WEBVTT - C-Suite Insights From Mattel, Chipotle Executives 0:00:01.360 --> 0:00:05.680 This is Bloomberg Business Wait inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:19.000 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:20.400 --> 0:00:22.599 We did see Mattel. We talked about it actually after 0:00:22.600 --> 0:00:25.400 the post yesterday because they came out with their earnings 0:00:25.400 --> 0:00:28.680 and man, the stock really rallied big time today on 0:00:28.800 --> 0:00:32.199 heavy volume, and this is after the company reported it 0:00:32.360 --> 0:00:34.160 actually rallied earlier in the day. I think by the 0:00:34.280 --> 0:00:37.200 end of the day it was lower like the overall market. 0:00:37.360 --> 0:00:39.040 Yeah, it ended up finishing the day up by about 0:00:39.080 --> 0:00:40.800 four tens of one percent, so like a lot of 0:00:40.800 --> 0:00:43.000 the stocks out there today, kind of all over the place. 0:00:42.920 --> 0:00:45.280 Right up six percent earlier. So let's get to it. 0:00:45.280 --> 0:00:47.360 Because the company did report sales and profit that beat 0:00:47.400 --> 0:00:51.840 Alice expectations with us and delighted to have us back 0:00:51.880 --> 0:00:54.680 with us. Is Enon cries, chairman and CEO of Mattel, 0:00:54.840 --> 0:00:58.000 on the phone in Elsugundo, California. Forgive me, Ino, there's 0:00:58.040 --> 0:01:01.000 a lot going on. Try to keep track of it. 0:01:01.040 --> 0:01:04.400 I know you've had a busy plate as well, first 0:01:04.440 --> 0:01:07.639 of all, congratulations on Barbie, because we have been talking 0:01:07.640 --> 0:01:10.200 about that with you for a while. I almost feel 0:01:10.240 --> 0:01:13.400 like since the beginning and your strategy of bringing Mattel 0:01:13.480 --> 0:01:15.880 Toys to life, what does the success of the movie 0:01:16.319 --> 0:01:18.280 mean to you and the company. 0:01:18.360 --> 0:01:20.520 Yes, that's right, Carol, and thank you for having me 0:01:20.560 --> 0:01:24.040 on the show. As you remember from the very beginning, 0:01:24.160 --> 0:01:28.120 this was never about just making a movie. This was 0:01:28.160 --> 0:01:33.800 about creating a cultural event, a societal moment, and we 0:01:33.880 --> 0:01:37.400 could not be happier where we are today with such 0:01:37.440 --> 0:01:40.080 strong performance right out of the gate the first week, 0:01:41.120 --> 0:01:44.919 with over five hundred million dollars in growth in box 0:01:44.959 --> 0:01:52.040 office receipts, and more importantly the audience reaction with people 0:01:52.120 --> 0:01:55.320 going too and even three times already in the first 0:01:55.400 --> 0:01:59.559 week to see the movie, a very broad audience including men, 0:02:00.160 --> 0:02:07.200 and very strong performance internationally that is stronger than than 0:02:07.240 --> 0:02:09.000 the US. And it's not because the US is not 0:02:09.080 --> 0:02:13.440 doing well. It's just a very strong performance across the world. 0:02:13.639 --> 0:02:18.200 And all in all, it really is, uh, you know, 0:02:18.320 --> 0:02:23.239 an exciting moment and a showcase for the cultural resonance 0:02:23.280 --> 0:02:29.720 of our brands, our ability to attract and collaborate with 0:02:29.800 --> 0:02:35.520 top creative talent and our marketing and demand creation capabilities 0:02:36.320 --> 0:02:40.440 to create what is now you know, a cultural phenomenon. 0:02:40.480 --> 0:02:42.160 You know what does it mean for merchandise? I mean, 0:02:42.160 --> 0:02:44.320 I've actually bought some Barbie products. To be quite honest, 0:02:44.320 --> 0:02:46.440 I grew up with Barbie's, introduced them to my daughter, 0:02:46.560 --> 0:02:50.760 My older sisters introduced me to them, and it's nostalgic 0:02:51.000 --> 0:02:53.840 for me. But I also have been in the stores 0:02:53.919 --> 0:02:59.480 where all ages are snapping out products. How how does 0:02:59.520 --> 0:03:02.400 that move the needle for you guys financially as well? 0:03:02.840 --> 0:03:05.560 All those Yeah, we did see incredible take up of 0:03:05.639 --> 0:03:11.080 the movie related merchandise. We we have a having been 0:03:11.120 --> 0:03:13.520 sixty more than a hundred and sixty five different consumer 0:03:13.520 --> 0:03:18.080 product partners, different different industry, different products, all over the world, 0:03:18.800 --> 0:03:22.200 and we're seeing incredible excitement and as you say, you know, 0:03:22.480 --> 0:03:26.639 product is selling out quickly. Yeah, this is movie related merchandise. 