The Best One Yet - 🍩 “Glazed & Confused” — Krispy Kreme’s giveaway strategy. Colorado River’s economy. Globo-Law Firm money.

Episode Date: May 23, 2023

Krispy Kreme stock is up 50% this year thanks to a bold strategy: Take your top-selling product — and then give it away for free. We just witnessed the biggest economic deal of the year: The Colorado River. And two of the biggest law firms on earth just merged, so we’re going to follow the money… that follows the big money. $DNUT $GOOG $MSFT Want merch, a shoutout, or got TheBestFactYet? Go to: www.tboypod.com Follow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypod And now watch us on Youtube 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. It's Tuesday, T-Boy, Tuesday, May 23rd. And today's pod is the best one yet. Here we go. Let's get right into it, Nick. What a wonderful show today. Jack, first story.

What do we got on the pod? Crispy Cream sales just hit a record high last quarter, even though Krispy Cream is constantly giving away donuts for free. Krispy Cream, they just growth hacks your graduation. For our second story, two of the biggest law firms on earth just merged. You're going to need a lawyer for. this story, aren't you, Jack? Yeah, you are. And our third and final story, three U.S. states out west just agreed to save the Colorado River by using less water. Yeties, this may be the biggest

economic story of the year. Physically. But Yeties, before we hit that wonderful mix of stories. I mean, no one else is doing this mix. I love this mix, Jack. We got to talk about another chapter of Swiftinomics textbook. Whip it open, Swift andomics 101, Yetis, when Taylor Swift holds a concert, the local economy, it moves. Bad blood, that boosts business. Shake it off, that's going to shake up the GDP. But get this, Yeties, the newest value creation by a Taylor Swift concert isn't the impact on hotels or merchandise sale? And it's not the impact on the t-shirts or the cute tops.

What is it, Jack? Rainwater. Yeah, it's rain water. Taylor Swift, rainwater. A jar filled with. with rainwater from Taylor Swift's concert, that's going to cost you $250. All right, here's the story, Yetis.

It rained over the weekend at one of Taylor's three Boston concerts that your buddy who's from right outside of Boston definitely went to this past weekend. Full disclosure, the concerts, they were technically just outside of Boston. But despite it continuing to rain the whole time, Taylor kept playing.

And so her fans kept getting water on them. She was a gamer, and some fans realized the epic moment they were witnessing and they held out their empty bottle to collect the rain. That's when the entrepreneurial mindset set in. They bottled that rainwater and now they're selling that rainwater online. Official Taylor Swift concert rainwater for sale for 250 bottles a pot. Legally, we're supposed to say it's unofficial. This is some profitable precipitation. Now, Yetis, you may not be able to afford tickets to this expensive Taylor Swift concert. But you can also maybe not afford six ounces of.

Taylor Swift rainwater. Yeah, it's 250 bucks. That's pretty much unaffordable. Which leads to a lot of specific questions. There must be a lot of options out there, right, Jack? Was it rain from like the floor seats? Or was it rain from the nosebleeds? Or maybe? Just maybe. It was rain that at one point trickled and tripled and tripled and tiptoed off of her fingertips. Of course, at the end of the day, we're just talking about water. False. Holy water. Look what you made me do, Jack. Let's hit our three stories. Two boys from the Northeast met in the dorm

They had an idea to cause a cultural storm It's the best one yet, but this 50% that's a fat tip T-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 the show Start the show For our first story

Krispy Cream has a new growth hack And here's what it is What is it next? They take their best-selling product And then they give it away for free Because Krispy Cream's customer isn't one person. It's a whole celebratory occasion. Get this yet.

He's Krispy Cream. It's one of the top performing stocks in the market right now. Congratulations to all you shareholders out there. The stock is up 50% so far this year. I mean, if you're going to say that, you want to do your disclosure now, Jack? I'll save it for the end of the pot. Jack got a bunch of shares a few years ago. He's been sipping on that citron.

Jack's been chopping on that custard over there ever since. Sales at Krispy Cream were up 12.5% last quarter, which is the sixth straight quarter of growth for this donut chain. Now, that is some really impressive numbers. We're talking outperforming a whole bunch of tech companies this year. But, Jack, there is that strange thing we noticed about Krispy Cream. Krispy Cream seems obsessed with giving away donuts for free. Okay, here's the weird thing. They're giving away their best selling donuts for $0.

