The Best One Yet - 🧊 “YETI vs Trump” — YETI Coolers’ tariff solution. The Federal Reserve’s independence. Chicken Tenders’ biz lesson.

Episode Date: November 11, 2024

YETI Coolers’ stock just jumped 10%... and Yeti shows how companies will handle tariffs.The Federal Reserve’s independence is under threat right now… so we whipped up its epic history.Chicken tenders are beloved today, but they’re just 50 years old… in that meat is a business lesson that applies to all.Plus, 70% of us have a “Work Wife” or “Work Husband”... and that’s a good thing.$YETI $QSR $SPYWant more business storytelling from us? Check out our new deep-dive show…“The Best Idea Yet”: The untold origin stories of the products you’re obsessed with — From the McDonald’s Happy Meal to Birkenstock’s sandal to Nintendo’s Super Mario Brothers.New episode every week. 45-minutes. Listen here: Wondery.fm/TheBestIdeaYetLinks —-----------------------------------------------------GET ON THE POD: Submit a shoutout or fact: https://tboypod.com/shoutouts FOR MORE NICK & JACK: Newsletter: https://tboypod.com/newsletter Connect with Nick: https://www.linkedin.com/in/nicolas-martell/ Connect with Jack: https://www.linkedin.com/in/jack-crivici-kramer/ SOCIALS:Instagram: https://www.instagram.com/tboypod TikTok: https://www.tiktok.com/@tboypodYouTube: https://www.youtube.com/@tboypod Anything else: https://tboypod.com/ Subscribe to our new (2nd) show… The Best Idea Yet: Wondery.fm/TheBestIdeaYetLinksEpisodes drop weekly. It’s The Best Idea Yet. Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. Welcome back. It is Monday, November 11th Veterans Day. And today's pod is the best one yet. This is a T-boy. The top three pop business news stories you need to know today. Well, Jack, welcome back. Stocks just finished their best week of the year. S&P up at an all-time high. Perfect timing. Because this episode is the best one we've ever done. We double checked. It's better than every other episode. Jack, three stories for the pod. What do we got on the show, man? For our first story, Yeti Coolers, the premium outdoor brand, just saw its stock jump 10%. And Yeti Coolers is a case study on Trump's tariff economy. For our second story, it's the Federal Reserve. Our nation's central bank is getting all the attention right now. So Jack and I whipped up a history of America's most independent government agency. And our third and final story, there are few things more uniting in America than fried chicken tenders. Chicken tenders and the chicken tender just turned 50 years old.

But within every chicken tender is a valuable business lesson. A deep fried, beautiful business lesson. But Yeties, before we hit that wonderful mix of stories. Wonderful mix of stories, no one else is doing this mix today, Jack. I love the mix. Yeties, you may have spent this weekend with your wife or your husband. But besties, you're about to spend the week with your work wife or your work husband. Get this.

70% of Americans report. having a work spouse. We repeat, get down on one knee. 70% of you have a work wife or a work husband. A work wife or a work husband. It's an informal term for a platonic relationship between two colleagues. And work spouses. It's not physical, it's professional. And it's not just a coworker with whom you most passionately vent at the water cooler. No, no, no, no, no, no. No, a work spouse is a coworker who understands your style so much. They basically share a brain with you. A work husband can give you intense feedback and you'll accept it because it comes from love. And a work wife helps you craft that promotion request better than anyone else. And there's some famous work spouses

in history and in Hollywood. I mean, Jack, can we whip out the whiteboard here and a bunch of work husbands, work wives out there? Batman and Robin, they were the original work husbands. Mario and Luigi, they're kind of, you know, international work husbands. Hans, Solo, and Chewbacca. Intergalactic work husbands. That was a bad impression. You got to work on that. Leslie Nullo, Ann Perkins in Parks and Recreation? A couple of work wives. Grace and Frankie? I got to say, pause the pod. What about us? No doubt. We are each other's work husbands. I mean, Jack, we are outrageously monogamous work husbands with each other, aren't we, man?

I would never consider being the work husband of anyone else in the world. Besties, Jack and I, we didn't even need a work pre-up. We just evenly split the company's equity 50-50. It's a beautiful thing. Nick whips up the intras. I whip up the takeaways. It's a balanced relationship. It's a relationship of understanding. It's what we got going, Jack. So, Yetis, we've got a poll on Spotify right now.

