The Best One Yet - LaCroix sparkling water drops, Amex acquires Resy, and Americans stop having as many babies

Episode Date: May 16, 2019

To get into your weekend calendar, Amex acquired restaurant reservation app Resy to make perks way more Millenniall-y. LaCroix is owned by National Beverage Corp, whose shares fell 7% this week as analysts say it can’t handle new competition. And a major study shows Americans are having a record low number of babies, so we jump into the businesses that affects.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 Thursday, May 16th, and it is the best one yet. Jack, let me check my records over here. Yep, this is the best one yet. This is the best one we've done. Markets rose yesterday, but we're actually coming at you from coast to coast. We're on either coast. I've got the Atlantic on my side. Jack, can you see the Pacific over there from San Francisco? I'm looking at the Pacific right now. I'm also looking at you through FaceTime, so this is a great coast-to-coast podcast. Jack, we haven't done a remote podcast. Jack, we haven't done a remote podcast. Jack, we haven't done a remote podcast. like this since... Hands across America? All right, we got three grade stories we're bringing at you. First is LaCroix. The Spirit Drink of Youthfulness. Its parent company stock dropped by 7% this week. Now, we opened up the fridge on this. We popped one open and we're going to tell you why.

It's all about the pompomoo. Our second story is about American Express. It just acquired Restaurant Reservation app Rezi. This is all about experiences, not appetizers. Big one here. Third and final story is big and it's economic. The birth rate in the United States just hit like a record low and the societal implications will be broken down in this podcast. Get this. Only 3.7 million babies were born and then reared in the U.S. last year.

But first, let's talk about what Snapchat just rolled out to this world. I'm liking the looks of this thing and then I'm mildly disturbed you. There's a new filter on Snapchat that will let you see yourself as the opposite sex. So we're talking, Jack and I are both guys. we pop up our photos, our faces on the screen, and then we get to see Nick as Nicole, Jack is Jacqueline. Jack is Jacqueline, and I looked like a really, really well-done-up woman. Now, your case you're wondering, seven million people as of last night had jumped on this thing. We'll give you a spoiler alert, though.

What are you basically going to look like on this? You're pretty much going to look like your mother, who's very beautiful, but with an Adam's apple for guys. That's if you're a guy. Now, if you're a girl, you're going to see the opposite situation. Either way, you can never unsee what you just saw. Now, we need to thank the top engineering talent at Snapchat for giving this world something that it really needed. Right. There are a lot of challenges going on on planet Earth right now, but you get to see what you look like as the opposite sex.

Oh, yeah. And Instagram, I dare you to try to copy that. Well, they probably are like already honest. All right, before we go further, listen to these important words. You're tuned in the snacks daily. We spoke to the lawyers and we got to get some illegal out the way. The snacks are about to hear rain food. It's air candy.

They don't reflect the views of the Robin Hood 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. Robberhood Financial, LLC, member FINRA slash SIPC.

For our first store, L'C, LaC, the sparkling water. It stock just fell 7% this week because it's getting sent to. down to the minors by investment banks. Nick, you just proved to me that you're not stubborn and you can learn. You were pronouncing it, Laquois forever. Jack, I evolved. I spent a whole summer popping open mango loquas and turnings out its... Nick called it Laquois on this pod last summer, and the friendly people in the legal department at LaCroix actually clarified it's LaCroix. Yeah, you don't make that mistake twice. Let me just tell you that. So, Jack, what's going on with our buddies over at LaCroix? This is the OG Sparkling Water Company.

and its parent company is called National Beverage Corporation. Great ticker symbol, by the way. The stock trades as F-I-Z-Z Fizz, which I love. That's very cool. Only better stock ticker symbol would be T-B-O-Y. Now, LaCroy has become a hallmark of millennial office culture. Our parents had bowls of peanut M&M's. We have fridges full of La Croy.

And then down south in Texas, I think you got that Topo Chico drink, which is like the new LaCroi competitor situation. Keep looking out for Topo Chico, but that's part of the problem for LaCroix. Its stock is down 56% since September, and there's a lot of signs that the good times for Fizz are over. And that's despite the big reality right now, which is, Jack, sparkling water, it is having a moment.

This stat says it all. In January, I love this stat. Sales of sparkling water in the United States rose by 16%. But LaCroix sales, get this, they slipped 2%. What? How could that happen? The market's growing and LaCroi is shrinking.

Not a good sign. Now the bank. The banks are jumping in here, and they're issuing like a few warnings for LaCroy. Okay, Jeffrey's predicted that there will be significantly decelerating sales, and it downgraded the stock. And then UBS jumped in and said, hey, LaCroix, you're getting beat up and bullied by Pepsi and Coke. Glad you mentioned Pepsi and Coke, because sparkling water is now mainstream. Pepsi has this thing called Bubli or Boublei, however you like to pronounce it. Very nice, very sleek hands, very sharp look.

And Coca-Cola's got those old-school brands, Desani and Smartwater, but they both come and sparkling versions now. Now, here is a key distinction. Pepsi and Coke, their sparkling waters, they're available in convenience stores like nationwide. LeCroys are not. I can vouch for that stat personal. Wait, Jack, do you want to take a moment here?

