WEBVTT - Bloomberg Businessweek Weekend - December 3rd, 2021 0:00:01.040 --> 0:00:05.400 This is Bloomberg Business Week inside from the reporters and 0:00:05.600 --> 0:00:09.200 editors who bring you America's most trusted business magazine, plus 0:00:09.240 --> 0:00:13.160 global business, finance and tech news. As it happened, Bloomberg 0:00:13.240 --> 0:00:16.759 Business Week with Carol Messier and Bloomberg Quick Takes. Tim 0:00:16.800 --> 0:00:21.240 Stinovic on Bloomberg Radio. Hi, everyone, welcome to the weekend 0:00:21.360 --> 0:00:24.880 edition of Bloomberg Business Week. It was a volatile week 0:00:25.040 --> 0:00:28.040 for markets, thanks in large part too uncertainty over the 0:00:28.080 --> 0:00:31.320 emergence of a new COVID nineteen variant, Amikron, which were 0:00:31.320 --> 0:00:32.919 still trying to figure out how to pronounce. I think 0:00:32.920 --> 0:00:34.680 we figured out it. Got it. I talked to our 0:00:34.960 --> 0:00:39.400 our our Greek colleague. We got it now, Sair Lulu. 0:00:39.640 --> 0:00:42.440 Also Federal Reserve Chair Jerome Powell taking a hawkish tone 0:00:42.440 --> 0:00:45.600 before Congress, vowing to keep inflation in check and saying 0:00:45.640 --> 0:00:49.120 Carol that FEDE officials should consider tapering asset purchases even 0:00:49.240 --> 0:00:53.120 faster than anticipated, setting a stage for potential interest rate 0:00:53.159 --> 0:00:55.480 hikes next year. But as you always remind me, interest 0:00:55.560 --> 0:00:58.840 rates they're low. We need perspective. Everyone exactly the other 0:00:58.920 --> 0:01:01.920 thing is, and this had our attention. He said, it's 0:01:01.920 --> 0:01:04.840 time to retire the word transitory when it comes to 0:01:04.959 --> 0:01:07.920 rising prices. That trend we are seeing in nearly every 0:01:07.920 --> 0:01:10.440 sector of our economy, and several of our guests on 0:01:10.480 --> 0:01:12.920 this program have plenty to say about that tim We're 0:01:12.920 --> 0:01:15.039 coming up in this broadcast, We're gonna hear from a 0:01:15.040 --> 0:01:18.200 pair of e commerce experts from different sides of the aisle. 0:01:18.440 --> 0:01:21.960 Shopify president Harley Finkelstein tells us how his company is 0:01:22.000 --> 0:01:25.360 outpacing the broader retail sector with the holiday shopping season 0:01:25.440 --> 0:01:28.160 already underway, and talk about timing. Wall Street Journal tech 0:01:28.200 --> 0:01:31.440 columnist Christopher Mims. He's got a new book out about 0:01:31.440 --> 0:01:34.320 exactly how we get all of the stuff that we 0:01:34.400 --> 0:01:37.440 have and why the global retail industry is at a 0:01:37.440 --> 0:01:40.440 tipping point. Plus, the Bloomberg fifty is back. It's our 0:01:40.480 --> 0:01:45.200 annual look at the people and ideas that defined global business, entertainment, finance, politics, 0:01:45.200 --> 0:01:50.040 science and technology. I love this list. All of that 0:01:50.120 --> 0:01:51.800 to come. We begin with a story in this week's 0:01:51.800 --> 0:01:57.080 economics section, supply chain carnage creating opportunities, yes, opportunities for 0:01:57.160 --> 0:02:00.200 companies willing to take a chance on random goods, from 0:02:00.280 --> 0:02:03.520 cheese to used cars and maybe even pumpkin seeds think 0:02:03.520 --> 0:02:07.120 of it as storage wars on steroids. Bloomberg Business we 0:02:07.200 --> 0:02:09.960 contributor Jeff Wise wrote the story and he joined us 0:02:09.960 --> 0:02:12.560 along with the editor of the magazine, Joel Weber. Jeff 0:02:12.600 --> 0:02:14.679 tells us his piece came from his coverage of the 0:02:14.760 --> 0:02:17.720 Ever given that, of course, was the monster cargo ship 0:02:17.760 --> 0:02:20.960 that clogged up the Suez Canal back in March. Nobody 0:02:21.000 --> 0:02:23.480 really knew what was on that ship. You know, there 0:02:23.520 --> 0:02:27.000 was something like twenty containers and there were there were 0:02:27.040 --> 0:02:29.839 various reports like um, it had been reported that there 0:02:29.919 --> 0:02:33.440 was a life sized train of Source rex that was 0:02:33.480 --> 0:02:36.520 heading for a mini golf course in England. UM, but 