The Best One Yet - 💪 “Mark Whalberg’s $1B Bicep” — F45’s gym franchise. Walgreens fridge ads. China’s worst stock day.

Episode Date: March 15, 2022

China’s stock market just had its worst day since 2008 because of 19 Covid cases in the Capital of Tech Gadgets. Mahky Mark Wahlberg’s fitness chain F45 will challenge you on a bench press to prove that physical companies can scale. And Walgreens’ new fridges aren’t just empty windows - they’re looking at you, analyzing you, and pitching you Ben & Jerry’s.$WBA $FXLVGot a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Got a SnackFact for the pod? We got a form for that too:https://docs.google.com/forms/d/e/1FAIpQLSe64VKtvMNDPGSncHDRF07W34cPMDO3N8Y4DpmNP_kweC58tw/viewformLearn 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 Tuesday, T-Boy, Tuesday, March 15th. Live from South by Southwest. Just kidding. We're not there. Oh, maybe next year.

Should you do it next year? Let's go next year. Yeah, maybe. But here in Vermont and for you in San Francisco, it's March 15th, which is also equal payday. It is. The day in 2022 that women must work until in order to make as much money as a man-made in 2021.

In the United States, equal payday is March 15th this year, because women have to work an extra. 74 days to get paid equally to men. We're talking an extra 74 days on top of the already 365 days. The only holiday that moves depending on the gender payout. We're hoping it moves in the right direction. By the way, this pod check, this is a good day for a pod. TBLI, for our first story, China just had its worst stock market day in 14 years.

It all comes down to Shenzhen, the city that made whatever device you're listening to us on right now. Our second story, Maki Mockie Mockie. Marky Mark Wahlberg. He's not just acting, modeling, and rapping. He's investing in F-45, his publicly traded squat record. I mean, Jim. For our third and final story, we're looking at Walgreens because their newest product turns their soda fridges into giant in-your-face ads. Snackers, the future of retail is here, and it is annoying.

It is so annoying. Snackers, before we hit that wonderful mix, though. A fantastic mix for a Tuesday. Three things are certain in life. Yeah. Three and only three. Death, taxes, and Tom Brady, QBee sneaking when it's fourth and one. This guy is aging in reverse like a six-foot-four Benjamin butt.

He is zero percent body fat. Jack, I hear body fat is 100% Tom. Last month, Snackers, Tom Brady announced to the world on his Instagram, he was retiring from the NFL. After 22 seasons, he was done with football. He was going to focus on crypto, anything. Then this weekend, Tom Brady announced on his Instagram, he's returning to the NFL after a seven,

week retirement. He is unretiring, strapping on the old strap skin, tossing the young pigskin around. Crank, you're open. Honestly, best thing to happen to Gronks since like spring break. Great day for Tampa fans. Awkward day for Giselle. And bad day for one specific fan. Because the day before Tom announced his return to the NFL. This is a true story. One fan made a purchase in an auction of a particular piece of Tom Brady memorabilia. And what he bought was a football that was Tom Brady's very last touchdown pass. of his entire career. It was Tom Brady's last touchdown pass.

Pass tense on this. He spent $518,628,000 on that ball because it was the final Tom Brady football. It was the very last Tom Brady football. But now that Tom's back, it's just another Tom Brady touchdown football. This isn't anything special because it's no longer the last one. Unless Tom doesn't throw a single touchdown next season. That's true. Then the price of this football is going to take.

Yeah, Tom hasn't caused this much value to disappear since he's laser-eyed. Twitter profile. At least the fan still has a physical, original NFL football. Unfortunately, Tom Brady still has his eternal youth. That's it on three stars. 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 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. Right. Snacks is digestible. Business news for you.

Robberhood Financial, LLC, member Fenra slash SIPC. For our first story, China just suffered its worst stock market dive in 14 years as COVID spikes lockdown major cities. But it all comes down to the city of Shenzhen. Which just happens to do something that you're touching right. Snackers, China is where COVID broke out nearly two and a half years ago. Yeah, it's been a while. But it largely disappeared from China, like immediately after the outbreak.

And even though Omicron is relatively mild variant, China's got less than 5,000 cases a day, and yet they're still locking down. 5,000 cases a day is nothing. That's it. Jack, can we talk about the other end of the spectrum on the other side of the world? In the United States in January, we had days where we had a million, positive confirmed cases of COVID each day. No.

And we didn't shut down. They have 5,000 in their shutting down. But here's the different Snackers. over in China, they've got a COVID-Zero policy, keyword zero. And as you know, what president she wants, she gets. And what she wants is that no amount of COVID transmission is acceptable. Not a single case. Not one. Not even one.

