Bloomberg Businessweek Weekend: November 14th, 2025

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Speaker 1 (00:00):
Bloomberg Audio Studios, Podcasts, radio News.

Speaker 2 (00:08):
This is Bloomberg business Week Daily reporting from the magazine
that helps global leaders stay ahead with insight on the people, companies,
and trends shaping today's complex economy. Plus global business, finance
and tech news as it happens. The Bloomberg Business Week
Daily Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio.

Speaker 3 (00:31):
Hi everyone, Welcome to the Bloomberg Business Week Weekend Podcast.
This week, the longest recorded US government shutdown finally came
to an end after forty three days that included disrupted
flights across the country and delayed food aid for millions.
In fact, one in eight Americans congressional Democrats, eight of
them in the Senate, crossed the aisle to end the

(00:52):
federal shutdown, a move some crid as the Democrats caving
to Republicans. We get into that a little later on.

Speaker 4 (00:58):
Then, as we await the first drop of US government
economic data, is things get back to normal in Washington, DC.
What's become normal in the US is a K shaped
economy where those at the top are doing well and
those at the bottom are not. And for those struggling
Americans they are already in recession. That's according to Peter Atwater,
who started talking about the k shaped economy five years ago.

(01:21):
He's the subject of a Bloomberg Big Take this week.
We're gonna hear from him a little later this hour.

Speaker 3 (01:25):
Also we get reads on the consumer, the business environment,
the global economy, trade, and more as we catch up
with a few members of the C suite, including the
CEO at Magna International.

Speaker 4 (01:35):
End Plus, in our second hour, the case against social
media and its dangerous algorithms determining which ultra processed foods
are actually bad for you spoiler alert, it's most And
then Carol SIPs on some wine in the responsible way
courtesy of the CEO of Maisson Mirabau very nicely said,
by the way, thank you, I won one year of French.

Speaker 3 (01:56):
It's actually high school paid off.

Speaker 4 (01:57):
Well, thank you, miss Halsey.

Speaker 5 (02:00):
So sweet.

Speaker 3 (02:01):
All of that to come, we begin with Washington, the
nation's capital, and the longest government shut down on record,
finally finally coming to an end.

Speaker 4 (02:09):
Writing about the actions by some Democrats to give Republicans
the votes to bring it all to an end, why
the vote was surprising, and why it wasn't for the
Democrats is Josh Green Bloomberg BusinessWeek national correspondent. Josh is
the author of a couple books, including the New York
Times bestseller Devil's Bargain, Steve Bannon, Donald Trump, and The
Storming of the Presidency Democrats Josh crossing the aisle to

(02:29):
end the shutdown? Was it a quote terrible mistake? A
Senator Elizabeth Warren told reporters. Governor Gavin Newsom called it
quote pathetic? Or is this smart ahead of the min terms?
This is kind of a narrative that's emerging now. Republicans
will own they see a premiums going up that'll affect
a lot of their constituents.

Speaker 6 (02:47):
What's the chatter?

Speaker 7 (02:48):
Well, I think the overwhelming sentiment of the Democrat grass
roots is anger and confusion that, you know, Democrats who've
just come off the sweeping election victory, who polls showed
were not being blame for a shutdown that they in
fact had caused. Why they would suddenly decide to throw
in the towel without really much much warning.

Speaker 8 (03:08):
I think is upset an awful lot of.

Speaker 7 (03:09):
People, mostly at the grassroots level, but also from a
lot of the politicians, especially ones like Gavin Newsom, who
maybe have their eye on the White House and are
especially attuned to grassroots sentiment. But I think that there's
another kind of quieter realist wing of the party that
looked in the mirror and said, look, there's really no
clear winning exit strategy.

Speaker 8 (03:30):
We've got to pull the plug at some time.

Speaker 7 (03:32):
So let's do it now before things get really bad
for federal workers, before the entire US airline industry grinds
to a halt, maybe on Thanksgiving weekend, and just turn
around and decided to kind of rip off the band aid.
Now that's caused a lot of anger, but it's not
necessarily clear that long term that this is going to be.

Speaker 8 (03:49):
The wrong move.

Speaker 3 (03:50):
What's that like thinking or strategizing about? Like, Okay, what
party gets blamed? And you know, I was thinking about
this when I was on a TSA line. I mean
the government shutdown and got at those screen screens and
who do I see Christy Nome, you know, playing over
and over on a loop, And I just wonder the
general public, like who do they blame? And so was
there a feeling that it was the Republican shutdown? Was

(04:13):
it both the parties? How was it playing out?

Speaker 7 (04:16):
I mean, it's interesting dynamic. Over the last like three
or four government shutdowns. What's happened in pretty short order
is that services start shutting down, national parks start shutting down,
you have a problem with airlines. Everybody says, well, gee,
who's to blame. And it's pretty clear whichever party shut
down the government gets blamed by the other party because
everybody in that party is on the same page, they
can kind of point to the same bad guy. I

(04:38):
think that the tricky thing this time around was that
President Trump didn't really seem to be all that interested
in the shutdown for like the first two or three weeks.
He was much more interested in knocking down the East
Wing in the White House, building up his new ballroom,
And so you had this kind of mixed message from
Republicans where some Republicans in Congress were trying to run

(04:59):
the ordinary place book of blaming Democrats, but Trump wasn't
really on that page, wasn't really doing that, and it's
a much more interesting exciting story to write about this
grand new ballroom that's apparently going up in the White House,
and so nobody really focused on who was to blame.
And when things started going wrong, they just kind of
naturally blamed the president and the party that controls Congress.

