The Best One Yet - “Sweetgreen is the most innovative company in food” — Hershey. Quibi. Sweetgreen

Episode Date: January 13, 2020

Quibi raises (another) $400M to create a new “era” (their words) beyond video streaming. Sweetgreen gets a profile in the NYT, and we think it may be the most innovative company in food right now. And “the OPEC of chocolate” may raise prices on the critical ingredient for Hershey and Mondelez sweets.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 in this Monday, January 13. How was your weekend? It was fantastic. I achieved some squad goals by going skiing at squad. It was wonderful.

Jack hasn't had meat in so long. I saw him chase a squirrel this morning. I had a lot of vegetarian chili this week. It was aggressive. This also happens to be the best snacks daily we've ever done. The Dow hit 29,000 points. It ended up going down on Friday. That's because of a poor job's report.

In the meantime, three wonderful stories. we found over the weekend. Quibi, this is the mobile first Netflix competitor that is coming in April. Not only mobile first, mobile only. Yes, and it just announced there will be 175 shows in Quibi this year. There was radio, there was TV, now there's Quibi. We're going to introduce Quibi. Second Story, Jack, what do we got? You know how OPEC controls oil prices? That's what they're doing this fair time. There's basically the same thing in chocolate. We're calling it Chopeck. We're calling it Chopeck. And they're going to probably mess with Hershey's number one ingredient. Third and final story is the unicorn of the day, sweet green.

Nick and I are huge fans of sweet green salads. I just had three romains go through my ears. This isn't just a fast casual salad chain, though. We think it's the most innovative company in food, period. Harvest bowls are what unicorns eat. Now, before we jump into all that, we've got to talk about Kaikibo. Kaikibo. Everyone's talking about Kaikibo these days.

Kikibo is the Japanese art of saving money. It sounds fantastic. Good name for a boy, good name for a girl. It's a great name. You ready for a completely made up status? Can you completely throw this at me over here? 50% of New Year's resolutions this year had something to do with money. 40% of New Year's resolutions are made up.

So money resolutions, you know, it's good to have money discipline. So let's talk about Kaikibo. It is a household financial ledger invented in 1904 by a woman named Hani Motoko. Now, the core tenant of Kaikibo is that you don't use any technology to keep track of your finances. I think that rule was self-explanatory in 1904 when this art of saving money was invented. I wasn't whipping out a TI.83 calculator. So you need to use a pen and paper to record all of your spending. Now, let's say you're going to purchase a product.

And a lot of people purchase, like, clothes. Jack is wearing a, you guys can't see him. He's wearing like an orange corduroy shirt. I've never seen anything like this. It's burnt orange. Yeah, it's burnt sienna, whichever you prefer. Don't say rusty. It's burnt sienna.

It's very cool. And before I bought this burnt sienna shirt, I should have asked myself seven questions, according to the Japanese art of saving money. The first one is, can I live with you? without this. And I feel like this is an extreme one, because unless you're talking about insulin, the answer is yes, you can live without this?

Oh, that's a great shirt, Jack, I got to say. The second question, can I afford this? This should be question number one, I think. The third question, will I actually use it? In the case of clothing, the answer is often no. For six months, but no one's using the same thing six months. Do I have space for it? My wife and I have recently cleared out our closet.

If you live in Manhattan, the answer is no. How did I come across this in the first place? It's question number five. We think they could update the list and probably a list. eliminate this question. Six is important. What is my emotional state right now? Because loneliness can often lead to spending it. Sometimes you're going to do a little retail therapy. You're not in a good mood. Boom. You get a nice shirt. Not the shirt. You're wearing jacket. Finally. How do I feel about buying this? Does this spark joy? Do other people comment on it? Am I still thinking about this thing? Nick, you're thinking about a summer 2020 Japan travel? That's the great irony here. Are you going to ask yourself these seven questions before booking the trip to Japan? I'm going through the Kikido process. There's technology has made spending so easy. A little bit of friction in the form of seven questions probably doesn't hurt. Then let's hit our three stories.

You're tuned in to snacks daily. We spoke to the lawyers and we got to get something legal out the way. The snacks about the hearing food is 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 Rapper Her Financial, LLC, member Fenra slash SIPC. For our first story, Quibi launches in April, and it just revealed all the plans about itself because no one really knows what this is. Well, for those who don't really know what Quibi is,

the founder of Quibi has a message for you. He said this the other day. I've been doing this before you were all effing born. That was Jeffrey Katzenberg at the Consumer Electronic Show in Las Vegas. And that's a real quote that he said to people who weren't sure what it is his company actually does. Yeah, he's basically like back off. Look at my resume.