0:02:36.639 --> 0:02:38.720 like nice little details like that, but nobody really knew 0:02:38.720 --> 0:02:40.280 what the bulk of it was. And there was this 0:02:40.440 --> 0:02:45.639 young guy Uh in the UK who um was more 0:02:45.680 --> 0:02:49.920 talkative than most of these these these salvage buyers, and 0:02:50.120 --> 0:02:53.800 he UM kind of became like sort of an internet 0:02:54.040 --> 0:02:58.160 instant media star over in the UK. He was on 0:02:58.200 --> 0:03:00.840 the local news and everything talking about what he had, 0:03:00.919 --> 0:03:03.200 what he had. He had taken about twenty containers off 0:03:03.200 --> 0:03:04.760 the ship and was trying to, you know, figure out 0:03:04.800 --> 0:03:07.360 what to do with it. Um he had actually ten 0:03:07.440 --> 0:03:13.520 containers five tons or something of raw cabbage that had 0:03:13.560 --> 0:03:16.679 been picked by farmers in China putting these containers and 0:03:17.120 --> 0:03:19.679 was destined for Europe. And then of course it was 0:03:19.720 --> 0:03:24.959 stuck for four months the heat and has liquefied that 0:03:25.040 --> 0:03:28.960 had turned into goop. And so this is a guy who, 0:03:29.200 --> 0:03:31.359 um you know, became the centerpiece of my of my 0:03:31.480 --> 0:03:35.200 article for Business Week. Um. You know, he can both 0:03:35.560 --> 0:03:40.560 turn around stuff that has some value left in it, um, 0:03:40.680 --> 0:03:43.200 or he can take stuff that's absolutely toxic or dangerous 0:03:43.280 --> 0:03:46.360 or whatever it has to be disposed of. Um. So 0:03:46.400 --> 0:03:48.320 he can he whatever it is, he kind of uses 0:03:48.400 --> 0:03:51.040 his cleverness and his connections to find out the best 0:03:51.080 --> 0:03:53.280 thing to do with it. And how is it that 0:03:53.400 --> 0:03:58.760 you know in that uh you know, these could be 0:03:58.840 --> 0:04:02.640 mystery bucks? Is is it? Don't the companies that trans 0:04:02.640 --> 0:04:07.200 transport these containers know exactly what's in every container For 0:04:07.280 --> 0:04:10.680 the most part, yes, um can. Each container has a 0:04:10.800 --> 0:04:13.840 manifest and it's sealed and so there's there's not susi 0:04:14.000 --> 0:04:16.520 any tampering, But there's shenanigans that go on and and 0:04:16.600 --> 0:04:19.720 sometimes the manifest is vague. In the case of the 0:04:19.960 --> 0:04:22.080 one that I wrote about in the story, it's just 0:04:22.120 --> 0:04:26.279 said household goods Brancket car and there was what that meant. 0:04:26.279 --> 0:04:28.680 Does anybody's guess like what what what value do its 0:04:28.680 --> 0:04:31.920 on to that? It's like a complete, you know, random gas. Um. 0:04:32.000 --> 0:04:34.320 But he was telling me sometimes this wasn't in the article, 0:04:34.320 --> 0:04:37.960 but there's a trade where people basically because you cost 0:04:38.000 --> 0:04:41.479 money to dispose of stuff, especially dangerous stuff. So what 0:04:41.520 --> 0:04:47.920 they'll sometimes do is they'll they'll bundle up you know correctly, um, say, 0:04:47.920 --> 0:04:50.680 plastic recycling in the front of a container, and then 0:04:50.720 --> 0:04:54.040 behind that it's like either just junk or garbage or 0:04:54.080 --> 0:04:56.840 something hazardous, and then then you ship it, you know, 0:04:57.320 --> 0:05:00.159 to Asia or to Africa, and then it's you know, 0:05:00.200 --> 0:05:02.800 effectively you're disposing of it. The same day I was there, 0:05:02.800 --> 0:05:04.640 he showed me the car. He had a load of 0:05:05.120 --> 0:05:09.080 tires that had been illegally shipped off and had been 0:05:09.080 --> 0:05:11.320 sent back, and so he was going to dispose of that. 0:05:11.560 --> 0:05:15.160 So I understand why someone might not claim twenty containers 0:05:15.240 --> 0:05:19.840 full of what was formerly known as cabbage, But why 0:05:19.920 --> 0:05:23.000 why would something like that car not get claimed? Like 0:05:23.080 --> 0:05:25.960 how how frequently does stuff just not get claimed at 0:05:26.000 --> 0:05:30.240 the port? He is not a detective. His job is 0:05:30.320 --> 0:05:31.880 just to figure out what to do with this stuff, 0:05:31.920 --> 0:05:34.159 and he like the quicker he can do it, the better. 