Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: This is Bloomberg Business Week, insight from the reporters and
Speaker 2: editors that bring you America's most trusted business magazine, plus
Speaker 2: global business, finance and tech news. The Bloomberg Business Week
Speaker 2: Podcast with Carol Masser and Tim Stenovek on Bloomberg Radio.
Speaker 3: Hi, everyone, Welcome to the weekend edition of Bloomberg Business Week.
Speaker 3: A big week for the megacap tech companies and for
Speaker 3: artificial intelligence as the Chinese AI startup Deepseek up end
Speaker 3: of the conventional thinking about investment in AI. It all
Speaker 3: kind of came together as we passed through the earnings
Speaker 3: of Meta, Microsoft, Tesla, Apple, and Intel, just to name
Speaker 3: a few from the past week. Our take though on
Speaker 3: it all well on Harvard Business and law school professors
Speaker 3: take how the Mac seven companies are eating themselves. He'll
Speaker 3: be along to explain.
Speaker 4: Plus, speaking of earnings, it's not just about tech, as
Speaker 4: a lot of other companies posted quarterly updates this past week,
Speaker 4: giving us snapshots of many parts of the US economy,
Speaker 4: including a big one from the world of leisure. We're
Speaker 4: talking about Royal Caribbean, who shares wrote a record wave
Speaker 4: up following a profit forecast that blew past analyst expectations.
Speaker 4: The company also shared details about waiting into a new business.
Speaker 4: Royal Caribbean CEO stop by to talk all about it.
Speaker 3: All of that ahead, let's start with the big megacap
Speaker 3: tech earnings. As for the Magnificent seven reported results this
Speaker 3: past week, Meta, Microsoft, Tesla, and Apple all out with
Speaker 3: their quarterly updates and outlooks, and earlier in the week
Speaker 3: the narrative shifted around the AI spend thanks to deep seeks.
Speaker 3: So there was so much going on when it comes
Speaker 3: to the world of technology.
Speaker 4: Well, look what happened on Monday and vidfl seventeen percent
Speaker 4: in a single day, at erased five hundred and eighty
Speaker 4: nine billion dollars in value. It was the biggest single
Speaker 4: day decline in market cap for any company ever. Me
Speaker 4: here they saw was watching what happened in the stock
Speaker 4: market that day closely. He's the Mazuho Financial Group, Professor
Speaker 4: of Finance at Harvard Business School and a professor at
Speaker 4: Harvard Law School. He's also contributed to Bloomberg's weekend edition.
Speaker 4: After the Nvidia selloff, he wrote in The New York
Speaker 4: Times that the value destruction illustrates something concerning happening in
Speaker 4: financial markets and can best be explained by an ancient
Speaker 4: myth of a serpent eating itself.
Speaker 5: What I tried to put forward in this piece was
Speaker 5: just the theory that actually it's pretty unsustainable and that
Speaker 5: in effect, big tech is eating its own tail. This
Speaker 5: serpent image that you might have seen of a snake
Speaker 5: eating itself has been around for millennia, and I think
Speaker 5: that's kind of what's going on, which is just a
Speaker 5: way of saying this AI frenzy has in some sense
Speaker 5: been manifest by these big seven companies having a very
Speaker 5: low cost to capital. They've become the safe asset in
Speaker 5: the world. So if you are around the world you
Speaker 5: want a dollar denominated asset but with better management teams
Speaker 5: than maybe governments, better balance sheets than maybe governments, you're
Speaker 5: going to flock to them. Well what is that mean? Well,
Speaker 5: if that happens and they become the safe asset, then
Speaker 5: people don't expect much in terms of return, because that's
Speaker 5: what happens with safe assets.
Speaker 6: Well, how to.
Speaker 7: Managers respond to that?
Speaker 5: And the answer is you invest a lot. And that's
Speaker 5: what they've been doing, and they've been investing a lot
Speaker 5: in each other, and they've been spending like crazy. So,
Speaker 5: for example, in videos, more than half their revenues is
Speaker 5: coming from their siblings in the Big seven. So the
Speaker 5: Amazon Microsoft are spending literally two hundred million dollars a
Speaker 5: year in infrastructure spend, and they're doing buybacks hand over fist.
Speaker 5: So they are literally eating themselves and literally eating each other.
Speaker 5: And the underlying story, I think is going to be
Speaker 5: that these is going to end.
Speaker 6: Up having low returns.
Speaker 5: So when you end up giving them the prize of
Speaker 5: being a safe asset, you don't expect much from them,
Speaker 5: and they invest like crazy and then they deliver slow returns.
Speaker 5: That's what we are going to see. It won't happen
Speaker 5: today or tomorrow. It'll happen over the next five or
Speaker 5: ten years, like it happened at the beginning of the
Speaker 5: last century with railroads and steel. I think that is
Speaker 5: why it wasn't that big of surprise.
Speaker 3: I want you to take a limited to this. And one
Speaker 3: of the things that we love looking at here at
Speaker 3: Bloomberg is that the supply chain functions. You pull up
Speaker 3: something like Nvidia, and so Microsoft is responsible for about
Speaker 3: nineteen percent of their revenue. Meta is about ten percent
Speaker 3: according to our latest data, super Micro about eight percent,
Speaker 3: Alphabet Google about six percent, Amazon about five percent, Dell
Speaker 3: about three percent. Like, we love to kind of get
Speaker 3: an idea of who's who's buying and so the exposure,
Speaker 3: especially if we get bad news from them, what it
Speaker 3: means for an Nvidia. So you're saying, what to concentrated
Speaker 3: or what's what's your point about? You know that they're
Speaker 3: kind of it's like there's almost closed.
Speaker 5: Circles right rid of a closed circle.
Speaker 3: And they all are kind of like supporting one another.
Speaker 5: Yeah, so I mean effectively, what's happening is they're investing
Speaker 5: in spending money on each other and that closed circle.
Speaker 3: Why are they doing that? Because some would say that
Speaker 3: what we've seen over the last couple of years is
Speaker 3: that everybody has all of a sudden realized, oh my god,
Speaker 3: look at what Generator of AI can do. And so
Speaker 3: we have to build out our own.
Speaker 7: Systems exactly right.
Speaker 5: And the promise is that it is not a close circle,
Speaker 5: that one day it'll all be manifest to us what
Speaker 5: those revenues and profits are. And that is a huge bet.
Speaker 5: We are all levered to the mag seven in a
Speaker 5: way that I don't think we understand when one third
Speaker 5: of the market cap is mag seven, we're levered to it,
Speaker 5: and the global economy is levered to it, and all
Speaker 5: of that is going to be a function of the
Speaker 5: productivity of all this capital they're spending on each other.
Speaker 7: And what I tried.
Speaker 5: To raise in that article is it's not clear that
Speaker 5: that is going to be manifest and in fact, deep
Speaker 5: seek I think people misunderstood the Deep Seak lesson.
Speaker 4: In part.
Speaker 5: The story about Deep Seak is it is very hard
Speaker 5: to create a competitive advantage in this industry. You know,
Speaker 5: people think there's a lot of money to be made. Well,
Speaker 5: to make a lot of money, you need to be
Speaker 5: able to capture the rents. And what Deep Seak showed
Speaker 5: is that it's not clear that these rents are easily captured.
Speaker 5: And so if it's easily accessible to everyone, that doesn't
Speaker 5: mean it's not going to be transformational, Carol.
Speaker 6: What it means is.
Speaker 3: Because some would say that if it's more accessible, more
Speaker 3: people can tap into it, and first people who are
Speaker 3: supportive of it, like hence the software guys, right we
Speaker 3: all of a sudden said they were often running.
Speaker 5: Yeah, and it could be transformational, but will a company
Speaker 5: be able to capture it?
Speaker 4: All?
Speaker 5: Right, So the whole premise of their market capitalizations is
Speaker 5: there's going to be seven big winners and we know
Speaker 5: who they are. It's those seven companies. And maybe that's
Speaker 5: not right even if it is transformational. If it isn't transformational,
Speaker 5: then we're all really in trouble because they're literally deploying
Speaker 5: capital at really really low rates of return, maybe negative
Speaker 5: rates of return.
Speaker 4: Your question about a mode or differentiation is an interesting one.
Speaker 4: It came up yesterday during our conversation with Caroline Hide
Speaker 4: oft Bloomberg Technology about what the difference is between Gemini,
Speaker 4: a GPT, LAMA, you know, anthropics, Claude, What is the
Speaker 4: difference between these Apart from the way they look that question,
Speaker 4: I think still a lot of investors in the private
Speaker 4: markets and the public markets are asking themselves.
Speaker 5: Yeah, And one theory is that it's about scale. You
Speaker 5: have to get big and you have to get big fast.
Speaker 5: And the answer is maybe deep seek suggests maybe not.
Speaker 5: And also we should just remember that having access to
Speaker 5: a lot of capital and spending it is not a
Speaker 5: competitive advantage. That is not what a competit advantages. Capital
Speaker 5: is not like the scarce resource in the world, and so.
Speaker 3: Especially for some of these big tech companies, right, Like
Speaker 3: we talk about their balance sheets, and typically you would
Speaker 3: say a higher rate environment would bother them, but they
Speaker 3: have so much cash that they don't have to really
Speaker 3: tap into the capital markets.
Speaker 5: So so, but I think they're in a race, right,
Speaker 5: So they're spending cash hand over fist and the answers
Speaker 5: will weep. But if you don't have a sustainable advantage,
Speaker 5: then what is this race about? And I don't think
Speaker 5: there is a real mode there, and then you really
Speaker 5: have to question the whole story.
Speaker 4: So I think it raises a lot of questions about
Speaker 4: where investors should be putting their money in the public market.
Speaker 4: You know, we've been talking. We talk a lot about
Speaker 4: single stocks in retirement portfolios. A lot of people are
Speaker 4: invested in indexes. If you're not playing the stock market.
Speaker 4: All the experts say, hey, just invest in the S
Speaker 4: and P five hundred index funds. What happens though, when
Speaker 4: the S and P five hundred exactly is dominated by
Speaker 4: these companies, where should people put their money?
Speaker 5: Well, that's exactly right, because the unique circumstance is that
Speaker 5: you know, I talk about the unmagnificent four ninety three,
Speaker 5: because there's a magnificent seven and there's an unmagnifics in
Speaker 5: four ninety three. And the answer is that is still
Speaker 5: the best advice. However, I think it's a good time
Speaker 5: to rethink certain things. So, for example, as you know,
Speaker 5: we are living in the twentieth year of the value
Speaker 5: growth split, where growth has just outperformed value forever, and
Speaker 5: I think it's a good occasion to revisit that. And
Speaker 5: for those of you who are listening who want to
Speaker 5: bebb still.
Speaker 7: I just want to index.
Speaker 6: I just want to do that.
Speaker 5: Well, you want to think about broader indsease, you want
Speaker 5: to think about value in disease, and you want to
Speaker 5: think about whether that whole mantra that has been good
Speaker 5: for the last twenty years is good again, especially as
Speaker 5: rates stay relatively speaking high in a way they haven't
Speaker 5: been for fifteen twenty years.
Speaker 4: Although one challenge, though someone might push back and say,
Speaker 4: well VTI, which is the Vanguard Total Stock Market Index,
Speaker 4: is pretty heavily correlated to the S and P five hundred.
Speaker 4: That is true, and that's a challenge. If you want
Speaker 4: to buy the entire market, you're still just buying that's
Speaker 4: a company.