I produced The Little Mermaid, Beauty and the Beast, Aladdin, the Lion King. And if you think he can only do animation, don't stop there, Jack, please don't job there. Shrek, boom, Madagascar. Out of nowhere. He founded Pixar. This guy knows what he's doing, and apparently he's really cocky about it. Now, this is the first mobile only and premium video service. Now we know you're thinking, no, no, no, what about Netflix?

Nope. That is premium, but it's not mobile. Oh, and then we know what you're thinking also. What about TikTok or Snapchat? Those are mobile only, but they're not premium. You got to go to the whiteboard like Jack and I did. Put together a very good old-fashioned event diagram and see where they meet in the middle, premium and mobile. Corby stands for Quick Bites.

Very simple. And for five bucks a month plus ads or $8 without ads, this is going to be another subscription situation. What are you going to choose? Starting in April when this Netflix competitor online. Now, Quibi just raised $400 million. They had already raised $1 billion prior to this. And what are they spending all that money on? Shows.

But we'll break it down in two ways. They have created content innovation and tech innovation. Let's start with the content innovation. From Chrissy Teigen to Steven Spielberg produced movies, there's going to be a whole bunch of stuff to binge on your smartphone. But because they're mobile first, they're not doing the old school like two hours a Game of Thrones. You got to sit down and like call off your day to watch situation.

They don't have episodes. They have chapters. That's what they're doing. These quick bites are designed to be consumed in under 10 minutes, perfect for a 456 train from Fulton Street to Union Square. I would love that you wanted that. But before you transfer to the five train, you're going to have to choose between one of the 175 shows they're launching in just the first year. 175 shows and movies, Nick. And that's a huge number.

Look at Netflix. They did 371 this year. So they're producing about half as much as the last. leading content creator, which is Netflix. They're not doing this on TV, though. As they say, Quibi, the era of movies, the era of television, now it's the era of Quibi. Bold words from a bold man. They're kind of thinking this is like just a different thing.

You don't even know what you're seeing right now. Now, there's tech innovation fueled by that billion dollars as well. Right. The other thing they've got is a feature called Turntable, which we had never seen before. Now, when we said this was mobile only, the indication was you're going to watch this vertically on your phone. Yeah. Because that's how people hold their phones vertically.

Sit down on your couch, throw a rock at the TV. You're just going to use your smartphone only if you're going to watch on Quibi. But I guess they wanted to differentiate. So they create a turntable, which lets you watch vertically on your phone. It fills up your whole screen. And then turn your phone sideways, and it will continue occupying the whole screen. You're not going to have the black bars on both sides. Try to do that with another media, and your screen gets smushed.

Suddenly everything gets smaller. Now Quibi says you can't watch on TV, which is bizarre. Because if you can watch on your horizontally formatted phone, Exactly. That's the same shape as a TV screen. Pretty much. We think that they're boldly saying it is a bad behavior to watch on TV. We will require you to be on the phone. What am I a child and what are you my parent? If I want to watch on TV, let me watch on TV. Honestly, Jeffrey Kaspur seems like the kind of guy who would spank you. So Jack, what's the takeaway for our buddies over at Quibi? Is Quibi too connected to fail? We kind of think so. Disney, NBC, 21st Century Fox, Lionsgate, MGM, Sony, Viacom, Warner Media. Those are. Every company that produces movies and shows in this country. So they sound like competitors, right? Right. They're actually all investors in Quibi.

Wow. All of those companies that Nick just mentioned are invested in Quibi's success. Of course it could still fail, but that's a lot of allies in the industry to have. Now, the media company, the information revealed, they've all invested in Quibi, but it's only like a few million dollars each. It's not that much. Clearly, Disney, Fox, these other movie companies, they see Quibi as a threat, but if Quibi succeeds, they want to be invested so that they succeed too. They want to keep their enemies closer.

For our second story, Jack, hot fudge or chocolate syrup? Chocolate syrup. The OPEC of chocolate could start messing with Hershey's, Tutsiroll, and Mondolas, which makes Oreos very soon. All three of those companies are elbow deep in chocolate, and they all have publicly traded stocks. Now, Snackers, you've heard of OPEC. The organization of petroleum exporting countries.

We've all, like, turned on the radio to here. oil prices have jumped 6% because of OPEC supplies changing it. AM Radio loves that. I think there's 13 countries. It's led by Saudi Arabia. Most of them are dictators. Well, we'd like to introduce you to their cousin who's a little more fun. We're calling him Chopec.