0:05:34.160 --> 0:05:36.359 So yeah, my instinct is the same as yours. I'm like, 0:05:36.360 --> 0:05:38.760 how do you? But he that that's not his approach, 0:05:38.760 --> 0:05:40.919 so he doesn't know, like he has no idea what happens. 0:05:41.080 --> 0:05:42.800 This guy could have died. He could have just like 0:05:42.839 --> 0:05:46.279 looked at the storage charges and been, um, I don't 0:05:46.279 --> 0:05:48.159 want to deal with this anymore. But this is a 0:05:48.160 --> 0:05:52.640 real problem. You know, the containers sit there and whatever 0:05:52.760 --> 0:05:55.440 is in it is not gaining any value, and and 0:05:55.480 --> 0:05:58.640 the the costs are mounting. I actually wound up I 0:05:58.680 --> 0:06:00.800 was I was over in the UK a couple of stories, 0:06:00.800 --> 0:06:02.599 and I wind up sharing a cab with a woman 0:06:02.640 --> 0:06:05.200 whose son was in the furniture importation business, and she 0:06:05.279 --> 0:06:07.320 was telling me he was looking at he might go 0:06:07.400 --> 0:06:10.960 bankrupt because there's such a shortage of truck drivers because 0:06:10.960 --> 0:06:14.240 of Rexit. All their truck drivers left, and they have 0:06:14.279 --> 0:06:17.400 a real problem. They just can't move stuff, and the 0:06:17.440 --> 0:06:20.680 longer it sits, the big worst. That was Bloomberg Business 0:06:20.680 --> 0:06:23.000 Week contributor Jeff Wise, along with Business We Get It 0:06:23.080 --> 0:06:25.520 or Joel Webber with an inside look at what happens 0:06:25.520 --> 0:06:28.240 when supply chains, well, they go haywire, and while not 0:06:28.320 --> 0:06:31.320 everything we order arrives on time, we still really do 0:06:31.400 --> 0:06:33.800 expect them to. Coming up next, we're going to explore 0:06:33.839 --> 0:06:38.120 how consumer demand for that instant gratification is transforming global 0:06:38.160 --> 0:06:41.200 commerce and displacing millions of workers at the same time. 0:06:41.320 --> 0:06:44.559 Wall Street Journal tech columnist Christopher MIM's details his new book, 0:06:44.680 --> 0:06:47.160 and it gives us a firsthand account of the pandemic's 0:06:47.200 --> 0:06:50.800 immediate impact on trade. In the early days, you're listening 0:06:50.800 --> 0:07:04.120 to Bloomberg Business Week. This is Bloomberg. This is Bloomberg 0:07:04.120 --> 0:07:07.760 Business Week with Carol Messer and Bloomberg Quick Takes. Tim 0:07:07.800 --> 0:07:12.080 Stinovik from Bloomberg Radio. All right, not a day, not 0:07:12.200 --> 0:07:14.320 an hour, seems to go on without us talking about 0:07:14.320 --> 0:07:16.920 the global supply chain. It certainly came up a lot 0:07:17.000 --> 0:07:20.280 this past week on Capitol Hill between lawmakers and Fed 0:07:20.360 --> 0:07:23.760 Chief J. Powell. Shortages and delays persisting even as the 0:07:23.760 --> 0:07:26.360 federal government works to ease these pain points. Our next 0:07:26.400 --> 0:07:28.680 guest started writing a book before the COVID lockdown that 0:07:28.760 --> 0:07:31.080 revealed how our supply chain could be brought to its knees, 0:07:31.120 --> 0:07:33.640 and his trip to Southeast Asia in early twenty ended 0:07:33.680 --> 0:07:36.720 up coinciding with the onset of the deadliest pandemic we've 0:07:36.720 --> 0:07:39.320 seen in more than a century. Well Street Journal technology 0:07:39.320 --> 0:07:43.000 columnist Christopher Mims recently released this book, Arriving Today from 0:07:43.040 --> 0:07:46.120 Factory to Front Door. While everything has changed about how 0:07:46.200 --> 0:07:48.720 and what we buy, the process was already in motion 0:07:48.800 --> 0:07:51.480 once COVID nineteen came around, and the crisis did little 0:07:51.480 --> 0:07:55.480 to change consumer expectations of convenience. It's solidified demand for 0:07:55.560 --> 0:07:58.840 services that could provide the instant gratification that many of 0:07:58.960 --> 0:08:01.360 us have come to know and rely upon. Mims said, 0:08:01.400 --> 0:08:04.760 had to understand the rapidly advancing technologies that are changing 0:08:04.760 --> 0:08:07.560 the way goods