0:03:26.800 --> 0:03:31.720 Doesn't financially have a material financial material impact on you guys. 0:03:31.960 --> 0:03:35.680 Well, we haven't broken it out, but this is already 0:03:35.760 --> 0:03:38.760 part of what we expect will be an uplift in 0:03:38.800 --> 0:03:42.040 Barbie sales in the second half. This is where really 0:03:42.080 --> 0:03:44.760 where it kicked in. And of course don't forget the 0:03:44.800 --> 0:03:50.120 Helo effect on the overall Barbie brand, with the significant 0:03:50.160 --> 0:03:55.680 improvement in consumer demands already in the third quarter, and 0:03:55.840 --> 0:04:01.280 expect Barbie to grow in the third quarter and for 0:04:01.720 --> 0:04:02.360 and the full year. 0:04:03.000 --> 0:04:05.840 Nan you called it a cultural moment, and certainly that 0:04:05.880 --> 0:04:08.880 means that it can polarize some people, at least here 0:04:08.880 --> 0:04:11.640 in the United States. Got to ask about the high 0:04:11.680 --> 0:04:15.240 profile people on the right who've criticized the film. Ben 0:04:15.240 --> 0:04:18.360 Shapiro made this forty minute YouTube video. It's been viewed 0:04:18.360 --> 0:04:20.920 nearly two million times. He says he destroys the movie. 0:04:20.920 --> 0:04:24.280 He actually burns Barbie's in it. Elon Musk says, if 0:04:24.279 --> 0:04:26.640 you take a shot every time Barbie says the word patriarchy, 0:04:27.000 --> 0:04:29.479 you'll pass out before the movie ends. How do you 0:04:29.520 --> 0:04:31.479 react to that criticism? 0:04:31.839 --> 0:04:36.400 So, Barbie has been a flag carrier for diversity and inclusivity. 0:04:36.960 --> 0:04:41.960 Barbie inspired the limitless potential in Every Girl, and the 0:04:42.120 --> 0:04:44.960 genius of Greta is what she did. She took this 0:04:45.080 --> 0:04:50.120 message you know that focuses on female empowerment and made 0:04:50.160 --> 0:04:54.920 this movie appealing and relevant to everyone and people who 0:04:54.960 --> 0:04:58.840 go to the movie, you know, whether you're a Barbie 0:04:58.920 --> 0:05:03.200 fan or or you know or looking to be entertained 0:05:03.200 --> 0:05:06.680 and inspired by by a modern day interpretation of one 0:05:06.720 --> 0:05:10.960 of the most iconic brands in modern culture. This movie 0:05:12.320 --> 0:05:15.520 Will Will Will Be, Will Be, Will be an experience 0:05:15.560 --> 0:05:17.960 for you. And what we believe is this movie will 0:05:17.960 --> 0:05:22.680 recontextualize the way people think of Barbie and what Barbie 0:05:23.600 --> 0:05:26.640 means for the world. And we could not be more 0:05:26.680 --> 0:05:30.200 proud of of the of the messages, uh and the 0:05:30.320 --> 0:05:33.200 unique voice that Greta has in this movie. 0:05:33.400 --> 0:05:36.080 Well, and I'm curious to does it mean that we're 0:05:36.080 --> 0:05:38.159 going to see a Barbie sequel or is it a 0:05:38.200 --> 0:05:40.840 case of you guys move on to other toys. 0:05:42.120 --> 0:05:43.919 You know, we have an announcer sequel, and you know 0:05:43.920 --> 0:05:46.000 we're still barely a week into the religion. 0:05:46.960 --> 0:05:49.400 But how we journalists are, We're like, okay, now, now, 0:05:49.440 --> 0:05:50.279 what what's next? 0:05:51.080 --> 0:05:53.400 You know, you're not alone, You're not alone and asking 0:05:53.440 --> 0:05:56.920 the question. But of course, you know, it's such a success, 0:05:56.960 --> 0:06:00.479 such a phenomenal success. You know, of course we'd be 0:06:00.520 --> 0:06:05.159 looking to extend, extend this. And we've always said that 0:06:05.200 --> 0:06:08.000 our goal is not this is broadly not just about Barbie. 