Speaker 1: This is Bloomberg Business Week inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business finance and tech news As it happened. Sloomberg
Speaker 1: Business Week with Carol Messier and Bloomberg Quick Takes. Tim
Speaker 1: Stinovic on Bloomberg Radio. Hi, everyone, welcome to the weekend
Speaker 1: edition of Bloomberg Business Week. From Alphabet, Apple, Amazon and
Speaker 1: Google to Microsoft and Meta, it was all about big
Speaker 1: tech earnings this past week. And you know these are
Speaker 1: the companies Tim right, that have been disrupting and innovating
Speaker 1: for years. Speaking of innovation and disruption, coming up something
Speaker 1: that might be the king of all disruptors or not. Crypto,
Speaker 1: The latest edition of Bloomberg Business Week magazine dedicated entirely
Speaker 1: to the Crypto story, your guide to what it does,
Speaker 1: what it means, and why it still matters that in
Speaker 1: a moment, and I gotta say, really, this whole first
Speaker 1: hour is all about our ever changing world and those
Speaker 1: shaking it up. With that in mind. Coming up another
Speaker 1: disrupt or, Chinese President j Ping tightening his grip and
Speaker 1: what it all means. Plus the Metaverse in practice with
Speaker 1: the CEO of Super League Gaming. All of that to come,
Speaker 1: We begin with the Crypto story, for just the second
Speaker 1: time ever the entire magazine dedicated to a single topic
Speaker 1: from a single writer. Paul Forwards what his code was
Speaker 1: the first that was just a few years ago. This
Speaker 1: time it's Bloomberg Opinions. Matt Levine, you know him from
Speaker 1: his Money Stuff newsletter that hits your inbox around lunchtime
Speaker 1: each day. He gave us forty thousand words on digital assets.
Speaker 1: He certainly did. Bloomberg business Week Markets and Finance editor
Speaker 1: Pat Regnier and the editor of Bloomberg business Week Magazine,
Speaker 1: Joel Weber give us a primer on the innovation that
Speaker 1: could forever change the way we transact and how we
Speaker 1: view the world of finance. Crypto has been just honestly,
Speaker 1: it's been an amazing story for a decade, and then
Speaker 1: to see what's sort of transpired over the last um year,
Speaker 1: uh where it has just felt like a lot of
Speaker 1: error has come out of the balloon and it just
Speaker 1: sort of makes you wonder, like, what was this thing
Speaker 1: that we've lived through for this past decade and what
Speaker 1: help us make sense of that? And the number one
Speaker 1: thing that I think collectively that group was like, we
Speaker 1: all want to read it. Is like anything Matt Levine
Speaker 1: wants to say about crypto, Um, we will, we will
Speaker 1: publish that, all right? So Pat coming in on here,
Speaker 1: uh and this because it's an incredible story. And I
Speaker 1: have to say I already said to do Like I
Speaker 1: started reading it and I'm like, oh, I kind of
Speaker 1: start to get it after so many conversations, so many
Speaker 1: different interviews, what Matt writes in terms of how he
Speaker 1: kicks it all off, it starts to make sense crypto
Speaker 1: to me. How do you guys, though, work with Matt
Speaker 1: on this because it's a massive project and it's broken
Speaker 1: down into parts. But how do you approach something this
Speaker 1: What are the conversations you had back and forth with
Speaker 1: Matt about it? Well, I mean first with something like this,
Speaker 1: you just asked him what he wants to do. He's
Speaker 1: such an accomplished writer that often the wisdom of editing
Speaker 1: is in knowing when to get out of somebody's way. Um,
Speaker 1: But then to ask questions and to be a good interlocutor. Um.
Speaker 1: I think there are different people on staff who think
Speaker 1: about crypto differently. I'm crypto skeptic and it was fun
Speaker 1: to bounce ideas off him, and I think the achievement
Speaker 1: of the piece is how demystifying it is. UM. If
Speaker 1: I try to describe it to people, I say, this
Speaker 1: is a tool for thinking about this thing that's kind
Speaker 1: of captured so much of our attention, and it could
Speaker 1: it could take you in a lot of different directions.
Speaker 1: I think one thing that a lot of people feel
Speaker 1: about crypto is let's say, for example, you're a crypto skeptic.
Speaker 1: You'll say, I, I'm skeptical this, but I'm not sure
Speaker 1: I understand it well enough because it's sort of obfuscated
Speaker 1: in so many wayers of detail. He'll he'll break that
Speaker 1: down for you, and he'll show it to you and
Speaker 1: you'll be able to think about it with an open mind.
Speaker 1: It might change your mind, but it also might actually
Speaker 1: uh take you to thinking about it in new ways.
Speaker 1: I think if you are a crypto fan, um he
Speaker 1: might surprise you in like what he focuses on and
Speaker 1: what he doesn't A lot of sort of the most
Speaker 1: important talking points of people who like crypto you won't
Speaker 1: see much in this story. And then he'll he's kind
Speaker 1: of drilling down into some of the UH financial market
Speaker 1: details of crypto and some of the surprising places that
Speaker 1: crypto went just in the past couple of years, and
Speaker 1: you may see new interesting opportunities in that or new
Speaker 1: places that crypto can go. Hey, Joel, can you talk
Speaker 1: a little bit about the presentation of this piece. It's
Speaker 1: it's in the magazine, so it's in traditional magazine format,
Speaker 1: but it's completely i don't want to say, a completely
Speaker 1: different experience if you read it online. Can you just
Speaker 1: talk from an editorial perspective, how you sort of make
Speaker 1: something unique online but also you can digest it in
Speaker 1: a traditional format. So the staff UM several members have
Speaker 1: been around long enough that they worked on that code
Speaker 1: issue that I mentioned by by Paul Fordan and so
Speaker 1: there were learnings from you know, sort of uh, how
Speaker 1: this is, you know what, and how ambitious we can
Speaker 1: be with this. And you know, the dirty little secret
Speaker 1: is that we built it really for web first, because
Speaker 1: we wanted this presentation to be something that was just
Speaker 1: organic and and in its kind of native form for
Speaker 1: the Internet. And so we did that first and foremost,
Speaker 1: and then we basically have reverse engineered it from there
Speaker 1: into print and it's almost going to be a one
Speaker 1: to one UM uh, kind of transmission where we take
Speaker 1: everything that we've already done online and bringing into the magazine.
Speaker 1: And I think there will be some there's some little,
Speaker 1: you know, bells and whistles that obviously aren't going to
Speaker 1: translate to print. But I think what we really tried
Speaker 1: to accomplish here was something that was timeless and felt
Speaker 1: like you know, if you if you really only read
Speaker 1: one Crypto story ever, and like, look like I think
Speaker 1: what's interesting about crypto and it's very different than code,
Speaker 1: was that code is this invisible thing and around you
Speaker 1: and is the architecture on which our modern worlds built.
Speaker 1: And then crypto is not like that. Like you have
Speaker 1: people who believe and then people who don't believe. So
Speaker 1: it's this really divisive topic. But we we I think
Speaker 1: we've really tried to create something here where people on
Speaker 1: either side of that equation have something that they can
Speaker 1: can read and understand. Like like Pat said, there, I
Speaker 1: think we're really we We tried to go out here
Speaker 1: and reach the whitest possible audience. With that, Joe Weber
Speaker 1: and Pat Rigneer breaking down this week's issue cover to
Speaker 1: cover again one story, the Crypto Story. Your guide to
Speaker 1: what it does, what it means, and why it still matters.
Speaker 1: By Matt Levine. It's so crucial to understand this coming
Speaker 1: up someone who's not so in love with crypto but
Speaker 1: very clear about what he wants to do about the future.
Speaker 1: It's been just about one week since m Pink solidified
Speaker 1: his singular spot at the top. What that means for
Speaker 1: the global pecking order when we come back. You're listening
Speaker 1: to Bloomberg Business Week. This is Bloomberg. This is Bloomberg
Speaker 1: Business Week with Carol Messer and Bloomberg Quick Takes Tim
Speaker 1: Stenovik from Bloomberg Radio. You might recall a chilling scene
Speaker 1: last week. It came out of China last week, and
Speaker 1: I watched it many times, feeling the gravity of it,
Speaker 1: watching former General Secretary Hu Jintao ushered off stage at
Speaker 1: the Chinese Party Congress and watching President Jijan Ping of
Speaker 1: China cement an unprecedented third term as that country's top leader.
Speaker 1: Andy Brown leads the China Hub as a partner at
Speaker 1: Brunswick Group. It's a critical issues advisory firm. He's also
Speaker 1: the former editorial director of Bloomberg New Economy and spent
Speaker 1: thirty five years in Asia. As both China editor and
Speaker 1: columnist for The Wall Street Journal. The Pulitzer Prize winning
Speaker 1: journalists joined us to sum up the result of She's
Speaker 1: years long game. So victory for Sea absolute triumph, gets
Speaker 1: his third um basically, if he wants it, rule of
Speaker 1: a life, packs the polit Burero standing committee with his
Speaker 1: own people. People say he's the new Mao, not in
Speaker 1: the sense that he's about to unleash chaos on China.
