1 00:00:02,520 --> 00:00:07,000 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:08,640 --> 00:00:13,000 Speaker 2: This is Bloomberg business Week Daily reporting from the magazine 3 00:00:13,000 --> 00:00:17,599 Speaker 2: that helps global leaders stay ahead with insight on the people, companies, 4 00:00:17,640 --> 00:00:22,520 Speaker 2: and trends shaping today's complex economy. Plus global business finance 5 00:00:22,560 --> 00:00:25,880 Speaker 2: and tech news as it happens. The Bloomberg Business Week 6 00:00:25,960 --> 00:00:31,320 Speaker 2: Daily Podcast with Carol Masser and Tim Stenebeck on Bloomberg Radio. 7 00:00:32,040 --> 00:00:34,800 Speaker 3: Well, it is one of the largest market cap companies. 8 00:00:34,800 --> 00:00:36,720 Speaker 3: In fact, I think it's the fifth largest. We're talking 9 00:00:36,720 --> 00:00:39,840 Speaker 3: about Amazon founded by Jeff Bezos. He's still chair. It's 10 00:00:39,880 --> 00:00:44,320 Speaker 3: now run by CEO Andy Jasse. He's now five years. 11 00:00:44,440 --> 00:00:45,880 Speaker 3: I can't believe that since he took over as the 12 00:00:45,920 --> 00:00:47,800 Speaker 3: chief executive autime, like just yesterday. 13 00:00:48,720 --> 00:00:50,800 Speaker 4: So how time for it really does? Hey? 14 00:00:51,280 --> 00:00:55,040 Speaker 3: And what's interesting is Jase was as Bradstone Rights in 15 00:00:55,080 --> 00:00:57,480 Speaker 3: the cover story of Bloomberg BusinessWeek. He was once Jeff 16 00:00:57,520 --> 00:01:00,959 Speaker 3: Bezos's deputy and the head of Amazon's class computing Arm 17 00:01:01,040 --> 00:01:04,000 Speaker 3: Massive Computing Arm. Five years into his tenure s CEO, 18 00:01:04,080 --> 00:01:08,040 Speaker 3: he's killing projects, cutting staff, pleasing Wall Street, and steering 19 00:01:08,080 --> 00:01:11,480 Speaker 3: the Everything Store through its greatest challenge yet. 20 00:01:11,720 --> 00:01:13,760 Speaker 1: His impact and role at Amazon. It's the cover story 21 00:01:13,760 --> 00:01:15,720 Speaker 1: of the new issue of Bloomberg business Week. It's also 22 00:01:15,760 --> 00:01:17,720 Speaker 1: the Bloomberg at Big Take. For more, let's head to 23 00:01:17,800 --> 00:01:20,400 Speaker 1: the Bloomberg News San Francisco bureau. It's where we find Bradstone. 24 00:01:20,440 --> 00:01:23,160 Speaker 1: He's the editor of Bloomberg at BusinessWeek magazine. You can 25 00:01:23,200 --> 00:01:25,800 Speaker 1: read it online at Bloomberg dot com, on the Bloomberg 26 00:01:25,959 --> 00:01:28,800 Speaker 1: and pick up on newsstands. Brad Al's the author of 27 00:01:28,920 --> 00:01:32,679 Speaker 1: several books too, about Amazon, including The Everything Store. Brad 28 00:01:32,800 --> 00:01:37,240 Speaker 1: so much coverage when it comes to Amazon, especially of 29 00:01:37,920 --> 00:01:40,720 Speaker 1: you know, the post Bezos era. The thing that I 30 00:01:40,800 --> 00:01:43,039 Speaker 1: want to know is why Andy Jassy still drives himself 31 00:01:43,040 --> 00:01:47,000 Speaker 1: to work every day in a nineteen ninety eight jeep Cherokee. 32 00:01:46,640 --> 00:01:48,800 Speaker 4: Like seriously, is the Masterwati at home? 33 00:01:48,880 --> 00:01:49,080 Speaker 5: I mean? 34 00:01:49,120 --> 00:01:51,200 Speaker 1: But also like even I don't know, like I thought 35 00:01:51,240 --> 00:01:53,880 Speaker 1: CEO's these days from a security perspective, like everything was 36 00:01:53,920 --> 00:01:57,160 Speaker 1: so is so tight and secure, and like, you know, 37 00:01:57,440 --> 00:01:59,920 Speaker 1: I know Bezos had a minivan for years two, But anyway, 38 00:02:00,920 --> 00:02:01,400 Speaker 1: I thought. 39 00:02:01,240 --> 00:02:02,120 Speaker 6: That was interesting. 40 00:02:03,480 --> 00:02:06,840 Speaker 7: You know, They've got these corporate values that they promote 41 00:02:06,840 --> 00:02:11,080 Speaker 7: internally and externally, and one of them is frugality. You know, 42 00:02:11,160 --> 00:02:14,040 Speaker 7: the idea that you're saving every dollar for the customer. 43 00:02:14,600 --> 00:02:17,239 Speaker 7: Walmart does the same thing. And I think the way 44 00:02:17,400 --> 00:02:20,640 Speaker 7: you know, Andy's such an Amazonian, It's where he's worked 45 00:02:20,639 --> 00:02:24,040 Speaker 7: his whole life. He embodies the principles and so I 46 00:02:24,040 --> 00:02:26,160 Speaker 7: think it shows up in its personal choices, you know, 47 00:02:26,200 --> 00:02:30,040 Speaker 7: which include you know, he wore to the BusinessWeek photoshoot 48 00:02:30,040 --> 00:02:32,679 Speaker 7: what he called his eight minute jacket and it's a 49 00:02:32,720 --> 00:02:34,880 Speaker 7: sport code. He literally bought an eight minutes and a 50 00:02:34,919 --> 00:02:37,840 Speaker 7: scramble for a customer meeting once and so it's just 51 00:02:38,160 --> 00:02:39,400 Speaker 7: the kind of guy he is. 52 00:02:39,760 --> 00:02:43,160 Speaker 3: All right, So you know this company like no other. 53 00:02:43,240 --> 00:02:45,440 Speaker 3: And to mention, you wrote the Everything Store, You're at 54 00:02:45,480 --> 00:02:48,680 Speaker 3: Amazon Unbound. Why is now a really good time to 55 00:02:48,720 --> 00:02:51,519 Speaker 3: be writing about Andy Jasse? Yeah? 56 00:02:51,720 --> 00:02:54,120 Speaker 7: I mean for tech companies right now, there is only 57 00:02:54,160 --> 00:02:56,760 Speaker 7: one thing that matters, and that is where are they 58 00:02:57,320 --> 00:03:00,720 Speaker 7: in this great AI race? And do they have the 59 00:03:00,840 --> 00:03:04,320 Speaker 7: leading models, do they have the right partners, what kind 60 00:03:04,360 --> 00:03:07,280 Speaker 7: of money are they spending on data centers? And this 61 00:03:07,400 --> 00:03:11,960 Speaker 7: is what investors are watching and with baited breath because 62 00:03:11,960 --> 00:03:15,600 Speaker 7: the numbers are so large and Amazon got a slow start, 63 00:03:16,120 --> 00:03:19,160 Speaker 7: they had an opportunity to invest in anthropic early, which 64 00:03:19,160 --> 00:03:22,320 Speaker 7: they didn't. Some of their early models that they developed 65 00:03:22,360 --> 00:03:25,240 Speaker 7: in house haven't really been considered state of the art. 66 00:03:25,480 --> 00:03:28,160 Speaker 7: But I think it's become apparent over the past few months, 67 00:03:28,200 --> 00:03:31,480 Speaker 7: maybe the past year, that Amazon's catching up in a 68 00:03:31,520 --> 00:03:34,920 Speaker 7: number of ways. One they've done, they've gone and and 69 00:03:35,080 --> 00:03:39,200 Speaker 7: he has foreigned partnerships with Anthropic, with open Ai. Open 70 00:03:39,240 --> 00:03:45,600 Speaker 7: Ai renegotiated it's Microsoft deal essentially to avoid the exclusivity contracts. 71 00:03:45,640 --> 00:03:49,960 Speaker 7: So chat GPT models could be on AWS, Amazon Web Services, 72 00:03:51,160 --> 00:03:54,880 Speaker 7: Amazon redid Alexa, they call it Alexa plus now and 73 00:03:55,000 --> 00:03:58,840 Speaker 7: they're making these chips, these trainium chips that are in 74 00:03:58,920 --> 00:04:02,840 Speaker 7: some ways competing with a video and Amazon's offering is 75 00:04:02,920 --> 00:04:06,160 Speaker 7: very Amazon like. It's come to Amazon, you'll see you'll 76 00:04:06,160 --> 00:04:08,320 Speaker 7: have a sort of menu of all the models, and 77 00:04:08,360 --> 00:04:11,120 Speaker 7: you'll do it more cost effectively than you might elsewhere. 