The Best One Yet - “Baby Yoda is Build-a-Bear’s Rudy moment” — Build-A-Bear jumps 14%. Califia Farms’ fund raise. Phase 1 trade deal

Episode Date: January 16, 2020

We finally got to see what was actually in the Phase 1 trade deal that was just signed. We noticed Build-A-Bear shares popped 14% because it’s working on what Hasbro can’t: A Baby Yoda doll. And Califia Farms is our (almost) “Unicorn of the Day,” snagging $225M in fresh funding to make plant-based milks bigger than plant-based meats.Learn 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 Thursday, January 16th. Jack's chewing on some tofu over there. One second. Let's give them a moment. We're back in San Francisco recording this podcast, which is where I used to live.

It's good to be back. And this happens to be the best snacks daily we've ever done. Jack, put down the mung beans over there and tell us what our three stories are. Big day for international commerce. The trade deal, phase one, was signed in Washington, D.C. And each side is getting something. But there's one common issue. We're still in a trade war.

This hasn't ended yet. The USA and China are still at trade war. Second wonderful story, Jack. Buildabair is a publicly traded stop. And it jumped 14% because it's got a just-missed Christmas stuffed Yoda surprise. The real winner here? The lawyers over at Disney. Actually, Disney.

Actually, Disney. Third and final story. The nearly unicorn of the day. A.k.a. the punicorn? The punicorn. It's adorable. Not quite a unicorn. Sticking on a teaser.

Califia Farms, it got a $225 million check because it thinks plant-based beverages will be bigger than plant-based means. Can we just get along in the plant-based space right now, people? Now, before we jump into all that snackers, people seem to like that Casper mattress life hack we shared the other day. Remember, if you have an internship in a city that's not your hometown, you need a bed, just buy the Casper mattress and return it after 90 days and sleep like a baby. Because they have that free trial opportunity. Now, we actually kind of felt bad about that. Yeah, because Casper would suffer if people followed our advice. And if everyone did that, then Casper would go out of business.

Right, but we're fans of Casper. We just thought it was kind of a funny thing. Well, we found another business hack that we feel more comfortable advocate. Yeah, this one's pretty good. It was actually shared to us by Anthony Catawon in Mountain View, California. He wanted this to be a snack fact, but we thought it was so good. We put it in the intro. We promoted this thing.

We're calling it the Ritz Reward. Get this. Employees at Ritz Carlton, who are involved in customer resolution. So like when you call and complain about something, basically, Ritz employees are allowed to spend up to $2,000 to make their customers happy. Let's say there's some hair in your quail egg soup, boom, you may get a free night out of that. If you slip by the infinity pool and scratch your elbow, you could get a free massage up to $2,000.

This is insane, but it's also a brilliant business strategy because on their website, they describe it as empowering their employees. And Jack and I kind of love this. They trust their employees so much that they, have a blank check to offer customers up to $2,000 per incident. Get this quote from the Ritz. The amount matters less than you showing that you trust your employees. This sounds like a really bad business practice, just letting any employee offer customers $2,000 without a manager's approval. But it's actually building a business culture that is brilliant.

My wife listens to the pot every day. She's going to be like, Jack, can we do our honeymoon at Ritz Carlton because of this? All she's got to do is StubberTell and get it for free. Let's get our three stores. You're tuned in to snacks daily. We spoke to the lawyers and we got to get something legal out the way. The snacks about to hear ain't food. It's air candy.

They don't reflect the views of the Robin Hood 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. Snacks is digestible. Business news for you. Robahood Financial, LLC, member FINRA slash SIPC.

For our first story, the mini trade deal just got signed. The USA and China are still in a trade war, but not as much as yesterday. Right, this was phase one. It sounds like the bad movie trilogy. Star Wars episode one, a little lame. I feel like mini is in the right word. Like, instead of being a full hot dog trade deal, this is more like a pig and a blanket. Pig and a blanket is pretty substantive dish.