Speaker 1: I mean he wants order, but in the sense of power,
Speaker 1: in the sense of prestige, in the sense of his
Speaker 1: place and history. In fact, he may actually have more
Speaker 1: leeway than Mao. Mao, after all, had to launch the
Speaker 1: cultural revolution to get control of the party. She has
Speaker 1: no rivals, no peers, and no success. He's alone at
Speaker 1: the top. Now, what the markets are reacting to is
Speaker 1: the fact that this wasn't just a personal victory. It
Speaker 1: was a victory for his policies, the policies that have
Speaker 1: so alarmed investors, portfolio investors as well as global companies
Speaker 1: investing in China over the last several years. So how
Speaker 1: do how should investors after decades of thinking this is
Speaker 1: where companies wanted to be to tap into um their
Speaker 1: citizen base. What a billion plus people. How should investors
Speaker 1: think about the Chinese market going forward? You know, it's
Speaker 1: so interesting. I took to I talked to business leaders
Speaker 1: now investing in China all the time. Just about everything
Speaker 1: they knew or thought they knew about China has turned
Speaker 1: outside down. They thought that the Chinese system was optimized
Speaker 1: for growth and development. In fact, it's now optimized for security.
Speaker 1: China is looking inward. They thought that Don Cha Ping's
Speaker 1: open door, open reform and opening policies would continue indefinitely.
Speaker 1: She's Don Schalping's open door has turned into Si jim
Speaker 1: Ping's fortress China. They thought that policy making would be
Speaker 1: pragmatic and predictable. It's become ideological, almost random. They thought
Speaker 1: businesses thought that China would do everything it could to
Speaker 1: ensure a benign global environment that would facilitate China's economic rise.
Speaker 1: Wolf warriord to pharmacy, ballistic missiles over Taiwan. Uh An
Speaker 1: alignment with Putin's Russia ahead of the invasion of Ukraine
Speaker 1: has reversed all of that kind of thinking. It's a
Speaker 1: very very different China. I do think about do we
Speaker 1: look back. I don't know any year from now, five
Speaker 1: years or now a few years, and this was the
Speaker 1: beginning of the division of the world, or maybe that
Speaker 1: was starting already, Like how do we think about this
Speaker 1: in a world where globalization was supposed to be it
Speaker 1: all that we've seen a tremendous pushback. We have to
Speaker 1: recognize that she Jimping is building a very different China.
Speaker 1: He has a very different vision. It's a vision that
Speaker 1: prioritizes security over growth, and it comes from a fundamental
Speaker 1: place of insecurity. He believes that Chinese government believes, the
Speaker 1: Party believes that they're in the early stages of a
Speaker 1: decades long struggle for supremacy against you and I did
Speaker 1: states that may actually lead to conflict. And so all
Speaker 1: of these policies that you see rolled out from you know, uh,
Speaker 1: the advance of the state, the assault on the private sector, UM,
Speaker 1: COVID zero, populist policies aimed at wealth redistribution, forcing billionaires
Speaker 1: to disgorge their money, UM, a more assertive foreign policy. UM.
Speaker 1: So much of this has to do with hardening the
Speaker 1: economy for the for the for for the struggle that
Speaker 1: they feel is coming. So what does it mean for
Speaker 1: American companies that want to do business there, Apple, Nike, Disney, Tesla,
Speaker 1: just to name a few. I mean they want access
Speaker 1: to this growing consumer base and this what well, what
Speaker 1: could end up being a wealthier consumer base. Right, So
Speaker 1: so they have a dilemma. They're not they're not going
Speaker 1: to leave. I mean a few are leaving. Right. We
Speaker 1: saw linked in airbnbum a couple of a few companies
Speaker 1: that weren't doing much in China, had big reputational risks,
Speaker 1: weren't weren't earning many much much much money. They've they've
Speaker 1: abandoned ship, they bailed. Most companies are staying uh and
Speaker 1: they're hedging. Uh. You know, every CEO is being leaned
Speaker 1: on now by by their boards. What is your plan?
Speaker 1: B what is your plans? Ce What do you do
Speaker 1: if it all goes wrong? What do you do if
Speaker 1: if the Chinese invade? Uh Taiwan. We saw this just
Speaker 1: the other day in the congressional hearings. You had politicians
Speaker 1: grilling you know, uh, Jamie, Jamie Dimond, you know, uh,
Speaker 1: all of the the the you know, Brian, Brian Moyney,
Speaker 1: you know, Jane Phraser. It's like, okay, what what's your
Speaker 1: what's your plan? What would you do you know, well,
Speaker 1: of course we would salute the flag and do what
Speaker 1: we're told to do. Right. And then somebody said to
Speaker 1: Jane Phraser, no, no, no, what what if you weren't
Speaker 1: told what you had to do? Said, well, we would
Speaker 1: probably still we would probably still pull out. Now this
Speaker 1: is this is a very different situation from Russia, right.
Speaker 1: I mean these companies that some of I'm getting of
Speaker 1: their global revenues out of China. So I do wonder
Speaker 1: about President g with everything that happened over the weekend, Andy,
Speaker 1: who's there to question him? We always talk about it's
Speaker 1: important for our leaders to be questioned. So who's there?
Speaker 1: And as a result, if there is no one, what
Speaker 1: happens in terms of China and the Chinese economy? Carol,
Speaker 1: you don't need to be a sinologist to figure out
Speaker 1: where all this goes? Uh. You know, the longer he
Speaker 1: lingers in office, the more he's going to face this
Speaker 1: autocrats dilemma. Right. So as the autocrat ages he or
Speaker 1: she usually he becomes more isolated, more paranoid, doesn't know
Speaker 1: where the next threat is going to come from. And
Speaker 1: as a consequence of that, the tendency is to pack
Speaker 1: themselves around with yes men with sickopants. Okay, and these
Speaker 1: are not the people who are going to challenge the
Speaker 1: great leading And as a result, course correction becomes quite
Speaker 1: a bit more difficult. Right, and for all its faults,
Speaker 1: for all its faults, democracy does have within it this
Speaker 1: capacity to shift course. We've seen it very but right,
Speaker 1: we can shift course, right, ask Liz Trust Okay, uh,
Speaker 1: you know that does not That is not going to
Speaker 1: happen in in China. That was Andy Brown. He leads
Speaker 1: the China Hub as a partner at the Brunswick Group
Speaker 1: and of course a former colleague of ours here at Bloomberg.
Speaker 1: So glad we could check in with him. All right,
Speaker 1: still ahead on Bloomberg Business Week, the metaverse it is here?
Speaker 1: So is it really here? To him? I don't think
Speaker 1: it's here yet, I mean, asked Mark Zuckerberg, you know
Speaker 1: during earnings. Yeah, exactly. Well, I gotta say our next guest.
Speaker 1: He is the perfect use case for the nascent technology
Speaker 1: in the wide world, the video games. We got super
Speaker 1: League Gaming CEO and hand up. Next. This is Bloomberg
Speaker 1: broadcasting from the financial capital of the world, Bloomberg eleven
Speaker 1: Frio in New York to Washington, d C. Bloomberg to Boston,
Speaker 1: Bloomberg one O six one to San Francisco, Bloomberg nine
Speaker 1: sixty to the country Sirius XM Chado one nineteen and
Speaker 1: around the globe the Bloomberg Business app and Bloomberg Radio
Speaker 1: dot com. This is Bloomberg Business Week, one of the
Speaker 1: big tech companies that with results this week meta Platforms,
Speaker 1: noting in its third quarter earning statement at the path
Speaker 1: to the metaverse, it is an expensive one and it
Speaker 1: will keep on losing money. And yet, you know, Tim,
Speaker 1: there's still businesses that are already showing demand for this technology.
Speaker 1: That includes gaming and hand is chairman and CEO of
Speaker 1: Super League Gaming. It's an e sports community and content platform.
Speaker 1: It's a publicly held company, a microcap that has struggled
Speaker 1: this year, along with many others in the tech spased
Speaker 1: down roughly se here today still an sees immense opportunity
Speaker 1: ahead as these virtual platforms expand their reach. Bloomberg Radios
Speaker 1: Paul Sweeney and I began by asking her how she
Speaker 1: defines the metaverse the way that I simply try to
Speaker 1: talk to both investors and some of our larger brand
Speaker 1: partners about is the first kind of part of the
Speaker 1: metaverse is metaverse games or what we call open world
Speaker 1: platform games. And in those games, instead of you going
Speaker 1: in and just playing a game that served up to you,
Speaker 1: you're actually given tools to create your own games and experiences,
Speaker 1: and there's no limit to what that game offied experience
Speaker 1: can be. It can be concerts, fashion shows, it can
Speaker 1: be all kinds of things. Metaverse game or open world
Speaker 1: platforms have been around for over a decade. It's it's
Speaker 1: platforms like Minecraft and Roadblocks and now increasingly Fortnite. Um.
Speaker 1: You don't need a VR headset um, and you can
Speaker 1: participate in those experiences as a creator or as a
Speaker 1: viewer or player. Um. Right now today, hundreds of millions
Speaker 1: of kids are already there, and the super leagues built
Speaker 1: a pretty big footprint there. We reached seventy million unique
Speaker 1: under eighteen gamers a month in those worlds alone. So
Speaker 1: the first thing I say is big meta maybe five
Speaker 1: years away, but the there. But metaverse games don't be
Speaker 1: don't be afraid of them. They're around. That's where kids play.