0:06:08.480 --> 0:06:10.760 Is We're not looking to create single movies, but to 0:06:10.839 --> 0:06:15.119 build film franchises for the long term. And of course 0:06:16.160 --> 0:06:18.479 this is part of our strategy in terms of capturing 0:06:18.520 --> 0:06:20.560 the full value from our intellectual properties. 0:06:20.880 --> 0:06:23.800 You know, does that intellectual property be it in movies 0:06:23.880 --> 0:06:26.880 or streaming series or what have you. How you guys, 0:06:27.040 --> 0:06:30.760 you know, whichever ways you go, does that ultimately become 0:06:31.480 --> 0:06:34.200 a big generator of revenues. 0:06:35.560 --> 0:06:40.279 Yeah, we absolutely said that our strategy in capturing the 0:06:40.279 --> 0:06:43.599 full value of our ip outside the toy isle can 0:06:43.680 --> 0:06:47.400 be meaningful in success, you know, and we're looking to 0:06:47.520 --> 0:06:50.760 scale this. This is not just about a movie or 0:06:50.800 --> 0:06:54.240 a TV series. This is about participating in the highly 0:06:54.279 --> 0:06:58.000 accreative business verticals outside the toy isle that are all 0:06:58.080 --> 0:07:02.239 driven by big franchises, big brands, and in some cases 0:07:02.360 --> 0:07:05.520 these verticals are larger than the toy industry. So we 0:07:05.640 --> 0:07:12.520 believe that we have you know, the assets, the capabilities, 0:07:12.760 --> 0:07:16.520 the relationship and with the Barbie movie, this really positions 0:07:16.640 --> 0:07:20.400 us in a very strong way as a key player 0:07:21.120 --> 0:07:25.800 that can participate in this in these verticals and create 0:07:25.960 --> 0:07:29.680 meaningful shareholder value and build a meaningful business out of this. 0:07:30.000 --> 0:07:31.840 You know. It's like Carol said, this has been a 0:07:31.880 --> 0:07:34.240 busy week for you. Got to ask about the big 0:07:34.240 --> 0:07:37.200 news yesterday the co president and CEO Richard Dixon moving 0:07:37.240 --> 0:07:40.840 on to be CEO of the Gap. Let's get your 0:07:40.840 --> 0:07:42.440 comments on that. How big of a loss is this 0:07:42.480 --> 0:07:43.040 for the company? 0:07:44.200 --> 0:07:46.360 Richard is a friend and has been a great colleague 0:07:47.440 --> 0:07:50.640 and partner for me since I joined the company. But 0:07:51.240 --> 0:07:56.800 one of Richard's biggest accomplishments is that we built a 0:07:57.080 --> 0:08:02.280 very very strong team of leaders, of designers, of innovators, 0:08:02.280 --> 0:08:07.280 of creative talent within the company and the executives who 0:08:07.320 --> 0:08:11.960 take over from Richard. Between Lisa McKnight, who has been 0:08:12.560 --> 0:08:15.760 the head of Barbie since twenty and sixteen and very 0:08:15.800 --> 0:08:21.400 much manage the transformation together with Richard and the head 0:08:21.400 --> 0:08:24.000 of Dogs in twenty nineteen. And Josh Silverman, who has 0:08:24.040 --> 0:08:28.000 been at Disney for twenty years that is now where 0:08:28.040 --> 0:08:33.920 he oversaw all of Disney's third party relationships with licenses 0:08:34.000 --> 0:08:36.520 now running our non toy commercial activities. 0:08:36.600 --> 0:08:37.240 So you're not worried. 0:08:38.720 --> 0:08:41.800 Two world class leaders really taking charge, and we could 0:08:41.800 --> 0:08:45.439 not be more confident of our team that he's running 0:08:45.440 --> 0:08:45.960 this business. 0:08:46.000 --> 0:08:47.920 You know, in ten seconds, gott to be correct, did 0:08:47.920 --> 0:08:50.240 you give tips to Will Farrell? I'm playing a CEO 0:08:50.280 --> 0:08:50.760 of Mattel. 