That's why a bunch of major cities in China have borders closed, no public transportation, and mandatory stay-out. Yeah, just a handful of cases. You've got a six-day lockdown coming your way and you're going back to ordering via the delivery apps. Shen Zhen is a city of almost 18 million people. 18 million. And they had 19 confirmed cases. 19.

And guess what happened to Shenjin? It's shut down. 19. Not 19,000. No, no, no. Or even 19 million. Twice the size of New York. Now, Snackers, this is a big deal because Shenjin's not just a city in China.

No, no, no. Shen Zhen is the kitchen where Silicon Valley's tech comes to life. Shen Zhen is the global capital of electronic gadgets. Totally. It is the home of where high tech jobs and high tech factories, happened to exist on the same block. You never see that. You never see that. And because of that, there's a bunch of billionaires in Shenzhen. In fact, there are so many billionaires that Shenzhen has the fifth highest number of billionaires of any city in the world. Back up a second. More than London.

Back it up. Paris. Back it up. Dubai. In 1979, China declared that Shenzhen was going to be a special economic zone. Shenzhen became China's very first experiment with capitalism, even when they only had 30,000 people. Today, a little over 40 years later, it's gone from 30,000 people to 18 million in this city that's just north of Hong Kong. And get this, Snackers, 90% of the world's tech gadgets and dongles, they are made in the city of Shenzhen. This city grew so quickly. There's a term in China called Shenzhen Speed. Like I wrote my term paper just last night. I did it in Shenzhenz Speed. Snaggers, the odds are, whatever it is you're listening to us on right now at this moment, it came from Shenzhen.

Foxcon is the biggest manufacturer of iPhones. They're designed in California, but manufactured in China. Apple is not a $3 trillion company without the city of Shenzhen. Almost half of their iPhones'con factory are produced in that Shenzhen Foxcon factory, which is closed right now. But here's the problem. That Foxcon plan? Which probably made your iPhone.

Is shut down right now. And so are six other Apple suppliers. And it's not just Apple products. No, it's not. Tencent, Huawei, and all the other big names. in China tech. They're also based in Shenzhen and they're also shut down right now. Toyota and Volkswagen, they got factories in Shenzhen. They're shut down. And it's all shut down. For at least six days. Right now, the COVID spike in China is hurting Chinese stocks. Okay, but Jack and I are

looking at this. If this drags on, it could mess with the entire world supply chain. Because Shenjin is the global capital of electronic gadgets. It's Silicon Valley's kitchen. So, Jack, what's the takeaway for our buddies who are anyone with a tech gadget? China stock market is down big, kind of on purpose. This is the will of the Chinese government. Snackers, the main Chinese stock index fell 7% on Monday. We're talking its worst drop since the financial crisis 14 years ago. And it's down 41% in the past year.

That is brutal. It is. And it's mainly caused by two punches from the Chinese government. Yeah, now we're not saying China's government wanted its stocks to fall. But the Chinese government did want to crack down on big tech in its country. That's one. And it did want COVID-0. That's two. And to accomplish those two goals, controlling tech companies and 100% elimination of COVID,

there was a cost to China. The cost was that stocks in China had to fall. In America, the stock market is a top political concern. In China, it's not. Straight added just outside of Boston, Mark Wahlberg's gym company, F-45, is proving economic survival of the fittest, fittest. Can it scale? Yes. This gym chain can scale. Snackers, maybe you've seen an F-45 gym. Maybe you haven't, but what they did was take a page from T25 and P90X. Yes. Name the workout after a number and a fierce letter.

T25. P90X. Because vowels are soft. You don't want a vowel in your workout. The best thing about numbers is counting reps. F-45 was founded in Australia. But now, like your ex-rmate, they live in Austin, Texas. And they open their first gym back in 2013.

Now, F stands for a functional. 45 is how long the workout takes. Zachers, don't overthink it. This isn't Tolstoy. No. And this also isn't Planet Fitness. You're not going to come into the gym with your headphones and walk around while occasionally picking up something and putting it down.

Planet Fitness, where you spend most of the time talking to your mother. This is actually more Barry's boot camper, Orange Theory. Well put. It's like circuits and hit style workouts. That's where you're getting an F-45 gyms. And you do it with a bunch of people and you motivate each other. Jack, remember Flywheel, the Soul Cycle competitor? Mm-hmm.

They were like kind of intense spinning. Yeah. Well, it turns out F-45 acquired flywheel to add spinning into their workouts. But we need to correct ourselves. This is kind of like Planet Fitness in a way. Good point, Jack. They also describe themselves like Planet Fitness as judgment-free. Right. There are no mirrors in any of the F-45 gyms. Step up to the scale, Jimmy? Yeah, step up to the scale. Step off the scale, Jimmy. There's actually no scales at this gym. They don't allow them.