Speaker 1: They prefer those types of game modes where they can
Speaker 1: be the creator as well. Uh to to traditional video games.
Speaker 1: Now that said, I do think that bigger meta is
Speaker 1: going to continue to happen faster than we think. There
Speaker 1: are companies building out the engines so that you don't
Speaker 1: just have to use roadblocks and Minecraft to create these experiences.
Speaker 1: Big brands, Iconic I P will be able to create
Speaker 1: their own worlds and interact with their fans and gamify
Speaker 1: things and modestization around those fans um and own that
Speaker 1: full user in that modestization stream. And that's not far away.
Speaker 1: That's happening and really now and over the next one
Speaker 1: to two years. So I think it's going to be gradual.
Speaker 1: I don't know if I'll ever be the person wearing
Speaker 1: a br headset for ten hours a day, right that
Speaker 1: that big meta vision. But but what I can give
Speaker 1: comfort around is it does exist right now in these
Speaker 1: game platforms. You know, when we think about the metaverse,
Speaker 1: are big bigger meta? Is it just with a gaming component?
Speaker 1: Is everything with a gaming component? Or is it the
Speaker 1: way you see it? I know you're an e sports
Speaker 1: community and content platforms, so that's your world, but is
Speaker 1: it something even more wider than that? Thank you for
Speaker 1: that question, because we do get called the sports a
Speaker 1: lot and yet we are so much bigger than that.
Speaker 1: Now when we talk about those seventy million monthly players,
Speaker 1: we're talking to all kinds of people who are seeking
Speaker 1: community inside these game based platforms. But super League isn't
Speaker 1: really just a gaming company. We gamify experiences and so
Speaker 1: to your question, it's much bigger than that. Um. We
Speaker 1: helped Samsung earlier this year bring Charlie xc X into
Speaker 1: the metaverse for a concert. We ran the Red Carpet
Speaker 1: for the MTV v m A Awards inside a digital
Speaker 1: world where your digital avatar could participate in that experience.
Speaker 1: And this is a real time example right now. We've
Speaker 1: had the pleasure of helping Mattel take their steps into
Speaker 1: met these metaverse games. And now you can go into
Speaker 1: one of our game world's called life Topia, and you
Speaker 1: can hang out in Barbie's dream House. We've created a
Speaker 1: three story digital version of Barbie's dream House. You can
Speaker 1: swim in the pool, lay on the chaise lounge, go
Speaker 1: hang out in Barbie's closet and try on clothes those
Speaker 1: aren't to all of us again, traditional video games. That's
Speaker 1: about community, it's a digital cul de sac. It's people
Speaker 1: finding people they want to socialize with. And so super
Speaker 1: League has come a long way because we now have
Speaker 1: the kind of reach where we can speak to the
Speaker 1: Barbie girl, the Hot Wheels boy, that older demo that
Speaker 1: maybe a Samsung or MTV wants to reach. Because here's
Speaker 1: the reality. Everybody is a gamer these days and it's
Speaker 1: not just hardcore gaming like we we tended to think
Speaker 1: about it five ten years ago. All right, just real quickly,
Speaker 1: what's the business model here? Do I sell advertising against
Speaker 1: this audience or charged them subscription business model? Yeah? The
Speaker 1: primary business model is that we work with brands and
Speaker 1: partners to take them into two metaverse worlds that we
Speaker 1: all already operate ourselves or are part of our extended network.
Speaker 1: We have several hundred game worlds, so when when a
Speaker 1: brand like Mattel comes to us, we can say, look,
Speaker 1: here are the types of game worlds that we really
Speaker 1: think matches your target audience. Here's the experience that we
Speaker 1: think um is right. And then we have some pretty
Speaker 1: special proprietary ad technology, media tech and analytics. And what
Speaker 1: that means is is we may have built Barbie's dream
Speaker 1: house in one world, but we have three D Barbies
Speaker 1: characters walking around digital avatars and other worlds directing traffic
Speaker 1: to it. I think in the first two weeks of
Speaker 1: Barbie we had were thirty two million visitors to her
Speaker 1: dream house. So we're talking about really outstanding numbers as
Speaker 1: far as engagement, but also deep engagement, you know, hanging
Speaker 1: out minutes at a time that was Super League Gaming
Speaker 1: CEO and Hamlett, me and Paul Sweeney. You're listening to
Speaker 1: Bloomberg Business Week. Up next, more from the c suite,
Speaker 1: this time on finding the financial professionals of the future,
Speaker 1: the Tapestry CFO. He's also CEO Scott Roe weighing in.
Speaker 1: That's coming up next. This is Bloomberg. You're listening to
Speaker 1: Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes
Speaker 1: Tim Stinovik from Bloomberg Radio Blier. This past week, a
Speaker 1: Bloomberg Live event was held at Bloomberg Global headquarters in
Speaker 1: New York City. It featured chief financial officers talking about
Speaker 1: cultivating the next generation of financial professionals. Carol spoke with
Speaker 1: Katie Rooney. She's CFO at a Light Solutions. It's a
Speaker 1: professional services, data and tech company that provides benefits, payroll
Speaker 1: and HR services and Applications also taking part with Scott Roe,
Speaker 1: CFO and CEO of Tapestry, that of course is home
Speaker 1: to the coach Stuart Whitesman and Kate Spade Brands. We
Speaker 1: kicked off our chat with thoughts on today's tricky world
Speaker 1: and the challenging financial conditions facing companies everywhere. Scott, let
Speaker 1: me kick it off with you. I told you in
Speaker 1: the green room. So I've been repeating something you said
Speaker 1: on our planning call, and that is short terms really
Speaker 1: hard to call right now for sure? Yeah, what a
Speaker 1: strange environment where in In In fact, we did an investor
Speaker 1: day recently and I made the comment it's almost easier
Speaker 1: to see the long term than it is the short term.
Speaker 1: And so what we're doing today, frankly, is we're talking
Speaker 1: more about decision models. Used to be able to put
Speaker 1: a you know, a plan out and say I think
Speaker 1: I think we can we can create this plan. But
Speaker 1: right now it's so volatile. We're thinking about agility, How
Speaker 1: do we react quick and what are the decision models
Speaker 1: of the no regret actions that we should take rather
Speaker 1: than maybe traditional planning. Well, Kate, come on in, because
Speaker 1: like Tapestry, you are a global organization. You work with
Speaker 1: organizations around the globe, most of them Fortune one hundred.
Speaker 1: So what are you hearing from them? What are you
Speaker 1: seeing about the global macro environment? Yeah, it's it's fascinating time.
Speaker 1: I think the good news is so we do about
Speaker 1: a light um as benefits and global payroll overall administration.
Speaker 1: So whether we're in a tough macro environment or great
Speaker 1: macro environment, people still need benefits and they still need
Speaker 1: to get paid. So that's the good news, which which
Speaker 1: is helpful. But at the same time, because of that
Speaker 1: position for us, we're spending a lot of time saying, so,
Speaker 1: how can we go an extra step to help our clients? Right?
Speaker 1: We are in this unique position. Do we need to
Speaker 1: think differently about payment terms for them for the short
Speaker 1: term because it will afford us a relationship that will
Speaker 1: grow longer term. And so that that's there's a lot
Speaker 1: of pressure for a lot of companies. I think we're
Speaker 1: in a good place. So it's enabling us to think differently.
Speaker 1: Can I ask you, because one of the big things
Speaker 1: I probably gonna talk about finance, talent and moment, but China,
Speaker 1: like you have exposure to China, and I have to
Speaker 1: say I can't tell you how many times like I
Speaker 1: was reading Chinese stories over the past weekend and trying
Speaker 1: to understand what China is going forward. Um people have
Speaker 1: said to meet China doesn't want to see its economy
Speaker 1: come apart and doesn't want to pull it to pull
Speaker 1: apart fully. But how do you factor something like that
Speaker 1: in terms of you're thinking, yeah, it's tough. So the
Speaker 1: first thing we did is we talked. We looked at
Speaker 1: what's happened before. I mean, there's the COVID issues and
Speaker 1: then there's maybe the more secular, bigger issues that are
Speaker 1: out there. So we've looked at when you see COVID effects,
Speaker 1: which there are still some, what what can you expect?
Speaker 1: And we used history as a guide on that. And
Speaker 1: then in general, we said, we're just gonna snap a
Speaker 1: line here, look at the trend in our business that
Speaker 1: we see, what's what's happening right now as we project
Speaker 1: that forward, and be very clear about what our expectations are,
Speaker 1: because you really can't, uh, you know, if you say
Speaker 1: I want to be conservative or aggressive, what does that mean?
Speaker 1: You know? What? How do you how do you do that?
Speaker 1: So we said we're not going to try to be
Speaker 1: that cute. We're going to look at what is the trend,
Speaker 1: what is our consumer um doing today, and as we
Speaker 1: project that forward. That's that's the basis for our for
Speaker 1: our guidance and what we see going for Katie, feel
Speaker 1: the same in terms of some of the instability we've
Speaker 1: seen you, whether it's the UK or China, I do.
