The Best One Yet - BONUS 🤤 “The Food Pod” — Our Best Food stories from 2024

Starting point is 00:00:06 This is Nick. This is Jack. And today's food pod is the best one yet. The top three food stories you need to know today. Now, Basties, this is episode number three of our holiday bonus week. It's the best of food, our best stories of the year on food, beverages, and restaurants. And Nutella. Send this episode to your buddy who works as a chef or in a kitchen.

Starting point is 00:00:26 Or just send it to your hungriest buddy. You know what? Send it to your buddy who can get you a 7 p.m. at Carbone on a Friday night. Send it to that somalia. That's what you got to do. It'll be a quid pro quote. You send them a great podcast. They send you a great reservation.

Starting point is 00:00:39 And they're going to get promoted. Jack, three stories for today's food pod. What do we got? Our first story is from January 22nd. My birthday. We got an inside look at one of the world's oldest businesses. Haribou gummy bears. Haribow, they became the biggest candy company on earth by staying the same.

Starting point is 00:00:56 For our second story, we're going back to May 6th. That's when the new hot IPO of the year was bubble tea. Bubble tea. Boba tea chains were IPOing for billions. But bubble tea may actually be facing a bubble tea bubble. And our third and final story is from August 5th. While all the other food chains were struggling, one was rising. Yes.

Starting point is 00:01:18 Shake shack. Shake shack. The $10 shack burger is proof that perception overpowers prices. But Yeties, before we hit that wonderful mix of stories. Fantastic mix of stories, Jack. When 2024 was beginning, Starbucks was launching their first olive oil coffee. But as 2024 ends, Starbucks is canceling their olive oil coffee. Olietta. That pretty much sums up the year, doesn't it? It does, because 2024 saw more

Starting point is 00:01:50 wild food stories in business to make Gordon Ramsey bite a pan. First, remember Chipotle was accused of shrinkage with their burrito balls on TikTok? Yeah, Jack. And then one bank analyst ordered 75 barrito bowls in order to test their size. And this was the year that red lobster sadly went belly up bankrupt. Yeah, blame the all-you-can-eat shrimp buffet or their private equity owner. On the bright side, Sweet Green opened up a robo restaurant. And sweet green stock tripled, while McDonald's finally started selling their sauces separately. Although McDonald's stock fell. We discovered in this pod this year that Capri Sun invented the juice box. And we discovered that Disney World got a Michelin Star. We also invented a new financial food metric. Yeah, we did. R-O-I. Return-on ingestment.

Starting point is 00:02:36 And we calculated that the avocado, while delicious, is actually the least efficient fruit. Because the avocado has the lowest fruit to pit ratio in produce. You're tossing most of that avar. Oh, side note, Jack had his very first Dr. Pepper. You still okay? You enjoy it? How do you feel up that? Oh, side note, Nick ate a bunch of strawberries, leaves in all. He just popped the entire thing into his mouth. It was controversial. Barry Gap. Never forget. Barry Gave. And every food business launched a value meal this year. It was hot value summer. So, besties, you're about to give a five-star Yelp review with a terribly taken photo from your iPhone of this episode. Because these are the three best food stories of 2024. We're going to need some more napkins. More napkins, please. Excuse me, sir.

Starting point is 00:03:21 More napkins. 15 years before this song, two boys from the northeast met in the dawn. They had an idea to cause a cultural storm. It's the best one yet, but the best is a norm. Jack Nick, that's it. I don't even think they need to practice. 50% that's a fat tip. Tea boy city on your at list. If you know, you know, because we're ready to go. We can't wait no more. So just start to show. First, a quick word from our sponsor. Yeties, for our first story, we're going back to January 22nd, 2024. Happens to be my birthday, but also happens to be a great story. Happy birthday, dude. Thank you. I appreciate that. Let's jump right into the store.

Starting point is 00:04:11 Okay, this one is on our favorite gummy bear. The biggest confectionery company on Earth just gave us a rare inside look at the business. Haribou Gummies. It's Haribou Gummies. Haribou's success may be from never, ever changing. But yeties, before Jack and I jump into this story, if you're a dentist or a dental hygienist, earmuffs. You're going to hate this story. Here it is, and let's start with a trivia question, Jack.