0:08:52.280 --> 0:08:54.839 I can learn a lot from him on the comedy side, 0:08:54.840 --> 0:08:58.320 but I'm a big fan and it's great to see 0:08:58.360 --> 0:08:59.280 him playing the role. 0:08:59.559 --> 0:09:03.319 We congratulations and we're looking forward to following more of 0:09:03.360 --> 0:09:05.640 this story and what comes next. Inon Cris, chairman and 0:09:05.720 --> 0:09:09.359 chief executive officer at Mattel, on the phone from elsin Gundo, California. 0:09:09.400 --> 0:09:10.160 This is Bloomberg. 0:09:11.160 --> 0:09:14.640 If you're listening to the Bloomberg Business Week podcast, catch 0:09:14.720 --> 0:09:18.079 us live weekday afternoons from three to six Eastern Listen 0:09:18.120 --> 0:09:21.600 on Bloomberg dot com, the iHeartRadio app, and the Bloomberg 0:09:21.640 --> 0:09:24.920 Business App, or watch us live on YouTube. 0:09:25.400 --> 0:09:27.880 We do want to get to another company in stock 0:09:27.960 --> 0:09:30.400 that was certainly in the news today, and we're talking 0:09:30.440 --> 0:09:34.440 about Chippotle Mexican Grill. The stock under pressure today, down 0:09:34.480 --> 0:09:37.520 the most since March of twenty twenty after second quarter 0:09:37.559 --> 0:09:41.320 sales fell short of expectations and third quarter outlooks suggested 0:09:41.320 --> 0:09:44.559 maybe momentum is slowing. So keep in mind that the Little 0:09:44.559 --> 0:09:48.400 perspective stock has been on a run in twenty twenty three. 0:09:48.440 --> 0:09:51.120 It's still up what about thirty five percent. 0:09:50.920 --> 0:09:53.480 Yeah, expectations, it's fair to say we're very high going 0:09:53.520 --> 0:09:56.640 into this print. We got with us right now and 0:09:56.679 --> 0:09:59.080 we're very happy to have him. Here is Chipotle COO, 0:09:59.280 --> 0:10:01.920 Scott Boat. He's the chief operating officer there. He's with 0:10:02.000 --> 0:10:04.640 us on zoom from Newport Beach, California. Scott, how are 0:10:04.640 --> 0:10:05.280 you this afternoon. 0:10:06.520 --> 0:10:08.839 I'm well, thank you for having us on this afternoon. 0:10:09.280 --> 0:10:13.440 So let's go through yesterday's numbers and you know what 0:10:13.600 --> 0:10:16.400 did disappoint analysts? Give us your take on the quarter. 0:10:17.880 --> 0:10:19.440 You know, we still feel like we had a really 0:10:19.480 --> 0:10:23.480 strong quarter, up seven point four percent in comparable sales, 0:10:24.160 --> 0:10:27.440 the highest margins margin numbers we have produced as an 0:10:27.520 --> 0:10:30.520 organization at quite some time, coming in at twenty seven 0:10:30.559 --> 0:10:33.719 point five diluted innings per share at twelve thirty two, 0:10:34.280 --> 0:10:37.160 all really in line with consensus. We felt great about 0:10:37.160 --> 0:10:40.920 the quarter, specifically that the comp number was driven primarily 0:10:40.960 --> 0:10:44.560 by transaction growth, and so we're still excited about Q 0:10:44.720 --> 0:10:47.240 three as we look at what Q three will be 0:10:47.320 --> 0:10:50.200 for end up for our organization, where we're trending and 0:10:50.240 --> 0:10:54.800 what we anticipate. It's still driven by healthy transaction growth, 0:10:55.640 --> 0:10:58.600 and so our full year guidance still remains unchanged. I 0:10:58.640 --> 0:10:59.800 think analysts were. 0:10:59.760 --> 0:11:04.080 A concerned about the estimate comp sales estimate for Q three. 0:11:05.040 --> 0:11:07.800 But keep in mind, there's there are other things that 0:11:07.840 --> 0:11:10.240 we have in the pipeline. You know we have We 0:11:10.280 --> 0:11:13.320 still have pricing leverage, which we believe as our economic 0:11:13.360 --> 0:11:14.360 model still holds up. 0:11:14.400 --> 0:11:16.640 We feel like the Chipotle. 0:11:16.400 --> 0:11:19.160 Meanings you can use. You're confident you could still raise prices. 0:11:20.880 --> 0:11:22.920 I think there's I say that to say, I think 0:11:22.920 --> 0:11:23.960 there's still a room yet. 0:11:24.320 --> 0:11:26.440 And then we have a fourth quarter lt O promotion 0:11:26.520 --> 0:11:29.840 that we will launch sometime probably around the September time frame, 0:11:30.360 --> 0:11:32.160 and so I say that to say, we still feel 0:11:32.200 --> 0:11:34.880 great about the year. We feel great about the healthy 0:11:34.920 --> 0:11:39.120 transaction growth that's happening, that's driving our comparable sales growth. 