The Best One Yet - 🍻“Here come the Bud Light Seltzer commercials” — Beyond Meat’s first struggles. Square’s Cash app stock. Bud drops 9%.

Episode Date: February 28, 2020

Beer-glomerate AB InBev dropped 9% as coronavirus stops China from socializing, but we’re focused on how Bud Light is losing market share in the US. After a week of plant-based meat partnerships and uncouplings, Beyond Meat’s earnings sent the stock down 9%. And Square shares jumped 4% because its Cash App is powering profits.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 Friday, February 28th. Snackers. Oh, yeah. Yesterday was another tough day for the markets. We should talk. We talk. Are you guys seen? We've actually had the worst week for stocks since the financial crisis. We're talking about stocks down 12% in the last eight days. The stocks Nick's talking about are the S&P 500, which is the top 500 stocks in America. Also, we just crossed over the fence. We're now in correction territory. That means stocks are down 10% from a recent time. You never really want to be in correction territory. Now, you know the driver of all that. We're guessing. We're pretty sure it's coronavirus and fears that it's going to hurt business. Full disclosure, Jack and I, not doctors. We can't tell you that much about coronavirus.

No, we also have never experienced something like this in the market since we've been covering the markets like eight years ago. Which is why we suggest to check out the New York Times Daily's podcast. They got a great episode yesterday. I biked to work yesterday. I listened to the pod. I was also aware of the traffic. It's a New York Times Daily podcast. It talks about the threat of coronavirus to the United States. You should check it out if you want to learn more. In the meantime, Jack and I jumped into all the business news stories. We happen to have made this snacks daily the best snacks daily yet. Oh, yeah. This is the best one yet.

This is a T-Block. Jack, can you start us with the first story? Budweiser just had its worst quarter in a decade. Don't just blame coronavirus, though, Snuggers. We're looking at its U.S. beer problems. Are we talking loggerpocalypse over here? Loggerpocalypse. Second story, Jack.

Square's cash app, it's living its best life. Jack, can we put this at profit puppy status yet? It's definitely close. It's pretty close, yeah. The stock jumped 4% after the earnings, but Square has one existential threat. One man, one syllable. We're talking Zuck. Zuck with a Z. Third and final story. Beyond Meat finally announced their earnings. Oh, week. There's been meat news. We have been waiting to cover this and we finally can. The stock actually dropped 15%. And it's a case study in

why first mover advantage doesn't exist. Business schools mean to update some things. But before we get to that, Nick and I are both wearing some fresh kicks. I feel like I'm on the red carpet right now. We had the opportunity to customize our own Nikes. So naturally we snacked them up pretty hard. It was aggressive. These are on our Twitter and Instagram at Robin Hood Snacks. Mine are business casual. If I'm business, if I'm pleasure, I can wear these Nike's. It looks like you're at like a GQ shoot when he's wearing these things.

Nick's looks like he went to the gym and his feet exploded. They're borderline offensive. They may harm eyes. I think there's radioactive material in Nick Shoe. Snackers, go to add Robin Hood Snacks on Twitter and Instagram and you can kind of check out what you like. You can actually vote for who's our better. Here's the thing, though, we didn't pay for them. They were gifted to us by Robin Hood.

Robin Hood is the company that owns this podcast and they make this podcast possible. Every Robin Hood, you got a pair of these custom Nike, so Nick and I snacked him up. Once again, check out Robin Hood snacks to vote for the better shoes. Now, if you don't know Robin Hood, it's well known as like the commission-free investing app in like stocks, crypto options and ETS. But it's also got a cash management feature with your money that you're not investing. We're talking like a 1.80% APY on your uninvested cash. Nick, are you even going to mention the debit card? I think we should whip out your wallet over here.