Speaker 1: I think we're seeing it more in Europe um today.
Speaker 1: But I mean it comes back a little bit back
Speaker 1: to diversification, right. I mean it's so hard we can
Speaker 1: I can never predict China verse the UK, but I
Speaker 1: know globally I can take a balanced approach, right because
Speaker 1: some are gonna be up, some we're gonna be down
Speaker 1: at different points in time. Look at currency right now,
Speaker 1: I mean right, you can't you can't predict currency, but
Speaker 1: you can figure out a solid hedging strategy so that
Speaker 1: you're balanced across your portfolio. All right, So let's talk
Speaker 1: about when you think about talent in this environment and
Speaker 1: what you think about um Scott front and center. For you,
Speaker 1: you said the character lens. You're thinking about talent. What
Speaker 1: does that mean? Well? For me, what that means is
Speaker 1: the first thing I always look at is are are
Speaker 1: you a team player, Are you out for the win
Speaker 1: of the broader group? Because people see authenticity or the opposite, right,
Speaker 1: And so I want to build a team. I want
Speaker 1: to I want to build a group of people who
Speaker 1: are working together and have each other's backs. And to me,
Speaker 1: that's the that's the go, no go. How do you
Speaker 1: know that when somebody walks in, Well, you don't know,
Speaker 1: but you know you know you do? Uh, I always
Speaker 1: get an impression, right, But I think one of the
Speaker 1: things that I've learned over time is actually to get
Speaker 1: a more a broader group into that discussion, and a
Speaker 1: diverse group because we tend, right we were all we
Speaker 1: bring our biases in and we tend to hire people
Speaker 1: like us. So one of the things I've forced myself
Speaker 1: to do and I've learned over time is make sure
Speaker 1: you're getting people from a broader range of experiences and
Speaker 1: people that are coming from a different place to help
Speaker 1: you judge is this going to be a good fit
Speaker 1: for our team. It makes a difference. It absolutely makes
Speaker 1: a difference. Katie. You two said to me, I can
Speaker 1: teach somebody P and L, but there's other things that
Speaker 1: I can't. So tell me about what you're looking for
Speaker 1: when you're bringing somebody in or or pulling somebody along internally,
Speaker 1: what is it that you look for when you build
Speaker 1: at experiences? I think that's so critical today. Like even
Speaker 1: I almost tried to look at my talent if they
Speaker 1: were to become a CEO, not even CFO. Right, it's
Speaker 1: almost if you think about bringing that strategic perspective with
Speaker 1: a financial perspective. Um I think it's really important. I
Speaker 1: talked to a CEO, I was helping her find a CFO,
Speaker 1: and she said, should I should I focus on industry
Speaker 1: or finance experience? I said, that's like an impossible question.
Speaker 1: Um right. It depends on where you are at that
Speaker 1: point in time for your organization. And you've got to
Speaker 1: complement yourself with those skill sets that that you know
Speaker 1: you might not be as good at. So can I
Speaker 1: Can I build on that too? Because I think I
Speaker 1: think another thing that is important is learning agility and
Speaker 1: and and maybe it's uh guts. I don't know people
Speaker 1: who have jumped into different areas, different disciplines, because I
Speaker 1: think the CFO of today needs to be way more
Speaker 1: than just a financial person. And I look for that
Speaker 1: global experience people that have been in different aspects of
Speaker 1: the business because they're going to be more empathetic and
Speaker 1: they're going to have a better broader perspective, you know,
Speaker 1: to be able to get to the c suite. There
Speaker 1: is something very interesting about I feel like the progression
Speaker 1: of CFOs and I think we felt it. I've said
Speaker 1: this a million times because I feel it. After the
Speaker 1: financial crisis, man, no, CFOs kept companies alive and figured
Speaker 1: out how to do it. Same thing in the pandemic.
Speaker 1: We've seen different members of the c suite that are
Speaker 1: more and more important important, and I feel like the
Speaker 1: CFO and their team is really very crucial in terms
Speaker 1: of strategy and really keeping companies alive in many different ways. Yeah,
Speaker 1: I think I think that's so true. And how did
Speaker 1: the pandemic even like knew that in a different way. Well,
Speaker 1: it's even broader than the pandemic. I mean, recruiter this summer,
Speaker 1: she had two hundred open positions for CFOs, right, And
Speaker 1: I said that, But think about like, so not only
Speaker 1: are the pandemic, but then you have this all this
Speaker 1: pent up demand and all these companies going public, so
Speaker 1: you need a different skill set. It wasn't even just
Speaker 1: kind and they're all done anyway. Sorry, sorry, okay, but
Speaker 1: we were sorry, okay, you're not tis real real profits
Speaker 1: of the ones. No, but it's true. I mean there's
Speaker 1: I just think there's a different you know, a different
Speaker 1: skill set through those different progressions and in what we see.
Speaker 1: I know, I fully agree, and I mean, you know,
Speaker 1: in the early days of the pandemic, it was so
Speaker 1: uncertain and everybody looked at us right to say, basically,
Speaker 1: are are you okay? And so I felt we we
Speaker 1: took a different role in in terms of just helping
Speaker 1: the organization understand first of all, we're okay, these are
Speaker 1: the actions were taken, this is why we think we're okay.
Speaker 1: And then slowly that went back to okay, we got
Speaker 1: six months of planning to do in six weeks because
Speaker 1: everything just changed, and it seems like we've been on
Speaker 1: that that little treadmill since. Really so true when you
Speaker 1: think about talent, internal development versus external development, Katie, how
Speaker 1: do you think about him? You have to have a
Speaker 1: balance of both. I mean, yeah, I just you always
Speaker 1: have to have a balance of both. But I think
Speaker 1: it's it's funny. We were talking about getting people back
Speaker 1: to work, right, you have to meet people where they
Speaker 1: are today, but at some point we all still have
Speaker 1: to figure out how to develop more internally in a
Speaker 1: remote environment. It's hard, but we used to complement that.
Speaker 1: If you can't do it all obviously on site, I
Speaker 1: think there's tons of external perspectives that help, you know,
Speaker 1: honestly bring new ideas to a company, but also bring
Speaker 1: new skill sets to our teams. Yeah, I guess from
Speaker 1: my we had in our pre call. We had a
Speaker 1: discussion about this. I think it's a hard one, but
Speaker 1: I would just own it and say I I have
Speaker 1: a strong preference for internal talent. I think that's an
Speaker 1: important message to your organization and when people come in,
Speaker 1: that's where I'm going to look first. That said, you
Speaker 1: can't always do it right, and and especially in the E,
Speaker 1: I and D area, we often have a conflict right
Speaker 1: in in terms of internal promotion or or do we
Speaker 1: go to the outside and and those are always hard
Speaker 1: discussions and sometimes you go left, sometimes you go right.
Speaker 1: But as a general rule, I think it's an important
Speaker 1: message for your organization and for your brand as an
Speaker 1: employer to give preference to internal right. I mean, if
Speaker 1: if what a signal that sense, if you're not promoting internally.
Speaker 1: That's really hard for your teams. That's a light solution.
Speaker 1: CFO Kat Rooney along with Tapestry CFO and CEO Scott
Speaker 1: Rowe check out Bloomberg Live dot com for more information
Speaker 1: on our discussion and upcoming events, and you can hear
Speaker 1: actually the full conversation that we had, and that wraps
Speaker 1: up the first hour of the weekend edition of Bloomberg
Speaker 1: Business Week from Bloomberg Radio. I'm Carol Masser and Tim Stantovik.
Speaker 1: Coming up in our next hour, Sustainability from all angles,
Speaker 1: including the promise and potential of hydrogen. We do that
Speaker 1: with the CEO of Plug Power and the one energy
Speaker 1: source that could end up trumping all others, and nuclear
Speaker 1: power in particular could form a firmer source of energy
Speaker 1: that we need to drive electricity and other other industries
Speaker 1: that we have they reliance so much. Jonathan Menard of
Speaker 1: the Princeton Plasma Physics Lab in a wide ranging discussion
Speaker 1: on the road to green energy and climate adaptation from
Speaker 1: our broadcast this past week at n j I T.
Speaker 1: You're listening to Bloomberg Business Week. This is Bloomberg. This
Speaker 1: is Bloomberg Business Week. Inside from the reporters and editors
Speaker 1: who bring you America's most trusted business magazine, plus global business,
Speaker 1: finance and tech news as it happened. Bloomberg Business Week
Speaker 1: with Carol Messier and Bloomberg Quick Takes Tim Stinovic on
Speaker 1: Bloomberg Radio plenty of head. In our second hour of
Speaker 1: the weekend edition of Bloomberg Business Week, We're going to
Speaker 1: lean in big time into the state of our global
Speaker 1: energy transition with the panel of experts who we spoke
Speaker 1: with at the New Jersey Institute of Technology, Plus the
Speaker 1: impact of climate change in the wine industry from Sidary
Speaker 1: Vineyards New Winemaker, and why the ultra wealthy are invest
Speaker 1: in life on the high seas. Our conversation with the
Speaker 1: CEO of Fraser Yachts is coming up. As we mentioned though,
Speaker 1: energy and climate are recurring themes on our program. This
Speaker 1: past week, Tim and I caught up with one of
Speaker 1: the players in the renewable space, Andy Marsh's president and
Speaker 1: CEO of Plug Power, the maker of hydrogen fuel cells
Speaker 1: for industrial equipment and vehicles, earlier this month cut its
Speaker 1: full revenue guidance by five to We started off by
Speaker 1: asking about the headwinds facing his company. What we actually
Speaker 1: told the market was we're not sure whether we're going
Speaker 1: to meet our targets, and we wanted to back off
Speaker 1: just so no one was surprised. I think a couple
Speaker 1: of things are important. One, we haven't lost any orders.
