Morning Brew Daily - Snacks Are Out, Ozempic is in & Wearable AI

Episode Date: October 5, 2023

Episode 163: Neal and Toby discuss why investors are shorting snack stocks as Ozempic usage explodes. Plus the guys circle back on a couple of stories that have evolved over the last week, including the biggest healthcare strike in US history and why Maui is welcoming tourists again. The guys also share some startup companies they are keeping an eye on - some even focusing on AI you can wear. Then, Neal shares his favorite numbers from this week's news. And finally, FIFA has announced where the World Cup will be hosted in 2030. Listen to BOSSY Here: https://link.chtbl.com/bossyshow Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

Many employees can't afford a hefty medical bill that pops up out of the blue, but it happens. And employees who are financially stressed are, understandably, more likely to be distracted at work, costing their employers greatly in lost productivity. Luckily, AFLAC plans help with out-of-pocket expenses not covered by health insurance and can be offered at no direct cost to businesses. Learn more at aflac.com slash morningbruedaily. That's aflack.com slash morning brewdaily. Good morning brew daily show. I'm Neil Freiman. And I'm Toby Howl.

On today's pod, throw on that hoodie and crack open A LaCroix because we are going to showcase some startups trying to become the next big thing. Then the ripple effects of the recent OZemphic craze are spreading far and wide. We'll take you through some surprising industries impacted by the weight loss drug. It's Thursday, October 5th. Let's ride. To kick off the show, I want to quickly mention a new podcast that's coming to Morning Brew Nation. Longtime listeners of MBD might remember.

We did a special episode with Personal Finance with money with Katie a few months back. It was hugely successful. We all learned a ton. Well, Katie is teaming up with fellow Dynamo Tara Reid, the CEO of Apps Without Code, on a new podcast called Bossy. It's focused on women and entrepreneurship. It's going to be epic. The first episode is out this morning, and we definitely encourage you all to check it out. Yeah, Katie and Tara are the best.

They know more about personal finance and business building than we could ever hope to. Funny story, too, they were in the office recently recording some episodes. And here's the crazy part. They actually had a hair and makeup team. So we were jealous. But honestly, please go check out Bossy. The first episode just dropped today. We love Katie and Tara, and we know you will too.

Before we jump in the news, though, we have a quick word from our sponsor, Yahoo! Finance. Now, Neil, one thing we know as not financial advisors is that investing is hard. not just because it's hard to stay in the green, but because things like complicated jargon and information overload, make it downright difficult to make smart choices. That's where Yahoo Finance comes in. They are your purple guiding light in a sea of darkness. That's right, Toby, and you can use that purple light to achieve financial prosperity, however you define it,

one informed decision at a time. So even though the market might not be cooperating right now, and dang, it is not cooperating. At least Yahoo Finance gives you the tools you need to get ahead of the next bull, whenever it may come. So after this pod, head to finance.jahoo.com. That's finance.jahoo.com. It's time to refresh your yard during spring backyard days at the Home Depot.

Get low prices guaranteed on propane grills starting at $179, like the next grill 3-burner gas grill, or get $50 off a select Weber Spirit grill and bring big flavor to your backyard. Then set the scene with Hampton Bay string lights that bring it all together. Shop Spring Backyard Day, for seven days at the Home Depot.

Now through May 6th. Exclusion supplies to homebopo.com slash price match for details. Let's jump into our top start of the day where we're checking in on an old friend, OZempic. The diabetes drug turned miracle weight loss drug has frequently made headlines for the surprising alternative benefits it potentially offers like curbing addiction and improving cardiovascular health. So today we're going to dive in even further and look at some of the ripple effects this

drug is having across industries that you wouldn't accept. expect. First up is the airline industry. Now, obviously, weight is extremely important to the fuel efficiency of planes. The lighter a plane, the less fuel it consumes. So what might happen if passengers on the whole started to weigh less? Well, using United Airlines as an example, one Jeffrey's analyst found that it could save $80 million a year on fuel costs if every passenger lost 10 pounds. Neil makes a lot of sense now that I think about it, but seeing that $80 million number on paper is still mine volume. Yeah, airlines have done everything possible to make their planes lighter because fuel is among their top two costs. I don't know if you've noticed, but there's no magazines anymore.