are transported and despicing workers in ways 0:08:07.600 --> 0:08:10.320 we've never seen before. And it was all sparked by 0:08:10.360 --> 0:08:13.480 his interest in the world e commerce king. It really 0:08:13.520 --> 0:08:17.680 came from witnessing the transformation in terms of automation and uh, 0:08:17.720 --> 0:08:20.200 you know, other types of technology that was happening in 0:08:20.240 --> 0:08:22.800 supply chains because of Amazon, and I just thought, okay, 0:08:23.000 --> 0:08:24.840 you know, if e commerce is going to become the 0:08:24.880 --> 0:08:27.200 dominant way that we buy things, this is going to 0:08:27.280 --> 0:08:30.320 be huge for millions of American workers and for every 0:08:30.320 --> 0:08:32.240 single one of us, because you know, we're all consumers. 0:08:32.280 --> 0:08:35.240 So I wanted to understand how those supply chains worked 0:08:35.280 --> 0:08:37.520 because it was clear that they were undergoing a transformation 0:08:37.960 --> 0:08:41.080 unprecedented since the invention of the shipping container. It's safe 0:08:41.080 --> 0:08:43.160 to say that we all just expect stuff to show 0:08:43.200 --> 0:08:45.400 up at our door. We don't really think about the process. 0:08:45.440 --> 0:08:47.800 We've gotten so removed from it for many of us. 0:08:47.800 --> 0:08:49.920 There are a lot of workers that are the backbone 0:08:50.000 --> 0:08:51.719 of our supply chains, but for many of us were 0:08:51.760 --> 0:08:54.000 removed from it. Right, Yeah, we're so removed from it, 0:08:54.040 --> 0:08:56.280 and we're even more removed from it than we used 0:08:56.280 --> 0:08:58.880 to be because of globalization, the supply chains are longer 0:08:58.920 --> 0:09:00.520 than ever. So when they get this up to we 0:09:00.600 --> 0:09:02.080 kind of throw up our hands and we're like, what's 0:09:02.080 --> 0:09:05.600 going on? We talked about when you started to write 0:09:05.640 --> 0:09:08.040 this book before the pandemic, So just take us back 0:09:08.080 --> 0:09:11.280 to that time in January when you were exploring supply 0:09:11.360 --> 0:09:13.360 chains in Asia. What what What did you end up 0:09:13.920 --> 0:09:16.760 uh finding out, especially as the pandemic began to ravage 0:09:16.800 --> 0:09:21.440 the globe. Well, what I witnessed was really the supply 0:09:21.520 --> 0:09:24.920 chain disruptions and the congestion that we're seeing now. So 0:09:25.000 --> 0:09:27.720 you know, I was standing on the key side in 0:09:27.840 --> 0:09:31.280 Vietnam when goods are being loaded, just as the World 0:09:31.280 --> 0:09:34.120 Health Organization announced that there was you know, an issue 0:09:34.120 --> 0:09:37.439 in Wuhan, China um and then you know, it was 0:09:37.480 --> 0:09:41.239 inadvertent on my part that the book coincided with the pandemic. 0:09:41.720 --> 0:09:44.000 But you know, as I sort of followed the journey 0:09:44.040 --> 0:09:45.520 of those goods all the way to the US, I 0:09:45.559 --> 0:09:48.160 ended up, you know in places like you know fed 0:09:48.200 --> 0:09:52.079 Exhortation Facility talking to the head of automation at fed 0:09:52.320 --> 0:09:55.640 X about how what used to be the holiday peak 0:09:55.760 --> 0:09:58.720 was now every single day and that they were anticipating 0:09:58.720 --> 0:10:00.840 that when the holidays did, they would have what they 0:10:00.880 --> 0:10:03.240 called peak on top of peak. So you had this 0:10:03.320 --> 0:10:06.960 system that was really sized for you know, maybe a 0:10:07.040 --> 0:10:10.120 holiday peak that was then having to do that holiday 0:10:10.160 --> 0:10:13.640 peak just as part of its normal uh line of business. 