Speaker 3 (05:20):
You know, Josh, I do wonder, like, did things like,
you know, tearing down the ballroom, showing off a new
marble bathroom at the White House that the president has,
having a great Gatsby party for Halloween exactly. That was
really over the top if you saw some of the images.
And I don't want to be political, but I do wonder.
This is a president who said, like, I am here

(05:42):
for you, and I'm going to take actions that are
here for more Americans. That's you know, at the same time,
we're talking about one in eight who aren't going to
get food stamps because of the government shutdown. So I'm
just curious how that plays politically. Was that getting noticed
that kind of gag.

Speaker 7 (06:00):
It definitely was. I think it does two things. I mean,
going back to sort of that, you know, how a
party deals with a shutdown. If all Republicans had been
unified from day one, including President Trump saying, look, the
Democrats did this, it's their fault, blame them, I think
things would have ended much earlier. But like as we said,
that didn't happen. Trump was more concerned with other things,
and when he did begin to get upset about the shutdown,

(06:22):
instead of blaming Democrats, he started getting angry at Republicans
and told them they ought to eliminate the filibuster, which
would be another way to open the government. But it's
not something that Republicans wanted to do. And so as
this fight was going on, you do see these images
on TV on social media of the redecorations in the
White House, of these glitzy parties at mar A Lago. Meanwhile,

(06:43):
you know, food stamps are being frozen. The White House
is out saying no, we don't want to pay these
during the government shutdown. Democrats and states are having to
take them to court. So it really did create a
political problem that polls show pretty clearly was hurting President
Trump's approval rating and hurting Republicans and Congress. And that's
one reason why Democratic kind of grassroots and a lot

(07:03):
of lawmakers were so upset that moderates in their caucus
decided to pull the plug in the shutdown early because
they didn't think it was hurting Democrats.

Speaker 8 (07:11):
They thought it was hurting their opponents.

Speaker 4 (07:12):
I think it was Mike Allen and Axios who wrote
a commentary about how it could be a challenge for
the Trump administration to present themselves as fighting for the
little guy or fighting for the middle class or the
working class if they're not focused on the ACA subsidies
or on funding SNAP during this time. I wonder if

(07:33):
that message will resonate with voters going into the midterms
in twenty six.

Speaker 9 (07:37):
Yeah.

Speaker 7 (07:38):
I think that's a really smart point. I think it
might resonate even sooner. I did a Business Week newsletter
just kind of my gloss on the shutdown and what
was and what it was not accomplished. And I do
think that one of the things that Democrats accomplished, even
though so many of them are unhappy about the way
things ended, They've added real salients to this issue of

(07:58):
rising Obamacare premiums. Originally, Democrats said were only going to
reopen the government if Trump and Republicans agree to fund
these provisions, it will help extend subsidies, keep insurance affordable.

Speaker 8 (08:10):
Republicans don't want to do that.

Speaker 7 (08:11):
They didn't do that, so even though Republicans are Democrats
weren't able to win that as a concession to reopen
the government. It's been on the front pages of the newspapers,
it's been in the news. I think the American public
is very aware that these premiums are about to rise,
and I think partly because of the spotlight that the
shutdown shown on this issue. If and when those premiums

(08:33):
do rise, the American people are largely going to bring
Trump and Republicans and essentially it's going to be up
to them to kind of find the solution, which isn't
exactly how Democrats wanted things to end, but it could
turn out to be that public pressure in the event
of these rising premiums actually does produce some sort of
solution that Democrats could get behind.

Speaker 3 (08:53):
So, you know, Josh, when the Republicans and the Democrats
that went over to the other side are basic, you know,
broke away and got this Republican promise to vote on
extending Obamacare insurance premium credits by mid December. So politically
it will happen or could Republicans back out.

Speaker 7 (09:13):
I think it's very unlikely to happen. I mean, Republicans
have been adamant that they're not going to vote to
support these things. So you can have a vote, the
vote will lose, and that will probably be the end
of it, at least in the short term. If the
vote were to win in the Senate, it would go
to the House houses controlled by Republicans, and they've said
they might not even take it up. But eventually, if
insurance premiums do go up and just ordinary people begin
to react badly to that, including Republican districts, that could

(09:36):
put pressure on Republicans in Trump to finally have to
do something about it.

Speaker 3 (09:39):
And there's a record right of people of how they voted.

Speaker 7 (09:43):
Absolutely yeah, And ultimately, look, Republicans control Congress, they control
the White House.

Speaker 8 (09:47):
The buck stops with them.

Speaker 7 (09:48):
If there needs to be a solution, they're ultimately going
to have to come through and deliver one.

Speaker 4 (09:52):
That was Josh Green, Bloomberg BusinessWeek National correspondent.

Speaker 3 (09:55):
Now, if the government reopened this past week, all eyes
now on the Bureau Labors, Statistics and other statistical agencies
and when they will release key economic data. Some information
on that tim definely started to come out throughout the
past week about you know, when and what we might
be getting.

Speaker 4 (10:11):
In the absence of that data, we've relied on a
lot of private data for reads on the US economy. Meantime,
we've also seen earnings and revenue growth for many US companies,
wealthy consumer shopping and US consumer sentiment that tumbled to
near the lowest on record as the government shut down
weigh on the economic outlook and high prices soured views
about personal finances.