If you Google Krispy Cream right now, you're going to see dozens and dozens of articles, about the graduate dozen. Pause the pod and you're going to look up and see that it's all about the graduate dozen. The graduate dozen is their current marketing promotion

where they will give graduating seniors a free box of glazed donuts. Congratulations. How did they put this? They had a great name for this. Oh, they call it a diploma. They call it a diploma.

I love the content team over there. Yet he's like graduating Summa Kama Kama. This is Kappa Sigma Sprinkle. This is glazed and confused. So we were curious about all these free donut giveaways because I swear,

I've seen other. other free donut promotions from Krispy Kreme as well. And Jack and I swear from our business school days, this is definitely how to lose money if you give it all away for free. So we jumped into the IPO paperwork from back in 2021 when the company IPO. Two years ago, we jumped in T-Boy style and we noticed some interesting things about their marketing tactics. That IPO paperwork mentioned the graduate dozen promotion 13 times. That is a big deal.

They thought it was important enough a promotion to highlight in their going public IPO. paperware. Because in 2020, the year before they went public, that's when seniors had an anticlimactic COVID graduation. So, Krispy Kreme launched this campaign, the glazed giveaway, and they got a pretty big ROI. That pandemic year, there were 2.4,000 articles written about that novel promotion. That pandemic year, there were two billion with a bee earned media impressions about that glazed donut promotion. So then in December, when Pfizer and like, Madeira came up with the vaccines, they started giving away a free donut if you showed off your vaccine card. And then, Jack, what kind of impressions did that marketing campaign get? They got

tons of articles and seven billion earned media impressions. Yeties, that's when the mad doctor marketers over Krispy Kreme realized they were getting some pretty strong marketing ROI return on investment. Every time they gave away free donuts, people talked about how amazing the free donut giveaway was. So Krispy Kreme pivoted their whole marketing strategy to acts of joy just like this. They call it acts of joy. Instead of buying advertising, they give away free donuts to select groups for a limited time and inevitably everyone would talk about. For example, Health Care Mondays, that's a free donut giveaway just for nurses. Last year, they gave away free donuts to compensate people who were frustrated about high gas prices.

This past spring, just because the weather was changing, they gave away free donuts on Saturdays for May. And it is working. Yes, it is. Nick, in 2020, they gave away $12 million worth of free donuts. Jack, can you talk to me about the return on that investment of the donuts? All in all, they got 38 billion impressions from all those articles written about all those promotions. Jack, Lather Me and Strawberry Jelly and whip up a takeaway for us over there. Crispy Cream realized they're not selling to customers, they're selling to occasions. Yet these most donut stores, they're going to sell to you, an individual customer.

Like you're getting one coffee, one donut, that's it. But Krispy Cream isn't selling to you. Krispy Cream is selling to your event. Get this. According to the CEO of Krispy Cream, 80% of their customers are buying donuts to share those donuts. They're bringing a dozen donuts to the office party or they're bringing a couple dozen donuts to the graduation part. Even Darleena Duncan, she's buying a dozen donuts for her buddies bar mitzvah. That's happening.

So each Krispy Cream customer is actually multiple customers. Yet he's every possible health and wellness trend right now. It is going against donuts. And yet, Krispy Cream is thriving because it's an affordable splurge that you can share. Krispy Cream realized it doesn't sell the customers. It sells to occasions. For our second story, two of the biggest law... Jack's just falling apart over there on me.

Falling apart. It must have been the glaze. I'm thinking about the takeaway. It is a good takeaway. This one is a good takeaway. For our second story, two of the biggest law firms are murder. to form global law. To find out why we're going to follow the money and the fine print.

Before we kick this off, Jack, how many lawyers does it take to screw in a light bulb? Can I ask you a question? That sounds like a lawyer right now. The answer is three, by the way. You know, one's got to get on the ladder. One's got to shake the ladder. And then the third one sues the ladder company because it was shaking. Yet he's breaking news from Bob Blah's LaBla.