0:10:13.720 --> 0:10:16.000 You know, I also wrote along with a UPS driver 0:10:16.640 --> 0:10:18.080 you know, who told me that you know, she was 0:10:18.160 --> 0:10:22.280 really keeping her her everybody on her roots supplied with 0:10:22.400 --> 0:10:25.160 you know, everything from the goods to homeschool their kids, 0:10:25.200 --> 0:10:27.120 to you know, food and other things that they were 0:10:27.200 --> 0:10:30.040 ordering they were being delivered through UPS and that every 0:10:30.120 --> 0:10:32.520 day she was as busy as she would normally be 0:10:32.640 --> 0:10:35.240 during the holidays, but of course this was you know, 0:10:35.920 --> 0:10:38.960 nowhere near the holidays. So the entire system now has 0:10:39.000 --> 0:10:41.760 had to expand to accommodate what used to be its 0:10:41.760 --> 0:10:44.319 maximum capacity. Hey, Chris, I too have written along with 0:10:44.400 --> 0:10:47.000 a UPS driver talk about being impressive, and they have 0:10:47.120 --> 0:10:49.720 technology and data to make sure that, you know, they 0:10:49.720 --> 0:10:51.839 are aware of everything they do, how long it takes, 0:10:51.840 --> 0:10:54.960 and keeping track of it. It blew my mind. Um 0:10:55.000 --> 0:10:57.760 Having said that, So when you look at all the 0:10:57.800 --> 0:11:00.600 work that you did and really understand ending the nitty 0:11:00.640 --> 0:11:04.400 gritty details, the technology, the logistics, the people behind our 0:11:04.400 --> 0:11:08.480 global supply chain, do you clearly understand the mess that 0:11:08.520 --> 0:11:11.120 we're in today? Yeah? I think I do. I mean fundamentally, 0:11:11.760 --> 0:11:13.800 this gets to the heart of you know, the most 0:11:13.840 --> 0:11:17.920 important macroeconomic indicators which drive everything, you know, the entire 0:11:17.960 --> 0:11:20.720 stock market. Like the reason that we're having inflation that 0:11:20.760 --> 0:11:22.520 the FED cannot deal with right now is we're having 0:11:22.559 --> 0:11:24.880 a supply shock. The reason we're having a supply shock 0:11:25.280 --> 0:11:27.520 is that we're having congestion in the supply chain, and 0:11:27.640 --> 0:11:30.400 part of that congestion is due to the labor crisis. 0:11:30.480 --> 0:11:32.560 We don't have enough people to drive the trucks to 0:11:32.600 --> 0:11:35.000 move all the containers out of all these ports. So 0:11:35.080 --> 0:11:38.040 you know, Marisks chairman just said they had more than 0:11:38.120 --> 0:11:41.680 eighty ships waiting on average eighteen days at ports all 0:11:41.720 --> 0:11:43.720 over the world, but in particular on the West Coast. 0:11:43.720 --> 0:11:48.640 So the shocks and the bottlenecks that every one of 0:11:48.679 --> 0:11:50.520 these junctures in the supply chain, I think are key 0:11:50.559 --> 0:11:54.600 to understand because these uh, seemingly small things are what 0:11:54.720 --> 0:11:58.320 are driving ultimately, you know, inflation, and I think a 0:11:58.320 --> 0:12:03.120 lot of investors fears that this new coronavirus will you know, 0:12:03.240 --> 0:12:05.960 hurt the economy and hurt the stock market. Chris, do 0:12:06.000 --> 0:12:10.280 you think that the era of just in time when 0:12:10.280 --> 0:12:12.280 it comes to the way that companies think about getting 0:12:12.360 --> 0:12:16.160 us our goods, the era of globalization, do we see 0:12:16.160 --> 0:12:19.319 any permanent shifts or changes to those things as a 0:12:19.360 --> 0:12:21.640 result of the pandemic and what we've learned. I mean, 0:12:21.880 --> 0:12:24.000 I think you're seeing a lot of smaller manufacturers and 0:12:24.040 --> 0:12:26.760 retailers are having a stockpile more goods. So in that way, 0:12:27.120 --> 0:12:30.280 you know, this era of lean everything is over for 0:12:30.320 --> 0:12:33.840 a lot of retailers. UM and you know, the biggest 0:12:33.880 --> 0:12:36.120 ones that are reporting that the supply chain is starting 0:12:36.120 --> 0:12:37.760 to clear for them, like Target and Walmart. They're the 0:12:37.800 --> 0:12:40.160 ones who order well in advance. So in some ways, 0:12:40.520 --> 0:12:44.040 I think, you know, just in time, you know, is disappearing. 0:12:44.480 --> 0:12:46.719 That said, you know, as soon as this supply chain 0:12:46.760 --> 0:12:48.959 backlog clears, it could be as early as the next 0:12:49.040 --> 0:12:51.360 summer um. You know, I think people will return to 0:12:51.360 --> 0:12:54.520 that because, of course it just drives more returns on everything, 0:12:54.559 --> 0:12:56.559 returns on capital. Nobody wants to have a bunch of 0:12:56.600 --> 0:12:59.520 goods tied up in inventory if they can avoid it, right, 0:12:59.520 --> 0:13:01.160 But you think about those balance sheets and how they 0:13:01.160 --> 0:13:02.880 would change. You know, It's funny I grew up with 0:13:02.960 --> 0:13:05.360 I guess you would say kind of depression era parents 0:13:05.360 --> 0:13:08.199 are parents who grew up with families that you know, 0:13:08.280 --> 0:13:10.200 had to deal with the depression. And we always had 0:13:10.240 --> 0:13:13.679 a utility room that was stock full of so much stuff. 