The Best One Yet - “Jack Daniel’s trilogies” — Brown-Forman’s blockbuster strategy. Stitch Fix’s 40% pop. Uber’s self-drive ditch.

Episode Date: December 9, 2020

Liquor legend Brown-Forman is borrowing a movie strategy for its top-shelf-ification of Jack Daniel’s. Stitch Fix stock surged 40% because it’s pulling a move straight outta Netflix. And Uber’s selling its self-driving biz… which completely changes our calendar of when self-driving actually arrives.$SFIX $BF $UBERGot a SnackFact? Tweet it @RobinhoodSnacks @TBOYJack @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Learn 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, December 9th. Did you hear that a 90-year-old woman in the UK took a COVID vaccine, Nick? Good for her. Stocks also hit a record high. Jack and I whipped up our best snacks daily yet. This is a lot better than yesterday. For our first story, what do Jack Daniels and Thor have in common? Jack, liquor legend Brown Form and is tossing a blockbuster strategy on its whiskey. Can you blame him? For our second story, Stitch Fix, the Stocks jumped 39% yesterday. Snackers, the fix is learning how to stitch. For our third and final story. Uber's big new plan for self-driving technology. Yeah, turns out they're ditching it. That's the plan. We're jumping into why Uber is walking away from self-traving ambitions after five years and two and a half billion dollars. But snackers, before we jump into, honestly, Jack, a wonderful mix of stories. You know, meat-based meat had a really good run. It did. Carnivores, give or take 10, 10,000 years. Uh-huh, yes, they did. Then plant-based meat seem to be enjoying like some kind of a moment right now. Yeah, give or take 10 months. But just like any select.

Celebrity's situation, 15 minutes of plant-based fame, that can end quickly. The real housewives of protein didn't get past season two. But get this snackers. Turns out Finnish startup Solar Foods just raised $5 million to create protein made from air. I thought you were going to say the sun, given the company is called Solar Foods. Jack, this is beyond beyond. This sounds like the actual impossible burger. Yeah, instead of pea or soy-based protein, they're using a little thing called Soling.

Ever heard of it? I saw this and immediately googled Solene. It's actually not a real word. No, it's not. It is a registered technology that this company created. And this technology is an edible protein that they find in the air. Also, sounds like they took it from the screenplay of Avatar. This is a pinch of unobtainium.

This is a little bit on top. Now, Snackers, this startup is claiming that they can pull carbon dioxide from the air, combine it with bacteria, and then form a single cell-based protein that will ultimately become your burger. Remember when Cosmo Cramer buys a meat slicer neck? Yeah, Jack. I cut the meat so thin, I couldn't even see it. Sounds like this company has actually found absolute zero. Snackers, air protein, solid option for the breatherian in your life.

Or anyone in your life who wants to eat while breathing. The calories are out there. You just have to believe in them. Let's hit our three stories. Yeah. 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.

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 Right Snacks is digestible

Business news for you Robberhood Financial LLC Member Fenra slash SIPC For our first story Jack Daniel's distiller Brown Foreman They are back baby Jack They're back They are back baby

But they're taking the same strategy as a movie studio. Yeah, they basically are. They're throwing them all your liquor cabinet. By the way, Louisville, Kentucky-based company, basically Brown Foreman is like a sponsoring every baby boomer's bar. These are reach boozes. We're talking like 40 bucks about Woodford Reserve, Finlandia. Uh-huh. And what is this last one, Nick? Yeah, Seanboard. Remember Seanboard? When you and I moved in together, freshman year roommates, someone gave a Seanboard as like a weekend party gift. Yeah, his name was Ben, and I think there's chocolate in that beverage, isn't there? I think it's raspberry, but if you drink enough, it tastes. It tastes.

like chocolate. It is raspberry. Now, a funny thing about Brown Formen here, Snackers, it is like old-fashioned, old-fashioned. It is 70% controlled by 40 members of the Brown family. The chairman of the board neck, which is like the CEO's boss, his last name is Brown, and it has been Brown since the company was founded in 1870. Are you kidding? That is fantastic trivia. That's like 11 Browns have been the head of the head of the head of this organization. I feel like we could have used that as a snack back. We promoted that one. That one's great, Jack. Now, we just learned that last quarter they brought in about a billion dollars in boo sales, which is up 4% from the year before.