They got a debit card. I've had mine in my wot for a while. It's green, but it also comes in white, black, or red, white, blue. It's like a rainbow situation over here. Did we mention that debit card works at 75,000 ATMs? It's like this ridiculously extended family of cash. Actually, I think it works at more ATMs, but 75,000 with no fee. But it is the end of the month. Jack and I wanted to give back to our snackers, so we're doing a free stock giveaway for our snacks listeners. If you set up an account with Robin Hood, you'll get a free stock when you open it up. Right, and that could be like a stock like Series XM or Lyft or Microsoft. By the way, lift is still worth one lift. It's picked randomly from a pool of stocks that we give away. You got to sign up at Snackspodcast.robinhood.com. And once your account set up, a free stock is waiting for you to claim. Nick, I got to repeat, Snackspodcast.

com. Definitely use that URL so we know it was you and we know to give you a free stock. And Snackers, if you're already a Robin Hood user, then you can still get a free stock if you were for a friend. Right. And to do that, I think you can figure it out in the hour. Let's hit our three stories. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something.

single out the way. The snacks about the hair ain't food. It's air 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.

Snacks is digestible. Business news for you. Robohood Financial, LLC, member Fenra slash SIPC. For our first story, Jack, get your hands off that decanter over there. Decanter. Budweiser isn't just having a coronavirus problem. It's having an American's not drinking it problem. Snackers, the stock dropped 9% yesterday.

Nick, the cantors are for wine. Yeah, I know. It's not kind of just messing with you. This is no wine story. I know. It was a trick question. Now, we're talking about A.B. Inbev, the owner of Budweiser, it's got a publicly traded stock.

I think it's co-listed in, like, Belgium and the United States. Multiple place, a lot of passports. Jack and I whipped open the earnings report, jumped in snack style. Let's take you to slide 10 where we got viciously disturbed. We saw something quite alarming. They talk about growing their share of throat. We're not talking about their share of market or market share. No.

In the beer industry, apparently you talk about your throat share. And apparently this is common in the beverage industry where we think they need to reevaluate things. Kind of creepy, but honestly, folks, we're not making this up. Snackers, we're talking about the world's largest brewer. From Goose Island to Budlite to Lanchark to Bex. What else he got? Actually, Bex is one of the most popular beers in German. Yeah, except when you really want to have a fun night, you go with Beck's Ice, which is not fun.

Sniff of Ice. You don't want to say that. Now, when it came to how bad this quarter was, we're talking profit dropped 75%. The worst drop in 10 years. And a key part of that, nightlife in China isn't happening right now. And the nightlife distribution channel is ABMBE's top channel in China. We're talking bars and clubs. If you're drinking alcohol, it's probably it should be in the evening.

The CEO said the problem is our products, alcohol, bring people together. And during the coronavirus, people are avoiding... It's actually the opposite of that. Now, while everyone's looking at Budweiser's performance in China, Jack and I were fascinated by what's going on here in the United States. Bud and Bud Light, which is like the right bicep and left bicep for ABMBF, they both lost market share again in the United States. And they're specifically blaming not coronavirus, but hard seltzer whose share of the

alcohol market has tripled in the last couple years. It's 2.6%. And that's of the entire alcohol market. Right. Not just like the, you know, the, I don't know, beer market, the Selter market? And when you look at the beer market specifically, Bud Light, Coorslight, Miller Light, their number is one, two, and three in gear. Budweiser's number four.

And Bud Light used to have 18% of the market in 2017, but it's declined each year since. And in this latest earnings, Budweiser has basically admitted it was way too late to the game on hard seltzer. But it's here now. And it came with authority. It came out with three different hard seltzers. Three of hard seltzers, including a Super Bowl ad, except Budlite. Seltzer, it only just launched.

It's also got Natty Light Seltzer, which is hilarious. And then another brand called Bon and Viv, which is trying to be the boutique hotel of Spike Seltzer. Yeah, when you have it, you got to have that pinky out just right when you have a little Bonavis. The situation is that Bud Weiser and its parent company, ABMF, they look desperate in the United States. They're kind of like the waiters you see in Little Italy where they're standing out

in the corner, like throwing menus at you. Come in, come in. They're trying to coax you into it. They're trying to trick you into the restaurant. You look like a rigatoni guy. What do I got to do to get you napkin on your throat? That's pretty much Budweiser these days. So, Jack, what's the takeaway for our buddies over at Budweiser?