Speaker 7: That is true.
Speaker 5: I mean in a way that is a little bit
Speaker 5: of a point of the piece, which is we are
Speaker 5: all levered to the max seven in a way that
Speaker 5: we can't get away. I think the answer is though
Speaker 5: there are narrower, you know, value indices that can help you,
Speaker 5: and there are international ways to go. So I am
Speaker 5: not a huge believer in stock pickers, so I think
Speaker 5: indices are fantastic. But there are other kinds of indices.
Speaker 5: There's non us in disease, there's yield, there's fixing. Right,
Speaker 5: there's lots of things that we for the last fifteen
Speaker 5: years have forgotten about. My previous piece was about magical
Speaker 5: thinking and how kind of long periods of low rates
Speaker 5: have infected people to think like this goes on forever,
Speaker 5: and growth the stuff happens forever, and technology solves everything.
Speaker 5: And so look when rates get back up where they are,
Speaker 5: you've got to think hard in your portfolio about fixting,
Speaker 5: come in away and cash in a way that you
Speaker 5: haven't thought about it in a long time.
Speaker 3: All right, So, professor Veisi, so how does this potentially end?
Speaker 3: You know, people have made the comparisons to the tech
Speaker 3: bubble of nineteen ninety nine, two thousand. I don't know
Speaker 3: that it's the exact same thing, but you tell me
Speaker 3: that in terms of then how does this ultimately work
Speaker 3: its way out or do these companies possibly ultimately deliver
Speaker 3: if AI is at transformative as we think it might be.
Speaker 5: Yeah, So I think the analogy to the dot com
Speaker 5: bubble isn't that great in some ways because those a
Speaker 5: lot of those companies were not real companies and it was.
Speaker 4: All a little sketchy.
Speaker 5: Exactly, these are real companies, like this is these are
Speaker 5: really the best companies in the world, Okay, And so
Speaker 5: what's more likely to be true is something like the
Speaker 5: nifty to fifty going to the early seventies or the
Speaker 5: early part of last century, which is railroads and steel.
Speaker 5: And what does that tell you? It's a grind. It's
Speaker 5: not a pop of a bubble. It's like five years
Speaker 5: of like zero of like zero returns, right.
Speaker 4: So it's grind.
Speaker 3: So five years of this stuff just kind of going sideways.
Speaker 5: Yeahhaps like sideways, right, because it's not is it?
Speaker 3: Because the build takes so long, The build.
Speaker 5: Takes a lot, and then we realize that the returns
Speaker 5: aren't there. Right, and for us to realize that and
Speaker 5: understand that, I mean, these folks are spending hundreds and
Speaker 5: hundreds of billions of dollars.
Speaker 7: We won't really.
Speaker 5: Know the productivity of that capital spent for a long time,
Speaker 5: and that's why it takes longer. And they're not like
Speaker 5: fly by night folks, right, people, And so it's going
Speaker 5: to take years and that. I don't know if that's
Speaker 5: good news or bad news, Carol, but I think that
Speaker 5: is the right way to understand it. It's it's three
Speaker 5: to five years of a grind, which also helps you
Speaker 5: understand why valuation levels are high right now and how
Speaker 5: they come back down, just very slowly and in a
Speaker 5: very boring, unexciting way.
Speaker 4: It's interesting because we saw in the president's first week
Speaker 4: of his term an announcement where he was flanked by
Speaker 4: Larry Ellison of Oracle Pasco Shei's son of SoftBank, Sam
Speaker 4: Altman of Open Ai, and he was tatting a one
Speaker 4: hundred billion dollar up to five hundred billion dollar investment. Yeah,
Speaker 4: is that something that concerns you when we're talking about
Speaker 4: figures of that size, Well.
Speaker 5: What would concern me is if capital you know, this
Speaker 5: is all about capital allocation, like everything is in the economy,
Speaker 5: and so if capital allocation is going to be guided
Speaker 5: by political litmus tests, which is, you got to spend
Speaker 5: one hundred billion, and if you're not good for the
Speaker 5: hundred billion, you know, we're not sure if you're a
Speaker 5: real deal.
Speaker 6: If it becomes a political test and it's not.
Speaker 5: Being guided by the tenants of capital allocation, we're all
Speaker 5: going to suffer on that over the long run. So
Speaker 5: that's what concerns me. It's about whether this is becoming
Speaker 5: a political litmus test, like are you with us on
Speaker 5: AI or not? And then of course, as you know,
Speaker 5: CEOs had to respond, which you know, I'm good for
Speaker 5: one hundred billion, yeah, which now starts to feel like
Speaker 5: a poker match as opposed to fought full capital allocation
Speaker 5: and feels a little bit like a political litmus test.
Speaker 4: Me here they Sai Mizuoo, Financial Group professor of finance
Speaker 4: at Harvard Business School and a professor of law at
Speaker 4: Harvard Law School. Also he's contributed in the past to
Speaker 4: Bloomberg's Weekend edition.
Speaker 3: And be sure to check out all of our conversations
Speaker 3: breaking down the major earnings from four of the Magnificent
Speaker 3: Seven this past week, so from Meta, Microsoft, Apple, Tesla.
Speaker 3: We talked about it a lot. They can all be
Speaker 3: found on our podcast feed. Just head over to Bloomberg
Speaker 3: dot com. Slash podcasts coming up. We stay on earnings
Speaker 3: and on the stock that Road and investor Wave hire
Speaker 3: this past week following stellar quarterly results.
Speaker 4: Well Caribbean CEO on the quarter and what's next. You're
Speaker 4: listening to Bloomberg Business Week. This is Bloomberg.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 3: It was a big week for earnings overall among those reporting.
Speaker 3: Royal Caribbean shares of the cruise line company hit a
Speaker 3: record this past week, up the most in more than
Speaker 3: two years, lifting the whole cruise group after it reported
Speaker 3: a full year profit forecast that blue past expectations as
Speaker 3: cruise demand continues to ramp up.
Speaker 4: Royal Caribbean also talking about a new area of the
Speaker 4: cruising industry that it's setting sale for. We got more
Speaker 4: on the outlook and what's driving the business with President
Speaker 4: and CEO of Royal Caribbean Group, Jason Liberty. He joined
Speaker 4: us from Miami.
Speaker 6: Certainly, we have a lot of great demographics on our
Speaker 6: side in terms of more millennials coming into this space,
Speaker 6: multi generational travel, a lot of active wealth transfer, and
Speaker 6: we see that more and more, which has been a
Speaker 6: surprise to me, just how much multi generational travel where
Speaker 6: you have the patriarch or matriarch of the family paying
Speaker 6: And I think that's been a little bit of a surprise.
Speaker 6: And there's also been just a continued flight to quality.
Speaker 6: We've invested so much in our ships and our brands
Speaker 6: and our destinations for so many decades. We're really now
Speaker 6: seeing these flowers bloom as we see consumers who are
Speaker 6: very healthy, you know, they have great balance sheets, they
Speaker 6: have great jobs, and they're high paying jobs. Having this
Speaker 6: flight to quality for our brands and for our destinations.
Speaker 4: When you talk about that flight to quality, break that
Speaker 4: down for us, where there's strength in the business and
Speaker 4: where you're seeing particular strength and if there are any
Speaker 4: areas where you're not seeing strength.
Speaker 6: Yeah, well we're really we are actually seeing strength in
Speaker 6: all markets that we source from. We're also seeing strength
Speaker 6: for all the different places that our ships go, whether
Speaker 6: that's in the Caribbean, Alaska, the Northeast, Europe, Australia, Southeast Asia, China.
Speaker 6: We're seeing strong demand kind of across the board, which
Speaker 6: is I think really great. We're also, you know, seeing
Speaker 6: again elevated spend on our ships, and that's really across
Speaker 6: the board. A lot of it is in the gaming,
Speaker 6: the beverage area, on the culinary side, SPA, shore excursions.
Speaker 6: So people are really looking to make sure that they
Speaker 6: grab the experiences that they want to have and there
Speaker 6: and there, and and they're and they're willing to not
Speaker 6: only pay a little bit more money for that, but
Speaker 6: they're also willing to have more repetition of that, and
Speaker 6: that's how they're expanding the memories that they're building with
Speaker 6: their friends and family.
Speaker 3: How much is that wrapping up, Jason, That is something
Speaker 3: that I've seen throughout the cruise industry that it's not
Speaker 3: just about buying the ticket to get you on the ship,
Speaker 3: but it's about what you do once you're on the
Speaker 3: ship and possibly go off to other destinations. Those bookings,
Speaker 3: right that add to the experience, but they also add
Speaker 3: to your revenue line right in your profit line.
Speaker 6: Yeah, that's exactly right. One. I think that we we've
Speaker 6: gotten a lot better, whether it's you know, through AI
Speaker 6: or other other disruptive tech to really take friction out
Speaker 6: of the experience of shopping with us, whether that's on
Speaker 6: the ticket side, whether that's also on the on board side.
Speaker 6: And what we're doing is we're able to enhance the
Speaker 6: experience so they can do all the different things that
Speaker 6: they want to do. And in reality, while it's still
Speaker 6: very frustrating to me, while we're increasing share of wallet,
Speaker 6: we're still a very significant discounts to land based vacation.
Speaker 6: And so for us, like we focus a little bit
Speaker 6: less on what's happening with our cruise competitors, we're trying
Speaker 6: to take a larger share of the two trillion dollar
Speaker 6: marketplace and travel leisure, and for us, having the experiences
Speaker 6: that our guests want to do and also being able
Speaker 6: to make it easier for them to shop with us
Speaker 6: is winning for us.
Speaker 4: The pace of bookings this year relative to last year,
Speaker 4: what does that tell you about demand where we're you know,
Speaker 4: when we're a little over a month past what is
Speaker 4: referred to in the industry as wave season.
Speaker 6: Yeah, so you know, the past couple of years. You know,
Speaker 6: wave has been elevated not just for us, but also
Speaker 6: for the entire industry, and we're seeing we're continue to
Speaker 6: see those waters rise here on the on the Wave season.
Speaker 6: So we're seeing record booking weeks, We're seeing elevated pricing,
Speaker 6: and we're seeing a consumer that is not only willing
Speaker 6: to pay a little bit more money for their vacation experience,
Speaker 6: but they're also looking to book further out. So the
Speaker 6: booking window is continuing to extend, and they're also doing
Speaker 6: more and more pre cruise booking activities for the activities
Speaker 6: that happen on the ship and off the ship to
Speaker 6: make sure they get the vacation experience that them and
Speaker 6: their family and friends want to have.
Speaker 3: Are you surprised by it? You've been doing this a while, Like,
Speaker 3: are you surprised by the pace of demand?
Speaker 6: Well, I have been doing this. I mean I've been
Speaker 6: in the sea for a little over three years, and
Speaker 6: of course I was the CFO before that, so I've
Speaker 6: been in the industry a while. Certainly you're seeing an
Speaker 6: elevated demand for experiences. So clearly, coming out of COVID
Speaker 6: you've seen a few different changes in behavior one of
Speaker 6: which is very comfortable booking and interacting through technology, so
Speaker 6: we're able to take friction out of that experience. But
Speaker 6: you're also seeing just a trade by a lot less stuff.