Two of the biggest law firms on earth are merging and becoming. one super law firm. Those law firms are Allen and Ovary, a British law firm, and they're merging with Sherman and Sterling, a New York City based law firm. The new combined giant law firm isn't going to be called Allen and Ovary and Sherman and Sterling because they ran out of ampersons. Although that'd be hilarious. Instead, they're going with A&O Sherman. Which is like a little awkward for Sterling, Jack. Sterling got left out there. Sterling just got knocked off the name card. I don't know what happened. Apparently Sterling wasn't pulling his weight. Andy smelled weird.

we're just going to call this global law. Yeah, basically, Eddie's, this is the white goodman of law firms. Nobody makes them bleed their own blood. Now, here's why Jack and I were fascinated about this story. The hardest thing to do in business is to do this. The hardest thing to do is to scale a services human-based business. Because people are expensive to scale. For example, this new firm, it's going to have 3,900 attorneys.

That's almost a billion dollars in accumulated law school tuitions. And this new law firm, it's going to have lawyers in 40, offices in 29 countries. That's a lot of real estate to fill up with a lot of expensive lawyers. So in order to afford to run this entire giant law firm operation, they're going to focus on cross border business. That's what they do. For example, let's look at Pepsi. Pepsi is a multinational corporation. They must consider laws, regulations, and geopolitical intricacies in the 200 countries they operate. Well, Yetis of Pepsi wants to sell soda in Senegal and Fritos in Finland. What's it going to do, Jack? They're going to call global law.

Yeah, that's going to be the business. This isn't no Atticus Finch law firm. This is huge profit-seeking global law. So, Jack, for the avoidance of doubt and perpetuity, what's the takeaway for our buddies over at this massive law firm business? Your money should follow the money. That follows the money. Yeties, look, these law firms, they are old.

In fact, one of them is celebrating its 150th birthday this year. And these law firms both make a lot of money. Together, they're going to bring in $3.5 billion in annual legal fee revenue. But here's the interesting thing. Despite being really old and really lucrative, these law firms are pivoting their focus now that they're together. This combined law firm is going to tell their young associate lawyers to focus on specializing in the life sciences and energy transition industry.

Jack, can we get a translation on that? We want your billable hours to go to pharmaceutical companies and energy companies. Yeties, here's why Jack and I are focused on law firms. They're in the business of deals. And these two law firms, they think that deals are trending toward pharmaceuticals and energy. So if you're paying attention to what's going on, you should follow the money. That follows the money. Which is these lawyers?

For our third and final story, we just witnessed a financial kumbaya moment. California, Arizona, and Nevada just agreed to protect the Colorado River. The Colorado River is one of the biggest economic deal. of the year. Physically. Yet he's California, Arizona, and Nevada. They don't have too much in common. They're kind of states with different vibes.

It's like an awkward thruple is what this is, Jack. One is coastal. That's California. One is a desert. That's Arizona. And one's mispronounced. That's Nevada. But they just made a joint decision together, those three states.

Here it is. They're going to all three cut back together on how much water they're drinking from the Colorado River. Each of those three states is going to reduce their consumption of water from the river by 15%. Jack, can you translate that into a unit of measurement none of us have ever heard before? Yes, one million acre feet of water is going to be conserved each year. Yet is that is what the geologists say. We don't know exactly how big that is, but one million of anything is usually pretty big.

I mean, I think it's enough water to cover an acre with a foot. Well, it's also enough water to keep the Colorado River flowing through 2026 not too shabby. At least through 2026, the rafting trip is on. Buddy Timmy, honeymoon is on. But Yeti's thinking how we're thinking about this river story. And we got to ask Bruce Springsteen, Bishop Briggs, Leon Bridges, why are they all writing songs about rivers? And why did I name my dog river?

Well, Yeti's, the reason for all these rivers actually has to do with Econ 101. You got to whip open the textbook. Rivers aren't just powerful. Rivers can run entire economies and they still do. Look, Bessie's roads and Wi-Fi, those are critical infrastructure. But water is still the number one most critical of infrastructure. Yeah. No aqua?

No assets. Uh-huh. No liquid? No life. No aquafina? Nice to meet you. No Perrier? That's a problem.

Yet he's the Colorado River. It starts in the Rockies. It ends in the Gulf of Mexico. But it's also the backbone of these three states economies. First, the Colorado River is one of their main sources of electricity. The Hoover Dam, it's not just huge. It's also high voltage. and the energy comes from the flowing rivers of the Colorado.