78 00:04:11,400 --> 00:04:14,440 Speaker 7: And frankly, like AWS is now growing at a pace 79 00:04:14,480 --> 00:04:16,240 Speaker 7: that it hasn't grown in a couple of years, like 80 00:04:16,800 --> 00:04:19,160 Speaker 7: the market has sort of turned. And so it does 81 00:04:19,279 --> 00:04:21,640 Speaker 7: happened to be five years for Andy Jasse. But you 82 00:04:21,720 --> 00:04:24,080 Speaker 7: can make an argument now that Amazon has caught up 83 00:04:24,120 --> 00:04:26,080 Speaker 7: and it is one of the names that is leading us, 84 00:04:26,240 --> 00:04:28,760 Speaker 7: whether we like it or not, into this new era you. 85 00:04:28,680 --> 00:04:31,320 Speaker 1: Know, as you're right in the piece, Amazon invented this 86 00:04:31,400 --> 00:04:34,920 Speaker 1: category with AWS and cloud computing. Andy Jasse and Jeff 87 00:04:34,920 --> 00:04:37,520 Speaker 1: Bezos sort of conceived this together years ago, and he 88 00:04:37,600 --> 00:04:41,120 Speaker 1: was the head of AWS before you became CEO of Amazon. 89 00:04:41,600 --> 00:04:43,960 Speaker 1: How did what he saw happening at AWS as the 90 00:04:44,000 --> 00:04:46,560 Speaker 1: result of AI informed the way that he makes decisions 91 00:04:46,600 --> 00:04:47,840 Speaker 1: about AI at Amazon? 92 00:04:48,480 --> 00:04:48,720 Speaker 2: M H. 93 00:04:49,520 --> 00:04:52,520 Speaker 7: Well, I mean I think they have a very good 94 00:04:52,600 --> 00:04:55,560 Speaker 7: sense for you know, what customers want, what the demand 95 00:04:55,680 --> 00:05:00,440 Speaker 7: signals are, and no surprise, you know, we I see 96 00:05:00,480 --> 00:05:03,040 Speaker 7: this in my own you know, kind of personal habits. 97 00:05:03,040 --> 00:05:05,920 Speaker 7: I'm experimenting more with AI than everyone kind of feels it. 98 00:05:06,240 --> 00:05:09,239 Speaker 7: And what Amazon saw, probably earlier than in the most 99 00:05:09,279 --> 00:05:13,320 Speaker 7: is that customer and corporate demand for AI services was 100 00:05:13,400 --> 00:05:17,360 Speaker 7: much hot, was was maybe even higher than folks even anticipated. 101 00:05:17,400 --> 00:05:20,720 Speaker 7: And so they're spending two hundred billion dollars in CAPEX 102 00:05:21,120 --> 00:05:24,280 Speaker 7: this year alone building data centers. We visited one of 103 00:05:24,320 --> 00:05:27,840 Speaker 7: them in Mississippi. It's the it's the lead to the 104 00:05:27,880 --> 00:05:32,279 Speaker 7: peace outside Jackson, Mississippi. These massive buildings that are rising 105 00:05:32,440 --> 00:05:35,640 Speaker 7: up from the from the you know, from the from 106 00:05:35,680 --> 00:05:38,960 Speaker 7: the clay, and and basically you know, one thing that 107 00:05:39,000 --> 00:05:42,279 Speaker 7: Amazon can do better than almost everyone because they are 108 00:05:42,440 --> 00:05:46,280 Speaker 7: are so uh early to the cloud computing movement is 109 00:05:46,360 --> 00:05:48,920 Speaker 7: stand up these data centers and and they're doing them 110 00:05:49,200 --> 00:05:52,720 Speaker 7: all across the country. They're uh, they're putting their own 111 00:05:52,800 --> 00:05:56,239 Speaker 7: chips in them, and they're promising that capacity to companies 112 00:05:56,279 --> 00:05:59,720 Speaker 7: like Anthropic and open aiye who can't even themselves again 113 00:05:59,839 --> 00:06:02,320 Speaker 7: enough compute. So it does seem to me that Amazon's 114 00:06:02,520 --> 00:06:06,200 Speaker 7: pretty well positioned right now, particularly for the bowl cases 115 00:06:06,200 --> 00:06:07,120 Speaker 7: and AI adoption. 116 00:06:07,480 --> 00:06:12,960 Speaker 3: So does he have his La Ray's girlfriend now wife 117 00:06:13,000 --> 00:06:15,719 Speaker 3: to thank for him being CEO of Amazon? 118 00:06:18,600 --> 00:06:18,840 Speaker 6: Right? 119 00:06:19,880 --> 00:06:20,120 Speaker 5: So? 120 00:06:20,680 --> 00:06:21,520 Speaker 6: I don't think so. 121 00:06:21,800 --> 00:06:26,640 Speaker 7: I mean, we talk about Andy Jase's history, and it 122 00:06:26,680 --> 00:06:29,680 Speaker 7: was almost a peculiar set of circumstances that got him 123 00:06:29,720 --> 00:06:33,080 Speaker 7: to Seattle in the first place. You're right that, you know, 124 00:06:33,160 --> 00:06:36,839 Speaker 7: his wife wanted them to spend a couple of years 125 00:06:36,920 --> 00:06:39,359 Speaker 7: earlier in their careers on the West Coast, and maybe 126 00:06:39,360 --> 00:06:43,120 Speaker 7: Seattle was a bit of a compromise. But he went 127 00:06:43,160 --> 00:06:46,680 Speaker 7: early to Amazon. He joined in nineteen ninety eight. It 128 00:06:46,720 --> 00:06:52,280 Speaker 7: was it was just the bookseller Andy Jasse pioneered the 129 00:06:53,160 --> 00:06:55,960 Speaker 7: at the time it was CD CDs, so the music 130 00:06:56,040 --> 00:06:58,680 Speaker 7: category on Amazon. He was early on the on the 131 00:06:58,720 --> 00:07:02,680 Speaker 7: marketing team, and then he was the first shadow or 132 00:07:02,720 --> 00:07:05,480 Speaker 7: sort of technical advisor to Jeff Bezos, which is basically 133 00:07:05,760 --> 00:07:08,280 Speaker 7: the person that's going to follow the CEO around, and 134 00:07:08,320 --> 00:07:11,760 Speaker 7: he was really became a kind of disciple. And then 135 00:07:11,840 --> 00:07:14,920 Speaker 7: when they conceived Amazon Web Services together, he broke off 136 00:07:14,960 --> 00:07:17,880 Speaker 7: and ran it with a lot of autonomy for fifteen years. 137 00:07:17,920 --> 00:07:22,720 Speaker 7: So yeah, it's it's this extraordinary story lot probably lots 138 00:07:22,760 --> 00:07:25,160 Speaker 7: of good fortune that he was there at the beginning 139 00:07:25,640 --> 00:07:28,000 Speaker 7: of this momentous Internet revolution. 140 00:07:27,840 --> 00:07:30,560 Speaker 1: But it wasn't always totally without speed bumps. You point 141 00:07:30,600 --> 00:07:33,640 Speaker 1: out in the piece that you know, Bezos admonished him 142 00:07:33,640 --> 00:07:35,880 Speaker 1: at one point publicly in a meeting, and you know, 143 00:07:36,720 --> 00:07:38,679 Speaker 1: he basically said, why should I ever listen to about 144 00:07:38,680 --> 00:07:40,559 Speaker 1: anything ever again if you get these numbers wrong. 145 00:07:41,280 --> 00:07:42,920 Speaker 7: I mean, it was the kind of it was probably 146 00:07:42,960 --> 00:07:45,440 Speaker 7: wasn't personal. It was the sort of comment that you know, 147 00:07:45,520 --> 00:07:48,720 Speaker 7: Jeff demanded excellence in meetings and had a brusque way, 148 00:07:48,800 --> 00:07:51,760 Speaker 7: particularly early on, of conveying that. But you know, Jassey 149 00:07:51,840 --> 00:07:55,680 Speaker 7: tells that story to illustrate to young people that like 150 00:07:55,800 --> 00:07:59,200 Speaker 7: even and this resonated with me that even if you 151 00:07:59,200 --> 00:08:01,560 Speaker 7: know what is what, what are you concerned about when 152 00:08:01,600 --> 00:08:04,320 Speaker 7: you go into big meetings with your superiors, well, you're 153 00:08:04,360 --> 00:08:07,280 Speaker 7: concerned that, you know, you'll look foolish. And he said 154 00:08:07,320 --> 00:08:09,480 Speaker 7: that there were instances when that happened and the next 155 00:08:09,600 --> 00:08:13,560 Speaker 7: day everything was fine, people moved on and so like, 156 00:08:13,640 --> 00:08:16,440 Speaker 7: he didn't end up worrying about that anymore, and it 157 00:08:17,000 --> 00:08:18,080 Speaker 7: gave him new confidence. 