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Meta Says It Will Pay Up to $18 Billion Over Social Media Claims · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio Studios.
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  Speaker 2: Podcasts. Radio. News.
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  Speaker 3: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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  Speaker 4: Paul, the big story of the morning, of the day,
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  Speaker 4: certainly in Silicon Valley, is Meta agreeing to pay up
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  Speaker 4: to $ 16. 7 billion to settle the social media case brought
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  Speaker 4: on by 29 states.
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  Speaker 5: Yeah, that number is big, but I'm reading some notes
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  Speaker 5: from our next guest. There's some serious usage issues.
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  Speaker 6: Changes coming.
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  Speaker 1: Exactly.
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  Speaker 4: All right, let's bring in Matthew Schettenhelm. He's our media
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  Speaker 4: litigation analyst on this settlement. And Matt, Paul just mentioned
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  Speaker 4: all these usage changes that META will or has agreed
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  Speaker 4: to implement. Does that mean that it can't deny that
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  Speaker 4: it was at fault? I mean, you know how most
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  Speaker 4: settlements end with not admitting any kind of.
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  Speaker 1: Not guilt.
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  Speaker 7: What's the word?
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  Speaker 1: Responsibility. Responsibility, I guess.
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  Speaker 4: Not admitting to any kind of concessions, really, when it
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  Speaker 4: comes to guilt for what happened.
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  Speaker 1: Is that the case here, or the fact.
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  Speaker 4: That it's agreed to use such changes means that it's
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  Speaker 4: agreed that it was at fault?
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  Speaker 2: This is certainly giving the states a part of what
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  Speaker 2: they asked for. Now, I want to be careful because
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  Speaker 2: this is a very detailed settlement agreement, and I haven't
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  Speaker 2: read in depth exactly what the company's admitting to or not.
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  Speaker 2: And I suspect it's still not admitting fault in any
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  Speaker 2: sort of formal way. But in an informal way, you're
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  Speaker 2: absolutely right. This is actual changes to how the service
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  Speaker 2: operates for teams, right? And it risks, at least at
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  Speaker 2: the edges, discouraging them from using it quite as often.
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  Speaker 2: And so we're talking about two-hour time limits on usage
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  Speaker 2: and other related terms, mandating that they take breaks from
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  Speaker 2: time to time in sort of an effective way. It
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  Speaker 2: was discussed in trial. Hey, no one actually uses that feature,
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  Speaker 2: and most kids just ignore it. This is kind of
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  Speaker 2: making those things work a little more aggressively. and more effectively.
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  Speaker 2: And in theory, down the road, that could have an
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  Speaker 2: impact on how many eyeballs are seeing ads on the service.
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  Speaker 5: I mean, some of these behavioral remedies are major in
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  Speaker 5: my mind. Two-hour daily limit, as you mentioned, nighttime lockout,
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  Speaker 5: school hours, push notifications will be disabled, most of them,
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  Speaker 5: mandatory breaks, age checks. I mean, these are significant behavioral changes.
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  Speaker 5: I would think, what's the company, I would think this
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  Speaker 5: would have a impact kind of the company's operations?
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  Speaker 2: I think it's a longer-term impact because one thing that
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  Speaker 2: was looked at in the case is what percentage of
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  Speaker 2: the company's revenue actually comes from these teens and even
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  Speaker 2: younger than teens, under 13. It was a relatively small
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  Speaker 2: amounts in terms of right now, how much revenue are
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  Speaker 2: we getting from them? Where this starts to impact is
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  Speaker 2: longer term, because those young users become your adults that
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  Speaker 2: are hooked on the service. And these changes risk denting that.
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  Speaker 2: If when you're 17, you're not using your social media
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  Speaker 2: as much, you're probably not using it as much when
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  Speaker 2: you're 17 to 35.
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  Speaker 5: Yeah.
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  Speaker 1: No, that's a really important point.
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  Speaker 4: I think about my son who's 20 and is always
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  Speaker 4: scrolling on these social media services. And, you know, he's
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  Speaker 4: not going to have to be subject to any of
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  Speaker 4: these restrictions, but, you know, he's hooked in there like completely. So, Matt, question.
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  Speaker 4: The changes that MetaGreed to make are good for 10 years.
