The Best One Yet - Unilever hates virgin-plastic, Harley’s e-bike isn’t connecting, and Walmart tries to return its ecommerce acquisitions

Episode Date: October 8, 2019

The owner of Ben & Jerry’s, Unilever is making an epic sustainability pledge: cut 400K tons of virgin plastic per year. Harley designed an electric bike to desperately snag millennial customers, but it turns out they’re not interested. And after diving deep into ecommerce, Walmart is undoing the parts that are too unprofitable.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. It is T-Boy Tuesday, October 8th. We're bringing a good one. We got three incredible stories. Jack, is this the best Snacks Daily we've ever done? The best one, yeah.

We're kicking it off with Unilever, which is an enormous European company that's going aggressively green. It owns Ben and Jerry's and is cutting 400,000 tons of plastic per year. And it actually thinks that's going to boost its profits. Second story, let's get right to it. Harley Davidson. It also wants to go green.

and it's making an electric bike that just isn't working. We're looking at why people aren't that into you right now, Harley. Third and final story, Walmart bought a bunch of e-commerce companies, and now it's asking about the return policy because it doesn't want them anymore. The first victim here, Bonobo's khakis, always the case. But let's get right to hashtag T-Boy Tuesday, which is right now. Thank you, Jack, for kicking it off. We noticed last week on snacks that Corona was releasing a hard seltzer.

And the name? Really boring name. Corona hard seltzer. Yeah, that was pretty brutal. Corona could have done way better on this kind of thing. It's battling against Truly and White Claw and Corona Hard Seltzer. Come on. Snackers can do better. So Jack and I tried whiteboarding this thing and we said, you know what? Snackers can do a lot better and they did. What did you guys send in? They came out as with four, a bunch of great ideas. But we created the top four for a Twitter poll today. The first is Celts-like Teen Spirit from Jesse. Jesse, that's fantastic. Also, runner up from Jesse. Corona Matada.

I love that. So this alcoholic seltzer from Corona should be called south of the bubbles, according to Mike McGuire. And then we had Tony Harris jump in and say, you know what, let's go a little partnership-ish with Clawrona. I think that's a little shade-ish against White Claw. Very true. Finally, Nikki, this is my personal favorite, unbasic beach. Jack, you're skewing the poll already, but we're down to do that.

Scanners. This is an unbasic beach. Go to Add Robin and Snacks on Twitter and vote for who's going to win. Winner gets a T-Boy shirt. Corona's marketing department doesn't get a T-Boy shirt. In the meantime, let's hit T-Boy Tuesday. You're tuned in the snacks daily. 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. 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, Unilever is going even more all in on sustainability with like this aggressive anti-plastic pledge. One of Europe's most valuable companies is Unilever. It's got health, beauty, cleaning brands, loads of brands. At some point in your life, you've had like Unilever all up in you and around you. You know what I'm thinking, Jack, right? X, body spray, Unilever, boom. Lippedite iced tea, you're probably having that in college.

And then Sir Kensington's Mayo because you got out of college and you're like, hey, I got to have something a little organic on my sandwiches. Unilever is also Anglo-Dutch, whatever that means. Yeah, they got two headquarters. London and Rotterdam, we're looking at this. We're just more like make up your minds. So let me tell you about Unilever. It has been sustainable before sustainability was cool. This was before millennial dollars were like flowing into assay bowls that were like sustainably sourced from somewhere where you knew the Berry's name.

Classic business school case study. Anybody from Michigan Ross knows what I'm talking about. Back in 2010, Unilever made a pledge that 100% of its tea was going to be sustainably sourced by 20. That was nine years ago. It even publishes like a full list of farmers it sources from. So it's like, hey, Todd, Iowa. This guy is good. It's actually not really Todd from Iowa.

It's probably a big farm in India where like human rights and workers' rights and environment could be questionable at best. So it's very important Unilever does this. In the meantime, though, Unilever has been busy buying up some interesting Vermont companies, including like two leaders over there. Ethan Allen's finest, seventh generation based in Burlington, Vermont. Ben and Jerry's based in Waterbury, Vermont, both belong to Unilever now. But kind of an issue here, they're still producing a ridiculous amount of plastic.

