The Best One Yet - “And the growth trophy goes to…” — Zoom’s unprecedented-ness. Nestle’s $2.5B food allergy. Walmart unveils Walmart+.

Episode Date: September 2, 2020

While you were chewing Nestle’s peanut butter chocolates, the company just acquired a $2.5B company that develops a peanut allergy treatment. Walmart unveiled the details and launch date of Walmart+ to subscriptify your life (and it promises it’s got nothing to do with Amazon Prime). And everyone had high expectations for Zoom’s latest quarter, but this one was truly historic.$ZM $NSRGY $AIMT $WMTWant a shoutout on the pod? We got the form for Snackers to fill out right here:https://forms.gle/KhUAo31xmkSdeynD9Learn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. And this is Snacks Daily. It is Wednesday, September 2nd. Nick, have you checked the numbers in megaphone? Jack, what the heck is a megaphone? It's actually the barometer of whether this is the best one yet. It's an if you know, you know, kind of thing. For our first story, Zoom had one of the greatest quarters of growth in corporate history. You're comparing MJ's best season to LeBron's best season. We've been there. We've seen it. How about comparing Zoom's best corporate quarter to Facebook and Apple's best corporate quarter? We're doing it. Second Story Jack. What do we got? Nestle spends billions pumping out peanut butter and chocolate candy because it's Earth's biggest candy company. Now it's spending $2.5 billion to buy a peanut allergy biotech company.

Doesn't quite fit. Delicious. Third and final story jack. Walmart just unveiled Walmart Plus. It's $98 a year membership. No word on whether that will include TikTok or not. TikTok sold separately. Oh, and they promise they swear and they guarantee Walmart Plus has no. Nothing to do with Amazon Prime. Before we get into that, let's talk mom athleisure wear. Or is it Athleisure Mama? This is a new thing. It's a combination of all the suffixes and prefixes you just heard.

It's athleisure but for expecting mothers. The key is that we're all wearing athleisure wear 24-7 right now, and you kind of need a version for every phase of your life. So Jack and I were fascinated when we noticed that Nike is launching its first ever maternity collection, starting with four products. A bra and cardigan easily adjustable for breastfeeding. You got a tank top perfect for that nursing posture for moms. Tights that can fit normal like the leggings you know and love or that can be folded up over the baby bump. Perfectly flexible for weeks 10 through 40 and what feels like week 747. And of course it's not athleisure if it's not sweat waking and breathing. No, you're in your

second trimester. You still want to run two miles and like bench press a small family. Now snackers, guess whose idea it was over at Nike who decided that Nike should have an a leisure wear line just for expected moms. Moms and expectant moms on the design team. This is another reason why team should have diversity. You don't want to miss out on entire clothing lines and made up words like we just had like mom leisure wear. Oh, and by the way, Nike is expecting a mini baby boom between October and next March driven by our stay-at-home lifestyle that started this March. perfect time to launch a little thing called Mama Thleisureware. After Gen Z comes the mini baby boomers.

Let's hit our three stories. You're tuned into snacks daily. We spoke to the lawyers and we got to get something legal out the way. The snacks about the hair ain't food. It's air candy. They don't reflect the views of the robberhood family. It's all informational just so. We're not recommending any securities.

It's not a research report or investment advice. Not an offer or sale of a security. Right. Snacks is digestible. Business news. for you. Robberhood Financial, LLC, member Fenra slash SIPC. For our first story, Zoom just scorched.

Quarterly growth records. This was insane. The growth was so big. We're going to have to compare it to Netflix, Facebook, and Apple's best quarters ever. Yeah, for one reason that requires absolutely no further explanation. Zoom really enjoyed the last three months. It wasn't just Zoom Snackers that benefited from changes to our lives due to the the corona economy. Yeah, you got Netflix. They added 26 million subscribers in just the last two

quarters. That is 16% growth in Netflix nation since March, not too shabby. You got sales over at Clorox's cleaning products up 40% in the coronavirus. The team at Clorox is delightfully surprised by this development. Chuck, can you check the numbers we're getting over here? This doesn't compute. And Peloton's even better than Clorox in Netflix. Their revenues are up 66% last quarter. Yeah, meanwhile, you got naked pelotoning, the unspoken surprise of 20 20. Snackers, Jack and I are looking at the pantheon of companies enjoying the last three months. You got Netflix, Clorox, Peloton's, Gaines, and they are pathetic compared to Zoom. Zoom just announced Monday that quarterly sales quadrupled to $663 million.