The trays that the attendants bring down the aisles are lighter. So if everyone on the plane is just a little bit lighter, it could save them a lot of fuel costs. There's been a wave of analyst reports. I would just say in the past few days and past few weeks talking about the quote-unquote's non-medical side effects of Ozambic and Wagoe, because these things, if adoption is as expected, these things are going to be so profound. Some analysts say that it could have as big an impact as AI. And when we talk about AI, you're like, okay, well, AI is going to be in the hardware business. It's going to affect literally everything. Everyone needs to talk about, and everyone needs to infuse AI into their corporate strategies. And if you believe

some of these analysts, people who are watching this industry, then the same thing is going to happen with Wagoe, OZempic, and nearly every other weight loss drug, that is coming onto the market. Yeah, the implications of a so-called slimmer society go far and wide, and let's just jump into the next industry. I want to talk about the showdown between big pharma and big food. So food companies have doubled down on snack foods recently. Remember, we just saw smuckers by hostess for $5.6 billion last month as it moves further

into kind of the unhealthy food aisle. But if Ozempic and other weight loss drugs are as effective at making people eat less as they appear to be, the snack food industry is in for a world of, of hurt. Morgan Stanley found that nearly 7% of the U.S. population could be taking one form of these weight loss drugs by 2035, and if that were to be the case, consumption of baked goods and other salty snacks could fall 3% or more. So Big Farmer versus Big Food Neal. It's going to be a crazy one to all. Yeah, and what was interesting, what happened this week on Monday was that Kellogg spun off its cereal business, which everyone knows it for, and created a new company

called Kelanova that's literally just focused on snacks. This company has, cheese its, Pringles, and Rice Krispies treats. And people are looking at this new company and saying, are you sure you really want to dive into these particular snack foods during this time of Ozmpic and Wagovi, you know, curving everyone's appetite? And the CEO gave an interview saying, we're by no means complacent. We're totally watching this. This is something we definitely have an eye on and we feel like we'll be able to adjust just as the food and snacking industry has adjusted to other regulations and other changes in consumer trends. And just yesterday, too, Walmart is already saying they're seeing an impact from OZempec. This is a quote from John Fern,

their chief executive of Walmart's U.S. operations. We definitely do see a slight change compared to the total population. We do see a slight pullback in the overall basket, just less units, slightly less calories. So again, this is something that might not be happening all at once, but slowly but surely you see these caloric intake go down and the basket size go down. And that has large effects across Walmart who has a massive grocery business. Right. And so they are the largest grocer in the United States. There are some

this is very hypothetical. This is all, this could happen. These are estimates, so this is not destined to happen. And why might not this happen? Well, cost is a factor because these drugs are not yet insured and

they may never be, and they can run $10,000 per year. So that 7% stat you cited at the top, that's on the bullish estimates. But if people can't really afford these drugs, then then this mass adoption, this mass disruption may never take place. I think they need to be insured for that to happen. Right. Especially in the snack food industry where typically on the lower income spectrum is the people who consume snacks. So it might be two different audiences, people who snack and the people who actually use Wagoves in Ozempic. So that's another thing to

look forward to. Really widespread implications for this will definitely be keeping an eye on it. For this next story, I want to talk about multiple news stories that we've discussed on previous episodes and want to give you an update on. We're naming this segment after everyone's favorite phrase to see in work emails, just circling back. The first story we're circling back on is the Kaiser Permanente health care strike. We mentioned could happen on Monday's show. Well, it did happen. Yesterday morning, more than 75,000 workers at Kaiser Permanente walked off the job in five states and Washington, D.C., to pressure their employer to address issues like higher pay and staffing shortages. It is the largest healthcare strike in U.S. history

and shows that this historic labor action that occurred during the summer is continuing its momentum into the fall no matter the sector. This being a health care strike, it hits a lot closer to home for regular people. Kaiser Permanente patients might have non-emergency and elective services rescheduled, but the company says it's brought on thousands of temporary employees to keep critical operations running. Hospitals and emergency departments will stay open. during the strike, which is expected to last three days. Toby, it seems like every week there's a biggest blank strike ever going on. What a year it's been for organized labor, and they have a lot to show for it. Yeah, I mean, more than 445,000 workers across all sectors have walked off the job

at some point this year, which is not an insignificant amount by any means. Also, striking in health care is always, as you said, it does hit very close to home for a lot of people. It's also sometimes a controversial thing. There's been papers written on both sides. One argument is that, the workers' obligations to their patients or society should make it so that this is one industry that shouldn't strike. But then the other side of the coin is these obligations are not absolute, and they have just as much a right to better working conditions as any other industry. So again, there is always a debate whenever health care workers do walk out. Super interesting ethical argument there. But it's not just happening in the United States.