And plastic comes from petrochemicals. We're talking fossil fuels, but ultimately, that ends up in a landfill. Not good for the environment. Unilever is the number eight largest producer of plastic in the world, hands down. It's behind seven companies. I only know two of them, Coke and Pepsi, are number one and two plastic trash producers in the world. And so Unilever is like pumping out a cool, you know, 700,000. thousand tons of new plastic here, which if you're trying to visualize, like, we could do one of those

things where it's like, this is how many trips to the moon that would be, but it's just a really big number. And since Unilever's Anglo-Dutch, we're talking 700,000 ton, T-O-N-E-S, British weirdness. Jack, can you whip up? Not the takeaway, but tell me what the big pledge was. The pledge Unilever announced yesterday. It is going to cut its virgin plastic in half by 2025. They're going to get busy, like, swapping the plastic for compostable materials. Maybe they'll get like a bunch of interns doing this, like, hand on hand. And then, are also going to use a lot of plastic still, but the non-vergent stuff, i.e., the recycled stuff, the stuff that was already used for something else in the past. Meanwhile, Unilever's American

competitor is Procter & Gamble. That is the huge Unilever equivalent of the U.S. It's like Destiny's Child in U.S. compared to Unilever's Spice Girls. Jack, you always know how to put it, and they're a cool, like five years behind when it comes to sustainability pledges like this. They're making the same cut plastic and half pledge, but it's only going to happen by 2030. Gina lame. So, Jack, what's the takeaway? for our buddies over at Unilever. Sustainability can actually boost profits, Nick. Here, on Snacks Daily, we chatted with all of you earlier this year about the purpose of a corporation being revised earlier this year. It's not just about profits anymore. That's not the number one concern.

There's also consideration to sustainability and a bunch of other like good things about making the world a better place. Yeah, the implication is that being good and making profits used to be in conflict and maybe now they don't have to be. Unilever has proven for years that sustainability and profits can go hand in hand. Ben and Jerry, seventh generation. It's T-brands. Sustainability branding is like baked into these things. Meanwhile, Patagonia is like, hey guys, I've been doing this for years, profit puppies because of sustainability.

Yeah, we're just chilling over here in our flaces. For our second story, we're keeping with a theme over here. Harley Davidson launched an electric bike. It's supposed to be the future of bikes. It's supposed to be the green motorcycle, but it's not really working. Not exactly the case. Jack, let's go back to last year when Harley Davidson realized it had a problem. Probably should have realized the problem sooner than last year.

But since 2014, Harley's had a problem in its biggest market, which is the United States. Sales have fallen every year since 2014. If it happens once, it's a thing. If it happens twice, it's a coincidence. Three times, it's a trend. Four times, shame on you. Very true. Now, the great thing Harley Davidson is going for it, its core customers tattoo its logo to

their biceps. That is the pinnacle of customers. customer loyalty right there. But the company is 116 years old, not really resonating with today's young customers. So Harley Davidson, they got the execs around the table and they said, hey, how are we going to fix this? Let's come up with the solution. And Jack, what was the solution? They came out with an electric bike called Live Wire. They basically were like, hey, we want to target everyone who kind of listens to Snacks Daily. If they could have thrown avocado all over this thing, they would have done it. They do. They want listeners of Snacks Daily to like buy this bike as their first bike.

Nick, you said it best. This bike looks like a character from the movie Transformers. Exactly. They even came out with like a unique sound because technically it doesn't have an engine. It's electric. So it doesn't make like the rev rev that you like. And that's the awkward thing. Harley's are the loudest inventions of humankind. Very true. And this electric bike doesn't even have a motor. So they created an artificial sound. Kind of sounds like a droid in Star Wars. Yeah, this is straight up, Tron. Hey, Tom Cruise, they stole the noise from your planes and top gun. Actually, best comparison. If you're cruising on the monorail at the Epcot Center in Disney, that's what this thing sounds like.

Harley, how come this doesn't come with like R2D2? Pre-orders for the live wire begin in January. So we're going to pause and ask ourselves, Nick, how's it going? How's the Lime Wire seller? Jack, I'm glad you asked this question because our friends over at Reuters decided to jump in and interview like a bunch of dealerships, about a third of them selling this bike. And they had a pretty interesting response. I love that.

So they got the early scoop because quarterly earnings will come out and they'll give us the report. But they tuck directly to the source, the motorstores. cycle dealerships. And what they found is that all those new young buyers, Harley was hoping for, they're not buying the product. Most of the buyers of this product are existing customers that already have Harleys. And here's the problem. If you want to buy this thing, you're going to have to shell out $29,799 for an electric Harley bike. That's as much as a Tesla. You could buy four Vespas. You could buy like 30 acres in the Amazon if you really want it to have a green impact. Now, this live wire electric bike, it looks awesome. I won't lie. But the entry level,

a bike for like conventional engine is $8,000. This thing is almost $30,000. And this leads us to our next problem, which is, Jack, can you whip up the takeaway for our buddies over at Harley? If you don't have a product market fit, you don't even have a product. Jack, you nailed it. Actually, Reuters nailed this best. They said that the target market for this product is the quote unquote, the young, green, affluent, first time motorcyclists. Here's the thing. I'm not sure that customer exists. That's a lot of circles. Like a big Venn diagram with no overlap. I know what you're talking about over there.

