The Best One Yet - “Married or your money back” — Match’s dating lab. Scotts Miracle-Gro’s cannabis. Harley-Davidson’s ride-leisurewear.

Episode Date: February 4, 2021

Match’s experiments with Tinder in Japan reveal the dating legend’s true competitive advantage. And Scotts Miracle-Gro’s stock doubled because it’s focused on lawns and cannabis. And Harley-Davidson stock fell 20% so we came up with a turnaround plan for them (which doesn’t hate Millenials).$MTCH $SMG $HOGSend us your Black History Month Snackfact here:https://docs.google.com/forms/d/1Hu00HOlQ-qb6S7Jx4CgnGOfzrA67_j_SLFqxvFKinEQ/editWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Got a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkLearn 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, February 4th. This is the best one yet. Today's pod so much better than yesterday's. Jack, what do we got for our first story today? Harley Davidson announced a five-year plan yesterday that was so bad. It got a 20% Wall Street Smackdown. So Jack and I came up with a whole new five-year plan.

Get this. One word, ride leisureware. For our second story, Match Group owns 25 different dating apps. but what they're doing in Japan is really interesting. Okay, Jack, here it goes. You ready, $100 bucks a year, and they will have you married within a year. Nupshules or your money back, guaranteed. Third and final story. Scott's Miracle Grow used to be your dad's lawn care company.

Okay, so it's still that, but it's also a cannabis business that helped double the stock in the past year. Before we hit those story snackers, it was about a year ago today, when nobody could find toilet paper anywhere. Jack, I remember well, then we couldn't find chlorox, we couldn't find Purell. Then hair clippers, bikes, and sourdough starters, they were gone from the shell. Sourdose starch. Too much work for one bad love of bread. I mean, that's what it comes down to. You have to wait like two weeks before you actually bake it. It's a long-term investment. But Snackers, we have got an update to the hoarder's almanac. Grape nuts is the thing that if you have right now, you better hang on to it because you can't find it anywhere.

Congratulations. It's the cereal, you know, that kind of looks and feels like an Iowa wheat field. Grape nuts is an extremely crunchy cereal that is extra packed with extra gluten. Can we get extra gluten on that? Is that possible, sir? Now, grape nuts goes back to 1897 when breakfast meant scavenging for nuts and berries. Classic, by the way, invented by Mr. John Harvey Kellogg, and yet, the company is not owned by Kellogg's. Feels like an interesting plot to us. Now, Grape nuts has an explanation for why there is a shortage of this not-so-popular cereal right now. Yeah, our mom's told us about this story, by the way.

Here's what they said. We are made using a proprietary technology and production process that isn't easily replicated. Translation, yeah, there's only one machine that makes this really dense cereal. Jack, they should have added, hey, if anyone has a grape nut machine, we could use a grape nut machine right now. We could use one. Oh, you're sending our way, please. It would really help us out. Ladies addition to the hoarder's almanac, let's hit our three stories.

You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out there. the way. It's 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, Scott's Miracle Grow, a classic. you don't get to talk about Scott. Scott's Miracle Grow 1, 2020, thanks to lawns. It's a publicly traded stock that could win 2021 thanks to cannabis.

Jack, the smell of fresh-cut grass, not something like Wall Street really knows about. No, no, they don't. My brother's allergic to it, but they do know the smell of Scott's Miracle Grow stock. Yes, they do, because the stock just rose 5% after some fantastic earnings. This company was founded in 1866, a few years after the Civil War, by a guy named Scott, who had some premium seeds that he sold to some premium farmers. Somewhere there's a weird connection between this and grape nuts, Jack. Now, today, they've got two business lines, both of them, pretty fascinating, looking pretty good. The first is pretty straightforward, but they call it U.S. consumer products, and that is why the stock jumped 86% last year.

Maybe Americans are spending more time at home than ever, and if you have a lawn, you pimp your lawn. Scouts is known for their grass seed. Yep, their fertilizer, check. Their garden products. Okay. Their mulch. Don't forget the mulch. No.

And sales of these products jumped 157% last quarter. All right. Next up, they're not doing this, but they should. Shmovies. They got to do a show, some kind of promo with Netflix, a lawn care shmovie series. We're thinking great British bake-off, but instead of like a one cup, one wheelbarrow. One wheel? It takes so much sense.

The other business line is the shocking one. It's called Hawthorne, and that is why investors are pumped. about 2021 for Scott. All right, get this Snackers. Scott's Miracle Grow apparently's got a lot of cash on the side. They acquired 50 different companies focused on indoor growing and hydroponics. This is growing a plant without the dirty soil. None.