0:11:39.559 --> 0:11:41.920 Uh, and the story still holds for the year. So 0:11:41.960 --> 0:11:43.160 we feel still feel confident. 0:11:43.960 --> 0:11:46.960 How much. Listen, you're the chief operating officer, so how 0:11:47.000 --> 0:11:50.960 things work and operate is really important, and how you 0:11:51.000 --> 0:11:54.640 can make the systems more productive and more efficient. Talk 0:11:54.679 --> 0:11:56.400 to us a little bit about some of the automation 0:11:56.520 --> 0:11:59.240 technology that you guys are doing and playing with. About 0:11:59.679 --> 0:12:02.199 years ago, I caught up with your CFO, Jack Hartung 0:12:02.440 --> 0:12:06.400 and talked about the amount of hours and how labor 0:12:06.400 --> 0:12:09.839 intensive it was dealing with avocados, because you guys are 0:12:09.840 --> 0:12:13.160 all about fresh guacamole and fresh avocados. So talk to 0:12:13.200 --> 0:12:16.600 a little bit about automation and how that helps the 0:12:16.640 --> 0:12:18.000 growth story going forward. 0:12:19.559 --> 0:12:22.240 Yeah, it's a great question, Carol. I think there are 0:12:22.280 --> 0:12:24.840 a couple of things that really fuel our economic model. 0:12:25.480 --> 0:12:27.120 One of those, I'll speak to you very quickly is 0:12:27.160 --> 0:12:27.880 around throughput. 0:12:28.240 --> 0:12:31.439 And we still have throughput advantages that have yet to 0:12:31.480 --> 0:12:33.760 be pulled through, and so we're working aggressively as an 0:12:33.840 --> 0:12:37.800 organization to get back to the throughput levels and efficiency 0:12:37.880 --> 0:12:41.160 levels we experienced in the brand back in twenty seventeen 0:12:41.200 --> 0:12:44.880 through twenty nineteen, really pre pandemic, before there was this 0:12:45.040 --> 0:12:47.760 massive shift to digital, and the new people in our 0:12:47.840 --> 0:12:51.040 organization today aren't accustomed to the speed at which we 0:12:51.040 --> 0:12:54.480 could deliver the Chipotle experience, and so we're really leveraging 0:12:54.520 --> 0:12:57.000 that and flexing that muscle here in the upcoming quorder 0:12:57.280 --> 0:12:59.720 to really get back to our throughput prowles. 0:13:00.040 --> 0:13:00.280 Again. 0:13:00.800 --> 0:13:03.880 It's also leveraging cobotics, where it makes sense to really 0:13:03.920 --> 0:13:08.120 remove some of the routine, mundane tasks like coring and 0:13:08.120 --> 0:13:11.560 fitting avocados each day in our restaurant to really move 0:13:11.600 --> 0:13:15.520 that labor to more consumer facing engagement and creates a 0:13:15.559 --> 0:13:18.200 better experience for the team member and a better experience 0:13:18.240 --> 0:13:19.400 for the consumer as well. 0:13:19.640 --> 0:13:21.880 Can Scott, can your partner, Can you just give us 0:13:21.880 --> 0:13:25.040 some numbers behind the automation the automation process when it 0:13:25.040 --> 0:13:28.800 comes to peeling or incoring avocados for that guacamole, Like, 0:13:28.920 --> 0:13:30.520 how how long does it take a person to do it? 0:13:30.559 --> 0:13:32.240 And how long does it take a machine to do it? 0:13:33.320 --> 0:13:36.560 Yeah, it takes one individual about fifty minutes to complete 0:13:36.640 --> 0:13:39.720 one batch of guacamole. That's starting with a fresh k 0:13:40.000 --> 0:13:43.280 K case of ripe avocados all the way through. 0:13:43.080 --> 0:13:44.360 The hand mashing process. 0:13:45.320 --> 0:13:48.720 So we think autocado can remove about fifty percent. 0:13:48.400 --> 0:13:51.480 Of that time. Wow, and really make it. 0:13:50.960 --> 0:13:54.480 Increasingly more efficient to get through that process and get 0:13:54.559 --> 0:13:56.400 towards more guest facing activity. 