The OPEC of Chocolate. We're talking Ivory Coast and Ghana, two countries that supply 60% of the world's cocoa. And they're teaming up to control 60% of the world's cocoa prices. Let's talk about cocoa for a second, aka... Also known as cacao. Everyone gets confused about this. It's a fancier way to say cocoa. Oh, the cacao.

Now, not to be confused, though, with coca. Right. Which is grown in Colombia, Bolivia, and lots of other South American countries, and is the ingredient for cocaine. And Chopec, not to be confused with bropec, which is a pack of dudes who have each other's backs. Now, cocoa prices. Cacao prices are currently sitting at, if you want to buy like a metric ton, like we all kind of want to do, that's going to cost you $2,500. But, Ivory Coast and Ghana plan to increase those prices by 16% this year because they control

60% of the world supply. This would be the biggest change to cacao prices in decades. And guess what? The smaller countries are thinking about following their lead. Weren't on the street is the number five cacao produce in the world. Nigeria is, quote unquote, exploring the same thing. And number eight, Peru has already up their price of excitement. It's like, hey, Nigeria, would you like to get 16% more money for every metric ton?

Where do I sign on this thing? And can I get a Chopec badge, please? We know what you're thinking. When is my Ben and Jerry's chocolate chip cookie dough pint going to start cost a ball? Well, to figure that out. We've got to look at the whole supply chain because when it comes to chocolate, it's actually like really long. Starts with the farmers. Right.

So you got small-time farmers. And then a wholesaler is going to like organize all the crops from all the farmers and send it over to the government. Right, because for the Ivory Coast in Ghana, the government then gets the cocoa and ends up exporting this. And then a processor in, let's say the United States, collects it. from overseas and then distributes it out to the candy companies who make it chocolate. And then they send it to the retailers from whom you splurge for that afternoon snack. Those processors, which is like number five in the supply chain, they've already raised prices because they've heard snacks problem.

And they're the ones who sell this chocolate to Hershey's and Mondalas, the maker of Orios, who then make it for you. You may not have noticed, though, prices increase of chocolate because Hershey's and Mondalays, they like consistent prices of supplies, so they actually sign deals with investors. banks, guaranteeing the price of their commodities for like six to 12 months. By the way, in the meantime, 80% of cacao farmers live on less than $3 a day. So, like, we're just hoping that some of this price increase actually goes to the farmers making the stuff.

And then we hope after this six to 12 months, when prices start to increase for us for chocolate, then I'm, like, not interested in chocolate. And then we hope that, like, they bring the prices down so we can continue to enjoy this chocolate. So, Jack, what's the takeaway for our buddies who do chocolate? This couldn't happen in the U.S., literally, legally. Cartels like Chopec are illegal in Western democracies, mainly because consumers end up getting stuck with really expensive candy. In capitalism, which we practice in the United States, we avoid monopolies by encouraging competition.

But in Ghana and the Ivory Coast, they're cooperating, which is the opposite of competition. But OPEC and Chopec are not part of these Western democracies. They're happy with their cartels. For our third and final story, we're talking about the unicorn of the day, sweet green, which has become the most innovative, company and food. There's a sweet green warm bowl or cold bowl for everyone. By the way, there is a big difference here. I walk into a sweet cream with Jack.

I'm jumping in there. Throw the heirloom tomatoes on. Give me the curried cauliflower. Jack is a very different approach. Nick's DIY. I am ordering off the menu because I want somebody else to try it first. Jack's sweating. He's not doing peaches and barata unless someone has done this before him.

I get major, like, build your own bowl anxiety. It's actually tough. Snackers. Instead of avocado, sweet potato, and cauliflower rice, Sweet Green's ingredients include digital payments. Very nice. Optimizing for pickup and take out. I'll take two of those.

It's actually a very nice thing. Now, the New York Times just interviewed the leadership team over at Sweet Green, which revealed a lot of how they came to their food innovations. This is a fast, casual, salad chain with 102 locations, mostly in cities, and they're targeting conscious achievers. Which is a ridiculous term. It sounds like that guy in your English class who would raise his hand every day. Yeah, it's very Hermione.

It's classic. That's their term. But we define it as people who want to match. maximize efficiency, taste, and healthiness at lunchtime. So baby boomers, they were drinking scotch in the office at 3 p.m. after a dozen oysters down the hatch. Professional millennials eat Sweet Green's curry chickpole bowls at 12 o'clock every day. Now, do you want to share, Jack, what you want to share?

