Morning Brew Daily - Markets Prepare for Hurricane Milton & Whole Foods Shoppers Hate 'Skimpflation'

Episode Date: October 8, 2024

Episode 426: Neal and Toby talk about Hurricane Milton which has picked up a considerable amount of wind speeds and rainfall in the last 24 hours and why Tampa Bay is particularly vulnerable. Then, when it comes to reaching out to voters, traditional media is out, podcasts are in as both presidential candidates use these emerging spaces to get their campaign messages out. Plus, the Supreme Court hears a challenge to gun laws that have crippled gun manufacturers and the making of ‘ghost guns’. Meanwhile, Whole Foods felt the fury of fanatic lovers of the cherished Chantilly Cake when they tried to change the recipe. They found out. And, Americans are staying home more than ever…and it’s been happening way before the pandemic. Lastly, a Qantas flight apologizes for showing an R-rated film to all the passengers that had parents trying to explain to their kids what ‘sexting’ was.  Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. To learn more about how Wise could work for your business, visit https://wise.com/business/  Get your Morning Brew Daily T-Shirt HERE: https://shop.morningbrew.com/products/morning-brew-radio-t-shirt?_pos=1&_sid=6b0bc409d&_ss=r&variant=45353879044316  Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow 00:00 - MBD Mailbag 02:45 - Hurricane Milton  08:30 - Podcast Platform 12:45 - Ghost Guns 18:30 - Toby’s Trends  22:00 - Whole Foods Cake  25:15 - Bad Plane Movie  Learn more about your ad choices. Visit megaphone.fm/adchoices

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Terms and conditions apply. Good morning, Brew, Daily Show. Neil Fryman. And I'm Toby Howell. Today, Hurricane Milton is leaving meteorologists at a lost four words as it heads toward Tampa. Then why podcasts could be the deciding factor in this year's presidential election. It's Tuesday, October 8th. Let's ride. Morning Brew Daily has been chugging along nicely for 426 episodes at this point, but it's been a while since we've checked in with you all. So Neil, I figured it's time for a Morning Brew Mailbag episode. Good idea, Toby. If you have any questions, you'd like to hear us weigh in on how the Fed's rate cuts will impact you. Does OpenAI have a sustainable business model? Is Joe Flacco elite? Does hair and makeup actually exist? Now is the time to ask. Feel free to keep it news cycle focus or MBD focus if you'd like to know more about what life is like at the brew.

You know, last mailbag episode, someone asked if we'd rather fight 100 duck-sized horses or one horse-sized duck. So you can get hypothetical and weird if you want. Whatever direction you go, send your burning questions to morning brewdaily at morningbrew.com. Yep, giving you permission to pause the episode now and email us your question at morning brewdaily at morningbrew.com. And this episode will air on next Monday. Now, a quick word from our sponsor, Wise Business, the app for doing things. in other currencies. Neil Wise has been our sponsor for the last month or so, but like any good podcaster should, why don't you give Morning Brew Daily listeners a refresh on exactly what it does?

Outside of being an awesome sponsor, Wise helps businesses handle international payments effortlessly, so you can pay and get paid in multiple currencies without hidden fees or inflated exchange rates. Tell them about the security stuff too. Well, Wise has a customer support team that's available 24-7, plus they require two-factor authentication to ensure your money stays secure. You are nailing this ad, Neil. You should really explain stuff for a living. Well, I have been thinking about starting a podcast, breaking down the latest business news. Nah, would never work. But Wise does. For anyone needing a smarter way to manage money globally, visit wise.com slash business. That's wise.com slash business.

