The Best One Yet - Google’s “city-within-a-city-of-the-future” milestone, Starbucks and Dunkin’ hit record highs, and BMW’s big electric car/motorcycle moves

Episode Date: June 26, 2019

Coffee stocks Starbucks and Dunkin’ are up to record highs this year because they’re both pursuing 4 specific strategies. BMW unveiled its new lineup of Tesla-battling electric cars and even an electric bike. And Google sister company Sidewalk Labs revealed details of its $1B future city plan to takeover a Toronto waterfront.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. It is Wednesday, June 26th. We got a T-boy to help you get over the hump. This is the best one yet we've ever done. Markets dipped because of a new report that American consumer confidence dropped. We're talking consumer confidence.

Very literal report here. It is. But we got, I'm confident about this pot. We've got three great stories. I'm a little cocky about this one. We're kicking it off with BMW. It just unveiled a Hanukkah's worth of new electric vehicles and electric toys. Full disclosure on this one, Jack and I just realized we both have German cars not made where.

In Germany. German, but not German. Second story. Coffee stocks are close to record highs. We're going to look specifically at Starbucks and Dunkin' Donuts. Both have a similar strategy. The same strategy. And they're both working, but one of the strategies is much more New England.

You know who we're talking about. Third and final story, crazy thing of the day is Alphabet's new city within a city of the future. Mouthful. We're talking sidewalk labs. We're talking 1.4 billion Canadian dollars. We're talking Toronto. This is the we work for entire cities of the future. But before you get into those, on Snacks Daily, we are big fans of symbols.

You love a good symbol. It replaces some words, makes life easier. We're both huge Batman. It's flashed up. It's on the clouds. Sarach is our favorite condiment. They got the big rooster. He got the rooster situation.

I like the Snacks logo, which is a nice symbol, even though it's technically just script. It's just script, but I actually wrote cursive growing up. It still due to that. The script is coming back. But today, we're going to talk about the rainbow flag, which is the symbol for Pride Month. Now, we decided to jump into this one, and we ended up down like a, I don't know, a four-hour Wikipedia rabbit hole situation. We did. It all started with a San Francisco artist named Gilbert Baker. Back in 1978, he thought the gay community needed a symbol. And then he had the brilliant idea that he should make it a flag based on the same kind of formatting as other flags to feel like a real community. Yeah, he looked at the U.S., he looked at France. He realized flags are something that people really rally behind and wave with pride. He whipped up an eight-stripe flag. Turns out flag manufacturers couldn't do the pink and teal stripes that he wanted. I know. Printers, man. Turns out now we've got a six.

Six-stripe flag. It's still a beautiful flag. It's still something that I love. And amazing move by Gilbert Baker. He never copyrighted that flag. He wanted everyone to have access to it. So it's like public access flag. It's an amazing thing. And it's a great thing for Pride. Great way to end on Pride Nun. What's their first few 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. You know, 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. Robberhood Financial, LLC, member Fenbra slash SIPC. We're our first story. We're jumping right into coffee stocks, which are close to record highs.

Next to four key initiatives. 2019 has been good to Dunkin' Donuts. Very nice. The stock is up 25%. 20sized. 2019 has been good for Starbucks. Not too shabby. The stock's up 30%.

Now, I'm not a coffee guy over here, Jack. I drink a coffee in the morning. New Year's resolution, actually. No afternoon coffees. I failed. New Year's resolution for me. But I'm aiming for tea out in the afternox. More almond milk in my almond milk lattes, which I usually get with double almond milk.

