The Best One Yet - “Lick or Treat & Dogs-giving” — BarkBox’s $1.6B SPAC. Budweiser’s spiked lemonade. Social Media’s automation.

Episode Date: January 11, 2021

BarkBox goes public with a $1.6B SPAC because your dog can, in fact, suffer from subscripturation. Budweiser just launched a spiked lemonade, but it reminds us of the same growth strategy as Apple’s iPhone. And automation is failing on social media platforms.$BUD $STIC $FB $TWTRGot 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. Welcome back. It is Monday, January 11th. Let's get this out of the way. Last month in the United States, the number of jobs shrank. Shrank for the first time in eight months. 2021, what are you doing? Jack, let's make this our best one yet, TBOI. For our first story, Bark Box, the birch box for your doxin is going public via a SPAC. Jack, fun fact here. Your dog, they can get subscription. This can happen to canines. Unless your dog is stealing the a password from some other dog. Right, because your dog's not a cat. Jack, second story, what do we got? Bud Light, Seltzer, lemonade, peach. That is actually the latest drink from Anheiserbush. Funny thing we noticed, Snackers, this is the same strategy as Apple did with iPhone.

You just reminded me that Apple's also a fruit. For our third and final story, Facebook, Twitter, and the rest of social media just blocked the president. So Jack and I are looking at automation. Great for scaling. Jack, terrible for public discourse, not just. Just awful. Do less, Zuck, do less. Actually, actually do a lot more. Actually, please do a lot less.

But before we jump into that wonderful mix of stories to start this week, 112-year-old General Motors wants you to know how young it is. So for the first time in like 65 years, GM got some work done. The logo for General Motors just got updated in Detroit. They're trying to look more like they interned in San Francisco last semester. They really didn't take any risks here. They made the classic move. They went from capital G, capital M to lowercase G, lowercase M.

Jack, and the logo now, it used to form a square. Remember, a lot of hard edges. Kind of like if you were running with scissors, you'd get cut. It was sharp, but they wanted to soften the corners to show these millennials and Jen's ears. You know, they're approachable. Plus, they went from navy blue to like, you know, harmless skincare product blue. That's the new tone. According to the press release, the whole goal here is to send electric,

vibes to reflect like the future of GM's electric cars. Hey, it's Nick, it's Jack. It's just us. We just want to talk to you for a second. The logo, your logo, that wasn't the problem. If you think about it, general isn't a very inspiring adjective. Exactly. The issue was actually your name, not the logo. General admission is the cheapest seat in the house. Generally speaking means speaking with no passion. And our buddy, Miriam Webster, says that general is defined as the main parts, but not the details, and it's all about the details. General Motors, here's the solution. You should have just renamed to the general. General, it's much stronger as a noun than it is as an adjective. So true, let's hit our three stories. You're tuned in the snacks daily. We spoke to the lawyers and we got to get

some legal out the way. It's snacks about to hear ain't food. It's ear candy. They don't reflect the views of the robberhood family. It's all informational just so. We're not recommending any securities. Nope. 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 story, we were actually laughing out loud about this one earlier.

Barkbox, the original dog subscription box. It's going public in a $1.6 billion spec this year. I think it's the only dog subscription box. But our question, is this a company? Or is it just a product? It's a fair question, but we're going to go back to 2011. Company was found at 2011. Jack, basically a pretty simple concept here.

It's a subscription box for your profit puppy. Yes, it is. Comes once a month, and now a million people have signed up for it. You drop in $23 a month. You get free shipping, two toys, two treats, and there's one theme every month. The dog actually smells it. Nick's brother-in-law, they have a dog, and the dog goes crazy when the mailman, like, approaches the door with the bark box.

