The Best One Yet - 👖 “Cotton Catastrophe” — Levi’s chain. Perfect Day’s meat ice cream. Gen Z’s Nike-fication.

Episode Date: October 8, 2021

Levi’s stock surged 8% not because of jeans it’s selling, but because of what it’s buying. Perfect Day hit a $1.5B valuation for pioneering a new phase in the Future Food industry: Meat-Based-Meat-Without-The-Meat. And the annual report on Gen-Z just revealed we’ve got a brand new brand king of the generation (Snapchat is out, Nike is in).$LEVI $BYND $NKEGot a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Got a SnackFact for the pod? We got a form for that too:https://docs.google.com/forms/d/e/1FAIpQLSe64VKtvMNDPGSncHDRF07W34cPMDO3N8Y4DpmNP_kweC58tw/viewformLearn 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 Friday. The real Friday. October 8th. Snackers, if you hear a sonic boom during this podcast, it's not me. It's Nick.

Yeah, it's Fleet Week in San Francisco, so we got a bunch of fighter jets doing a show and... And they're practicing during this pod recording. Today's pod, though, despite any sonic booms, is the best one yet. TBOI for our first story, Levi's stock jumped 8% because a lot of mom jeans. Yeah, warning, though. We're in the middle of a cotton catastrophe. There is a cotton catastrophe. For our second story,

Perfect Day is a startup that just hit a one and a half billion valuation because of animal-free dairy milk. We know what you're thinking. Oat Milk? Are you thinking oat milk? Jack, is this oatmeal? No. No.

We're thinking of meat-based meat without the meat. You'll NVMWTM. For our third and final story, there was an annual report about Gen Z's like spending habits and it just revealed the top brand for a whole generation. LeBron is out.

Nike is. Swosh, there it is. Before we hit those three wonderful stories, Snackers. Wonderful mix to end the week, chat. It's the first Friday of October. So you know what that means. It's the monthly jobs report comes out today.

The monthly jobs report, we're going to learn about the number of new jobs, the freshest unemployment rate. The overrunners 5.1%. Did you hear that? We weren't kidding about the Blue Angels, everybody. That was aggressive. I think, let me just do a little mic check. Mike check, one, two, three, one, two, three.

But Snackers, since it's jobs report Friday, Nick was going to tell you. about the coolest job we ever saw. The coolest job we ever saw. Car sniffer. What's a car sniff? It's a sniffer of cars. That's what this is. Now, people are paid to smell new cars.

No joke. We're talking like a new position here. CSO, chief smelling officer. Nisa has a car smelling department. They call it the odor evaluation engineer. And that person literally smushes his nostrils on the dashboard. Jack's doing a perfect visual here. After like a pathfinder car leaves the factory, here's the problem.

They don't want it smelling like a factory. No, the first impression is crucial, especially if that first impression is something you spent 40 grand on. Oh, absolutely. Oh, and car sniffers, this job? This is of growing importance these days. You want to do this. That's right.

Yeah. Have you ever ridden in an electric car? They're so quiet. So silent. That the driver notices their smell even more. Jack, it is an ensemble of vinyl and plastic leather and cloth all coming together in one scent. Excuse me, waiter.

Could I have lighter on the light? leather, more on the cloth. Snackers, we got a message to whoever's right in the aptitude test for high school students these days. Yeah, you need to add car sniffer as a potential career path. Ability to detect subtle aromas, Jack? Lick Liam, you could be the Beethoven of the odor orchestra. I'm telling you.

Ah, that. Have you thought about it? Is grade A leather? What's in our three stories? You got the nostrils for it. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. The snacks about to hear.

rain food is ear 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. 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. Robahub Financial LLC. Member Fenra slash SIPC. For our first story, Levi's stock just jumped 8% despite denim's caught in catastrophe going on right now. It's not what Levi's is selling. It's what they're buying actually. First of all, the people, Jack, the people are dancing in denim again.

Levi's is based in San Francisco. And Nick just told me everyone is looking up into the sky every like five minutes. Seriously, these fighter jets going by for the stuff this weekend. It's intense. Down the road on Market Street, Levi's sales surged 41% in the third quarter, crushing Wall Street's expectations. We've told you before. about the dawn of the new denim cycle.

We're going through it. Every 20 years or so, it changes. And right now, loose fit is taking the throne from Slim Fit. I got a closet full of Slim Fit caccus jack, though, and I'm not abandoning it. But your post-quarantine silhouette may have you trading in the 511 Levi's for the 559s. We've all been there, and it's totally fine. Or you could just unbutton your pants and use it. That always works too.