0:13:13.720 --> 0:13:16.880 But I think they remember, you know, when there were 0:13:16.960 --> 0:13:18.960 lean times and you couldn't get stuff. And I do 0:13:19.040 --> 0:13:21.559 wonder the impact that this will have on all of 0:13:21.640 --> 0:13:24.120 us going forward, or perhaps our families going forward, and 0:13:24.280 --> 0:13:26.920 we meet companies as you just talked about, you know, 0:13:26.960 --> 0:13:30.240 going forward so absolutely. I think people are at every 0:13:30.240 --> 0:13:32.400 note of the supply chain, which by the way, includes us, 0:13:32.440 --> 0:13:35.440 includes our individual households. You know, people are being forced 0:13:35.480 --> 0:13:39.120 to stockpile more goods and um, yeah, those depressionary mentalities, 0:13:39.160 --> 0:13:41.439 they don't go away. That was Wall Street Journal technology 0:13:41.440 --> 0:13:44.240 columnist Christopher Mims. He breaks down the wide world of 0:13:44.280 --> 0:13:47.560 supply chains in his new book, Arriving Today from Factory 0:13:47.600 --> 0:13:50.360 at the Front Door. Why everything has changed about how 0:13:50.400 --> 0:13:53.240 and what we buy. It's about logistics, it's about technology. 0:13:53.360 --> 0:13:55.920 More importantly, it's about the people being affected by these 0:13:56.000 --> 0:13:59.559 changes to the global business landscape. Millions of workers will 0:13:59.600 --> 0:14:01.400 be showed when the burden as we moved towards a 0:14:01.440 --> 0:14:04.240 fully automated system. I think what's notable to Carol is 0:14:04.240 --> 0:14:06.439 is the consumer expectation side of this. We've all become 0:14:06.480 --> 0:14:08.800 accustomed to getting things so quickly, regardless of where they 0:14:08.840 --> 0:14:10.559 come from. What's interesting, and I think about this in 0:14:10.600 --> 0:14:12.800 the pandemic, right, we learned so much about how a 0:14:12.880 --> 0:14:15.600 vaccine is made right because we've been living it in 0:14:15.640 --> 0:14:20.080 real time, and every data point, every research study, every 0:14:20.480 --> 0:14:23.320 vaccination that comes out, we've learned about it. The same 0:14:23.320 --> 0:14:25.520 thing for the global supply chain. We just expect stuff 0:14:25.560 --> 0:14:27.640 to be there, and now we're like, well, wait a minute, 0:14:27.680 --> 0:14:31.440 what's that process of you know, from start to finish? 0:14:31.520 --> 0:14:34.840 And we're learning so much more about how complicated it 0:14:34.880 --> 0:14:37.880 is and really truly how global it is. As most 0:14:37.880 --> 0:14:40.360 people say, you can't go back still ahead. On Bloomberg 0:14:40.360 --> 0:14:43.320 Business Week, a dispatch from the epicenter of the Amicron 0:14:43.440 --> 0:14:46.640 variant of COVID nineteen South Africa and executive from de 0:14:46.720 --> 0:14:49.800 Beers explains how the world's largest diamond company is adapting 0:14:49.840 --> 0:14:52.000 to the new threat and what it means for the 0:14:52.000 --> 0:15:01.000 company's bottom line. This is Bloomberg on casting from the 0:15:01.040 --> 0:15:04.920 financial capital of the world Bloomberg eleven Frio in New 0:15:05.000 --> 0:15:09.480 York to Washington, d C. Bloomberg to Boston, Bloomberg one 0:15:09.480 --> 0:15:12.600 oh six one does San Francisco, Bloomberg nine sixty to 0:15:12.720 --> 0:15:15.840 the country Sirius XM Chado one nine team, and around 0:15:15.840 --> 0:15:20.000 the globe the Bloomberg Business app and Bloomberg Radio dot Com. 0:15:20.000 --> 0:15:24.480 This is Bloomberg Business Week. Like most companies involved in 0:15:24.480 --> 0:15:26.680 the retail space, to Beers has had to pivot and 0:15:26.720 --> 0:15:29.160 adjust to change in consumer taste