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You win? Details at yamava.com must be 21-20. Please gamble responsibly. Monopoly is a trademark of Hasbro. Hasbro is not a sponsor of this promotion. For the second time in three weeks, the west coast of Florida is bracing for a powerful, life-threatening hurricane to land on shore, and this one could be far worse than the first. Even as residents are still picking up debris from

Helene, they're staring down Milton, which strengthened to a Category 5 powerhouse Monday with sustained winds of 180 miles per hour as it churns across the Gulf of Mexico. If you're thinking Category 5, what? Well, Milton grew from a Category 2 to a Category 5 in the span of a few hours yesterday before weakening a bit to a category four this morning. It's expected to make landfall as a major hurricane on Wednesday afternoon. And where it makes landfall could make all the difference between extremely bad hurricane and historically catastrophic storm. Milton is cutting a path toward the Tampa metro area. And if it hits there, it'd be really bad news. Because of its topography and a recent population growth spurt to coastal areas, Tampa is considered

one of the most vulnerable places in the U.S. and even the globe to severe flooding from a powerful hurricane. It's been spared a direct hit for over 100 years since 1921. But Milton could change that. It's worth stressing just how intense and nearly unprecedented this storm is. A meteorologist at Fox 35 in Orlando tweeted, this is nothing short of astronomical. I am at a loss for words. This hurricane is nearing the mathematical limit of what Earth's atmosphere over this ocean water can produce. And markets are already reacting in a big way. Shares of backup power generation company Generac Holdings surge more than 8% to a 52-week high, so they're expecting many power outages.

Insurance stocks that have weather catastrophe exposure, all state travelers, Chubb, all saw their shares falling more than 4% on Monday. And then Orange Juice Futures, a major industry in that area in Florida rose 4.3%. Yeah, and if it hits Tampa, it is bad news. is Tampa specifically so vulnerable? One, it's just got a ton of shoreline, over 700 miles of shoreline. And to you're right, it has seen this huge population influx.

More than 3.2 million people live in the Tampa, St. Petersburg, Clearwater, metro area. It's growing by more than 180% in the last 50 years. Even the areas around it as well, Northport, Sarasota, Bradenton area, that's growing 283%. So there are a lot more people, more vulnerable to rises in sea level,

as well as more people live on the barrier islands surrounding the area. And as you mentioned, just the general topography of the area being very close to sea level. Those are some of the reasons why this could just be a calamitous storm, even if it weakens from its category five down to that category four or three range. Right, which is expected to do before it makes landfill, but they're still saying it's going to be major. And we've seen just billion-dollar disasters absolutely skyrocket over the past few decades last year. there were $28 billion weather and climate disasters.

And while storms are getting bigger because of climate change, one of the big reasons why we've seen so many more expensive billion-dollar disasters is that people are just moving into vulnerable areas like the Tampa Metro area. There are these 11 barrier islands where there's just been insane amounts of development and construction as the population has boomed there. So we had $28 billion weathering climate disasters in 2023. In the 1990s, it never got above 10. that is one reason why is just the population growth in areas where they are experiencing

disasters. And Tampa is one of the top ten places on the globe that is most vulnerable to them. What's interesting, though, is that a lot of people did move to the west coast of Florida because they thought it didn't get hit as hard by hurricanes like the East Coast does. So it's seen this huge developmental boom driven by almost a lack of hurricane activity, which is how you end up with these housing developments on barrier islands. and developers maybe let their guards down a little bit because, again, you said it's been since 1921

that it's had a direct hit. So you get lulled into almost a false sense of security. Speaking of maybe lulled into a false sense of security, Tampa's main hospital is also built on an island, which sounds like a crazy thing to say as a hurricane is bearing down on it. They do have measures they can use to protect it. They installed this fence called an aqua fence that can keep out floodwaters up to 15 feet,

but it is just crazy to see some of these, kind of developmental decisions in the eyes of a, when you put it in context of a hurricane bearing down upon it. So just a lot of maybe head scratching decisions that seemed fine at the time but no longer seemed fine with this hurricane. Yeah. So the big concern for Tampa is storm surge, which is when the hurricanes winds blow the sea level above to where it normally is. And they're saying for Milton it could get above 10 feet, the storm surge in Tampa Bay, which, which is this enclosed area where there's just not enough air space for the water to go, and then it goes on land.