158 00:08:18,680 --> 00:08:21,920 Speaker 3: I am curious too about the relationship between Jasse and 159 00:08:22,000 --> 00:08:25,000 Speaker 3: Jeff Bezos, And I think increasingly we see people like 160 00:08:25,120 --> 00:08:28,040 Speaker 3: Jeff Bezos or Tim Cook of Apple like they are 161 00:08:28,120 --> 00:08:30,800 Speaker 3: the ones who are dealing with Washington and all of 162 00:08:30,840 --> 00:08:33,160 Speaker 3: those issues, and then there are other folks like really 163 00:08:33,240 --> 00:08:36,719 Speaker 3: running the company. But talk to us about I mean, 164 00:08:36,840 --> 00:08:39,559 Speaker 3: is Jasse involved in the politics and so on and 165 00:08:39,640 --> 00:08:42,440 Speaker 3: so forth, because Amazon, of course, as you know, there 166 00:08:42,720 --> 00:08:44,959 Speaker 3: has its fans and it has its foes, like of 167 00:08:45,000 --> 00:08:46,640 Speaker 3: people who are really critical of the company. 168 00:08:47,120 --> 00:08:48,760 Speaker 7: Yeah, I mean, I think, and he does have his 169 00:08:48,760 --> 00:08:51,400 Speaker 7: own relationship certainly with the President and the White House. 170 00:08:51,440 --> 00:08:53,960 Speaker 7: But it's I want to like one make make one 171 00:08:54,000 --> 00:08:56,800 Speaker 7: distinction which I thought about a little bit and wrote 172 00:08:56,840 --> 00:09:00,000 Speaker 7: about in the BusinessWeek daily newsletter this morning, which. 173 00:08:59,800 --> 00:09:02,600 Speaker 6: Is we are surrounded by leaders in. 174 00:09:04,120 --> 00:09:08,320 Speaker 7: Corporations and even political movements who are kind of, you know, 175 00:09:08,760 --> 00:09:12,840 Speaker 7: inextricably linked to their organizations, and so you can't imagine 176 00:09:12,840 --> 00:09:16,920 Speaker 7: say Tesla without Elon Musk or the MAGA movement without Trump. 177 00:09:17,440 --> 00:09:22,000 Speaker 7: And you know, Bezos really did architect and orderly and 178 00:09:22,160 --> 00:09:26,640 Speaker 7: model CEO transition, and he did it five years ago. 179 00:09:26,880 --> 00:09:30,160 Speaker 7: He's kind of stepped out of the way. He's executive chairman. 180 00:09:30,520 --> 00:09:35,520 Speaker 7: He's he's very involved as an executive chairman, definitely probably 181 00:09:35,600 --> 00:09:42,840 Speaker 7: helping Jasse to manage Washington, introducing and talking about evangelizing 182 00:09:42,880 --> 00:09:46,120 Speaker 7: for new technologies. But you know, you have to say, 183 00:09:46,160 --> 00:09:48,280 Speaker 7: you have to give them credit. You know, in this 184 00:09:48,360 --> 00:09:51,520 Speaker 7: day and age when the key man risk to use 185 00:09:51,559 --> 00:09:54,760 Speaker 7: the sec term is so high at companies like he 186 00:09:55,440 --> 00:09:57,880 Speaker 7: gave Jasse the reins and he really stepped out of 187 00:09:57,880 --> 00:10:00,240 Speaker 7: the way. And I think it's worth saying at a 188 00:10:00,240 --> 00:10:03,960 Speaker 7: time when you know you've got Palenteer or Tesla or 189 00:10:04,040 --> 00:10:07,800 Speaker 7: SpaceX going public where you can't even imagine what happens 190 00:10:07,800 --> 00:10:10,520 Speaker 7: to the market value of one of these companies if 191 00:10:10,760 --> 00:10:14,080 Speaker 7: the key guy, the key figure is no longer there. 192 00:10:14,480 --> 00:10:16,080 Speaker 1: And Brad, you make the point in the piece too 193 00:10:16,120 --> 00:10:18,400 Speaker 1: that early on in the transition he had to make 194 00:10:18,440 --> 00:10:21,280 Speaker 1: some really tough choices as a result of some over 195 00:10:21,400 --> 00:10:26,640 Speaker 1: hiring during the pandemic, you know, somewhat bloated corporate workforce 196 00:10:26,720 --> 00:10:29,760 Speaker 1: that I think many would argue, how was he seen 197 00:10:29,800 --> 00:10:32,040 Speaker 1: internally and externally as he was doing that, and what 198 00:10:32,360 --> 00:10:33,520 Speaker 1: exactly did he have to do? 199 00:10:34,000 --> 00:10:37,160 Speaker 6: Yeah, probably not, you know, very very popular. 200 00:10:38,360 --> 00:10:41,920 Speaker 7: He's laid off a good percentage of the company because, 201 00:10:42,120 --> 00:10:44,880 Speaker 7: as you say, there was over hiring during the pandemic. 202 00:10:45,240 --> 00:10:48,319 Speaker 7: They also he also Andy also felt like Amazon was 203 00:10:48,360 --> 00:10:49,199 Speaker 7: too bureaucratic. 204 00:10:49,240 --> 00:10:50,720 Speaker 6: He wanted to remove layers. 205 00:10:51,679 --> 00:10:55,319 Speaker 7: And then of course, somewhat spoken, somewhat unspoken, you've got 206 00:10:55,320 --> 00:10:57,400 Speaker 7: Ai making the company more efficient. 207 00:10:58,080 --> 00:11:00,360 Speaker 6: And you know, when you you. 208 00:11:00,280 --> 00:11:05,840 Speaker 7: Take opportunity away from people, or you reduce the the 209 00:11:06,000 --> 00:11:10,040 Speaker 7: ability to promote, or people feel like promotions are closed off, 210 00:11:10,120 --> 00:11:13,720 Speaker 7: you know, it creates conflict and more and you know, 211 00:11:13,800 --> 00:11:16,720 Speaker 7: and like and this is not unique to Amazon, this 212 00:11:16,840 --> 00:11:19,960 Speaker 7: is probably across business, certainly across Silicon Valley right now. 213 00:11:20,400 --> 00:11:23,680 Speaker 7: So he made some unpopular choices. He he also killed 214 00:11:23,720 --> 00:11:27,360 Speaker 7: some prominent projects like the ghost store that just walk 215 00:11:27,440 --> 00:11:33,120 Speaker 7: out technology and supermarkets, Amazon Fresh grocery stores, different like 216 00:11:33,480 --> 00:11:39,439 Speaker 7: you know, robot delivery, drone, you know delivery robot projects, 217 00:11:39,800 --> 00:11:43,920 Speaker 7: but he's also place bets elsewhere, like the satellites. They're 218 00:11:43,960 --> 00:11:46,360 Speaker 7: creating a satellite internet service, and they're going to be 219 00:11:46,400 --> 00:11:50,320 Speaker 7: opening a new supermarket, new like superstore in Chicago. So, 220 00:11:50,640 --> 00:11:52,920 Speaker 7: you know, I think there's a lot of people who 221 00:11:52,920 --> 00:11:54,440 Speaker 7: have a lot of respect for him, and like with 222 00:11:54,480 --> 00:11:56,280 Speaker 7: a lot of companies, it's not unanimous. 223 00:11:56,720 --> 00:11:59,240 Speaker 4: Great, great deep vibe as you know, this company like 224 00:11:59,280 --> 00:11:59,559 Speaker 4: no other. 225 00:11:59,559 --> 00:12:02,480 Speaker 3: Breadstone, editor of Bloomberg Business Week magazine, Brad thank you 226 00:12:02,559 --> 00:12:03,080 Speaker 3: his story. 227 00:12:03,120 --> 00:12:03,840 Speaker 4: It is the cover. 228 00:12:04,000 --> 00:12:06,760 Speaker 3: Find it on the Bloomberg and online at Bloomberg dot com. He's, 229 00:12:06,800 --> 00:12:09,800 Speaker 3: of course the author of many books, including two on Amazon. 230 00:12:10,840 --> 00:12:13,600 Speaker 1: Stay with us more from Bloomberg Business Week Daily coming 231 00:12:13,720 --> 00:12:14,679 Speaker 1: up after this. 232 00:12:18,320 --> 00:12:22,320 Speaker 2: You're listening to the Bloomberg Business Weekdaily podcast. Catch us 233 00:12:22,400 --> 00:12:25,839 Speaker 2: live weekday afternoons from two to five pm Eastern Listen 234 00:12:25,880 --> 00:12:29,440 Speaker 2: on Applecarplay and Android Auto with the Bloomberg Business app, 235 00:12:29,559 --> 00:12:31,360 Speaker 2: or watch us live on YouTube. 236 00:12:32,600 --> 00:12:33,920 Speaker 4: About a year ago, we. 237 00:12:33,760 --> 00:12:37,160 Speaker 3: Were kind of coming off Trump's President Trump's Liberation Day, 238 00:12:37,840 --> 00:12:39,800 Speaker 3: hire or uncertain tariff environment. 