Both of these stocks recently got upgraded by an analyst. Who also doesn't like his coffee? He takes his coffee without the coffee. He said right in the beginning of the report, I'm not a coffee. Full disclosure, he's into, let me just double check this. Sweet teas and hot chocolate, not into the job. Those are highly unhealthy. beverages, but it makes this report more credible. So Jack and I decided to indulge and read more into

this analyst report because both stocks are at record highs, and we noticed an interesting theme here. There are four keys that both of these companies are following. They're both following the same keys, and their stocks are both doing the same thing. First, a more streamlined menu. This thing is key, and you're not even going to believe this job exists, but there is an menu engineer at Starbucks. Right. And he has this wonderful quote about his job. He says, my job is to make it so that the sooner a guest finds their item, the happier they will be. Yeah, you might have noticed that Starbucks menus, up above the thing. They're a little bit shorter and like more pictures and fewer items. So you're a little bit happier when you can figure out your item and not spending like hours

stressing. And then Stegna is streamlining the menu. Duncan, anywhere it mentions the name, it's shorter because it's, no more. Drop the the the. Changed it last year. So number two, this is the second key initiative, is that Duncan and Starbucks are focusing aggressively on espresso-based drinks. For the first time ever, consumers under the age of 35 drank more espresso beverages than coffee beverages in 2017. That's, Huge. And get this, Duncan Donuts has an $100 million growth initiative. 65% of that is going to espresso-based drinks, like latte. So espresso-based drinks are the ones where you, like, pack that really fine coffee and your little thing.

The guy's like, he's sweating, I think. You got a big machine that looks like a spaceship probably made in Italy. Makes the noise. And then you're wondering. Whereas coffee and coffee, you just pour hot water on top of it. Completely different operation here for lottes. So espresso is the trend. So our third trend here is loyalty programs. We're calling it M-Commerce.

Exactly. The ability to see the entire menu ahead of time on your phone, that's actually a huge, huge benefit for coffee companies. Also, these loyalty programs, they get you to keep coming back because they know if you just get two more cups, you're going to get that third cup. And if you're ordering on the app ahead of time, you're more likely to place a larger order because you're not going to be stressed out at the counter. Finally, you've heard about this trend on Snacks Daily. This is the fourth big trend. Delivery. Grubhub has partnerships with both Dunkin' Donuts and Starbucks to deliver hot coffee to your door.

double dipping over here. It's got both them set up. So, Jack, what's the takeaway for our buddies over at Duncan and Starbucks who are living their best lives? Coffee is a commodity, but coffee consumption is not. Jack, can I read you the definition of a commodity over here? Please. It is a raw material or primary agricultural product that can be bought and sold such as copper or coffee. Coffee is in the definition of commodity. It is a commodity, and it's in the definition. It's living it there. So the key with commodity is you just buy whatever's the cheapest price. Like gasoline, you buy the cheapest gas. Because it's all the same. It's a commodity. Coffee beans, they're all the same. And yet, in the coffee industry, they keep on raising prices because they've decommoditized the whole thing. What Starbucks and Duncan

have done is they've made it so you'll pay more for coffee because you're not just getting coffee. You're getting app service. And you're getting holiday cups. You're getting frapuccino toppers. You're getting unicorn frappuccino. You're getting brands that are being updated and look good and make you feel special. And that's why coffee is a commodity, but coffee consumption isn't. For our second story, BMW just whipped up a wild amount of electric cars, and they're going to double electric car sales by 2021. No big deal. They're just throwing all this out there. That was a German statement. Lade it. Trivia about BMW. The logo? This is a good one. I think we should say, this is a good one to drop out Saturday. Yes, it is. The logo of BMW. It's got the little

black, blue and white patchwork. Yeah, it's got the quadrants. That is not the Bavarian flag. common misconception. It is an airplane propeller with blue sky background because they used to make planes. Now, BMW itself is like known as the, kind of like the Apple of Germany when it comes to working. It's the coolest place everybody wants to work. It's also the top American car exporter. Impressive. Get this. The X3, the X4, the X5, the X6, the X7. All those cars are whipped up in South Carolina. Not too shabby. Now, the stock is publicly traded. And it's the fourth most valuable car company in the world. Even though it's the 14th biggest maker of cars. And just to kind of lay the groundwork a little more, because I think we're layering on the context here, which I'm loving.