Do you have a work spouse? And if you've got a work wife or a work husband, share this episode with them right now. The options on our Spotify poll, by the way, are yes, no, and I hate this concept. Because Yeties, you tell each other everything, even though you're keeping it professional. Jack, let's in our three stories.

15 years before this song, two boys. From the Northeast met in the dorm They had an idea to cause a cultural storm It's the best one yet, but the best is an norm Jack Nick, that's it I don't even think they need to practice 50% that's a fat tip Tea Boy City on your at list

If you know you know because we're ready to go We can't wait no more so just start the show First, a quick word from our sponsor For our first story, Yeti Coolers Just saw it stock jump 10% last week because Yeti has a tariff plan. In fact, this cooler company is the perfect explanation of the tariffs coming to the U.S. Yes, it is.

But, Jack, we should have a full disclosure here. There is a challenge when covering this company Yeti Coolers, isn't there, man? Their name is Yeti, and our audience is nicknamed Yetis. Yeah, that's a problem. So, besties, Jack and I want to tell you about Yeti Coolers. Yeti invented a category we didn't know was necessary. luxury coolers luxury coolers

hey let's make this thing three times heavier we can charge three times as much that idea you just jokingly mentioned worked for yeti cooler it did yeti is now a three billion dollar publicly traded company yeti it's for hikers who don't love dirt

if your buddy owns a philson bag a patagonia fleece and a pendleton bike it or drives a rivian yes jack they probably own a yeti cooler too yeah yety coolers they pair well with a fort bronco we should also point out yeti sells to serious ranchers and outdoorsmen. At the same time, they sell to city slickers like Nick. It's a wildly diverse customer base. I put a Yeti tumbler in my Yeti cooler. It's like a rushing nesting at all of Yeti products, Jack. And I don't love dirt. The one time you went camping,

you complained that your heated comforter wasn't working. It was glamping. It wasn't camping. It didn't go well, Jack. But Yeti's Yeti is a company based in Austin, Texas. And they just announced some pretty impressive earnings. Yeti sales jumped 10%. Their profits jumped 10%. Their profits jumped 14% and their drinkware was winning last quarter. Because they're selling huge cups that compete with Stanley Tumblr's and they're selling really well. They're not dupes though. No, they're not. These things are $45 from Yeti. But here's what Jack and I found fascinating about this story. The real reason Yeti stock popped 10%? It's one theme in the report that captures the biggest theme in this economy. Because Besties, Yeti Coolers is a case study on how businesses will operate in Trump's second term.

because Yeti Coolers explains tariffs. Let us explain. First, Trump's number one economic policy. He said it for a while now. He said it's going to be tariffs. He plans to tax everything Americans buy from overseas. And that's why Jack and I have described Trump's plan as trade war two. Trump plans to tax things we buy from China by 60% and everywhere else in the world by 10%.

And that is a major challenge for American companies with production overseas. He's like Yeti Coolers. Get this, 80% of the things Yeti sells are made in China. 80%. That's right, four out of five of those glamorous Yeti cups that I got in my closet jack, they were made over in China. And if those products get taxed 60% as they enter the United States in the future, that's a huge problem for Yeti.

So Jack and I jumped into Yeti's earnings, and we saw that they already have plans to pass on some of that tax to customers like us through a budget. price hike. The rest of the tax is going to be paid for by shrinking the company's profit margin. And interestingly, Yeti also said they're going to get creative about dealing with the upcoming tariffs. Whenever they can, they're going to ship Chinese-made Yeti products directly to non-U.S. Markets. For example, Yeti would send Chinese-made coolers to Canada instead of the United States to avoid American tariffs. And the last thing Yeti said in their earnings call about how

they're going to handle these tariffs is that they were going to move production out of China. Spoiler, they're moving the factories out of China. Yeti said that by next year, they'll reduce the percent of their products made in China from 80 percent today to 50 percent next year. They're basically cutting their Chinese production almost in half. So Jack, what's the takeaway for our buddies over at Yeti? Prepare for the great migration from Chinese factories. Besties, Yeti Coolers is the first major company since the election to openly discusses. tariffs. So we were fascinated to hear Yeti's tariff plan, and it's probably similar to other companies that produce overseas. Jack, we already are getting evidence of this. Steve Madden, the shoe company,