Speaker 6: We want to buy experiences. We really appreciate the time
Speaker 6: with our friends and family, and we want to make
Speaker 6: sure that time that we have is one that is
Speaker 6: not only exceptional, but it's also with somebody who we
Speaker 6: trust will deliver that for us. And I think we
Speaker 6: have that trust. We value that trust with our customers
Speaker 6: each and every day.
Speaker 3: All Right, we want to talk a bit more about
Speaker 3: the business. But you know, Jason, we've been asking everybody
Speaker 3: who comes on a CEO or anybody who runs an institution,
Speaker 3: a company, an organization, the dynamics and the backdrop anything
Speaker 3: that could be impacted by policies out of the Trump administration,
Speaker 3: anything coming out of government. And I think about you know,
Speaker 3: we've talked about various policies that could lead to inflation, tariffs,
Speaker 3: you know, on possible goods that could increase costs, immigration,
Speaker 3: the impact on the labor force. So I'm just curious.
Speaker 3: You guys are floating cities, your massive ships, so you
Speaker 3: you know, the dynamics of kind of the economy of
Speaker 3: the UCC want to me certainly impact you. So I'm
Speaker 3: just curious anything in particular that could come out of
Speaker 3: d see that you're watching very closely.
Speaker 6: Well, look, I think we're we as we always have.
Speaker 6: We're gonna work very closely with the administration. But I
Speaker 6: think I think you know, what we're looking for is
Speaker 6: a healthy and happy consumer. And I think as long
Speaker 6: as the consumer has confidence and their spending and and
Speaker 6: and of course they seek great vacation experiences, which we
Speaker 6: think they're going to do, I think we feel very
Speaker 6: bullish about the future spending behavior of our customers. The
Speaker 6: other point that I would just add, which I think
Speaker 6: also brings us great comfort on whether if if costs
Speaker 6: do rise in some form or fashion or there is inflation,
Speaker 6: is that point I made earlier that there is a
Speaker 6: significant gap to land based vacation. There's a lot of
Speaker 6: value for the consumer and in our different vacation products,
Speaker 6: and that's a good hedge for us if there is
Speaker 6: any any any type of change in the winds.
Speaker 4: How are you guys doing it? Can only costs right now,
Speaker 4: specifically when it comes to labor, are you are you
Speaker 4: getting all the employees you need and where are you
Speaker 4: getting them from?
Speaker 6: Yeah, well, most of our our employee base our international crew.
Speaker 6: So we're not really that impacted by rises on the
Speaker 6: wage side, you know, shore side certainly like every other company,
Speaker 6: you know, there's there's inflationary pressures that can impact your wages.
Speaker 6: For our shore side and our corporate offices and so forth,
Speaker 6: we actually are Our cost guide for this year was
Speaker 6: for us to be flat to up one percent, and
Speaker 6: we've been able to do that by really managing our
Speaker 6: supply chain, leveraging the scale as our business grows, and
Speaker 6: having a team that wakes up every day and says,
Speaker 6: how do we do it better? And and doing all
Speaker 6: that and making sure we're enhancing the guest experience and
Speaker 6: we're not cutting the guest experience because we feel that
Speaker 6: it's it's you know, it's important for us to live
Speaker 6: up to our marketing and our reputation each and every day.
Speaker 3: Jason, Could any of that supply chain be impacted by tariffs?
Speaker 6: I don't think so, you know, because we source a
Speaker 6: lot of the things that we source are are are
Speaker 6: really from here here in the US. We're not really
Speaker 6: expecting any any any tariff impact but you know, we're
Speaker 6: watching it just like we're watching other things on more
Speaker 6: more in terms of how it would impact our customer
Speaker 6: le's so, how it's going to impact our cost space?
Speaker 4: What about when it does come to that international labor pool?
Speaker 4: Are there concerns about a crackdown on immigration affecting the
Speaker 4: way that employees on your ships are able to be
Speaker 4: on your ships when they're docked in the US. How
Speaker 4: do you handle that?
Speaker 6: Yeah, Well, it's obviously something that we're that we're always
Speaker 6: looking into, but I don't think that's a very high risk.
Speaker 6: And we know we're an international maritime organization. Our crew
Speaker 6: are international maritime. They're really focused on being on the ships.
Speaker 6: So you know, obviously we watch it and we try
Speaker 6: to manage it, but we don't see that as a
Speaker 6: high risk in terms of any policies that can come
Speaker 6: forward there.
Speaker 3: Hey, listen, we want to talk about you guys getting
Speaker 3: into the river cruise market before we do so. So
Speaker 3: you talked though a lot about destinations and experiences for
Speaker 3: those who get on ships. You guys have had great
Speaker 3: success with Cococae private island destination that's in the Bahamas specifically.
Speaker 3: How could perfect day Mexico, which is another such destination
Speaker 3: kind of drive some of that on board spending that
Speaker 3: you were talking about a little bit earlier and ticket
Speaker 3: prices when it opens in twenty twenty seven.
Speaker 6: Yeah, So I would say a few things about the
Speaker 6: destination experience. So you take as you gave an example
Speaker 6: of Perfect Day of Coco Ka, which by the way,
Speaker 6: is the highest rated, has the highest and promoter score
Speaker 6: of any other destination we go to in the world,
Speaker 6: because we do an exceptional job of delivering thrill and
Speaker 6: delivering chill, but we're not able to deliver that experience
Speaker 6: to all guests, all guests in the Caribbean, and so
Speaker 6: Perfect Day Mexico will allow us to not only ensure
Speaker 6: that every especially on our Royal brand, as at least
Speaker 6: one perfect day when they're in the Caribbean, but it's
Speaker 6: also going to expand the catchment area of areas like
Speaker 6: tech Exists and West of the Mississippi, which will have
Speaker 6: an easier way to get to places like Galveston where
Speaker 6: they can go in and have a perfect day. We're
Speaker 6: also adding oryal beach clubs, which will also expand the
Speaker 6: experience in places like Nasa Bahamas, and also and cause
Speaker 6: them out. So what we're trying to do is again
Speaker 6: continue to enhance the experience offering. We see ourselves as
Speaker 6: an experience organization with really a vision of you know,
Speaker 6: what we've always been done great is delivering delivering the
Speaker 6: best vacations in the world, and we want to be
Speaker 6: able to deliver a lifetime of those vacations over somebody's life.
Speaker 3: And I just want to make sure I heard correctly.
Speaker 3: But in terms of Perfect Day Mexico specifically driving on
Speaker 3: board spending and ticket ticket prices when it opened, can
Speaker 3: you give us any kind of color on that or specificity.
Speaker 6: Absolutely, you know. I think one of the surprises when
Speaker 6: we when we open Perfect Day at Coco Ka is
Speaker 6: not only do we get high demand to go to
Speaker 6: the island and people were willing to pay for things
Speaker 6: like water park to overwater cabanas, but we also saw
Speaker 6: ships that touch Perfect Day of Mexico got elevated pricing,
Speaker 6: and so we expect that's going to be the same
Speaker 6: thing here is when you deliver the destination and the
Speaker 6: experience mark, guests are willing to pay for that, and
Speaker 6: that's what we expect to occur in Mexico. It's also
Speaker 6: what we expect to occur with our Royal beach clubs
Speaker 6: as well as as we'll you know, we'll deliver an
Speaker 6: experience that's far superior to what is currently being offered
Speaker 6: in those in those different destinations.
Speaker 3: I'm just gonna say I'd like some thrill and chill
Speaker 3: right now, because I'm tired of cold New York.
Speaker 4: I'm just going to put that out there, all right,
Speaker 4: sign up, Carol. Speaking of.
Speaker 6: Available available, you know, I would say it's available and
Speaker 6: I'm happy. I'm happy to help you book a cruise.
Speaker 4: Well, let's let's talk about what's going on in the
Speaker 4: river cruise market. I mean, my in laws are back
Speaker 4: from a river cruise this fall, my sister's back from
Speaker 4: river cruise, both of those with different companies in Europe. Now,
Speaker 4: you guys are getting in through the celebrity business. Why now?
Speaker 6: Yeah? Well why now is? You know we've been seeing
Speaker 6: for some time, you know, a growing trend with our
Speaker 6: guests that they're looking for addition vacations, not a substitute
Speaker 6: for going on a cruise, but additional vacations. And when
Speaker 6: we look at what are those additional vacations that they're
Speaker 6: going on, one of the things that we've seen Arizon
Speaker 6: is on the river side. And so as we again
Speaker 6: seek to deliver a lifetime of vacations and we want
Speaker 6: to leverage, you know, all the having a single loyalty program,
Speaker 6: great reciprocity across our different brands. We're enhancing the flywheel
Speaker 6: and we're investing in that flywheel so that we can
Speaker 6: get more reps out of our guests. And so we
Speaker 6: had to listen to what our guests are looking to do,
Speaker 6: and we have to be focused on how do we
Speaker 6: keep our customer in our ecosystem. And one of the
Speaker 6: ways of doing that is expanding the offering. And we
Speaker 6: think River is you know, it's it's similar, it's sowing,
Speaker 6: not exactly the same as an ocean cruise, and we
Speaker 6: think we can elevate that vacation experience significantly, not just
Speaker 6: on the ship in itself, but also on land.
Speaker 4: That was Jason Liberty, President and CEO of Royal Caribbean Group.
Speaker 3: Still ahead on Bloomberg Business Week, how to add as
Speaker 3: much as one tree dollars to the global economy by
Speaker 3: twenty forty.
Speaker 4: This is Bloomberg.
Speaker 2: This is the Bloomberg Business Week podcast. Listen live each
Speaker 2: weekday starting at two pm Eastern on Applecarplay and Android
Speaker 2: Auto with the Bloomberg Business app. You can also listen
Speaker 2: live on Amazon Alexa from our flagship New York station,
Speaker 2: Just Say Alexa Play Bloomberg eleven thirty, Carol.
Speaker 4: When we talk about the gender gap, we're often talking
Speaker 4: about gaps in education, or political participation or salary, right,
Speaker 4: but there's also a pronounced gender gap when it comes
Speaker 4: to healthcare. I confess I had no idea about this
Speaker 4: until I started researching our next guest.
Speaker 3: I mean, share these numbers.
Speaker 4: Okay, big, Okay. Well, Mackenzie says that closing this gap
Speaker 4: could add as much as a trillion dollars to the
Speaker 4: economy by twenty forty, but perhaps more importantly, it could
Speaker 4: add five hundred healthy days to a woman's life over
Speaker 4: her lifetime.
Speaker 3: All right, that seems like a really good thing. Carole
Speaker 3: Lee is working to close that gap. She's founder and
Speaker 3: chief executive officer of WHAM, which stands for Women's Health
Speaker 3: Access Matters. It's a nonprofit that encourages research and investment
Speaker 3: in women's health, as well as works to, in the
Speaker 3: organization's words, quote, eliminate the inequities and bias in research
Speaker 3: and enterprise. She joins us right now from Greenwich, Connecticut. Caroly,
Speaker 3: it's great to have you here with us. Just paint
Speaker 3: the picture. I have heard anecdotally for many women, young, older,
Speaker 3: where they do walk in to a doctor and say
Speaker 3: something and they're very much dismissed. But tell us about
Speaker 3: this poor healthcare or poorer healthcare that women are dealing
Speaker 3: with versus men.
Speaker 8: Sure, well, first of all, thank you, delighted to be
Speaker 8: with you. So let's just frame the picture a little bit.