They know, they can tell, we dare you. you to unsubscribe to that thing. I am definitely subscribing to this because when River doesn't have something to chew on, I feel like a terrible person. You get that pet parent guilt, you know, you get that pet parent guilt. But they have themed monthly boxes. For example, in October, a liquor treat arrives at your door. Jack, how about November? You got the dog's giving themed box. This December, the bark box was called Home Alone. Last year, 2019, they did the mutt cracker. Also, there's something called bark buddy that this company has launched. They're calling it the Tinder for Dogs. You swipe right to adopt an abandoned cockapoo. That's how it goes down. Impressive. We think Tinder's the wrong analogy,

but very good to promote dog adoption. All right, we check out the metrics on this thing. Cancelation rates for these Bark Box subscription boxes extremely love. Your dogs, puppy eyes looking up at you are something you cannot say no to. Yeah, Jack, cuteness is a powerful anti-churn strategy. Subscription businesses are fantastic, but running a subscription box company company is complicated. Chewy, like the sell everything dog stuff online company, they have a subscription program with a wild statistic. The subscription program drives 70% of their sales. 70% of sales are customers that just set it and forget it and get refills every month. And Chewy investors, they love that recurring revenue from those set it and forget it reliable customers.

But subscription companies aren't necessarily profitable. Yeah, Birchbox makes subscription boxes. They're struggling to make a profit trying to get you to buy the Sephora lipstick. That's in their little birch box. And Blue Apron, which tried to do subscription boxes of food that you still have to cook, is basically on the McDonald's dollar menu on Wall Street. But here's what Jack and I found fascinating about Parkbox. Out of the $365 million of revenue, they brought in last year, $221 million was gross profit.

That's squeezing a whole bunch of profit juice out of those melons neck. Yes, it is. It's because they're selling their own products in these bark boxes. It's their own goods. The two-and-one memory foam dog bed in a donut shape. Jack, the bark-bright toothpaste. Those are both produced and manufactured by Barkbox. And that's how they get the big profits.

So, Jack, what's the takeaway for our buddies over at Barkbox? Barkbox is neither product nor company. We think it's a future learnquisition. All right, Jack, got the whiteboard out here. You got General Mills. You got Nestle, you got Unilever. All of those big companies, they bought up smaller dog food companies in just the last few years. Historically, they were food companies, but they recently recognized that humans, they're kind of treating their beagles better than their babies.

We basically do. But Jack, developing a direct-to-consumer subscription business? That is hard. Jack, how about building a passionate audience around that subscription business? That is really tough. Jack, how about running that online-based subscription startup profitably? I quit. I can't even do it.

Yeah, it's the hardest thing. And that is why Unilever acquired direct-to-consumer start. startup dollar shave club a few years ago because it had to learn how they did it. Big companies haven't been able to learn themselves how to run a direct-to-consumer subscription company. So most have to learn by buying one. That is why Barkbox could be a future learn acquisition. For our second story, all of social media and even e-commerce are boycotting President Trump this week. The longer-term problem is that social media's automation strategy is failing. All right, so it's been almost a week now. Five people lost their lives in that insurrection last week

and the reputation of America's democracy was badly damaged for a long period of time. Also, we witnessed a double standard in the way that police treated Trump's mob last week. Yes, we did. Compared to the way that police treated the Black Lives Matter protesters this entire past year. All right, so if you add all that up,

this event basically became the straw that broke social media's back in a couple of days. Tech decided all at once on Wednesday Thursday last week, that the president must be muted. And Snackers, here is the key distinction you got to keep in mind. While lying is protected by free speech, inciting violence and endangering the public safety, that's not protected. Nick, you know that thing you scroll through, the terms and conditions when you're setting up a new account? You just click accept, you don't even read it. It's like a totem. It's charming. You never see it. When it comes to a tech platform,

there's actually language in there forbidding you from using the platform to promote violence. And we saw that put into action last week with this epic rundown. First, Twitter blocked Trump's account permanently on Friday, and Facebook has blocked it for the next two weeks. And Amazon blocked his Twitch account so he could not live stream video to people. And then PayPal and Shopify, they jumped in, blocked his ability to sell merchandise and even accept donations. And YouTube changed their policy.