they announced at the end of last week they're going to move a lot of their shoe production out of China into other countries. Now, interestingly, neither Yeti nor Steve Madden said they would move their factories to the United States. They just said they'd move them out of China. They're probably going to stay in the region with other low-cost countries like Vietnam, India, Indonesia. But Yeti Coolers captures the results of tariffs. Yeti Coolers is the perfect case study on the great migration from China. For our second story, on Friday, Jerome Powell declared that the Federal Reserve will remain independent even in the Trump era. Because the Federal Reserve is our only institution that can do unpopular things. It's our most independent institution and we need to talk about

that. But first, a quick history on the chairman of of our central bank, Jerome Powell. Jerome Powell, Jerry Powell, aka Jay Powell. How you doing, man? Interestingly, even though he's basically in charge of our finance system, he doesn't have an econ degree. He's a lawyer. He worked at a law firm. He went to Georgetown law like your dad, Jack. Yeah, I know. I know. I knew each other. Pretty cool, pretty cool. And then he took a huge pay cut in 2012 to enter public service by joining the Federal Reserve. In fact, Donald Trump appointed Jay Powell to be the most powerful person in finance in 2018. the chairman of the Federal Reserve.

But almost immediately, Trump turned on him. He was mad at Jerome Powell for raising interest rates. Well, six years later, things are awkward. Because now that Trump is going to be president again, Powell is in the hot seat. Which leads to the news. On Thursday, after lowering interest rates, he had a press conference.

And in that press conference, Jerome Powell emphatically defended his institution, the Fed, and defended himself, in a really kind of wild, quick discussion. I mean, Jack, what happened? A reporter asked him, if Trump asked you to resign, would you? And Jerome Powell said one word. No.

Later, he was asked for more, and he said that the law does not allow the president to fire him. That's right, yeah, he's J-Powell, Jerome Powell, plans to remain head of our central bank until his term ends in 2026, and there's nothing anyone can do about it. It was a powerful statement right after the election. Which leads to another quick history lesson that Jack and I wanted to share with you. What do you got, Jack? The committee that Jerome Powell leads at our central bank, it was created during America's darkest days.

That's right, Yeti's, the Great Depression, 25% unemployment. One out of four Americans did not have a job during that era. So during the Great Depression, we created the Fed's open market committee to be the guardian of our economy. Now, Jack, the Federal Reserve's Open Market Committee. It's a complicated name, but they really have two very simple areas of focus. Very simple goals. Keep unemployment rate low and keep inflation low too. For example, when inflation is high, they raise interest rates. You spend less money and the economy slows down.

But when unemployment is high, they lower those interest rates. So that you spend more money, which creates jobs and lowers the unemployment rate. It was designed to be independent of politics. And the interesting reason why is our takeaway. So Jack, what's the takeaway for our buddies over at the fighting Fed? Why does the Fed matter? Because it's our only institution that will do the unpopular thing. Yeties, let's go back to 2022.

When inflation was getting out of control, prices of eggs were popping, and Jay Powell gave us some tough love and did the unpopular thing. Jerome Powell jacked up interest rates. He is the reason that mortgage rates are 7% right now. It's really annoying. We'd love to be purchasing a home, but man, these interest rates, They're pretty annoying. But that tough love had to happen because inflation is dangerous.

And if you don't crack down with high interest rates, prices would have kept going up and up and up. Those painfully high interest rates, that's the only way to kill inflation. And that's why the Fed is independent, because they were willing to give us tough love and they were not worried about political consequences. The Fed was willing to do the unpopular thing, but the necessary thing for our economy. And that's rare. Think about all the major problems we have in our country that never get solved because the solution is unpopular.

All right, Jack, I got a couple examples for you. A health care costs that are so high? Or stopping climate change? Neither one of those has really happened. We haven't solved those because the solutions are expensive and therefore unpopular. But the Fed, our Federal Reserve, they can do the unpopular thing. And it's because they're independent of politics. The Fed could only do it because they don't have to worry about politics.

