The Best One Yet - Beyond Meat’s partnership-palooza, Boeing’s $8.5B “gate”, and Tinder tries to cut out Google’s app tax

Episode Date: July 22, 2019

Beyond Meat is bouncing back after 2 big partnership deals — online and offline. You’re constantly hearing about Boeing’s issues, so we’re breaking down how its $8B price tag stacks up to other corporate scandals. And Tinder’s new move to sneak past the Google Play store highlights how app stores have become tollbooths.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. This is snacks daily. It is Monday, July 22. And this is the best one yet. This is actually the best snacks we've ever done. We've got three stories for you at this point. Wonderful mix. This is a really well-balanced. Beyond Meat just announced a partnership that is beyond the early adopters. Maybe the most important partnership it's ever cooked up ever. Second story is Boeing. It's been a drip, drip, drip, drip, drip, drip, drip of news. Boeing, Boeing, Boeing. We just learned that the price tag of its 737 crisis is $8 billion. And we'll show you where that ranks in the hall of corporate efforts. We're going to compare that $8 billion. We're going to compare that $8 billion. like every other gate out there. We'll get to that. Every other gate. Third and final story, Tinder is our strategic move of the day. It sneakily got around Google's app tax, which is 30% and brutal. If you have fingers and you use apps, this story is going to be highly critical for you. Now, before we get into that, how was your weekend? Good. I was seeing Jack, actually. Yesterday was yesterday was really good. We got a lot of, you know, mountain bike riding in, which was new to me.

And then we got an ice cream right after. Because that's what you'd do. Yesterday was national ice cream. It's why we actually did the ice cream. So we're going to talk about our boys, Ben and Jerry. This is a critical founding team. So the strategy of where they were going to open up their first ice cream shop in the 80s. A lot of people don't know this. They decided they were going to pick a city that didn't have an ice cream shop. Right. So that means you were going to go a little north on the longitude. Yeah, because in the south, they already had ice cream shops because it was in super high demand. I meant latitude. So they were going to pick Saratoga Springs, New York first. Right. A nice city, nice town. It's a lot of water. But then somebody came in and like set up an ice cream shop. Boom. So they go a little bit further north. The adventure continues to lovely Burlington, Vermont. The Queen City was its second choice, actually, and the only reason they picked it is because there was no ice cream shop. Paris on the lake right up there. Now, yesterday was brutally hot, like, throughout the country. It's easy to sell ice cream one at a time. If you're selling ice cream in Burlington, you're dealing with brutal cold pretty much, I think it's like nine months out of the year. So to incentivize Vermonters to buy ice cream, Ben and Jerry's came up with this brilliant strategy.

It's called Pops Subiswe, which actually stands for something human. So Ben and Jerry's gave a penny off per Celsius degree below zero. Add up all those first letters. It's a beautiful little acronym. So basically, if it was 20 degrees below zero, you get 20 cents off your cone. That was a big deal in the 80s. Business School 101. By way, favorite flavor?

Chocolate fudge brownie. Okay, I'm going with anything with the side of cookie dough that I put in myself. You sound like a half-baked guy, which is half chocolate fudge or brownie, half chocolate. It's a pro move with extra extra cookie dough. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. For 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 You know, we're not recommending any securities Nope 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 Robah Financial, LLC Member Fenra Slash SIPC For our first story Beyond Meat's big week Just has a stock up like

Really close to a record high over here Now Beyond Meat, You have been polarizing to the snaps. You have hurt some people. We got a message on Instagram that someone thinks it tastes like chalk. I guess that's a negative. That is not good. Another was surprised that there's like 22 grams of fat.

It depends what kind of chalk you're eating. But another thinks it tastes better than... Right. Apparently... Never going back to the red meat. People are putting Beyond Meat on there beyond meat. Right. We're not food critics.