239 00:12:39,880 --> 00:12:40,160 Speaker 7: It was. 240 00:12:40,480 --> 00:12:42,040 Speaker 3: We were kind of up in the air about a 241 00:12:42,080 --> 00:12:45,119 Speaker 3: lot of things, and at the time we were forecasting 242 00:12:45,120 --> 00:12:47,160 Speaker 3: put out a story at Bloomberg just ahead of Memorial 243 00:12:47,240 --> 00:12:49,320 Speaker 3: Day that the price of a cook at was going up. 244 00:12:49,440 --> 00:12:50,559 Speaker 1: The prices were an issue. 245 00:12:50,559 --> 00:12:52,840 Speaker 4: Then too, yes, right, and that was well. 246 00:12:52,920 --> 00:12:55,400 Speaker 3: The story got into a lot of the issues were 247 00:12:55,480 --> 00:12:57,960 Speaker 3: domestic ones that were impacting the prices of things. And 248 00:12:57,960 --> 00:12:59,840 Speaker 3: then I think about this year, Tim, what's going on? 249 00:13:00,080 --> 00:13:03,520 Speaker 1: A US swarny ron, higher energy prices, higher gas prices, 250 00:13:03,600 --> 00:13:06,000 Speaker 1: inflation prints just this week reminding us that inflation is 251 00:13:06,000 --> 00:13:07,200 Speaker 1: outpacing wage growth. 252 00:13:08,280 --> 00:13:09,480 Speaker 4: Not so good? That so great? 253 00:13:09,520 --> 00:13:11,280 Speaker 3: So what does it mean for our summer picnics as 254 00:13:11,280 --> 00:13:13,480 Speaker 3: we get ready, please please to kick off summer. 255 00:13:13,480 --> 00:13:14,800 Speaker 4: It's just around the corner. 256 00:13:14,880 --> 00:13:17,240 Speaker 1: It was a felt like forty five this morning. That 257 00:13:17,320 --> 00:13:19,559 Speaker 1: was the feel like temperature, fifty one degrees in New York. 258 00:13:19,600 --> 00:13:21,280 Speaker 4: I still head layers. I hear it's going to be 259 00:13:21,320 --> 00:13:22,680 Speaker 4: like eighty degrees on Sunday. 260 00:13:23,120 --> 00:13:23,440 Speaker 2: For more. 261 00:13:23,520 --> 00:13:27,760 Speaker 3: Let's head to Stu Leonard's Wine, Wines and Spirit Store. 262 00:13:27,880 --> 00:13:30,960 Speaker 3: It is in Norwalk, Connecticut. That's where we find Blake Leonards. 263 00:13:30,960 --> 00:13:34,360 Speaker 3: She's the president of Stu Leonard's Wines and Spirits. She's 264 00:13:34,400 --> 00:13:36,400 Speaker 3: also part of the next generation that will take over 265 00:13:36,559 --> 00:13:39,880 Speaker 3: running the store founded by her grandfather. She will take 266 00:13:39,920 --> 00:13:42,240 Speaker 3: the reins as president, along with a cousin from her dad, 267 00:13:42,320 --> 00:13:43,800 Speaker 3: Stu Leonard Junior, keeping. 268 00:13:43,600 --> 00:13:44,320 Speaker 4: It in the family. 269 00:13:44,360 --> 00:13:47,600 Speaker 3: I love that you are a certified somoller from the 270 00:13:47,600 --> 00:13:50,720 Speaker 3: Culinary Institute of NAPA. You've worked for many other families 271 00:13:50,760 --> 00:13:53,040 Speaker 3: too in the wine business, including the well. 272 00:13:52,840 --> 00:13:55,600 Speaker 4: Known Gallows Blake. Welcome, Welcome, how are you? 273 00:13:56,360 --> 00:13:56,600 Speaker 7: Hey? 274 00:13:56,679 --> 00:13:58,400 Speaker 8: Thank you so much for having me today. And you know, 275 00:13:58,440 --> 00:14:01,000 Speaker 8: since it's Friday, I wanted to start just cheersing you 276 00:14:01,120 --> 00:14:03,560 Speaker 8: with an appall sits right here? 277 00:14:03,880 --> 00:14:04,480 Speaker 4: Oh my god. 278 00:14:04,640 --> 00:14:06,720 Speaker 1: I feel like she's seen Stu Leonard do this a 279 00:14:06,720 --> 00:14:09,959 Speaker 1: few times on our show. Yeah, learned from the best. 280 00:14:10,440 --> 00:14:12,600 Speaker 2: I love you, I love you, but I. 281 00:14:12,520 --> 00:14:14,640 Speaker 4: Do resent that there wasn't one cent to us. That's 282 00:14:14,640 --> 00:14:15,319 Speaker 4: all good to say. 283 00:14:15,360 --> 00:14:15,560 Speaker 9: I know. 284 00:14:15,760 --> 00:14:16,440 Speaker 4: I'm just going to say. 285 00:14:16,440 --> 00:14:18,600 Speaker 1: I think the interstate liquor laws that's a big issue. 286 00:14:18,760 --> 00:14:20,360 Speaker 4: Truly true, that is true. 287 00:14:20,440 --> 00:14:21,920 Speaker 5: Yeah, okay, well. 288 00:14:21,760 --> 00:14:28,400 Speaker 8: Maybe you know right here in season now, so I'm excited. 289 00:14:28,720 --> 00:14:31,480 Speaker 3: Hey, talk to us so about the environment before we 290 00:14:31,520 --> 00:14:35,160 Speaker 3: get into the summer season. What people are interested in 291 00:14:35,240 --> 00:14:37,240 Speaker 3: terms of wines and spirits, But talk to us about 292 00:14:37,240 --> 00:14:38,760 Speaker 3: the consumer, what you guys are seeing. 293 00:14:39,560 --> 00:14:41,440 Speaker 8: Yeah, well you know, I was the other day just 294 00:14:41,560 --> 00:14:44,240 Speaker 8: visiting one of our wine suppliers and he was saying 295 00:14:44,240 --> 00:14:47,480 Speaker 8: that it cost him over two thousand dollars more just 296 00:14:47,520 --> 00:14:49,920 Speaker 8: to get a container of wine here into the US 297 00:14:50,080 --> 00:14:53,040 Speaker 8: right now. And that's you know, just one part of 298 00:14:53,080 --> 00:14:56,520 Speaker 8: the whole transportation piece, you know, for getting wine into 299 00:14:56,520 --> 00:14:57,320 Speaker 8: our wine stores. 300 00:14:58,080 --> 00:14:58,520 Speaker 4: Wow. 301 00:14:59,000 --> 00:15:03,160 Speaker 1: So you couple that with actually selling the wine in 302 00:15:03,200 --> 00:15:05,640 Speaker 1: a time when we're hearing more and more about young 303 00:15:05,680 --> 00:15:08,480 Speaker 1: people not drinking as much. This idea of like, uh, 304 00:15:08,720 --> 00:15:11,880 Speaker 1: you know, dry January actually lasting the entire year. What 305 00:15:11,880 --> 00:15:13,720 Speaker 1: does that mean for the overall business. 306 00:15:14,920 --> 00:15:16,880 Speaker 8: Well, you know, you also see customers here on the 307 00:15:16,920 --> 00:15:18,360 Speaker 8: store and I was just talking to a lady the 308 00:15:18,360 --> 00:15:20,440 Speaker 8: other day who was just talking about how much more 309 00:15:20,520 --> 00:15:22,480 Speaker 8: it costs her to fill up her huge you know 310 00:15:22,600 --> 00:15:25,200 Speaker 8: van that she drives with all her kids in the back. 311 00:15:25,320 --> 00:15:27,600 Speaker 8: So you know, you know, everyone here in the store 312 00:15:27,600 --> 00:15:30,200 Speaker 8: floor is definitely feeling it. I think one good thing 313 00:15:30,320 --> 00:15:32,440 Speaker 8: and you know I was hearing all the stock prices before, 314 00:15:32,520 --> 00:15:35,120 Speaker 8: But about being a family business is that we can 315 00:15:35,440 --> 00:15:38,080 Speaker 8: you know, work with our suppliers and hold those costs. 316 00:15:38,880 --> 00:15:40,960 Speaker 8: In a lot of instances will split you know, that 317 00:15:41,000 --> 00:15:44,560 Speaker 8: transportation cost with our suppliers so we can keep prices 318 00:15:44,600 --> 00:15:47,120 Speaker 8: here on our store floor family friendly. 