The Best One Yet - “‘Mealkitting’ never became a verb” — HelloFresh vs Blue Apron. Signet Jewelers’ 40% surge — Microsoft pulls a Sierra Club

Episode Date: January 21, 2020

We’ve got a new #1 in the US meal kit market — HelloFresh is beating Blue Apron (even though mealkitting may be in trouble). Zales/Kay/Jared’s owner Signet Jewelers watched its stock pop 40% last week, but its “Path to Brilliance” plan may not be working. And Microsoft is acting more like a non-profit, announcing it’s not just going carbon neutral… it’s going carbon negative (mic drop).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. Welcome back. It is Tuesday, January 21st. Jack, how you feeling? This, everybody, is the best snacks daily yet. No joke, this is definitely the better one we've ever done.

Jack, how are you feeling like, what are we up to this weekend? Day 21, the January continues. I've had six straight meals that had yam and Brussels sprouts. Snackers, I saw Jack dipping his carrots into barbecue sauce the other day to try to get sensations going. I actually feel really fresh. you, plants have a lot of protein. I've been in Jackson, trying to figure out the Jackson whole ruggedness situation. I'm more of a faux rugged.

I put antlers all over my body and tried to take a lot of photos. There are more antlers per capita than Jackson than anywhere else in the world. I almost guarantee. Jack, the three wonderful stories we got today, I particularly like them. What's number one? Hello Fresh. Hello Fresh, one word. Have you ever heard of it?

Yeah, probably if you've ever heard a podcast ad, it was for a meal kit company. Hello Fresh is based in Berlin. It's a meal kit delivery company that has officially. beaten blue apron in the meal kit wars. Which are a lot more like meal kit skirmishes. We're going to go with that. Second story, Microsoft is acting a lot like the Sierra Club. It's pledging to become carbon negative.

We've heard of body positive. We've heard of carbon neutral. Carbon negative is a new thing for us. Hadn't seen this coming. Third of final story, Zales. Yep. Kay. Yes.

The Gallery of Jarrants. Love the way you pronounced it. They're all owned by a publicly traded company called Cigna Jewelers, and its stock jumped by 40% in one day last week. Sales, 2020 looks good on you. Keep wearing it. But before we hit those stories, we need to talk about our buddies at Spotify, who just launched a podcast playlist for pooches and cats. Turns out a whopping 69% of pet owners sing to their pets because, you know.

Honestly, I don't know anyone who's ever sung to their cats. If you wanted to check this out, you can go on to Spotify. Go to the option to pick your pet, and it's going to prompt you with like a dog, a cat, a bird, a hamster, or an iguana. Now, after that, you can build a custom playlist for them, which in theory you can play while you're gone to keep your pet company. Now, Jack knows, I grew up. I had an iguan.

His name was Scali Whaley, rest in peace. Wasn't it your aunt who let the Scali Whaley out the door? I don't really want to talk about it right now. But you pick the personality for your iguan in this case. You can go relax, energetic, shy, outgoing. Then they come up with a playlist customized based on what your pet is like. And of course, this is kind of a publicity stunt, let's be honest. They're hoping for Instagram virality.

So at the end, you can insert your pet's name, upload a picture, and they're going to give you a super Instagramable post to brag to everybody. What kind of music your pet likes? Now, the big question here, of course you're asking Snackers, is are they going to use, like, focus groups to see what the animals actually like in this situation? Did they get it right? Are they really a Boubley fan? I don't want to torture my pet with Michael Boubley unless they actually like it.

So how do you indicate happiness in this situation? if you're a pooch. Clearly, the dog wags their tail. Now, how do you indicate sadness if you're just a cockapoo? A growl, a bark? Some sort of paw motion suggesting next song? The other option, and this is the open-it, if too much Boubley gets paid,

there's going to be an accident. What happens if the dog named Proctor has an accident during the play? Let's hit our three stories. Great to be back. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way.

It's 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 nope 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 can you flambay some turnips over there for me blue apron is officially losing the meal kit wars to Hello Fresh.