Speaker 8: Women are fifty one percent of the population, same about
Speaker 8: in the workforce. They make eighty five percent of the
Speaker 8: spending decisions in eighty percent of the health care decisions. Okay,
Speaker 8: so first of all, let's start with it. We're not
Speaker 8: a niche market. And then you have to really look at,
Speaker 8: you know, where we're lacking and if our first reports
Speaker 8: which came out four years ago that we did with
Speaker 8: the RAND Corporation showed how little money is invested in
Speaker 8: women's health research. In fact, NIH invests less than four percent,
Speaker 8: for example, in heart disease, when it's the number one
Speaker 8: killer of heart disease. So there are tremendous disparities between
Speaker 8: the incidents and the burden of disease and the amount
Speaker 8: of money is invested, whether in research or in business.
Speaker 3: Can I ask you why that happens when it comes
Speaker 3: to research in women's health. Why does that lag?
Speaker 8: There's a lot of answers to that.
Speaker 3: Is it just biasness? Is it men in charge making
Speaker 3: the decision about where the men is, where the money
Speaker 3: is spent? What is it?
Speaker 8: Yeah? I think for many years, unfortunately there was bias
Speaker 8: intended and unintended, and it just grew into the system.
Speaker 8: And in many situations, women are not at the table
Speaker 8: and we as frequently or is in the kinds of
Speaker 8: position and says they should be. And we know that
Speaker 8: these kinds of inequities don't create or generate the same
Speaker 8: kind of results when you have sex differences in the
Speaker 8: room and you need to have men and women in
Speaker 8: the room and making these decisions.
Speaker 4: So let's talk a little bit about how to solve
Speaker 4: this and what you are doing over at WHAM, who
Speaker 4: you're partnering with, who's getting involved, How is this a
Speaker 4: problem that gets solved?
Speaker 8: So it's not going to be easy to solve, but
Speaker 8: the first thing is to create greater awareness. So for example,
Speaker 8: I just spoke at several different in several different instances
Speaker 8: in delivering the findings from our new WHAM report out
Speaker 8: at the JP Morgan Health Conference, and that's important for
Speaker 8: a lot of reasons. One is the report itself, which
Speaker 8: is available online obviously at our website whamnow dot org.
Speaker 8: It really paints the picture of what every investor should know.
Speaker 8: And part of what we're trying to do now is
Speaker 8: change the investment community. Our first reports did show how
Speaker 8: to change the research community and and investment by showing
Speaker 8: that in for disease areas and I mentioned heart disease
Speaker 8: is one. In for disease areas that would affect a
Speaker 8: woman in her lifetime, a three hundred and fifty million
Speaker 8: dollar investment, which is what NIH had allocated to those
Speaker 8: for disease areas, would have yielded a return, if just
Speaker 8: increased by a small percent, would have yielded an economic
Speaker 8: return of fourteen into the economy.
Speaker 3: Is that economic return? You know, we're into economic statistics
Speaker 3: and so and so for that A you're just saying
Speaker 3: that healthier women are much more productive in terms of
Speaker 3: economic output.
Speaker 6: Is that?
Speaker 3: Is it as simplistic as that?
Speaker 8: Okay, that's part of it, and it's also obviously taking
Speaker 8: care of their families. All the different costs that are
Speaker 8: involved in either treating a disease and or treating being
Speaker 8: out of work because of inadequate care or because of
Speaker 8: diseases that make you not be able to stay in
Speaker 8: the office, such as menopause. It's not even a disease,
Speaker 8: it's a condition, but the numbers of hours that are
Speaker 8: lost both to the women in terms of her earnings
Speaker 8: and to the company are extensive. So I think one
Speaker 8: of the first things that we have to realize is
Speaker 8: that one of the things we need to do is
Speaker 8: not just think of women's health as reproductive health. And
Speaker 8: so what we've done is try to redefine women's health
Speaker 8: to be exclusively, disproportionately, or differently. And that is an
Speaker 8: NIH definition, by the way, because exclusively means things like,
Speaker 8: let's say, more gynocological issues like menopause are varying. Cancer
Speaker 8: disproportionately is autoimmune diseases where women are eighty percent of
Speaker 8: the people have autoimmune How about Alzheimer's where we're two
Speaker 8: thirds of the population and twice is likely to have Alzheimer's.
Speaker 8: And guess what we don't have the research to show
Speaker 8: us why. So if we don't have the research, then
Speaker 8: you can't even begin.
Speaker 3: Because we live longer, don't we still live longer?
Speaker 4: Women?
Speaker 8: No?
Speaker 4: No, no, Why is my life insurance more expensive than
Speaker 4: my wife's? They told me he sold me my wife's
Speaker 4: cheaper because she's lived longer.
Speaker 8: Yeah, that's not I think that's not true. But it's
Speaker 8: a great question. I'm not I'm not qualified to answer
Speaker 8: that one, but all good questions. I mean, women live
Speaker 8: on average five to six years longer and in poor health.
Speaker 8: We know that, and with the inadequate finances.
Speaker 3: So we do live. We do live longer, but in
Speaker 3: poor health is what you're saying.
Speaker 8: Correct, that's exactly right. Okay, close us more and we
Speaker 8: don't have the money.
Speaker 4: There's a really interesting Oh sorry, go ahead.
Speaker 8: Well I'll just finish the exclusively disproportionately and differently. The
Speaker 8: two areas and the two conditions that affect women differently
Speaker 8: are cardiovascular disease and lung cancer. For example, where cardiovascular disease,
Speaker 8: to your point, Carol, women are go to the emergency
Speaker 8: room with chest pain and all kinds of issues, indigestion,
Speaker 8: shoulder pain, and in many instances, they're given an anti depressant,
Speaker 8: they're told that they're having anxiety, and they're sent home
Speaker 8: and they dropped out of a heart attack. Why is that?
Speaker 3: I don't know.
Speaker 8: Why is that? Yeah? I mean, well, because because because
Speaker 8: first of all, because this is women experience some diseases
Speaker 8: such as cardiovasculogies differently, not all emergency rooms and not
Speaker 8: all medical practices or that familiar with these differences. And
Speaker 8: often if they are, they'll misdiagnose it, which is very unfortunate.
Speaker 8: But but some of the symptoms are you know, they
Speaker 8: could be anxiety, but women are not often given the
Speaker 8: same tests as quickly as a man is.
Speaker 3: All right, so listen those that are heading up medical
Speaker 3: institutions hospitals. You have a quote in the in the
Speaker 3: study from Michael Dowling, Presidency of Northwell Health Health. He
Speaker 3: has been on our air several times. The quote is
Speaker 3: women's health needs innovation and creativity. It needs everybody to
Speaker 3: look at it in a new way. I have heard
Speaker 3: from doctors that such a big part of their job
Speaker 3: is also thinking about money and kind of getting donors
Speaker 3: to donate money that goes into R and D and
Speaker 3: so on and so forth. So how do we you know,
Speaker 3: I'm thinking about these of institutions. If they are aware
Speaker 3: of this, why aren't we making sure that R and
Speaker 3: D money gets allocated to more women's health issues.
Speaker 8: Well, it is happening slowly, but the problem is this
Speaker 8: word slowly. In other words, there is more money flowing,
Speaker 8: and over the past five years has been a significant
Speaker 8: amount of money. And I think between twenty eighteen and
Speaker 8: twenty twenty three, the women's health gap grew by three
Speaker 8: hundred percent. So the amount of research that is being
Speaker 8: done is growing, it's just not growing at a fast
Speaker 8: enough rate, and it's not significant enough. And that's a problem,
Speaker 8: There's no question about it. And I think part of
Speaker 8: it is the lack of understanding. So, for example, even
Speaker 8: women's health is such a high growth opportunity. You are
Speaker 8: focused on economics and opportunity. Five percent of the conditions
Speaker 8: that impact a woman in her life are exclusive to women,
Speaker 8: the other ninety five percent or not. So I think
Speaker 8: about that.
Speaker 3: You're saying, like, in terms of investment dollarsmpanies that are
Speaker 3: addressing some of these issues, why is it maybe more
Speaker 3: going into it? Is that kind of the question.
Speaker 8: Ninety five percent of the market is still on tap.
Speaker 4: Leave me a mass some opportunity because you know, you
Speaker 4: have some of the companies that are listed in your
Speaker 4: report really really interesting companies that we've had on our air.
Speaker 4: Maven and kind Body are a couple of those companies
Speaker 4: that cater to women exclusively, that have raised money in
Speaker 4: the past few years from private investors. Other companies including Aura.
Speaker 4: We've spoken to that CEO in the past couple of months.
Speaker 4: You argue that they treat women differently. Will we see
Speaker 4: more capital flow to startups because you think it is
Speaker 4: such an untapped opportunity.
Speaker 8: Yeah, I think so. I mean, this is the point
Speaker 8: of the report is to lay out the groundwork that
Speaker 8: says this is a market that's ready for growth. So
Speaker 8: investments in women's health grew by about three hundred percent,
Speaker 8: as I said, between twenty eighteen and twenty and twenty three.
Speaker 8: So that's a huge opportunity when you think that only
Speaker 8: two percent of healthcare VC funding was allocated to women's health,
Speaker 8: really two percent, one percent of the population. Ten percent. Yeah,
Speaker 8: it doesn't work.
Speaker 3: It's amazing and I feel like we have had this
Speaker 3: conversation a few times over the last couple of years,
Speaker 3: So it's disturbing this in depth, extensive research that you've
Speaker 3: done to find that we still have a long way
Speaker 3: to go.
Speaker 4: Our thanks to Caro Lee Lee, founder in the CEO
Speaker 4: of WHAM. It stands for Women's Health Access Matters.
Speaker 3: All right, And you can catch the full interview if
Speaker 3: you missed any of it on our podcast feed. Hey,
Speaker 3: you know what's interesting, uh, women's health? Health care in general,
Speaker 3: I feel like comes up a lot in our conversations
Speaker 3: with a lot of investment experts. We know some of
Speaker 3: the reasons, the long term catalysts, changing demographics, aging demographics,
Speaker 3: you know, these are things that play into why healthcare
Speaker 3: could be a good investment play. And what's interesting on
Speaker 3: that Our own Susanne Wooey of Bloomberg News, she covers
Speaker 3: wealth and investing. She had a story out this past
Speaker 3: week about how to invest ten thousand dollars right now,
Speaker 3: and the health and healthcare area came up.
Speaker 4: I love these stories. They do these periododically at a
Speaker 4: Bloomberg and it talks about different areas of the market
Speaker 4: to consider one of those and they interview folks all
Speaker 4: around the industry. Russ Costerrech one of those Folks, portfolio
Speaker 4: manager over at Blackrocks Global Allocation Fund. He recommends finding
Speaker 4: cheap growth stocks, which he says are healthcare stocks because
Speaker 4: last year there was a gain of more than twenty
Speaker 4: percent in the market, healthcare stocks Carol barely eked out
Speaker 4: a low single digit return. Yeah.
Speaker 3: Longer term relative performance looks even worse. On a five
Speaker 3: year timeframe, the sector's total return is roughly thirty five percent,
Speaker 3: approximately half of the seventy percent gain for the MSCI
Speaker 3: World Index. So, given years of underperformance, healthcare has become
Speaker 3: a market anomaly, a cheap growth sectors. That's kind of interesting, right,
Speaker 3: So there's growth going on and you're looking at valuation
Speaker 3: and it's inexpensive for that growth.