319 00:15:47,800 --> 00:15:50,080 Speaker 3: And you guys have not yet seen price increases my 320 00:15:50,160 --> 00:15:51,520 Speaker 3: understanding is due to fuel. 321 00:15:51,600 --> 00:15:53,800 Speaker 4: Correct, Yes, we have not. 322 00:15:54,360 --> 00:15:56,880 Speaker 8: You know here in the wine business, as you started 323 00:15:56,880 --> 00:15:59,480 Speaker 8: off with the tariffs that was big last year and 324 00:15:59,520 --> 00:16:03,040 Speaker 8: for this really no one wants to raise the price 325 00:16:03,040 --> 00:16:05,520 Speaker 8: of wine right now. And I always look, this is 326 00:16:05,520 --> 00:16:08,080 Speaker 8: a great new rose that just came in. It's a new, 327 00:16:08,120 --> 00:16:12,080 Speaker 8: fresh vintage. But you know, we're retailing this under fifteen dollars, 328 00:16:12,320 --> 00:16:14,040 Speaker 8: and if I were to go and sell it over 329 00:16:14,080 --> 00:16:17,040 Speaker 8: fifteen dollars, what happens to sales is they go down. 330 00:16:17,480 --> 00:16:19,880 Speaker 8: So you really have to be price sensitive with those 331 00:16:19,880 --> 00:16:23,200 Speaker 8: barriers there, and we look at it as hopefully a 332 00:16:23,200 --> 00:16:25,880 Speaker 8: temporary thing, and you know, trying to look at the 333 00:16:26,000 --> 00:16:26,600 Speaker 8: longer picture. 334 00:16:26,840 --> 00:16:28,560 Speaker 1: Is the idea on it with a product like that, 335 00:16:28,800 --> 00:16:31,520 Speaker 1: and if you know, if I'm thinking about margins correctly, 336 00:16:31,560 --> 00:16:33,040 Speaker 1: that you take a little bit of a hit there, 337 00:16:33,040 --> 00:16:35,280 Speaker 1: but you get people in the store to buy that, 338 00:16:35,400 --> 00:16:37,240 Speaker 1: and then they buy other things that don't have as 339 00:16:37,240 --> 00:16:38,720 Speaker 1: big as that have bigger margins. 340 00:16:39,680 --> 00:16:39,920 Speaker 7: Yes. 341 00:16:39,960 --> 00:16:42,280 Speaker 8: Well, And one of the things that I love doing 342 00:16:42,520 --> 00:16:44,880 Speaker 8: is I'm like a little you know, wine detective out there, 343 00:16:44,880 --> 00:16:46,880 Speaker 8: but I love going Every year we go to a 344 00:16:46,920 --> 00:16:51,040 Speaker 8: wine show, either in Paris or in Italy and we 345 00:16:51,080 --> 00:16:53,320 Speaker 8: get to meet firsthand with a lot of these multi 346 00:16:53,360 --> 00:16:57,400 Speaker 8: generational families who are making unbelievable wine and we get 347 00:16:57,440 --> 00:16:59,400 Speaker 8: to bring them back and sell them in our stores. 348 00:16:59,440 --> 00:17:02,680 Speaker 8: And really there are wines that over deliver for the price, 349 00:17:02,840 --> 00:17:05,040 Speaker 8: and we often say they taste. 350 00:17:04,760 --> 00:17:05,840 Speaker 6: Like their twice the price. 351 00:17:06,200 --> 00:17:09,200 Speaker 8: So really trying to bring not only the price point 352 00:17:09,240 --> 00:17:11,639 Speaker 8: but also the story back for our customers because we 353 00:17:11,760 --> 00:17:14,199 Speaker 8: think that now more than ever, that's what customers want 354 00:17:14,240 --> 00:17:14,720 Speaker 8: to hear about. 355 00:17:14,960 --> 00:17:17,240 Speaker 3: I'm always amazed, like when you're over in Europe or 356 00:17:17,359 --> 00:17:20,920 Speaker 3: Paris and you just order i don't know, just a 357 00:17:20,960 --> 00:17:23,800 Speaker 3: little wine, nothing big, and it's just great. Like I 358 00:17:23,840 --> 00:17:27,120 Speaker 3: feel like over the years and you know, this this industry, 359 00:17:27,320 --> 00:17:30,359 Speaker 3: like it just feels like, you know, we keep getting 360 00:17:30,520 --> 00:17:32,200 Speaker 3: told you don't have to spend a lot of money 361 00:17:32,240 --> 00:17:32,480 Speaker 3: to get a. 362 00:17:32,480 --> 00:17:33,560 Speaker 4: Great bottle of wine. 363 00:17:34,240 --> 00:17:37,120 Speaker 8: Yeah, no you don't. And you know right here this 364 00:17:37,240 --> 00:17:40,040 Speaker 8: is this is a course of kin rose that I have, 365 00:17:40,240 --> 00:17:43,320 Speaker 8: and this is also one of our best sellers. It's 366 00:17:43,359 --> 00:17:47,720 Speaker 8: a provence rose under fifteen dollars a female winemaker. She 367 00:17:47,880 --> 00:17:50,400 Speaker 8: won the top one hundred wine maker, you know, one 368 00:17:50,400 --> 00:17:52,080 Speaker 8: of the top one hundred wine makers in the world. 369 00:17:52,160 --> 00:17:54,400 Speaker 8: She was awarded a couple of years ago. So there's 370 00:17:54,480 --> 00:17:57,080 Speaker 8: great value out there. You do have to, you know, 371 00:17:57,160 --> 00:17:59,280 Speaker 8: spend time looking for but that's what we really strive 372 00:17:59,359 --> 00:18:01,600 Speaker 8: to do for our custostomers here on the store floor, 373 00:18:01,760 --> 00:18:02,960 Speaker 8: as well as educate them. 374 00:18:03,240 --> 00:18:05,080 Speaker 1: So let's talk a little bit about the next generation 375 00:18:05,160 --> 00:18:08,240 Speaker 1: of Stu Leonards and sort of the timeline for you 376 00:18:08,400 --> 00:18:12,359 Speaker 1: and your cousin taking over. And also I'm curious about 377 00:18:12,520 --> 00:18:15,160 Speaker 1: with a background in wine and spirits, what you can 378 00:18:15,200 --> 00:18:18,840 Speaker 1: then do and your approach to the grocery business, a 379 00:18:18,880 --> 00:18:22,280 Speaker 1: historically low margin business, a very challenging business that you 380 00:18:22,320 --> 00:18:24,200 Speaker 1: know you have to work with the ups and downs 381 00:18:24,200 --> 00:18:26,720 Speaker 1: of the economy and the macroeconomic environment. What is your 382 00:18:26,720 --> 00:18:28,520 Speaker 1: plan for stut Leonards when you take it over. 383 00:18:29,520 --> 00:18:32,480 Speaker 8: You know, yesterday all of my cousins and my dad, 384 00:18:32,600 --> 00:18:34,240 Speaker 8: you know, it was work, but we got to spend 385 00:18:34,240 --> 00:18:36,840 Speaker 8: the day all together in the city listening to other 386 00:18:36,920 --> 00:18:39,560 Speaker 8: family businesses talk and it was a really awesome day. 387 00:18:39,560 --> 00:18:42,240 Speaker 8: But one of the biggest takeaways I had listening to 388 00:18:43,920 --> 00:18:46,840 Speaker 8: Jim Purdue Speak and we got to meet him afterwards, 389 00:18:46,960 --> 00:18:51,479 Speaker 8: and hearing Enterprise as well and panneda express. They all 390 00:18:51,720 --> 00:18:54,960 Speaker 8: stick to their core values, so no matter what happens, 391 00:18:55,200 --> 00:18:57,240 Speaker 8: is sticking to their core values. And when I look 392 00:18:57,280 --> 00:18:59,439 Speaker 8: back at our business today, you know, I grew up 393 00:18:59,480 --> 00:19:03,639 Speaker 8: drinking milk from stews, and my kids today they're also 394 00:19:03,720 --> 00:19:06,800 Speaker 8: drinking milk from Stews, but it's organic. And so you know, 395 00:19:06,840 --> 00:19:09,840 Speaker 8: if we had twenty years ago tried selling organic milk, 396 00:19:09,840 --> 00:19:12,720 Speaker 8: it would have been way too expensive to really for 397 00:19:13,080 --> 00:19:16,199 Speaker 8: our customers at that time. But we've evolved, and so 398 00:19:16,280 --> 00:19:18,959 Speaker 8: it's kind of just this slow evolution over time, and 399 00:19:19,320 --> 00:19:21,600 Speaker 8: that's you know, one of the things that always sticks 400 00:19:21,640 --> 00:19:24,160 Speaker 8: out to me is that my kids are drinking organical milk. 401 00:19:24,240 --> 00:19:25,760 Speaker 4: Now, Blake, I just want to mention. 402 00:19:25,800 --> 00:19:28,879 Speaker 3: We have a headline crossing from Reuters SpaceX picks the 403 00:19:28,960 --> 00:19:33,119 Speaker 3: NASDAC as it's listing venue for its massive upcoming IPO 404 00:19:33,880 --> 00:19:34,240 Speaker 3: on that. 405 00:19:34,680 --> 00:19:37,120 Speaker 4: Did you guys Do you guys ever think about going public? 