Speaker 3 (10:31):
It's that case shaped economy, right, of some doing well
in some not. I mean, just this past week, car
Loans have gone from the safest consumer credit products to
among the riskies over the last fifteen years as delinquencies
rose more than fifty percent fifty percent driven by soaring
car prices and rising interest rates. So that is one
of the troubling signs Tim, in this economy.

Speaker 4 (10:50):
Yeah, it's the K shaped economy that we've been talking
about for years. Also talking about it for years. Peter Alwater,
president of Financial Insights and Adjunct Lecture of Economics at
the College of Willing and Mary, he started talking about
the K shaped economy that was during the pandemic.

Speaker 10 (11:04):
Long time five years ago at least, so, Carol, it's
been more than five and a half years since I
first started writing about the K shaped economy, and I
think what's happened is that for those at the top,
the financial markets have been extraordinary. Meanwhile, for those at
the bottom, things have just continued to deteriorate, and now
compounded by the cumulative effect of inflation on particularly food.

(11:29):
You've referenced the car Loan delinquencies, and that's another sign.
And I think that those at the bottom have this
heavy weight, whether it's childcare, education, housing, it feels mighty
heavy to those at the bottom. And I think at
this point we really don't have a single economy in America.

(11:50):
We have two very distinct experiences.

Speaker 3 (11:52):
So are we becoming peter An economy a country where
there are a few rich people who are living in
a poor country.

Speaker 10 (12:04):
I would describe it, yeah, as a handful of folks
who feel invulnerable in a mounting sea of despair.

Speaker 6 (12:11):
Hasn't it been like that for years?

Speaker 11 (12:12):
Though?

Speaker 4 (12:13):
What's different about right now? I remember having the same discussion,
not with the same data, but in graduate school in
a class about how in the developing world you start
to see economies such as this, and that was that
the professor was arguing where we were headed in the US.
It's been like this for quite some time.

Speaker 10 (12:33):
The gap has existed, but not to this extreme. And remember, Tim,
there used to be a sense that there was a ladder,
a way to progress from the bottom up through the
middle class and into the upper middle class and then
into the truly wealthy. And for those at the bottom,
that ladder's gone. There are no more rungs that enable
them to go up. And I think we have fallen

(12:55):
into a more of a cast system that, to your point,
looks less like America that many were promised, and more
like a lot of the developed nations around the world.

Speaker 3 (13:07):
So when does it show up, Peter, Because those who
are at the lower economic rung, if you will, when
it comes to the US economy or having troubles and
so they're not going to Chipotle or they're not going
to Kava and a few other places. But when does
this really start to show up in our economy in

(13:28):
the financial markets? Just curious.

Speaker 10 (13:32):
So in terms of consumer sentiment, it showed up almost
immediately after COVID, when those white collar workers were able
to pivot to work from home, their confidence was restored.
They also got boosts from monetary and fiscal policy. And
for those at the bottom, those stimulus chicks really just

(13:52):
went through them to their lenders, to their landlords. And
so this has been ongoing for a long time, and
I wouldn't underestimate the compounding effect that time has for
those at the bottom, and I think it's showing up
in the affordability message that you're seeing now politically, all.

Speaker 3 (14:10):
Right, The other part I want to get to is
ask you about is the upper part of the K
when you look at this economy, is it kind of fragile,
even perhaps potentially for those who are even wealthier in
this economy?

Speaker 10 (14:25):
I think so, And I think that what there's been
lots of discussion about the circularity within the AI system.
I think that circularity exists more broadly between the wealthy
AI and you see that in first class travel, you
see that in a lot of the luxury experiences. And

(14:45):
we used to say that the economy is not the markets,
but at the upper end, the markets and the economy
are now indistinguishable. And we need to appreciate the fragility
of over financial markets. If I look at the amount
of speculation going on through options and the price price

(15:07):
to earnings multiples, there are lots of signs that this
is a market that feels extraordinarily confident, and ironically, that's
where the fragility ultimately rests.

Speaker 4 (15:17):
What about this idea of the meritocracy, or the idea
that people actually in this day and age have a
harder time moving in and out of social strata. The
American dream is this idea that anyone can come to
the United States and succeed regardless of where they start.

(15:37):
You argue that that doesn't exist as much anymore.

Speaker 10 (15:41):
Why is that so wealth accumulation happens more slowly? You
look at, for example, the fact that it now takes
to age forty to be a first time home buyer.
It wasn't that long ago when that age was twenty five,
and so the wealth accumulation potent for this new generation

(16:02):
is far less than the generation before, assuming that housing
is a means for accumulating wealth, and so what you're
seeing is, particularly with things like childcare and healthcare, the
burden on those families starting out is substantially higher than
the one certainly I experienced and likely the one you

(16:22):
started with.

Speaker 3 (16:25):
All right, so how do we fix this? Because it does.

Speaker 4 (16:28):
Feel like you have three minutes, Peter, fix the pot.

Speaker 12 (16:33):
No.

Speaker 10 (16:34):
I think that policy makers need to be really attuned
to this. I think they shouldn't ignore the message of
a affordability that came out of the New York mayoral election.
What we're seeing is not a movement to the left
as much as a movement down. And I think policy
makers really don't appreciate how purple the bottom of our

(16:57):
economy is, and recently purple with rage. So we need
to address their shared vulnerability, their despair, because ultimately history
shows that that when it becomes widespread, those with nothing
to lose will gladly go after those with everything to lose.