Speaker 4: Yeah, you said. The discount appears even more interesting given
Speaker 4: the solid earnings outlook, because analysts expect earnings growth of
Speaker 4: roughly seventeen percent, second only to tech stock.
Speaker 3: So, Tim, you mentioned earnings in the healthcare sector. Earnings
Speaker 3: are expected to benefit from continued growth in blockbuster drugs.
Speaker 3: According to JP Morgan, between twenty twenty two and twenty thirty,
Speaker 3: the market for a BC drugs alone expected to grow
Speaker 3: at a compound annual rate of more than fifty percent.
Speaker 3: That's another theme we've talked.
Speaker 4: About a lot remarkable.
Speaker 3: And that wraps up the first hour of the weekend
Speaker 3: edition of Bloomberg Business Week from Bloomberg Radio Ahead. In
Speaker 3: our next hour, how about some red sauce. Everyone, It
Speaker 3: is big business. We hear about that from the CEO
Speaker 3: of Carbone Fine Foods.
Speaker 4: Plus, how about a little red wine to go with
Speaker 4: your dinner. The founder and CEO of Nomadica Wines stops by.
Speaker 1: So one of the beautiful things about our brand, our
Speaker 1: name is kind of a double entendre, Nomadica. You can
Speaker 1: take it wherever you want to go, and we have
Speaker 1: a normadic sourcing style. So my job, I guess I'll
Speaker 1: get into my background a little bit and then I
Speaker 1: can talk about our vineyards. If that's okay with you,
Speaker 1: Yes h, I amazing. I spent a decade plus as
Speaker 1: a somolier in Michelin restaurant.
Speaker 3: This is Bloomberg Business Week. I'm Carol Masser.
Speaker 4: And I'm Tim Stenovec. Stay with us. Today's top stories
Speaker 4: in global business headlines are coming up right now.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 2: Live weekday afternoons from two to five pm Eastern. Listen
Speaker 2: on Apple CarPlay and Android Auto with the Bloomberg Business app,
Speaker 2: or watch us live on YouTube.
Speaker 3: Plenty ahead in our second hour of the weekend edition
Speaker 3: of Bloomberg Business Week, including Carbone. You know they're sought
Speaker 3: after restaurants and the March, and you probably know their sauces,
Speaker 3: which you now can serve at home. The CEO of
Speaker 3: Carbone find Food stops by to chat the business and unfortunately,
Speaker 3: I don't know how this happened, Tim, but we did
Speaker 3: not share a bowl of pasta.
Speaker 4: I don't know how it travels on the plane because
Speaker 4: he had just flown in and he was about to
Speaker 4: fly out too.
Speaker 3: We have people who take care of that too.
Speaker 4: We could have done this, okay. I would have made
Speaker 4: a mess, but that would have been okay. We did, however,
Speaker 4: sample some wine recently which might pair well with a
Speaker 4: bowl of pasta or something else. It's wines that focus
Speaker 4: on being sustainable and without quarks. That's what Nomadica Wines
Speaker 4: is up to. We check in with the founder and
Speaker 4: CEO of the company, and later on.
Speaker 3: The Transparent TV the Cartier Necklace, the ice baths, how
Speaker 3: to spend your year in Bonus.
Speaker 4: First up this hour. When you think though of how
Speaker 4: to get wine, you probably think of the classic wine
Speaker 4: bottle and the cork. Kristin Olsski wants to change that.
Speaker 4: She's a founder and CEO of Nomadica Wines. It distributes
Speaker 4: its wines not in bottles, but in cans, boxes and kegs.
Speaker 4: She joined us from Malibu a little over a week ago,
Speaker 4: and we wanted to ask her about how she and
Speaker 4: her community in the LA area. We're doing after weeks
Speaker 4: of those devastating wildfires.
Speaker 1: Longtime admirer and big fans, this is exciting and a
Speaker 1: bright spy as Unfortunately I'm calling in from Palm Springs
Speaker 1: as our house burned down.
Speaker 3: Oh my god, I'm so sorry.
Speaker 1: Oh it's you know, I think it's a really insane
Speaker 1: time to live in Los Angeles because everyone I know
Speaker 1: knows a dozen people who lost their homes minimum, never
Speaker 1: mind all the businesses and everything.
Speaker 7: It's tough.
Speaker 4: Yeah, it's absolutely devastating. And our hearts are with.
Speaker 3: You, and we had no idea, we weren't sure actually
Speaker 3: your status and yeah, I can't even mind. How long
Speaker 3: can I ask you or can we ask you? How
Speaker 3: long you've lived in the area.
Speaker 1: So I've lived in Los Angeles for almost ten years,
Speaker 1: and a year and a half ago, my husband and
Speaker 1: I moved to Malibu. He grew up in southern California
Speaker 1: as a surfer. We both always wanted to live by
Speaker 1: the beach. It was kind of our dream and we
Speaker 1: found the perfect rental. And you know, I do have
Speaker 1: to say, I'm so grateful that we got to live
Speaker 1: there for.
Speaker 8: The time we did.
Speaker 1: It's such a special, peaceful, beautiful community that will be
Speaker 1: forever changed moving forward, and I just I enjoyed it
Speaker 1: every moment.
Speaker 3: I lived there.
Speaker 4: Do you think you'll go back?
Speaker 8: Probably not now.
Speaker 1: I don't think I can ever live in a wildfire
Speaker 1: area again after that.
Speaker 4: Does that mean leaving California?
Speaker 1: No, absolutely not, especially because we are a California wine company,
Speaker 1: and so in Los Angeles is my home, it's my community.
Speaker 1: I think it's one of the most innovative and interesting
Speaker 1: wine scenes in the US right now, and I very
Speaker 1: much want to remain an integral part of building that.
Speaker 1: But we're going to live probably in the middle of
Speaker 1: Los Angeles where it's a little bit safer.
Speaker 4: So let's talk a little bit about the wine that
Speaker 4: you mentioned, you do get some of the wine from.
Speaker 4: You do get the wine from all over California. Where
Speaker 4: are the vineyards that you source the wine from.
Speaker 1: So one of the beautiful things about our brand, our
Speaker 1: name is kind of a double entendre Nomadica. You can
Speaker 1: take it wherever you want to go, and we have
Speaker 1: a normadic sourcing style. So my job, I guess I'll
Speaker 1: get into my background a little bit and then I
Speaker 1: can talk about our vineyards, if that's okay with you, Yes, amazing.
Speaker 1: I spent a decade plus as a somolier in Michelin restaurants,
Speaker 1: so running and working in some of the best wine
Speaker 1: programs in the country, tasting the best wines in the world,
Speaker 1: typically talking to a you know, forty five plus wine collector.
Speaker 1: And when I was working for Nancy Silverton at Austria
Speaker 1: Motza in Los Angeles, she was on a Netflix show
Speaker 1: called Chef's Table and it entirely changed the demographic of
Speaker 1: who's coming. In the first time in my life, I
Speaker 1: was talking to people my own age and they did
Speaker 1: not want to drink wine.
Speaker 4: What did they want to drink?
Speaker 8: Anything but wine?
Speaker 1: Basically, so beer, sodala like anything but wine.
Speaker 4: So you said, I'm gonna make wine because nobody wants
Speaker 4: to drink it.
Speaker 1: Yes, Well, I started talking. I was like, why don't
Speaker 1: you want to drink wine? It's the most ancient beverage.
Speaker 1: Nothing uplifts and enhances a meal like wine, and there's
Speaker 1: something beautiful about sharing wine with your dining partner.
Speaker 3: I totally agree. It's one of my favorite things is
Speaker 3: sitting down to a great meal and having wine. I
Speaker 3: have a twenty one year old too, who it does
Speaker 3: feel like they are just like all these mixed cocktails,
Speaker 3: but she is learning to and has appreciated and appreciates,
Speaker 3: excuse me, a great glass of wine, and it's really
Speaker 3: fun to kind of see that with her and share
Speaker 3: it with her.
Speaker 1: You're doing God's work making her pallets there.
Speaker 3: All right, Well, tell us about the work that you
Speaker 3: guys are doing, because I am curious about kind of
Speaker 3: you know. First of all, we have the cans with
Speaker 3: us you shared with our producer Paul Brennan, and we've
Speaker 3: got a bunch of them. They're really beautiful cans, but
Speaker 3: I also care about what's in them. So tell us about,
Speaker 3: you know, the vineyards you're working with, how you're making it,
Speaker 3: how you think about what's inside the can.
Speaker 1: So when I was talking to these young people, I
Speaker 1: started realizing why they weren't drinking wine.
Speaker 8: Which few factors. People believe that.
Speaker 1: Great wine needs to be expensive, which it doesn't. There
Speaker 1: was a lot of knowledge which people were intimidated. A
Speaker 1: lot of consumers.
Speaker 3: Feel like they need a PhD.
Speaker 8: In order to enjoy.
Speaker 1: Wine, and there's a lot of misinformation about one out there.
Speaker 1: So I wanted to be kind of a soumelier to
Speaker 1: the masses and curate and select styles of wine that
Speaker 1: would be, you know, appealing to a wide range of audiences,
Speaker 1: bring the younger consumer back, and also make it really
Speaker 1: easy to choose high quality wines. So I brought on famed,
Speaker 1: amazing winemaker Kent Humphrey and Corey Alberry, who's our current
Speaker 1: director of operations in winemaking. Ken Humphrey ran Eric Ken
Speaker 1: Sellers makes award winning pino and no orange chardonay up
Speaker 1: in Sonoma, and Corey has spent time over over a
Speaker 1: decade running some of California's best vineyards and also spent
Speaker 1: some time at Costa Brown.
Speaker 3: So I feel fame, I'm going to actually open up
Speaker 3: one of the and often like when we have somebody
Speaker 3: on from a vineyard, or you know, it's a cork
Speaker 3: we're pulling out, but it is a flap top top
Speaker 3: can crowd, which I have to say, for those of
Speaker 3: us who are doing different things on weekends, there's times
Speaker 3: I don't want to have to open up a bottle
Speaker 3: or something that I am increasingly popping open a can.
Speaker 4: I will tell you. I will tell you. I saw
Speaker 4: a bunch of these on our producer Paul Brennan's desk,
Speaker 4: and a couple hours before our show, I heard that noise.
Speaker 4: I turned around, said Paul, it's too early. It's too
Speaker 4: early to be opening these things. He didn't do it,
Speaker 4: he was.
Speaker 8: Opening something else, lunch wine.
Speaker 3: All right, so tell us I'm opening up the red
Speaker 3: and I'm giving it ah Tim and I so tell
Speaker 3: me what I've got here.
Speaker 4: It's a blend.
Speaker 3: The're Nomadica. It's a blend, right, it's a blend.
Speaker 1: So we source again from all over California, but primarily
Speaker 1: from Mendocino, Sonoma and lod Eye. Those are areas that
Speaker 1: we find off the bean path, grapes that deliver high
Speaker 1: quality without the price tag. So what you're drinking is
Speaker 1: one of my favorite wines that we do. It's primarily
Speaker 1: a grape call toldego, So cut my teeth. In Italian wine,
Speaker 1: that's where my passion and heart lies. And I was
Speaker 1: so excited to find one of my favorite Italian alpine
Speaker 1: varieties growing in lod Eye and so it's predominantly it's
Speaker 1: about ninety percent torold Togo with a little Merlot and
Speaker 1: Marlbeck mixed in separately, fermented and then blended. The Toroaldago
Speaker 1: is aged for nine months in neutral oak because Toroaldago
Speaker 1: is a slightly tannic variety and we want to be poppy, crispy, crunchy,
Speaker 1: have all those alpine herbs, lots of bright red fruit,
Speaker 1: but still a little mellow. Sometimes tannin can be aggressive
Speaker 1: out of a can.