Bud can't just acquire its way out of this like they used to. Snackers, Jack and I opened up the history books, and the last time big beer was under threat like this was from craft beer in the last decade. All of the giant beer glomerates, including ABMBF, they acquired the craft beer companies in response to the threat. Right, we're talking about a time when, like, every township was whipping up a quadruple IPA that had like enough alcohol to kill a bird. But whatever beer you're drinking right now, Snacker, look at the label. Chances are it's actually owned by like A.B.N.B.N.B. or Constellation brands or one of the other beer glomerates. But this time, the threat is from Hard Seltzer, which isn't as fragmented as Kraft Beater. No. The disruptors in the hard seltzer industry, they're too big for AB Mbev to acquire.

We're talking White Claw, which is owned by the Liquorglomerate Mark Anthony brands. And truly, which is owned by Sam Adams owner, Boston Beer. Together, they've got 85% of the Hard Seltzer market. They're too big to acquire. So strategy for Budweiser, they got to do it differently than they handled craft beer. They're going to leverage those three brands we mentioned earlier, Bud Light-Seltzer, Natalite Seltzer, and Bonnbeeve, and try to grow that to 20% of the market. They're going to pour that money into marketing and distribution, not acquiring brands.

Get ready for some commercials. For our second story, Beyond Meat announced growth, but not enough growth, so the stock plummeted. Snackers, if you're interested in this company, we recommend checking out the investor presentation that came out yesterday. I mean, this thing is, can we say delicious? There are a lot of colors. It's vibrant. I actually thought it was kind of weird. It opens up with like a comparison of animal anatomy with like its plant-based anatomy.

We're talking about slide number one of the earnings, which was like kind of like a science experiment slash first date where you over expose yourself and talk about like all of your life problems. It's like easy for a thing. I found it kind of snobby. Right. So like we're part of the solution, not part of the problem. Basically beyond me was saying we begin with the composition of the product, not the animal origin. They were basically, you know, kind of it was poetry about how they come up with a plant-based meat. But you've heard enough about its origin story.

Let's jump back to the trauma that occurred for the stock during the IPO. This thing rocketed up after the IPO and nearly quadrupled. But then it cut way back down to Earth and dropped by half and then dropped by half again. It turns out, though, if you look at this IPO, it kind of turned out to be a huge marketing win. Despite all the volatility and turmoil of the actual stock, it did generate a ton of awareness. for Beyond Meat and the products itself. The company actually revealed this in its latest earnings. Awareness of the Beyond Meat brand tripled in just the last nearly a year since the IPO.

And now it's not just in grocery stores. You can also find Beyond Meat at A&W, which is where they rollerblade up to your car with your rupee. It kind of feels like, yeah, yeah, yeah, it's adorable. You can also get it at Dunkin' Donuts, Costco, Marriott. The list goes on and on. It used to be Beyond Meat. It was like at Whole Foods, like, you know, holier than that. Now it's out with the people.

It's hanging out with us. Now, it's been a crazy week of headlines coming up to this earnings report yesterday. We were dying to cover this story, but we knew we should wait until 30. Every day was another serving of plant-based meat news. First, Starbucks announced it's launching beyond breakfast sandwiches in Canada. Canada gets like test out every food. They do. They must be like, stop, just not a lot of out.

Canada and Scottsdale, Arizona. You're not hamsters. You're great hockey. And then Cargo, which is the second largest privately owned company in America, both. They're making their own plant-based meat. So that's a new competitor to Beyond Meat. And then Disney came out and said their theme parks are going to start using plant-based meat.

Impossible. Impossible is actually Beyond's biggest rival. It's still privately held. So Jack, what's the takeaway for our buddies over at Beyond Meat? Is Beyond Meat... LaCroix? Is Beyond Meat the first mover that can't stand up to the bigger competition? That's the question that we're starting to get some evidence for.