Earlier this year in Britain, there was the largest ever national strike by health care workers. So this is an industry that, you know, employees really. need more help on because there's a mass exodus due to people being burnt out. Another story I want to circle back on is Maui's recovery from the wildfires that devastated the western part of the island almost exactly two months ago, if you can believe it. There's a great deal of conflict brewing right now over the governor's plan to open up sections of West Maui to tourism again beginning on Sunday. The governor, Josh Green, said it's critical for the island's economic recovery to get tourists

back after the number of visitors plunged 70% after the fire, and we know how reliant Maui is on tourism for jobs and its overall economy. But many Maui locals say they're not in a place yet to put on a smiling face for outsiders when they haven't had enough time to grieve the 97 people who were killed in the fires and left many others without shelter. More than 14,000 people have signed a petition asking the state to delay its phased reopening in West Maui, saying they're not emotionally ready. So once again, we're seeing this tricky balancing act for officials as they try to kick the economic engine back into gear and be respectful of locals who lost everything and are already frustrated with the government's response to the disaster.

Yeah, there's also a ton of housing tension there right now because there's still 8,000 people living in temporary shelters. So should we open up tourism when these hotel properties are being used to house people who lost everything in those fires? But then there's also some people, I was reading some local Hawaii kind of tourism publications saying that there's been some bad messaging around this. and even predating the fires and that tourism was down in Maui even before the fires happened. And so now that a lot of people think that all of Hawaii's kind of burned down

just based off the coverage that we saw globally. And so now everyone is saying we need better messaging. Like we still are open for tourism even though like we want to be respectful for everyone. These are just long festering problems that have you know, that manifested right now

because the locals in Maui for many years have chafed at the amount of tourism coming in and destroying local ecosystems. But, you know, they rely on tourism for four out of five of every dollar. So for the economy to rebuild, public officials are saying, we got to get people back. They want Maui locals want this to be a new time to revisit this dependence on tourism. Okay, to switch gears completely in our final circling backstory, remember that wave of lawsuits accusing fast food restaurants of false advertising of making their burgers seem bigger and juicier in marketing materials than they are in real life,

two companies just defeated that challenge. A judge in Brooklyn dismissed a suit brought by a customer against Wendy's and McDonald's about burger size exaggeration, saying he didn't see a problem with the chains using appetizing images to foster positive association with their products. The judge also said it wasn't clear that the plaintiff even saw the ads he was referring to. Other fast food chains are still fighting their own false advertising legal battles, but this is a win for critics who called these lawsuits kind of a waste of everyone's time. Yeah, the judge literally said that the McDonald's and Wendy's food images, which were the case in this particular case, are no different than other company's use of visually appealing images. It was interesting that

the legal argument was like, oh, everyone else does it, so these people are fine doing it too. And then they also said they provided more objective information about it, like weight and caloric content of those things. We kind of knew that this was never going to actually be a lawsuit, but it is a growing area of law. Fast food litigation is the fastest growing area of law, as some people say. So it is interesting to see this kind of rush, kind of a gold mine.

People think that maybe we can get them on this advertising angle, and it's kind of a gold rush in terms of litigation. There is a similar lawsuit against Burger King that was allowed to proceed. So it's not all... It's not all dead yet. Yeah, there we go.