Get this. It sells about a quarter as many cars as General Motors does. And yet, BMW makes the same amount as profit as General Motors. It squeezes a lot more juice out of those cars. Okay, so let's put on our little event stickers with our name on it that says, hey, I got my lanyard. I'm Nick, and that's Jack. And let's walk into this unveil of an event. Yeah.

Big electric car announcement in Munich yesterday. First, the Vision M next. It is like the Batmobile of electric car concept cars. It's got two like ways to drive this thing. Two modes. So it's got, first mode is called ease. Ease mode is like chill out, sit back, open a book. This thing is going to self drive itself.

It is a self-drive mode. The second mode is called boost. You literally push a button and the thing like jacks itself up and the engine goes into overdraft. So just to clarify, the second one is just like driving a regular car, but it's just like a little more intense. Yeah, it makes more noise. It's called boost mode. Now, the other big announcement was the Vision DC Roadster. This is just a concept vehicle, but it is a serious electric motorcycle that looks like a transformer.

It's intimidating. It makes a statement. Now, the third key element of this announcement was what the actual plans are for the whole lot. This one's like corporate strategy. It said that it will meet its goal of having 25 electric car models by 2020. For BMW, that's two years ahead of what they were planning to meet. They are ahead of schedule. Now, currently, if you want, like a BMW electric car, you're stuck with, you may have seen

these, the I3 and the I8, which are kind of awkward looking vehicles. The I3 kind of looks like a droid. It's almost like a Prius decided to, like, give itself a makeover, and it just didn't go a while. It's a much more stocky Prius, and then the I8 is just, like, ludicrous looking. So the key thing here is that BMW has a lot more options coming that look like more like your normal cars. Including the X3 electric version, which is just,

looks like an X3. So, Jack, what's the takeaway for our buddies over in Deutschland at BMW? Not all promises are created equal. Remember, Tesla's Elon Musk, just this spring, announced that he's going to have one million robotaxies on the road. Tesla robotaxies. Tesla self-driving Robotaxies. By next year, that is a bold claim. BMW's promise, it's a lot more modest, but because it's so modest, maybe it's more believable and reachable. So if you're Tesla, you've got to be realizing now, you've got some German competition that's got a lot of models coming out. And they are thinking very practically about their goals, and they already proved that they're ahead of one of their goals. Very practically. This is Nick, and just so you know, both Jack and I own shares of Tesla.

Our third and final story is our first ever crazy thing of the day. Brought to you by Alphabet. But not a sponsorship, and this is definitely not an ad. Alphabet, Smart City Unit, sidewalk labs, just unveiled its urban utopia. Seriously, we saw this saying Jack and I jumped into Naxda. We were very curious about what's going on. The story starts with the Canadian city of Toronto. All great stories do. So it had a big part of the city. that was just being wasted. Wasn't anything going on there? It was down by the waterfront. There were a bunch of industrial buildings

that were just vacant. No pond hoc. So it issued an RFP request for proposal. For private development and sidewalk labs won that RFP in 2017. Now, if you're wondering about sidewalk labs, maybe you haven't heard of it. It's because it's a division of Alphabet and it's a sister of Google. So Alphabet owns Google. It's the parent company.

Sidewalk Labs is part of that whole parent company too. It's got a bunch of like do-gutters who also want to work in the private sector. It's a mix of like big urban development plans and policy walks. So the news is that Sidewalk Labs just delivered yesterday. It's master innovation and development plan. The old MIDP for short. This thing is 15 pages long. 15-100 pages long. It's a trilogy plus one. Exactly. They nailed this thing. You got to see it to believe it. So in this like gigantic pitch about a city within a city, the city of Toronto would get 1.4 billion Canadian dollars, which is about one billion U.S. dollars investment from Google. Now, all.

