The Best One Yet - “Taco Bell’s TSA pre-check” — Taco Bell’s store of the future. John Deere’s waterfall chart. Drizly’s booze delivery.

Episode Date: August 24, 2020

Yum Brands’ Taco Bell is launching new “Go Mobile” stores that show how food is leading the convenience movement. John Deere loves your gardening moves lately, so we’re looking at its waterfall situation. And booze-deliverer Drizly is our “Unicorn of the Day” — It just raised $50M because alcohol and cannabis delivery are just different.$YUM $DEWant a shoutout on the pod? We got the form for Snackers to fill out right here: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, August 24th. Today's podcast is the best one yet. Best Snacks Daily we've ever done, T-B-O-Y, Jack. What's the first story for us?

John Deere sells a three-ton tractor that you can supersize to five tons. Yeah, huge equipment companies are struggling to sell their million-dollar machines right now. Because the world is just too crazy. Right now. Second Story, Jack, what do we got? Taco Bell just unveiled its restaurant concept of the future. Spoiler alert, no tables, two drive-through lanes in a GPS tracking system that knows when you're almost there and hungry. For our third and final story, the holy grail of e-commerce delivery is booze.

So Bastin-based Drizzly's business model reveals the challenges of delivering highly regulated drugs. Because don't forget that lesson from seventh grade health class. Alcohol is a drug. But before we jump into all that good stuff, Jack, Sunday, fun day? Not happening right now. Jack, rosé all day? Rose. No way.

Jack, sun's out, guns out? Well, if you're alone in like the middle of a field with one beach towel, I guess you can be sun's out, guns out. Jack and I can never really pull that one off. But Airbnb, we noticed right before the weekend, whipped up the party ban. Effective August 20th, if you're booking an Airbnb, you may not host a party at that Airbnb property. And Airbnb says that policy shall remain in place indefinitely. Now, 73% of Airbnb's already had banned parties. And Airbnb says that policy shall remain in place indefinitely. Now, 73% of Airbnb's already had banned property. per the house rules, which are determined by the host of that property. If you got to say per, a lawyer was definitely involved. Well, as being of lawyers, it is now a corporate policy, no parties known internally at Airbnb as the party pooper policy. Yep, the old PPP, the other PPP. But Airbnb's lawyers, we noticed, didn't do much diligence on the fine print for this thing. We were trying to figure out, like, what is a party?

And all they said was that there are definitely no gatherings allowed of more than 16 people at an Airbnb. But then they clarified in a terrible way by saying no parties, even if fewer, than 16 people as well. So if 15 people, it's fine unless it's a party. So what constitutes a party? How does one define a party? Jack, can you have chips and dip? No, you may not. You may have chips or dip. Choose one, because if there's both, it's a party. Jack, can you have a theme? I just ask the judges at Airbnb, if there's costumes, it's a party. Jack, what if your host, Timmy says, please bring your own, I don't know, anything. If the letters B, Y, and O are on the invitation, it's a party.

So how old are you, McLevin? Old enough. Old enough for what? Old enough to party. Let's add our three stories. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. It's snacks 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. 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. Rob her financial, LLC, member Fenra slash SIPC.

For our first story, Taco Bell just announced an entirely new store concept. It's called Go Mobile, and it is the next level of convenification in restaurants. Snackers, you know what we're thinking? We've all got it. It's in the back of the pantry. It's kind of near the oatmeal. It's the old El Paso Taco seasonings. Well, you finally used them during this COVID-19. shelter in place. So Taco Bell's sales fell by 8% last quarter. But here's the wild thing about Taco Bell. They also served 5 million more cars this spring than they did last year. And that's a nice sign. So Yum Brands, which is the company that owns Taco Bell, its stock is just below its pre-COVID-19 highs. So Taco Bell is looking at this. Their sales are down, but their drive-through sales are killing it.