All right, Neil, let's take a quick break, but don't go anywhere because we've got three more stories, including Neil's number. coming up right after this. Study and play. Come together on a Windows 11 PC. And for a limited time,

college students get the best of both worlds. Get the Unreal College deal, everything you need to study and play with select Windows 11 PCs. Eligible students get a year of Microsoft 365 premium and a year of Xbox GamePass Ultimate

with a custom color Xbox wireless controller. Learn more at Windows.com slash student offer. While supplies last, ends June 30th, terms at aka.m.m.m.m.a. Resort and Casino at San Manuel is California's number one entertainment destination for today's superstars. Catch the Jonas Brothers return to the Yamava Theater stage on April 30th, the powerful vocals of Demi Lovato on May 17th, and the signature Southern Country Rock of Eric Church

on July 19th. Tickets on sale now at Yamavatheater.com, only at Yamava Resort and Casino, celebrating its 40th anniversary. You in? Must be 24th. when you want to enter. Neil, our next story is another little roundup segment. This time we're bringing you some cool new startups that we've come across recently that we think you all might enjoy. Up first, we've got a good old-fashioned arms race to see which AI company can figure out wearable AI first.

Let's meet the players. One company called Rewind.A.I. Just release its Rewind pendant, which is a $59 necklace you wear around your neck that records conversations so you can create a sort of searchable database of all the stuff. you've listened to or said during the day. Another company is called Tab, which also created a wearable device that, quote, ingest the context of your daily life by listening to your conversations. These two devices were launched within days and hours of each other, actually,

and so that clearly founders think the future of AI is something that can interface with the outside world. Do these just make turn your life into a podcast episode? I do not like it. I mean, a lot of the Rewind company has really, really pushing the safety and the security aspect of it, like, your data won't be leaked anywhere. But it is so eerie to imagine people recording every single minute of their days and then saving those recordings for later. There's got to be ethical implications of it, too. Of course. Rewind said on its website that you could not record someone without their consent, but I was doing some souping. I didn't quite

understand how that would happen. They did pitch it as a device that you could use as an executive or another member of a team who is recording a meeting. Instead of taking notes, you could just have your meeting and then revisit it later and it'll transcribe everything for you. So that's one of the use cases that also mentioned people, one of its target audiences was people with ADHD who are constantly moving from one task to the next. So that's who they're pitching it to. But you're right.

This is an arms race for creating the next smartphone, really, the next piece of hardware that could unlock this AI software boom and everyone from these startups to big players like meta and Apple are trying to unlock it. Yeah, the big fish in the pond is also humane, which is led by a former Apple employee that has an AI pin, which comes with a projector that you can use to interface. It appears on your hand, so that's a big company with a lot of funding. And the other big fish is obviously Open AI, who are reportedly in talks with the former Apple designer, Johnny Ive, to create a wearable device. So again, I call it an arms race.

I do think we're going to see more and more of these new interfacing. AI objects. But okay, that's enough AI. Let's move on to our next startup, which is a company called Habit, spelled with a Y. Of course. Of course, very startup B, which is an Airbnb-esque platform that aims to connect people interested in longer stays than the typical Airbnb duration, longer stays, meaning in that six to nine months range. Neil, we're a bit chained to this podcast desk, but in the age of remote work, I can see this being super appealing to a certain subset Yeah, this is a big round, $42 million, and it's valued, last raised money at $200 million, and now it's going to be worth a lot more than that.

So this is a fairly large startup, and they're trying to weasel into that middle space between Airbnb with its short term stays and actually just renting a house or an apartment, and it cites the fact that people can't really afford housing right now is one reason why this might be attractive, and it's targeting digital nomads. So if you believe that the future of work is flexible and hybrid and remote, then this might be a company that you might be bullish on. Yeah. And then also they get to avoid that short-term rental controversy, that Airbnb and VRBO, we saw it in New York City, that there's this big crackdown on short-term rentals. So they are kind of threading the needle between actually long-term rentals and short-term.

So have it with a why, a name to watch. And finally, for our last startup, we have Blackbird, which is a restaurant reward platform founded. by the co-founder of Rezi and Eater. Essentially, Blackbird incentivizes eating out by having patrons tap their phone when they dine at a restaurant, kind of like how you sign in at the gym in order to keep track of regulars and reward people who frequent a spot. Neil, I love this idea because I absolutely eat at the same restaurants a lot, and I'd love to build up some rewards points or get access to off-menu items like Blackbird offers.