Speaker 4 (17:18):
Do policymakers actually have the tools in a divided country
to fix this, I.

Speaker 8 (17:24):
Think they do.

Speaker 10 (17:25):
I think it requires them to recognize that it is
in the best interest of both political parties to address this,
because we know that anti establishment candidates become more popular,
we know that progressive candidates become more popular, and so
it behooves them to pay attention to this and to

(17:47):
address it. And to be clear, those at the bottom
are not looking for a handout. They're looking for a
hand They want to see job training, They want to
see opportunities that allow them to move up. We saw
from the soybean farmers and the ranchers. They don't want
a government handout. They want their products sold. They want
to have a real meaningful purpose in this economy.

Speaker 3 (18:10):
Peter, I'm thinking of the big take that you do
with Sara Holder that's on the Bloomberg right now, and
I guess they were asking. She was asking along with
Katerina Sariva, talking about this case shaped economy not just
being kind of the same thing as like measuring inequality.
And I'm just thinking about a response that you gave

(18:31):
and you said, it's not just inequality in terms of
an economic sense, it's inequality multiple dimensions at once. Because
for those at the bottom, they have scarcity and education
and healthcare, in childcare, in job opportunity, they have what
you termed stacked vulnerability, where the economic piece is just
one more thing. And at the same time, those at
the top have an overabundance in everything, power, money, influence,

(18:55):
and so it's become very difficult for those at the
bottom to ignore what's happening around them. It's also something
that has accumulated over years. It feels like whether there
were Republicans or Democrats in the White House are in
charge in Congress, So is it going to take time
for us to get this fixed, or do the people
like I don't know you know. I had a brit

(19:15):
say to me, you're a young nation. You're going to
have some kind of uprising, a revolution, Like, I don't know,
how do you I understand policymakers going at this, but
it seems like it's a big task.

Speaker 8 (19:28):
Yeah.

Speaker 10 (19:28):
I think those at the top ignore the impatience at
the bottom. Time moves very slowly when you lack confidence.
And I also think that those at the top are
largely blind to the human experience at the bottom, and
at the same time, those at the bottom are all
too aware of the abundance that exists above them.

Speaker 4 (19:50):
Thanks to Peter Atwater, president of Financial Insights and adjunct
lecture of Economics at the College of William and Mary.

Speaker 3 (19:56):
Coming up, how one auto parts manufacturer is faring under
the president tariffs.

Speaker 4 (20:00):
The CEO of Magna International is next. You're listening to
Bloomberg Business Week. This is Bloomberg.

Speaker 2 (20:08):
You're listening to the Bloomberg Business Weekdaily Podcast. Catch us
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Speaker 3 (20:22):
When Magna International reported earnings on Halloween, shares. The autoparts
manufacturer rallied as much as seven percent inter day in
response to third quarter sales and adjusted EPs beats. Magna
management also raised its fiscal year sales forecast thanks to
strengthen North America and China. There was a lot going on.
Company based in Canada, biggest automotive supplier of North America.

(20:43):
Everything from automated driving control modules, powertrains, lighting mirrors, complete
engineering systems, so much. It is a great, great, great
read on the auto economy.

Speaker 4 (20:54):
Back with us is Swami Coda Geary, president and CEO
of nearly fourteen billion dollar market cap autoparts maker Magna International.
The stock up close to eighteen percent so far this year.
I want to start with kind of where we left
off when we spoke to you back in April. This
was just after the president's so called Liberation Day tariffs.
You liken them and the additional cost to drawing upon

(21:15):
the playbooks from past rotating UAW strikes, COVID, the Great
Financial Crisis, the Chip crisis all rolled together.

Speaker 6 (21:23):
We were pretty.

Speaker 4 (21:23):
Shocked about those comments because you said it was big.
Is it still that big.

Speaker 6 (21:28):
Of an impact? Has it been that big of an impact?

Speaker 11 (21:30):
Yes, there has been a lot of dynamic challenges in
the industry, as you know, and Benny spoke to me
last year. It was fresh, you know at that time.
As we sit here and look at it, I think
our annualized tariff impact is roughly in the range of
two hundred million. But we continue to work with our team,
with our customers, with our supply base, and mitigating as

(21:53):
much as possible, you know, adhering to the USMCA compliance.
All in all, I think we have been able to
with a lot of self help, a lot of work
with our customers, we've been able to bring down that
impact to roughly ten bass points, which means about thirty
million for Magna this year.

Speaker 3 (22:13):
So I will say our BI team reacted to our
Bloomberg intelligence team, Swamy reacted and they said they believe
that your company's continuous cost cutting and operational excellence could
further release margin gains in twenty twenty six. And they
talk about in the US major customers are benefiting from
a more profitable sales mix, with higher sales and pickups

(22:33):
and SUVs offsetting lower EV production, which should enhance Magnus
program economics for upcoming twenty twenty six launches. Do they
have it right?

Speaker 11 (22:43):
Yes, they do. There's a lot of hard work and
thanks to the team, there's been a lot of traction
in our operational activities, including some of the activities that
you men mentioned cost restructuring, optimizing our operations. We have
really worked through about forty divisions, inter of restructuring, consolidation,
bringing things together, and when the mix in the volume

(23:06):
becomes stable and it comes through, you see profitability going
to the bottom line, and that has been our focus.
Cost reduction, margin expansion, and free cash flow generation. We've
talked about one hundred and fifty basis points over the
last three years, and I'm glad to say we have
an additional visibility of thirty five to forty basis points

(23:27):
going into twenty twenty six. So this is a journey.
It's never going to stop. In an industry that we
need to constantly work on improvements. We call them continuous improvements,
and we're starting to see the result of that.