Just spray the roots that are dangling in the air with water and nutrients and you can do it indoors. Okay, so this Hawthorne business, this indoor growing and hydroponics business, it jumped 71% last quarter increasingly thanks to marijuana. Scott's Miracle Grow is like the mom from HBO's weed series from the mid-2000s. Yes, it is. Suburban mom on the outside. Classic cannabis dealer in the basement. Perfect. So Jack, what's the takeaway for our buddies over at Scott's Miracle Grow? Investors think federal decriminalization is finally happening. Okay, get this, Snackers. Cannabis stocks, they did more in the last month than they did in the last three years. That's because of January 5th, when Democrats took over

the Senate, this is the first big impact to markets. Okay, so this week, the new Senate majority leader, Senator Chuck Schumer, he announced his plans to end what he calls the prohibition of cannabis. He calls it the prohibition of cannabis because legalizing marijuana is a step in the right direction for racial justice. So he believes that blacks historically have been targeted unfairly on marijuana possession charges and still are. So now we have the House of Representatives, the White House, and the Senate all in control by one party. And all are supportive. supportive of decriminalizing cannabis at the federal level. The federal level, that part is key. That is why a fund comprised of popular cannabis stocks is up 70% in the past one month. And since

Scott's miracle grow is pretty much half cannabis, it's up 20% this month as well. For our second story, this one's wild. Matches stock fell 7% yesterday, but Jack and I noticed something interesting that it is doing with dating in Japan. If a dating feature works in Japan, We'll see it on every dating app in every country. Okay, Jack, before we get to the meaty stuff, let's focus on the numbers here. Revenue growth for match, up 17% in 2020 to $2.4 billion. Sounds like 2020 was pretty good for this dating app company. Pretty good.

But in 2021, they expect it to only be like marginally better, which was kind of disappointing. We're still impressed with match right now, considering the dating situation singles are dealing with. Jack, if you're dating right now, it's either digital or it involves a rapid COVID test. Also, true story, my sister met her boyfriend getting a COVID test. Nick, match group is based in the U.S. It's their number one market. What do you think their number two market is for dating apps? This is a good trivia right here. It's not China. No, it's not. It's not the biggest, it's not the most populous country. No, the second biggest country outside of the United States for match is Japan. It's Japan. Revenues have grown 600% for Match Group in Japan in the last

five years. And half of matches users in Japan are on Tinder. The other half are on an interesting app called Pears. Pairs is owned by Match Group and the popularity is surging right now. And it's surging all because of one key, critical, $100 a year feature. Okay, they promise to get you married in a year. Yes, they do. If you pay them 100 bucks. That's it. You just got to use Pairs Engage, 24-7 wedding concierge. They're going to serve up 30 potential husbands or wives a month for you. Now, the reason this app is successful is because users self-select. So if you really want to settle down and get married, you sign up for Pairs Engage. Yeah, basically, they give you three months to actually date, and then pairs will cut off the messaging after that.

I'd love to see the push notification that's like, will you marry this person? Yes or no. Interestingly, pairs engage is also competing against companies that arrange marriages in Japan. Yes, a small percentage of Japanese people are in arranged marriages today. So, Jack, what's the takeaway for our buddies over at Match? Match isn't a dating company. It's a dating laboratory running 25 different experiences. Okay, critical quote, Jack and I noticed in Matches earnings. Here it is. Our ability to deploy learnings from across our portfolio is our differentiator. How do you think Match Group became the number one and number two dating app in Japan so quickly? Here's how they do it. They take the lessons

from their 25 different dating apps and cross-pollinate the best ideas wherever they want to in the world. Here's the playbook. When they launched Tinder Japan, they took the best practices they learned from Tinder USA. Right, Jack. And then when they bought Pears app in 2015, they immediately applied the best practices from Tinder Japan to Pears App Japan. Now the CFO says they're going to use the concept from pairs engaged, which is basically promising marriage really soon, to other non-Western focused dating apps. So Match has got 25 different branded apps, and it's constantly testing different features in different places. They're not running an AB test. They're running an ABCD, F, G-G-H-I-J-K, up to the 25th letter test.

For our third and final story, Harley Davidson just unveiled a five-year turnaround plan. No one seems to like it. No, I know. So we're proposing a different plan. All right, here's how this went down, Snackers. Harley Davidson told us their earnings. Deliveries of their motorcycles fell to the lowest point in 10 years.

Don't worry, though. Because they have a plan. Yeah. They have a turnaround plan. They don't just have any plan. They have branded and named this turnaround plan. They call it the hardwire. It's the five-year turnaround plan that sounds like a Vin Diesel movie.