And it was half of that 10 feet for Helene, and it caused several dozen deaths in that county in the St. Petersburg County. And this could be double that. So that's really what they're concerned about here with Tampa, the flooding from the storm surge, which could be at record levels. As always, where the storm makes landfall could be the difference here. If it veers a little bit, if it veers north, it could bring. these high winds, these dangerous storms, or just if it goes a little bit south of Tampa Bay

region, will likely be spared a little bit. So again, even just a few miles can make all the difference here. Vice President Kamala Harris's interview with Alex Cooper on Call Her Daddy came out this weekend, but the discourse surrounding her appearance is still going strong. People on all sides of the political and media spectrum are weighing in. Some lobbed criticism at Harris for dodging harder interviews in favor of softball sit downs, appealing more to millennials in general. Z. Others feel like Alex Cooper alienated part of her audience by agreeing to talk with Harris, though Cooper did mention she had offered an interview to the Trump campaign as well. Through the whole saga, it's clear that there's really only one clear-cut winner here.

Podcasts. Both candidates, Trump and Harris, have shunned some traditional media appearances in outlets in favor of jumping on your favorite shows. Trump has done interviews with podcasters like comedian Theo Vaughn and Lex Friedman, while Kamala Harris, Harris chose call her daddy, and it's 5 million-plus weekly listeners as her outlet of choice. But, Neil, this is not your mother's election media strategy. No, just take it from Kamala Harris's opponent, former President Trump, who when he was appearing on Lex Friedman, he just told Lex. He said, to get the word out is important in politics, and television is a little bit older and maybe less significant when talking about the online sphere, like podcast. Trump said, I just see that these platforms are starting to dominate.

They're getting very big numbers, which is true. I mean, when you look at Call Her Daddy, it's the second most popular podcast on Spotify after Joe Rogan. It's the most popular one for women ages 18 to 24. So if you are looking for a big audience and where the attention is going, as you are for a political candidate with 30 days left before the election, then you're absolutely looking to these podcast rather than traditional media. Traditional media is not so happy about it, of course.

But these are where the eyeballs and the earballs are going. And so it's not a surprise to see more media savvy political candidates starting going on these podcasts. Right. You can either sit down on maybe a CNN or you can go on Call Her Daddy. One will get distributed multiple times via social media, the behemoth that is Call Her Daddy, giving it a lot more legs to sort of creep around the Internet, not to mention the millions of downloads the episode itself will get.

So if you are in this game where you're trying to attract as much attention with 30 days to go, of course you're going to want to do something that has the potential to go viral. We've also been seeing this strategy play out across the business world as well. More and more CEOs are turning to podcasts

to get their message out. I mean, we had Mark Zuckerberg here to talk about his vision for meta when it comes to AI, AR, VR, etc. It's a much more natural environment to conduct an interview. These podcasts attract a large audience because precisely because they don't feel like mainstream media.

They are a lot more conversational. They don't come across like traditional media does. So CEOs like stepping into that environment to show that they can riff, that they can talk, that they can vamp alongside these podcasters. So definitely a shift from even a few years ago how first and foremost sounds like we're patting ourselves on the back here, that podcasts have become, especially when it comes to kind of the political spectrum. And critics would say it's a way for politicians to dodge really tough questions from, you know, seasoned journalists.

But Kamala Harris did go on 60 minutes, which is considered the toughest interview in the business last night. It's also a risk for these podcasters as well for Alex Cooper, who doesn't talk about politics, to bring a politician on. And she got a lot of hate from some of her fans. And she addressed it at the beginning of the show. She had this long soliloquy talking about why she had Kamala Harris on. She said, at the end of the day, I couldn't see a world in which one of the main conversations in this election is women and I'm not a part of it. But she still got hate. And she said she has an invite out to Trump and he just hasn't accepted.