I'm thinking not appetizer more a rederve. Aren't those the same things? One's French, one's not? I feel like we should have discussed this. this earlier. The trade war between the United States and China started 18 months ago, and yesterday we reached a de-escalation with a ceremonial phase one trade deal at the White House in Washington, D.C. Literally sounds like a fake name they'd come up with something in a Morgan Freeman movie. Now, you might think this is old news because we announced this was coming like a month ago,

but we actually didn't know the details or the text of the trade deal until yesterday. This is like the Coca-Cola formula. No one knows what's in it. They just know this happens. Here are the headline numbers. China has agreed to buy $100 billion more of American stuff than it has bought in the past. We're not talking like J. Cruchinos. We mean manufactured goods, oil, crops, grains, soybeans. These are the agricultural and manufactured things. China's purchasing. The stuff produced in fields and in factories. And then here's what the U.S. is going to do for China in return. The United States is canceling new planned tariffs that it had previously announced, which would have made iPhones, Nike's, and other made in China. China stuff, 25% more expensive for Americans. Now, the good news here, American companies are probably going to get more business.

Yeah, $200 billion more business over two years. Oh, one second, Jack. There's like one more thing we should talk about. One huge issue when it comes to the trade war with China is China's policy of forcing American companies to hand over the secret sauce of their business if they want to operate in China. Let's say you want it to open a restaurant in another city. It's like the mayor would say, before you do, you got to give me.

all the recipes to your famous chicken parm. That's basically what China is doing. So there is actually text in the trade deal, which directly addresses this problem. Specifically, it says neither party shall require or pressure persons of the other party to transfer technology. Now, that sounds like a win for the United States because China has been forcing U.S. companies to transfer technology. But here's the thing.

China's been doing this and just denied doing it. So China has kind of agreed with this deal to stop doing a lot of things. that it denies that it does in the first place. That's why we're thinking, can we please go with pig and blanket? It's like, I didn't murder him, but I promise I'll stop murdering people. Phase two is going to be the real hot dog on this. So, Jack, what's the takeaway for our buddies over in China and the U.S.? This is important to remember.

We are still very much in a trade war. The $102 billion annual tariff tax on American Snackers, it's continuing. It's still there. Three quarters of the stuff that we buy from China is still in the penalty box. a.k.a. getting tariffed as it enters the United States. Here's how we came up with that $102 billion number. So the tariffs are having an impact of about $800 per a U.S. household every year, according to PBS. Right. And multiply that by the 128 million households in the United States. That's $102 billion of tariffs that American people and companies are paying per year. And the trade war has been going on for about two years.

So double that and you get $200 billion. That's how much American citizens. have paid in tariffs for the trade war. So if anyone tells you today, oh, the trade war, we moved on, it's over, grab them, shake them, and then gently tell them we only got a little bit of a hot dog on this. There's a lot more substantive issues that need to be resolved before this is over. We're waiting for phase two. For our second story, Jack, wrap me up and throw me in a stocking over here. Build a bear just launched a baby Yoda stuffed animal.

And the stock rose 15%, but I need to correct you. Not a stuffed animal, a stuffed Jedi. Also, they didn't launch it, they just announced it. A Jedi is not an animal. It's adorable. How dare you? But it's also kind of creepy in the way that, like, in a movie, this thing seems to come to life and, like, take over a small village. Correct to your heart check.

You know the story. Baby Yoda is kind of a big deal. It's trending higher on Twitter than all of the presidential candidates combined. That's not an exaggeration. That is what the CEO of Build a Bear said when they... Build a bear. It's also Bill DeBare workshops. The ticker symbol is B-B-W.

Classic. Based in San Luis. Why is it the ticker symbol B-E-A-R? Or hug. Incredible invention straight out of St. Louis. They do Budweiser and they do bear toys. So Baby Yoda is a character in the Disney Plus show, The Mandalorian. And you know that Disney didn't give anybody a heads up that that character was coming and about to sweep the nation.

We did a whole Snacks daily episode in this when Hasbro Stock fell because it was supposed to make these toys, but never found out that the Yonel. Yoda toy was going to even be a thing, a character on the show. Right. Hasbro has the exclusive rights to make toys about Disney characters, but there's one carve-out. Oh, great term. That does not include stuffed animals. Great legal time.