Because I think you have like a traumatic story you want to share. Well, I had quite a cross-country drive with my fiance from Vermont to California, and I'm telling you, all I wanted the whole time was sparkling hydration. Jack gets to Phoenix and he's like, None of the gas stations on Interstate 80 have any sparkling water anywhere. Finally, I get to Santa Fe, New Mexico. Thank goodness there's a whole foods. I bust in there.

Does anybody have any LaCroix? They're like, we have water. He's like, I need Fizz. I need Fizz. Okay, so Pepsi and Coke are getting into convenience stores. LaCroi just hasn't done a great job at it. So, Jack, what's the takeaway for our buddies over at LaCroix? LeCroi was doing great on the small stage, but it's failing on the big stage.

Now, when there's no competition and there were not many drinkers other than LaCroix, you know, LaCroix stock rose by like seven times from 2014 to 2018. This was one of the best stocks of like the 20 teens. And now LaCroix is not handling the competition well at all. It's got a couple problems here. A key one is distribution because it's not in gas stations. That's just a sign of bad management. I mean, the company needs to hire somebody from Coca-Cola who knows how to get into gas stations

and just get it done. In the meantime, we're going to pop open a poplmose. And just watch what happens. For our second story, American Express just acquired restaurant reservation app, Rezi, to get all up in your dining experiences. One of the great stresses in life, Nick. There's actually two I want to mention. I know what you're thinking here. One is organizing the game at like the family Christmas party.

And the second is being the person responsible for the dinner reservation. Look at any brunch of like 12 people yaking away. There is one person there who sacrificed. There were 30 emails back in. fourth, there were six calls, can you get me an 8 p.m. A 6 p.m. 11 p.m. too late. Those restaurant reservations, they are stress. And American Express loves that stressed out reservation person and has a solution for them. Yes. So Rezi came around in 2014. It took on Open Table, and it's now like the largest restaurant reservation app like in the entire country.

And the concept is simple. In the past, you used to actually have to call a restaurant and talk to a person and figure out when you could get four seats next to the window. We're talking. We're talking there was human interaction and you would like ask how someone was doing. Not anyone. That was crazy. Now it's an email address and you're picking out times on a date. So you're filling the unused inventory you have, the tables, if you're the restaurant, which is a huge benefit for the restaurant. So Rezi's been around since 2014 and now they have 4,000 restaurants on the roster in 200 cities. So Jack and I jumped into this one a little further snack style. Really interesting investors in Rezi as well, right? It's an impressive

roster of investors, I'd say. Airbnb, for one. And then you've got the Shake Shack founder, Danny Myers, who owns Union Square Hospitality Group. So that's the side of Rezi that you see, getting a table for Saturday night. But there's a side of Rezi you don't see. The back kitchen, if you will. Exactly. That's what they call their hospitality software. This is pretty impressive data-driven analytics, actually.

There's business tools that will help restaurants figure out. Like, on a rainy day, what types of dishes they're going to need more of because people will want them. So Rezi actually calls this service, Rezzi fly. And they'll even tell you like the average amount of time someone's eating at your restaurant so you can order food accordingly. And this is all happening on the back end. Now let's talk about American Express's strategy in acquiring Rezi. Please. So here's the deal. When it comes to American Express, they're thinking of experiences. They're not thinking of points and rewards. Yeah. So when you spend $10,000 in the first three months with your American Express, everybody's got points and everybody

can translate those points to like flights on a Delta flight. Big, big spender over there. there. That cross-country trip, very nice. Very nice. Nick, what everybody can't offer is a table at ABC Kocena at Madison Square in New York on Saturday night, Valentine's Day. At 8 p.m. At 8 p.m. 4-2. Exactly. That's the kind of value that American Express is trying to unlock by owning a company like Resi. It's going to start dishing out the best reservations. So, Jack, what's the takeaway for our buddies over at Amex and now Resi? Both on points and in rewards, you see that American Express is catering to millennials. It's not just catering. It is like obsessive. It's like that waiter at the restaurant who borderline wants to go home and hang out with you. They're asking so many questions.

It's all up in Millennials Grill. So in the past, MX was, you know, lounge access, jazz tickets at 5 p.m. on a Wednesday and like five-star hotels that no one is going to right now. That's when it was catering to old school business travelers. But today, they're going after millennials. So you get extra points if you link it to your Uber or Lyft account or your Netflix or HBO Go. All right. I know what brands you're talking about. Now, it just relaunched a card even the other day with like quadruple points on dining because it knows food is the heart of our souls. It wants to hook your weekend up with all of your millennial goodies that you love. And that's why this acquisition is a strategic move by Amix. For our third and final story, a big study just came out showing that America has got baby problems, aka, what would you say? Not enough of them?

Not enough of them. Not enough. Not nearly enough. Not enough babies being born in this country. Can't find them anywhere. Wouldn't know that by looking at my Instagram. Everyone's got to show off their babies. Very true. Now, Snackers, if you want to appreciate babies in a new way, go live in London's financial district for six weeks like I did. You will not see a baby anywhere.