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  Speaker 4: Why is there this time limit?
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  Speaker 2: Yeah, I think this was a negotiated settlement. And there's
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  Speaker 2: a lot of details in this agreement that we need
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  Speaker 2: to work through. I think some of these conditions are
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  Speaker 2: contingent upon other industry players also adopting them. So you're
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  Speaker 2: right to point out the time limit. But there's also
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  Speaker 2: some of the strictest versions of this may not apply
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  Speaker 2: if TikTok or other peers I see. Don't adopt them.
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  Speaker 2: So there's a lot of close reading we need to
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  Speaker 2: do on exactly how this works. And all of this,
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  Speaker 2: of course, is in addition to the monetary terms and
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  Speaker 2: the broader litigation. This is just one piece of a
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  Speaker 2: multi-layered piece of litigation facing the company.
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  Speaker 4: I find it interesting that we had heard that Mark
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  Speaker 4: Zuckerberg was going to be testifying.
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  Speaker 1: Lawyers had said that they would call him to testify.
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  Speaker 4: So I'm guessing that this settlement means Mark Zuckerberg would
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  Speaker 4: not need to testify?
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  Speaker 2: That's what I would expect. So the parties filed this
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  Speaker 2: consent judgment before the court this morning. I don't expect
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  Speaker 2: her to stand in the way of them reaching into
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  Speaker 2: this agreement. So that trial that's been going on in
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  Speaker 2: Oakland should end with this development. What it won't stop
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  Speaker 2: is other cases brought by school districts. There's over 1,200
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  Speaker 2: school districts across the United States that are suing Meta
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  Speaker 2: on that basis. There are personal injury lawsuits, individuals who
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  Speaker 2: say they're harmed and they're suing the company. All of
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  Speaker 2: that continues and doesn't seem to be displaced by this agreement.
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  Speaker 1: But that's a little bit down the road.
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  Speaker 2: That's not this trial that that's ongoing in Oakland right now.
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  Speaker 2: That one should come to an end. So Zuckerberg should
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  Speaker 2: be off the hook, at least in the near term.
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  Speaker 1: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 3: You're listening to the Bloomberg Intelligence Podcast.
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  Speaker 5: Average property and Fitch, a good quarter. I would say
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  Speaker 5: a really good quarter. The stock's up 38% year to date.
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  Speaker 5: I'm sorry, just today. That brings it to a positive
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  Speaker 5: gain for the year. It was trading down on the
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  Speaker 5: year prior to today. So a big, big turnaround there.
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  Speaker 5: Let's break that down, plus some other retailers reporting numbers.
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  Speaker 5: We do that with Mary Ross Gilbert, senior equity analyst.
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  Speaker 5: She covers all the retail stuff for Bloomberg Intelligence. She's
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  Speaker 5: based out there in L.A. So, Mary, I mean, again,
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  Speaker 5: the stock up 38% today. That doesn't happen very often.
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  Speaker 5: What did Abercrombie & Fitch report?
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  Speaker 8: Well, Paul, Abercrombie & Fitch reported a comparable sales increase
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  Speaker 8: at its namesake brand. It was up 4%. And you
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  Speaker 8: could say, well, look, they cycled at 11% decline last
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  Speaker 8: year in.
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  Speaker 1: The second quarter.
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  Speaker 8: But if you look at the three-year stacked growth, figure,
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  Speaker 8: that was up 32%, 32 and a half percent to
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  Speaker 8: be precise, is the three year stacked increase, and they
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  Speaker 8: still delivered a 4% increase. So that was really encouraging,
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  Speaker 8: and when you look at the total sales, because of
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  Speaker 8: course they're expanding, and with some wholesale opportunities, their total
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  Speaker 8: sales were up 8% for the brand. Hollister, this is
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  Speaker 8: their Gen Z brand, that was down 4% in the quarter,
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  Speaker 8: and analysts were looking for sales to be down less
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  Speaker 8: than 1%, but They were cycling a 19% comp increase
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  Speaker 8: a year ago. And so really what kind of overrode
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  Speaker 8: that is the fact that the name brand, the namesake
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  Speaker 8: brand did really well. And the fact that we're seeing
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  Speaker 8: improving trends in the third quarter so far, starting off
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  Speaker 8: strong for both brands. So we could see the Hollister
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  Speaker 8: brand also return to positive comps. But their overall sales...