406 00:19:38,800 --> 00:19:42,840 Speaker 8: We've definitely had offers and we have, you know, offers 407 00:19:42,880 --> 00:19:46,520 Speaker 8: either go into partnerships or to be purchased, and it's 408 00:19:46,560 --> 00:19:49,840 Speaker 8: always something we think about because in my generation it 409 00:19:49,880 --> 00:19:52,880 Speaker 8: went from four in my dad's generation now to over 410 00:19:52,960 --> 00:19:56,240 Speaker 8: thirteen of us and now in the fourth generation there's 411 00:19:56,280 --> 00:19:59,959 Speaker 8: over twenty two great grandkids. So it's definitely something we 412 00:20:00,040 --> 00:20:03,359 Speaker 8: always think about. But really what we want, and you know, 413 00:20:03,359 --> 00:20:05,240 Speaker 8: my cousins and I all just met recently to talk 414 00:20:05,280 --> 00:20:06,840 Speaker 8: about this, is we really want to keep this a 415 00:20:06,920 --> 00:20:10,520 Speaker 8: family business and want to continue. You know, the decisions 416 00:20:10,600 --> 00:20:13,639 Speaker 8: we get to make every day are really, you know, 417 00:20:13,720 --> 00:20:16,280 Speaker 8: ones that we don't have to rely on anyone else 418 00:20:16,320 --> 00:20:16,520 Speaker 8: for that. 419 00:20:16,680 --> 00:20:17,400 Speaker 4: So listen. 420 00:20:17,560 --> 00:20:19,639 Speaker 3: So fun to catch up with you, stay in touch. 421 00:20:19,800 --> 00:20:21,760 Speaker 3: Thank you very much, especially as we kick off the 422 00:20:21,760 --> 00:20:24,640 Speaker 3: summer season. Blake Leonard, she's the president of Stu Leonard's 423 00:20:24,680 --> 00:20:28,480 Speaker 3: Wines and Spirits. Joining us out there in Connecticut. 424 00:20:28,960 --> 00:20:31,760 Speaker 1: Stay with us. More from Bloomberg Business Week Daily coming 425 00:20:31,840 --> 00:20:32,800 Speaker 1: up after this. 426 00:20:36,440 --> 00:20:40,439 Speaker 2: You're listening to the Bloomberg Business Weekdaily Podcast. Catch us 427 00:20:40,520 --> 00:20:43,960 Speaker 2: live weekday afternoons from two to five pm Eastern Listen 428 00:20:44,000 --> 00:20:47,560 Speaker 2: on Applecarplay and Android Auto with the Bloomberg Business app, 429 00:20:47,720 --> 00:20:50,000 Speaker 2: or watch us live on YouTube. 430 00:20:50,200 --> 00:20:55,080 Speaker 1: How about this? Okay, a bus company with a million followers. 431 00:20:54,760 --> 00:20:57,520 Speaker 3: On TikTok Wait, why all right? 432 00:20:57,640 --> 00:21:02,560 Speaker 1: If you're listening on radio It's like a TikTok dancing 433 00:21:02,680 --> 00:21:07,680 Speaker 1: person with a bus. There's some lips on the bus 434 00:21:08,560 --> 00:21:10,320 Speaker 1: and the bus is just going everywhere in the world. 435 00:21:10,400 --> 00:21:12,119 Speaker 1: It's a green bus, it's a Flicks bus. 436 00:21:12,160 --> 00:21:12,440 Speaker 5: Carol. 437 00:21:12,560 --> 00:21:14,480 Speaker 3: Can I just tell you one of our producers, Ceci 438 00:21:14,560 --> 00:21:19,760 Speaker 3: and I, she discovered this TikTok account and we just 439 00:21:19,800 --> 00:21:21,920 Speaker 3: went down a rabbit hall. There it is, the bus 440 00:21:21,960 --> 00:21:26,840 Speaker 3: continuing to dance and I'm just gonna say we were 441 00:21:26,960 --> 00:21:27,600 Speaker 3: less why. 442 00:21:27,680 --> 00:21:31,040 Speaker 1: This is why you can't get TikTok on. This is 443 00:21:31,040 --> 00:21:33,560 Speaker 1: why you can't get TikTok because you would be in 444 00:21:33,560 --> 00:21:34,120 Speaker 1: that rabbit hole. 445 00:21:34,160 --> 00:21:34,640 Speaker 7: Oh my god. 446 00:21:34,680 --> 00:21:38,399 Speaker 3: We were laughing so hard and it just it's their 447 00:21:38,600 --> 00:21:41,159 Speaker 3: TikTok presence is really entertaining. 448 00:21:41,560 --> 00:21:43,520 Speaker 1: Well, if you're Flicks Bus, you do have a million 449 00:21:43,560 --> 00:21:46,280 Speaker 1: followers on TikTok. The company operates in dozens of countries 450 00:21:46,320 --> 00:21:49,679 Speaker 1: in Europe, North America, South America, Asia and Australia. Here 451 00:21:49,680 --> 00:21:53,680 Speaker 1: in North America they owned Greyhound and Flicks Bus back 452 00:21:53,720 --> 00:21:57,000 Speaker 1: with US as Kay Boys and CEO Flicks North America. 453 00:21:57,040 --> 00:21:58,600 Speaker 1: He joins us from Dallas. 454 00:21:58,680 --> 00:21:58,880 Speaker 5: Kai. 455 00:21:59,200 --> 00:22:03,560 Speaker 1: It's been almost two years since we've last spoke. It's 456 00:22:03,560 --> 00:22:05,919 Speaker 1: good to have you back on the program. It's a 457 00:22:06,040 --> 00:22:08,200 Speaker 1: very different environment than when you last joined. 458 00:22:08,280 --> 00:22:08,440 Speaker 3: US. 459 00:22:08,680 --> 00:22:12,840 Speaker 1: Flights are more expensive, jet fuel is their shortage of 460 00:22:12,920 --> 00:22:15,960 Speaker 1: jet fuel in parts of the world. Here in the US, 461 00:22:16,080 --> 00:22:19,280 Speaker 1: gas is more expensive. How is your business right now? 462 00:22:21,160 --> 00:22:22,280 Speaker 5: Our business is strong. 463 00:22:22,880 --> 00:22:25,840 Speaker 9: I mean intercity bus is the most cost effective option 464 00:22:26,000 --> 00:22:28,080 Speaker 9: by far. I mean if you just look at New 465 00:22:28,119 --> 00:22:32,199 Speaker 9: York City in DC distance and people can travel, and 466 00:22:32,240 --> 00:22:36,119 Speaker 9: bus is a fraction of the railways or airlines. Cost 467 00:22:36,359 --> 00:22:42,240 Speaker 9: budget clearly matters and fuel increase also drive shift demand 468 00:22:42,600 --> 00:22:46,880 Speaker 9: historically from personal cars to intercity bus, and that's why 469 00:22:46,880 --> 00:22:48,080 Speaker 9: we're seeing it right now. 470 00:22:48,480 --> 00:22:49,200 Speaker 4: You know, it's interesting. 471 00:22:49,240 --> 00:22:51,959 Speaker 3: I have a daughter who is up in Boston and 472 00:22:52,000 --> 00:22:55,760 Speaker 3: who has taken Amtrak several times, but she's also increasingly 473 00:22:55,800 --> 00:22:56,600 Speaker 3: taking the bus. 474 00:22:56,640 --> 00:22:57,879 Speaker 4: It's less expensive. 475 00:22:58,640 --> 00:23:03,280 Speaker 3: I think maybe delays she's seen, but it's interesting, and 476 00:23:03,280 --> 00:23:05,320 Speaker 3: I think she was a little bit surprised how much 477 00:23:05,359 --> 00:23:06,600 Speaker 3: she liked taking a bus. 478 00:23:07,880 --> 00:23:08,520 Speaker 5: That's spot on. 479 00:23:08,640 --> 00:23:12,520 Speaker 9: I mean what we see is generations are less likely 480 00:23:12,600 --> 00:23:15,080 Speaker 9: to have a driving license. They like their comfort and 481 00:23:15,119 --> 00:23:19,200 Speaker 9: convenience and spot on reliability. He plays an important part 482 00:23:19,280 --> 00:23:23,000 Speaker 9: of the equation right now, and we have increased our 483 00:23:23,080 --> 00:23:25,840 Speaker 9: reliability massively. I mean nine to seven percent of the 484 00:23:25,920 --> 00:23:29,320 Speaker 9: time we depart on time with this scheduled time, and 485 00:23:29,400 --> 00:23:32,600 Speaker 9: eighty five percent we arrive on time. That's second to 486 00:23:32,680 --> 00:23:37,080 Speaker 9: none and way better than airlines and railways. So what 487 00:23:37,119 --> 00:23:40,000 Speaker 9: we see is a continue to increase in the number 488 00:23:40,000 --> 00:23:42,280 Speaker 9: of passengers on our buses year after year. 489 00:23:43,359 --> 00:23:46,520 Speaker 1: I'm wondering about the split between Flicksbus in the US 490 00:23:46,560 --> 00:23:49,600 Speaker 1: and Greyhound and sort of how you position those two brands, 491 00:23:49,600 --> 00:23:51,840 Speaker 1: and how you're positioning the Greyhound brand, which is seen 492 00:23:51,840 --> 00:23:53,840 Speaker 1: I think by a lot of people as a real 493 00:23:53,920 --> 00:23:58,840 Speaker 1: legacy brand in an environment where there are some newer 494 00:23:58,920 --> 00:23:59,440 Speaker 1: up starts. 