So they came out with this completely new concept. They're calling it Go Mobile, and it comes out in January 2021. This is basically air traffic control by the FAA. Yep, but for nachos. Think LaGuardia meets Doritos Locos tacos. Now, this restaurant looks like a small square shape Taco Bell surrounded by parking spaces and drive-through lanes. That's adorable. Basically, with just a kitchen inside. Now, there are two drive-through lanes, which is like, that's marginally better than a one drive-thru lane operation. But, Nick, one of those drive-through lanes is like TSA pre-check are clear. It's reserved for Taco Bell loyalty members only. So he is. Here's where it gets interesting and why Jack and I found this concept so fascinating.

Taco Bell is going to know when you're almost at the Taco Bell. Get this Snackers, your Taco Bell app will alert the restaurant when you're like 1.3 miles out. And then the manager of the Taco Bell is going to be like, Jessica, Jesse, finish that burrito and put it under the heat lamp because they're going to be here in three minutes. Then you get the alert on your phone, Supreme Soft Taco Party Pack for Party of One, awaiting your Jeep at window three. It's incredible. You get your Supreme Soft Taco Paradox.

party pack without having to touch anything because we assume they have those grocery store-style doors that they open up for you. Plus, Taco Bell is doubling down on the number of parking spots in the space by like literally having double as many parking spots. Right. If you don't want to run up to window three to pick up the food yourself. Who does? They're going to have those old school bell hops, but with iPads doing curbside drop-off

so you don't even have to get out of the front seat. Oh, expensive. They're going to replace the roller skates with an apple product. Now you get to eat in your car and Taco Bell doesn't have to interact with you. This is Jack. Nick owns stock of Apple. Now, the new Taco Bell store concept we're talking about, it knows Dine and is Dying, so it's all about eating on the go as much as possible. So Jack, what's the takeaway for our buddies over at Taco Bell?

Restaurant chains are leading the greatest jump in convenience innovation ever. Snackers, when it comes to these new Taco Bell stores, you benefit from all the nose. You don't need to wait in line. There's no human contact. There's no waiting for your credit card to process. And there's no cold, soggy food because it's been sitting there waiting for you. But what's key is that the stores of Taco Bell, they are benefiting from all this too. All those things we just said that there's none of, that means less wasted time for the restaurant doing slow things and more time cooking the food and getting them into customers' bellies. So honestly, Jack and I are looking at this. And we thought Chipotle's Chapot Lanes were like peak restaurant takeout convenience, those drive-thrues that you have. access only with the app. They are app optimized to increase speed and they've boosted sales by 10% at Chipotle locations that have them. But Taco Bell just kicked it up a notch with a drive-through

that's basically stocking it and knows you're two and a half miles away. Taco Bell's Go Mobile restaurant concept is like passing where the receiver's going to be. Oh, true. Not where the receiver is right now. There is no limit at this point to where we can eliminate friction in the food buying process. Who will be the first to replace those ANW roller skating root beer servers with roller skating robot servers? That's the next step. For our second story, John Deere's multi-million dollar mullah machines aren't getting enough love in the corona economy. They're not getting bought. So we're jumping into its famous waterfall profit chart. All right, Snackers, if you want to appreciate John Deere, you got to look at this like the machines they make. Jack

sent me a picture one. It's so big. I couldn't even. and download the PDF. Apple can't handle the size of these tractors. It's like a gigantic tractor pulling another gigantic tractor that's like harvesting millions of corns on the car. It looks like Starship Enterprise. This is the kind of thing that lifts with its legs, not with its back. Now, John Deere announced bad news Friday, but it wasn't as bad as expected.

Yeah, so the stock actually ended up jumping 5% before the weekend. Now, John Deere, a man who was born in Vermont, but a company that's based in Illinois, has two divisions. Agriculture and turf, that's the first division. It's for farmers, its profits were up. The second division is construction and equipment. They sell huge machines to construction companies and profits were actually way down for that division. So Jack and I tossed on some overalls, and we are jumping in literally snack style to their earnings report to see the waterfall profit chart. Now, the CFO of industrial companies that build physical things, they love waterfall profit charts. They don't love fancy ties. They prefer waterfall charts. Waterfall charts are the Instagram bio of every industrial earnings report. Absolutely. These things explain the five accounting reasons. The profit changed from like last quarter to this quarter.