Yeah, because the longer you guys are quarantining, the longer you're whipping up Nogaroni's at home, right? Now, Brown Foreman makes pretty much every liquor served at your country club's bar, but the company mentioned Jack Daniels 71 times in their single earnings report. Jack and I whipped up the old Control F on that thing. We got curious, we dove on a little more snack style. Jack, can we share how they, like, divide up the whiskies over at Brown Foreman? Brown Foreman has three different segments. First is premium whiskey. Second is super premium whiskey. Must be nice. Then they have their own segment just for the Jack Daniels family of brands.

Get this. It's literally called Jack Daniels family of brand. That's because there's over 20 of them, almost as many as there are Browns running this organization. It's basically like, it's like the characters in the Magic Kingdom. It's a whole fantasy world going on there. My favorite spinoff Jack Daniels brand is Tennessee Fire, which was created in response to Fireball, which took over the entire New York City bar scene in the early 20 teams. So Snackers, let's say you were with Jack and I in the East Village back in 2012, maybe opt for one of the other Jack Daniels' options like Daniels single barrel collection or Jack Daniels single Sinatra Select or Jack Daniels number 27 gold Tennessee whiskey.

But the best performing of all of Brown Foreman's drinks last quarter was Jack Daniel's Tennessee Apple. Yeah, Jack and I jumped into this further snack style. Turns out that launched exactly a year ago and get this. sales surged for Jack Daniels, Tennessee Apple, 143%. Now, the weakest performing was the OG Jack Daniels, also known as simply Tennessee whiskey. Yeah, your basic straightforward Jack Daniels sales down 6% probably on some competition from its in-house drinking bodies. Yeah, I'll have a Jack with a little bit of corporate cannibalization. And that's because you could also get Jack Daniels, American served. Jack Daniels canned cocktails. Jack Daniels Tennessee Fire. Jack Daniels Lynchburg

Lemonade. Jack, what's the takeaway for our buddies over at Brown for him? I love the deep breath you took there, Nick. I was surprised you could name so many brands. It was intense. Snackers, liquor is pulling a strategy straight from the movie industry. Sequels, spin-offs, and trilogies. Perfect. Jack, when you found a franchise, you milk it for all it's worth. Get this, Snackers. In the 90s, 16, just 16 of the top 100 summer blockbuster movies, just 16 of them were sequels. But in the last decade, over half were sequels. Now, that is why, and perhaps because Disney acquired Marvel and Lucasfilm in 2009 and 2012 for $4 billion each. And then Disney took Marvel and spun out 22 sequels, milking that franchise for $20 billion.

We're seeing Brown Foreman doubled down on that same blockbuster universe strategy but for booze. And that's because they're unique costs and revenue wins when you found. of franchise. For example, you don't need to build a brand from scratch. 90% is just the same brand you're spinning off from. Honestly, plus you got reliable demand. You got a built-in audience that wants just the next iteration of your franchise thing. There's not much creativity in Star Wars Episode 9. But Jack, there is a whole bunch of money in Jack Daniel's sugar plum, Machiazza. For our second story, Stitch Fix sock just jumped 39% after crushing earnings. Because after hiring a ton of scientists, their algorithm has become very fashionable.

All right, Snackers, if you don't know Stitch Fix, basically, companies a combination of like algorithms and human fashion consultants who are going to pick your closet for you. Classic or Active, Supreme Revenue Vineyard Vise, are you showing off or are you just trying to blend in? That last one is key. You're going to answer those kind of questions when you go on their website. Then, boom, their human curators and their algorithm are going to pick the outfit for you.

You get a box every month and you buy what you like, send back what you don't. Now, full disclosure here, Jack and I did jump in snack style like a couple years ago. it wasn't great for me. It didn't really work for me. I'm going to say Nick jumped in snack style because he infamously sent back like three pairs of sweatshorts that they recommended for. Didn't know sweatshorts were, I think, they're like the fanny packs of the sweatpants world. They claim they were khakis. Now, the last time we covered Stitchfix on this pod, we learned that they were basically dropping the fix. A little awkward here, Stitch Fix kind of was dropping the fix. They offered an a la carte clothing option called

Direct Buy, which is basically you scroll through a bunch of items, you put the ones in your cart you like, and you buy them. Which is basically the same as every other online shopping experience. They seem to be inadvertently killing their unique differentiated. Yeah, they basically did self-inflicted ordinariness in the e-commerce world. We were kind of shocked. But we were relieved because yesterday happened. Yeah. They announced that revenues jumped by 10% last quarter and they swung back to a profit. Also, kind of a funny hiring situation. They brought on board a new CFO from Amazon, a company that kind of zucked them and launched the exact same product this Stitch Fix. Totally. So it's good that they got

them out of there. Plus, they expect 20 to 25% growth next year because of successful first fixes. Jack, feels like we're led right into our takeaway. So what's the takeaway for our buddies over at Stitch Fix? Tech's algorithms, they're not just smart. They're also learning. They're learning. Snackers, interesting statistics here. It's actually a homemade metric they whipped up over at Stitch Fix. Here it is. It's called Successful First Fixes. They look at first-time stitch-fix customers, and they ask, did this customer purchase one of the items we sent them? And do they plan to get another box full of more items?