495 00:24:00,880 --> 00:24:05,720 Speaker 9: I mean, Flexbus and Greyhound are two very strong brands 496 00:24:05,720 --> 00:24:09,440 Speaker 9: for US. Approximately more than forty percent of our businesses 497 00:24:09,480 --> 00:24:12,680 Speaker 9: in flex Bus and more than fifty percent is in Greyhound. 498 00:24:12,960 --> 00:24:17,440 Speaker 9: And what we do mostly is Flexbus really strong in 499 00:24:17,520 --> 00:24:21,359 Speaker 9: the East Coast and the West Coast shorter distances, and 500 00:24:21,480 --> 00:24:25,480 Speaker 9: where Greyhound comes in, it connects multiple states together and 501 00:24:25,760 --> 00:24:28,040 Speaker 9: becomes the pipe for the long distance traveled. 502 00:24:29,920 --> 00:24:32,320 Speaker 3: Tell us a little bit about the demand that you're seeing, 503 00:24:32,480 --> 00:24:34,840 Speaker 3: I mean, has it increased year over year? 504 00:24:34,880 --> 00:24:35,919 Speaker 4: What moves the needle? 505 00:24:36,080 --> 00:24:38,920 Speaker 3: And I know some of what we've been thinking about 506 00:24:38,960 --> 00:24:40,399 Speaker 3: here in the newsroom is like, when you saw the 507 00:24:40,440 --> 00:24:43,080 Speaker 3: Spirit shutdown, did you guys see an uptick in business? 508 00:24:44,280 --> 00:24:44,520 Speaker 4: Oh? 509 00:24:44,600 --> 00:24:46,360 Speaker 5: Yes, significant increase in the band. 510 00:24:46,480 --> 00:24:50,560 Speaker 9: With the Spirit shutdown, we saw over that weekend more 511 00:24:50,600 --> 00:24:55,000 Speaker 9: than thirty percent increase in ridership on overlapping lines. I 512 00:24:55,000 --> 00:24:57,200 Speaker 9: think we have more than one hundred and twenty overlapping 513 00:24:57,200 --> 00:25:00,520 Speaker 9: lines with Spirits, so these of course, that was an 514 00:25:00,520 --> 00:25:06,000 Speaker 9: opportunity for many travelers to experience our reliable and comfortable service. 515 00:25:06,280 --> 00:25:11,280 Speaker 9: So intercity bus is clearly a strong alternative when there's 516 00:25:11,359 --> 00:25:16,160 Speaker 9: a kind of disruption with the airport, airways, the airlines 517 00:25:16,320 --> 00:25:20,159 Speaker 9: or railways, especially when there's a big travel period, we 518 00:25:20,320 --> 00:25:22,200 Speaker 9: are a very strong alternative to them. 519 00:25:22,280 --> 00:25:23,200 Speaker 1: What's the sweet spot? 520 00:25:23,240 --> 00:25:23,440 Speaker 6: Though? 521 00:25:23,480 --> 00:25:25,760 Speaker 1: For somebody who said, who makes the choice? Okay, I'm 522 00:25:25,800 --> 00:25:27,520 Speaker 1: not going to fly, I'm actually going to take a 523 00:25:27,520 --> 00:25:30,040 Speaker 1: bus instead. It works for something like New York to 524 00:25:30,160 --> 00:25:33,399 Speaker 1: Washington or New York to Boston, for example. It doesn't 525 00:25:33,440 --> 00:25:37,360 Speaker 1: work for New York to California. 526 00:25:37,800 --> 00:25:40,680 Speaker 9: It depends what you're looking for in that instance. I mean, 527 00:25:40,760 --> 00:25:46,080 Speaker 9: if our strongest competition is when it comes to the 528 00:25:46,119 --> 00:25:49,240 Speaker 9: travel time is up to twelve hours, So that's where 529 00:25:49,280 --> 00:25:52,280 Speaker 9: we're really strong versus alternative must transport. 530 00:25:52,840 --> 00:25:54,359 Speaker 1: So what does that look like in the US in 531 00:25:54,440 --> 00:25:57,720 Speaker 1: terms of city to city. 532 00:25:57,040 --> 00:26:00,000 Speaker 9: I mean that covers a vast majority of northeast line 533 00:26:00,320 --> 00:26:03,919 Speaker 9: at Tov's all the city pairs. Mostly it covers also 534 00:26:04,119 --> 00:26:06,320 Speaker 9: a multiple I mean if you look at the southeast 535 00:26:06,320 --> 00:26:08,440 Speaker 9: to be covered majority of sitis there. If you want 536 00:26:08,440 --> 00:26:11,199 Speaker 9: to move from one region to another and you have 537 00:26:11,280 --> 00:26:15,520 Speaker 9: the time, then what we offer is reliable service, clearly 538 00:26:15,560 --> 00:26:18,880 Speaker 9: on time. Performance is stellar and the second one is comfortable. 539 00:26:18,960 --> 00:26:21,920 Speaker 9: So so your first class seat, your rest and relaxed, 540 00:26:22,000 --> 00:26:23,800 Speaker 9: and you've got Wi Fi all the way through a 541 00:26:23,840 --> 00:26:27,119 Speaker 9: strong Wi Fi atwork and on the way you can 542 00:26:27,119 --> 00:26:30,960 Speaker 9: see and enjoy the United States, the beautiful scenery, very possible. 543 00:26:31,400 --> 00:26:33,960 Speaker 3: Kai coming into you, we talked about we really were 544 00:26:34,040 --> 00:26:37,960 Speaker 3: kind of surprised our producer CC who fell into your 545 00:26:38,000 --> 00:26:42,239 Speaker 3: TikTok account, and kind of shock that you guys have 546 00:26:42,440 --> 00:26:47,000 Speaker 3: a million followers. I am curious tell us about what 547 00:26:47,040 --> 00:26:51,399 Speaker 3: goes into what you guys program and has that Every 548 00:26:51,440 --> 00:26:53,840 Speaker 3: time I see the dancing bus, it does make me laugh. 549 00:26:54,760 --> 00:26:56,960 Speaker 3: What is that done in moving the needle in terms 550 00:26:57,040 --> 00:26:59,960 Speaker 3: of bringing in younger customers? And I am curious about 551 00:27:00,080 --> 00:27:04,240 Speaker 3: you know, the demographics of who are getting on buses. 552 00:27:05,760 --> 00:27:09,960 Speaker 9: I mean we welcome all walks of life and kind 553 00:27:10,000 --> 00:27:13,200 Speaker 9: of we've got everybody from every segment. But you're right, 554 00:27:14,240 --> 00:27:19,320 Speaker 9: we attract disproportionately young people Generation Z mostly coming on 555 00:27:19,359 --> 00:27:22,040 Speaker 9: our buses and enjoying. And how we attract them, I mean, 556 00:27:22,359 --> 00:27:26,160 Speaker 9: number one is clearly is being on time, reliable service. 557 00:27:26,200 --> 00:27:28,000 Speaker 9: They want to make sure that they don't have any 558 00:27:28,040 --> 00:27:31,199 Speaker 9: surprises like they see at the airport's long queues or 559 00:27:31,240 --> 00:27:32,480 Speaker 9: delays in cancelations. 560 00:27:32,520 --> 00:27:33,240 Speaker 5: That's number one. 561 00:27:33,320 --> 00:27:37,280 Speaker 9: Reliable is really important connecting more locations. I mean we 562 00:27:37,320 --> 00:27:41,840 Speaker 9: connect the more than one eight hundred stops in this region, 563 00:27:42,320 --> 00:27:45,720 Speaker 9: and that's far more than airlines as well as railways combined. 564 00:27:46,160 --> 00:27:48,800 Speaker 9: And not only cities, we reach the rural community. So 565 00:27:48,800 --> 00:27:51,520 Speaker 9: it's possible for anybody to hop on a bus and 566 00:27:51,600 --> 00:27:54,479 Speaker 9: travel all the way through the final destillation without changing 567 00:27:54,880 --> 00:27:58,080 Speaker 9: actually more of travel. So what happens that we with 568 00:27:58,240 --> 00:28:00,439 Speaker 9: that on our mind at what we see is we 569 00:28:00,520 --> 00:28:03,720 Speaker 9: continue to grow lines at new lines to our network. 570 00:28:03,840 --> 00:28:06,679 Speaker 9: I mean, just in the course of the last two months, 571 00:28:06,680 --> 00:28:09,480 Speaker 9: we added more than twenty five lines to our network. 572 00:28:09,520 --> 00:28:12,119 Speaker 9: New lines to make sure that our network is growing 573 00:28:12,560 --> 00:28:15,240 Speaker 9: and we are meeting the demand out there. So the 574 00:28:15,280 --> 00:28:18,240 Speaker 9: growth is out there for us with the reliable service. 