The Best One Yet - Budweiser’s US Bud-pocalypse, Airbus is 2019 airplane champ, and Waste Management stock cleans up

Episode Date: October 28, 2019

Shares of Bud-owner AB InBev plummeted 11% on word it’s losing beer market share (fast), so it’s betting big on (wait for it…) sparkling seltzer. Airbus is thriving off of Boeing’s 737 Max crisis. And Waste Management’s recycling passion isn’t charitable — it’s profitable. 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. This Monday, October 28th. We got the best one yet for you, folks. Best snacks daily we've ever done. What's going on? Three awesome stories.

Airbus, Budweiser, and Waste Man. Giving them away right now. What's going on first? Airbus is having itself a year. Just got promoted to first class in the airplane industry. We're looking at the anti-Boeing. No peanuts in this one, peanut free. Second story is Budweiser.

Its parent company AB InBeth. Yep. Is having a Budpocalypse. This is serious. The stock dropped 11% Friday. Not a happy hour. That's a big. company to lose 11%. It was actually really significant. Third and final story, waste management

takes out the trash and can also take us out on a date. They can paint your front porch at this point. It's a public stock that's up 26% this year, just announced earnings. We're going to look at the recycling issue, which is now an issue. Waste management does recycling. All right, now before we jump into all that, people, we've got to talk passwords, password sharing. What's going on here? Well, this month, not this month, next month, November. Two new video streaming networks come out. And you're not going to have to share a password anymore. No more calling mom and dad where you know what goes on that. They never remember. No, no. No, no idea. My dad has texted my brothers and me at least 30 times, boys, what's the password? My mom just does a variation of her middle name

pretty much the whole time. It's like Alicey Al, Alicey ish, and then a random birthday. Here's the deal, Snackers. Disney Plus, which we're all excited about, comes out November 12th. And Apple TV Plus comes out Friday, November 1st. But that's not just happening in a vacuum, because if you own a Verizon-related wireless plan, you're getting one year of Disney Plus for free. And if you buy an Apple device, you get one year of Apple TV Plus for free. They're giving these things out. It's like Oprah style. You get this.

You get that. You get this. Because guess who else is doing this? T-Mobile. Yeah. T-Mobile's going to be offering Quibi. That's the story we covered last week. And then AT&T, they're going down hard on HBO.

They're going to be giving out HBO Max. The only streaming network that doesn't have a date. You know, they're at the ball. They're looking around. They're kind of pretending they're talking to themselves and they're occupied, but they're solo. Casey and Jojo is about to play, and you're going to have to do a slow dance with somebody. They're walking to the bathroom because we're talking.

about Netflix. Netflix does not have a Sugar Daddy wireless or phone company that's going to start paying the bills. Everyone else does. And these aren't just Sugar Daddy Wireless phone company situations. We're going to give them a specific name. When Verizon decides that it's going to give you a year of Disney Plus for free, they're hoping that Disney Plus makes you a Verizon customer. You know what we're calling this? That's a promo puppy. It's a promo puppy. Sounds like a profit puppy, not really. It's a promo puppy. Disney Plus is Verizon's promo puppy. Apple TV Plus is Apple's promo. Big month for the promo puppies. Let's hit our three stories.

You're tuned in to snacks daily. We spoke to the lawyers and we got to get something legal out the way. It snacks about to hear rain 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. Snacks is digestible. Business news for you. Robahood Financial, LLC. Member Fenra. SIPC. For our first story, Budweiser owner AB InBeb just lost $16 billion in market cap value. It's because of a Budpocalypse.

This is a serious situation. How many? By the way, $16 billion, that's like a lift in a quarter? Yeah, lost a lift in a quarter in market value, which is like all the shares of ABNB InBeb that exists in the world. It lost that much value. Jack and I are just trying to get home. It's Friday.

And next thing we know, Budweiser stock had dropped 11%. Their sales had barely budged up last quarter, 2.7%. And then the profits? Forecasting, not so much. No, the fourth quarter is going to be bad. The third quarter was bad. It wasn't fun. Not a good time for ABMbev.

And this is almost a side note. Yeah, this is kind of a hilarious situation. AB InBev is like the most global company we can even think. Right. They're like that one kid who shows up mid-year at your school and they're like, hey, this is John. He can speak 12 languages. Oh, welcome in. Hello.