Snackers, delivery wars get all the attention. So true. But do you remember the meal kit clashes of 2015 and 2016? Way smaller scale than delivery. By the way, delivery means you're lazy. Meal kits mean you're lazy, but you have just enough dignity to want to try to nail that teriyaki-glazed salmon hero

with a side of miso-dipped carrots. Am I the only one who doesn't know what miso actually is? But I do know a great food brand, Nick, Me-So-Hungry? That'd be great. Me-so-Hunger. Someone's got to run with that right now. Now, HelloFresh is publicly traded. It's based in Germany, and they've been chopping onions over there since 2011. And this Berlin-based company announced some news last week that was pretty outfregend, if you let me use a little Deutsche on this.

Google Translator. Half of all meal kits in the United States are delivered by HelloFresh. Not just that Snackers. Jack and I noticed that this is the second straight year that HelloFresh is number one in the U.S. Blue Apron, never heard of it. Blue Apron, by the way, also is publicly traded here in the United States, but its stock is down 96% since it IPOed. We're going to compare the state of the union of these two meal kit delivery companies. All right, Jack, I got the Tinder profile up here for HelloFresh. They got 1.5 million members, quarterly sales doubled since 2017 to 247 million.

And get this, they are profitable and single. Wow. That sounds marriage material. Look at Blue Apron, though. Not so good looking. It's less than 400,000 members. Quarterly sales dropped by 38% since 2017 to less than 100 million. Not good. And it honestly seems allergic to profitability. Now, we know what you're thinking. How is Hello Fresh beating Blue Apron? And the answer is simplicity. They are passionate about simplicity over at HelloFresh. Its recipes are very basic and very simple to put together. In fact, they brand some of their meal kits rapid boxes, which they promise will be ready to eat in less than 20 minutes. These things are closer to a snack bar than they are to a meal on the spectrum of hungry. Some of these like air pressure sealed things look like a government-issued meal that can last three years in your backpack if you're deployed for sermons.

Snackers, think meatloaf simplicity, not shrimp tempura with a ragu side. So, Jack, what's the takeaway for our buddies over at Hello Fresh and Blue Apron? Sadly, meal kidding never became a thing. It never became a verb. Snackers, get this quote from the Hello Fresh CEO himself. Overall, the market is still growing for meal kits, but not as much as we thought. That is the ambitious and questionably unpositive response from the leader of meal kits right now. He points out that less than 5% of Americans used meal kits in the past. 30 days. And that's because we've noticed some fundamental issues when it comes to meal kits.

It's revealed by the low retention. 50% of meal kitters quit after just the first week of getting meal kits delivered. Anyone would be intimidated by like a curried lamb situation in 20 minutes. You got an inflexibility problem too. These meal kit companies make you commit to like two or three meals being delivered every week. And once your plans change and you like pop up to Jackson for the weekend like Nick, suddenly you got an inventory of like five meals that are about to spoil. Boom, it's a waste of the shrimp noodles, that's all you know. And the third big issue here, packaging guilt. It comes with boxes, plastic wrappers, gigantic freezer packs that I don't know what to do it.

There's so much waste. It basically takes a whole forest just to wrap the pink Himalayan sea salt oregano and beets to make you happy. What we've seen with meal kits is that once the free meal promotion dries up, so does your business with meal kits. And that's why meal kidding never became a verb. For our second story, Microsoft just won up to Amazon big time. with a carbon negative pledge. Carbon negative pledge. First thing we want to do with this story snackers is introduce a new term that we're kind of making up here. Two words, one term, carbon debt. How much carbon have you added to the atmosphere ever? And how bad do you feel about this? Every time you work out,

like go up a stairmaster, you're adding greenhouse gases to the earth. Every time you drive a car, same story. I think flatulence causes greenhouse gas. Can we go back to your Stairmaster reference? Are you working out, in your mom's house still? No, that would be a Nordic track. Jack, can we talk about what's going on with Microsoft's hefty carbon debt? It's got 144,000 employees. It's a lot. Millions of devices out there are made by Microsoft.