575 00:28:18,040 --> 00:28:20,760 Speaker 3: But the demographics who's getting on the bus? Is it 576 00:28:20,800 --> 00:28:23,760 Speaker 3: increasingly a younger population? Is it a mixture? Has it 577 00:28:23,840 --> 00:28:27,280 Speaker 3: really not changed in the last few years. 578 00:28:27,320 --> 00:28:30,560 Speaker 9: I mean the bigger one of the bigger segments for 579 00:28:30,680 --> 00:28:34,720 Speaker 9: us is clearly young segments. Students, university students, That's where 580 00:28:34,760 --> 00:28:37,080 Speaker 9: we attract. But we also attract the retires who got 581 00:28:37,119 --> 00:28:40,040 Speaker 9: the time and like to travel on a reliable platform, 582 00:28:40,080 --> 00:28:42,160 Speaker 9: and some people prefer not to fly, they come to 583 00:28:42,240 --> 00:28:45,320 Speaker 9: us as well. So all walks of life we welcome 584 00:28:45,480 --> 00:28:49,320 Speaker 9: and we have kind of presence from all walks of life. 585 00:28:49,320 --> 00:28:52,800 Speaker 9: But you're right, generation zets and students are one of 586 00:28:52,800 --> 00:28:53,880 Speaker 9: our biggest segments. 587 00:28:54,080 --> 00:28:57,560 Speaker 1: We're speaking with KAI Boys and Flicks North America CEO 588 00:28:57,680 --> 00:29:00,920 Speaker 1: joins us from Dallas. Hey, Kai, the areas of innovation 589 00:29:01,520 --> 00:29:03,760 Speaker 1: for flicks busted for Greyhound? 590 00:29:04,040 --> 00:29:04,560 Speaker 5: What are they? 591 00:29:04,640 --> 00:29:05,080 Speaker 1: You mentioned? 592 00:29:05,080 --> 00:29:05,520 Speaker 5: Wi Fi? 593 00:29:06,720 --> 00:29:07,560 Speaker 1: Is it starlink? 594 00:29:07,720 --> 00:29:08,040 Speaker 5: What I mean? 595 00:29:08,080 --> 00:29:10,160 Speaker 1: I guess you don't even need starlink. You could use cellular, 596 00:29:10,400 --> 00:29:13,280 Speaker 1: but like you know, how fast is it? Where can 597 00:29:13,360 --> 00:29:16,720 Speaker 1: you innovate to continue to attract younger demographics? 598 00:29:17,480 --> 00:29:19,960 Speaker 9: I mean, obviously we work with one of the prominent 599 00:29:21,040 --> 00:29:24,280 Speaker 9: telecommunications service providers here in the United States, and we're 600 00:29:24,360 --> 00:29:25,720 Speaker 9: very happy with the service. 601 00:29:25,440 --> 00:29:26,560 Speaker 1: So it would be like that would be like a 602 00:29:26,680 --> 00:29:28,760 Speaker 1: Verizon AT and T a T Mobile type of conesting. 603 00:29:28,800 --> 00:29:32,840 Speaker 9: Correct one of those, yes, And in addition, we also 604 00:29:32,920 --> 00:29:37,840 Speaker 9: do real time actually updates to our services just pre onboarding, 605 00:29:37,960 --> 00:29:40,920 Speaker 9: during on board service, and after off boarding. What is 606 00:29:40,960 --> 00:29:44,360 Speaker 9: really critical is to make sure that our travelers, our 607 00:29:44,400 --> 00:29:46,560 Speaker 9: passengers are up to speed as to where we are 608 00:29:46,600 --> 00:29:48,800 Speaker 9: when we're going to arrive, if there's any delay. So 609 00:29:48,840 --> 00:29:52,960 Speaker 9: it's really critical our platform enables that massively, and also 610 00:29:53,040 --> 00:29:55,239 Speaker 9: not only with the passengers, with the bus operates are 611 00:29:55,240 --> 00:29:59,360 Speaker 9: all coming together making sure that we provide a seamless experience. 612 00:29:59,520 --> 00:30:03,280 Speaker 9: I mean, our motto is kind of happy experience, Happy 613 00:30:03,280 --> 00:30:08,160 Speaker 9: writer experience always comes back with incremental action revenue for us, 614 00:30:08,280 --> 00:30:10,400 Speaker 9: So we're going to extra well to make sure that 615 00:30:10,480 --> 00:30:12,880 Speaker 9: each and everybody is happy with that experience, and that 616 00:30:12,920 --> 00:30:19,480 Speaker 9: comes with reliability, comfortability, and obviously cost effectiveness. Bringing that 617 00:30:19,560 --> 00:30:23,080 Speaker 9: all together with many connections will make that difference and 618 00:30:23,520 --> 00:30:27,840 Speaker 9: innovation for us is not only kind of once we've 619 00:30:27,880 --> 00:30:30,240 Speaker 9: got the customer on board, and that's done and dust 620 00:30:30,280 --> 00:30:32,600 Speaker 9: that no innovation to the continuous For us, we always 621 00:30:32,640 --> 00:30:35,560 Speaker 9: look out what are the best search options available, what 622 00:30:35,600 --> 00:30:37,560 Speaker 9: are the best payers that we can bring so that 623 00:30:37,600 --> 00:30:42,600 Speaker 9: we can provide the option to our travelers to travel 624 00:30:42,680 --> 00:30:46,160 Speaker 9: from let's say from a distance that it needs to 625 00:30:46,160 --> 00:30:48,720 Speaker 9: actually connect with multiple buses. 626 00:30:48,800 --> 00:30:50,840 Speaker 5: So it's a continuous operation and. 627 00:30:50,760 --> 00:30:55,080 Speaker 9: We leverage AI in that way strongly to find the 628 00:30:55,160 --> 00:30:56,080 Speaker 9: optimal service. 629 00:30:56,280 --> 00:30:58,480 Speaker 3: K KAI before you go, we do want to squeeze in. 630 00:30:58,600 --> 00:31:00,680 Speaker 3: We got about forty seconds left here. Are you see 631 00:31:00,680 --> 00:31:03,320 Speaker 3: any bookings around the World Cup, especially as we've heard 632 00:31:03,840 --> 00:31:06,080 Speaker 3: other options are really expensive just quickly. 633 00:31:07,560 --> 00:31:11,280 Speaker 9: Yes, we're seeing a strong demands already with the peak 634 00:31:11,320 --> 00:31:13,160 Speaker 9: and we know that World Cup is a huge, large 635 00:31:13,160 --> 00:31:16,680 Speaker 9: scale event and it's going to make a difference. Ridership 636 00:31:16,720 --> 00:31:20,640 Speaker 9: is increasing early bookings, especially in the noteaest we cover 637 00:31:20,720 --> 00:31:24,360 Speaker 9: all sixteen cities, so this is a large scale event 638 00:31:24,480 --> 00:31:27,200 Speaker 9: and it's going to put pressure on the infrastructure for cities. 639 00:31:27,520 --> 00:31:30,160 Speaker 9: And what we do is we increase where we see 640 00:31:30,440 --> 00:31:33,360 Speaker 9: optic in demate, we increase our schedules so we help 641 00:31:33,480 --> 00:31:36,640 Speaker 9: reduce the pressure on the city infrastructure and we work 642 00:31:36,880 --> 00:31:40,880 Speaker 9: very collaboratively with the cities and local transtorians to make 643 00:31:40,920 --> 00:31:43,360 Speaker 9: sure the fan experience is superb. 644 00:31:43,800 --> 00:31:45,120 Speaker 3: All right, we got to leave it there. Hey, have 645 00:31:45,160 --> 00:31:47,480 Speaker 3: a great weekend. Kai, thank you so much for carving 646 00:31:47,520 --> 00:31:49,640 Speaker 3: out time for Tim and me. Hi boys and he 647 00:31:49,760 --> 00:31:53,400 Speaker 3: is CEO of Flicks North America joining us on this Friday. 648 00:31:54,560 --> 00:31:59,920 Speaker 2: This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify, 649 00:32:00,080 --> 00:32:03,760 Speaker 2: and anywhere else you get your podcasts. Listen live weekday 650 00:32:03,800 --> 00:32:07,840 Speaker 2: afternoons from two to five pm Eastern on Bloomberg dot com, 651 00:32:07,880 --> 00:32:11,760 Speaker 2: the iHeartRadio app, tune In, and the Bloomberg Business App. 652 00:32:12,000 --> 00:32:14,760 Speaker 2: You can also watch us live every weekday on YouTube 653 00:32:15,000 --> 00:32:17,160 Speaker 2: and always on the Bloomberg terminal