For John Deere, they showed that last year's second quarter profit and this year's second quarter profit with all the ups and downs in between that caused the difference. The first thing you notice is that like volume, how much they're selling, that was way down. John Deere sold way fewer backhose, way fewer planters, and way fewer fertilizers than last year. But here's the kicker. The prices for all that good stuff, those were way up. Not that many companies make diesel tractors the size of small planets like John Deere does. John Deere had leverage to determine those super high prices. Now, also, there's like three other categories for smaller upsets. and downs, like for an exchange, like how many farmers said my tractor is broken, you need to replace it with a new one.

Warranties. Then you got the research and development costs because they're trying to whip up like a plant-based self-driving tractor. So there were ups and downs, but it was mostly downs because it resulted in profits and sales falling by 10%. You'll look at all that, and it's neatly arranged in a waterfall chart that looks like a waterfall, and we'll tweet it out. We'll tweet it out. It'll give every former investment banker PTSD. It's not fun. So Jack, what's the takeaway for our buddies over at John Deere. There is no demand problem going on over a John Deere. There's an uncertainty problem. Snackers, the pandemic hasn't changed like people's need, you know, to eat food. Right. So John Deere's customers are just as busy planting and harvesting tomatoes now as they were before COVID-19. But the difference Jack and I have noticed is that there's uncertainty. Think about it. Big farms have

some flexibility when it comes to timing of buying new tractors and buying new equipment. And right now we've got a huge political election and a huge trade war with China. So sales of tractors are down because things are so GD uncertain. If you're planting up soybeans, but you don't know if China's going to buy them because of tariffs, you don't know how many soybeans to plant. So farmers are thinking of themselves, I could spend $2 million on a shiny, fancy, new tractor. Nice. Or I could keep it as cash because I don't know what's going to happen tomorrow. The answer is you always treat yourself. So when political and international and pandemic situations stabilize, we're thinking sales for John Deer-like companies should improve. You don't buy a million dollar 25 foot tractor when things in the world

are insane. Or maybe you do, Jack. That actually seems like a perfect time. Actually, yeah, millions and millions of farmers did last quarter, but not as many as the previous one. For our third and final story, we got our unicorn of the day, drizzly, the largest alcohol delivery platform in the U.S. It just raised $50 million to show that not all delivery is created equal. So true, Jack. Now, before we jump to this, Jack, I got a surprise for you. I missed you over the weekend, so I invented a cocktail for you. Martel's mocktail? I actually know, it's called a jacktail, and here's what it is. It's two parts German brandy. Nice. Two parts Seltzer Pample Moose. I love that. And one part, extra organic maple syrup. Oh, I was waiting for

the maple syrup. It's a good one. It's go. I made one for myself, too. It's called a Nick Groney, but we'll save that for another pot. The perfect amount of maple syrup is always a thimble of maple syrup. So Snackers, alcohol delivery is basically like the frosé of 2020. Your favorite local watering hole is closed, but you're wanting to get your drink on is up. So it turns out like in January, only a measly 2% of alcohol sales were actually conducted online. And that is expected to climb to 20% in just a couple years, and that's being accelerated by shelter and place COVID-19. Which leads us to Boston-based Drizzley, whose second quarter sales quintupled and it's now profitable. This is the booze delivery beast who experienced a 750% jump.

in first-time users coming to Drisley.com this spring. The most innovative thing out of Boston since the hazelnut pump over at Duncan. But here's the shocker about their $50 million fundraise at Drisley. Some of it's going to alcohol delivery, but a lot of it's going to a thing called Lantern. That's right. Booze wasn't enough for Drizley, so they also launched a cannabis delivery company. Yeah, so Drizley's selling you like 43 different types of Mez Cal's. Lantern's actually selling something called Bootylicious strain of cannabis,

which apparently tastes like cookies and cream. Pineapple Express is so last year, this year it's all about the Bootylicious Strain. Cannabis, booze, and gambling, those are things that just like they can't use Instacart to deliver them to you. The executives at DoorDash would have a panic attack if they had to start delivering those products. So what separates Drizley from the rest of those other delivery apps is their expertise in regulated consumer products. Pot, booze, gambling products, that's what Drizley does. And it's only available in 33 states, and it can only add four states a year. because it's so complicated to get approvals.