The young and viral conscious haven't really been interested in motorcycles and don't plan to be, it seems like. Nick, a WWE wrestling event, it's not going to sell beat chips with Himalayan salt because there's no product market fit. Jack, every strategy is a bet, and this one didn't have product market fit. For our third and final story, Walmart is basically firing all of the innovative e-commerce projects has been so focused on. Walmart is cleaning house right now. Jack, to get our like hands on this, I think we've got to focus on Walmart's existential threat.

Amazon was threatening Walmart's core business. So Walmart does what any big, slow, un-innovative company does when it has money, but is concerned. It buys smaller, innovative, smaller, faster companies. Let's go to the timeline. In 2016, Walmart acquired its e-commerce company, Jet.com, for $3.3 billion, billion with a bee. Jack, in 2017, Walmart said, you know what, a good pair if slacks looks good on me, I'm going to acquire Dude Chino startup, Bonobos for a cool $310 million. The shopping spree continued

the following year. Walmart acquired a faux vintage company called Mod Cloth, which sells, you know, urban outfitters anthropology type clothes online. I mean, this is so faux vintage as like the floral prints have their own floral prints kind of it. It was jacking up its e-commerce game and spending a lot of money on it.

At some point along that trajectory, it decided to launch a secretive incubator on the future of retail that it stealthily called store number eight. And in store number eight, it launched this personal concierge delivery service called Jet Black, where you could just text a human being who would then go shopping for you and like, deliver it to your front door. Wild stuff. Basically, Walmart's been a few years becoming an e-commerce icon on every possible front.

Jet Black is like Anne Hathaway and Devil Wears product. Basically that, but it's an app and it does all those things she was doing. But lately, Walmart's tried to do the old controls. Z on all these acquisitions. Jack, I know exactly what you're talking about. Last week, there were reports it was trying to sell off Jet Plack, aka Ann Hathaway as an app, because it was losing $15,000 per a customer on the app. That sounds like it was just burning cash in a big barrel. And then yesterday, we found out that Walmart's bonobos was going to be firing dozens of employees. Last week, it actually sold Modcloth at Anthropology competitor. And then in June, it actually like folded up

Jet.com, it's like cool e-commerce, you know, purple-look thing, into its own staff at Walmart. New corporate email addresses, new business cards. So, Jack, what is the takeaway for our buddies over at Walmart? The war on the unprofitables has hit a new frontier. At first it was investors who were getting frustrated with these loss-making IPOs from like Uber to Slack, and then, of course, we had we work the other week. It's been a really bad IPO year, but now even corporations like Walmart are losing interest in their online-based loss-making.

division. And snackers, you've noticed this as we've talked about it on Snacks Daily. Tech companies tend to lose a lot of money more than ever before because they're spending so much money to acquire new customers. It takes a lot of time. And Walmart is full of old guard, old school retail people who just love the profits of the big stores. And they don't have the patience for the unprofitables. Jack, can you whip up the takeaways for us over there? Unilever's key differentiator is sustainability and Anglo-Dutchness. So it's eliminated half its virgin plastic by 2025. And to think sustainability will actually boost profits.

Harley Davidson wants to connect with Enviro millennials, but its live wire bike just isn't doing it. The product is electric motorcycles. The market is millennials. They don't fit. Third and final story, Walmart went big into e-commerce, but it looks like it's regretting a lot of that. Yeah, it turns out Walmart execs have lost patience with the unprofitables. That should be a movie. Snackers, time for our snack fact of the day. This one's sent in by Jason Ashby in the lovely Knoxville, Tennessee. see. Go balls? Nick, this one is about drowsy driving, which can be a killer. A study shows that after 17 to 19 hours without sleep, your response speed gets like really, really bad. So 17 to 19 hours

without sleep. You'll wake up at 5 a.m. If you're still driving at midnight, that's pretty dangerous. It's the equivalent of driving of having like a 0.05% blood alcohol content. Pull over, get some sleep. Don't keep driving. Snackers, loved having you with us on this Tuesday. Remember, it's T-Boy Tuesday, check out the poll at Robin Hood Snacks and vote. Hashtag T-Boy Tuesday. This is Jack. I own stock of 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, 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.