Starting point is 00:04:38 Who invented the gummy bear? Well, the answer is Mr. Hans Regal from the German city of Bonn. Hans Regal from Bonn. Haribo. Oh, my God, Jeff. We put it together. We solved the case. Yet he was 102 years ago, Haribo, named after Hans Regal from Bon,

Starting point is 00:04:56 literally invented the gummy bear. And today, they sell a thousand different varieties of gummy bear across 120 countries. And now this is a private, not a public company. But according to Bloomberg Research, Haribo is the biggest confectionary brand on earth. Hershey's and Mars makes more candy in the United States, but nobody sells more candy in the world than Haribah. Yet he's Haribo is the Sultan of Sugar.

Starting point is 00:05:20 It is the Chancellor of Chew. Jack, can we say it's the king of the cavity? Haribou brags that their annual production of gummy bears could wrap the world ten times. Yeah, it's the king of the cavity. And 102 years after birthing the very first gummy bear, Haribo is still owned and run by that same family, the Regals. But yet, here's what Jack and I found fascinating about this story.

Starting point is 00:05:45 Haribo is the only company we have ever covered on this podcast that has said this. We will never change. We will never change. Like literally, the CEO of Haribo told Bloomberg last week that the company's German principles come down to this. We don't like to change. If it ain't broke after 102 years, Over at Harribo, they don't fix it. For example, in the last century, they've only made one major change to their core product,

Starting point is 00:06:12 the gummy bear. They changed its pose. Yeah, for the first 40 years, the Haribo classic gummy bear was like a dancing bear. It had its legs out. It was dancing. It was having fun. Now it's a chubby bear. It's not dancing anymore. They basically just made the bear's tummy bigger and they made its legs not dancing.

Starting point is 00:06:28 Only changed they've made in a century. Another example, their latest factory is the one they built in the United States in Wisconsin. But that factory, has the same exact layout as all 15 other Haribo factories across the world. Now Haribo does add new gummy flavors to cater to local tastes. Because every country has a different taste for their gummy indulgence. Sweden likes licorice. Spain likes peach-flavored gummies and the U.S. like sour gummies. Otherwise, Haribo does not do change.

Starting point is 00:06:55 Will you make us a gummy vodka, Haribo? No, don't. CBD gummies? Niche. An AI chatbot gummy. A zuntaita. It's not happening. And so Jack, what's the takeaway for our buddies who will never change over at Haribo?

Starting point is 00:07:10 When you chase fads, you run out of gas. Yiddies, Jack and I have told you on this show how hard, but how critical it is to innovate, to adapt, to evolve, to change. Netflix is Netflix because they disrupted themselves. They pivoted from DVDs to streaming. But Blockbuster went bankrupt because they didn't evolve to streaming. They did not change. So when Haribo says they don't change, what they really mean is, don't change who they are. Haribo doesn't chase fads. They don't change just because the outside

Starting point is 00:07:39 world is telling them to change. For example, they didn't change their company resources to partner with the Barbie movie. They stayed focused on global expansion instead. Haribo, they don't alter products for trends for publicity or for short-term viral hits. They stay focused on doing their thing. That's why Haribo still has the energy to sell more gummies than ever after 102 years. Because besties, when you only chase fads, you run. Yeties, for our second story, we're going back to May 6th, 2024. Happens to be Molly's birthday, too, but also a great story. But shortly after the publication of this episode, I actually tried my first bubble tea with you.

Starting point is 00:08:16 Oh, yeah, it was fantastic. Those little rubbery tap yoke balls are delicious. They're highly satisfying, especially when you suck them through the tube. It's like, they are satisfying. I feel like a vacuum sucking up tennis balls. And it is fascinating to learn about the whole bubble tea industry. For our second story. Bubble tea isn't just taking over your block.

Starting point is 00:08:37 Bubble tea is pouring all over Wall Street right now. Boba tea brands are IP on. But now Starbucks is joining that bubble. Jack, are we saying it's a Boba Tea bubble? Yes, we are. And I don't even know what a Boba Tea is. Oh, well, Jack, oh, and then we've got to start this story like this. Educate me, Nick, educate me.

Starting point is 00:08:57 If I go on Google Maps right now in San Francisco and search for Boba Tea, you know what I see, Jack? A lot of Boba T's. 18 place. This is in a one mile radius. That is Boba saturation. Yeti's bubble tea, aka Boba, is a tea with some bubbly balls. That's what it is. You've seen it

Starting point is 00:09:14 before you tasted it. And it's the fastest growing refreshment in the United States right now. Get this. In the last five years, there's been a 60% surge in the number of boba shops bubbling up across American cities. Kung Fu Tea is the name of the largest boba chain here in the United States. They're making 250