Nope. We're business critics. Technically. Let's talk about two big developments. First, number one up north here with our buddy, Timmy Hoze. Timmy Hose, which is Tim Horton's. It's Canada's. biggest restaurant chain, basically the McDonald's for hockey players. Yeah, it's like a McDonald's, but it's

more polite. They've been exclusive to like breakfast food, like forever. They're not just jumping into burgers right now. They're going straight into plant-based burgers. They're expanding to burgers, but plant-based only. You can't even get a beef burger. They're not even stopping to go and collecting 200 bucks. They're going right to the plant-based. So now all of Canada can try out Timmy Ho style beyond meat. For lunch and dinner. Now, that was the first partnership. The second one was a lot more interesting and got us very curious at snacks. Blue Apron will be the first meal kit to offer Beyond burgers in the meal kits. Now, when this news got announced, the meal kit maker Blue Apron, it stock searched 30% on the news. Yeah, that was a whole different

story, but we're focused on Beyond, because Beyond stock rose 4% last week, and we think they're the real winner of this story. Their stock barely budged, but here's why they're the real winner. Beyond has needed a testing vehicle. And meal kits are the perfect way to do that. So Blue Apron, apparently did this survey if you're getting the meal kits at night because you're a little too lazy to just chop up your own zucchini. 63% of Blue Apron users who get meal kits said they wanted to try plant-based meat, but they, like, didn't know how. They didn't know how. They didn't know where.

Now, a Blue Apron meal kit is the perfect way to test out a Beyond Meat. Exactly, because you're just getting it once or twice. If you like, you can get more. And if you don't, you stop ordering it on the milk. Now, here's the thing. It is all dressed up in a beautiful way this plant-based pattern. Right. This isn't just a meal kit.

This is like Beyond Meat decided to go to prom, get dolled up, and make. make sure I put on extra makeup. If you look at the Blue Apron menu, there are two items that include the Beyond Burger. So the first one, can I serve this to you, sir? The special tonight is a caramel onion and cheddar Beyond Burger with garlic green bean side. Eh, not too into caramelized onion. Can we interest you in the other option, which is a jalapeno and goat cheese beyond burger with corn on the cob as a recipe?

Okay, I'm drooling. That sounds delicious. Jack's got this mucus situation. So let's break down why this is perfect for Beyond. It gives you the great opportunity to try out at Beyond Burger. Check. It controls the experience because it has the whole recipe and how to cook it perfectly. Check.

And it is dressed beautifully in all those lovely side items. They probably have a parsley sprig as a garnishing. You got to have that. Compare that if you went to Whole Foods, picked up some Beyond Meat, and then we're just in your kitchen trying to throw it on a sauce. So this puts Beyond Burger to be like the best chance for success in your first try. So, Jack, what's the takeaway for our buddies over at Beyond Meat? This is how you move beyond the early adopters.

Early adopters. This is a key tech concept, but we're going to apply it to meets. Basically, the first 15% of users are the early adopters. They like trying new things. Yeah, they don't care that it's kind of crazy. They want to do something that's been unknown, totally different. It's like the guys who bought Google Glass. Yeah.

Yeah, it said it's the future and they won't stop talking about it. The next 35% after the first 15, that's crucial. That's how you determine business success. That's your mass market. Google Glass never got there. No, because you can't just wait for it. that mass market to come to you, you have to go to them. And one great way to do that is to align with brands that the customers already trust. This partnership between Blue Apron and Beyond Meat,

it's way more strategic than if Beyond Meat just threw that money at like ads. Now, a side note, we anticipate self-driving cars will eventually need this. Early adopters are going to love to try it out. After that, you'll need a partnership. Strategic brand partnerships are how you can move beyond early adopters. And by the way, this is Nick. Both Jack and I own shares of Beyond Meat. For our second story, Tinder is bypassing the Google Play Store. And that's a strategy that more tech companies could follow. Now, this seems small. You almost like would pass this over, just go into your weekend, forget about it, whatever.

But don't. Do not. This is a big deal. Match, which owns, Match the dating app company, which owns Tinder, their stock jumped 5% on this news. Tinder is the most profitable app for Match. By the way, Match is ticker symbol. M-T-C-H. Huge missed opportunity here.