Speaker 3 (23:39):
But you did talk about demand destruction the short term
when we talked with you in April, right after Liberation Day.
How has it played out as bad as you expected?
And where are we today? Your top customers are who's
who of the global auto industry. So where are we
today in that demand destruction? Are we done?

Speaker 11 (23:56):
I wish I could have that crystal ball, But you know,
the way I look at it is we peaked out
as our industry in North America about seventeen and a
half million units. Interestingly, I was looking at the data
go back twenty years. In two thousand and four two
thousand and six time frame, North American production volumes were
somewhere between fifteen to sixteen. We are still at fifteen

(24:17):
to sixteen million units today. I think the volumes held
up this year, but I always like to stand back
a little and see where it was Magna. Magna twenty
years ago was a twenty billion dollar company. Today we're
a forty billion dollar company. And it's the result in
the efforts of the team to continue to gain CPV
and to diversifire customer base, and that's where our focus

(24:40):
is right And to your point, though, I hope this
is the trough. If you look at the average age
of the fleet, it's pretty high. The inventories are pretty normal.
So I like to say, you know, there is an
elasticity of demand that's going to come back looking forward,
if there is no more externalities like we have had
in the last four years.

Speaker 4 (25:01):
Your company is based in Ontario. We are curious about
the US and Canada trade negotiations or lack thereof. Given
the impasse between the US and Canada, how is that
affecting your industry and you specifically.

Speaker 11 (25:17):
Yeah, As you know, auto industry is very interdependent ecosystem
and it's pretty complex in North America, so it has
been challenging. But I would like to look at Magna
really as a global company. We have tens of thousands
of people in Mexico, in Canada and in US, and

(25:39):
obviously we are following the footprint of our customers, looking
at the economics, looking at transportation, looking at logistics, and
that is the competitiveness that ultimately lets you be the
player that you are. Right, So the focus has been
on it. Whatever the policy is, If there is certainty
and visibility to the policy going forward, I think it's

(26:00):
just going to be a tailwind to everybody, the oidiums
and the supply base in all but Swami.

Speaker 3 (26:06):
Is it broken the US Canada? I mean it's been
so intertwined really, the North American global auto supply chain.
But is it, especially the US and Canada, is it
changed forever?

Speaker 11 (26:22):
Again, I'm not an international trade policy expert speaking from
but you have a.

Speaker 3 (26:27):
Great advantage and a great window on how it has
worked and how it feels today.

Speaker 11 (26:34):
It's definitely been strained, right, There's no question about that.
But I've lived in this industry for twenty six years,
and what we're talking today is going to impact maybe
twenty seven or twenty eight. So we're always looking at
what we are doing today impacts three or four years
down the road. What we are doing today has been

(26:54):
planned and decided three or four years ago, So I
tend to think a little bit in longer cycles.

Speaker 10 (27:00):
You know.

Speaker 11 (27:01):
I'm still hopeful that the policy is going to get
to a point where it's mutually beneficial to everyone the president.

Speaker 4 (27:08):
In the past, the President of the US has talked
about his back and forth in his conversations with executives
at North American auto companies.

Speaker 6 (27:17):
Have you had conversations with the President or his team,
We have.

Speaker 11 (27:21):
Had obviously a seat at the table in being able
to communicate facts that possible impacts, the challenges of the
industry and what could benefit I always say we are
able to give an opinion one of the opinions. I
hope it's a dot on the chart. And definitely we
have talked to all three regions right expressing what is

(27:42):
the jobs that we have, what is the investments that
we have made, and how it could impact r Definitely,
that is the conversation that's always ongoing.

Speaker 3 (27:50):
Hey, Swammy, one thing we wanted to ask you the
EV retrenchment that we continue to talk about here at Bloomberg,
how is it affecting your business and the auto industry
in general. You've got Fordkinson during killing the F one
fifty Lightning, Stilantis killing the ram EV, and GM taking
a one point six billion dollar impairment charge on its
EV assets. That feels pretty chilling. How is that impacting

(28:13):
you guys?

Speaker 11 (28:15):
In the past, we've always looked at EV and if
you look at some of the comments that we've made,
I think we were a little bit conservative. But definitely
the North American EV penetration has had an impact on us.
We came back and talked about the impact of our
revenue going forward in the August I think of twenty
twenty four. But the key thing has been how we've

(28:38):
been able to pivot. We had our peak capex spend
in twenty three twenty two, we got back to the
sales to capex ratio. Shows our agility and being able
to get back, and you know, look at optimizing how
we can re use some of the capital with the
help of the customers and so on and so forth.
But overall, EV, I think in other regions continues and

(29:00):
as a global company, we see that continuing in China
and Europe. But when it does come back, and we
still believe EV is a secular trend, that take rate
is very different than what we all expected a couple
of years ago. But with the investments already there, with
the development that's behind us, and our ability to hit

(29:20):
whether it's an internal combustion engine or a bav or
a hybrid, that flexibility in our product line has helped
us whether the storm pretty well. And I know, I
think that's what we need to continue to do going forward.

Speaker 4 (29:34):
I know that the decisions you make now are decisions
for four years from now. So are you changing product
plans to develop more gas powered vehicles or it helps
make supplies for more gas powered vehicles?