Starting point is 00:09:31 million a year in revenue. Now, like me, Yetis, you might have seen one of these. It looks like a glass of milk with a bunch of marbles at the bottom of the glass. It's like drinking a juice with tadpoles. Tadpoles that are trying to jump up and surprise you through the straw. I'm very intimidated by what those balls are. Nick, are they squishy? Do they pop when you bite them? Jack, when I dive in Teeboy style to my mango jasmine boba tea with extra bubbles, by the way, always get the extra bubbles. What are those balls, dude? The balls are tapioca balls, my friend. And what is tapioca? Tappioka is a rice like starch from the cassava plant. And yes, it is filled

Starting point is 00:10:05 with carbs, but delicious carbs. So when you chew it, is there liquid inside the balls? Or is it just like a solid ball? No, it just kind of hits your throat. It makes you a little uncomfortable. But Yetis, Boba was invented back in 1980 on the island of Taiwan, and it took off from there. And since it took off so much, tapioca for the Boba balls is now Taiwan's number one food export. Yeties, Boba tea has become so popular that Boba has its own emoji.

Starting point is 00:10:29 That's when you know you've made it. And Boba Tea has gotten so popular that Starbucks is added in bubble tea too. It's summer drink menu. Starting today, you can order a boba tea at Starbucks. And in fact, and I'm running out of octaves here, Jack. Boobot tea has gotten so, so popular that six Chinese boba tea companies are going public. I'll repeat it so that Nick doesn't have to because he might injure himself. I'm going to take a breath and drink some tea.

Starting point is 00:10:55 Six different boba teas have IPOed on the stock market this year. Boba tea brands, they're going public right now. Don't pop your champagne, pop some pearls. Bovati is pouring. onto Wall Street and investors are just discovering what the heck this is. All right, Jack, let's jump in T-Boy style. Last quarter, two of the biggest boba brands on Earth IPOed. One's named Mixu and one is named Gouming, both in China.

Starting point is 00:11:18 Both of those companies are worth over a billion dollars based on their stock price. All right, let's look at Mik Su. Mixu, whose name means sweet snow like honey in Chinese, has how many stores in China? 36,000. Could you pour on some context for us over there, please? There are nearly as many Miksu stores just in Chinese. China as there are McDonald's and Starbucks stores globally. So, Jack, I got to ask, how did all these boba tea IPOs do over the last few months? They've done boba brutal. They're down, big.

Starting point is 00:11:47 Yeties, the new boba stocks, they have plummeted and it has not been delicious out there. One fell by 40 percent, another is down 88 percent. This is a tapioca travesty. So, Jack, we got to ask, you got to ask, everyone who's in line for boba tea over here is got to ask, what is going down in that thick straw? I don't know, because I still haven't tried one. But I know the business behind it now. I got to get you some mango Jasmine. So, Jack, what's the takeaway for all our buddies sipping on boba tea? Boba is the perfect example of a bubble. This is a bubble tea bubble. But yet, Jack and I should make something clear. There is huge demand for boba. There has been for years, and this is not a fad. Boba is not going away. So the problem for boba isn't lack of

Starting point is 00:12:28 demand. The problem over in Asia, where the majority of boba sales are, is too much supply. It's not demand, it's supply, because usually we see bubbles in the stock market. The price of a stock outgrows the underlying value. That's a bubble. But this is an economic bubble. The number of physical boba shops simply outgrew the underlying demand for boba tea. Here's the cycle that happened. First, to chase demand, there was a surge in new boba stores that just got out of control. 36,000 Mixu stores? That is so many. stores and it's just in China. And then there was so much competition among those boba stores that the prices started dropping. One chain sells everything on the menu for $1. Just $1. And the result of

Starting point is 00:13:10 too many boba chains selling drinks for way too cheap? Oh, what was it, man? The result was a price war and none of the Chinese boba chains are profitable right now. That cycle is why we're seeing so much thirst for boba, but none for boba stocks. It doesn't matter how much you love boba. We're in a bubble tea bubble. And I promise I'll try my first. first one soon. Now a quick word from our sponsor. For our third story, we're jumping back to August 5th, 2024. Okay, the first story was Nick's birthday. The second story was Molly's birthday. The third story is where Nick and Molly had their first date. It's honestly a total, total coincidence. I think it's a conspiracy. It's a total coincidence. This one's on Shake Shack. Are you trying to

Starting point is 00:13:55 replace me with Molly this episode? Also a Shake Shack shareholder. I should point that out. Jack. Okay, definitely conspiracy. Besties are going to love this one. Let's jump into the Shake Shack story. For our second story. The surprise top stock of last week, get this, it's Shake Shack. Shake Shack shows that value doesn't mean low price. Value means it's worth it. Oh, Jack, I feel like we got to check ourselves on this. We've been calling this hot deal summer. And we've been saying that this summer had big deal. Haven't we, Dan?