Instead of simply removing single videos that break their policies, YouTube will now start blocking entire channels of Trump's. And Jack, how about that? Snapchat and TikTok. They kind of had to make moves after Facebook and Twitter. Yeah, they decided to take away Trump's megaphone as well. Put that all together, and we got ourselves a striking demonstration of tech's power in refereeing speech and commerce on the internet. Yeah, that's a whole different takeaway for a different day. So, Jack, what's the takeaway for today for our buddies over in tech? Facebook strategy of automation is failing. Yes, Snackers, Facebook has a whole bunch of

rules about what you can and you can't post. For example, paid political ads on Facebook, those cannot lie. And nobody can promote violence with their posts on Facebook. All right, so when we look a little bit deeper into Facebook, they've got 56,000 employees. On the other hand, they've also got 2.7 billion users. It's quite a ratio there. So to monitor all the posts to make sure they're not breaking rules, each Facebook employee would have to oversee the posts of 48,000 Facebook users across Instagram, Facebook, WhatsApp, and whatever other apps. It's basically like each employee would have to have their own dominion. Yeah. So instead of that, they use artificial intelligence, which reads the post that we make

and flags the rule breakers so that a human can check them out. But here's the thing. As was shown last week, that artificial intelligence strategy is failing. Thanks to the New York Times, we know that Facebook groups were used to organize the attempted insurrection by Trump supporters last week. Yeah, eventually got taken down, but only after reporters had to tell the FBI all about them. And thanks to separate reporting from a guy named Jud Leggum, who runs a great newsletter, we know that misleading political ads were up this campaign season for days viewed by millions of people. Just like the Facebook groups, eventually they get taken down, but only after reporters alert the FBI to them. Here's how it seems to always go with Facebook. Artificial intelligence misses something.

Okay, check. Someone finally flags it and lets them know. Step two. Facebook takes it down, but only after the damage has been done. And that process is all because of automation with no human involvement. It's low cost, and that is why Facebook is incredibly, ridiculously profitable. But it is also why the platform has so much misinformation and so much policy-breaking content still makes it. Facebook, the automation, it's failing. For our third and final story, honestly, just in time for dry January, Bud Light is launching a hard-seltzer lemonade. It's actually a little late for dry January. Yeah, it's a little lighter. A couple weeks.

Yeah, they are true. But that lemonade part of the story is actually an iPhone strategy, too. Jack, feels like we got a, we kind of got a pendulum situation here. The pendulum swung from like light beers back in the day. Yeah, Millie five freshman year. Yeah, we were in college. All the way to like heady quadruple IPAs you had to like eat this. It was liquid bread. That's the late 20s through until today for me. Well, that got intense with beer. But then the penitial. Hendium swung back to lighter stuff, and that's where White Claw came in. White Claw summer. It's kind of a health trend. People want to get drunk for under 100 calories per drink and go gluten-free if possible. Minimum sugar. And that basically is why Budweiser stock is down 13% in the last year because beer sales only grew less than 1%. And that's because the spike-seltzer market doubled again last year for like the third year in a row.

Now a little context we've got to sprinkle on here, Snackers. Hard Seltzer, growing crazy fast. but still only 4% of the beer market. So big beer is still the big player in this market, but they don't like that that tiny little wedge is growing so darn fast. Oh, they didn't like it. So in just the last 365 days, get how many beer companies have jumped into Spike Seltzer.

Molson course. Check. Corona. Add it to the list. Natty Light, which we didn't know could get any lighter. No, it could apparently. It did. Budweiser, also Coca-Cola is getting into this.

And despite all of them jumping to this fun foray of Spike Cic Seltzer, still, White Claw controls over half the Spike Seltzer market. Truly controls about a third of the Spike Seltzer market. And the rest is like kind of split between a bunch of your friends and cousin is who just launched some Spike Seltzer startups. Now, when Anheiser Bush, which is Budweiser's parent company, when they first got into Spike Seltzer, they launched Bud Light Strawberry and Bud Light Black Cherry Spike Seltzer's. And kind of stuff that's like on the Jolly Rancher Flavor spectrum. That was the goal. But then our buddies over at Anheiser Bush, they noticed there were fewer spike seltzers in the lemonade flavor, but that that little category was growing faster than the rest.