0:13:57.040 --> 0:13:59.520 But you're watching on streaming and YouTube that can see 0:13:59.520 --> 0:14:01.199 some of okado. First of all, I just love the 0:14:01.280 --> 0:14:03.160 name of it, but they're actually seeing the process of 0:14:03.160 --> 0:14:04.000 how do you. 0:14:03.960 --> 0:14:06.680 Lose do you lose some of that vegetable? Do you 0:14:06.679 --> 0:14:08.880 lose a little bit of it with the automated process. 0:14:10.400 --> 0:14:11.880 You know, that's one of the things that we are 0:14:11.920 --> 0:14:16.360 testing for jam is we think about autocado's effectiveness in restaurant, 0:14:16.760 --> 0:14:19.360 It's got to be able to deliver on a few things. Hey, 0:14:19.400 --> 0:14:22.080 it has to be able to protect this incredible ingredient 0:14:22.280 --> 0:14:23.840 as we bring it into our restaurant. 0:14:24.120 --> 0:14:27.000 It has to continue to be as food safe as. 0:14:27.920 --> 0:14:30.120 It can and should be in our restaurants, and it 0:14:30.160 --> 0:14:32.960 has to deliver on our specification. And so if it 0:14:33.000 --> 0:14:35.240 doesn't beat that criteria, then it doesn't move forward. 0:14:35.280 --> 0:14:36.520 And it's testing protocols. 0:14:36.560 --> 0:14:41.160 But early days, we're very excited about the opportunity and 0:14:41.200 --> 0:14:42.920 feel good about what the product is today. 0:14:43.000 --> 0:14:44.960 All Right, what about workers? That's the other thing, right, 0:14:45.000 --> 0:14:47.160 You don't want turnover. You want to train people and 0:14:47.200 --> 0:14:50.320 have them stay. So one of the things many years ago, 0:14:52.120 --> 0:14:54.640 I was very impressed with what was done by the 0:14:54.720 --> 0:14:58.920 company to hold on to workers, to promote workers, to 0:14:59.000 --> 0:15:01.240 keep them in the system them. So talk to us 0:15:01.240 --> 0:15:03.440 a little bit about manager turnover and what you guys 0:15:03.440 --> 0:15:04.960 are seeing in the hourly turnover. 0:15:06.720 --> 0:15:07.640 Yeah, great question. 0:15:07.680 --> 0:15:11.400 I think those early investments that you're referencing, Carol, have 0:15:11.520 --> 0:15:14.320 paid huge dividends for our organization as it relates to 0:15:14.800 --> 0:15:18.640 retention and turnover specifically, and then overall development. 0:15:18.160 --> 0:15:20.600 For the organization. As you think about the growth that 0:15:20.680 --> 0:15:22.920 is ahead of us. We are currently. 0:15:22.560 --> 0:15:27.200 Experiencing all time low turnover numbers for the brand and so, 0:15:27.320 --> 0:15:30.480 and that's throughout our salary rates and our hourly team members. 0:15:30.880 --> 0:15:32.560 And so we feel like more and more team members 0:15:32.600 --> 0:15:35.920 are coming into the organization. They see the opportunity for growth, 0:15:36.080 --> 0:15:39.160 advancement and to hit their career goals, and they're met 0:15:39.200 --> 0:15:43.120 with an organization that has very competitive wage rates across 0:15:43.160 --> 0:15:46.960 the industry, across the United States, and is very competitive 0:15:46.960 --> 0:15:48.920 in the industry and what I believe to be industry 0:15:49.000 --> 0:15:53.520 leading benefits in total that really capture things around financial health, 0:15:53.920 --> 0:15:56.280 mental health, and personal health. 0:15:56.840 --> 0:15:59.160 Is there still pressure though to raise wages? Give us 0:15:59.160 --> 0:16:00.880 an idea? I mean that such a big part of 0:16:00.920 --> 0:16:02.880 you know, we're coming off of FED meeting yesterday and 0:16:03.160 --> 0:16:05.200 we talked a lot about wage inflation and that is 0:16:05.240 --> 0:16:09.480 still sticky. Is that still you can't back off? It's 0:16:09.680 --> 0:16:12.200 are you paying up more or is it leveling off? 0:16:13.480 --> 0:16:13.760 Carol? 0:16:13.800 --> 0:16:17.600 There's always inflation in the wage markets, as you're well aware, 0:16:17.920 --> 0:16:21.360 and we do we go through an air twice annual 0:16:21.440 --> 0:16:25.040 merit process for our team members and that's a practice 0:16:25.080 --> 0:16:27.680 we've had for many, many years in the organization. We're 0:16:27.680 --> 0:16:32.480 experiencing about five percent wage inflation, which has anticipated and 0:16:32.520 --> 0:16:35.600 built into our annual plan, but nothing extraordinary. 