Right, the founder, his name is Leventhal, and, I mean, he has a first name, too. His first name is Ben. He is saying that he wants to build something for independent restaurants, something along the lines of the loyalty programs that you see at chains like Dunkin' Donuts and Starbucks and Sweet Green and things like that. But they just don't have the bandwidth to connect with customers in the way that these massive chains do. So if you go to these restaurants multiple times, you get a free cocktail and then you get a free appetizer and you can build up rewards points over time at particular restaurants. I personally wouldn't use it because you know that I like to go to a lot of. of different restaurants. I don't like to go to the same one because we live in New York City. There's so many different ones. But you find a place. You love it. And it would be great for you to be

able to build some sort of loyalty with these restaurants and get some sort of rewards. Yeah, I love it. And you can get so creative with it too. Some restaurants were giving away bomber jackets. It's not just food items. Like you can create a rewards program however you want in your own using your own creativity. So I do like that aspect. All right. I'm going to put you on the spot. Which of these three startups that we profiled? Say you're an investor. You're Andreessen Horowitz. Which one do you plug?

I go, first of all, not financial advice. That's our disclaimer. But I would actually go with Blackbird just because very experienced founder knows the space extremely well. And it's something personally that I identify with. So those are enough boxes checked in my opinion. And for that reason, Toby is in. Okay, let's move on. Welcome back to Neal's numbers, the segment where I share three stats from the week's news

that will help you liven up any dinner party conversation. For the first number, let's head to Singapore, where buying a car is laughably expensive. Just the price of the certificate that gives you the right to own a car has surged to an all-time high of $106,000 equivalent to four Toyota Camry hybrids in the U.S. The reason you need to buy a certificate to buy a car is because Singapore, a small city-state that can be driven across in less than an hour, has limited the number of vehicles on the road to less than a million. This quota and rising demand for vehicles coming out of the pandemic has but owning a car

out of reach for most middle income people. Government subsidized flat in Singapore costs $125,000. So it literally costs more to own a car than it does to own a place to live. It is truly crazy to see these numbers out there. And it's not just cars that are expensive in Singapore. The city ranks number one in the most expensive cities in the world, according to the annual report from the Julius Bayer Lifestyle Index. So it is very pricey to live there.

And anecdotally, Abby, who's an editor at Morning Brew, used to live in Hong Kong, has heard a lot of people moving back from Singapore to, Hong Kong because it's just not affordable at all. So my second number is 104. That's how old a Chicago woman named Dorothy Hoffner is, and what makes her newsworthy is that she skydived from a plane last weekend, likely setting the Guinness World Record for oldest person to skydive. How does a 104-year-old even get into skydiving?

Well, Dorothy says she's not a thrill-seeker, but she is adventurous. Her interest in skydiving began when she developed a friendship with a nurse named Joe at her senior living center in Chicago. Joe mentioned he was going skydiving. And of course, as we all would at 104 years old, Dorothy said, can I come along? Anyway, on Sunday, Hoffner stuck the landing and the company that took her skydiving is talking with Guinness about getting it certified as a world record jump. Toby, this woman was born in 1918 right after World War I, and she's been around for two global pandemics. The Spanish flu and COVID. That is insane. We talked about blue zones on this show before, Neal, which is places where a disproportionate amount of people live to be an advanced age,

maybe skydiving is one of those things that just help you live longer because clearly it's working for Dorothy. When we are 104, the only place we're going to be skydiving is in the Metaverse. I hope not. Are you into skydiving? No, absolutely not. Yeah, me neither. I'm never doing that.

Okay. For my final number, let's talk about the Nobel Prizes that are being announced this week and their relationship with immigration. Economist Adam Ozemeck pointed out that the U.S. has won 70. 25% of the Nobel Prizes so far this year in the fields of chemistry, physics, and medicine. But that's mainly thanks to immigrants. Without immigrants, the U.S. would have won just 25% of those Nobel prizes. On Tuesday, we talked about Coteline Kerrico, who shared the Nobel Prize for pioneering MNRA vaccine research. She immigrated to Philadelphia from Hungary. And yesterday, more immigrants to the United States won Nobel Prizes in chemistry.

Three scientists, two of whom moved to the U.S. from France and the Soviet Union, won the prize. for discovering what are known as quantum dots, semiconductor so small that the difference between them and a soccer ball is about the same as the difference between a soccer ball and Earth. Quantum dots have lots of commercial applications from increasing the resolution of your TV to biomedicine and solar cells. But really the point of this stat is to highlight how effective attracting smart people to your country is as a policy tool.