They can jack up interest rates to kill inflation, and it works. We hope our central bank remains independent for that reason. Because the Fed, it's our only institution that can do the unpopular thing. Now a quick word from our sponsor. For our third and final story, it's the 50th birthday of one of America's greatest innovations, the chicken tender. Chicken tenders, they revolutionize the food industry, but they also hold a lesson for every industry. You ready for this, Jack?

Chocolate or vanilla? Soft taco or hard taco? Crunchy peanut butter or smooth peanut butter. I actually think you and I differ on all three of those. Yes, we do, Jack. They are all divisive food questions. And yet, the chicken tender, the tendi, is the most uniting food among us. Did you just call it a tendi?

I did, Jack, because if you actually know the chicken tender, you call it a tendi. In poultry terminology, the chicken tender is known as the paltry. pectoralis major muscle. Ah, the chicken tender, it is a flavorless thin, lean strip of boneless meat that runs along the spine of the chicken. It's kind of TMI, but remember the word flavorless. That'll come back later. That's key. Today, the chicken tender is a profit puppy, isn't it, Jack? Chick-fil-A, pop-eyes, raising canes. They're all enjoying double-digit sales thanks to the chicken tender. Well, perfect timing, Jack, because it's the 50th birthday of our buddy, the chicken Tender. Humans domesticated chickens 8,000 years ago, but it was only 50 years ago we found the chicken tender.

Apparently it took 7,950 years for us to get this innovation that is the chicken tendi. It took us that long to notice, oh, we should try to eat that. No, no, Jack, it took us that long to innovate it. And it all began, according to the New York Times, with two brothers, Greek immigrants living in Manchester, New Hampshire. They served the first ever chicken tender. Their restaurant is still there today. It's called the Puritan restaurant. And that's where the Papa's brothers were low on meat one day,

so they tried a cut of the chicken that was often ignored. They deep-fried that pictalus major muscle on the chicken, and thus the chicken tender was born. I'd love to see the face of the first customer that chomped into that fried chicken delight. But besties, there is a wild twist in this chicken tender business story. For 10 years, the chicken tender didn't leave New England until Burger King came along.

Get this. 1970, Burger King is losing badly to their rival McDonald's. And Jack, what did McDonald's just done? They just launched the chicken McNugget. So Burger King kind of zucked it with chicken tenders. That's right. Burger King said, hey, this chicken tender thing, it's taken off in New England. Let's make it our thing.

So they did a $20 million ad campaign to push and promote the chicken tender. And it worked. So well. Too well. That they had to pull down those ads. because they couldn't serve customers anymore. They were sold out. They couldn't keep up with demand.

People were getting annoyed. In fact, Burger King even sued one chicken company for infringement on their chicken tendees. According to the New York Times, the case went to a trial, and the trial was graphic. Apparently, one expert witness was called up to the stand and cut up a three-pound chicken

in front of the judge and the jury with a butcher knife. That expert witness wanted to show the tender, like Nick so graphically described earlier. the story. Yeah, it runs along the spine. And guess what? Burger King won the case. Now, eventually, Burger King's ownership of the tender, it expired. That's why every restaurant makes them today on both the kids' menu and the adults' menu. But Jack and I were still wondering, after 50 years, the chicken tender, it's now a top-selling meat, and yet it's also the least flavorful of the meats? Remember we said it was pretty much flavorless? Yeah, that's our takeaway.

We don't want to lick it. And yeah, Jack, I just said lick. So, Jack, I just said lick. So Jack, what's the takeaway for our buddies who are anyone ambitious out there? You can turn a weakness into a strength. Just look at the chicken tender. Now, Yeties, why was the chicken tender meat ignored for 8,000 years? Well, it's because it doesn't have much flavor. It's easier to cook. It's easier to prep, but no one wanted it because it was pretty much tasteless. So, Jack, what did the early chicken tender innovators do to solve that weakness? Two things. They deep-fried it, and they launched sauces. Oh, they launched a lot of sauces. In fact, America's sauce obsession? It's all thanks to the chicken tender. Sweet and sour sauce, honey mustard