But she felt the need to explain herself and explain why she was talking about politics on a show that does not have politics. So there are risks as well for these podcasts to get a little political. Halloween is just around the corner. so let's talk about ghosts, specifically ghost guns, which are at the center of a major Supreme Court case beginning today. Fresh off their summer vacation, the nine justices are being asked to decide whether President Biden's regulations of so-called ghost guns, which are untraceable firearms that can be built at-home DIY style or 3D printed are legal. The number of ghost guns has increased exponentially in the past few years. The amount at crime scenes jumped by a factor of

10 between 2016 and 2022. But after Biden's rules went into effect at the end of 2022, cities reported a dip. So city leaders, law enforcement, and the firearms industry are keen to see whether these regulations stay or go. And let's talk about those regulations because they are at the heart of this case. Two years ago, Biden amended the Gun Control Act of 1968, one of the main laws governing the commercial firearms market, to clarify that the definition of firearm also included a weapon parts kit that can readily be assembled into an operational firearm, a.k.a. a ghost gun sellers need to go through the same steps as commercial firearm manufacturers, such as marking their products with serial numbers, running background checks, and keeping transfer

records. But a group of sellers, dealers, individuals, and gun rights groups challenge Biden's rule change. And after a series of appeals, this case ended up here at the highest court in the land. Right. So the Biden administration was sitting looking at this data and seeing this huge spike in the number of ghost guns used in serious crimes. There's almost a tenfold increase between 2016 and 2022. So they sat down and say, how can we address this? And they did go and modify that 1968 gun control act where they said that, hey, these components actually do meet the definition of a firearm. But then gun rights groups argued that the majority of the consumers who purchase these components are actually doing so as hobbyists. They're doing so because they like building homemade guns. They painted this picture of them sitting in their cabins and just putting guns together like that.

They also pointed out that the overwhelming majority of firearms that are used in gun crimes around 85 to 90 percent are just manufactured professionally. So they're saying that this is not as big of an issue as you're painting it to be. But yeah, the Biden administration now has data that is a correlation or causation that they have seen the number of ghost guns seized at crime scenes falling a little bit. So you could point to that and saying, hey, this is doing exactly what we wanted to do. So that's kind of both sides of the aisle right there. Both sides are kind of the lines are being drawn in the sand. And you can see where both camps sit. Yeah, and they use some interesting business metaphors to try to bolster their points.

The Biden administration said that their regulation was similar to what you would consider putting on IKEA furniture. So, IKEA, when they sell you, you know, your bedding or a cabinet, they're selling you the components. But in the end, it is ultimately going to be a cabinet or a bookshelf or a bed. And they still have to pay taxes on that. There's not a way they can skirt around that. Meanwhile, the gun rights groups and the manufacturers who are challenging the rule said this is more like going to, a hardware stair or Home Depot and buying all of the components you need for a woodworking project. So those are the two metaphors that the Supreme Court justices will have to weigh when they're

deciding whether to strike down the regulation. And really, the entire industry is at stake here because last year, Polymer 80, which at one point was the country's largest manufacturer, online seller of components used to assemble these untraceable homemade weapons, which are called ghost guns. It's had to temporarily stop doing business because of the Biden administration's rules that force them to behave more like an above-the-board regular commercial firearms manufacturers. So they're all watching this decision closely. If the rules are struck down, this industry is set to grow. If not, then it could be squashed. Up next, you got Toby Trends coming your way. We're the Hartford, with decades of experience ensuring millions of unique small

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Even though our top story today was all about how fraught weather has made certain parts of the country, please do not let it dissuade you from going outside. Because as a whole, Americans are spending a whole lot more time indoors these days, a shift we have to talk about on today's edition of Toby's trends. According to U.S. Census data analyzed by the New York Times, the average amount of time spent at home increased by an hour and 39 minutes per day from 2003 to 2022, an increase that spiked during the pandemic, but has remained far above pre-COVID levels in the years since. Now, a few things could explain this. More people are working from home, so they'll naturally

be spending more time inside. Also, more of our leisure time takes place inside with things like eating and drinking, increasingly moving from the great outdoors to the great couch in front of the TV. You know, obviously this trend jumped exponentially during COVID, but spending 100 plus more minutes inside than in the mid-2000s is still much more normalized even as we emerge from the pandemic. It does seem like, I mean, obviously work from home is driving a big part of this, but also just more of our lives are able to be lived online.