So Build a Bear has a moment right now. Everybody wants Baby Yoda characters. Hasbro is not going to be ready until May, but Build a Bear can make the teddy bears potentially quicker. As long as they're just stuffed animals. I can't do any other kind of paraphernalia. It must be a stuffed baby Yoda. So Bill DeBer announced their quarterly earnings yesterday. And they also said that a toy of the child, aka Baby Yoda.

I guess that's what it's actually called. Official. We'll be coming in the coming months. Now, Snackers, the last time Jack and I covered this Buildabair stock, we were discussing its famous pay your age day to make a custom buildabare. So if you're three years old, your custom builder bear cost $3. The stock was going crazy because there were literally riots in the streets as parents went parent-on-parent to get their kids a toy. Well, Buildabar had to shut down their stores because they didn't. have enough bears to satisfy the demand.

Now, keep in mind, this is a tiny company. It's worth about $50 million. It's worth $50 million. That is 3% of a lift. Ironically, one of the smallest companies we've ever talked about. Someone's got like a bill de bear stuffed up in their garage somewhere that's like a special edition probably worth as much as the company. Now, it's been trying to move beyond just like toddlers and children as their customers.

They've innovated to attract a slightly older market. Right. Their average age of the builder bear customer, keeps on increasing as they do partnerships like they have with Disney, and now half their sales go to tweens. I would love a Baby Yoda stuffed animal. I think most people would enjoy this in their lives. So Hasbro totally missed out on Baby Yoda this past holiday season, and the toy's not coming until May. But Buildabare may have the Baby Yoda toy monopoly for a few months if they get it out before Hasbro. So Jack, what's the takeaway for our buddies over at Builda Bear? And if you don't

want to go in the Bilbaer direction, we can move from the Bilbaer direction. Bold claim here, Disney writers are probably the most revenue-generating writers in the world. And that's all because of licensing and creativity that Disney does. All those billion-dollar box office movies from Marvel, like The Avengers number 19, those are created by writers at Disney. What about the Lion King Broadway play? It began with the writers for the movie. What about the Star Wars Galaxy Edge theme park in Los Angeles?

It started with writers who created Baby Yoda and this new Skywalker. And now what about the Baby Yoda build a little? a bear plush toy. Disney's writers invent the characters that the world loves. Then Disney does an ecosystem-wide triple dip to make money off these things. It first makes money off movies, then licenses the characters to Build a Bear. Then it sells the Disney Plus subscriptions because you keep watching the movies. Then it creates rise at Disney World. But it all began with the writers. For our third and final story, Caliphia Farms. Caliphia, like California, not Caliphah. Oh, no. Whiz Khalifa. They just raised $225 million because they think plant-based dairy is bigger than plant-based meat.

The company calls itself Calafia because of the island of Caliphia. Right, Jack, you take me to the campfire. Tell me the story here. There was a European misconception for centuries that Baja, California, that little peninsula that comes out of San Diego. It's kind of like this small arm of Mexico. They thought that that was an island. They didn't realize it was connected to the mainland. And there was a mythical ruler, Queen California. Caliphia who ruled that island, and that's where we get the name California. All right. History is over. Next question. How do you make almond milk? Well, there are three ingredients, Jack. There's almonds, water, and then patience.

And then more water. You basically take a bowl of almond milk, pour water in there. Let it sit for like three days. And just wait. No, then put it in a blender. Then put in more water. And then do you even do anything of the almonds? Now, there's definitely a snack right now is doing this. Also, there are snackers who are now who are like, oh, it's not Caliphia farms. So Calafia started as a juice company, but then they pivoted to plant-based milks. Now they've got almond milk, oat milk, nitro-infused lattes, and even Uber milk. What about Lyft milk? If you have to ask, you can't afford it. Actually, it's a plant-based milk with extra plant-based protein in it.