and trends. During the 0:15:29.160 --> 0:15:31.880 pandemic and the world's biggest diamond company now has a 0:15:31.880 --> 0:15:34.400 new challenge to deal with. The latest COVID variant has 0:15:34.440 --> 0:15:37.080 taken root in Southern Africa, where many of its key 0:15:37.120 --> 0:15:39.720 minds are located. We were fortunate enough to catch up 0:15:39.720 --> 0:15:42.200 with Pat Dombi, VP and a head of corporate affairs 0:15:42.200 --> 0:15:45.880 and government relations at the Beers Group of Companies, just 0:15:46.040 --> 0:15:48.680 as word that the omicron strain had begun to circle 0:15:48.720 --> 0:15:51.080 the globe. Pat joined us well in transit from South 0:15:51.120 --> 0:15:54.920 Africa to neighboring Botswana, telling us that regional travel restrictions 0:15:54.920 --> 0:15:57.800 were unlikely to hinder business as usual. It's one of 0:15:57.920 --> 0:16:02.920 the important aspects of the success of our partnership with 0:16:03.320 --> 0:16:05.520 the South African government and the books on a Government. 0:16:05.600 --> 0:16:08.520 It's interesting because they both supported at the same time. 0:16:08.600 --> 0:16:13.120 They obviously they have a very good working relationship, particularly 0:16:13.160 --> 0:16:16.040 when it comes to the border, because a lot of 0:16:16.120 --> 0:16:21.960 us come from both countries, like myself. UM so UM 0:16:22.040 --> 0:16:28.920 the the importance of adaptability. I think that the private 0:16:28.960 --> 0:16:34.880 sectors with government are working together. UM. And for us 0:16:34.920 --> 0:16:38.320 as a business, as you write fully say, kill it, 0:16:38.680 --> 0:16:42.520 it's been having to really figure out how to be 0:16:42.720 --> 0:16:46.720 adaptable UM and how do we refine and be agile 0:16:47.280 --> 0:16:51.320 UM in this market? UM. But I think we've done it, UM, 0:16:51.400 --> 0:16:55.480 And I think that whole focus is really UM focusing 0:16:55.560 --> 0:17:00.840 on our employees UM. And of course the communities in 0:17:00.880 --> 0:17:04.680 which we operate are really critical, and that's also very 0:17:04.720 --> 0:17:09.400 important to our partnerships with with the government. And then 0:17:10.240 --> 0:17:14.520 of course, you know, demonstrating the importance of managing covid 0:17:14.880 --> 0:17:18.160 UM with them. Tell us about the business right now, 0:17:18.200 --> 0:17:20.080 do you guys have all the workers that you need 0:17:20.119 --> 0:17:22.200 to do what you need to do. How has the 0:17:22.320 --> 0:17:27.240 relationship with consumers changed as a result of the pandemic UM? Sure, Carol, Well, 0:17:27.440 --> 0:17:33.479 it's interesting because we're actually pretty excited we had UM. 0:17:33.520 --> 0:17:35.320 You know, the beginning was a little bit tough for 0:17:35.400 --> 0:17:41.239 everyone UM in but UM based on our adaptability and 0:17:41.320 --> 0:17:44.840 being able to refine and and look at what it 0:17:44.960 --> 0:17:50.119 meant to continue our business, we ended with a pretty 0:17:50.119 --> 0:17:57.680 good year UM in and now going into the holiday season. UM. 0:17:57.720 --> 0:18:00.520 You know, we're looking at some of the days that's 0:18:00.600 --> 0:18:05.680 been coming out, like sources UM DAN going Diamond Research 0:18:05.720 --> 0:18:09.600 and data UM that are reporting that US jewelry sales 0:18:10.880 --> 0:18:16.760 advanced to standing from January through May. UM tolpening about 0:18:16.760 --> 0:18:22.000 thirty two billions. So that's up UM by about twenties 0:18:22.000 --> 0:18:26.040 three billion in the same period pre the pandemic UM. 0:18:26.200 --> 0:18:28.920 So that tells us tells us a few things. It 0:18:28.960 --> 0:18:33.480 tells us that American consumers want to celebrate licening in 0:18:33.560 --> 0:18:36.080 each other a little differently. I think he said that 0:18:36.119 --> 0:18:39.520 a little bit earlier in the program UM, and they 0:18:39.560 --> 0:18:45.800 have a real strong love more importantly for diamonds, especially 0:18:45.840 --> 0:18:48.000 at this time of the year. Help me understand and 0:18:48.040 --> 0:18:51.040 help help our audience understand where your