Bonveniros. They have beer brands across the globe. True. So true. When you order a beer, they're like, what language do you want your beer? They don't even waste time on this thing. In China, though, the volume of beer sold by ABM Bev dropped by 6%. We thought this was hilarious.

We looked into it further. Pretty funny the situation going on. In new Chinese law limits the amount you can drink after 2 a.m. Yeah, they're not serving it anymore after 2 a.m. Apparently, a lot of beer is getting drunk past 2 p.m. Which is funny because in America, almost every bar closed at 2. With one exception. New York City and Las Vegas.

Everyone who lived in New York City like us right after school, they go and visit their buddies in Boston. And you're like, oh, your bars here close at like 11. Yeah, cute bar, close it to 12. Meanwhile, Jack and I are like, go home and cook on a Saturday night at 6 p.m. We're in bed by 9. That's true. How times have changed. New reality.

But let's get back to the Budweiser. Yeah. The bigger issue is the U.S. market. This is Bud's home market. Anheuser Bush used to be based in St. Louis, Missouri. Very true. It got acquired by Inbeb. Very true.

It's the biggest beer company in the world. And let's talk about market share. Right, because that's where we're seeing the Bud pocket. where the market share is. Market share is like who owns what percentage of beer sold in this market? So let's say there were a hundred beer sold because market chair is out of a hundred. Whatever number you get there. So like let's say that you're Budweiser and you've got six, that's the percentage of a hundred. So like you're selling six beers out of 100 beers. Right. A couple of years ago, Budweiser had six percent of the beer market in America.

Turns out that that Budweiser label has been losing market share rapidly. Two quarters ago. So the second quarter of 2019, I remember well. Budweiser lost 1.35 percentage points of market share in America. Turns out last quarter, it got even worse. It lost 1.75 points of market share. So it used to have 6% market share of American beer. So like 6 out of every 100 beers. Now it's down to 3%.

Really bad sign for your flagship beer brand. Not something you want to see. So, Jack, what's the takeaway for our buddies over at Budweiser? A.B.M.B.M.B.'s plan is to take all of its beers and create a seltzer version. It basically wants to like copy. Happy paste control S this whole thing. The S being Seltzerify its beer. Sparkling Seltzer is rapidly evolving.

Jack's his air quotes. According to the men wearing suits at A.B.N.B.N.B.B. But Budweiser wants to jump in. So what A.B.N. Bev is doing is it's launching so many sparkling seltzers. They're mimicking exactly what the beers are. They've got like a top shelf version. They've got a mid-tier casual version. And then a college frat juice version.

They got something you can throw on the beer pound tables. So the top one is called Bonn-en-Vee. The flavor, by the way, their main flavor? Clementine Hibiscus. You're not getting that in the basement of ADP. Put that on my chest and massage me, please. It sounds like a spa thing. That's ABM Bev's first ever official hard sell.

All right, so that's on the higher end. On the lower end, they've got Natty Light. By the way, core flavor here? What? Catalina Lime mixer. That's a stepbrother reference. It kind of beats up the Clementine a little bit. And then, this is the flagship one coming out soon.

They haven't said when. Bud Light Seltzer. Bud Light Seltzer. So if you're AB&B. and Bev, you're reacting to what's happening with Budweiser by going all in on sparkling seltzer. For our second story, Airbus has become the top airplane maker of 2019. This thing's official.

This story is about Airbus and Boeing. Do you get like a trophy for this kind of thing? Maybe you get one of those model airplanes. They like bring you up to first class. They give you wings that you get on your shirt. Bring those back, please. Now, Boeing and Airbus, one of the great duoplies of this world. Right.

Two companies that are dominating and basically, They together have a monopoly on the whole industry. You got NASDAQ and New York Stock Exchange. You got Coke and you got Pepsi. You got the F-150 and the Silverada. You got Uber Lyft going on right now. Brittany and Christina in the 2000s. So with just two months left, the race is already run by Airbus.

Okay, we got a scorecard here? Airbus has delivered 557 airplanes. Nice number. They wanted to hit that 600, I'm sure. Someone had that up there somewhere. Well, it's got two months left. That's pretty curious. Boeing, on the other hand, has only delivered 300.

Now, Boeing as a company, it's based in Chicago and Washington State. They got a kind of dual situation there. I think corporate is in Chicago and manufacturing is outside of Seattle. Washingtonians are very proud of their Boeing roots. Airbus, on the other hand. Oh, my God. This is like a, this is a beautiful thing. It's like the European Union of corporations.