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  Speaker 8: For Hollister, we're up 2%.
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  Speaker 4: It's kind of remarkable when you go into an Abercrombie &
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  Speaker 4: Fitch now how different it is from its heyday in
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  Speaker 4: the 90s. I mean, for one thing, the music is
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  Speaker 4: not like so loud that you can't hear anything. And
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  Speaker 4: it's a lot brighter. And it's catered. women a lot
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  Speaker 4: more than it ever used to be. And of course,
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  Speaker 4: that might reflect the sensibilities and the strategic decisions of
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  Speaker 4: the CEO, Fran Horowitz, as opposed to Mike Jeffries, who
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  Speaker 4: really put his stamp on the company. But Mary, just
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  Speaker 4: talk to us a little bit about the dependence on
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  Speaker 4: young women, or maybe not even young women, millennial women,
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  Speaker 4: as the key audience for the close now.
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  Speaker 3: Yeah.
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  Speaker 8: So, Scarlett, you really hit on it. And that is that,
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  Speaker 8: you know, going back to the 90s when it was
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  Speaker 8: really more of a high school, college student. Now it's
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  Speaker 8: really we're talking about millennials. So those are think about
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  Speaker 8: customers in their 30s and 40s. That's really where Abercrombie &
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  Speaker 8: Fitch is going after, and it resonates. And not only
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  Speaker 8: is it that consumer in terms of the age demographic,
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  Speaker 8: but from an income demographic perspective, they tend to be
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  Speaker 8: higher earning. So that's in the $ 100, 000 to $ 200, 000 household
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  Speaker 8: income range. So that's really how that brand has shifted,
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  Speaker 8: just to your point.
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  Speaker 7: And also, they're really looking.
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  Speaker 8: To have more of a balanced business, like half and
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  Speaker 8: half men versus women. And you'll see that in the stores.
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  Speaker 8: It's divided straight in half, men on one side, women
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  Speaker 8: on the other side in terms of assortments.
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  Speaker 1: Promotions.
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  Speaker 5: How promotional were they in the quarter? And kind of
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  Speaker 5: what are you hearing from some of the other retailers?
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  Speaker 9: Yes, Paul.
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  Speaker 8: So you're bringing up a good point. They were actually
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  Speaker 8: able to do more full price business in the quarter.
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  Speaker 8: So that helped them on the margin side, you know,
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  Speaker 8: within the Abercrombie brand. This is distinct and different from
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  Speaker 8: the story that we're talking about here with Abercrombie. If
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  Speaker 8: you talk about Kohl's, Kohl's delivered another comp sales decline.
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  Speaker 8: And this follows, you know, three years stacked sales. sales
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  Speaker 8: declines in the double digits. So Kohl's is still struggling
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  Speaker 8: to make a comeback. We did see some encouraging signs
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  Speaker 8: when we walked the stores more recently. We're seeing much
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  Speaker 8: better merchandising. The store is starting to look more cohesive.
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  Speaker 8: But we also saw that it's a lot more promotional
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  Speaker 8: right now. That should benefit them in the third quarter,
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  Speaker 8: and they might be able to inch closer to break even.
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  Speaker 8: But nonetheless, it just goes to show you that off price,
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  Speaker 8: I think, is really making a dent in that business
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  Speaker 8: and why you're continuing to see declines there, despite the
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  Speaker 8: improvements there. that they're seeking to make. And if you
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  Speaker 8: look at Sephora, which has been about a $ 2 billion business,
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  Speaker 8: their comp sales were down 4%. So here was a
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  Speaker 8: business that initially was showing strength, and that's a business
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  Speaker 8: that draws repeat customers, but again, still seeing weakness there
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  Speaker 8: as they try to you know, improve the assortments there,
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  Speaker 8: bringing in a lot more newness. It just goes to
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  Speaker 8: show you there's still a lot more to go there
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  Speaker 8: at Kohl's. And of course, they're catering to a lower
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  Speaker 8: to middle income consumer, talking about a K-shaped difference there.
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  Speaker 4: So when it comes to Kohl's, it feels like it's
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  Speaker 4: been in turnaround mode for a long time. I can't
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  Speaker 4: remember when we weren't talking about it being in turnaround mode.