sauce, spicy Chipotle, all great options for dipping a chicken tender into. In fact, Burger King added barbecue sauce specifically for their chicken tender. Now, customers don't just want chicken tenders. There's also high demand for the sauces, too. The sauces? They've been driven by the chicken tender. So how did the cheap, flavorless chicken tender become America's favorite food? Because they turned a weakness into a strength. Or as Nick said earlier, they innovated the food. They did, they did, they did. Jack, could you whip up the takeaways for us to kick off the week? Yeti Coolers produces 80% of their products in China, but they're cutting that to 50% by next year. Yeti Coolers, they're a case study on tariffs because in Trump's trade war two, the migration out of China

has already begun. For our second story, the chairman of the Fed defended our central bank's independence last week. Why does the Fed matter? Because it's our only institution that will do the unpopular thing. And our third and final story is the 50th birthday of the chicken tender. Happy birthday, tendee! America's favorite chicken cut is actually the least flavorful part. So the chicken tender, it shows that you can turn a weakness into a strength. You just need a little bit of sauce. Or a lot of sauce in next case. A whole lot of sauce. But, Yeties, this pod's not over yet. Here's what else you need to know today.

First, despite the Fed cutting interest rates, mortgage rates still remain stubbornly high. The 30-year mortgage is at 6.79% right now. It's actually up since the Fed began cutting rates. Honestly, we've been looking into it. We jumped in T-boy style. We got a whole background of finance. And experts just aren't really sure why mortgage rates haven't fallen yet. Neither are we, but we really hope they come down soon.

And second, Airbnb, T-B. teased last week that they're going to expand beyond accommodations. Finally, we've been saying this for a while. Airbnb should become the sharing company. Brian, let's not just put our houses on Airbnb. We want to put a swimming pool, a car, anything you can share. We'd put our pod studio on Airbnb. Yeah, we would.

We would. We record for two hours a day. We got other time check. It's wasted the rest of the day. Honestly, Brian, we should talk. Although Airbnb didn't point out where they would go beyond accommodations. And finally, we just got the... Grammy nominations and Beyonce is leading with 11 nombs. Billy Eilish, Kendrick Lamar,

Post-Lamone, and Charlie XX each received seven nominations, followed by Taylor Swift with six noms. I don't want to make this about us, Jack, but I think they could add podcast to the Grammys. I'm going to throw that one out there as well. We record standing up. We're basically singer. Now time for the best fact yet. This one whipped up by Jack and me for all the veterans out there. According to the U.S. Census Bureau, there are are 16.5 million veterans living in the United States. Jack, can you sprinkle on some context of that number, please? That's about 6.4% of the entire U.S. adult population.

So, Yeties, based on those numbers, you're probably going to interact with a veteran today. If there's any day to thank them for their service, it's today. Happy Veterans Day. Yeties, you look fantastic to kick off the week. Jack, I'm a work wife over there. How you doing? It's an honor to be your work wife. It is.

Besties, if you've got a work wife or work husband, any kind of work spouse, we got a poll going right now on Spotify. We want to know if you do. But I honestly don't believe there's a more committed and faithful work marriage than Nick and me. No, that's true, Jack. That's true. Although we need to talk because you didn't clean the microphones last night. And I feel like we've discussed this a lot. I like how you're using we.

You're persuading me by not singling me out. Well, Jack, I believe in us. All right, we got to wrap up the show. Best, you share this pod with your best work spouse. So Jack and I, we'll see you tomorrow. And before we go, we've got so many amazing Yeti and bestie veterans out there. But a couple we want to highlight, LaSalle Vaughn and Tony Nash, a couple of legends. The Tony Nash, actually.

Great listeners of the show. Thanks for your service. And congratulations to little Brooks Finley down in Waco, Texas. His parents, Silas and Arden Finley are so happy because he was just born. Great name. Great name. And congratulations to Stephanie Shea and Brandon Hall from Brooklyn, who got married in beautiful Mill Valley over the weekend. Oh, that's got to be

stunning. Fantastic ceremony, guys. And Carolina and Parker Dunaway from New Orleans just got married as well celebrating that win down in Mexico. And happy anniversary to Kara and Frankie, who are celebrating one year together in Destin. And besties, if you want to get a shout out for yourself or a buddy for anything, we've got a link in our episode description so you can submit that shout out. This is Jack. Nick and I both on stock of Airbnb. And we've both on ETFs of the S&P 500.