Snackers look at these numbers. Sales growth for Beyond Meat has slowed in the fourth quarter to 220. That means sales more than tripled, but a year ago, they were quadrupling sales every quarter. And if you compare the quarterly sales just to the previous quarter, they only rose four percent. Right. So they tripled compared to last year, but they only rose four percent compared to last quarter. When you look at all the competitors jumping in, it seems like there are no barriers to entry to the plant-based meat market. And another industry where there was no barriers to entry and anybody could come in and play was Seltzer. Yeah.

LaCroix was the big winner in Seltzer. for many, many years. And then Pepsi jumped in and Coke jumped in and Spindrift became a thing, and Topo Chico became a thing, and then Spindrift started doing like, you've got Halloween costumes. And now LaCroy is struggling immensely, and its parent company National beverage court, the stock is way down from a couple years ago. Beyond is clearly a top now, but competition is everywhere, and it's slowing their plant-based growth. Competition hurt LaCroi.

Looks like it's hurting Beyond Meat, too. By the way, this is Nick, and both Jack and I own shares of Beyond Meat. For our third and final story, Square is a Franken Finance company, and based on the latest earnings, everything seems to be growing. The stock grew 4% yesterday. Pretty much the only increasing stock we saw on the whole market. We were like looking at it. We're like, anyone out there?

Anyone? Any stocks up today? Anyone. Oh, there's a green stock. Let's jack. Run over there. Square calls itself on Wikipedia a merchant services aggregator. We're going to go ahead and call them the Marvel universe of digital finance.

That's because they do everything. They got someone doing something everywhere involving your money. First, they got Square. Capital, which issues loans to businesses. And then they got Square seller ecosystem, which is like doing the transactions when you're at like Project Juice trying to get a smooth. That's a little terminal that you can stick your credit card into. Again, adorable.

And then they have the cash app, which is like a cultural revolution people are using for peer-to-peer payments and investing. It also defies the whole concept of you have to have a verb as your name because people say they Venmo you something. No one's really saying I'm cash in you. So Square last quarter processed $28 billion in payments total, but that's not their money. No, it's actually, we're talking about your money. We're talking about the money you spent on that coffee.

Now, revenue for the company, that's what they actually got. That was $1.3 billion. So we did the math here. 28 billion of transactions happened through Square, and Square got 1.3 billion of revenue. That means it somehow took 4.6% total of all the transactions. Now, part of that is what we like to call here at Snacks the swipe tax. When you stick your credit card into a terminal that's owned by Square, they're taken 2.6% of that transaction, plus 10%. plus 10 cents, and usually like the coffee shop pays for it.

Right, let's say your project juice, you're getting the daypals, they're delicious, Jack and I can eat them all day, Project Juice is actually paying that fee. They're paying that fee, and it goes to Square's pocket. Now, the other way that Square's making money, they're getting like subscription fees off of the software they give to small businesses. And they're also making interest in fees from the loans they give to small and medium business. But here's what fascinated Jack and I, Cash App, because Cash App is the Tony Stark of Squares.

Yes, and Tony Stark is the hottest of all the Marvel characters. I think we can say that here and we're all comfortable. If you can't say that, are you even paying attention? The facial hair is undescribable. It's not even possible. Who works on that? It's like a three-person job just to cut out. So our big question for the Snackers, who's winning?

Cash App or Venmo? Well, both offer peer-to-peer payments, you know, when you're just paying a buddy back for that coffee. And both have a debit card. Venmo is a verb. Cash app isn't. Not really. It's awkward. But Cash App also has investing.

So we're going to compare some of the metrics of these two companies. and we got, there weren't exactly any metrics that were perfectly comparable. We're going to dabble in the fruit trade on this one and compare apples to oranges. Start with apples to oranges. Cash app announced yesterday. It has 24 million users who log in at least once a month. That's up 60% from last year. Those are called monthly active users.

And Venmo says it has 41 million yearly active users. Right. The Venmo number, they only announced last year or two, so that could have grown. But again, that's only people who logged in every year, which is easier. than the number who logged in every month. So it gives us kind of a sense, but not really a good comparison. Now, we do have one apples to apples comparison between Cash App and Venmo. The ranking in the App Store.