It is barren of babies. The sound of a baby laughing or crying is actually a beautiful thing. It's like an unknown thing. But if it has an English accent, that's actually a plus. News this week, the Center for Disease Control in the United States reports, that 3,78,285 births happened in the U.S. last year. Now, I have no idea of that's a good number. That is not a good number, Nick.

It's almost 4 million, but that's the smallest number of births since 1986. Which is like pre us, by the way. You were not a thing then. That is pre us. And it's the fourth straight year of declining births in the U.S. Now, there was one small gain, which is women in their late 30s, early 40s. That's where they're seeing some baby growth. But everywhere else in the women-age spectrum is having fewer babies than before.

By the way, that is an interesting new concept, the women-age spectrum. Sounds very technical. Now, there are many reasons why this is the case. We can get into a lot of them. No, I don't think we should go into those, Nick. That's a different podcast. And the solution to this, birth decline, that's also a different podcast. But what is the subject of this Snacks podcast is what we're most interested in.

Who are the winners and who are the losers when your economy like stops having babies? So one winner is like Uncle Joe who never had any kids and can't stand having kids around, okay? So a grouch. You're talking like a grouch. Yes, grouchy people are loving this trend. Now, there are a few key winners here. For example, the elderly. Elderly care.

Old people tend to rely on their kids and their grandkids to bring them to the soccer outing, to take them out to dinner. And if there are fewer kids, old people will need someone else to care for them. Interesting fact, in the original Uber pitch deck from like 2008, one of the highlights was the benefits of a future car service company for the elderly. Yes. Also, self-driving cars could really help old people get around, and so could robots. They could like stay in the house and take care of old people. Another industry that's been cited as winning from this situation is the pet industry. People need companionship, and they love having little cute things around. If it's a baby, great, if not a puppy. If it's a dog, it could be a succulent at a certain point. doesn't matter. And last, all of the like problems that we don't even know or think about,

entrepreneurs can find a way to solve them. Exactly. There is some kind of a solution. It could even be like an augmented reality. Maybe you don't need the real people. It's a company providing not real people. Now, the losers of a declining birth rate are actually much more. First of all, the baby industry, there's fewer butts to wipe with diapers. There's fewer mouths to feed with formula. Keep going. Cute little, cute little baby bodies to put onesies on. And then economic growth in general. is kind of a loser in this situation. The state of Vermont is one of many states that needs young people to procreate, okay? And they are actually offering 10,000 in the state of Vermont if you'll come back and work there. Meanwhile, New York City has got like an endless supply of interns every summer.

So it seems like they're all going down to these villages. Ship them north. So Jack, what's the takeaway for our country without the babies? This is how Japan lost 25 years of economic growth. Japan's economy is 12% smaller today, smaller than it was in 1995. 25 years of shrinking economy. And the big reason for Japan is it's like world record low birth rate. We're talking, we want to get back to Jack's, what was it, the women age spectrum over here? It was, Japan's had like, I think it's 1.4 babies per a woman. That's Japan's current birth year.

Now compare that to the U.S. we have 1.8 babies born per woman. So we're actually, if it wasn't for immigration in the United States, we'd have a shrinking economy. And here's the other key. It's young families who tend to be working, spending, and growing, whereas older people who are living individually on their own without kids are not. So this is a new era for the American economy, and it's not a good trend for it. Jack, can you whip up the takeaways for us? LaCroy owner National Beverage Corp has not matured well as sparkling water has gone mainstream. Pepsi and Coke are basically. basically elbowing these guys out of the fridge.

An American Express just acquired Rezi because it wants millennial credit card customers to just love it. Pro tip always tell the restaurant it's your birthday. Every time you go to a restaurant. Third and final story, the U.S. birth rate just hit a 32-year low, and low birth rates lead to declining economies. Good for regular gap, bad for baby gap. That's a weird issue. Very, very true.

Now, time for our snack fact today. This one sent in by a fantastic snack. William Townsend the 3rd, who is from the peach state of Georgia. Specifically, he's from Atlanta, Georgia, and he tells us that his hometown is home to 71 streets with a variation of the word peach tree in their names. However, he then adds this really important clarifier, which is, despite all those peach tree names, he claims there are no peach trees in Atlanta. We did not fact check that second part, but we did look into streets.

with peach tree in the name in Atlanta. You got Peach Tree Street. You got Peach Tree Circle, Peach Tree Parkway, Peach Tree Hills, peach tree, industrial. Wow. Peach Tree Lane, Peach Tree Road. This is a true fact for the Peach State. A couple other big stories happened yesterday. Check out our Snacks Day of the newsletter to learn about Madison Square Garden stock, which is down because the Nix did not get

the number one draft pick. And then we're covering Alibaba, which is the Chinese Amazon, which is becoming the world's Amazon outside the United States. Snackers, thank you for potting with us today. We love to having you guys with us. I can't wait for tomorrow, right? Talk to you then. 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.