Speaker 3: Yeah, there was, Can I just say, Kristin, there was
Speaker 3: a little bit of like bubbly, like a little bit
Speaker 3: of once I poured it, So what is that?
Speaker 1: So that is just because we are not using any
Speaker 1: so two in our ends.
Speaker 8: Note you don't need sulfur.
Speaker 1: I'm not a sulfur puris as a so yeah, I
Speaker 1: know that's a little divisive within the wine.
Speaker 8: Community right now.
Speaker 1: I don't mind a little sulfur in my wines, but
Speaker 1: you don't need it in the can. But that's just
Speaker 1: the canning process and it'll blow off in the glass.
Speaker 4: Hey, Kristin, we've had some wine folks on over the
Speaker 4: past few months and they've told us about challenges in
Speaker 4: the industry, with wine sales going down over the last
Speaker 4: couple of years by some measures. What are you seeing?
Speaker 1: Nomadica is growing rapidly this year. We're on track to
Speaker 1: double our business.
Speaker 6: Wow.
Speaker 1: And last year we grew the business twenty percent in
Speaker 1: a very difficult year.
Speaker 4: That's amazing. How do you attribute that? I mean, are
Speaker 4: you small because you're starting from a smaller space, You're
Speaker 4: increasing distribution, You're offering something that's not necessarily out there.
Speaker 1: We were the first people to do fine wine in
Speaker 1: can We were the first to go to market with
Speaker 1: a nationally distributed orange wine, first to go to market
Speaker 1: with a nationally distributed fine wine in a box. I
Speaker 1: think early mover advantage. And you know, I'm a millennial.
Speaker 1: I saw the writing on the wall for the wine industry,
Speaker 1: and so we are really trying to be a force
Speaker 1: of change and showing people that wine isn't dying. People
Speaker 1: are just drinking it in a different way.
Speaker 4: There's oh well, So, speaking of drinking in a different way,
Speaker 4: I'm a big fan of non alcoholic spirits and I
Speaker 4: noticed that you guys have teamed up with Proxies to
Speaker 4: create a non alcoholic bubbly white. How'd you do this?
Speaker 1: So I've loved Proxies for years. Non alcoholic wine has
Speaker 1: a long.
Speaker 8: Way to go.
Speaker 4: We know, we know, we've tried some. Some of it's great,
Speaker 4: by the way, it's some of it's not.
Speaker 1: Yeah, gosh, it's as a solier, I haven't been able
Speaker 1: to find one that I'm I've been really excited about
Speaker 1: that speaks to the same quality that I expect from
Speaker 1: a bottle of wine. But when I found Proxy, it's
Speaker 1: not just dealcoholized wine. Because all of our wines at Nomadica,
Speaker 1: they're you know, practicing organic. There's no chemical manipulation, there's
Speaker 1: zero grams of sugar, no ingredients added. And so I
Speaker 1: wanted to take that same approach to our non alcoholic project.
Speaker 1: And so I teamed up with the entire amazing genius
Speaker 1: team at Proxies, which also has Acid League.
Speaker 8: They're old school.
Speaker 1: CpG founders, and we came up with a blend of
Speaker 1: proprietary herbs, juices, floral tinctures, all of the things you
Speaker 1: love about wine, but in an all natural way.
Speaker 4: Our thanks to Kristin O'shewski, founder and CEO of Nomadica Wines.
Speaker 3: You're listening to Bloomberg Business Week. Coming up spicy vodka Ourbiata?
Speaker 3: Did I say that right?
Speaker 4: I don't know.
Speaker 3: I don't know Arabiata Alfredo or great Old Marinera.
Speaker 4: It's time to get saucy with the CEO of Carbone
Speaker 4: Fine Food. This is Bloomberg.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern. Listen
Speaker 2: on Apple CarPlay and the Android Auto with the Bloomberg
Speaker 2: Business app, or watch us live on YouTube.
Speaker 4: You know the Marinara sauce aisle at the grocery store
Speaker 4: these days, Carol, Yeah, not what it was like when
Speaker 4: I was a kid, where it was like all classico
Speaker 4: and prego. Remember that it really was.
Speaker 3: Can I just wait before you go on? I'm just
Speaker 3: gonna say my mom was always made homemade.
Speaker 7: Wow.
Speaker 3: I know I was spoiled, but go ahead.
Speaker 7: Go on.
Speaker 4: Wow, go on, because not everybody shade to Susan Stem.
Speaker 3: There's also a stay at home mom for a while,
Speaker 3: so she could do that well.
Speaker 4: The aisle has moved up scale with more botique options,
Speaker 4: including reyos and the sauce from our next guest company.
Speaker 4: Eric Ska is CEO at Carbone Fine Food. It's the
Speaker 4: maker of Marinera spicy vodka tomato basil arabiata. You like that? Wow?
Speaker 4: I practiced that one earlier Alfredo and more.
Speaker 3: Eric joined. He disappeared for like an hour or so.
Speaker 4: It was just holding a bottle in the Bloomberg Interactive
Speaker 4: Brokers studio. Eric, good to see you. Okay, Carol and
Speaker 4: I were talking about this Carbone Fine Foods. Right, Carbone,
Speaker 4: the restaurant which is owned by Major Food Group. Let's
Speaker 4: start there. What's the relationship. Just settle the score for it.
Speaker 7: Major Food Group is majority owners of Carbone Fine Food.
Speaker 4: Okay, and inspired by the restaurant.
Speaker 7: Inspired by inspired by the restaurant.
Speaker 4: Yes, what you get in a jar at the grocery
Speaker 4: store from Carbone Marinera? Do you get that at the
Speaker 4: restaurant Carbone?
Speaker 7: Yes? I mean as close representation as you can make
Speaker 7: good that's the Ip Marshall kitchen. Absolutely okay, all fresh ingredients.
Speaker 7: Tomatoes from Italy, onions are chopped on site, Garlic's minced
Speaker 7: on site, basil his hands stripped on site as we
Speaker 7: produce a product and it cooks for an hour to
Speaker 7: an hour and ten minutes, meeting your homemade taste. What
Speaker 7: we look for restaurant quality, and Mario Carbone is very
Speaker 7: passionate about that, so he tastes everything.
Speaker 3: I kind of love it when I roll over the
Speaker 3: ingredients and what you're seeing is everything I understand and
Speaker 3: there's no chemicals, there's no nothing like that. I mean
Speaker 3: that to me is super important. How do you though,
Speaker 3: make sure that it is as good as the restaurant?
Speaker 7: So, I mean, look, we're very, very involved in the
Speaker 7: manufacturing of this. So the first year I tasted personally
Speaker 7: every single batch before it was allowed to go in
Speaker 7: a jar. Obviously, I have a staff now. How to
Speaker 7: go one hundred thousand miles on United without leaving the country.
Speaker 7: I live in Las Vegas. That's my fault.
Speaker 3: How many times did you taste something You're like nope, nope, nope.
Speaker 3: It sounds like a lot.
Speaker 7: Not that often because I work with people that I
Speaker 7: trust that are very very good at doing this. It's
Speaker 7: a very specialized process. No one wants to cook for
Speaker 7: an hour in a manufacturing facility, so those who do
Speaker 7: it are as passionate as I am about it.
Speaker 4: How do you control that? Because I mean, I would
Speaker 4: imagine you have manufacturing facilities in several parts of the country.
Speaker 4: It's not necessarily centralized in place ingredient variabilities based on seasons.
Speaker 4: And those tomatoes that you do get from Italy, how
Speaker 4: do you control for those things?
Speaker 7: So the tomatoes you get from Italy, you're going to
Speaker 7: be fairly consistent. They come in. We open up number
Speaker 7: ten cans, just like the back of a restaurant, so
Speaker 7: or not. It's not big drums of tomatoes. They're packed
Speaker 7: just in tomato season, and that's tomato we use. So
Speaker 7: I mean, to your point, I might be able to
Speaker 7: take us taste a slight variation in fresh basil because
Speaker 7: it was hand stripped at a different time. We've never
Speaker 7: gotten a complaint.
Speaker 4: Is it any different parts of the country where the
Speaker 4: where you do many where you actually do the manufacturing.
Speaker 7: No, most of it's here in East Coast. We have
Speaker 7: a couple of cup backords set up that that we
Speaker 7: work with, but we have a primary that does a
Speaker 7: good majority of it.
Speaker 3: All right, great bottle carbon name very prominent. Why are
Speaker 3: they doing this? Why do they need to do this?
Speaker 7: You know that would be a that'ud be a question
Speaker 7: for for Mario, but you know, as I've seen him
Speaker 7: ask that question, he's got X amount of restaurants and
Speaker 7: not everybody can get to his restaurants, and people want
Speaker 7: to get there, So you wanted to put something in
Speaker 7: the jar that represented the restaurant and allowed people to
Speaker 7: taste the experience of Carbone. And that's why we're so
Speaker 7: passionate about what goes in that jar, tasting better than anything.
Speaker 7: Our recipes on our site were developed by Carbone chefs
Speaker 7: so and we've kind of kept them simple so the
Speaker 7: home cook can make it, but they're really good recipes.
Speaker 3: Does it create a significant revenue stream potentially? I mean,
Speaker 3: you understand this industry, we didn't. You know, you're a
Speaker 3: former CEO RAOS. You know someone who's been in the
Speaker 3: food and beverage, but you know area for a long time.
Speaker 3: Is it something though, when you have a name that's
Speaker 3: known that you can build a significant revenue line.
Speaker 7: Yeah. Yeah, I mean we just finished our third full year.
Speaker 7: We've done eighteen million jars since we launched. We're in
Speaker 7: twenty four thousand accounts, and we're the number seven brand
Speaker 7: in America, number two in natural foods. So it's went very,
Speaker 7: very fast, and it is in large part because we
Speaker 7: had a name that we could leverage from an awareness standpoint.
Speaker 7: You know, awareness was not massive in the Midwest Midwest,
Speaker 7: for example, but it was known certain by enough people
Speaker 7: to start something. Yeah, and then you know, then the
Speaker 7: blocking and tackling happens of building a brand.
Speaker 4: Okay, so this is not your first rodeo, as Carol mentioned,
Speaker 4: your first Red Sauce rodeo twenty sixteen to twenty eighteen
Speaker 4: CEO of REOs. That was the period it was acquired
Speaker 4: by Sovos from more than four hundred million dollars. Then
Speaker 4: a couple of years later I believe it was what
Speaker 4: twenty twenty one, twenty twenty four, Yeah, twenty twenty four, Yeah,
Speaker 4: when it Sovos closed its acquisition, or when it SOLS
Speaker 4: was bought by Campbell's for two point seven billion dollars.
Speaker 7: Yeah.
Speaker 4: Obviously some big growth in the space over the last
Speaker 4: few years. What do you see as driving the growth
Speaker 4: and how much growth is left in sort of the premiumization.
Speaker 7: I think it's significant because of the premiumization. You know,
Speaker 7: Reo started that trend when they put the first jar
Speaker 7: on the shelf in nineteen ninety two. So if you
Speaker 7: think about it's a long time ago. So this has
Speaker 7: been a long slow build the consumer. And you think
Speaker 7: about other categories like craft beer, right that premiumized years ago.