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  Speaker 4: And you mentioned Sephora and how that was a bright
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  Speaker 4: light for the company. Outside of Sephora, what other growth
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  Speaker 4: drivers does Kohl's have?
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  Speaker 1: And very quickly here.
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  Speaker 8: Yeah, so Scarlett, key point, it's really the private brands,
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  Speaker 8: and that's where you're seeing strength. So we noticed in
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  Speaker 8: the stores that their private brands, you know, it's always
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  Speaker 8: been around that sort of 33%, 34% of sales. It
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  Speaker 8: looked like it was higher in the stores. They were
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  Speaker 8: much deeper. And again, all promotional. The whole store felt
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  Speaker 8: like it was on promotion and probably 20% to 25%
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  Speaker 8: of the store on clearance. But the junior's business was
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  Speaker 8: up 10%. So they are seeing some, you know, bright
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  Speaker 8: spots there. Their core credit card customer up 1% after
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  Speaker 8: being down, you know, previously. So continuing to see improvement there.
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  Speaker 1: Stay with us.
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  Speaker 3: More from Bloomberg Intelligence coming up after this. You're listening
• 12:26
  Speaker 3: to the Bloomberg Intelligence Podcast. Catch us live weekdays at
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  Speaker 3: 10 a.m. Eastern on Apple CarPlay and Android Auto with
• 12:33
  Speaker 3: the Bloomberg Business App. Listen on demand wherever you get
• 12:36
  Speaker 3: your podcasts or watch us live on YouTube.
• 12:40
  Speaker 4: It is still earning season, and the retail companies are
• 12:43
  Speaker 4: busy reporting their results. And we've got a read on
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  Speaker 4: two different parts of the consumer retail economy. Bath &
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  Speaker 4: Body Works, sales sliding, and that is having an effect
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  Speaker 4: on the share price, certainly, this morning. And then you
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  Speaker 4: have Williams-Sonoma, whose sales momentum has extended. Bath & Body Works,
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  Speaker 4: for the moment, up 3.5%. Williams-Sonoma down 2.5%. Lindsay Dutch
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  Speaker 4: is with us right now. She is our Consumer Hardline
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  Speaker 4: Senior Analyst. And Lindsay, if we just take a step back,
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  Speaker 4: first of all, and look at the headlines, look at
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  Speaker 4: the numbers out of Williams-Sonoma and Bath & Body Works,
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  Speaker 4: what kind of story does it tell about consumer spending
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  Speaker 4: and the willingness of consumers to spend on little treats
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  Speaker 4: and bigger, more expensive investments like cookware?
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  Speaker 6: Thanks, Scarlett, for having me. Yes, I think that there's
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  Speaker 6: two different stories happening here. You know, I think the
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  Speaker 6: Bath and Body Works, the stock is up, sort of
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  Speaker 6: results better than feared. But as you mentioned, they're seeing
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  Speaker 6: sales decline and sort of pressure on profit if you
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  Speaker 6: take out any tariff refunds from the result. That company
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  Speaker 6: is going through a little bit of a transformation. They're
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  Speaker 6: kind of cutting interest. So, some of that decline is
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  Speaker 6: sort of a contraction in the assortment that they have
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  Speaker 6: going on with this strategy to revive growth. But the
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  Speaker 6: other piece is, you know, they generally cater towards, you know,
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  Speaker 6: like a broader, like the average U.S.
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  Speaker 7: Consumer.
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  Speaker 6: And you can see, you know, there is some pressure there.
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  Speaker 6: Those consumers need big discounts to come and spend even
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  Speaker 6: on a lower-price item that you'd find at a bath
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  Speaker 6: and body. And by contrast, if we jump to Williams-Sonoma,
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  Speaker 6: you know, they had very strong results, sales growth of
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  Speaker 6: almost 7% in the quarter, super strong across all of
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  Speaker 6: their brands. And I think the bar, you know, for
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  Speaker 6: investors for this company is just very, very high, and
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  Speaker 6: their guidance raised just didn't meet that high bar.
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  Speaker 5: So, what are these companies, just across your coverage, what's
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  Speaker 5: the general feel about the consumer here, because we talk
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  Speaker 5: about the K-shaped economy and some folks are saying maybe
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  Speaker 5: that's changing a little bit. What are your companies kind
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  Speaker 5: of suggesting?