Now, they unveiled this thing like it was like the final season of The Bachelor, and the stock, it just fell 20% right afterwards. That's because the message that was loudly and clearly stated from the Hardwire plan, we only care about boomers. Jack and I jumped in snack style. Here's what they said. Literally, they said priority number one, profit focus. Sell as many of those $20,000 big, loud bikes as possible.

the ones that Harley lifers love. So that's priority number one. Then, like, out in priority number three, they unveiled a one millennially-ish bike that's electric. It's a cool electric motorcycle. It is. But it's $30,000. Yeah, and as we have said before Snackers,

there is nobody under 40 who wants a Harley, is environmental conscious, and has $30,000, you know, just a drop on a bike. We'd love to meet you. There's just no overlap in that four-circle Van Dyck. No, not at all. Now, Harley is basically taken the same approach as like cable TV and cigarettes right now. Cable TV, cigarettes, and Harley Davidson all have the same problem. Their core user base is aging, but still profitable. You can still make money off them.

Yeah, so instead of appealing to a more younger demographic, they're just doubling down on this shrinking user base that happens to be profitable. Instead of connecting the cable box to the internet, they're making it harder to disconnect. the cable box. So Jack, what's the takeaway for our buddies over at Harley Davidson? Here's what Harley Davidson could have done. Take an inspiration from six millennial and Gen Z focused brands. Okay, so first, Harley, focus on tech, culture, and media, then pivot aggressively without changing your core product. They could have found inspiration from Tinder by building a dating app for only Harley riders. Jack, how about inspiration from Poshmark, launch a secondhand bike website? Just do it. What about a Netflix show? Developed like

a culture-focused bike micro-streaming service and call it Hog Plus. Take inspiration from Lyft, add an option to Lyft's ride chair so someone could ride on the back of a Harley when they're in the app. I would pay a few bucks to wrap my arms around the belly of a Harley Yon. Take inspiration from Bird, build out a motorcycle ride share program, and do it in like every secondary city. You're visiting Philadelphia? Visit Philadelphia in style.

Jack, final idea, and I'm glad we wiped right at this one. inspiration from White Claw, create a motor oil-scented Spike Seltzer. Yeah, maybe don't do that last one. Yeah, you don't do that. Now, they probably won't do all these over to Harley-Davidson, but you need that customer and you need this kind of mindset. Otherwise, Harley-Davidson could be destined to a shrinking business of aging customers. Jack, can you whip up the takeaways for us over there?

Scott's Miracle Grove, 1-2020 and 2021's off to a good start. Yeah, investors are thinking decriminalization of cannabis finally happening. Match Group has 25 different dating apps. But don't think of it that way. Don't think of it that way. It's really a lab with 25 different experiments that are always happening. For our third and final story, Harley Davidson decided to be more cable TV and less streaming. You need to do less leather, more sparkling seltzer.

Now, time for our snack fact of the day. This one whispered to us, I would say, Jack, from Tony Felder in lovely Grand Rapids, Michigan. Tony, the stage is yours. In 1652, Wall Street was just a 10-foot-high wall built by enslaved Africans, but once it became a street in 1711, the New York City Common Council passed laws that made Wall Street the city's official slave market. Now, the Wall Street slave market was shut down in 1762, but the New York slave exchange thrived as a black market, pun intended, until 1860 and by 1850 was the major hub for slave trade in the Americas. The ships that brought over slaves were usually insured by banks you know today like J.P. Morgan Chase, who accepted slaves as collateral. Tony, thanks for sending that in because Jack and I have been to Wall Street thousands of times

and had no idea about that. I'd say hundreds of times, but nonetheless, I did not know about that. We can occasionally round it. Thank you for that snack fact about Black History Month. And Snackers, if you want to submit an audio snack fact, we have a link to a Google form in the notes of this episode. Snackers, love being with you. We'll see you tomorrow. See you then.

And before we go, happy birthday to my little sister, Katie Martel, an Upper East Sider, living down in Gramercy. Dallas Barbecue. That's where you lost your phone, right, Katie? Did you ever find that? She lost her phone there, yeah. Happy birthday to Michael Sikin, a podcaster at a University of Michigan. And happy birthday, Ukeel Gupta in Deradun, India, and Diana M. in Kona, Hawaii, and Steph Hagan in San Diego, and Aaron Barlow in Boston, and Andrew Diggle in Folsom, California. And Lev in Brooklyn.

And happy literal birthday. to Murphy Shepard, who just turned zero in Arlington, Virginia. Born there. And Kelly and Scotty just had their first baby down in Tribeca. Is it a Lenox Hill baby? What's going on? Congratulations to Addison Hurst for getting promoted in the Keystone State of Pennsylvania. Keystone State. And then Karan Zaveri just became a certified accountant in Mumbai, India.

Amanda Oliver, we just want to say keep up the hard work in South Fayette, Arkansas. You got this. This is Jack. I own stock of Netflix. 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.