The Best One Yet - “We found an Innovation Vampire” — Walmart’s Jet black shutdown. Molson Coors spiked seltzer. Uber/Lyft’s “rideshare” lie.

Episode Date: February 19, 2020

Walmart’s earnings report wasn’t anything special, but we think it’s latest moves to buy up startups, suck out their innovation, and then spit out the remains is. A report on the impact of Uber and Lyft reveals that the rideshare apps really aren’t about ridesharing at all. And Molson Coors isn’t a beer company anymore as it whips up its first spiked seltzer (did we mention it’s testing a spiked coffee?).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 Wednesday, February 19th. Second day of the week, the week's already halfway over. I love three-day weekends. Did I mention that? Good timing because this is the best snacks daily we have ever whipped up.

Jack, first story. Our first story is Molson Coors, the beer company. Nick, I didn't tell you this before the pod. Moulson Coors officially changed its name to Mulsin Coors' beverage company. They finally jumped into the Spike Seltzer game hard. And we're looking at how Vizzy will stand out post. White Claw Summer. Or is this a pre-visy spring jack?

I see what you did there, and I bet you the PR people at Moulson are pretty pumped. Liter reversal, second story, Jack. It's time to decide if Uber and Lyft are good or bad for society. Spoiler alert, Snackers. Good if you use Uber, bad for everyone else like our moms. Third and final story, Walmart just announced its quarterly earnings, but we're looking at all the startups that the world's biggest retailer has murdered. It's an innovation vampire.

We're getting into that more. Jack, it's kind of freaky. I was thinking Dementor, not innovation vampire, innovation deventor. We do too many Harry Potter references. We did like a reflection on this one. But Snackers, before we jump into all that, we got to talk about how General Mills is struggling with cereal sales. So it's offering some really expensive cereal as a result. You know that old adage. If people aren't buying something, jack up the price on it.

Basically, customers don't want the soggy bread soaked in milk, which is a.k.a. cereal. So it's raising the price to $13 a box for one brand. Now, price raises like that tend to work in things like perfume or jewelry or wine. You don't want to impress your date with the 2020 reserve collection of Pino Gris. Now, you're going with a 1995 Chateau-Cabernet with a little bit of reserve. Our old trick out of college was order the second cheapest thing on the menu, but not the cheapest thing on the menu. So Jack and I got curious about this new cereal from General Mills. Don't call it a cereal.

They're calling it Morning Summit. It comes in at $13 a box, and it looks like a bowl of cereal, got sprayed by a granola fire extinguisherers. Like, poof, pff. Sounds like a documentary about Mount Everest, less like a cereal. It's got gourmet nuts, dried cranberries, toasted pumpkin seeds, almond, and then finally, cereal flakes. We were shocked they didn't throw in coconut shavings. What were they thinking on this thing? The cereal flakes mentioned at the end, it seems like they were almost embarrassed to mention the word cereal.

General Mills is like corporate made us do it. Honestly, this stuff looks really good, though. It looks like it could be served at like an Austrian Alpine B&B. You get stuck on an island for like three years. All you need is one bowl, this thing it'll carry over. It's a classier cousin of Musley. Let's hit our three stores. 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. 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, Moulson Cors is jumping into the Spike Seltzer game hard. And we may have to redefine the beer industry. Snackers, we're going to jump into this snack style by going straight to the 2020 About Us page on Moleson Cores' website.

They really snuck this in there. In 2020, Mulsin-Corps changed its corporate name to Mulsin-Corge beverage company. They also announced they've got a rich heritage of not just beer. No, no, no, no, no, no. They've got sparkling cocktails, hard coffee, canned wine, kombucha, cider, and more. Or as the corporate PR says, we got a lot of offerings beyond the beer aisle. Hey, guys, slim it down and just focus on one thing. And they also announced earnings last week, and the stock has fallen 6% since then.