Then they announced that the number of paying corporate customers with more than 10 employees quintupled to $370,000. It also increased its profit projections for this year a second time this year. You just don't do that. do that twice. By the way, we don't even know what comes after Quintuple. That hasn't even been reached before. Now, the stock of Zoom rose 39% Tuesday on news of Monday's epic earnings report. Oh, and by the way, the stock was already up 330% this year on top of that. Zoom video communications is now worth $127 billion, which is 14 lifts. Beginning of 2020, Zoom was worth us two lifts.

Snackers, the reason Zoom keeps soaring, some believe the future of work is remote, which would be nice for Zoom. And if you don't believe that, then you'll probably just end up using Zoom when you get back to the handy, cozy office anyway. So, Jack, what's the takeaway for our buddies over at Zoom? And the all-time growth award goes to Envelope. Zoom. Zoom. Snackers, some startups, they can quadruple sales because they're going from like $100 in sales to like $400 in sales. Right. But we've never seen a mature company like Zoom that has already IPOed, put up such ridiculous growth numbers as Zoom. Case and point, we're whipping out the old MJ versus LeBron scenario. Let's look at Apple's holiday season, pack in 2008. It was insane. Everyone was buying the iPod video

or else your girlfriend was breaking up with you. Gen Z. That was a thing before the iPhone. We'll get into it on a later podcast. ubiquitous yet. Sales grew 90% for Apple back in the fourth quarter of 2008. Nowhere close to Zoom's 337%. Okay, so that's a tech product. But like tech gadgets, they're tough because you can't scale a physical tech gadget as fast as you can scale software like Zooms. All right. Let's do apples to Apple Zoom to Zoom here. Let's compare Facebook's best quarter to what Zoom just announced. Well, when Instagram and Facebook were scaling out there very fastest back in 2014, revenues were growing 72%. Even if you zoom in on that 72%. That growth is nothing compared to what Zoom pulled off last quarter. Zoom, Zoom.

For our second story, this one's wild. Nestle is the world's largest food and beverage company. But the Swiss-based company just pledged $2.6 billion on a peanut allergy treatment thing. We're talking about that chocolate company, Nestle. By the way, on their last earnings report, they had an image of DeGerno croissant crust pizza on the top of the thing. That's right. Nestle owns DeJorno. It's not delivery. It's DeJono. True. Why are they adding croissant to pizza? It makes so much sense. Pizza needed to evolve into a pastry at a certain point.

Pizza needed a French word in it. But Nestle just tossed a little old biotech company called Amune into a shopping cart and decided to walk out with it. Now, Nestle is paying a price per share that is three times more than Amune stock was trading. Not bad. So the stock tripled on announcement of this acquisition. And Amune is the awkwardly named California-based biotech company that just received FDA approval for Palphorzia. Palphorsia. It is a treatment for peanut allergies, and we think there should be a drinking game. Is it a treatment or is it a planet where aliens live?

Or is it like a Greek goddess. If it has a Z in it and it sounds vaguely Latin, it's probably a medication. It's the first and only peanut allergy treatment. It costs $890 a month. Not bad. And it builds resistance to peanut allergies. Yeah, so you can like loiter by a Reese's factory and not have an outbreak. Because that's the life goal of all children these days. Peanut allergies, by the way, is one of the biggest allergies that ails humanity. Jack and I looked it up, apparently 2.5% of U.S. kids have a peanut allergy, and it's shockingly grown by 25% in the last decade. We don't know why peanut allergy is becoming a bigger and bigger problem for humanity.