It was a niche within a niche. And that niche of spiked seltzer lemonade was growing nine times more than it did the previous year. Anheuser Bush decided that's where we should be. Yes. So they're launching their first Bud Light Spike Seltzer lemonade this summer kicking it off debut style with the Super Bowl ad in February. Go big or go home. So Jack, what's the takeaway for our buddies over at Budweiser. It's counterintuitive, but segmentation can drive growth. So here's what you'd think, and Jack and I are talking about this for a while, you'd think you'd think that simplifying your product offering would be better for like everyone. It's easier for the consumer to choose if there's just one thing. It's easier for the company to make it if there's

just one thing. However, if a company has the resources to segment, then it can launch a specific product for specific types of customers. If there is a product just for you, you are 100% satisfied. You don't have to compromise. Every customer gets exactly what they want. Funny thing, Jack, and I noticed, Apple does this exact thing when it comes to price. It used to be one iPhone. That's your only option. $600, pretty expensive, unaffordable for many. Now they got like a dozen iPhone starting at $400 for the SE. But it goes all the way up to the $1,400 ruby-crusted 12 Pro Max Plus. Handcrafted by Tim Cook every other Tuesday. Now Apple, used price segmentation to grab more of the smartphone market.

Bud Light is using flavor and product segmentation to grab more of the Spike Seltzer market. Jack, can you whip up the takeaways for us to start the week? Barkbox just got acquired by a SPAC called Northern Star Acquisition Corp. Soon, that company will change their name to Barkbox. Yeah, the box subscription business, it is tough so they could become a learn acquisition. Second story, social media has blocked President Trump for encouraging a mob to storm the U.S. But honestly, it was their failing automation strategy that was an enabler in last week's attack. For our third and final story, Bud Light, Spiked Seltzer Lemonade, Peach.

It rolls out the tongue jack. They're segmenting the spiked booze market, kind of like how Apple segments smartphones. Now, time for our snack fact of the day. This one sent in by Silas Findlay from Lovely Waco, Texas, where he's a fan of lovely Waco, Texas. The invention of Dr. Pepper, occurred in. in Waco, Texas in 1885. It turns out Dr. Pepper preceded the invention of Coca-Cola by one single lovely year. Impressive. There's also a Dr. Pepper museum in Waco, Texas. It turns out also 75% of the world's snicker bars manufactured in Waco, Texas. Waco, the city that feeds the world's sweets.

Waco, Jack, we don't do locale. No, we don't. We power Chicago. Snackers, we love starting the week with you. If you haven't yet, you can scroll. down and we'd love if you drop a five-star review. And if you're listening on Spotify, it's super easy to share as a story on your Instagram. Please. That helps us grow. We love how that looks and we can't wait to chat with you tomorrow. See you then. If you know, you know. And before we go, happy birthday to Emily and Lucy, a mom and daughter combo who happened to share the same birthday in Hood River, Oregon. Incredible. I heard Hood River is gorgeous, especially for mountain biking. Yeah, it's supposed to be great. And happy birthday to Katsumi in Houston, Texas. And Anisa in Los Angeles. And Inisa in Los Angeles.

and Katrina Seagrove in South San Francisco. I can see you from here, Katrina. And Holly Ann Clements in Philadelphia. And Hayden Flores in Santa Barbara. I hope that didn't sound creepy in Isa. And happy name day to Hekmo in Dubai. And Brad Thompson. Nick and I are impressed that you're kicking off your MBA down in Miami.

And Kunaught Patel also kicking off the NBA up in New Jersey. Happy anniversary to Antonio in June in Oceanside, California. And a two-year anniversary for Irwin and Ronnellin in Portland, Oregon. This is Jack. stock of Amazon, nickel and stock of Apple, Shopify, and Northern Star Acquisition Corp. 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.