All that Sidewalk Labs needs is for, like, the waterfront of Toronto Council to approve it, and then it gets past along, and this could actually become a thing. And if it does approve it, then Alphabet gets a little city, like a toy train set that it gets to experiment with and, like, watch and play with. And in case you're wondering how crazy this thing looks, this thing looks pretty crazy. It's kind of like Star Wars cities, like those ones you see in the movies, meets like summer camp. It's a city built on code. Basically, the images, you know, people, they've got like computerized sensors everywhere,

and then there's, like, people kayaking and flags. Yeah, let's give some specific. All of the buildings in this neighborhood will be made of mass timber, which just means wood. Yep. But that means no concrete, no steel, and a smaller environmental footprint. Super sustainable wood. The other key here is that the whole thing is internet connected. The sidewalks will actually expand after rush hour is over, and not as many lanes for cars are needed.

Because it knows you actually need some space when you're walking out. That's because it's connected to Google Maps. The other key here is that they've got this wild thing called an outdoor comfort system. I wouldn't call it a key. I'd call it a strange detail. It's basically a giant raincoat is the nickname. It's a glorified awning, but it will keep you cozy like during the winter in Toronto. Basically, it's an awning that pops out and protects the sidewalk.

Finally, like, we all can't stand when delivery trucks are just raging down your street. You know that UPS guy, he's double parked and you can't find him anywhere? And you got to tell your mom, hold on, I'm walking by this absurdly obnoxious truck. And your mom's like you should move to Toronto to the smart city. Yeah, that's because the freight delivery will all happen underground. The other interesting element here, and this is the policy one, is that there's going to be a mix of, like, high-tech jobs. but also a bunch of affordable housing, like 20%, 20% affordable housing, 20% middle class housing, which means like 60% is...

The sidewalk didn't mention the other 60%. No, but we think we know where they're going with it. So, Jack, what's the takeaway for our buddies over at Sidewalk Labs, aka Google, aka Alphabet? We know what you're thinking. What is in it for Google? The answer? A new business model. Now, Sidewalk Labs does not share your urban data, does not share your user data, and does not share your personal data with Google or anyone else. Yeah, that was probably the other thing you were thinking.

You're like, is all my data going to get taken by Google? Are they judging me because they know I'm not going to coffee shops? Right. No, it's not going to happen. They're going to contain your data. Sidewalk Labs has a separate for-profit business model. And that business model is to sell building and city plans to developers in other cities to create other sidewalk lab cities. We love this comparison. We work made the perfect template for modern workplace.

Sidewalk Labs is creating the perfect template for modern cities. Jack, can you whip out the takeaways for us over there? Duncan and Starbucks are charging premium. prices for commodity coffee. Even if you can't handle coffee, you got to respect a coffee trend. BMW is racing to catch up with Tesla in the high-end electric car market. Elon Spreckensy Deutsch. And third and final story, Alphabet's Toy City in Toronto could be a win-win for future cities and future profits. The we work of future cities. By the way, we're going to tweet I pictured this thing because it just looks ridiculous. We have to. It's pretty crazy.

Now, time for our snack fact of the day. This one sent in by a daily snacker, Sam Campbell, in Danville, California. By the way, he pointed out that he gripped down the street from our headquarters in Menlo Park. Wonderful. So Goldman Sachs is named after Marcus Goldman. And Marcus Goldman is also the name of Goldman's new consumer finance division called Marcus. Right. Now, two CEOs later, because the bank was found in 1869, came Sidney Weinberg. Sidney Weinberg is a legend. He went from the assistant to the janitor. He was not even the janitor. He was working his way up to get to janitor. He was Dwight Shrew and he became the CEO of Goldman Sachs for 39 years. He was making $3 a week as he says.

From the assistant janitor to the CEO. Now, a couple of other stories we're covering in our Daily Snacks Newsletter. First, Amazon's making Prime Day a two-day affair now. Because we all needed that. Exactly. And Tyson Foods stock fell yesterday because of price-fixing allegations. We'll look into that further. Now, Snackers love to having you with us today.

Great way to kind of get midweek with you. And we'll talk to you again tomorrow as nice. Can't wait. 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 affiliates. 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.