Starting point is 00:14:31 Why are we saying that? Because in the last two months, every fast food chain has launched the same value meal. Wendy's, Burger King, McDonald's, all of them specifically launched $5 value meals, five bucks each. McDonald's ordered a burger, fries, and a soda for five bucks? Yeah. Wendy's and Burger King were like, me too. Even Keenan and Kell over a good burger launched a $5 value meal.

Starting point is 00:14:54 I love a good burger reference. Home of the Good Burger. Can I take your order? Everything's 20% off. So why is every fast food chain launch in a value meal this summer? Well, Americans have turned against fast food because of the higher prices. The burgers, that doesn't feel like your class of quarter pounder these days, does it check? No.

Starting point is 00:15:12 Feels like quarter of my paycheck. So despite all the value meals, McDonald's just announced last week their first quarterly sales shrinkage since 2020. We repeat McDonald's sales are down. You're not buying a Big Mac unless it's on the sale rack. Fast food is looking like T. T.J. Max right now. But yet here's what Jack and I found fascinating about this story. There is one shocking exception to everything that Jack and I just said.

Starting point is 00:15:38 Shake shack. Shake shack. That's the exception. The fast food chain that began the better burger movement. By the way, Jack, we should point out that you and I used to celebrate the wins at the original Shake Shack in Madison Square Park. That's where we would go. And I know that that's where you had your first date with Molly.

Starting point is 00:15:53 Yeah, it really is. I mean, you feel like the center of the world when you're in that Shake Shack, although you're always fighting for a chair, you know? The Edison Lightbulb. are a wonderful upgrade. Well, yet is whether or not you have been to the original Shake Shack, Shake Shack's earnings just dominated in a way no other food chain is doing. Revenues rose by 16%.

Starting point is 00:16:11 Profits doubled, and they had their highest profit margin in four years. Stick that in your Shroom Burger. Oh, in the top sellers last quarter, what were they, Jack? Seasonal burgers, like the Carolina barbecue burger with fried pickles, which is on the menu right now. But, Bessie's, this was the shocking thing. The Shake Shack's CEO said something, on the earnings call that made investors drool. He said they're not dropping prices. We repeat not

Starting point is 00:16:36 dropping prices. Despite peer pressure for Ronald and Wendy, Shake Shack will not put its burgers on sale. The CEO said that pricing is not a way to drive sales. It's the kind of thing that would make grimace grimace. No other food chain is doing that. It's a bold and confident thing to say right now. So Shake Shack stock surged by 20% last week. Shake Shack was up 20% percent. percent like there was caffeine in the custard. So Nick and I got to ask, how is Shakechak attracting more customers when every other burger chain is attracting less customers right now? And on top of that, ShakeShack has the most expensive burgers in the industry.

Starting point is 00:17:13 You'd think that they're suffering the worst with people being fed up with high prices. So Jack and I came up with this takeaway. Jack. Can we please get one takeaway side of fries extra ketchup for our buddies over at ShakeShack? Value doesn't mean cheaper. Value means it's worth it. Interesting thing, Eddies, Shake Shack stock is up 30% this year. Chipotle is up 20% this year and Sweet Green is up 140% this year. And yet McDonald's, Wendy's, and Burger Kingstock are all down this year. Well, the reason we think why is perception.

Starting point is 00:17:49 Because value doesn't mean cheaper. Value means worth it. A sweet green salad, a Chipotle burrito, and a shakejack burger are more expensive, but they're perceived as better value. Chipotle burrito feels like a high-end cuisine, but it's lower priced than a high-end restaurant. So that is value. On the other hand, Wendy's $5 value meal is cheaper, but it's perceived as less value right now.

Starting point is 00:18:12 Because a Wendy's burger feels low end, it's compared to a frozen pizza. And it's actually more expensive than a frozen pizza. So it's less value. See, someone thinking about a nice dinner, they consider ShakeShack a better value than the sit-down restaurant. But someone thinking about a cheap, dinner considers McDonald's a worse value than a frozen pizza. Add it all up, Yetis, and value and price

Starting point is 00:18:33 are just two different things, even though we often conflate the two. And perception overpowers price. Hey, Yetis, if you're a bestie, take a sec and hit that subscribe button. And like this video while you're at it. If you leave a comment, by the way, we'll read it. For our third and final story, across the world, stock markets just finished their worst week in years. And the reason investors are freaking out is the Titanic. You know, Yiddies, we'll just cut right too because it ain't pretty awkward update for your portfolio. Jack, you wake up the numbers, please? The NASDAQ stock index fell into correction territory on Friday, which means it's down 10% from its recent high. Jack and I told you last week that investors are worried about the huge investments in AI that they