But there are studies on this, and we did not read them. Some say it's a conspiracy theory involving almonds. Nick, almonds are actually nuts. Peanuts are not nuts. It's a true story. So naturally, you're thinking to yourself, Nestle must be building some peanut Kit Kat that like 110% of children can safely eat, right? That was our first instinct and it probably should be yours. But no, the answer for why they made this acquisition lies in their earnings report

details. Specifically, the second quarter earnings report, slide five, bullet full. I'm on there right now, Jack. It says, and states, continued portfolio transformation toward attractive high growth categories. Now, when some guy in a suit says portfolio transformation, what he means is they sold their U.S. They sold their Canadian bottled water business, and they sold their U.S. ice cream business. So that's what they've sold, but Nestle is now looking to sell their U.S. water business, their rice porridge business, and their peanut milk business, we didn't even know that was a thing. I guess you can milk anything these days. Now that's what Nestle is exiting.

So what is Nestle entering? Besides Amune, which it just acquired, it also acquired a company called Zen Pepp. Nice. It's a like pill capsule business. They make the capsules do your pills. And they acquired vital protein, a company that makes pretty much scientific supplements for like your workout routine. It's like Maya Plex, but with glasses. So they're trading in oven mitts for lab goggles.

So, Jack, what's the takeaway for our buddies over at Nestle? Low-growth companies need high-growth products. Snackers, a decade ago, Nestle launched a healthcare sciences unit focused on dietary management. That thing has transformed into a $2 billion a year business in terms of sales. Billion with a B, $2 billion's pretty big, but it's small. you compare it to the $350 billion value of the biggest food company in the world. But Nestle's $350 billion of pantry staples, they're only grown like 2 to 3% per year. Yeah, meanwhile, its health sciences unit sales are projected to double in just the next year.

So buying this peanut allergy treatment, it's not about some creative strategic food Frankenstein, which was our first instinct when we read this headline. It's about an entirely new shiny growth division at a company that has a good. growth allergy. For our third and final story, someone has finally launched a rival to Amazon Prime. Walmart Plus is $98 a year of fun perks on gas, online shopping, and in-store benefits. It sounds like a lot of fun. But to cover this, we're going to go back 15 years. Beep, beep, beep. Jeff Bezos created a new form of holy matrimony. The bond between a consumer and their e-commerce platform is called Amazon Prime.

You take this promo code to be the promo code you use today? Amazon Prime is the force that's driven Amazon's Bezosian growth for the last few years. I can't believe we're even recapping this at this point, but free two-day shipping on just about everything. Yeah, you got plus movies, plus music, whole thing. Now, the genius of Amazon Prime, once you commit the $119 a year, you're not going to comparison shop elsewhere on the Internet. No, you cross the hurdle, you're not going back. And that's why 150 million people right now are primers in the United States.

No other subscription has come anywhere close. Bezos is putting on a toga going, Are you not entertained? Is there no one else? Until now, apparently there is somebody else right now. Walmart just launched yesterday. $98 a year. It's a membership.

It's called Walmart Plus. We're talking unlimited free shipping for orders over $35,000, including same day on 160,000 items. Now, that same day shipping option, if you select that during checkout, it probably means someone's going to grab stuff off the aisle. at the local Walmart that's like three miles away from you. Now, this feels like the biggest benefit

because it's effectively free grocery delivery, which isn't bad. And free same-day grocery delivery, that's pretty convenient. Pretty good. I'd pay $98 a year for that. But the second feature is probably the coolest feature. It's called Scan and Go. This is a feature in the Walmart app

that's only available to Walmart Plus members that can scan barcodes of things in Walmart super stores. So while you're shopping, you just scan everything as you go, we're talking self-checkout style, and then you just bounce. This is for people who love strolling the aisles and shopping, but hate standing in line and hate interacting with the cashier and inserting their credit card chip into that thing. It's also kind of working on the honor system,

because Walmart knows this is going to lead to some theft and has no response for how to deal with that. Right. They tried this feature out two years ago and had a major theft problem because people left and they were like, yeah, I already paid for it on my app. And they're like, did you pay for it on your app? You're doing the thing where you're like, yeah, I've got so many bags. I'm carrying it. I can't take out my phone. Now, Walmart admits they don't have like a great response to this, but they hope that the $98 a year for Walmart Plus will like deter the criminals. Oh, and by the way, the third and final and least interesting feature is on the slightly cheaper gas. Up to five cents off per gallon at the 2000 gas stations that are sitting right there in Walmart parking lots. Extremely mediocre. So Jack, what's the takeaway for our buddies over at Walmart? This isn't a