Yeah, it's always one of those things. We talk about brain drain from other countries, and we end up benefiting it from the most where the smartest people from around the world to often end up in the U.S. And the fact that without the immigrants, we would have only won 25% of the prizes that we won. Truly, truly is crazy to see it put that way. All right, Neil, for our last story of the day, let's move on to something near and dear

to my heart, and that is the Men's World Cup. While it feels like we were just celebrating Messies historic win in the last competition, we have some news about the 2030 edition that broke yesterday, and it's going to be unlike any tournament before it. The 2030 Men's World Cup is set to. feature games in six countries on three continents in honor of the 100th anniversary of the tournament. The countries are Spain, Portugal, Morocco, Argentina, Paraguay, and Uruguay. All six will get automatic entering to the tournament, which will be the first time a World Cup will be played

on different continents. Neil, I'm actually all for this idea because I think the days of a single host country will grow less and less frequent, but certain fan groups are up in arms about what the extra travel means for supporters. Do you think spread the World Cup across countries and continents could be the future, or is this? I think this is a bit of a trick because what happens is what they, this is all about 2034. And who wants 2034 and who is likely to get it? Saudi Arabia. Saudi Arabia is very tight with FIFA.

They are doing this whole move into soccer and other sports, and they are eyeing 2034. And what this does by spreading the World Cup across all these different countries and continents, is it just clears out everyone else for Saudi Arabia to get that bid in 2034. So I'm cynical as one should always be with FIFA, but this is a play for Saudi Arabia. Right. Only the member federations from Asia and Oceana will be eligible to host a bid because North America is getting the one, 2026 World Cup that's coming up. And then now you have Europe, African, South America also getting the World Cup. So only Asia and Oceania are left in Saudi Arabia is a member of one of those federations.

But I also do think that the idea that putting the World Cup on one country and one country only is just too big a financial burden. The big example I point to is that Brazil spent over $3 billion on 12 new renovated stadiums. And the biggest stadium of all, which was located in Brasilia, cost $550 million. It's now being used as a bus parking lot. So again, putting this financial burden on just a singular country, which often ends up not even being worth it because the stadiums go into disuse versus spreading it out across. multiple countries. I think it's actually a smarter financial decision for people. And there were climate groups that warned about the environmental impact of all of this travel. That may happen. We'll see how that plays out. But there's a converse to that, which is maybe

countries and fans won't need to travel as far because there will be games that are played closer to home. But I should just mention that these games are not going to be played equitably across South America and North Africa and Europe. There's just going to be the first debut games in South America, which is where the first World Cup was held in Uruguay, which is a little bit of interesting trivia in 1930. And then it'll move to North Africa, Spain, and Portugal for the remainder of the games. And it'll be much bigger. If you thought the World Cup was not big enough, well, it's only getting bigger.

Starting in the next tournament, they're going to have 48 teams and 104 games. So this is just going to be an extravaganza, unlike any other. But the World Cup I'm paying attention to is the Cricket World Cup. It's starting today in India. We just had the Rugby World Cup. Now we're into the Cricket World Cup. I love it. All right, that is all the time we have for the show.

I can taste Friday. I can literally taste it. It tastes like chicken wings. As always, we love when you write in with your thoughts on the show. You can direct those thoughts to Morning Brew Daily at Morningbrew.com. Let's roll the credits. Emily Milliron is our editor and producer. Sam Velas and Raymond Lou are associate producers.

Yuchenoa Ogu is our technical director. Billy Minino is on audio. Hair and makeup went skydiving. Devin Emery is our chief content officer and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow. Spring is the season everyone refreshes everything, except their blinds.

People put it off because they think it's complicated. But at blinds.com, we've spent 30 years proving it's not. Right now, you can save big during the Spring Cyber Monday sale. Whether you want to DIY it or have a pro to handle everything from measure to install, we've got you. Free samples, real design experts, and zero pressure. Just help when you need it. Shop up to 50% off cycle.

wide. Huge savings on special buys, plus a free professional measure now during the spring Cyber Monday sale. Rules and restrictions apply.