And Mark Wahlberg loves the workouts and the motivating each other with your teammates. he said, and I quote, this energy is absolutely incredible. Yeah. So he actually was a big investor in the company. And honestly, his eyebrows have their own muscles. You've seen those things? F-45 went public last summer. Mark Wahlberg was there wearing a strapping t-shirt.

Shocking he was wearing anything. And it listed for a billion dollars. The stock since then is only down 20%. Honestly, not too shabby. Not bad for a company that listed last year. Yeah. Because if you're a company that went IPO last year, It's a different situation.

Now, one reason F-45 is doing so well, it survived the pandemic. And you know what? That's good enough. Because by the time F-45 went public, get this, an estimated 27% of all the gyms in the United States had gone out of business. So F-45's opportunity is filling the void left by sad local gym closures. Yeah, it's a horrible story. But basically, this became survival of the fittest, literally of the fittest. Local competition for F-45 was shutting shop.

Yeah, F-45 was IP-O-I-Ling. Local yoga spots were losing money. F-45 was raising money. So F-45 opened 312 new gyms last year, reaching 1,700 worldwide. And F-45 has already got 1,500 more studios franchised out like a Baskin-Robbins. They're soon to become opened up and hit like 3,000 gyms. Where's White Goodman?

This is global gym. Jack, nobody makes me bleed my own blood. So what's the takeaway for our buddies over at the depotting? Franchising is how you can scale what's physical. Snackers, venture capital, and growth investors generally, they have a fetish for scaling. Oh, yeah, that's a great idea. But can your idea scale? That's what I want to know.

If you're a founder and the word scale isn't on your pitch deck slides, 1, 258, 8, and 9, you're not getting the meeting with Sequoia. According to F-454,000, on average, to open up a new F-14. 15 gym location. Now, but here's the key. F-45 doesn't pay that $345,000 to open up a new gym. The franchise owner does. A small business person who wants to own an F-45 gym. And franchisees have signed up to build 3,300 F-45 gyms for F-45. Now, it would have cost F-45 over a billion dollars if it had to build the gyms themselves. But instead, it's costing them almost nothing because the franchisees are doing it.

In fact, F-45 is generating. upfront money when the franchisee has to pay F-45 in order to open up a new gym. They pay for a license and they pay for equipment from F-45 to fill their gym. F-45 shows that a company can scale even with the most physical of businesses. By franchising. McDonald's did it decades ago. F-45 is doing it today. For our third and final story, the newest profit puppy over at Walgreens, it isn't something you can buy.

It's something that will tell you what you. you should buy. And the reason we notice this is because there's a new trend on TikTok. People annoyed at the fridges at Walgreens. People hating the refrigerators at Walgreens. Snackers, if you walk into one of 2,000 Walgreens locations right now, some special ones. The fridge is going to startling. Yeah, and that's because the door of the fridge has been transformed into what Jack and I can only describe as a giant iPad. Yeah. The door you open to like grab your beverage. It's not a clear window with frosts in the corner. No, no, no, no.

It's a huge screen. Yeah, I mean, Jack, you're going to see stacks of 28 soda brands like on the fridge. But they're digital images on the screen of the bottle. They're not the real soda cans. So let's just say, you know, it's one of those Tuesday nights and you're in the mood for like a frozen pizza with some gabagool toppings. You go up to your normal fridge where it's always there. Yeah, I walk runs.

And you're not going to see what pizzas are in there. First, you're going to see a five-second tombstone pizza ad before the they show you on the screen what stuff is inside this cooler. Then you're going to grab your Tumazum pizza. You're going to be a little bit annoyed. But you're like, hey, I actually want some ice cream too. Look, they don't have salt and straw. So I'll go with the Teleni Jolato, but the caramel flavor.

But first, the fridge is going to show you a Ben and Jerry's chunky monkey graphic. Because Ben and Jerry's paid for that ad on this cool. And Walgreens knows that you really want that ice cream. Your routine function and ritual of going to the fridge and grabbing your go-to items, it's getting messed with. It is. Now, Snackers, that routine, preempts? procedure of yours is an upsell opportunity for Walgreens.

This began in 2018 when Walgreens started a pilot. They started double dipping on sales of dipping dots. Now, this is what Jack and I find so fascinating about this story. The front of a refrigerator at a drugstore, it happens to be where you spend your most time in a drugstore. And it's a decision point. You're standing there. You're looking. Top shelf, bottom shelf.

Caramel. Non-dairy. Milk. Dairy. Mint? A lot of decisions. It takes some time. Chunky monkey.

And that's why Walgreens fridges in 2,000 stores are now outfitted, not just with the screen door. No, no, no. But also with hundreds of cameras and motion sensors that are looking at you as you make your decision. Naturally, Jack and I got curious. We jumped in snack style. And we discovered that these smart fridges are actually run by a startup called Cooler Screens. It's worth over half a billion dollars. They're a venture-backed company.