0:16:37.080 --> 0:16:40.040 Do those benefits that you talked about that are not 0:16:40.280 --> 0:16:44.120 directly impacting a higher hourly wage? Do those? 0:16:44.960 --> 0:16:45.600 Do those work? 0:16:45.880 --> 0:16:50.280 Do those create a stickier workplace? It's a great question 0:16:50.360 --> 0:16:51.680 is people at the end of the day, people are 0:16:51.680 --> 0:16:53.280 gonna people are gonna want more money. 0:16:54.400 --> 0:16:55.720 It's a philosophical question. 0:16:55.840 --> 0:16:57.920 It's one that I talk about often, So thanks for 0:16:58.000 --> 0:17:01.640 asking you question the question. If your wage rates aren't 0:17:01.640 --> 0:17:04.840 working hard enough for you, then the benefits conversation never 0:17:04.880 --> 0:17:07.760 comes into play. And it's Maslow's hierarchy. If you're not 0:17:07.800 --> 0:17:10.960 meeting the basic needs of your team members and your workforce, 0:17:11.240 --> 0:17:13.639 you can have all the benefits in the world, but 0:17:13.720 --> 0:17:16.919 if they're not able to meet the needs of making rent, 0:17:17.200 --> 0:17:19.880 having food on the table for their families, then those 0:17:19.920 --> 0:17:21.920 benefits can't work for you and your behalf. 0:17:22.359 --> 0:17:23.720 And so what we try to do. 0:17:23.680 --> 0:17:26.520 Is maintain a competitive wage no matter what market we 0:17:26.600 --> 0:17:29.280 operated in the country, and that allows us to have 0:17:29.320 --> 0:17:33.399 a robust benefits conversation that really creates the employee. Value 0:17:33.440 --> 0:17:37.439 proposition keeps people engaged, keeps them bought into our vision, 0:17:37.720 --> 0:17:40.679 our purpose of cultivating a better world and looking for 0:17:40.760 --> 0:17:42.760 more opportunity within the Chipotle brand. 0:17:43.040 --> 0:17:45.959 All right, so just got about thirty seconds left here, Scott, 0:17:46.000 --> 0:17:48.959 when you look at the horizon six to twelve months 0:17:50.560 --> 0:17:54.680 feels a beat, a little cautious. How would you describe it? 0:17:56.440 --> 0:17:58.520 I'll tell you, Carol, I'm really bullish. 0:17:58.920 --> 0:18:01.560 I know this summer there a lot of US travelers 0:18:01.560 --> 0:18:03.399 that are out of the country, so we're seeing a 0:18:03.400 --> 0:18:06.879 little bit of softening and demand across retail and in 0:18:06.920 --> 0:18:10.119 the hospitality space. I think it rebounds very quickly in 0:18:10.160 --> 0:18:14.840 the fall. Consumer spending is still obviously a big part 0:18:14.880 --> 0:18:16.720 of our economy, is still driving our economy. 0:18:17.040 --> 0:18:17.760 I feel good. 0:18:17.600 --> 0:18:21.440 About where we're situated from our value proposition perspective. We're 0:18:21.480 --> 0:18:25.280 still a low cost provider that provides abundance, variety and 0:18:25.359 --> 0:18:28.280 a very high quality, great tasting meal and affordable price. 0:18:28.520 --> 0:18:28.840 All right. 0:18:28.880 --> 0:18:30.600 Well, so glad we got some time with you, and 0:18:30.640 --> 0:18:33.800 our best to Brian as well as Jack Scott boat right, 0:18:33.840 --> 0:18:36.800 Thank you so much. Chief Operating officeerch Potle Mexican Grill 0:18:37.160 --> 0:18:40.880 joining us on zoom from Newport Beach and why. 0:18:40.680 --> 0:18:42.639 Do these interviews always make me hungry? 0:18:43.760 --> 0:18:47.360 You're listening to the Bloomberg Business Week podcast. Catch us 0:18:47.359 --> 0:18:51.479 live weekday afternoons from three to six Easter on Bloomberg Radio, 0:18:51.600 --> 0:18:54.879 the Bloomberg Business app and YouTube. You can also listen 0:18:54.960 --> 0:18:58.080 live on Amazon Alexa from our flagship New York station 0:18:58.520 --> 0:19:01.280 Just Say Alexa playing Bloomberg eleven thirty. 