Speaker 11 (29:46):
Yes, Tim, I think we have had a lot of
content in obviously the internal combustion engine platforms, right, and
as some of these programs are delayed or pushed out,
we continue to get leverage on the existing programs and
we continue to win. The other thing to note is
a lot of our products, almost eighty percent of our
product is propulsion agnostic. That means whether a make a

(30:09):
mirror or a door, or a structure or a seat,
we'll make it for whatever propulsion it is.

Speaker 3 (30:16):
Right.

Speaker 11 (30:16):
So, as far as we are flexible and continue to
do that in our processes, we've been able to take
advantage of that of that flexibility and gain market and
continue to grow our revenues.

Speaker 3 (30:28):
So I want me just thirty seconds here, any signs
of a US recession, a global recession. What's the word
that you would use to describe the marketplace right now?
Just quickly?

Speaker 11 (30:39):
Yeah, I think there is signs of stress, I would say,
And obviously that puts us all us on a cautionary foot.
But like I said, from an auto industry, the inventory
seem normal. The average age of the fleet is pretty high,
so we are looking for auto demand not to be
impacted that much. We've still remained very cautious.

Speaker 4 (31:01):
That was Swami Koda Gharri, President and chief executive officer
of Magna International.

Speaker 3 (31:06):
I really do love talking with him Tim, because we
get a great read on the global supply chain. I
mean auto If you think about how many different countries
have been involved, how many times there you know different
parts might be crossing borders. It's really complicated. It involves
a lot of pieces, and he really gets into it
and understands it.

Speaker 8 (31:24):
Yeah.

Speaker 4 (31:25):
He also understands that in order to make decisions for
the next few years, he has to do them now,
So he talks a lot to us about Okay, if
this is what we're going to do in twenty thirty,
this is the decision we need to make right now.
And one area that I think has sold a lot
of confusion, not just for automakers but for the parts
suppliers is the fate of ebs.

Speaker 6 (31:45):
At least here in the AA.

Speaker 4 (31:46):
Love that you went there because this you know, five
years ago they couldn't make evs fast enough. Fast forward
to today, it's like, Okay, well, what does demand look like,
what does adoption look like? And how does that reset
what these auto companies are doing terms of what they're
offering to consumers. And when they're offering it.

Speaker 3 (32:02):
But what's interesting is right he is taking the longer
term perspective. And if you look outside the United States,
I mean China or elsewhere ev you know, people are
buying electric vehicles and so I think he's going on
the assumption that that's the future. And so love getting
his perspective.

Speaker 4 (32:20):
I always love getting his perspective. We also love getting
the perspective of the CEO of Axon Enterprise. He's going
to join us next Yeah.

Speaker 3 (32:26):
It's the company best known for tasers. His stock has
been on fire over the past decade, but it recently.
I got to say the company did catch investors off
guard with earnings and another acquisition.

Speaker 6 (32:38):
This is Bloomberg.

Speaker 2 (32:41):
This is the Bloomberg Business Week Daily podcast. Listen live
each weekday starting at two pm Eastern on Apple car
Play and the Android Auto with the Bloomberg Business App.
You can also listen live on Amazon Alexa from our
flagship New York station Just Say Alexa played Bloomberg eleven thirty.

Speaker 3 (33:00):
Earlier this month. Axon Enterprise, it's a company known for
making tasers, missed analyst estimates for third quarter profit after
it reported higher costs resulting from the implementation of tariffs.
Now that sent it shares slumping twenty percent and extended
trading despite reporting record revenues. So investors definitely turned sour
on that report.

Speaker 4 (33:19):
On top of that, Axon agreed to buy emergency tech
company Carbine. That's a deal valuing the company at six
hundred and twenty five million dollars. Still, it is worth
noting that stock got more than thirty three one hundred
percent since the end of twenty fifteen. That was when
Axon was just seventeen dollars.

Speaker 3 (33:34):
Yeah, it's not a seventeen dollars stock anymore. In fact,
you know, when you look at it on the Bloomberg
this is a stock that now trades at about five
hundred and seventy dollars this share. So, as we said,
it's been on fire, but investors a little bit of
a rethink from more. We caught up with the CEO
of Axon, Rick Smith. He is still feeling optimistic.

Speaker 5 (33:54):
Yeah, I'd say the business is the strongest it has
ever been. You know, it's a public CEO for like
twenty four years now, and this is the fifth time
we've come in reported the business with really strong operating
results and then the stock drops. So I just tell
our people don't even look at the stock price like
it's going to move around for a bunch of factors.
Where we stay focused is building the long term business

(34:16):
and every previous time it's recovered and we're going to
stick with that playbook. And if you look at where
we're growing from some of our new investments, you know,
from counter drone and fuse this real time crime centers
and artificial intelligence, our bookings in those areas are up
almost triple year over year. And then we just announced
two new acquisitions that is our entry into them mission
critical voice space, which we think is going to be

(34:39):
a huge opportunity over the next decade.

Speaker 4 (34:41):
So what are you guys seeing that investors and analysts
are not seeing because the narrative that you have and
your tone doesn't necessarily match the reaction from the street.