This is literally like the Disney ride. It's a small world after all. Yeah. They were created in 2000 with the merger of a French, German, and British aerospace companies. It's actually a charming method. metaphor. The headquarters are in Toulouse, France, but it's got manufacturing and employees all across the European. Now, here's the thing about Airbus stock. It's up 45% this year. Not too. It's pretty impressive. It's actually never been in more demand. Well, I think we all know why.

Yeah, we know why, because Boeing 737 Max has cast a shadow of pretty much all things Boeing right now. Get this. Southwest Airlines has been monogamous, faithful relationship with the Boeing 737, Since it started 40 years ago. It's a beautiful thing. Like high school sweet arts. Yes. Even Southwest is thinking about switching airplane manufacturers because they're so disgusted with the 737. Boeing stock, on the other hand, is actually up, but only 5% this year.

It's shocking that it's up and we'll explain why. Because the 737 max crisis, you know, all of their 737 maxes have been grounded since March. They're literally stuck leaving him in like the air or in like the parking lots. Yeah. It's cost the company $9 billion so far. The CEO had. to step down as the chairman of the company. But the thought is long term.

This won't have a huge impact on sales. It's more of a short-term thing. By the way, before we hit the takeaway, Airbus's earnings report come out Wednesday. It's a publicly traded time. So, Jack, what's the takeaway for our buddies over at Airbus? Airbus stock is up because of pricing power. Airbus has a nine-year backlog of plane orders. You want to get on one of their planes?

Yeah, good luck. You're going to be like a different person in nine years. If you're Southwest and you've been waiting for seven months for your 737 max to be delivered, You can't just go like, oh, I'm going to Airbus. Airbus, can I have a plane instead? There's no 1-800 number boom, you're gone. You got your plane. Airbus is going to be like, sure, you could buy one of our planes.

Get in line. Get in line. Line takes nine years. Take a ticket. We're on number three. Yours is 62. Like a deli. So Airbus stock isn't up because it's selling more planes.

It's already maxed out on how many planes it can sell. But Airbus is now a premium brand. So it has the leverage because Boeing's kind of out of the picture temporarily to charge a higher price. Yeah. So it can try. charge higher prices to customers, it can actually demand like a lower price from its suppliers. This is Airbus exercising its pricing power. Boeing, on the other hand, long term, we think it'll be fine because it's in a duopoly,

and its customers are kind of stuck with it unless they want to wait nine years. Our third and final story, this one is fascinating. Waste management just revealed what it's doing with recycling, and the stock is up 26%. I just ordered Chinese food on DoorDash. I know it's happening. I swear there were 27 containers. involved in my two-person meal. I ordered a meal the other day. I got a container with no food in it. They just gave me an extra container. This is so frustrating. It's incredibly difficult.

You know, we're partly to blame. I said it. It's one of the great inconvenient truths of our generation, the waste of delivery. But we got curious about the company waste management because they just reported earnings. The stock dipped down like 2%. But they're in an interesting situation. They're the ying to your like door dash delivery obsession, yeah. Right, because you're buying stuff, it's got to go somewhere. That's where their business model comes in. Basically, all consumer goods that we buy eventually end up. End up in the trash. And that's where waste management steps in. So here's what Jack and I found so fascinating about waste management. They're not just making money on your waste. They're making money on the other side, too. They're making money on two different

ends of the product. Let's start things off with. Two different ends of the trash. The collection and disposable business. This business is pretty straight for. When you put stuff in a dumpster or you put stuff in that huge building trash can that you and your neighbor share. Yep. Waste management comes by once a week and it takes it away. Right. Let's say your buddy Timmy threw something in there. Waste management's going to take it away.

They're going to charge your building for this situation. Now, revenues in collection and disposal grew 2.6% last quarter compared to the year before. Right, because you're buying sparkling seltzer. You're buying brolets. You're buying DoorDash. You're doing Shake Shack. All that stuff's ending up with waste management and they're getting paid to take it away. And like the landlord pays for it or maybe you pay for it if you're a residential.

All right. So they get rid of all that stuff. But then here's the other thing. They're also making money off the recycling end. Yes. A lot of the trash ends up in a landfill. And that's why it's important to minimize your waste. Exactly.