Speaker 1: A lot has to do with construction our customer sites,
Speaker 1: as well as supply chain with us. Did you caution
Speaker 1: because the supply chain concerns are caution that I'm not
Speaker 1: quite sure about the economy and maybe those deals won't
Speaker 1: come through with supply pure supply chain, the deals are there,
Speaker 1: and look, it's working the supply chain every day. I
Speaker 1: when my drive down from Saratoga Springs this morning, I
Speaker 1: was on with supply chain issues and make sure we
Speaker 1: were addressing them. So they're real. But you know, you
Speaker 1: just have to work at it every day and to
Speaker 1: explain what the supply chain challenges are and and specifically
Speaker 1: when it comes to your business, because we talked about
Speaker 1: supply chain challenges and we oftentimes, you know, think about
Speaker 1: companies trying to get goods from outside the US or
Speaker 1: maybe they're stuck in a rail yard somewhere. Yeah, what's
Speaker 1: what's going on with you know, it's it's interesting. So
Speaker 1: simple item you would think fans are really easy to get, right.
Speaker 1: Uh So I was on the discussion on the way
Speaker 1: down about fans and that come from Germany and the
Speaker 1: issues actually integrate circuits, right, So when fans themselves, there's controllers.
Speaker 1: So is that I mean, is that translation? Is that
Speaker 1: a chip? That's a chip? So I have too much
Speaker 1: of an engineer too, but I guess I use the
Speaker 1: term chip like you know, kind of overarching. So what
Speaker 1: about the abandoning plans for two plants? First? Want to
Speaker 1: you know, I talked to one of the analysts that
Speaker 1: are events said to me, Andy, know, this moving a
Speaker 1: month at a quarter not really a big deal in
Speaker 1: the big picture, right, you know, we're building this five
Speaker 1: green hydrogen plant across the United States. Well, Andy, when
Speaker 1: you think about some of the people that you partner with,
Speaker 1: our your big clients, like when we talk about the
Speaker 1: move towards green, and we constantly have every day in Bloomberg,
Speaker 1: are our Green Vertical and our green reporting team, you know,
Speaker 1: talking about the climates getting warmer. We're seeing it this week,
Speaker 1: like you know, again in terms of you know, and
Speaker 1: the impact of it. So do you feel like in
Speaker 1: terms of the move towards alternative fuels and what you
Speaker 1: guys are doing. When is the tipping point going to happen?
Speaker 1: Because the big oil giants they're doing well too, and
Speaker 1: we're still going to be tapping them for some time.
Speaker 1: You know, we have infrastructure in this country which the
Speaker 1: fossil fuel companies have developed which could be leverage for renewables,
Speaker 1: i e. Natural gas pipelines could easily use hydro gen
Speaker 1: mixed in their pipelines. I mean you can't just you know,
Speaker 1: there's activities with carbon capture that has to go on
Speaker 1: that to help protect the environment. To think that all
Speaker 1: these assets are going to go away instantaneously overnight, I
Speaker 1: don't think it's very smart. Yes, you're emitting c O two,
Speaker 1: but actually you can end up with negative CEO two
Speaker 1: depending upon how the farmers till the land. So there's
Speaker 1: ways that you know, when I say being smart is
Speaker 1: trying to look and say, Okay, with the tools we have,
Speaker 1: how can we not only eliminate emissions, but how can
Speaker 1: you turn in negative? Can you talk a little bit
Speaker 1: about the power that's consumed in order to create hydrogen
Speaker 1: fuel cells, so use it power, I mean to generate
Speaker 1: hydrogen um from electricity. It's probably a fifties sixty percent
Speaker 1: offishient process. If you think about that, boy, that sounds bad.
Speaker 1: I also tell you if you use batteries to back
Speaker 1: up the grid, it's about a six process. When you
Speaker 1: look at self, what do those percentages mean? How much
Speaker 1: power you get out for how much power you put
Speaker 1: in and power out over power in equal sufficiency? It
Speaker 1: makes sense. It's really contextualize that for us. What's the
Speaker 1: most efficient power generation? Nuclear? Probably pretty efficient. We're talking
Speaker 1: like eighties nineties. Yeah, you're probably talking. But you know,
Speaker 1: you have to also think about tim the application, right,
Speaker 1: So it's great if you know, let's say batteries, batteries
Speaker 1: are not the right solution for heavy duty vehicles. They
Speaker 1: wigh too much, they take up too much room stuff, right,
Speaker 1: So that means that you know, testless semi is not
Speaker 1: necessarily the right application. I would not buy that product. Interesting,
Speaker 1: you probably could justify that product for like a hundred
Speaker 1: and fifty mile run, but then you got to think
Speaker 1: about how much power you need. So there was worked
Speaker 1: at the Port of Long Beach, which you know, when
Speaker 1: you thought about how to power a truck for one truck,
Speaker 1: it was more than the power that went into the
Speaker 1: station where they hold fifty trucks. I'm actually finding we
Speaker 1: have a lot of customers who want us to put
Speaker 1: hydrogen fuel cell systems in place the power electric vehicles
Speaker 1: because they can't get the power. So you know when
Speaker 1: I say it's it's not all easy, it's not all
Speaker 1: black and white. You need people who are really smart
Speaker 1: thinking about what's the right solution for the right application.
Speaker 1: What's top of mind for next year. Well, for I
Speaker 1: think from my perspective, we're going to do one point
Speaker 1: four billion dollars in revenue in twelve to fifteen months.
Speaker 1: We're going to be positive because of an operating income,
Speaker 1: positive because of all the plants we're bringing online. That's
Speaker 1: the key to my business, getting those plants built to
Speaker 1: support all our applications. That was Andy Marsh. She's president
Speaker 1: and CEO of Power, The company scheduled to report third
Speaker 1: quarter earnings after the Bellmer eight. You're listening to Bloomberg
Speaker 1: Business Week coming up. Our focus on sustainability takes us
Speaker 1: out to the New Jersey Institute of Technology for a
Speaker 1: look at where our global waste is coming from and
Speaker 1: how we might safely power the Globe for generations to come.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Messer and Bloomberg Quick Takes Tim Stinovik from Bloomberg Radio.
Speaker 1: Carolin I paid a visit to the New Jersey Institute
Speaker 1: of Technology in Newark. We conducted our entire broadcast from
Speaker 1: the campus and led a great discussion on green energy
Speaker 1: and climate adaptation. Our panel included Jonathan man Our, Deputy
Speaker 1: Director for Research and Chief Research Officer at Princeton Plasma
Speaker 1: Physics Lab, Dr Sam Mitra and j I t Distinguished
Speaker 1: Professor of Chemistry and Environmental Science, and Dina Prostos, founder
Speaker 1: of Indigo River. It's an environmental consulting firm, and Dremnards
Speaker 1: starts off by weighing in on the progress being made
Speaker 1: as we move toward a global energy transition and where
Speaker 1: to turn as we try to gradually shift away from
Speaker 1: fossil fuels. One of the challenges we see with some
Speaker 1: of the renewables, or with wind and solar for example,
Speaker 1: as they can be intermittent, they depend on, you know,
Speaker 1: the power coming from the sun to blow the wind
Speaker 1: and solar energy and nuclear power in particular could form
Speaker 1: a firmer source of energy that we need to drive
Speaker 1: electricity and other other industries that we have. They rely
Speaker 1: on so much, so that that's our real role at
Speaker 1: the Plasma Physics lab as advancing fusion energy and studying
Speaker 1: the plasma physics. That's really the foundation of the energy.
Speaker 1: So you're using fusion energy as a synonym for nuclear,
Speaker 1: You're using the terms interchangeably, right it is. So it's funny.
Speaker 1: I don't know if you guys follow Josh Wolf on
Speaker 1: Twitter as a ventro capitalist at Lux and he argues
Speaker 1: that we need to rebrand nuclear power and I call
Speaker 1: it elemental power because nuclear has this terrible connotation. What
Speaker 1: do you make of that? I mean, has a brand
Speaker 1: image part of them? It does? I mean think about right,
Speaker 1: you know, you've got Fukushima, You've got three mile Island
Speaker 1: here in the US, and then of course Chernobyl in
Speaker 1: the nineties. It's very much. I was actually trained as
Speaker 1: a nuclear engineer and got got the bug for fusion
Speaker 1: looking at some of the waste concerns, safety concerns for
Speaker 1: fission nuclear power. But nevertheless, the safety issues associated with
Speaker 1: vision energy are quite manageable and really is an important
Speaker 1: source of energy. And electricity. For example, of our electricity
Speaker 1: in the United States comes from fission power and nuclear
Speaker 1: energy Frances seventy South Korea just under. So it's a
Speaker 1: very important part of the energy portfolio, and I think
Speaker 1: it's one of the few options we have for a
Speaker 1: few firm energy to really take up the baselin energy
Speaker 1: that we need in our economy and to power the world.