It also has thousands of servers that are drinking up electricity. Although most of the people using those Microsoft devices were forced to by their jobs. That's true. By way, Jack, bz, bz, do you hear that? That is the random sound of your Microsoft or any computer making a really loud fan noise when it's working really hard, which we still don't understand why, but it's probably because it's using a lot of electricity. Usually my computer is silent. Other times it sounds like it's going to explain. Now, here is the news from Microsoft. They just announced a pledge for carbon

negativity, something we had not heard before. That's when you're not just lowering greenhouse gases. You're removing them from the atmosphere. They are actively going to be building more wind, more solar, and planting a ridiculous number of trees. We're talking multiple sharewoods. By 2030, just 10 years out, Microsoft wants to be carbon negative and then continue being carbon negative until it has erased all of its carbon debt since it was founded in 1970. Honestly, we thought the only way they could do this is like magic. Now, this is classic example of one-upsmanship over its rival on the other side of the Puget San. We're talking about Amazon, which has pledged carbon neutrality by 2040. Microsoft, though, wants to be carbon negative by 2030.

This one-upsmanship is like that bridal shower scene and Bradenance. I know exactly. Remember when the main character? Yeah, she gets that lovely photo album. It's a really thoughtful gift for the bride. Everyone's happy. Beautiful thing. And then the other friend comes in and offers like an all expenses paid trip to Paris. Boom, Jack.

What is the takeaway for our buddies over at Microsoft? Environmental activism, like what Microsoft is doing right now, was borderline illegal for corporations in the past? But things have changed. will be spending money to plant new trees, aka giant forest worldwide. It'll be spending extra money on clean electricity instead of the dirty coal kind that is lower priced. But Microsoft is not a charity. It's not a nonprofit.

And yet, Jack and I are looking at this, it's kind of acting like one. Kind of sounds like the Sierra Club, doesn't it? It kind of feels like they have a good, feel, good vibe going on over there. Now, companies have a legal responsibility to maximize returns for their shareholders. But recently, we've noticed more of these cultural changes affecting how finance thinks about environmentalism, and Microsoft can now kind of legally justify that they can do this. Look at what happened last week. BlackRock, one of the biggest investors in the world with $7 trillion of investments,

announced it is going to buy more stocks of climate woke companies and fewer stocks of climate deniers. Plus, consumers are rewarding companies that are part of the solution, not the problem. Cough Cough, Cof, Patagonia. Patagonia. Patagonia. Wall Street thinks environmentalism is kind of sexy right now. For our third and final story, this is a wild one. Signet jeweler's stock jumped 40% on a single day last week.

That's the best day in 27 years for this stock. Now, the only problem with Jack and I researching a jewelry company is now we're getting pounded with like engagement ring ads on social media. I got cushion cuts, round cuts, pear cuts, and like a bunch of sapphires coming at me. Molly's like, Nick, what is going on? But as we've researched this story, we actually learned there are awkwardly two different types of carrots. Is anyone to wear this? The C versus the K situation.

Carrot with a K is a reference of quality, and it's usually describing gold. Carrot with the C is just plain old size. Quality. Typically a diamond thing. Purity. We're not specials in this, but we jumped in snack style. And here's the context you got to know, Snackers. You may never have heard of this company, Signet, but you've heard of Signet Jewelries

brands. The stock is called Signet. Awkwardly, its ticker symbol is not ring, and it's also not just dollar symbols, because this stuff's expensive. Now, they own Zales, K, and Jared, the gallery of jewelry. Why is it called the Galleria, by the way? Jack, if you have to ask, you probably can't afford it. By the way, it was definitely a typo, and then at a certain point, they just ran with this thing.

Should have just said gallery. Now, there are 3,500 stores of Zales, Ks, and Jared across the country. It's the world's largest diamond retailer. And as you know, every kiss begins with a K salesperson pushing you a heart-shaped pendant from some B-less celebrity. Now, this company, as you've heard from those brands, is very mall dependent. The only place I've seen those brands are inside shopping. But they're covering a wide spectrum of buyers because it's not just people getting engaged. They've even got a brand called, get this, great name, piercing pagoda, focused on teens to get you buying jewelry early.