Because beer sales are down in America and everybody's going to the sparkling seltzer. So guess what? They just launched a new sparkling seltzer called Vizzi. But guess what? They just got sued by an Austin-based sparkling seltzer called Brizzy. Now, I actually get that because in Spanish, the letter V sounds like a B. So these are highly confusible names. But here's the real problem we think.

A can of Vizzi looks like a Jamba Juice Halloween costume. Blueberry and pomegranate. Pineapple and mango. The flavors are outrageous. They're bursting with this stuff, although they claim over it, Vizzi, it's just a hint of the pineapple mango. It's very mixed messages. They have these outrageous, like, fruits everywhere. But yes, Nick, it's just a hint of blueberry mango.

Pineapple, mango, pineapple! They're trying really hard to be intense and chill at the same time. Subtle messaging here, though, is they're trying to tell you that you can get drunk with this stuff, but you won't be bloated. It's basically like Smearnoff Ice got a makeover. So hosting snacks day of the past couple of years, we've noticed that the not beer aisle is getting pretty crowded. Sparkling Seltzer beer alternatives are everywhere right now. If you look at every big beer company that's publicly traded,

they're all bragging about the new hard seltzel they just launched. Budweiser's A.B. and Bev, they've got Bud Light Seltzer. Boston Beer Company, home of Sam Adams, they're bragging about Truly. Constellation brands, they've got Corona Hard Seltzer. And they're all chasing the OG White Claw. White Claw's sales nearly quadrupled last year. as White Claw Summer did everything. Now this sloppy Spike Seltzer mess,

Bank of America predicts, is going to lead to $100 million splurged on ad sales in the Seltzer Wars. Everybody is trying to put an ad in front of you so that you drink their Spike Seltzer at the beach and not their spike seltzer at the beach. Oh, and by the way, Boston Beer Company, they're making more money on non-alcoholic beverage these days, not beer.

The beer industry is truly in decline. So, Jack, what's the takeaway for our buddies over in big beer? When you're late to a trend, you have to differentiate to get noticed. We were shocked, Snackers, that Molson took so long to jump into the Spike Seltzer game. It's like they hadn't sent any researchers to a single Fratter Beach party. It's really been hard to not notice White Claw. I don't know what was happening at Moulson Cores. They're the last ones to the Spike Seltzer party, so they're adding a second trend on top of the Spike Seltzer trend to make their new product work.

That trend is functionality. So Vizzi is not just a low-carb spike seltzer. It's also got benefits with super fruits and antioxidants, and they're boldly displayed on the can. No joke. The first hard seltzer that's going to be called Vizzi comes with acerola cherry, which is like some rare kind of... Where do they even get this? I don't know what acerola cherry is, but apparently it's high in vitamin C. They had to like go to the depths of the Amazon rainforest to find this stuff.

So the new value prop of Vizzi is you can get drunk but not bloated and maybe like not get a cold because there's vitamin C. have been seeing there. Sounds a lot more like NyQuil to us, but the bottom line, when you're late to a trend, you kind of got to throw in a second trend to differentiate. For our second story, it's time to conclude the impact of Lyft and Uber on society. It's been good for people who

Uber and Lyft, back for everybody else. Like our moms. Uber has been fantastic for one thing in particular, and that's academic research. Everybody has some post-grad buddy writing a paper right now called The Environmental and Equity Impacts of Transportation Network

companies on post-urban subrural communities. Times New Roman size 15 on that one to make it stand out. So the Wall Street Journal summarized a bunch of those academic studies to figure out the impact of Uber and Lyft on society. So the winners are basically anyone who's Ubering or lifting. Uber introduced the freedom to not have to own a car, not worry about the bus line or subway schedule, and not have to pay an arm and a leg for a taxi. And then it created the whole side hustle economy so you can make some flexible income on the

side as a driver not too shabby. But these studies show that the losers is everybody else who's not participating in Uber. So once it for all Snackers, Jack and I are going to look at how Uber has impacted society. Jack, finding number one. Big finding number one, Uber is not ride sharing. Do not call Uber ride sharing. There is definitely someone playing this in an Uber right now and they're looking at the driver and it's very awkward. There is a myth that Uber is a ride share company and ride sharing is similar to carpools. Fewer cars on the road, less pollution, less traffic, more kumbaya. But the reality is that Uber drivers aren't sharing their rides.