Speaker 1: So I'm come on in on this conversation. You're teaching chemistry,
Speaker 1: you're teaching environmental science here at n J. I t
Speaker 1: how much I mean, let's let's piggyback on what we
Speaker 1: been talking about. I am shocked how much we've talked
Speaker 1: about nuclear energy here because it doesn't come up a lot.
Speaker 1: Everybody's solar its We like just closed Indian Point Nuclear
Speaker 1: Power plant here in the Tristate area. So there's a
Speaker 1: perception problem too. I think, yeah, you know, I'm not
Speaker 1: really an expert in nuclear energy, you know, but talking
Speaker 1: about the big picture of sustainability, I think, um, you know,
Speaker 1: but is it part of that? Like do we need
Speaker 1: to think about it? Is? Oh, definitely, yeah, definitely, you know,
Speaker 1: I mean definitely, I mean, you know, if you factor
Speaker 1: in the safety issues and if we can really factor
Speaker 1: in the safety issues. Uh, and we can have safe
Speaker 1: nuclear energy. Absolutely, yeah, definitely we'll expand to in terms
Speaker 1: of your teachings for the students who are here, maybe
Speaker 1: some of them in this room and in general, when
Speaker 1: you think about you know, sustainability, when you think about, um,
Speaker 1: the climate, climate adaptation, where do you go with your
Speaker 1: students and how do you tell them to think about
Speaker 1: you know, it's five years from now, ten years and
Speaker 1: now that we've got to make sure that we can
Speaker 1: power the world. Um. You know. For me, sustain ability
Speaker 1: is like you know they are saying that, you know,
Speaker 1: think globally, act locally. So sustainability starts from your morning
Speaker 1: coffee cup, you know. I mean you take buy a
Speaker 1: Starbucks coffee. Do you think how many trees when goes
Speaker 1: into making you know, all those Starbucks coffees, for example,
Speaker 1: how much water pollution is coming from all those coffee cups?
Speaker 1: You know, things like that. So then you dig down
Speaker 1: to every little thing and seeing you know, what is happening.
Speaker 1: So for example, let's say hand sanitizer, right, typical hand
Speaker 1: sanitizer is about isopropile alcohol three percent water. Now, the
Speaker 1: waste water from the hand sanitizer is seven percent dipes
Speaker 1: of propile alcohol. So what do we do with that
Speaker 1: seven percent isopropile alcohol. We mix it with solvents and
Speaker 1: we burn it, so so there we produce carbon dioxide. Now,
Speaker 1: is there a way we can take that seven percent
Speaker 1: isopropile alcohol and concertated to se. So now it's back
Speaker 1: being a you know, hand sanitizer. And that's the kind
Speaker 1: of thinking we need at at grassroots level. This is
Speaker 1: what I think. You know, we're thinking about waste and
Speaker 1: you know, forgive again, I'm going back to I think
Speaker 1: about at the beginning of my career and going and
Speaker 1: thinking about yuck a mountain and you know, where do
Speaker 1: we put the radioactive waste? And you know, visiting a
Speaker 1: nuclear power plant and seeing the pools where they cool
Speaker 1: the rods, and you know, and wearing a monitor and
Speaker 1: realizing that, you know, I could be at risk, Like
Speaker 1: it really scared me. I'm going to be quite honest,
Speaker 1: But how do we be smarter? What's the smart conversation
Speaker 1: around nuclear that we need to be having, and what
Speaker 1: do we think about when it comes to the waste,
Speaker 1: what do we do with it? Yeah, I would say
Speaker 1: every source of energy has risk associated with a coal
Speaker 1: for example, has in the past released sulfur dioxide and
Speaker 1: acid rain. Things like that. Coal tailings can lead to
Speaker 1: environmental issues. Burning of fossil fuels clelly has impacts on
Speaker 1: on the environment. There's no free lunch in the energy picture.
Speaker 1: And other countries have have taken on the challenge of
Speaker 1: storing this waste, and there are new reactor designs that
Speaker 1: are more efficient a burning up the fuel and producing
Speaker 1: less waste. But ultimately we think fusion energy could really
Speaker 1: replace vision energy. It's much more inherently safe, doesn't have
Speaker 1: the chance of uncontrolled reactions. The fuel is ubiquitous. You
Speaker 1: can find it in sea water, in the ground. Lithium
Speaker 1: editorium are are readily available, and it's it's really could
Speaker 1: be a game changer, we think for for energy production.
Speaker 1: But it's very technically challenging, and that's why we've been
Speaker 1: working so long on that technology. Do you know we
Speaker 1: got about ninety seconds, then we're gonna do some news
Speaker 1: and then we're gonna come back. But connect coastal resiliency
Speaker 1: to this because we think about the idea of waste,
Speaker 1: we think about climate change and think about the way
Speaker 1: that burning coal actually contributes to climate change and the
Speaker 1: coastal projects that you've had to do across Manhattan to
Speaker 1: make sure that well Manhattan doesn't go under water. So
Speaker 1: I think the conversation about waste is an incredibly relevant
Speaker 1: one and it has to do beyond coastal measures, um
Speaker 1: but certainly how we live our life, and it's certainly
Speaker 1: where we're spending our money, whether or not it's going
Speaker 1: into our community or whether it's going to ron, whether
Speaker 1: it's it takes five connections shipping in excess energy and
Speaker 1: excess waste, or if we can begin to look at
Speaker 1: more closed loop systems and how we can reduce waste.
Speaker 1: And the perfect example of that is nature, and nature
Speaker 1: does that, it has its systems that if we can
Speaker 1: imitate nature a bit more in coastal resiliency certainly, um,
Speaker 1: but in our daily life and in our practice, if
Speaker 1: we can figure out ways to eliminate waste and find
Speaker 1: purposes for every element of our interactions, that's a direction
Speaker 1: that's a foot in the right direction our Thanks to
Speaker 1: Indigo River founder Dina Prasto's Dr Jonathan Menard of the
Speaker 1: Princeton Plasma Physics Lab and n j I. T. Distinguished
Speaker 1: Professor of Chemistry and Environmental Science, Dr some Mitra. We
Speaker 1: also want to acknowledge the entire team at nj I
Speaker 1: T for graciously hosting our entire business Week team. Check
Speaker 1: out the full discussion. You can do that on our
Speaker 1: podcast feed. Still to come on Bloomberg Business Week Sustainable Grapes,
Speaker 1: we'll hear from a West Coast winemaker on mitigating the
Speaker 1: effects of climate change in the wine business. We're looking
Speaker 1: into farming methods called regenerative agriculture, basically long term trials
Speaker 1: to eventually make vineyards carbon sinks, so fewer disking passes,
Speaker 1: basically taking a tractor through and plowing the soil, erosion,
Speaker 1: things of that nature. So we want to have less
Speaker 1: inputs in the vineyard and actually eventually have them beat
Speaker 1: carbon sinks. This is Bloomberg Broadcasting from the financial capital
Speaker 1: of the World, Bloomberg e Love in Frio in New
Speaker 1: York to Washington, d C. Bloomberg to Boston, Bloomberg one
Speaker 1: oh six one does San Francisco, Bloomberg nine sixty to
Speaker 1: the country Sirius XM Chado one nine and around the globe.
Speaker 1: The Bloomberg Business app and Bloomberg Radio dot com. This
Speaker 1: is Bloomberg Business Week. Alright, finishing up our last half
Speaker 1: hour with two of the finer things in life. I
Speaker 1: guess you could say fine wine and yachting. First up, wine,
Speaker 1: which we like to imbbe from time to time. All Right,
Speaker 1: Our next company we're focusing on was named for the
Speaker 1: Babylonian got us of wine, Saduri. It's a family owned
Speaker 1: winery and it began back in the early nine nineties
Speaker 1: with the love of Pinot noir. Okay, I'm really sorry
Speaker 1: I missed this one, because wine on a Friday is
Speaker 1: always fun. Matt Revelette is the winemaker for Sidury Wines.
Speaker 1: He pade a visit to our Bloomberg studios to discuss
Speaker 1: the evolution of the business over the last couple of
Speaker 1: years with Carol and our own Bloomberg Radio colleague Paul Sweeney.
Speaker 1: Of course, COVID presented a unique set of challenges to us.
Speaker 1: All but but things have been good. Things are steady, um,
Speaker 1: you know. Of course, there's some restaurant accounts, retail accounts
Speaker 1: and switching back and forth with who's open who's closed.
Speaker 1: But things have been really good and we've had we've
Speaker 1: had some nice harvest on the heels of that well.
Speaker 1: And like good No, I spent a lot of time
Speaker 1: in northern California, and I know the wildfire issue affects everybody.
