about going forward. I think you
Speaker 1: should always be concerned. I Right now, I think Carol,
Speaker 1: we're in the positive aspects of what's taking place right
Speaker 1: If you think we've seen a lift and we know
Speaker 1: the set is anchored to the front end for probably
Speaker 1: at least eighteen months, maybe a little bit longer. So
Speaker 1: if we see a lifted interest rates, it's positive for
Speaker 1: three reasons. One of steep Field curve is positive for
Speaker 1: financial services companies, which are still, you know, the key
Speaker 1: catalyst to expressing money into the economy to exhibit that
Speaker 1: multiplier effect to better savings rates. We have so many
Speaker 1: clients and there's so many people out there that don't
Speaker 1: want to be forced into taking risk to earn a
Speaker 1: reasonable rate of return for a conservative allocation. And three,
Speaker 1: you get this return of constructive pricing power in the
Speaker 1: form of modest inflation. That's positive right for companies, particularly
Speaker 1: as we see kind of the global economy opening up
Speaker 1: and they're exhibiting and experiencing more demand for what they're selling.
Speaker 1: A little pricing power I think is very positive for
Speaker 1: valuations in cash flow generation. Democrats right now are trying
Speaker 1: to get other Democrats, some more moderate democrats on board
Speaker 1: with at one point nine trillion dollars spending package from
Speaker 1: the binding administration. Doug, what do you want to see
Speaker 1: out of Washington? What's effective policy? You know, I don't
Speaker 1: know that we did we'd get that much to him.
Speaker 1: I don't know that we need that much, particularly because
Speaker 1: I think it's logical to think there's going to be
Speaker 1: an infrastructure bill that gets introduced in the not too
Speaker 1: distant future after the blessing of the next pandemic stimulus
Speaker 1: plan um. I think that the set up in Washington
Speaker 1: is actually pretty positive for the market and the economy
Speaker 1: in general because there is that that quote unquote beneficial gridlock.
Speaker 1: But I don't feel like any single party is going
Speaker 1: to have this clear pathway of ramarting legislation that's superpartisan.
Speaker 1: I think because of that, regulation stays reasonably low, taxes
Speaker 1: stay reasonably low, and that is by a large pretty
Speaker 1: positive for the economy and subsequently the market. Hey just
Speaker 1: got thirty seconds left here? Forty seconds? Is there one
Speaker 1: place in the market you definitely don't want to be
Speaker 1: right now? Oh, I don't know. I mean, I think
Speaker 1: that's a hard that's a hard call to make. I mean,
Speaker 1: I think it was some of the speculation like that
Speaker 1: that we're seeing around, um the spacks and some of
Speaker 1: the cheerleaders and the short squeezes. And you know, it
Speaker 1: was interesting back twenty years ago, right, Those fomo instincts
Speaker 1: were hard to turn back during the dot com years.
Speaker 1: But I just think super selectivity is really important. And ultimately,
Speaker 1: if there are no cash, lest discount, no tangible operations
Speaker 1: to assess, the whole process possesses a lot of speculation.
Speaker 1: You need to be careful. Hey, I didn't hear you
Speaker 1: say corn. Okay, nothing in that portfolio, al right, Desioca
Speaker 1: be well, stay warm. B B Safe, Chief executive Officer,
Speaker 1: partner at Covar Capital Partners, roughly nine hundred million in
Speaker 1: assets under management, on the phone from a really chilly Leewood, Kansas.
Speaker 1: Thanks for listening to Bloomberg Business Week. Download the podcast
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