Speaker 5 (34:51):
Yeah, I mean part of this excuse me was we
did have a gap operating loss, a tiny one, but
that's largely because we have this very unique stock in
center program we call the Exponential Stock Plan, and all
of our employees participate. And when the stock does really
well and we're hitting our operating targets, stock comp goes up,

(35:11):
and so paradoxically, the better the operating business does, the
more stock comp goes up. And that was the biggest mover.
But if you look at the adjusted EBIT data, if
you take that noise out, you know we managed to
turn in. We've got like seven consecutive quarters over thirty
percent top line growth, and we turned in right at
twenty five percent or twenty four point nine adjusted EBITDA

(35:32):
while maintaining the growth rate. And if you listen to
our president, who used to be the head of sales,
is very close to the customer. You know, he was
pretty bullish on our conference called telling people we think
the fourth quarter is going to be a monster from
a bookings perspective. So we're feeling really good, all right.

Speaker 3 (35:47):
I want to come back to that monster for the
fourth quarter in terms of bookings. But I want to
say that you know, Rick, you get this. You've been
a CEO for a long time. When you're kind of
price for perfection, you know, investors can be like, well
wait a minute, citizens an investor there, Trevor Walsh said
the company had little room for error in its report.
It made investors' concerns about valuations. Stock trades at three

(36:07):
hundred and ninety eight times current earnings or nearly ninety
four times future earnings. You've got a forty seven billion
dollar market cap with projected twenty twenty five earnings of
two point seven billion, So your price to sales or
at least there are in terms of your market app
you know, expectations. I mean, there's there's a lot there
that they expect everything to kind of just hit perfectly.

(36:30):
There's also concerns about tyrists of the government shutdown. There's
also concerns that you just did a second acquisition here
less than two months after you did that agreement to
acquire Prepared, which was an AI powered emergency communications platform.
So why is that valuation or why is that you know,
market cap versus sales justified?

Speaker 5 (36:51):
Well, first, i'd probably get a note from my general
counsel telling me not to use words like monster when
talking about future performance.

Speaker 3 (36:57):
Really, come back, is your phone going off right now
next to you?

Speaker 9 (37:01):
Yeah?

Speaker 5 (37:01):
Yeah, it probably is. But look, the core business is
really strong. Gap EPs is a really hard way to
value the business. Because I talked about the stronger the
operating business, the more gap EPs gets punished with stock
competition to expense, so I think something like looking at
a multiple of revenue is probably a little more like
gonna be a little more instructive. But look, yes, there

(37:22):
we are valued as a growing company that's got to
continue to deliver, and we've been delivering. I think we've had,
like I said, seven quarters of over thirty percent growth
and it's our job as a management team to keep
delivering on that. And you know, if the stock takes
a breather, you know that's kind of outside our control
and you don't have an optimist. It creates a great
entry point for some of our long term investors, and

(37:44):
we're just going to keep chugging away working on the
business to make sure we keep growing. And those two
new acquisitions they're a big piece of it. We made
a very strategic move to move into mission critical voice.
We think AI plus voice now is a very magical
moment and there's a lot of AI hype out there,
but look, ten percent of our core business bookings this
year are going to be on our AI services, so

(38:04):
we're really delivering value to our customers and we see
doing that in nine to one one call centers and
then extending across You know, any sort of mission critical
voice communication is going to be a huge business, and
we found two very complementary businesses. Prepared allows us to
go fast into any nine one own call center, and
then Carbine allows those customers to then go deep and
get out of the business of running all the hardware

(38:25):
and move their entire nine one one infrastructure to the cloud.
And those two together, we think are like chocolate and
peanut butter. It's gonna be a great combo.

Speaker 3 (38:32):
Well, I do want to ask you about those monster
bookings for the fourth quarter. But having said that, tell
us about you said ten percent of the bookings this
year are going to be on AI services. You know
how much is still Tasers like, give us an idea
of what the business is today and kind of where
you guys are positioning it, especially as you take on
these acquisitions.

Speaker 9 (38:49):
Got it.

Speaker 5 (38:50):
Well, I'm terrible in details, but I can tell you
the Taser business is. It continues to grow, even though
it is a fairly mature business in the US, where
the real opportunity is our new Taser ten. For the
first time, we have a weapon that some of our
customers in Europe were saying is a better weapon for
their officers than even a handgun. And if we can
prove that out this winter, we'll be testing it above

(39:12):
the Arctic Circle and heavy cold conditions with heavy clothing,
which is our historically been our Achilles heel. If we
succeed there, we could see Taser really become a driving
force across Europe and the rest of the world outside
of the US. So, even though it's been our core
business from the beginning, Taser we think could be the
growth engine that pulls body cameras, drones, AI and all

(39:32):
our other services right along with it.

Speaker 4 (39:34):
Well, let's talk about those other services, because if I
go back into your earnings and look at twenty seventeen,
connected devices account for close to seventy percent of your
total revenue. Software and services was just over thirty percent
of revenue. If we fast forward to just in recent years,
last year that pretty much flipped, where connected devices was
forty percent and software and services is now close to
sixty one percent of your business. How big does software

(39:58):
and services get?

Speaker 6 (39:59):
What's the old goal there?

Speaker 5 (40:01):
Well, that's sort of like asking me which of my
children is my favorite?

Speaker 11 (40:04):
I love them all, but I.

Speaker 6 (40:05):
Mean one of those has a higher margin. Right, Oh, yeah,
one has a higher margin.

Speaker 5 (40:09):
But when you can do hardware and software together, when
you can do body cameras, drones in card cameras and
the software layer, you can just do so much more
magical things for the customer than if you're a pure
software play.

Speaker 6 (40:20):
Chah.