Speaker 1: It's almost no one is immune. And I know you're
Speaker 1: part of the world and that region of the state
Speaker 1: has really been impacted. Given some kind of some your experiences,
Speaker 1: it does. It's it's challenging, and you know it's it's
Speaker 1: difficult because there's also human elements. I mean, we don't
Speaker 1: want to expose people to danger smoked from wildfires things
Speaker 1: of that nature. And of course it's very difficult to
Speaker 1: make wine when you're under evacuation orders from the winery. Um,
Speaker 1: there are challenges. Climate change is definitely a real thing.
Speaker 1: We're seeing it more every year. But it makes us
Speaker 1: more and more grateful for when we don't have those
Speaker 1: challenges and wildfires. And two is absolutely fantastic. It was
Speaker 1: a good year. What if there's one thing that climate
Speaker 1: change has caused you to change in terms of either
Speaker 1: strategy or how you um developed cultivate wine, what is it? Sure?
Speaker 1: So um we're looking into farming methods called regenerative agriculture,
Speaker 1: basically hearing more and more of the long term trials
Speaker 1: to eventually make vineyards carbon sinks UM so fewer disking
Speaker 1: passes um perc Again disking, what is that basically um
Speaker 1: taking a tractor through and plowing the soil, so eventually
Speaker 1: you might lose lots of top soil erosion, things of
Speaker 1: that nature. So we want to have less inputs in
Speaker 1: the vineyard actually eventually have them be carbon sinks. All right,
Speaker 1: So is that something that the industry embraces or is
Speaker 1: it something that maybe you have some old fashioned winemakers
Speaker 1: and now I'm doing the way we've done it forever.
Speaker 1: There's there's some of both, but it takes you know,
Speaker 1: a few brave folks to really lead the way on that.
Speaker 1: And you know, we're happy to be, you know, part
Speaker 1: of leading the charge on that. So we're very very happy.
Speaker 1: But when you think about your customer base, who is
Speaker 1: it that you guys are going after? There's so much
Speaker 1: wine and wineries. Absolutely, so we like to think that
Speaker 1: we can make um peanoo wirres an affordable price to
Speaker 1: where you don't have to be an expert and you
Speaker 1: do have a nice price point of course. Yeah, so
Speaker 1: standard retail price, you know, thirty to forty dollars on
Speaker 1: most of our products, and we do offer a slew
Speaker 1: of Vineyard Designate series wines which we retail for seventy dollars,
Speaker 1: a lot smaller production on those, and a lot more
Speaker 1: geeky wines. I guess you could say matte. There we
Speaker 1: go so with solutely. So the first one we have
Speaker 1: at one of our that's that's one of my favorite sounds,
Speaker 1: of course, thank you, thank you, thank you. Um So,
Speaker 1: the first one I brought is a vineyard desinite Pean
Speaker 1: noir from Gary's Vineyard and the St. Lucia Highlands, so
Speaker 1: Monterey County, very cold, very windy, place to grow peer noir. Um.
Speaker 1: Gary's is a farming team of two friends, both named Gary,
Speaker 1: that have been farming in the St. Lucia Highlands. I'm
Speaker 1: serious childhood best friends as well, So great stories, So
Speaker 1: lucky to be um Sourcing grapes from this vineyard tends
Speaker 1: to be a pretty robust Peter noir. The fruit holds
Speaker 1: its acid really well in our studio all of a sudden, Yeah,
Speaker 1: so if you're like a full bodied kind of rich
Speaker 1: ripe style, this is right up your alley. Who is
Speaker 1: it's It looks beautiful I mean, beaut explained to me
Speaker 1: that designate business like versus your grapes versus somebody else's grapes.
Speaker 1: Is that sure? It's basically just a closer look of
Speaker 1: doing one vineyard only. What does this one vineyard doe
Speaker 1: and bottle? So we do vineyard designated wines, but we
Speaker 1: also do larger what we call Appalachian blends, uh, that
Speaker 1: encompass several vineyards. So this is just kind of a
Speaker 1: micro look at what one vineyard can do in one vintage. Well,
Speaker 1: and I was freaking like on the website, you guys
Speaker 1: talk about minimal intervention in the wine making process. Talk
Speaker 1: to us about what that means and maybe how that
Speaker 1: distinguishes you from some other Absolutely, so Peano noir is
Speaker 1: what we call a wine growers grape. Um. It doesn't
Speaker 1: really liked high touch in the winery. If you get
Speaker 1: the farming right, if you get a good vintage, if
Speaker 1: you pick on the right date, it's pretty minimal intervention.
Speaker 1: So a couple of punch downs to keep the cap wet,
Speaker 1: then you go to barrel and that's pretty much it.
Speaker 1: So it doesn't like having a lot of fingerprints on it.
Speaker 1: And the vineyards really shine with minimal intervention in the winery.
Speaker 1: We kind of make them all the same and keep
Speaker 1: our hands off. That was the Dairy Wines wine maker
Speaker 1: Matt Revolette. He was in studio with Carol and Paul Sweeney. Carol,
Speaker 1: I was sorry to miss that one. Next time, next
Speaker 1: time it will be next time, I promise. All right,
Speaker 1: you're listening to Bloomberg Business Week. Coming up, we're gonna
Speaker 1: wrap up things with a taste of luxury. The average
Speaker 1: sales today in the industry is about eighty to ninety
Speaker 1: feet of an average price of seven million. But obviously
Speaker 1: we also have bigger sales over you know, one hundred
Speaker 1: meter and and and a few hundred million dollars, big
Speaker 1: boats with big price tags, and there's a waiting list.
Speaker 1: The CEO of Fraser Yachts joins us. On the other side,
Speaker 1: this is Bloomberg. You're listening to Bloomberg Business Week with
Speaker 1: Carol Masser and Bloomberg Quick Takes. Tim Steinovic from Bloomberg Radio. Well,
Speaker 1: I find a bit of luxury to wrap up our
Speaker 1: broadcast this week. The Fort Lauderdale International Boat Show underway
Speaker 1: this weekend and some impressive and rather large vessels will
Speaker 1: be on display courtesy at the full service yacht brokerage
Speaker 1: Fraser Yachts. With inside on the industry geared toward the
Speaker 1: ultra high net worth customer, we turned to Raphael Solo,
Speaker 1: the CEO of Fraser Yachts. He says, the business remains
Speaker 1: robust despite a recent slowdown. Look, we've been going through
Speaker 1: some tremendous years the last couple of years. I have
Speaker 1: to say the twenty two is a little bit slower.
Speaker 1: We are so fasting the drop of in the cell
Speaker 1: of second end boats. But you know this is probably
Speaker 1: due to many factors. One probably the lack of inventory
Speaker 1: so many boats were sold last year, and yes, but
Speaker 1: more also probably some of our potential buyers who are
Speaker 1: wanted to see what's coming next. But you know, as
Speaker 1: you rightly said that you think industry has never been
Speaker 1: doing so well, so we're very fortunate, Rafael, did you
Speaker 1: say down thirty two, that's right for the cells Segonden
Speaker 1: without in one and two. Sorrey however, were still ahead
Speaker 1: of sixty nine percent on the average of the last
Speaker 1: thirteen years, so this is a very very strong industry
Speaker 1: still going for for your team, Rafael, there's yachting and
Speaker 1: their yachts, and we're says are super. Yes, is anything
Speaker 1: you use for pleasure? Is that true? We are talking
Speaker 1: about the yards over thirty feet here, you know. So
Speaker 1: the numbers have just gave you refer to the industry
Speaker 1: of what we would call the super yachts effectively, Uh,
Speaker 1: and I can ensue yes, this is a lot of
Speaker 1: a lot of pleasure on body. Yet, so tell us
Speaker 1: who is your like, what's the typical yacht at cells
Speaker 1: that the majority of your sales give us an idea
Speaker 1: of what they are, how long they are, how much
Speaker 1: they go for, and who's typically buying. Well, you know
Speaker 1: this is this is a very large subject. We we
Speaker 1: sell y adds between thirty feet up two or three
Speaker 1: hundred plus feet, you know, So it really depends on
Speaker 1: on what you are your customers are looking for. But
Speaker 1: the average CELLS today in your thing industry is about
Speaker 1: eighty to ninety feet of an average price of seven million.
Speaker 1: But obviously we also have bigger sells over you know,
Speaker 1: one hundred meter and and and a few hundred million dollars,
Speaker 1: So it really depends. It's a wide range of products
Speaker 1: which we have available in now industry. Now when it
Speaker 1: comes to the customers there again, you know, the American
Speaker 1: market leads a charge to that at say for more
Speaker 1: and fifty percent of our own serves at phrase yard.
Speaker 1: We are leading with American best customers, and they've always
Speaker 1: been very, very strong in the market. I have to say,
Speaker 1: we haven't have an additional public ten percent in twenty
Speaker 1: two from the American market, so we are close to
Speaker 1: fifty five six in twenty two. And you will not
Speaker 1: only see this with the sales market, but also with
Speaker 1: the shater market. The US market is very strong and
Speaker 1: they surely like their yachts. Who is buying these yachts
Speaker 1: right now, because my understanding is you're seeing a lot
Speaker 1: of Americans by them. Yes, absolutely, and one one trend
Speaker 1: or so something which is new, if I may say,
Speaker 1: over the last couple of years, we've seen younger, younger
Speaker 1: customers coming to the market. I mean our company on
Speaker 1: its own we have at fourty percent newcommers coming to
Speaker 1: you think forty is a big number, and all these
Speaker 1: all these people have made our average age of customers
Speaker 1: going from fifty five to sixty five to fully five
Speaker 1: to fifty five. So I mean, all these numbers are
Speaker 1: extremely encouraging for you think number one, new customers, younger
Speaker 1: customers and a lot of American buyers. So these would say,
Speaker 1: you know, as we say in my in my country
Speaker 1: in French, you know, all lights are greed for the industry.