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  Speaker 6: I think the results so far still sort of indicate
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  Speaker 6: the strong divide in the K-shape economy, sort of lower
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  Speaker 6: to middle, pulling back a little bit more, getting a
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  Speaker 6: little bit more selective, going after the value. And then
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  Speaker 6: we have higher income. They are selective, but they are
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  Speaker 6: still spending. So Williams-Sonoma does cater to a higher income consumer.
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  Speaker 6: They said home furnishings industry was about flat in the quarter,
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  Speaker 6: but again, as I mentioned, 7% sales growth for that company.
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  Speaker 6: And they saw growth across furniture and non-furniture categories. So
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  Speaker 6: that higher income consumer is still spending, especially if the
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  Speaker 6: product is new or if it really speaks to them
• 15:40
  Speaker 6: in terms of a collaboration.
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  Speaker 4: So does this increasing divide between higher income consumers and frankly,
• 15:46
  Speaker 4: everyone else mean that more merchants, more retailers are actively
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  Speaker 4: choosing to chase the higher income consumer and cater to
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  Speaker 4: that group of consumers rather than sell to the mass consumer?
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  Speaker 1: I think that's a really hard pivot to make.
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  Speaker 6: So if you think of a Bath & Body Works,
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  Speaker 6: for example, they did just earlier this week announce a
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  Speaker 6: new collection that kind of sounds like what you're describing,
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  Speaker 6: going after more of a higher-end consumer. It included home
• 16:15
  Speaker 6: decor and higher-price items. And I guess that maybe is
• 16:20
  Speaker 6: some effort from a mainstream retailer trying to get that advantage.
• 16:25
  Speaker 7: But I think.
• 16:26
  Speaker 6: executing on that and really pulling in that higher income
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  Speaker 6: consumer out of nowhere is very difficult to do. I
• 16:32
  Speaker 6: think a company like Williams Sonoma, they have brands that
• 16:36
  Speaker 6: already cater to that consumer. The consumer already knows to
• 16:39
  Speaker 6: search for them online. And so I think executing on
• 16:44
  Speaker 6: that pivot would be extremely hard.
• 16:47
  Speaker 5: Lindsay, I'm reluctant to ask this question because it suggests
• 16:50
  Speaker 5: that summer is almost over. But Holiday shopping. What are
• 16:54
  Speaker 5: the trends?
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  Speaker 6: Really, Paul?
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  Speaker 1: You're going there? I'm going there. I'm going there. What
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  Speaker 1: are you hearing from your companies?
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  Speaker 9: Right.
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  Speaker 6: So I think excluding Williams-Sonoma, the broad trend is very cautious,
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  Speaker 6: sort of a cautious look into second half. Most guidance
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  Speaker 6: changes sort of indicate more of a potential slowing in
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  Speaker 6: sales growth, continued margin pressure, and just sort of very
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  Speaker 6: much uncertain or needing to use a lot of discounts
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  Speaker 6: to draw that shopper. I think Williams-Sonoma would be the exception.
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  Speaker 6: You know, they raised their guide that they, based on
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  Speaker 6: the midpoint, should get at least 4% growth in that
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  Speaker 6: back half, and they kind of chopped off that. sort
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  Speaker 6: of what they were thinking might be the worst case
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  Speaker 6: for the year.
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  Speaker 1: So broadly, I.
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  Speaker 6: Think there's a lot of caution going into holiday. Back-to-school
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  Speaker 6: comments have been minimal so far, but not a lot
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  Speaker 6: of indication of strong momentum for that holiday season.
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  Speaker 4: That's exactly where I wanted to go. I mean, now
• 17:55
  Speaker 4: is the time to look at back to school, not
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  Speaker 4: the holidays, not yet at least, Paul. So when it
• 18:00
  Speaker 4: comes to back to school, does that tend to be
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  Speaker 4: a leading indicator for how holiday sales will shape up
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  Speaker 4: or is there not really much of a correlation?
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  Speaker 6: It can be.
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  Speaker 7: So William Sonoma talked about it slightly.