Well, get this. That number hit 80% last quarter, as in 80% of people who did, like, a first-time stitch-fix, ended up buying an item and getting another stitch-fix box. They had a good experience, and that is the highest percentage of successful first fixes in five years. All right, so Jack and I whipped out the old whiteboard here. We're trying to come up with answers. Basically, they're like two possible explanations.

for this record number. First, maybe people realize they can't go shopping in person right now because of the pandemic. Jack, you settle up for that skirt even though it doesn't quite fit. No one's going to see you right now. The other possibility, maybe the algorithms and fashion curators at Stitchfix are just making perfect selections that you love. Jack, these corduroyes fit me freakishly well. Quarterized sweatpants. We think it's the latter. Yeah, we do. Their algorithm is actually better than ever because it's making even more highly personalized picks that it keeps learning from. The evidence we found to this claim came from a LinkedIn search of Stitchfix employees. Yeah, do a little search on LinkedIn. You're going to notice that unlike the gap,

Stitchfix has 1,300 employees with science in their title. No joke, we looked this up. They have 1,300 self-proclaimed scientists over at Stitchfix. So Stitchfix's customer satisfaction depends on the algorithm performing extremely well. and that algorithm keeps on improving by learning. It's learning, and that's why Stitchfake stock has doubled in 2020. For our third and final story, Uber just sold away something that we were shocked to see this. They've sold away their self-driving car division, which means they've sold away their key to profitability. Which means we've got to go all the way back to Travis Kalanick, the co-founder, Jack.

I know you're a big fan of the The Thoressaurus these days. Cantacarus, can we say cantankerous? Cantacarus is one of the many words we could use to describe Travis Calvert. Yeah, and the reason we're talking about Travis is even when he, like, founded Uber, he believed that self-driving technology was existential for this company. That's because Uber isn't profitable. No, it's not. Mainly because 70 to 80% of your Uber fare, it goes to the driver, not Uber.

All right, so let's say you get out of the airport, you jump into the Uber. It's going to cost you $30 to get home. What's the breakdown here on the revenues, Jack? Who's getting what? $22 goes to the driver, give or take. and eight bucks, give or take, goes to Uber. Now we're going to do the more complicated math on what happens if there is a robo driver. Well, $0 is going to go to the robot driving the car.

That's true. And they don't accept tips, by the way. And all $30 is going to Uber. Yeah, just wait until they unionize, Jack. Now, self-driving is the existential solution to Uber's profitability when you look at the straightforward fair math. Same with Dornash. Their IPO intent. But now that we've covered Silicon Valley, we've got to pop back across

the country over to lovely Pittsburgh where it's the home of Carnegie Mellon University's Robotics Center. Pittsburgh does rivers, steel, and bridges. There's 446 bridges in the city of rivers. What are they called? The Three Rivers City? When they have that many rivers, Jack, you got to make the third thing you do rivers, but you got to have something in the middle too. Pittsburgh does a fourth thing. Self-driving car technology. That's right. To the top researchers and scientists focus on self-driving, they really happen to be in Pittsburgh, Pennsylvania. That's why in 2015, Uber set up an office one block away from Carnegie Mellon University and started rapidly hiring Carnegie Melloners. Yep, a.k.a. Tardins, that's what they like to go by. In total, Uber hired 50 Carnegie Mellon Tardons away from the university and basically gutted the college's entire self-driving program. I think the appropriate verb is that they poached 50 researchers and professors from Carnegie Mellon.

And what do they do, Jack? They created a whole new team here over at Uber. They launched a highly intimidating group called ATG, Advanced Technologies Group from Uber. Remember, if you're a technology company and your product doesn't have an acronym, you will not get funding or resources for it. And ATG's goal was to eliminate the human driver from the Uber ride with robotics and autonomous driver. All right, so that was five years ago. We now can fast forward to today.