The thing about alcohol and cannabis, every state has their own laws. So Drisley has a team of lawyers who need to like pass the bar in Kansas before they can sell product there. You need to pass it like twice up there. Case and point, everything's different in every state. In Vermont, you can't change beer prices depending on the time of day. Which technically means happy hour is illegal. It's actually the only flaw of the great state of Vermont. They could remark at this and just say every hour is happy hour.

We'll see if they run with it. We extended happy hour by 23 hours, everybody. And in the state of Illinois, your doorman can sign for alcohol, but maybe in the state of Montana, you need like an ID and someone to verify it for you to make that happen. In New York, if you sell liquor, you may not sell food. It is completely illegal to cross over those two things. So you've got a church and state situation, Drizzly has to navigate it all. So, Jack, what's the takeaway for our buddies over at Drizzly?

To be a successful platform, Drizley has to nurture both sides of itself. Snackers, every platform has two sides. Drizley has the booze consumers and it has the booze retailers who sell on its site. The CEO of Drizley has confessed that they have prioritized the consumer in the past at the detriment of the sellers who are selling the booze. For example, they like optimized your easy way to check out to buy that mescal, but not the way that the retailers can sell that mescal on their website. So Drizley promises to make up for it with this next 50 million of funding

to make retailers happy and invest in their needs. The first use of their fundraise $50 million, they're pouring it into ads. They need to get the word out to Bud's Liquor Mart that they can boost their sales if they start selling online through Drizzly. They got to nurture both sides of Drizzly. Jack, can you whip up the takeaways for us to start the weekend? Taco Bell knows there's less dining happening in restaurants, so it's optimizing for takeout. It's thrown burritos where you're about to be, not where you are right now. Second story, John Deer's sales dipped as some farmers put off new tractor purses.

The problem isn't demand. It's all about uncertainty. For our third and final story, Drizley specializes in the sticky situation of state-by-state laws for alcohol and cannabis delivery. But it's made its platform great for consumers, so now it's focusing on the retailers. Now, time for our snack fact. This one sent in way across the pond from Norbert Zabo in lovely Budapest, Hungary. Every autumn, children are allowed to exchange acorns and chestnuts for Haribo gummy bears at the Haribo factory in Germany. Honestly, those gummy worms are fantastic. This was a wonderful tradition started by the founder of Haribo Gummy Bears, Hans Regal I first in the 1930s. He wanted all the kids to have an opportunity to enjoy candies regardless of their economic status and anyone can find

an acorn. We know what you're thinking. Why nuts? Because Hans was actually an avid hunter, which is called a Jaeger in German, and he used the nuts to feed the animals on his game reserve before he would shoot them. For every charming tale with a German component, there is a dash of unpleasant ending. Now before we go, happy birthday to Bob Grunich from Real Ranch, New Mexico. And to Darrell

D. D. Train Williams and Gainesville, Florida. We got another one from Tebow Gator country, David Barreto, in Orlando, Florida. Happy birthday. And happy 61st to David Lorsch in Scottsdale, Arizona. And to Nicholas Glover in Palm Springs, California. And Michaela Yeaman in San Jose, California. And happy

birthday Ben C. who lives just outside of Boston. Just like everyone at a Neskack school. And Alyssa and Walker just got their first apartment in Rockville Center, New York. Robin Ruska just landed a new gig out in Salvisborg, Sweden. Julia Hopsafel and Nicholas Zabellon just got engaged. I love this one. Stephanie and Nate Salazar have a seven-year anniversary in Thornton, Colorado. And a happy graduation to Jose Maria Palencia in Mexico. And happy graduation to Irie out in the Philippines. Let's get more people snack in this week, ask your friends H-Y-H-Y-S-D. Have you had your snacks daily? Nick and I can't wait to see you tomorrow. It's going to be great if you know, you know. This is Jack. Nick on stock of both Chipotle and Apple. 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.