job comes in 0:18:51.080 --> 0:18:55.560 when it comes to transparency and sustainability and and helping 0:18:55.680 --> 0:18:59.359 consumers understand that the diamond that they are buying is 0:18:59.680 --> 0:19:01.919 one they can feel good about. It's one that was 0:19:02.080 --> 0:19:05.040 mind sustainably, it was mind in a conflict freeway, and 0:19:05.080 --> 0:19:08.639 it wasn't mind using labor practices that, for lack of 0:19:08.680 --> 0:19:11.840 a better term, aren't appropriate. Well, thank you for that question, 0:19:11.960 --> 0:19:16.639 because it really is paramount to everything we do UM, 0:19:16.680 --> 0:19:20.239 and it's something that as a as a person from 0:19:20.280 --> 0:19:25.000 Botswana UM that I'm really proud of our company. UM. 0:19:25.040 --> 0:19:28.960 You know, we definitely believe in sustainability and we've invested 0:19:29.119 --> 0:19:34.320 heavily in innovation and technology as a link to that. Um, 0:19:35.560 --> 0:19:39.119 we've created a sustainable framework which we call Building Forever, 0:19:39.720 --> 0:19:42.119 and it says exactly what it means. It's at the 0:19:42.200 --> 0:19:45.560 heart of what we do. Tim and I talked about 0:19:45.560 --> 0:19:48.879 this a lot, whether it's wife or friends that he 0:19:48.920 --> 0:19:53.800 knows that aren't necessarily into diamonds. Um, it's just different. 0:19:54.119 --> 0:19:55.879 I look at my daughter, I look at you know, 0:19:55.920 --> 0:19:58.679 different individuals that maybe aren't into jewelry that like my 0:19:58.760 --> 0:20:02.320 mom was, or even myself. Off is it translating and 0:20:02.320 --> 0:20:08.040 and reaching the newer, younger consumer A very good question. UM, Well, 0:20:08.080 --> 0:20:13.159 what we're seeing is that through our insight research. UM, 0:20:13.320 --> 0:20:17.800 we're seeing a generational shift, as you rightfully point up, Um, 0:20:17.800 --> 0:20:23.120 with consumers, particularly young consumers. You're right, Um, what's really 0:20:23.119 --> 0:20:28.080 important for them is the provenance, which is constantly evolving. 0:20:28.359 --> 0:20:31.000 That was Pat Dombay, VP and head of Corporate Affairs 0:20:31.040 --> 0:20:33.760 and Government Relations at the de Beers Group of Companies. 0:20:34.080 --> 0:20:37.000 For more of the company's sustainability framework and commitment to 0:20:37.200 --> 0:20:40.359 ethical sourcing of diamonds, check out our podcast feed for 0:20:40.400 --> 0:20:43.720 our full conversation. You're listening to Bloomberg Business Week. Coming 0:20:43.800 --> 0:20:46.600 up next, the Bloomberg Fifty is unveiled. We're going to 0:20:46.680 --> 0:20:49.000 break down the list of people and ideas that defined 0:20:49.080 --> 0:21:01.240 global business over the past year. This is Bloomberg. You're 0:21:01.280 --> 0:21:05.200 listening to Bloomberg business Week with Carol Messer and Bloomberg 0:21:05.280 --> 0:21:11.359 Quick Takes Tim Stinovik from Bloomberg Radio. It's the most 0:21:11.359 --> 0:21:13.440 wonderful time of the year, and it's not just because 0:21:13.480 --> 0:21:15.880 of the holidays. It's also the fifth installment of Bloomberg 0:21:15.920 --> 0:21:18.760 Business Week's Bloomberg Fifty. It's a list of fifty people 0:21:18.840 --> 0:21:23.320 and trends that deserve recognition in business, entertainment, finance, politics, 0:21:23.320 --> 0:21:26.080 science and tech. Him For where else are you going 0:21:26.119 --> 0:21:29.399 to find Britney Spears, the CEOs of Ford and CVS, 0:21:29.680 --> 0:21:33.359 and even the meme stock Ted Lasso is on there too. 0:21:33.640 --> 0:21:35.479 Here with a look at how it all comes together. 0:21:35.680 --> 0:21:37.880 Who made the list this year is Bloomberg Business Week 0:21:37.960 --> 0:21:42.080 editor Joel Weber. Also Bloomberg Business Week Features editor Brett Vegan. Joel, 0:21:42.080 --> 0:21:43.760 I want to start with you. We know Brett is 0:21:44.000 --> 0:21:47.800 the Bloomberg fifty Maven, but give us some background on 0:21:47.800 --> 0:21:51.199 the issue and really how it got started. So we 0:21:51.480 --> 0:21:53.720 long wanted to do an issue that kind of looks 0:21:53.760 --> 0:21:57.120