Jack, what is the situation look like for the self-driving ATG unit over at Uber five years later? Well, they've spent a lot of money. and a half billion total in salaries, acquisitions, and technology in this ATG group. And Jack and I added up, the return on that investment has basically been, give or take, a half a dozen nightmares. Yeah, Uber was stuck in court getting sued by Google because one Uber employee stole self-driving secrets from Google and brought it to Uber. And then sadly, testing of these self-driving vehicles actually killed a pedestrian in Arizona,

the other home of self-driving in the country. And they have practically nothing to show at all in terms of like working self-driving. driving cars. So that has led to what we saw yesterday with the big shocking news. Uber just sold the ATJ group to another Pittsburgh-based company. So Jack, what's the takeaway for our buddy self-driving over at Uber? We have to reset our expectations on self-driving cars. Snackers, Elon Musk, like famously said last year, that in 2020, there would be one million self-driving Tesla robotaxies on the road. Jack, how many are we seeing these days? What we got out there? Let me whip out my one finger. Zero. Yeah, zero. There are zero. There are.

They're absolutely none. Oh, and by the way, related to today's Uber news, Volkswagen just announced that self-driving technology is coming to its cars in 2025, like 2030-ish. Yeah, the Germans are a little more conservative and realistic. So Snackers, when Jack and I are looking at this situation, it looks like it's going to be in years, not months that we're getting self-driving tech on the mainstream roads. There has been a lot of overhype. We all want to take a nap while our car drives us somewhere on the weekend. Don't hold your breath. Uber's founder said self-driving was the key to their profits. Well, they just sold the key. Jack, can you whip up the Sean Bore takeaways for us over there? We thought Stitch Fix was dropping the fix. Yeah, they're actually fixing the fix.

The algorithms seem better than ever. This is insane. Brown Foreman should hire Robert Downey Jr. Yeah, they should. And their Jack Daniels brand has like, you know, four trilogies already with more coming. For our third and final story, Uber is bailing on self-driving tech, although they will own 26% of the company that they're selling this ATG unit. Honestly, this is kind of like the Avatar sequel. It's going to be years, not months. Honestly, is this even going to become a thing? Nick, they say it's going to be next December. Avatar it is, not self-driving cars.

Well, believe it when we pay $30 for it. Now, time for our snack fact today. This one's sent in by legendary snacker, Goroff Menin from lovely Toronto by way of Los Angeles. Apparently, there are some insane laws in the state of Colorado. Yeah, Snackers, if you're in Denver, please tweet us at Tebowoy Jack, at Nick in New York to confirm this. In Denver, it is apparently illegal to lend a vacuum cleaner to your neighbor. But it's perfectly acceptable to lend a vacuum cleaner to a buddy. I believe they should have scripted this. It is illegal to lend a vacuum cleaner to thy neighbor. This feels like a thy situation. I think this is an ordinance. Not a lot.

If it's insane and crazy, it's usually an ordinance. This feels very ordinances. Snackers, you look fantastic today. Pour yourself another nagroney. Jack, I'm just going to applaud that 90-year-old UK woman who took the vaccine. She's fantastic. H-Y-H-Y-S-D. Have you had your snacks daily?

We'd love if you tell your buddies about us. We'll see it. Tomorrow, if you know, you know. And before we go, Snackers, big congratulations to Rafael and Marlucci, a seven-year anniversary in Sao Paulo, Brazil. Congrats to Camille Terry, who just launched a startup, actually a year ago, in South Central L.A. And to Julian Adams, congrats for finally finishing those graduate school tests in Arlington, Virginia.

And happy birthday to Matthew Magnus in Royal Wooten-Basset, England. And to Jen Hoffman on the Upper East Side, are you from, I'm from 93rd Street, so I feel like, I hope you're from 93rd Street. And happy birthday to Phil Thomas from New York City, maybe on 93rd Street. There are a lot of other options, but we're hoping you are. And to Carson Foley in Overland, Texas. And happy birthday, Miguel Alvarez in Arlington, Virginia. And to Karen Lang in San Antonio, Texas.

And to George of Miami, Florida. And Mack in Bradenton, Florida. And Quinn Flanagan in Portland, Oregon, home with the timbers. And Mateo Galvez in San Francisco. And Dr. Shannon, calling Dr. Shannon in Chicago. This is Jack. I own stock of both Stitchfix and Amazon. 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. Heavenhood Financial LLC, member FINRA, SIPC.