Cash App is number one for finance. Venmo is number two for finance. There you go. So Jack, what's the takeaway for our buddies over at Square? The existential threat to Square is Facebook's Libra or any other crypto codes. Snackers, remember, Square charges 2.6% plus 10 cents for every swipe. that's part of the swipe tax. And that's a huge source of their revenue.

Visa does this too, MasterCard does it too. Except for cash and check payments, there's always a financial middleman taking a cut. Meanwhile, Zuck jumps in board with this Facebook Libra pan last year and he's promised to let you pay without a swipe tax. Libra is Facebook's plan

for a global cryptocurrency. When Jack and I go to the marina, we're splurging up on date balls. We could be doing these transactions with a Libra product. Imagine we take out our Facebook app and there's a little QR code, and you can pay at stores, and the money goes straight from your Libra account on the Facebook app

to the restaurant with no financial middleman in between. If you're the consumer, this doesn't affect you that much, but if you're like Project Juice, the retailer, this means you're saving money. You're not having to give it up to a payment processor. And Square didn't make money in that simulated transaction we just described. Here's the funny thing about this whole situation. We don't have that Libra thing we just mentioned from Facebook quite yet.

And we haven't heard any positive progress about Libra in month. But if Libra or other crypto become mainstream accepted currency, that could disrupt the swipe tax and that would disrupt Square. Jack, before you put your weekend pants on, can you whip up the takeaways for us over there? A.B.N. Bev is the hugest beer company in the world, and it's struggling all over the world. Last time, it acquired the disrupting competition. This time with hard seltzer, it can't. Beyond Meat's sales growth has slowed from quadrupling a year ago to just tripling this year. The first mover advantage isn't there with plant-based meat. Just like it wasn't there with LaCroix.

Third and final story. Square is the Marvel universe of finance. And its stock grows 4% yesterday as everything is growing. And we're wondering how Libra could affect its swipe tax. Now, Snackers, time for our snack back to the day. This one sent in by great name. I hope it's real Dakota Dan. Dakota Dan.

I think that's like his Instagram account. I know. You should just make it right name. But he's from Apple Valley. Not to be confused with Orange's Valley. Not to be confused with Cupertino where Apple's based, but also Apple Valley sounds like a fake town. Apple Valley, California. We got to say, this Dakota Dan from Apple Valley sounds a little questionable to me.

We got a Russian bot situation, Jack? No, no, no. I've DM'd him. He's a good guy. Good guy. Now, the 2022 World Cup, the global soccer team. Ever heard of it? Well, first of all, it's happening in Qatar or cutter.

I'm not sure how to pronounce that. It depends. It depends on something. It depends who you're trying to impress. A couple of things here. First of all, it's going to be so hot that it can't happen in the summer like most World Cups. It's happening in November and December of 2022. Secondly, some of the games are hoped to be played in a town called LaSalle, which, fun fact, hasn't been built yet.

You can Google this and look at the plants. They are wild. They're incredible. They're not real buildings. We're not saying the stadium hasn't been built. That's true. The stadium hasn't been built. We're talking about the place on the map.

It is currently known as a planned city on Wikipedia that intends to have the infrastructure to hold 450,000 people, but it hasn't yet. Snackers. We loved snacking with you this week. Jack wore his power salmon corduroy shirt one day, which I was just, I love that thing. It's called slamming salmon, and I wore my Lulu lemons every day. I was pumped about it, Jack. I was talking about it, I love that.

I love that thing. But remember Snackers, H-Y-H-Y-S-D. Have you had your snacks daily? Share this weekend. We can't wait to see you Monday. See you then. The annual percentage yield, or APY, paid by program banks, is 1.80% as of October 30th, 2019. APY might change at any time at the program bank's discretion.

Neither Robin Hood Financial LLC nor any of its affiliates are banks. The debit card is issued by Sutton Bank, member FDIC, pursuant to license by MasterCard International Incorporated. Free stock is chosen randomly and no specific stock is guaranteed. See the Robin Hood app or Robin Hood website for additional information. 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.