That could have been L-O-V-E. Or K-I-S-S. Or S-Y-P, or S-W-Y-P? That could have worked because he can't do five letters. Nice. And we'll go with it. So it's also Tinder, the highest-grossing app in the Google Play Store. Now, the key here to understand is how Tinder actually makes its money, because it's making a lot of money.

All right. The first way is obvious. You're probably aware of this. There's subscriptions. Right. You got Tinder Basic, which is a lowercase B. Right. Not like Basic.

Like, they're not against your brunch and like the yoga pants or anything. It's Tinder Basic, meaning it's just the free version. Right. But after that, you get two premium versions. that create revenue for Tinder. So you got Tinder Plus, which is $10 a month. Unless you're 30 or older, tender age, you pay double.

It's 20 bucks a month. And that's when you're going on mountabike rides over the weekends and eating ice cream for the rest of the day. And then you got Tinder Gold, which is somehow better than Plus. And it's five. The other one didn't do it for you. Yeah, it's $5 more per month. We're calling that the insecure tax.

Right, because you're paying a little too much at that point. So these premium features, they give you like super likes. They give you a boost, so you can boost your profile. You can also check out singles. like not in your radius in any part of the world. Passport feature over there. Or you can see who has liked you, but you haven't liked them yet. Right, which is kind of like unnecessary.

Yeah. Now, you also can do these in-app purchases, which like can upgrade you to cool new features. This one's fun, but can be depressing. They have read receipts, which you can buy like five or 20 packs of. So when you send a message to someone, you get to see whether they've read it. This is the subtle he or she is just not that into you kind of situation. Now, both of those things require payments from the customer. And in the past, you pay through your Google Pay account.

Right. It was a one-click kind of a thing. Google already had your credit card info. Boom. You want to find out if someone read that love note they haven't responded in a week. Now you can find out by paying. But here's the deal. That five pack of read receipts, 70% of the revenue goes to Tinder and 30% of it goes to Google.

We have to like sit back and repeat that. 30% of that goes to Google. That is a huge percentage of Tinder's revenues. Now, Tinder wants to change that. They're basically seeing there and saying, hey, we're paying a lot of money. Just for Google a process of payment here. By the way, that's the news. Tinder is trying to get around that Google tax by having customers go straight to them and cut out the Google.

So again, now, if you're in another country, you want to use Tinder abroad so you need to download the new feature, Tinder wants you to pay by giving them your credit card info directly. So that 70-30 split that we talked about, Apple has the same thing. We call it the app tax. It's basically a toll business situation, but it's run by Google and Apple. Now, most companies just accept that as a cost of doing business. Yeah, they're like, whatever, I got to pay this even though it's a big sum. But there is a recent trend of companies that are resisting the app tax. Hardcore. Epic Games, which owns Fortnite. It's a gaming company that is doing the same thing as Tinder's doing.

And Netflix, which is the king of streaming. It's like, I am tired of giving 30% of my revenue and 15% after the first year. And then Spotify is fighting the good fight here by suing Apple because it's unfair. So, Jack, what's the takeaway for our buddy swiping over Tinder? This is a tax, and taxes increase prices for you and me. And this tax is possible because Google and Apple that own those app marketplaces, they have monopolies. Now, if this app tax can go away and that 30% doesn't go to Google, in theory, Tinder and Netflix and Epic, they should lower prices because that's how competition works. Now, let's say this Tinder situation goes through. There is a slight downside here. The only downside is you're going to have to grab your credit card, type in 16 digits,

put in that three-digit code a little more often, which is a pain. And then maybe your buddy, Timmy, he loses his credit card. He's got to re-put his credit card into each of the apps. do this. But this is a big concern for both Google and Apple because they have a lot of revenues coming through this app tax. And Google's a little worry that other gaming companies in particular could be following this because those tend to have a lot of in-app purchases. So expect those tech giants to like somehow resist these resistors. For our third and final story, I can't believe we're already here, Jack. Boeing scandal officially ranks as like one of the worst corporate scandals ever. So we've got a key update and a little bit of context. Yeah, worst price-wise. Snackers, we have been

keeping track of how much the Boeing 737 max crisis has cost Boeing. Now, last week they announced, $5.6 billion is going to be shelled out by Boeing to their customers as like reimbursements. And their customers are like Delta, Southwest, United. The airline companies. All of the airlines that bought these planes, but haven't been able to use them since March. Now, they've also lost $2.7 billion in planes that they like should have sold but haven't been able to sell.