Speaker 1: What are you seeing from Chinese consumers right now? And
Speaker 1: how is that different from what you've seen over the
Speaker 1: last few years, you know, do your thing. Industry has
Speaker 1: been trying to break through China and we're talking again
Speaker 1: large yats, and you know, it never never been successful
Speaker 1: for many reasons before you know, even the economics and
Speaker 1: and and the luxury goods, et cetera. One of the
Speaker 1: most reason, it's the most important reason, is the fact
Speaker 1: that this is not really in their DNA to be
Speaker 1: at sea on the yacht, you know, the Chinese in general,
Speaker 1: in the Chinese and then all they don't necessarily like
Speaker 1: the sun. We don't necessarily like the sea. And for
Speaker 1: them to be on the yacht for seven, six, eight days,
Speaker 1: it can get very boring very fast. So this is
Speaker 1: a market which has not been very very successful for
Speaker 1: the industry overall. You have some few exceptions, obviously, you know,
Speaker 1: like you know, lots of bios can come from Hong Kong,
Speaker 1: but mainland China you have a very very few customers today.
Speaker 1: I would I think that maybe the future generation a
Speaker 1: lot of a lot of Chinese are putting the children
Speaker 1: in you know, occidental school as well say, and some
Speaker 1: of them are maybe more accustomed to the uttin you
Speaker 1: think a bits and what it can provide you with.
Speaker 1: So we may see a development in the Communists, but
Speaker 1: I would not bet too much money on that market
Speaker 1: so far. And as you see also because of the regime,
Speaker 1: is not necessarily very well seen to to have a
Speaker 1: yacht and have being since spending your money in such
Speaker 1: a type of good. So the market itself in China,
Speaker 1: we've seen some few openings mainly for in vidual based
Speaker 1: in Hong Kong, not many from mainland China. And this
Speaker 1: is not a very strong market as we speak today,
Speaker 1: um in terms of Hong Kong, though maybe not a
Speaker 1: massive market for you guys, but hasn't changed too as
Speaker 1: rule there has changed dramatically over the last year, it
Speaker 1: does not affected yet few buyos whom we have in
Speaker 1: Hong Kong. They still are buying boats and there's a
Speaker 1: culture of your thing in obviously by its proximity to
Speaker 1: the sea and its magistrate's albor So and the fact
Speaker 1: that they want the British regime in the past, so
Speaker 1: they have a kind of a U Team kershaw, if
Speaker 1: I may say. So, this market remains. But again for
Speaker 1: our own market over the eight feet boats, it's it's
Speaker 1: not a big, big, big game change to day at least.
Speaker 1: What about when it comes to Russians. I mean, we
Speaker 1: know that Russian oligarchs were big buyers of yachts. We've
Speaker 1: been tracking for the last six plus months about what
Speaker 1: actually happens to those yachts and different parts of the world.
Speaker 1: What are you seeing from that market? Well, you know
Speaker 1: that what we've seen about obviously the oligars they've met
Speaker 1: the airlines because most of them at the largest boasts
Speaker 1: in the world. If you if you now put things
Speaker 1: into perspective, you know, the the Russian market for the
Speaker 1: what we call the mega at the biggest yachts in
Speaker 1: the world is about seventeen. However, if you look at
Speaker 1: the U Team market overall, the Russian market is done
Speaker 1: to seven eight. So of course it has been a
Speaker 1: bit of an impact on our own industry. But from
Speaker 1: what we said earlier and the influx of new customers,
Speaker 1: mainly from America. We've been able to compensate a little
Speaker 1: bit the loss of the of the Russian market by
Speaker 1: the able of these new customers. The biggest impact is
Speaker 1: indeed with the larger yachts, where you are obviously a
Speaker 1: man impact the bigger shipyards which were building the two
Speaker 1: hundred three feet um. Now when it comes to the
Speaker 1: existing yards, but as you know, some have been frozen,
Speaker 1: if you have been seized, and we really don't know
Speaker 1: what's gonna happen to these yeard's going forward. That is interesting.
Speaker 1: Um okay, so what are kind of some of the
Speaker 1: interesting big trends when it comes to yarding? And I
Speaker 1: think about one helicopter path or being greener, being greener
Speaker 1: and sorry but I'm just laughing, yeah, bio diesel to
Speaker 1: put in that, Yeah right, well, you know, I mean
Speaker 1: there's also a trend which we see developing and that
Speaker 1: is really I think it true after COVID where people
Speaker 1: see the pussures of a yacht as being like, you know,
Speaker 1: a second or third home. So you see a little
Speaker 1: changer as well, you know, because of the technology and
Speaker 1: people realize and it also not so difficult to work remotely.
Speaker 1: So some of our customers, you know, they are not
Speaker 1: trying to go away for six months on their yet
Speaker 1: and walk from there yet, So we have we have
Speaker 1: seen that shift as well, which I think played a
Speaker 1: big role into the your booms which we've experienced the
Speaker 1: last couple of us. Now, going back to your question
Speaker 1: about green, you know, I'm not I'm not a liar,
Speaker 1: and I think it would take us for your think
Speaker 1: to be super green. Obviously, that's so much she can
Speaker 1: do with a yacht. However, our industry is really at
Speaker 1: the forefront of trying to find new technology and new
Speaker 1: west to make you think greener than it is today.
Speaker 1: So the shipyard as are spending a lot of money
Speaker 1: together with the owners. You know, we have our owners
Speaker 1: building new boats who are actually very very keen to
Speaker 1: make a difference. So they are coming up with with
Speaker 1: new ideas and plans and new technology. So today you
Speaker 1: have you have said, oh, yats which are so called hybrid,
Speaker 1: so like their name states, you know, they are both
Speaker 1: which can remain without without proportion for about eight to
Speaker 1: nine hours, and that makes a huge difference. You know,
Speaker 1: eight to nine hours without burning fuel is already eight
Speaker 1: and nine hours, and not only it allows you to
Speaker 1: have agree in the yacht, but also it allows you
Speaker 1: to really enjoy you in your different manner, no more
Speaker 1: nos normal vibration. So I have to say, you know,
Speaker 1: there's so much we can do, but we can see
Speaker 1: that the industry and its wall is making a huge
Speaker 1: effort and spend a lot of monetrying to make you
Speaker 1: think more greener normal is today? Hey, Raphael, our producer
Speaker 1: Paul Brandon, that chilled on our planning car that there
Speaker 1: is a six year waitlist at shipyards for yacht. Is
Speaker 1: that that's really the case? Is that you know today
Speaker 1: go ahead, Yes, today you can go up to almost
Speaker 1: almost five years, that's right? Is that typical or is
Speaker 1: that historically high? No, it's historically. I why we're in
Speaker 1: that delays for the very simple reason that the last
Speaker 1: two years, especially twenty one have been just incredible, meaning
Speaker 1: that we have had so many others. So all the
Speaker 1: ship yards are just full. They are no more space
Speaker 1: to build new boats. So whenever you want to come
Speaker 1: in some certain shipyards, you've gotta have to wait, yes,
Speaker 1: full to five years to get your boat delivered. And
Speaker 1: that's the reason why. Also the second end market has
Speaker 1: been so strong because a lot of people don't want
Speaker 1: to wait five six years. You know, they have that
Speaker 1: CAPI M factor after COVID, so they decided, okay, you're
Speaker 1: gonna take me full to five years to build a
Speaker 1: new boat. I'm gonna buy a second end boat for now.
Speaker 1: And this is what we've seen. That that that boom
Speaker 1: in the seng Woland market. Now you have some yards
Speaker 1: which have been smart enough to build on speculation, as
Speaker 1: we said, so you can find a few a few
Speaker 1: boats which will be available in twenty three summer and
Speaker 1: in twenty four. But in some other yards, if you
Speaker 1: want to build a new boat, yes you have to
Speaker 1: wait for years. It's a very long time to get
Speaker 1: a new yacht. That was Raphael Solo is the CEO
Speaker 1: of Fraser Yachts. Are thanks to him for joining us,
Speaker 1: and of course the Bloomberg Radio is Paul Sweeney for
Speaker 1: helping us out once again this past week. That wraps
Speaker 1: up the weekend and ino Bloomberg Business Week from Bloomberg Radio,
Speaker 1: thank you so much for joining us. I'm Carol Masser
Speaker 1: and I'm Tim Stanovik. Be sure to tune into Bloomberg
Speaker 1: Business Week Monday, through Friday. It starts at two pm
Speaker 1: Wall Street Time on Bloomberg Radio. You can also watch
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Speaker 1: great weekend, everyone, stay say. This is Bloomberg