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  Speaker 6: They had acquired Dormify and they relaunched that. They saw
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  Speaker 6: success with, you know, back to college students and their
• 18:19
  Speaker 6: Pottery Barn Kids brand did well this quarter. Not a
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  Speaker 6: lot of detail, but again, you know, a lot of
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  Speaker 6: their benefit is coming from that higher income brand. When
• 18:29
  Speaker 6: I think back to yesterday, Dick's results, they didn't really
• 18:33
  Speaker 6: comment on back to school, kind of gives you the
• 18:36
  Speaker 6: indication that perhaps the performance from Foot Locker was not
• 18:40
  Speaker 6: as good as they were expecting. And again, I think
• 18:43
  Speaker 6: that is reflecting pressure on a lower income consumer for that.
• 18:48
  Speaker 1: Stay with us.
• 18:49
  Speaker 3: More from Bloomberg Intelligence coming up after this. You're listening
• 18:56
  Speaker 3: to the Bloomberg Intelligence Podcast. Catch us live weekdays at
• 18:59
  Speaker 3: 10 a.m. Eastern on Apple CarPlay and Android Auto with
• 19:02
  Speaker 3: the Bloomberg Business App. Listen on demand wherever you get
• 19:05
  Speaker 3: your podcasts or watch us live on YouTube.
• 19:09
  Speaker 5: Earnings continue to come in. And we heard from J.M. Smuck,
• 19:13
  Speaker 5: our good friends out there in Orville, Ohio. They raised
• 19:16
  Speaker 5: a four year outlook for sales and profit.
• 19:19
  Speaker 7: That's a good thing.
• 19:20
  Speaker 5: Let's break that down a little bit. Diana Rossetto-Pena, Consumer
• 19:23
  Speaker 5: Staples Analyst for Bloomberg Intelligence. She joins us live here
• 19:26
  Speaker 5: in studio. What do we hear from our friends at Smuckers?
• 19:29
  Speaker 9: Yeah, so the biggest surprise was volume. At the beginning
• 19:32
  Speaker 9: of the year, management entered the year as a, I
• 19:37
  Speaker 9: would say, conservative mode. They still expect volumes to remain
• 19:43
  Speaker 9: relatively flat for the year compared to the 1% decline
• 19:47
  Speaker 9: that they experienced.
• 19:50
  Speaker 7: Previously. So, you know, it wasn't just one product.
• 19:54
  Speaker 9: It was an over, you know, gains all over the board,
• 19:58
  Speaker 9: like Uncrustables, Coffee, you know, Meow Mix, all were contributors
• 20:05
  Speaker 9: to the volume growth.
• 20:09
  Speaker 5: What do they say about their kind of longer-term top-line growth?
• 20:12
  Speaker 5: Is this a GDP-type story? Is it one of those
• 20:15
  Speaker 5: companies where you look at consumer products and staples and
• 20:18
  Speaker 5: things like that? Is that kind of where the market is?
• 20:21
  Speaker 9: So, yeah, that is the benchmark, I would say. In
• 20:25
  Speaker 9: the past few years, these companies have tried to compensate
• 20:29
  Speaker 9: with innovation, premiumization of their products, so they have an
• 20:35
  Speaker 9: argument for a better market. pricing compared to what you
• 20:41
  Speaker 9: will normally follow through GDP. So I would say brand
• 20:46
  Speaker 9: equity has been playing a big part of sales growth,
• 20:51
  Speaker 9: not only for Smucker, but for all of these companies.
• 20:54
  Speaker 9: It seems that while Americans are complaining about basket pricing,
• 21:01
  Speaker 9: they're still going after their favorite brands.
• 21:03
  Speaker 1: The stock is up.
• 21:04
  Speaker 5: 3.5% today. It's up 33% year-to-date, a 52-week high. I
• 21:09
  Speaker 5: haven't looked at the graph. It's probably close to an
• 21:11
  Speaker 5: all-time high.
• 21:13
  Speaker 2: Why?
• 21:14
  Speaker 7: It really, it seems that- It's not an AI story,
• 21:17
  Speaker 7: is it?
• 21:18
  Speaker 4: No.