Starting point is 00:19:18 may not pay off. It didn't help that on Friday, one famous hedge fund called AI a bubble saying it was overhyped. But then Jack and I were talking over the weekend and We're like, um, but wait, markets worldwide plummeted on Friday. So there's got to be something else going on here, right, Jack? We found three things that help explain the stock market dive of last week, which are unrelated to AI, and here they are. First, Japan's stock market fell nine percent on Thursday and Friday. It's the biggest two-day drop for Japan since that huge tsunami happened in 2011. What's going on in Japan? Well, their central bank is increasing rates, which will likely slow down their economy. The second thing that happened last week was Intel,

Starting point is 00:19:57 stock fell 28% on Friday. That's the worst day for Intel in 50 years. And the reason for that is that the once iconic chip company, Intel, is cutting 15,000 jobs because their business ain't doing well. But the biggest issue overall yeties was in the United States because recession alarms just went off. The worst recession alarms yet here in the United States. Because on Friday, we got the big monthly jobs report that showed a serious jump in America's unemployment rate. So far this year, the unemployment rate has increased from 3.7% back in January to 4.3% today. I know you're thinking best is a 0.6% increase in the unemployment rate. That doesn't sound like a lot exactly. But if you apply it to a whole economy, that means a million additional people are unemployed. Now, you know

Starting point is 00:20:49 that we've said that 4.3% unemployment, that is still historically low. But an increase that fast in that little bit of time, that's an increase that doesn't usually stop. That ends up being momentum. And it doesn't stop because our economy is kind of like the Titanic. If unemployment's rising fast, you can't just tap the brakes. Like the Titanic, it takes a while to slow down. It's a giant ship, not a go-cart. Just ask Kate and Leo. So Jack, what's the takeaway for our buddies over in the U.S. economy? The Fed drives this ship, but the ship takes forever to turn. Now, yadies, for three years, the Federal Reserve, our central bank, has steered our economy with high interest rates. That has been the direction.

Starting point is 00:21:32 The goal was to steer us away from hot inflation, to slow the economy down, to get prices down. And you know what? That worked. Inflation has been slayed, but now our economic ship has turned to a new issue. Unemployment. And it worked. Inflation has been slayed. It was great that the Fed turned the ship in that direction. Now, our economic ship is headed towards a new issue, unemployment, and a potential recession.

Starting point is 00:21:56 So now the Fed has to try to avoid that and turn the ship in a new direction by cutting interest rates at their next policy meeting. So here's the underlying problem. Our economy is like a huge ship. Yeah. It takes months or years to turn it into a different direction. It's like trying to boost the economy at the next policy meeting in September? That could just be too late.

Starting point is 00:22:17 It would be too long. The new iceberg facing the American economy isn't inflation, like the last few years. It's a recession and high unemployment. So hopefully the Fed, the captain of our economic ship, can turn this ship on time. Yet is those are the three best food stories of 2024. But grab another napkin because now we got the best fact yet on food for 2024. Here it is. Nutella was created because of a shortage of chocolate.

Starting point is 00:22:49 That's right, Nutella, the legendary hazelnutty Italian spread. Also a good skin cream was invented because of a shortage. Here's the story. Post-World War II, the region of Piedmont, Italy, had shortages of just about everything, including cocoa. But the one thing they were not short on was hazelnuts, which are grown locally, and they also had a whole bunch of ingenuity. So they mixed ground hazelnuts into their chocolate to make the little cocoa that they had go further. It's like the first example of shrinkflation. the cocoa, so they use more of the hislots. It is swapplation. Good point, check. And the result

Starting point is 00:23:25 was Nutella. They didn't turn lemons into lemonade. They turned not enough cocoa into Nutella. It's like we always say, necessity is the mother of invention and Nutella. And skin cream, apparently. And skin cream. Trust us, but that's a story for another pod. Yeties, you've looked fantastic for our third bonus episode of the holidays. Share this with your buddy who likes to eat or likes to buy food. Or anyone who can get you that reservation you really need this Friday night. Jack and I got another bonus pod for you coming tomorrow, H-Y-H-D-B-O-I. Have you had the best one yet?

Starting point is 00:24:04 If you know, you know.

The Best One Yet - BONUS 🤤 “The Food Pod” — Our Best Food stories from 2024

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