And you're seeing that in the numbers as well. I mean, the biggest age group that are spending more time at home is younger people ages 15 to 34. They spend roughly two more hours at home on a typical day in 2022 compared with 2023. And it's not just that people are spending more time at home. It's they're spending more time at home alone, okay, McColley Colkin. For each additional hours spent at home, people spend an additional 7.4 minutes with family and 21 minutes alone, but five fewer minutes with friends. So if you are someone who is concerned about the loneliness crisis or you're the,

you're the Surgeon General Vivek Murthy, who you authorized a health advisory on the rise of loneliness and social isolation, saying it was an epidemic, then you're looking at these numbers and nodding and saying this is exactly what I'm talking about. People aren't socializing. People are staying at home and sitting in front of their screens. And it's truly astonishing a 10% increase over the span of two decades of people. just really not venturing outside the house. And that stat was about the amount of time that the youth were spending at home compared to 2003, not 2023.

But you are totally correct. So many of our institutions, churches, social clubs, even, I mean, there's that famous book, Bowling Alone, talking about how everything is moving towards a more socially isolated society, potentially with more adverse consequences as well. And you're right, loneliness isn't the same as technically being alone, but it does feel like there is a rise in loneliness as people spend more time alone. We are simply eating more at home alone. You can look at the religious activities numbers as well.

59% of religious activities took place at home in 2020, up from 24% in 2003. So just staggering amounts of our lives are moving more towards indoors, which I think anecdotally everyone kind of can understand. A lot of our lives do just happen inside. This is just your daily reminder. Make sure you get outside. Make sure you get some sunlight on your skin. Get that vitamin D.

Hell hath no fury, like a Whole Foods bakery customer sconed. In case you missed all the drama unfolding on social media, here is the TLDR. Whole Foods made a substantial change to one of its most beloved products. Customers complained loudly, and the chain backed down and restored the product to its former glory. The product is the Barry Chantilly Cake, a longtime standout of Whole Foods bakery.

apartment. You might have seen it at weddings, birthday parties, and other celebrations of life's milestones. People go crazy over it. So they weren't too happy when Whole Foods seemingly replaced the cake with a much worse version, kind of like casting Ben Affleck as Batman after Christian Bale. The original form of the cake had a spongy vanilla layers and whipped frosting dotted with fresh mixed berries. Yum. But what rolled out to stores recently replaced the fresh berry filling with a lame jam-like spread. Whole Foods said the reason for the change was to align the flavor profile, size, packaging, and price of the cake slices to make the product consistent across its more than 500 stores.

But customers had a different explanation. Skimpflation. Skimpflation, a cousin of shrinkflation, is when companies make under-the-radar tweaks to ingredients and quality as a cost-saving measure. In Whole Foods case, the tweak wasn't under the radar at all. Barry Chantilly cake lovers complained. loudly on social media, and in a rare move, the company said it had heard the concerns and was bringing back the OG version last Friday. You've heard of inflation. You've heard of stringflation. Now, this is

skimpflation. People were going absolutely in on this thing. Someone said on social media, it's now just a little English tea cake. It tastes like raspberry jam-flavored cleaning product. So this was a big deal, and a very noticeable example of skimplation. Sometimes skimflation goes more under the radar. A food company will substitute an expensive ingredient here for a cheaper oil or artificial sweetener there. A big industry that does this is chocolate a lot. If cacao prices start skyrocketing, they'll sub in some cheaper oils, palm oil to kind of be a replacement for it. So we are seeing more and more examples of this as some of these input prices rise, especially in the food industry. But this was just one that was so right in the face of consumers and to a product that they love so much that, of