Prime killer. It's just designed to stop the bleeding. Snackers, Walmart's spokesperson said that Walmart Plus wasn't created in response to Amazon Prime. Snackers, let's be honest, those three benefits we just described are kind of underwhelming. Unincredible. For people living in cities, Walmart Plus's gas discount and like the Scan & Go feature, basically worthless. But if you're someone who doesn't live in a city and you shop at Walmart often, you're probably going to join Walmart Plus. But then after you pay the $98 bucks a year for Walmart Plus, you're probably not going to also pay for Amazon Prime and Amazon shipping on some random thing. We don't think Walmart Plus will add new Walmart shoppers. It'll just save existing Walmart shoppers from defecting to Amazon. Jack, can you whip up

the megaphone takeaways for us over that? Zoom just finished up one of the best corporate quarters in corporate history. Honestly, better than like any other Corona Economy winners, better than just about anyone ever. For a second story, Netflix's food biz is doing fine, but it's slow growing. It's adding a side dish to its corporate palate, a fast-growing biotech division. For our third and final story, Walmart Plus is $98 a year, but it's not that incredible. We think it's defensive, not offensive. It's not particularly exciting.

Now, time for our snack fact of the day. Tweet it in by Ashton Corsin from lovely Portland, Oregon. By the way, Snackers, tweet us at Robin Hood Snacks, your snack facts. We want them. You may have heard of Stump Town Coffee, a coffee chain based in Portland, Oregon. Well, Stump Town, it turns out, is actually the city of Portland, Oregon's nickname. And there's a reason, because it was expanding so fast in the 1840s, Nick? How fast was it expanding?

They had to, like, cut down trees left and right to make spaces for homes to be built. And then apparently the people responsible for moving the stumps, real job before robots did it, couldn't keep up. That's right. They were cutting down like 10 trees a day and only removing like one stump a day. We're estimating on the numbers here. It may have been more. And I think, yes, the professional soccer team in Portland, Oregon has a mascot that's just a tree stump.

If someone can confirm that, that can be a follow-up snack fact. Now, before we go, Snackers, we got to say Corey and Cheyenne Carroll, they got a new baby in Baumhilder, Germany, where he's based in the Army. And I think that means that that baby can become president of the United States, John McCain-style. Congrats Mary and Jonathan anniversary in lovely Buffalo, New York. And Tom and Christina Fitzgerald, happy Annabelle. in Northfield, Ohio. Welcome to the world Milan's End, the baby of Taylor and Steve Catalan, do baby. And happy birthday to Jake's mom, Linda Levy, who's 60 in Milwaukee, Wisconsin.

And Anthony Brilia, 22 in Phoenixville, Pennsylvania. And Pax Brutus in Boca Raton, Florida. And Rick Helmuth in Plain City, Ohio. And Sarah Collins in Lincoln, Nebraska. And Greg Seider, 26 in Madison, Connecticut. Happy birthday, Bianca Aguio in Bakersfield, California. And Anne in the marina of San Francisco, she likes listening to snacks on her walks down Chestnut Street to Project Juice, which Jack and I appreciate. Get the almond assay, not the regular ascii.

Classic toppings on that one, please, Anne. Snackers, if you want a shout-out at the end of the pod, remember we have a Google form in the description of this podcast episode, and every podcast episode takes like 30 seconds to fill out. But when you're not doing that, remember to tell your friends H-Y-H-Y-S-D. It stands for have you had your snacks? Ask it every day if you know, you know. This is Jack. I on stock of Amazon, Nick on stock of Apple. The Robin Hood Snacks podcast you just heard reflects the opinions of only the hosts who are

associated persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets, or any of its subsidiaries or affiliates. The podcast is for informational purposes only and is not intended to serve as a recommendation to buy or sell any security and is not an offer or sale of a security. The podcast is also not a research report. and is not intended to serve as the basis of any investment decision. Robin Hood Financial LLC, member FINRA, SIPC.