Wow, incredible. Now, it is the number three biggest plant-based milk company out there. And you've seen this bottle before because it kind of looks like a bottle of almond milk that's showing off in a very nice dress. It's got an hourglass shape. actually kind of aggressive in an obnoxious way. It takes up a lot of shelf space. The investors of Califier are mysterious. There's a Luxembourg-based venture capital firm, an investor from Qatar, or as PhDs would call it, Qatar. And then investors from Singapore. And finally, this one was wild. This is what the company says. An unnamed Latin American family

with interests in the coffee industry has invested in Caliphia. This sounds like a bunch of like the international students in the international club at an international University. Now, before plant-based milk goes mainstream, it needs an entry point. And that's what Calafia wants to be, the entry point to plant-based anything you consume. It's not just vegans, like me, this month, who are buying Calafia almond milk. And it's not just lactose intolerant people either. No, they shared this interesting statistic that their average customer eats meek three times a week, which implies they're a reducititarian like me. People who just want to eat less meat, but not cut it out altogether. Exactly. And this is the way they get

into the non-meats. The CEO of Califia thinks that plant-based milk is a bigger potential market than plant-based meat. And that's because he's looking at the products he's selling, which are core ingredients that go into a bunch of other things. Like coffee creamer. I use plant-based coffee creamer all the time. Or you can be using it as a plant-based addition into a coffee blend.

Or yogurt. Or ice cream. It's a lot of use cases for almond stuff. Behind the scenes. So, Jack, what's the takeaway for our buddies over at Caliphia, not Caliphia? Does the brand matter? I'm not sure it does for almond milk. Plant-based meat brands do seem to matter.

You got the impossible Whopper at Burger King. You got the Beyond Breakfast Sandwich at Dunkin' Donuts. But almond milk is kind of commoditized just like dairy milk. Commoditized means it doesn't matter what brand, everything's the same. Just give me the cheapest one because that's on I'm buying. Starbucks, for example, they have almond milk and they use a lot of non-milk products, but you don't really care who's behind that. No, they pour it right into that silver half and half thing. You don't know what brand it is.

I was even touching that thing. So if you don't care what brand it is, that's not a great news for Caliphia. And you don't seem to care about cow milk if you're still drinking cow milk these days. Yeah, you just want the cheapest cow milk. So Calafia has a brand right now. But we'll see if the customer actually cares who that plant-based brand actually is. This is Jack, Nick and I own stock of Beyond Meat. Jack, can you whip up the takeaways for us over there?

China and the United States agreed to de-escalate the trade war. But Americans are still paying $102 billion in tariffs a year. And the point is to discourage. Americans from buying Chinese made things. Second takeaway, Jack. Build a bear is seizing its moment. It's racing to bake a Baby Yoda toy before Hasbrook. Because Disney writers are behind everything.

They're Disney's competitive. And the lawyers made a carve-out for teddy bears. Third and final takeaway. Califia. Sorry, Caliphia is scaling plant-based milks with its new $225 million venture capital check. It hopesia that you don't just want almond milk. You want Calafia.

Did you say hopesia? I went with that one. Nice. It seemed like I should run with it. Jack, what's it? What is our snack fact of the day? It's from Richard Philbin, one of the original snackers from London, England. Original, classic, really good guy.

Richard has some fascinating stats about the United States. He always has great ones about us. If you cut out Alaska and Hawaii, just look at the lower 48. It seems weird, but yeah, we're going to do that here. Then the contiguous United States dedicates 50% more land to airports than it does to golf courses. We've got 3 million acres going to airports, 2 million going to golf. There are a lot of airports out there, random ones, and they are all pretty big. But there also seem to be a lot of golf courses that are really small, I guess.

No, they're not small. They're huge. Yeah, I guess they're not. It's a surprising one. Snackers, tweet us your snack facts at Robin Hood Snacks. Also, welcome to the snacks team, Rebecca Moretti. The third snacker has arrived. She's awesome.

And if you look at Robin Hood Snacks on Instagram, we've got a great intro video for. She's crushing through our newsletter as we record this right now. And she's bringing snacks to video. It's going to be exciting. We can't wait to be there for you on that. Talk to you tomorrow. 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, Inc. 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 security. investment decision. Robin Hood Financial LLC, member FINRA, SIPC.