course it was going to be called out. Yeah, I didn't know how viral or popular this product was, but Ray, our producers, was singing its praises earlier in that every celebration he goes through, someone seems to have this cake. So when you make a big change to it, people are going to be pretty upset. And we've seen this happen across many different companies now where they make a little change to their ingredients. They reduce the quantity. And obviously, I'm thinking about Chipotle here. People are very quick to point it out. And I think consumers are becoming much more, you know, sensitive and quick to post things on social media, when they see that they're not getting value in a period that we just come off of high inflation. There's just very more discerning about

what they buy and how companies are broadcasting these particular products and whether they're making any changes noticeable or unnoticeable. It's just a time where companies are on notice. Democracy for all its flaws is still one of the better systems for governing human that we've discovered, and yet sometimes letting people vote can lead to disastrous consequences. Such was the case on a recent Qantas Airlines flight from Sydney to Japan. Due to some technical issues, some passengers were having difficulty choosing individual movies from their in-flight entertainment screens. So after a request from passengers that they'd rather watch something than just stare at their reflections,

the crew polled some people, and the passengers voted to put on a movie to help the nine-plus hours in the air melt away. the movie that was chosen was the R-rated 2023 flick Daddio starring Dakota Johnson and Sean Penn. In this movie, there are multiple explicit shots ranging from sultry sex to full-on genital nudity and there were children on this plane.

So yes, sometimes voting can go wrong, at least when you're trapped in a metal tube 30,000 feet in the air with some people with god-awful taste in movies. Oh my God, this is a very kind of funny story. Quantis did offer an apology saying the movie was clearly not suitable to play for the whole flight when we sincerely apologize to customers for this experience. I think after like 40 minutes and people are like, what is going on?

Why is everyone being forced to watch this movie? You couldn't dim it. You couldn't turn it off. It was just playing across everyone's screen on this entire flight, including the kids. Parents raised a ruckus and they changed the movie to a more family-friendly flick. And the most confusing part about this is that they're, were more family-friendly movies available, and the people voted to watch Dadio,

which I think not that many people I've heard of. It might be the only people who saw this movie were on that plane. I mean, you had the fall guy, A Quiet Place Day 1, which, yes, is a scary movie. It's probably more appropriate than something called Daddy-O, and even Inside Out, too. So just not a good look. The real question here, Neil, is if you were tasked with choosing a movie for an entire flight,

What would, first of all, what's your process and then what do you think the movie that you'd choose would be? Probably I would choose a comedy because I want everyone to laugh. And when you see a comedy at the theaters, everyone's laughing together. And I would go to like the movies that I grew up with in terms of comfort food, dodgeball, Anchorman. All those, you know, that era of comedy were just so funny. Not family friendly whatsoever, though. So you'd be ejected from the plane as well. They're PG-13, though.

I think it's time to wrap it up. Thanks so much for starting your day with us and have a wonderful Tuesday. Quick shout out to my dad, a loyal MBD listener on his birthday. Hope the Phillies pull one out for you tonight. For any feedback questions or comments on the show, send an email to Morning Brew Daily at morningbrew.com. And please spread Morning Brew Daily far and wide to your friends, family, co-workers, or even just a rando on the street.

If you need some ideas on who to share it with, Toby has some inspo. I want you to share today's show with someone who loves the Barry Chantiliontile. cake. I feel like this thing has super fans, so send it to one of those super fans. Okay, let's roll the credits. Emily Milliron is our executive producer. Raymond Loo is our producer. Olivia Graham is our associate producer. Drew Magner is our technical director. Billy Minino is on audio. Hair and makeup took the day off to shop Amazon Prime Big Deal Days. Yes, that's starting today. Devin Emery is our chief content officer and our show is a production of Morning Brew. Great show day, Neil. Let's run it back tomorrow.