You know what I'm talking about. We know what you're talking about. So the big problem here, though, Snackers, is a different issue facing Levi's. Cotton. Cotton prices. Cotton prices have surged about 40% this year. The white gold. Cotton. Came out of nowhere. And that's a problem because jeans are like pretty much entirely cotton. Jack, we jumped in snacks out of this. What percentage of jeans are cotton? Like 20%, 30%, 40%, 40%, 50%. I mean, it must be everything except the rivets and the zipper, right? Sorry, a fire jet went by again. What number did you say, Jack? I said everything but the rivets and the zipper.

Yeah, 99% of jeans are cotton, literally the buttons. not. There's actually two pounds of cotton per pair of jeans. So when cotton got mentioned 15 times by the CEO on the earnings call, Wall Street assumed there was a crisis and shot the stock down 5%. Literally the middle of the earnings call, Levi stock starts plummeting. They must have control after cotton. But then we learned this. The cotton catastrophe has actually cost Levi's almost nothing. Yeah. Then the CEO said, everybody, why don't we just sit down, stand up, sit back down again. the cotton issues only cost us $10 million extra dollars last quarter. And considering Levi's did $1.5 billion in sales, which is a lot.

10 million in extra cost for cotton is round down to zero. It's like a, it's like a Haynes shirt, Jack. So that's why the stock rebounded so hard today. The cotton catastrophe didn't cost Levi. Levi's is back, baby. So Jack, what's the takeaway for our buddies down the street over Levi's? Unlike skinny jeans, supply chains are always in style. Yeah, Snackers, 10 years from now, Slim Fit is, it's probably going to be back, Slim Fit 2030.

Regardless of the fit, pants are going to need cotton on next. They are. Now, Levi's success isn't just in anticipating the return of high-rise mom-fit jeans. It's not just about styles. Their success was also sourcing cotton from 25 different countries. That's a lot of countries. Because get this, one third of Lulu lemons cotton all comes from one country, Vietnam. And that's a big, uh-oh, because Vietnam got hit, especially.

hired by the pandemic, and factories have been shut there. No cotton, no thank you. On the other hand, or I guess on the other leg, just 4% of Levi's cotton comes from Vietnam because they completely diversified their supply chain. That's right. Years ago, Levi's decided no more than 20% of any one crucial material can come from one country. And that decision is the reason why Levi's profits aren't slim fit and Levi's stock just jumped. Levi's profits are baggy. It took me a second. For our second story, great name here. Perfect Day.

The company just hit a one-and-half billion dollar valuation for the next phase of future food. Perfect day comes down to one word. One word. Based. Because Snackers, let's see, Jack. We've got Beyond Meat, they IPOed in 2019. We know it well. Oatley IPOed this year.

Yeah. And then a bunch of other plant-based this, plant-based that, yada, yada, yada. Everyone's seen plant-based in the last two years. But the next phase of future food is meat-based food that is not. Can we please call this meat-based meat that's not meat? Sure. That brings us to seven-year-old perfect day, which just raised $350 million out of one-and-a-half billion dollar valuation.

Which makes it the biggest startup in the meat-based meat that's not meat space or as people we hope will one day call it MBMTN. All right. We're a minute into the story and you still don't know what this company does. No. They take a cow's DNA sequence as the basis of a protein and then they teach little plants to grow that cowish protein wicked fast. I don't know, Jack, it's so crazy, it just might work. So then you get a carton of milk that is the same as dairy milk, but didn't include an animal at any

point. As we said, it's based on the animal, not from the animal directly. It's not dairy. It's dairy identical. That's what they call their products. And since there's no cow, there's 99% less water used in the process of building them. But since there kind of was a cow in the DNA, the protein tastes 100% like 2% milk you used to get when you're a kid. Right. You're not like, this has got hints of oat. Oh, wait, because it's oat milk. Nick, with meat-based meat that's not meat, you can keep eating bacon cheeseburgers guilt-free, no sacrifice. Exactly. The only sacrifice we're thinking here is probably the price. I bet you this is like $3 per slice of cheese.

Meat-based meat that's not meat is definitely not on the dollar menu anytime soon. Perfect day, though. They're not just great at science. They're great at, business too. Most startups, they're trying to nail down like one customer base just to stay viable. Perfect Day is devouring three different revenue streams at once. Wild. All right. First, perfect day sells to businesses. Yes. Primarily, Graters, which is a icon of the Midwest and ice cream. You can't go to a wedding in Ohio without them force feeding you graters like cookie dough. They offer a couple of ice cream variations that use Perfect Day dairy, that never had a cow involved. Okay, so Perfect Day selling to businesses, but Perfect Day also sells to consumers.