Speaker 7: So ice cream premiumized with Ben and Jerry's years ago.
Speaker 7: The premiumization in every category is happening. Pasta saus finally
Speaker 7: got its turn, you know around twenty fifteen, twenty sixteen
Speaker 7: where it started to really really drive from a premiumization standpoint,
Speaker 7: and people are just looking for healthier, better ingredients.
Speaker 3: Listen, I can't tell you. I've got a twenty one
Speaker 3: year old and the same thing. We turn everything around
Speaker 3: and we want to know what's in it, and we
Speaker 3: want to make sure we understand the ingredients. I am
Speaker 3: curious how big you think it can be, how big
Speaker 3: you want this brand to be, and is it a
Speaker 3: case of you're going to follow the model of selling
Speaker 3: it off at some point?
Speaker 7: You know, there's no decisions made. My partners are young, Jeff,
Speaker 7: Mario and Rich are in their forties, right, I'm the
Speaker 7: old guy in the room, and I love what I do,
Speaker 7: so I'm in no rush, and I actually I would
Speaker 7: have never envisioned doing a startup. I went from raos
Speaker 7: to another run where I took a company through an exit,
Speaker 7: and I didn't want to do that, So that's why
Speaker 7: I went to startup. So we don't have a timeline.
Speaker 7: We believe there's a tremendous amount of growth, not only
Speaker 7: in Sauce but in Italian like we have a platform
Speaker 7: brand that I could if we wanted to go beyond.
Speaker 7: We see a significant amount of growth in Sauce in
Speaker 7: the next two to three years. So I'm not doing anything.
Speaker 7: I believe in maniacal focus when something's working, So it's
Speaker 7: working eight.
Speaker 4: To ten bucks roughly give or take you for a jar.
Speaker 4: Are you seeing any pushback from consumers on on higher
Speaker 4: price stuff as we speak.
Speaker 7: Not, I mean not that I'm seeing. I mean, of
Speaker 7: course people will make comments, you know, friends, friends in general,
Speaker 7: or my brother who waits till it's on sale.
Speaker 6: To buy it.
Speaker 7: But probably, But for the most part, I think, I mean,
Speaker 7: come up I think Raos has I you know, I
Speaker 7: give I give Rayos a lot of credit. And the
Speaker 7: people before me who built Rayos slowly and painstakingly, right,
Speaker 7: they really did a good job and they built a model,
Speaker 7: and they built they built a category, so that eight
Speaker 7: to ten is not sticker shock for everybody anymore. It
Speaker 7: is for certain people. And I get it. But once
Speaker 7: you try that product, the amount of care we put
Speaker 7: it into what goes in that jar, it's worth it.
Speaker 4: Here's a problem, Carol. What feeding your kid the pasta
Speaker 4: sauce that you buy as adults, because then they get
Speaker 4: hooked on it, and then you find yourself in situations
Speaker 4: like us ordering huge jars and then they're like, I
Speaker 4: want you know, that's a problem. I mean, that's the
Speaker 4: expensive pasta sauce.
Speaker 3: And that's the thing. I mean, not every pasta sauce
Speaker 3: is the same, no doubt about it. How do you
Speaker 3: manage the growth or the expansion of the brand in
Speaker 3: a careful, thoughtful way, and do you need to.
Speaker 7: Yeah, of course I do. I think brand is everything,
Speaker 7: so you have to make sure it's working before you know,
Speaker 7: if you've got initiatives and something's not working, fixed that
Speaker 7: before you moved it the next thing. Right, We grew
Speaker 7: fast because it was working. But had I saw, you know,
Speaker 7: some resistance, I would have worked on figuring out that
Speaker 7: resistance before I expanded. I started. I started in the Northeast,
Speaker 7: and my intention was to stay there for eighteen months,
Speaker 7: but within eighteen months I was national, right, and I
Speaker 7: didn't expect that the intention was to go slow. I
Speaker 7: didn't expect it to go as fast.
Speaker 3: As its stores were asking for you guys, or what.
Speaker 7: We had stores asking for us. We had, yeah, I
Speaker 7: mean all everything, you know. The customer that I thought
Speaker 7: would adopt it immediately took a year and a half,
Speaker 7: which was Whole Foods, but you know, we were we
Speaker 7: started in twenty one. Yeah, pandemic luck going on, buyer changes,
Speaker 7: you know, so on and so forth. So it took
Speaker 7: a little longer with that particular chain. But now if
Speaker 7: you go into Whole Foods, were very well represented.
Speaker 4: Hey, one thing I noticed about your career is you've
Speaker 4: been in this industry for decades at this point, and
Speaker 4: you started off. You've really rode the wave of different
Speaker 4: trends at different points in your career, like the juices
Speaker 4: in the early part of the career like fresh Semantha's
Speaker 4: Naked on Wallas and those sorts of things, and then
Speaker 4: popcorn rayos a little later in your career. What's what's
Speaker 4: the trend that you're seeing play out right now? Sort
Speaker 4: of the next trend?
Speaker 7: It's really hard to say. In today's world. It's gotten,
Speaker 7: it's gotten muddy. But any anything that's going to be
Speaker 7: higher protein is on point. You you know, you did
Speaker 7: a segment on g LP once. That's going to drive
Speaker 7: I think new innovation that's real, right, and healthy innovation.
Speaker 7: Everything points to at least the doubling in usage in
Speaker 7: a last in the next call it five years, and
Speaker 7: the households that are on it, they're actually showing a
Speaker 7: decline and how much they purchase a grocery stores, So
Speaker 7: it's interesting much bigger decline and convenience stores because if
Speaker 7: you think about snacking, right, that's that's what's going to
Speaker 7: get hurt. Right. I think good food is always going
Speaker 7: to do well. That's that's the way I look at
Speaker 7: and healthy food because those people I you know, just
Speaker 7: having interview a couple, they tend to get healthy. Some
Speaker 7: of them tend to get healthier at the same time.
Speaker 7: Necessarily are looking for better ingredients.
Speaker 4: Is it like the visceral reminder that you're stabbing yourself
Speaker 4: with don't know, a.
Speaker 3: Pen I think, you know, I know initially from folks
Speaker 3: who've done it too. I mean, they don't like the
Speaker 3: taste of food, right, and so they kind of, I
Speaker 3: don't know, they almost kind of go through a little
Speaker 3: bit of a cleansing to some extent, and think, I
Speaker 3: don't know, it's just interesting to watch.
Speaker 7: That could be. I do have a daughter that is
Speaker 7: using it, and that when I say I inter read someone,
Speaker 7: it's close close to me. Yeah, but you know she's
Speaker 7: like at Barry's boot camp in the morning now and like,
Speaker 7: you know, really healthy, which is great cool.
Speaker 3: You do wonder if it's a case of and not
Speaker 3: necessarily for your daughter, but others who tried to lose
Speaker 3: weight couldn't lose weight, or whether it's because you know,
Speaker 3: they're diabetic or whatever. And finally, Ken and I think
Speaker 3: it feels really good. They feel so much healthier, and
Speaker 3: I think want to kind of stay in that place
Speaker 3: would be would be my gut. But so I'm curious
Speaker 3: if gop one is really ultimately the driving force in
Speaker 3: a lot of the food companies. Is it upstarts that
Speaker 3: all of a sudden become the giants or do the
Speaker 3: giants have to buy the upstarts because they've got to
Speaker 3: catch up and they evolve, they're disruptive, Like, how do
Speaker 3: you see that play now?
Speaker 7: I think it's all the above. I think you have
Speaker 7: new product development going on in big food already. Would
Speaker 7: be my bet. I mean I don't know that certainly,
Speaker 7: but that would be my bet. And they're going to
Speaker 7: look at upstarts because sometimes buying growth is easier than
Speaker 7: creating it.
Speaker 4: That was Eric Skaye, CEO of Carbone Fine Food.
Speaker 3: Still ahead on Bloomberg Business Week Fire Cooking with the
Speaker 3: King or a three hundred year old violin, not any
Speaker 3: old violin, I should.
Speaker 4: Say, so off its hour? What to spend your bonus on?
Speaker 4: That's next? This is Bloomberg.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern Listen
Speaker 2: on Apple CarPlay and Android Auto with the Bloomberg Business app,
Speaker 2: or watch us live on YouTube.
Speaker 3: Yeah, it's bonus season. If you're one of the lucky
Speaker 3: for you who are looking for something to spend that
Speaker 3: money on rather than spending it on I don't know,
Speaker 3: tuition or bills and necessities. Well, we've got you.
Speaker 4: Covered everything from transparent TVs to ice baths to fire
Speaker 4: cooking with the King with more. We checked in with
Speaker 4: Chris Rouser, the editor of Bloomberg Pursuits.
Speaker 9: So Wall Street bonuses are supposed to be up about
Speaker 9: ten percent this year. So for the Right Stuff page
Speaker 9: in Bloomberg Business Week and the next issue, we had
Speaker 9: some We brought together a little bit of inspiration and
Speaker 9: insight from our readers about what they're fantasizing about what
Speaker 9: they might want to buy, what the biggest mockers are
Speaker 9: going to get into this year, And one of them
Speaker 9: was a cold plunge. Yeah, there's a collaboration between Cohler
Speaker 9: and Remedy Place, which is a little sort of a
Speaker 9: wellness spot company, and you can get a cold plunge
Speaker 9: in your own house, so you can plunge into forty
Speaker 9: degree water and sit in there for up to six
Speaker 9: minutes while you're listening to music and resting on a
Speaker 9: pillow and presumably screaming and crying.
Speaker 4: Or the Bloomberg Business Week, the Bloomberg Business Week podcast.
Speaker 4: I've done, have you done a cold plunch?
Speaker 6: Chris?
Speaker 4: Have you done cold plunch?
Speaker 9: I have, but not for six minutes.
Speaker 4: No, that's what I was going to say. I did
Speaker 4: one minute. I did one minute. But that's what they
Speaker 4: reckon this one. Thank you, Carol. You've never done it,
Speaker 4: so I don't know what you're saying.
Speaker 3: Iod cold water, but so this sounds like goes why why?
Speaker 4: This one also goes up to one hundred and four
Speaker 4: degrees so you can have a life.
Speaker 3: So okay, then I'm in. Then I'm in, Chris. I
Speaker 3: am curious because there's some really great things. What's like,
Speaker 3: what's the thing you would want?
Speaker 9: Well, you know the answer to that, Carol, I would
Speaker 9: want to watch. We have a show hard Watch, which
Speaker 9: has not only a turbion, which is a very rare complication,
Speaker 9: but also a perpetual calendar, which is like the geekiest
Speaker 9: thing that watch collectors love. It keeps track of the day, months, dates,
Speaker 9: and year across leap years. But and Chparte has this
Speaker 9: new great one, luc one, but it is pricey. It's
Speaker 9: one hundred and eighty four thousand dollars and you could
Speaker 9: just inspiration. You could get something at a wide variety
Speaker 9: of price ranges for your wrist.
Speaker 3: All right, something more kinto that maybe that I would
Speaker 3: like the Cardier I was saying. I said to Tim
Speaker 3: coming into this, Chris, I'm like, most of this stuff
Speaker 3: feels like it's for dudes, but there is something a
Speaker 3: Cardier necklace that women who are getting bonuses might be
Speaker 3: interested in.
Speaker 7: Yeah.