0:19:03.400 --> 0:19:05.760 Kind of reading for this segment, I came across Tim 0:19:06.720 --> 0:19:09.200 something from Voice of America and it talked about how 0:19:09.440 --> 0:19:13.760 climate change gives rise to increase precipitation, higher tempts, higher humidity, 0:19:14.280 --> 0:19:18.960 conditions under which mosquitoes thrive and multiply. And so it 0:19:19.000 --> 0:19:21.679 got into some new research from the World Health Organization 0:19:21.760 --> 0:19:26.440 that even dry weather enables mosquitoes to breed, and so 0:19:26.840 --> 0:19:30.119 getting into just a lot more mosquitos out there and 0:19:30.160 --> 0:19:32.440 the implications of it with these weather patterns. 0:19:32.440 --> 0:19:34.760 Here's something I didn't know until you told me. Scientists 0:19:34.800 --> 0:19:36.960 say that dry weather makes mosquitos thirsty, and when they 0:19:37.000 --> 0:19:39.959 become dehydrated, they want to feed on blood more often. 0:19:40.320 --> 0:19:43.080 Love That creeps me out a little bit, all right, 0:19:43.119 --> 0:19:45.920 So let's get more on the implications of mosquitos and 0:19:45.960 --> 0:19:49.360 their attraction to us All Connor McMahon. He is Professor 0:19:49.359 --> 0:19:52.840 of molecular microbiology and Immunology at the Johns Hopkins Bloomberg 0:19:52.880 --> 0:19:55.399 School of Public Health, which of course is supported by 0:19:55.400 --> 0:19:58.040 Michael R. Bloomberg, founder of Bloomberg ELP and Bloomberg Philanthropies. 0:19:58.080 --> 0:20:01.800 Connor is with us on Zoom from Baltimore. Connor, we 0:20:01.880 --> 0:20:04.880 all know mosquitoes. We all hate them. They drive us crazy. 0:20:05.880 --> 0:20:07.520 Tell us a little bit about the report that you 0:20:07.560 --> 0:20:10.400 guys just did there over at Hopkins. 0:20:11.840 --> 0:20:17.480 Yes, so we recently in Zambia actually created the world's 0:20:17.680 --> 0:20:22.720 largest multi choice small test for mosquitoes. We all know 0:20:22.840 --> 0:20:27.679 from our backyard barbecues and picnics that mosquitoes tend to 0:20:27.760 --> 0:20:30.960 target some humans more than others, and some of us 0:20:31.680 --> 0:20:37.440 more alluring to mosquitoes than say, our partners or our 0:20:37.480 --> 0:20:40.680 family members, and so we were really interested to create 0:20:40.720 --> 0:20:44.720 a way to firstly test this. And what we found 0:20:45.040 --> 0:20:49.479 was the scent of certain humans, the chemistry of the 0:20:49.520 --> 0:20:54.120 scent of certain humans actually dictates how attractive we are 0:20:54.280 --> 0:20:58.760 to the mosquito. And in this particular interest, in the instance, 0:20:58.840 --> 0:21:02.680 it was the mosquito that transmits malaria in Africa. 0:21:03.560 --> 0:21:05.119 So it's not as my mom always said when I 0:21:05.119 --> 0:21:07.760 was growing up, if you eat sweet things, you know 0:21:07.760 --> 0:21:10.280 have sugary blood, and you know the mosquitoes, well we'll 0:21:10.280 --> 0:21:13.960 get you. I'm sure you've heard that before, Professor. In 0:21:14.000 --> 0:21:16.560 all seriousness, though, this is a huge issue around the 0:21:16.560 --> 0:21:20.199 world because of malaria, because of mosquito born illnesses that 0:21:20.240 --> 0:21:23.239 affects so many people each and every year. So I'm 0:21:23.280 --> 0:21:25.439 wondering what the implications of this study are for the 0:21:25.480 --> 0:21:27.840 way that people can protect themselves. If we know what 0:21:27.960 --> 0:21:31.560 attracts and what doesn't attract mosquitoes, how do we extrapolate 0:21:31.600 --> 0:21:33.560 that data and put it to use in the real world. 0:21:34.760 --> 0:21:40.320 Yeah. Absolutely, I think a really molecular understanding of the 0:21:40.400 --> 0:21:45.080 chemistry of mosquito attraction to human scent could be really 0:21:45.200 --> 0:21:50.440 used to effectively inform the risk of being bidden by mosquitoes. 0:21:50.880 --> 0:21:55.560 And as you pointed out, malaria still kills around six 0:21:55.720 --> 0:22:00.480