They're getting hailed, key verb difference. And they might even be coming from like two hours away just to do an Uber shift in some city to find you and then like drive back two hours. There's a lot of driving going on. Jack, the Uber ride home from that New Year's Eve wedding I went to in Nashville, people were Ubering in from like Alabama to do these rides. The drivers were? drivers were moving in. And here's a crazy fact. 40% of the driving time happening in Uber in New York in California is with no passenger in the back seat. They're just driving to Nashville to pick up somebody post-wedding. We're talking lots of empty cars on the road, which brings us to our finding number two,

Jack. Uber and Lyft actually increased the amount of driving happening overall. All right, so here's the myth. If people can rely on the rides with Uber and Lyft, they'll be less likely to get a car and they'll jump on a bike or take public transportation instead. Yeah, they'll take Uber and Lyft sometimes, but a lot of times they won't take Uber and Lyft. They'll take, like, you know, the bus or the subway or a scooter. So the reality, though, is that people are taking more rides overall, and that's causing lots of pollution, and that's her ridership and public transit. Here's a scary fact.

Traffic in cars moves two and a half miles per hour slower, in general, after Lyft and Uber have become mainstream in a city. But here's the crazy thing. You know what could fix this, Snackers? Uber pool or lift pool. Unfortunately, Uber pool is not that good business for Uber, so they're not really setting the prices to incentivize us to take those car pools. All right, so we got our two findings. Uber and Lyft are not ride-sharing, they're ride-hailing.

And they increase the number of cars on the road, not decrease. So, Jack, what's the takeaway for our buddies who are Uber and lifting over at Uber and Lyft? Fibbing about your mission can actually be a successful strategy. Get this Snackers. It's a quote from Travis, the co-founder of Uber back from 2015. He and Jack, the honors. If every car in San Francisco was Ubered, there would be no traffic. No joke, he said that.

But the reality, there's more driving, more traffic, more pollution, more horn honking, more air fresheners, more unwanted bottles of water forced upon you at Jolly Ranchers. Hey, feel free to have one of those Jolly Ranchers in the back. No, I'm not an eight-year-old trick-or-treating. They don't even look that good. They don't eat actually some of them are good. The strawberry's okay. Now, if we were woke sooner to the fact that Uber was part of the problem, not part of the solution, maybe fewer people would have started Ubering in the first place.

But now Uber and Lyft are here to stay. If you fib about your mission, you can already become a success by the time your fib is corrected and people get woke. But full disclosure, Jack and I are not advising you to fib about your mission. No. Of course not. For our third and final story, this one's wild. Walmart just announced its earnings.

But all we can think about is the innovation vampire. This is straight out of the Twilight series. But before we kick that off, Jack, can we share a little of this? these early snack facts we found about Walmart? Walmart's a pretty big company, so when it makes tiny tweaks, a lot of dollars can be saved. Turns out Walmart's going to save $60 million a year by changing how it buys its shopping bags. It's already saving $200 million a year by using different light bulbs in its parking lots. And it's saving $30 million a year with like lighter duty step ladders. That's incredible. Yeah, nothing too special about the earnings. But what

fascinated Jack and I was the news on the innovative companies that Walmart is killing. These companies are owned by Walmart. It's like a praying mantis killing off their young. It's a beautiful National Geographic image there, Jack. Robert Pattinson is going to be impressed. I wouldn't call that a beautiful image, kind of an alarming image. The first company to focus on is modcloth, which is like an anthropology for people obsessed with floral prints. They just got sold off last fall to a financial firm. And that got acquired Modcloth by Walmart just two years ago, and they're already gone. Now, Bonobos is the direct-to-consumer khaki company that laid off some workers last fall and its CEO left.