Great name, by the way. Clever name. But the power of cooler screens isn't that they turn the fridge into a screen. It's that they turn it into a screen. a dynamic advertisement. Let's say it's 96 degrees outside at one Walgreens location. Brutal July Day. They're going to change the screens to highlight ice cream, even when you're over in the

soda section. Or let's say it's a regular day like tomorrow and it's between 7 and 9 a.m. They know that you want something different than ice cream. So they're going to advertise ready to grab coffee options. For the commuters out there who are ready to grab a coffee. They even have the technology to recognize if you're like an older person, a middle-aged person or a kid. They could.

And they will change what they show you based on that. And here is the magic of the situation. Walgreens is making money on the Chunky Monkey Pint that they just sold to you. And they're making money on the Hagenaws ad that you ignored to grab the chunky monkey. Because let's all admit it, Hagen-Daz is a lesser product. So, Jack, what's the takeaway for our buddies over at Walgreens? A new industry is emerging. It's called retail media.

Snackers, drugstores, they're a low margin, low-prud. profit business. You're not making big bucks on TikTok. Yeah, but advertising on the other hand, advertising is the opposite. High margin, high profit business. Well, Walgreens realized that you are a captive audience when you're stuck in Isle 6 trying to make an ice cream decision. So they're going to figure, you know what, let's toss some ads at these guys. And those ads are called retail media. And we're seeing these ads become more frequent in like Walgreens earnings. The CEO said these digital ads are a new alternative profit business. There we go. And they are growing quite nicely. And get this, cooler screens that like startup that's making these things,

they say their fridge screens are now seen by 90 million consumers every month. That's going to get advertisers attention. It is. Now there is a risk here to Walgreens that, you know, customers will hate this. The risk is that customers will go to Rite Aid because they hate this. And they don't want to see a frozen smoothie ad when they just want their normal go-to snap. But here's the thing. We're thinking that retail media is coming to Rite Aid too.

Yeah. I'm sorry, but this is going to be everywhere. Because retail media, it is the next profit puppy of physical stores. Jack, can you whip up the takeaways for us over there? China is on lockdown because of its COVID-Zero policy. And China's stock market is down big, kind of on purpose. It's the will of the government. For our second story, F-45, I peoped last summer, as many gyms were forced to close.

Franchising, it's how you scale what's physical. Our third and final story is Walgreens. At 2,000 locations, they have cooler screens. It's called retail media. It's really annoying, but it's probably coming everywhere soon. Now, time for our snack fact of the day. This one sent in by Savannah Westwood from a lovely Orlando, Florida. I think this is like her fifth jack.

Setting records. Kansas is known as the sunflower state. There's actually a beautiful sunflower atop the state flag. But get this, Ukraine is actually the sunflower country. Hold my beer. Yes, you may have seen a lot of sunflowers to show support for the invaded country. Yeah, well, get this, Snackers. Turns out 46% of the world sunflower seeds and sunflower oil, they come from Ukraine.

Sunflower seeds, the stuff you cheered in the dugout. So if you've got sunflower seeds in your mouth or you just spat one out, pretty good chance. That's Ukrainian seed. Snackers, you look fantastic today. Let's say you want your voice on the pod or you want a shout out or you got a snack fact jack. What can you do? Click the link to a Google form. It's right in the description of this pod and you can be in this pot.

If you know, now you know. Nick and I'll see you tomorrow. And before we go, happy birthday to Snackers, Asba and Raya Khan, a mother and daughter with the same birthday down in Georgia. Happy 35th to Ashley Wilson in Columbus, Ohio. And Paulette, enjoy that 60th over in Green, Ohio. Happy birthday to Y Che Yu Yu in Taiwan. And Jake Kramer, enjoy that birthday in Gotham. Thought it was Jack Kramer.

That one messed with my head. And to anyone else celebrating something today, make it a T-Boss. Celebrate the Woods. This is Jack. Nick owned stock of Apple. And I own stock of Volkswagen. And I own a Volkswagen. And I lease a Volkswagen. Robin Hood Snacks, newsletters, and podcasts reflect the opinions of only the authors who are

associated persons of Robin Hood Financial LLC and do not reflect the views of Robin Hood Markets, Inc, or any of its subsidiaries or affiliates. They are meant for informational purposes only and are not a recommendation to buy or sell any security, cryptocurrency, or investment strategy in any account. This is not an offer or sale of a security, not a research report, and is not intended to serve as the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robinood Markets Inc., Robinto Financial LLC, or any of their subsidiaries or affiliates.

All investments involve risk, including loss of principle and past performance, does not guarantee future results. Robin Hood Financial LLC, member Finra, SIPC. Chunky monkey.