Yes, I want to, like, file something. I want to make a claim here. The Department of Whatever. Sweet Green has healthiness inflation problem. They claim that their chicken pesto parm, which includes chicken, pesto, which is oil and cheese and nuts, right? Yeah. Plus grated parmesan cheese on top.

I mean, I'm actually getting hungry right now. They're claiming that that's 525 calories. No way, Jose. Don't you dare. That's at least a thousand. Do not bring a class action lawsuit on this thing. Who's with me? Who's with me?

I know we want to get into the spicy cashew dressing situation with this. That's a negative for sweet green. But, spin it back here. Because they probably deserve an Oscar for best innovation in a nourishing role. Yes. Let's talk about the innovation at Sweet Green. Not on the menu. No.

Just in like the restaurant, the way the restaurant works. Right. They've got a new product. that sweet green calls sweet green outpost launched in 2018 they have these wooden cubbies that look like kindergarten but way fancier in the lobbies of high-end office buildings i mean you would sleep on this thing without a mattress these outposts they look like they're made with reclaimed aspen pine wood that was polished by da Vinci it's beautiful blonde wood as smooth as a baby's butt now jack and i were fascinated about this because we just haven't seen other companies pursue this type of strategy

well let me tell you how it works everyone in the office building let's say it's a huge office building with like 10,000 workers. We're talking midtown. There's going to be a big sweet green outpost, and everyone can order a sweet green south on their app by the deadline, which is 1130 a. It's like a frontier version of sweet green in the office building where you work. It's not a sweet green location. So sweet green gets like 300 orders from that office building and brings a huge delivery

with no delivery fee, and they'll notify everybody on the app when it's waiting in your cubby to pick up. Now, to make this happen, they're using ghost kitchens, which are dedicated kitchens with no storefront. They only produce for outpost delivery. You're back at your table working like in no time. It's a productivity multiplier. I was very curious where you were going with that. The other innovation they have is this order in line concept. Everyone knows you don't go to sweet greens at 1230 because the line is going to be real. Ironically, it actually be a great place to meet people. There should be a dating app for connecting you with other sweet green. There you go, boom.

There should be a sweet cream just for singles. Yeah, for when you're waiting in line. But sweet green is trying to crush that line by sending order takers into the the back of the line. This is crazy. Getting your order and then it's already going to start to be prepared while you're still in line by a second salad bar that you can't even see. It's like a self-driving cashier. Mind-blown. So Jack, what's the takeaway for our buddies over at Sweet Green? What Sweet Green invents? The rest of the restaurant industry copies. Sweet Green was the first mover for like most of the innovations that are becoming mainstream right now in fast casual food. The one we want to focus on is the app. Sweet Green came out with the app in 2013. They stopped accepting

cash at their physical locations like a couple years later. And now 55% of their diners use the app to make their purchases. And the other 45% are using the credit card. Snackers, what Sweet Green ID'd early on was that waiting in line was a huge customer experience and revenue killer. Now every company wants every customer paying with the app because you get past faster, you're eating quicker, and everyone's happier. And if people want to actually invest in this company, you'd have to wait for the IPO because they're still private. It's still a private company. the stock is not available. But they said the IPO coming, quote unquote, eventually, probably at some point.

Jack, can you whip up the takeaways for us to start the week? Quibi's Jeffrey Katzenberg seems like the kind of guy who might spank you. That's just him. That's because he's got a mobile first premium video billion dollar company that has 175 shows launching with 10 minutes free show. Exactly. Chopec is what we're calling Ivory Coast in Ghana, which produced 60% of the world's cocoa. They're happy raising prices on American chocolate eaters, because their farmers could really use some extra income.

Third and final story, Sweet Green is killing the time that you spend wanting a salad, but not having it yet. It's optimizing the salad bar and other restaurants are noticing and pretty much copying it. Time for our snack fact of the day. This one's sent in by Cesar in Guayaquil, Ecuador, listening to us from below the equator. Nice pronunciation on that town in Ecuador. I'm not going to know. I wasn't sure what to say.

I've been there. It's a great place. Incredible country. Excellent. Wonderful cities. So here's the snack fact. Google Translate. handles 143 billion words every single day.

And it got a boost very noticeably during the last World Cup. Speaking of international competition, we got the Olympics coming up in Japan. True. This coming summer. This summer, we're going to look to see if Google Translate gets more love. Well, how do you translate the art of saving money? That's a true question. Back to our intro.

And that's why you start the pot over and listen again. Kikebo. Perfect. Snackers. Love starting the week with you. Jack, let's do this tomorrow. I'm in. Can't win. 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.