Speaker 9: So this year last year actually was one hundredth anniversary
Speaker 9: of Cardier is Trinity Collection, which is there. You've seen
Speaker 9: people wearing it, everybody copied it. It's interlocking rings of
Speaker 9: yellow gold, white gold, and rose gold, and it's become
Speaker 9: very popular. They've been pushing it for its one hundredth
Speaker 9: anniversary and new there's a new iteration of it, which
Speaker 9: is little squares instead of little rings, and they've done
Speaker 9: it in rings and bracelets. And this is a necklace
Speaker 9: which is just like gold tumbling down your neck, which
Speaker 9: we really liked.
Speaker 4: Okay, I too. You know which one the thing on
Speaker 4: this list that I.
Speaker 9: Would want dRIT to various Nope, the Glen Live Nope,
Speaker 9: The speakers nope.
Speaker 4: The France Melman Nope.
Speaker 3: The meat yes, the cooking thing.
Speaker 4: The cooking Sorry, he wants the meat. It's more than
Speaker 4: just a cool you know, I like experiential stuff. Fire
Speaker 4: cooking with the king sounds pretty cool.
Speaker 9: So Francis Malmon is sort of a legendary chef and
Speaker 9: he's famous for well also being able to like go
Speaker 9: out in the wild and like eat things he finds
Speaker 9: and kills, but also for cooking over fire and like
Speaker 9: a not a grill, like a fire built with wood
Speaker 9: with a ring of stones around it, and he will
Speaker 9: teach you how to do it. And for the first
Speaker 9: time ever, he's offering little trips where you can go
Speaker 9: to his private island in Patagonia and you can learn
Speaker 9: from him for a week. And it seems very cool
Speaker 9: and very exclusive and just like really experiential because of
Speaker 9: the land where it is, what he teaches you, and
Speaker 9: you can do it with a small group of friends.
Speaker 3: All right, So we know if Tim is taking off
Speaker 3: the dates March twenty first through the thirtieth, I know
Speaker 3: exactly then what you're doing. It's only what twenty one
Speaker 3: four hundred at a pump?
Speaker 4: Yeah, but it's for five days, yeah, I know.
Speaker 3: So are you going to take anybody for.
Speaker 4: Twenty yeah, four thousand bucks a day? It's okay?
Speaker 9: I mean, Tim, what other two people. Are you going
Speaker 9: to take other than Chris and Carol?
Speaker 4: That's right, Jil, we're not allowed to take vacation at
Speaker 4: the same time.
Speaker 6: That's right.
Speaker 4: We're sorry, Chris.
Speaker 3: It's just we're not allowed to fly together. We're not
Speaker 3: allowed to No, just kidding.
Speaker 4: There's something on this list.
Speaker 3: Where are you going?
Speaker 4: That is? I think many people would say priceless, yet
Speaker 4: for a price it might be yours. We're talking about
Speaker 4: a stratavarius.
Speaker 9: Yes, so strata various violins. They're actually a fair amount
Speaker 9: of them still bopping around and you can play them.
Speaker 9: They still sounds of everything. And one which is called
Speaker 9: the joke im Strata Areus was owned by the New
Speaker 9: England Conservatory Music and they are auction it off this
Speaker 9: year next month so that someone else can buy it
Speaker 9: and they're going to use the proceeds to do music
Speaker 9: scholarships and stuff and so. But for years it's been
Speaker 9: in their hands and students have played it, so you know,
Speaker 9: they're hoping that it finds its way into an enthusiast hands.
Speaker 9: The low estimate is twelve million dollars and it's the
Speaker 9: only one for sale currently, so it is a stretch
Speaker 9: and it is one of those inspiration things, you know,
Speaker 9: reach reach for the stars. But the previous one, the
Speaker 9: previous record is fifteen point nine million forest ratuv areas,
Speaker 9: though it could go for more than that.
Speaker 4: That's Chris Rouser, the editor of Bloomberg Pursuits.
Speaker 3: The Grammys are this weekend, taking place in the Crypto
Speaker 3: dot Com Arena in Los Angeles. Ninety four categories in
Speaker 3: the music industry recognized. It is billed as music's biggest
Speaker 3: night and will be an evening with an additional focus
Speaker 3: to raise funds to support relief efforts and aid music
Speaker 3: professionals impacted by the wildfires in la.
Speaker 4: Just ahead of the event, we caught up with Harvey Mason,
Speaker 4: CEO of the Recording Academy, it's the organization behind the Grammys.
Speaker 4: He's also a record producer, songwriter, and film producer.
Speaker 10: It's going to be a very different show. We are
Speaker 10: based here in La as are many of our creative
Speaker 10: community members and members of the Academy, so we've been
Speaker 10: affected by these fires. We are going to set a
Speaker 10: different tone on the show. We're still an honor music.
Speaker 10: We're gonna have you performances and awards, but we're also
Speaker 10: going to raise money. We're going to raise awareness, Shawn
Speaker 10: a spotlight on some of the heroes that have been
Speaker 10: saving home, saving lives. So we hope we can be
Speaker 10: a light in a time that's been pretty dark for
Speaker 10: a lot of people.
Speaker 3: Yeah, no doubt about it. And you know, we've had
Speaker 3: some conversations with folks in various industries who have been
Speaker 3: impacted directly. What can you tell us about I hope
Speaker 3: your family and your community are well, but I am
Speaker 3: curious what you can tell us about firsthand and what
Speaker 3: you are hearing about. Folks in the music industry who
Speaker 3: have been impacted.
Speaker 10: Well, I can tell you a lot because we're hearing
Speaker 10: from them every day, all day long. People in our
Speaker 10: community are struggling. Obviously, I'm safe and I'm fortunate, thankfully
Speaker 10: my house is and my family or my house and
Speaker 10: my family are okay. But the music community has been
Speaker 10: hit very, very hard. Music Cares, which is our philanthropic affiliate,
Speaker 10: we're getting hundreds of requests a day for help for
Speaker 10: just basic needs, food, shelter, water, and now we're going
Speaker 10: to start seeing a second wave of the need, which
Speaker 10: is instruments. Studios have been burned down, guitars have been ruined.
Speaker 10: There's so many people in our community that are going
Speaker 10: to struggle to make a living after this fire.
Speaker 4: Yeah, and I wonder, you know how long if there's
Speaker 4: like a concern. I mean, we talk a lot about
Speaker 4: Hollywood and the struggles at Hollywood has seen over the
Speaker 4: last few years, given COVID, given the strike, given the
Speaker 4: way that movies and TV are now shot all over
Speaker 4: the world instead of in Hollywood, less and less so
Speaker 4: in Hollywood. Are you concerned about the music industry moving
Speaker 4: away from Southern California.
Speaker 10: I believe there's always going to be a to be
Speaker 10: in Southern California, the creativity, the infrastructure, the other things
Speaker 10: that are here. But of course I'm concerned. I'm concerned
Speaker 10: for our members. We have over twenty five thousand members
Speaker 10: that are part of the Academy. I want them to
Speaker 10: be safe, I want them to be healthy. I want
Speaker 10: them to have an opportunity to make a good living.
Speaker 10: Many of our members are not the superstar as you
Speaker 10: see on that stage back there. They're the working class
Speaker 10: people that come to work every day, or play in
Speaker 10: a restaurant or play a small tour. So yes, I
Speaker 10: want to make sure they're able to make a living.
Speaker 10: So we have a lot of things to work through.
Speaker 10: But this week, specifically, we're going to be honoring music
Speaker 10: and we're going to be hopefully doing it in a sensitive,
Speaker 10: thoughtful way that can also raise money for fire victims.
Speaker 3: Hey, one of the things I wanted to ask you,
Speaker 3: or we wanted to ask you, Harvey, is you are
Speaker 3: the first black CEO of an organization that has been
Speaker 3: around for many decades and that has sometimes been criticized
Speaker 3: for a lack of diversity among its voting members. And
Speaker 3: even so, you know, in terms of when determining awards,
Speaker 3: maybe concerns about racial bias. The environment that we're in
Speaker 3: today had President Trump setting actions that aim to block
Speaker 3: DEI practices across the federal government. Another initiative in terms
Speaker 3: of the FAA dealing with diversity.
Speaker 10: How are you looking at You're saying that I'm Are
Speaker 10: you saying I'm a diversity higher?
Speaker 2: No?
Speaker 3: No, No, I'm not, I'm not.
Speaker 4: I'm just you know, I know exactly what you're saying.
Speaker 10: And I have to say, yeah, I have to say
Speaker 10: that when I came into this role, I had some
Speaker 10: of the same concerns. There were things about the organization
Speaker 10: that I felt needed to be changed. Our membership was
Speaker 10: not diverse. Some of our awards processes were out of
Speaker 10: date and being affected by systemic history of lack of
Speaker 10: diversity in certain parts of our community. But we've made
Speaker 10: a lot of changes. Right now we're forty percent people
Speaker 10: of color, and I think it's really relevant as it
Speaker 10: relates to music into the academy, it's not performative. The
Speaker 10: people that are making the music and the genres that
Speaker 10: are popular and the consumption habits are very reflective now
Speaker 10: by our membership, our voters are now reflecting who's making music,
Speaker 10: which genres are popular.
Speaker 3: And I guess what I wanted to add ask you
Speaker 3: is that to have this come out of the federal government,
Speaker 3: by the leader of the free world, the President of
Speaker 3: the United States, looking to block the initiatives and government,
Speaker 3: what happens in your community? Do things change or do
Speaker 3: people continue to focus on the importance of diversity. Do
Speaker 3: they continue to stress it? I guess going forward, I'm
Speaker 3: not sure what.
Speaker 10: Everyone else is going to do, but we are going
Speaker 10: to continue to stress it because it's relevant applicable to
Speaker 10: our industry. Music is very creators, artists, people who make
Speaker 10: this magic. This music come from different parts of the world,
Speaker 10: different types of people, different races, So for us it
Speaker 10: is important and we can't hope to evaluate music, and
Speaker 10: that's what we're doing is very subjective. We can't evaluate
Speaker 10: music without having a wide spectrum of opinions and thoughts
Speaker 10: and beliefs. So for us, diversity is always.
Speaker 3: Going to be very, very important, totally great. It's what
Speaker 3: we love about music. Hey, Harvey, what are you looking
Speaker 3: forward to at the Grammy Sunday?
Speaker 10: Oh my gosh, there's so many things and the stage
Speaker 10: is absolutely beautiful. We're going to have incredible people to
Speaker 10: get We're gonna have a chance for our music community
Speaker 10: to really come together. It's gonna do good for some
Speaker 10: financial reasons, but it's also gonna do good for the
Speaker 10: city of La resilient nature of music is gonna bring
Speaker 10: the city back and at least help to bring it
Speaker 10: back a little bit for three hours at least, and
Speaker 10: then it's gonna be just time for the community to
Speaker 10: hug and share stories and maybe have some emotional moments
Speaker 10: together because it has been a trying time for.
Speaker 7: All of us.
Speaker 4: That's Harvey Mason, CEO of the Recording Academy. The Grammys,
Speaker 4: by the way, airing live on CBS and Paramount Plus
Speaker 4: on Sunday Highlights two at Live dot Grammy dot com.
Speaker 3: And that wraps up the weekend edition of Bloomberg Business
Speaker 3: Week from Bloomberg Radio. Thank you so much for joining us.
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Speaker 3: I'm Carol Masser. Have a good and saved weekend. Everyone.
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