But some of that trash can be recycled and waste management makes money off that. Right. They're turning that trash into gold, like literally in some cases, and then they're selling it. For example, let's say those sparkling seltress that your buddy Timmy just finished and you guys recycled, those are going to be processed by waste management. They're getting the fee just to take them. Right. And then Coca-Cola is making.

You know, they're bubbly or whatever. They're sparkling water. And they need some cans. So they're going to buy those recycled goods from waste management. Here's the funny thing with waste management's recycling right now. We notice the revenues dropped a whopping 27%. And there are two key reasons for this. One is commodity prices.

Right. So the aluminum can that Coca-Cola is buying from waste management that came out of your trash. That's got a price. Aluminum has a price and it's not up to waste management how much that price is. Right. Copper, aluminum, plastics. metals, their prices are determined in global commodities markets. And then whatever waste management can sell that product for, it's based on that commodities price. So commodity prices are down. That's one reason waste management's recycling revenues are down. The other reason is that

30% of the recycled materials that waste management was processing, China was buying them. China is a historic, long-term buyer of America's trash. Because they want it. It was the part that's recycled. They're going to get your stuff. They're going to reprocess it because they're manufacturing so many things. But this is kind of partly a trade war. Oh yeah. China has stopped buying recyclable materials from the U.S. And now we just have like, we're like, wait, you don't want this, you don't want this recycled stuff? We're like at the port. It's trying to drop it off. It's kind of a crisis in America right now recycling and waste management is dealing with it.

But waste management's trying to find some more American firms to make up for China not buying its stuff anymore. So Jack, what's the takeaway for our buddies over waste management? Waste Management has a financial incentive. to help the environment. Recycling is good for the environment and it's good for humanity, but waste management, it's not just doing this for like charity. No, it's making it, it's doing it to make money. It's making money on both ends, as we just pointed out. Sometimes there is a financial incentive to do good, and that's like this case. Other times, there is not a financial incentive, and the government has to step in, like greenhouse gases. In this case, this is how capitalism can work. It's the market-based

solution that waste management's fault. So a top initiative for waste, management right now is consumer education. They want to make sure people are recycling correctly so we minimize waste and so that waste management can sell more recyclables. Consumer education, like pamphlets and stuff and the thing posted up, the PSAs with like the little boy who's recycling and having fun and smiling. Sounds like nonprofit work. It does. No, it's a for-profit company called waste management. Jack, can you whip up the takeaways for us to start the week? A.B. Inbeb is creating a seltzer version of a bunch of its drinks. And the U.S. market chair, Budweiser, keeps losing market share. Airbus has maximum swagger right now, officially crushing Boeing

as the planemaker of 2019. It's flexing its pricing power Airbus style. Third and final story, waste management is trying to be a leader in recycling. We need, we just need like need a song about how you can recycle. That'd be pretty critical. Yeah, what bins to put it in, how to clean it, April, June, and November, 30 days, half September, something like that. We need something like that. Someone just give us something to help us remember where to recycle and how. In the meantime, we've got our snack fact. one, like a second one we got in from Justin Crammond, Fort Lauderdale, Florida. Justin, baseball season, kind of ending. World, in honor of the World Series, we want to bring you back to the history of,

Take Me Out to the Ball Game. Conceived and written by one Jack Northworth in all 1908. Yeah, you wonder why he mentions Cracker Jacks in the song. His name was Jack. The guy wrote it. And Cracker Jacks was apparently like 150 years old we just found out. Yeah, we were fact checking this. Jack Northworth wrote the song, Take Me Out to the Ballgame in 1908.

He'd never been to a baseball game. game before and didn't for another 30 years. And now he's had a legacy. It's actually kind of impressive. It's kind of cool. It's kind of cool. Snackers, T-Boy Tuesday was last week. We got to congratulate Jesse Kerr of Portland, Oregon, who is the winner suggesting Adam Scott should play Travis in the upcoming Uber TV show. Adam Scott is either a really, really nice guy in his roles or a total jerk. It's one of the extreme of the other time. Now, this week's Teboy Tuesday, This one I am so excited about. Best business Halloween costume idea.

It could be a profit puppy. It could be a profit puppy. It could be something else. We have some great ones already on Twitter. Submit one on Twitter right now at Robin Hood Snacks for your chance to win a T-Boy T-shirt. We want to hear your ideas. 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 a

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.