• 21:19
  Speaker 9: I mean, they do some type of AI for their
• 21:22
  Speaker 9: products and stuff, so for marketing and stuff like that,
• 21:25
  Speaker 9: but it's not, it's definitely not that. It seems that
• 21:28
  Speaker 9: they have been trimming some portfolio and getting rid of
• 21:32
  Speaker 9: the least performing brands, and that seems to be working
• 21:36
  Speaker 9: in their favor.
• 21:37
  Speaker 5: So what's the Industry saying now that we've got several
• 21:40
  Speaker 5: years of evidence of the GLP-1s. Can we look back
• 21:44
  Speaker 5: and say it has had an impact on these consumer
• 21:47
  Speaker 5: staples companies, these food companies, or not so much? What
• 21:50
  Speaker 5: do we know?
• 21:51
  Speaker 7: I would say so.
• 21:52
  Speaker 9: Penetration for GLP-1 products have been increasing significantly, I would say,
• 21:57
  Speaker 9: in the past year. People seem to be a little
• 22:00
  Speaker 9: bit more inclined to try them. PepsiCo actually said that
• 22:05
  Speaker 9: they were going to not pay for GLP products.
• 22:12
  Speaker 7: Through their insurance. Really? That was a thing that we
• 22:16
  Speaker 7: saw yesterday.
• 22:17
  Speaker 2: Wow.
• 22:17
  Speaker 5: Yeah.
• 22:18
  Speaker 9: Yeah. Especially from PepsiCo. So that's a little on the nose.
• 22:23
  Speaker 9: But definitely they have been some headwinds. And obviously with
• 22:30
  Speaker 9: everything that these companies have gone through, it seems that
• 22:33
  Speaker 9: they try to position themselves in terms of permissible indulgence.
• 22:38
  Speaker 9: So you see more calorie-dense products having a smaller packet
• 22:43
  Speaker 9: or some formulation or some marketing straight up.
• 22:49
  Speaker 5: What are these food companies doing with their marketing? Are
• 22:52
  Speaker 5: they going just all digital, all social, or are they
• 22:54
  Speaker 5: still buying a 30-second spot on a network TV show?
• 22:59
  Speaker 7: Yeah, I would say a little bit of everything.
• 23:02
  Speaker 9: They seem to be a little bit more inclined with marketing. social, particularly,
• 23:06
  Speaker 9: for example, for Café Bustelo and, you know, going back
• 23:10
  Speaker 9: to Smucker, they seem to be going through the TikTok
• 23:15
  Speaker 9: audience by formulations of your iced coffee, and that seems
• 23:19
  Speaker 9: to increase demand for their.
• 23:22
  Speaker 7: Products as well.
• 23:22
  Speaker 9: So it's more of like a show and tell, and
• 23:25
  Speaker 9: they actually rely a lot on social media for that.
• 23:29
  Speaker 4: Interesting.
• 23:30
  Speaker 9: Yeah.
• 23:30
  Speaker 5: So I guess gone are the days of just relying
• 23:32
  Speaker 5: on magazines, newspapers, you got to go where the influences are.
• 23:37
  Speaker 5: When you talk to your clients, what's the stock they're
• 23:40
  Speaker 5: most interested in these days?
• 23:43
  Speaker 9: Well, I would say Smucker seems to be a really
• 23:50
  Speaker 9: interesting story, as well as Hershey.
• 23:53
  Speaker 7: And Campbell seem to be among the most asked.
• 23:57
  Speaker 5: Those are some diehard, diehard brands for sure, American brands
• 24:01
  Speaker 5: that have been around forever. How are they all trading
• 24:05
  Speaker 5: this year? I mean, Smuckers is doing great, but how
• 24:08
  Speaker 5: about everybody else?
• 24:09
  Speaker 9: Well, I would say that there seems to be, you know,
• 24:13
  Speaker 9: within range, you know, for I would say for Smucker,
• 24:17
  Speaker 9: that seems to be an outperformer compared to the others.
• 24:22
  Speaker 7: Yeah.
• 24:22
  Speaker 9: And it is, again, because of that premiumization, that kind
• 24:26
  Speaker 9: of volume growth that seems to be the driver for
• 24:28
  Speaker 9: most of the, you know, metrics for these companies, your
• 24:32
  Speaker 9: ability to show volume.
• 24:34
  Speaker 7: That's that's the play.
• 24:36
  Speaker 3: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
• 24:41
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