They created their own brand called Brave Robot, which you can buy a pint of online or in like 5,000 stores. Okay, so Perfect Day is selling to businesses and they're selling to consumers, but then they're selling more to businesses. They're consulting companies on how to innovate in food science like they have with the Cow DNA. So Perfect Day is the rare startup that has achieved like the triple threat here, three different revenue streams. So Jack, what's the takeaway for our buddies over Perfect Day? didn't focus on the final dish. They focused on the ingredients. Snackers beyond meat, impossible foods, Oatley, the biggest future food companies we've been talking about, they are all

focused entirely on consumers. Perfect Day does sell ice cream to consumers with their brave robot brand, but they sell way more ice cream ingredients to other businesses that need them. That way, Perfect Day could focus on technology, not marketing, and then just convince a few big brands to use their stuff. If they were selling just to consumers, they'd have to compete with Ben and Jerry's and Hog andaws. And they'd probably have to splurge tons of money on Facebook ads to get millions of consumers to even know who they are. So the way we're seeing at Snackers, like all of the future food industry, is focused on the final dish for the consumer. Perfect Day is focused on the ingredients. For our third and final story, honestly, Jack, I'm still shook from those fighter jets.

That was very loud. For our third story. The Genzi-Rubesie. The huge Gen Z report just showed that Nike is winning as the number one brand among that generation for the 11th year in a row. Nick, is this proof generations don't exist? I'm just going to let that poetry stand out there, Jack. Snackers, this story is about a survey of 10,000 teens who we assume were TikTok DM to fill out the survey. This company, Piper Sandler, formerly known as Piper Jaffray, gets out there, I don't know,

are they going door to door in this thing? Oh, yeah, yeah, you're right. They're probably DM. I don't know how they do. it, but they do it every six months, and they've been doing it for 21 years. This is the 42nd semi-annual report of teens. This used to be about millennials. Now it's about Gen Z. It is. And it looks like we got some good day to hear favorite celebrity among Gen Z. It's Adam Sandler. It is. Favorite beauty brand among Gen Z. Alta Beauty. Crocs are on the rise. Chipotle's on the

rise, too, with Gen Z. Amazon dominates Gen Z with 52 picking Amazon as their favorite e-commerce platform. Apple's like cute. That's adorable. iPhone, it really dominates. 87% of Gen Z prefers the iPhone. Also, Snapchat is the king of teens. It is the number one pick for most favorite social media platform with 35% of teens. Now, unshockingly, TikTok is number two, but still Snapchat. There you go. Get this, just 2% of America's teens say that Facebook is their favorite social media network.

And those 2% were probably part of a margin of error of some kind. Now, Instagram snuck in as the number three most popular, but it's the number one most used. Also, Mark Zuckerberg and Cheryl Sandberg snuck in to be that 2% who like Facebook the most. So Snapchat is the king of teens. Instagram's like the dictator of teens. That was surprising. But Jack and I thought the most interesting part is who's losing. Who is losing with Gen Z?

Beyond meat got fewer mentions by these 10,000 teens when it comes to plant-based meat. Impossible foods got more. Well, LeBron, he fell in popular. and influencer David Dobrick, he fell in popularity too. Another loser of this report is planet Earth. Yeah. Because teens' number one political concern is climate change and the Earth is not doing great. Understandable, considering Gen Z is the proverbial grandchildren referred to about who will inherit the Earth when we all.

But if you're going to talk about the losers, we really, Jack, should talk about the one winner, the winner above all. The winner of all winners was Nike. It was voted by these 10,000 teens as their favorite apparel brand. by far. So much. With American Eagle, a distant second place. Jack, what is this? Like third time running?

How's Nike doing on this survey? This is the 11th year in the row that Nike is the number one most favorite fashion brand among teams. Snackers, let that sink in. Nike's brand, it's not about speed. It's about endurance. So, Jack, what's the takeaway for our buddies over in the entire generation of Gen Z? Generations don't exist. Yeah, Gen Z snackers.

They love Nike and Adam Sandler and Crocs. and Amazon and iPhones. Those things are all very popular with millennials and Gen X too. But Gen Z also loves Netflix as their number one for video and YouTube as their number two for video. That's also very popular among millennials and Gen X. Oh, wait, get this. When it comes to favorite snacks of Gen Z, Gen Z's favorite snacks are goldfish crackers and nature valley bars. That's boomers.