Every one of my high school girlfriends has a cubic zirconia ring or earrings, which are just like $16 intended to look like that. It actually is a cool sounding name. You could just give someone to that and be like, hey, this is Zirconia. It sounds awesome. It's from X-Men. Finally, remember last week we talked about Buildabair? Oh, my gosh. Which is licensing the baby Yoda thing from Disney.

Jack and I heard this. Disney strikes again. There are Disney branded rings being sold at Zales. Jack, you can splurge $5,000 and put a ring on it, Elsa style with a frozen-inspired diamond. There's actually a Disney inscription. You know, you like to put like the day that you got married inscribed inside. It's just as Disney. The magical thing. You got Mickey a part of your relationship now. It's the only weird part.

Now, here's the news. Sales over the holiday for Cigna were way higher than expected. Yeah, their sales at their physical stores actually slipped. But get this. Their online sales for jewelry surged 14%. It's understandable that sales at stores slipped because malls are struggling. But what was interesting about the online sales is that you're not typically buying jewelry online. Before you get that $5,000 ELSA ring, you probably want to see it in person. So the company's invested in super high quality images so you can get a sense of the quality without actually seeing it physically. Now, when Jack and I looked at Signet a little further, we thought we would see more because a strong economy means you're probably splurging on more jewelry. Right. Jobs, the GDP, and the stock market in general have been rising the past five years, but Signet stock has been falling over the same period.

You've got executives from Signet, they're quitting. You've got Maupaclapse. That's closing down Signet stores. Then there was a New York Times Magazine article accusing the company of harassment issues in the workplace and also paid discrimination of the many workers who work for the company. That's not a good brand. So the cheeky team over at Cigna came up with something they're calling the path to brilliance, which is their attempt to transform the company within five years. They're only on year two. So Jack, what's the takeaway for our buddies over at Cigna Jewelry?

Cigna Jewelers has turned itself around before, so maybe they have a shot. This company was originally founded by a guy named Gerald Ratner, who scaled it from just 30 stores to 2,500 stores. Then, at an industry conference full of reporters, and speaking on the record, he made one of the biggest business gaffs in the history of business. This is insane. Someone asked how he was able to make a piece of jewelry at such a low price, and his response, the piece is total crap. That's how he explained he could do it. Now, you can actually say that pulling a ratner is when you trash talk your own products that you're telling the public are really high quality, but like behind the scenes, you think they stink.

Now, Zignet has spent 15 years recovering from that 24-carat gaff. Jack, can you whip up the takeaways for us over there? HelloFresh is pulling all-nighters out in Berlin and has taken over half of America's meal kit sales. But meal-kitting hasn't become a verb like Uber. Second story, Microsoft is now a software company, a hardware company, a hardware, company and a tree planting company. It's kind of acting like the Sierra Club because financial markets think that's all right right now. Third and final story, Cigna Jewelor's stock rose 40%

last week on signs its online pivot is working. Every TV break begins with an every kiss begins with cake commercial and you cannot deny that. That's like the entire marketing strategy, let's be honest. For a snack back to the day, we got it from Tomas Bajiao coming from the north shore of Oahu, Hawaii. Snackers, if you're not in a good mood right now, just say the word Oahu like six times fast, nothing sounds better coming out of your mouth. By the way, Oahu has four letters and three syllables. That is very efficient. It's good at what it does. Here's the snack fact. The state of Hawaii has 10 million tourists in 2018, but only 1.4 million residents. That's a very strong tourist to resident ratio. And get this, 525,000 of those 1.4 million residents.

Only that amount is of Hawaiian ancestry. The rest are from out of out. of state or out of the country. Snackers loved being back with you. Jack, you look great. I missed you all weekend. Thank you. I wish you too, Nick, but we got a short week this week, which is awesome. We'll wear the same sweater. You want to do that tomorrow? I'll see you then. Let's do it. This is Jack. I own stock of Spotify 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. Robin Hood Financial LLC, member FINRA, SIPC.