It's also critical for hydration. 40 million Americans in seven states, plus Mexico, drink water from this river. But most of all, the Colorado River is maybe our most important river for farming. Yeah, the river's wet, and you know what's nice for wetness? Talk to me, Jack. Growing things. It irrigates 5.5 million acres of farmland. Nearly 40% of all the water we use from the Colorado River, Jack, what does that water go for?

It grows grass, which feeds animals, which we ultimately eat. Four out of ten gallons of that water is going to the grass that feeds the animals that you're consuming. The mighty Colorado River is the first link in a massive economic supply chain. And now California, Nevada, and Arizona are going to sip a little bit less from the straw of the Colorado. Actually, a lot less. So, Jack, what's the takeaway for our buddies over in the United States? The price today pales to the price tomorrow. Yetis, this decision is costly.

Like, cutting a million acre feet of water a year, that is a really big cost. That's a pretty big sacrifice. Not having that water is a huge cost. So the federal government is going to chip in $1.2 billion to help those states cope. But Yetis, when you add up the math, the alternative of cutting that water is a lot worse and a lot more expensive. If we didn't conserve today, the water in the next few years could stop flowing altogether. And if you step back, the worst climate change gets, the more tough decisions like this. are going to have to be made.

And like a leaky roof, the sooner they get fixed, the better. And the cheaper. Because the price today pales compared to the price tomorrow. Jack, can you whip up the takeaways for us for T-Boy Tuesday? Krispy Cream just announced record sales driven by awareness of those free donut giveaways. Krispy Cream doesn't sell to customers, it sells to occasions. It doesn't sell to consumers. It sells to calendars.

For our second story, two law firms are merging. Allen and Overie and Sherman and Sterling. Besties, your money should follow the money. That follows the money. And our third and final story is the Colorado River. It's being conserved by California, Arizona, and Nevada. Because the price today pales to the price tomorrow. Now time for the best fact yet.

This one sent in by Kevin Dewey from lovely Del Rio, Texas. Push and plan. Here we go. Hey, Nick and Jack, today's best fact yet has to do with the NBA playoffs. The Denver Nuggets are the only team left. that have never won an NBA championship. Out of the NBA's 30 teams, how many have never won? The answer is 11.

Phoenix Suns, Denver Nuggets, Memphis Grizzlies, Minnesota Timberwolves, Brooklyn Nets, Indiana Pacers, Charlotte Hornets, New Orleans, Pelicans, Utah Jazz, Orlando Magic, and Los Angeles Clippers. Quick shout out to the best team yet, the Portland Trailblazers who are not on this list because they've won a championship. I mean, it kind of feels like the Knicks have never won, but they won in 73. By the way, Kevin, trivia. you, name the only two basketball players who have 5,000 more rebounds than they have points.

There's only two. This is a tough one, but I think Kevin's up for it. This one's only for Kevin. Nobody help him. Nobody help him. Nobody help Kevin. Make sure he's not Googling it. Yeties, if you have got the best fact yet, Jack and I want to get it on the show.

Jack, if you got the fact, what should you do? We got forms for shoutouts and the best fact yet at our website, T-boypod.com. Go to t-boypod.com. Jack and I will see you there and we'll get your voice on the show. And before we go, congratulations to Yeti's Chip and Kate Fala, who just had their first baby boy named Champ down in Columbia, South Carolina. And congratulations to Josh and Rachel Wilmore, celebrating seven years together in Charlotte, North Carolina.

And Chase Baker, congrats on starting your first podcast. Trendy, Jack, apparently he was inspired by our show, and he's gotten on the mics. We got Chase on the mics. Chase is chasing us. Jason is Jason Nuss. And a happy birthday to Tim Shepinski over in Milwaukee, Wisconsin. Happy birthday to Janelle, the Nurse Perry,

celebrating in the ICU unit of the University of Utah Hospital. And Jack, get this. Sean Wong and Sabrina are a husband and wife in San Francisco with the same birthday and the same age. That was an easy match on Tinder. And to anyone else celebrating something today, make it a T-boy. Celebrate the wins. This is Jack.

I own stock of Krispy Cream and Nick and I are both the sons of lawyers. Full disclosure. Physically.