Yeah, I'm pretty sure, Jack, we had that same combo after soccer practices, I don't know, 15 years ago. Yeah, that's a pan-generational thing. Classic. Now, sure, Nick, no one over 30s probably heard of Emma Chamberlain. Of course. The number one influencer in the survey. Or knows what watermelon sugar high means. But this report had a very different takeaway for Jack and me.

It showed that Gen Z is more similar than it is different to all the other generations. And you could argue that generational terms like Gen X, Gen Z, and Millennio are actually just artificial groups created by demographers so they can sell their consulting services to a whole bunch of big brands. Generations don't exist. Jack, can you whip up the takeaways for us before the weekend? Levi's avoided the cotton catastrophe. Styles change. Supply chains don't. For our second story, perfect day is worth $1.5 billion with meat-based food that has no meat.

The opportunity is in the ingredients, not the final product. For our third and final story, the bottom line is one big survey was supposed to show how Gen Z is different than the others. What it really showed is that Gen Z is the same as all us other generations, and it's a beautiful thing. Now, time for our snack fact of the day. This one's sent in by Luke Snyder from a lovely Osseo, Minnesota. The median height of an American man is five feet nine inches. But here's the shocking thing. Surveys have found that less than 3% of male CEOs in the U.S. are under that height of 5 foot 9.

You'd think it'd be 50% are under that height because of statistics and what median means. Now, in fact, a whopping two-thirds of all male CEOs in the United States are six foot or higher. This is Jack. I'm 5 feet 10 inches and a half. This is Nick and I'm 5 foot 10 inches and a half. But I might as well round up to 5 feet 11 inches. And then we usually tell people we're 6 feet. So then our college athlete roster said that we were 6 feet 1.

Confession. Yeah. When I visited Middlebury for my recruiting trip. Coach Ritter, I'm sorry, but I put packs of index cards in my shoes to appear taller. I'm a short 7 foot is what I'm trying to get at. It's like, Jack, it does hear your 6-6? Yes, sir. Well, you're walking strangely, but yeah, come on down, kid.

Snackers, you look fantastic today. Have an incredible weekend. Celebrate some wins. Jack, I know what win you're celebrating. While they're getting over his first fever. I'm going to a wedding in L.A., so I'm whipping out a tucks for the first time in two years. Good for you. I've got it on right now.

Hope it still fits. A win to celebrate next week. See you Monday, Snackers. Can't wait. And before we go, happy birthday to Snacker Brian Mina over in Denver. And Dan Holliser in Medford, Mass. And James Ma in Hacienda Heights. Birthday, Josh Gorbett in College Station, Texas.

And Nica Kossi celebrating with sushi and karaoke down in New York City. And Neil Shankar, happy 25th in Berkeley Cal. And Kareen Gerski over in San Francisco. And Alyssa Reza in San Francisco. And Megan Bates and Wadsworth, Ohio, Braiders. Birthday greetings to San Antonio, to Daniel Gip. Happy birthday. What you did there.

And Sammy Jimenez, happy birthday in Lebanon, Pennsylvania. And Chris Sykes, happy 30th in Chicago. And Callie Cox and Charlotte, North Carolina. Happy birthday is Stefan Baton in Boston Mass. And Austin Muti in Springfield, Massachusetts. Good luck to Nick McCormick running the Chicago Marathon. And Giuliana, first paycheck down in Atlanta. Congrats to Miles McHenry for passing the Series 7.

That's a brutal thing. And Christian Jump just got an engineering license in Oklahoma. Happy anniversary to Matt in Tahoe Vista. And Desmond and Andrea, seven years down in Phoenix. Happy 50th to David and Julie in Rippin, California. These two are ripping. It's like if you add me and you up. We get that number, Jack.

And Gwarov just drove from Michigan to Los Angeles listening to snacks every single day, every episode. Ever. Wait. Yeah, ever, ever. Unreal. He must have been at like three times speed. Always a really slow driver. This is Jack.

Nick owned stock of Beyond Me, Lulu Lemon, Apple, and Chipotle. And I own stock of Netflix, Levi's, and Amazon. Robin Hood Snacks, newsletters, and podcasts reflect the opinions of only the authors, who are associated persons of Robin Hood Financial LLC, and do not reflect the views of Robin Hood Markets, Inc. or any of its subsidiaries or affiliates. They are meant for informational purposes only and are not a recommendation to buy or sell any security,

cryptocurrency, or investment strategy in any account. This is not an offer or sale of a security, not a research report, and is not intended to serve as the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robin Hood Markets Inc., Robin Hood Financial LLC or any of their subsidiaries or affiliates. All investments involve risk, including loss of principle and past performance,

does not guarantee future results. Robin Hood Financial LLC, member FINRA SIPC.