They haven't sold any 737 maxes since March. You need a buyer and there haven't been buyers. Now, another cost is the $100 million, Boeing has set aside for victims of the families of the two deadly crashes that caused this whole scandal in the first place. So Jack opened up his drawer, pulled out the abacus. We did a little math here. Give her a shake. It's $8.4 billion.

That is a lot of money. But honestly, $8.4 billion. What does that mean? Right. So snack style. Snack style. We'll give you some context. We got to give some context.

We went deep into the textbooks of corporate shame. I think you should do this first one because you really. really like this first. Yeah, we're going to give you context how this compares. Volkswagen, Volkswagen, in German, Dieselgate. They lied to regulators. They lied to customers about the clean diesel engines. That cost Volkswagen $30 billion to date. That you might be familiar with the Cambridge Analytica scandal over at Facebook that affected like 87 million users data. That cost Facebook a $5 billion fine we found out the other way. All right. We got more. Wells Fargo. It opened millions of fake bank accounts to rip off customers. Never a healthy business model. That caused it $575 million. Then you've got the subprime mortgage crisis.

This was the doozy. This is what led up to the whole 08 financial crisis. It caused massive, massive human pain and damage. And when you look at the cost for the big banks, Citibank, $7 billion. J.P. Morgan Chase, $13 billion. Bank of America kicking it up a notch with $16.5 billion. That gives you some perspective. Like, Boeing's cost is about half the price the banks paid for the financial crisis, basically. So, Jack, what's the... the takeaway for our buddies over at Bowen. It's a miracle for Boeing that it only has one competitor out there. If you look at Boeing stock, this indicates a lot. It's only down 11% since the second crash happened on March 10th. 11% that is like nothing for an $8 billion crisis already. Boeing hasn't

lost many orders because Europe's Airbus is pretty much the only competitor and Europe's airbus. It's like sold out for years and years already. Now since we're handing out some context here, VW scandal hurt the company a lot worse than Boeing's been heard. Right. VW stock was down 60% in the months following the diesel gate scandal. Right. Because if you were upset at Volkswagen and he didn't want to use one of their cars, you had like three dozen options to choose from when it came to car companies. And if you're mad at Boeing, you have one other option. It's Airbus and you can't even really buy a plane for Madhus. Nothing else you can do. P.S., Boeing hopes to have at 737 maxes flying

before the end of the year. This is Jack and I own stock in Volkswagen. Jack, can you whip up the takeaways for us? Blue Apron is helping people try out beyond. me in a safe environment. Blue Apron meal kids. This is how you move beyond the early adopters. Second story, Tinder is trying to cut out the app tax of Google by getting daters to pay it directly. Tinder, making the first move over here. Very nice Tinder. Third and final story, Boeing 737 Max crisis has cost at $8.5 billion, but its stock hasn't suffered much because there's only one competitor. And $8.5 billion makes a lot more sense when you have a little bit of context. So time for our snack fact of the day. This one we're going to like wrap up all.

the moon stuff because there's like a lot of moon stuff. Yeah, moon week ended over the weekend. So we're going to know more for you. We're going to give one more ending to it. There are 355 U.S. astronauts past, present, and future. And the two top cities where those astronauts hail from? First one's New York City. Not surprising.

No, population-wise. But the second one is like a little bit more of a surprise. Cleveland, Ohio. You got to give these guys a shout-out. Eight astronauts from Cleveland, Ohio. Rome on the Lake, Cleveland, amazing. Ohio has a couple other famous ones, Neil Armstrong and John Glenn. Both from Ohio, the home place of aviation.

Snackers. We love starting our week with you guys. We will be back with you again tomorrow as often. More ice cream. 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, 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.