That company got acquired just three years ago by Walmart. And Jet.com shut down its grocery delivery business and its workers are moving to a Walmart headquarters. Can you guess what happened to that one? It got acquired by Walmart four years ago. Now, last week, we noticed that Jet Black also got shut down. Jet Black was the first company in Walmart's own startup incubator that actually saw the light of day. Yeah, they basically took the co-founder of Rent the Runway and took her to, like, lead this new startup. Did they take her?

It was a complete Liam Neeson situation. She was taken. So for $50 a month, you get a membership to live a very fancy white glove city life. That's what Jet Black would provide. It was like tech space ordering and delivery of stuff. You didn't know you needed and you probably didn't really need it. You could be like my little brother, Teddy, mid diaper changing because he has a daughter now, realize you ran out of organic diapers. Next Walmart and they will deliver your diaper stat.

Yeah, and boom, throw in a set of Brazilian juice cleanses and they'd get that to you to asap. Now, Nick and I just got emails this week. After two incredible years in New York City, Jet Black is ending our current operations. As soon as Jack and I saw that JetBlack was ending its operations, that's when we knew there was something up with what Walmart's doing. By the way, we got that email because we're on the wait list for Jet Black, which we never got off. And by the way, we literally got that email like yesterday. So Jack, what's the takeaway for our buddies over at Walmart? All of those startups got their innovation blood sucked by Walmart,

which is the innovation vampire. For four-year Snackers, Jack and I have watched Walmart buy up unprofit for e-commerce companies, and it was kind of cool. It was kind of cool to see. But those companies didn't mesh well with Walmart's old school leadership, which just wants profits and doesn't have patience for unprofitability. So instead, Walmart sucked out the online shopping innovations from those startup brands and used it all to benefit Walmart's own brand. And they're letting the innovative brands and

companies die. Case in point, Jet.com, acquired by Walmart, and that led to like two-day delivery at Walmart. Yeah, they took Jet.com's best tricked, aka. sucked their innovation blood. And now Jet.com can't even deliver groceries. They've basically been maimed to like dine in a closet. Guess what? This strategy is working. Walmart stock is at a record high, more than double as high as it was, before the first of these acquisitions, which was Jet.com. Which is why we want to leave a warning for entrepreneurs. If you sell to Walmart, it's probably going to take your best innovation and probably let you die in a bloodless cave.

Jack, can you whip up the takeaways for us over there? Moulson Coors is worried about declining sales of Coors Light, so it's launching busy spiked Seltzer. It's late to the Hart Seltzer party, so it's adding a second trend functionality. Our second story, Uber and Lyft are great if you're Ubering or lifting, but have bad side effects for cities. If you fiv about your mission, you could become a billion-dollar company before people find out and prevent you from becoming a billion-dollar company. But we're not recommending you fib about your mission.

You should definitely not fib about your mission on this one. Third and final story, Walmart is an innovation vampire. It sucked up the best ideas from the companies that's acquired. And now it's a brick-and-mortes giant with online shopping powers in a vampire. Snackers, time for our snack fact of the day. This one tweeted in by Blake DeHart in San Antonio, Texas, also a dry heat, I understand. They love Sean Elliott down there for that epic three he made in the NBA finals. Snackers, you know that Facebook's logo color is blue.

Abaddi, Abadai, Abadi, Abadi, Abadi, Da. I like what you did there, Nick. That's because Mark Zuckerberg, when he was a freshman dropout in Harvard University, was a little bit colorblind and couldn't see red or green that well. He also was still colorblind, and the richest color he can see turns out it's blue. No pun intended on that richest color, man. by Nick right there. Snackers, fantastic to have you with us. You look beautiful. I will see you tomorrow. Nick, I'll see you tomorrow too. Can't wait. Let's do this tomorrow. I'm in. I'm in.

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.