Speaker 5 (40:21):
Investors love the software revenue and margins, and so do we.
But the hardware is also growing and really contributing. And
it's when you bring it all together that we think
the magic happens. And that's our real competitive advantage.

Speaker 3 (40:32):
Hey, one of the things I want to ask you
about is there's been a bunch of reporting. There's a
story about Flock Safety, which is one of your competitors,
to be fair, and what's interesting is, I guess you
guys are all doing deals with the Amazon ring and
this camera, and you know footage is certainly being shared
with law enforcement, whether it's ice and others. Again, there's

(40:55):
a lot of reporting that's being done about this, and
at the same time some community backlash. So are you
concerned about community pushback as we have more and more
surveillance that is out there and that is a big
part of your business.

Speaker 5 (41:10):
So that's one reason We're really proud of the approach
we take. We have an Equity and Ethics Advisory Council
that is comprised of people from communities of concern, particularly
black and brown communities. Right if we're really talking about
over policing, I think that's the communities of most concerns.
All of our approaches, we run through this ethics review

(41:31):
upfront with people that are n actually very concerned and
skeptical on these issues, and we build safeguards in that
help minimize the risk of abuse while maximize the opportunity. Look,
when a private consumer buys a camera to keep their
home safe, they're buying and not to watch their dog
in their at work. They want to stop criminals from
stealing their stuff breaking into their house. I actually had

(41:51):
a vehicle stolen years ago, and it took me days
to get the video from my home security system to
the police. What we're doing with the ring and by
the way, we encourage open sharing standards like sharing with
our competitors. We openly share on a reciprocal basis with
our competitors. We think this is like doing the right thing.
With all these cameras out there, we should be using

(42:12):
them to deter crime and criminal activity, and we think
you can do that without having to track everybody, you know,
where they go to in their personal lives. We're talking
about detecting dangerous criminal acts and detoring those acts in
the first place.

Speaker 4 (42:26):
So that's with a lot of local law enforcement agencies.
And I'm curious about the conversations that you have at
the federal level with the Department of Homeland Security, for example,
and the way that their officers do or do not
use your products. What are the conversations that you have
at the federal level with DHS.

Speaker 5 (42:43):
Yeah, we certainly work with the federal agencies as well,
and I think where there is some controversy, it's like, look,
people have different perspectives in different states and in different cities,
and our system is built so they're like, hey, if
you are, you know, a city in a very deep
progressive you can choose who and how you share your data.

(43:03):
And look, if you're in a border town in a
red state and you want to be more collaborative with
those federal agencies, one thing I'll tell you it's not
our position to try to dictate how government customers and
that's who we sell to. We're a private corporation shouldn't
be telling government how to how to use their own data.
But what we do is we enable them to make

(43:24):
decisions so those elected officials can be responsive to their
voters and we can be responsive to their communities.

Speaker 3 (43:30):
One last question, two acquisitions in as many months, is
there more to come?

Speaker 5 (43:36):
We're probably going to take a little breather here. We
were not expecting when we went into this. We thought
we would make one acquisition, but we found that these
two were really so complimentary that, you know, sometimes you
got to move quickly when opportunity knocks, and so, yeah,
this was unexpected, but we're really excited about it.

Speaker 4 (43:54):
That was Rick Smith, the founder and CEO of Axon Enterprise.

Speaker 3 (43:57):
And that wraps up our first hour of the weekend
edition of Bloomberg Business Week Daily from Bloomberg radio Head.
In our next hour, the dangers of social media and
the urgent need to protect its youngest users.

Speaker 4 (44:07):
It's all in, Can't look away, The Case Against Social Media,
a Bloomberg original investigation produced and directed by an Emmy
Award winning film duo. Plus many Americans are getting their
calories from ultra processed foods. Not just adults, but kids, too.
How bad is that? And Ken Rfk Junior do anything
about it?

Speaker 3 (44:26):
And he gave up a career in a London office,
moved his family to France to make rose and do
it in a way that is good for the climate
Mother Earth. Will be joined by the owner of Maison Mirabau.
This is Bloomberg Business Week. I'm Carol Messer.

Speaker 4 (44:40):
And I'm Krim Stanovic.

Speaker 2 (44:43):
You are listening to the Bloomberg Business Weekdaily podcast. Catch
us live weekday afternoons from two to five pm Eastern
Listen on Apple CarPlay and Android Auto with the Bloomberg
Business app, or watch us live on YouTube plenty.

Speaker 3 (44:57):
Hen in our second hour of the weekend edition of
Bloomberg Business this week, including the family who moved from
the UK to Provence to live out the dream of
owning a vineyard and being in a mission as well
to make rose wine but in a very environmentally responsible way.
Stephen Kronk. He's the founder and CEO of Maison Marabou.
He was back to talk wine, regenerative farming and so

(45:18):
much more. And well we may have.

Speaker 4 (45:21):
Sampled a little bit, Hey, nothing wrong with that.

Speaker 3 (45:23):
Nope, it was Friday, wasn't it.

Speaker 4 (45:25):
It was I think it was. It was definitely Friday. Well, okay,
so the wine not ultra process, but we also did
speak about ultra process foods. This is a danger to
our bodies and it's what the majority of Americans eat,
yet not all are unhealthy. Gait what Yeah, we're going
to explain.

Speaker 3 (45:41):
All right, I'm glad we're going to do that. Hey,
first up this hour, we do want to highlight a
Bloomberg Original investigation that exposes the real world consequences of
harmful social media algorithms. It is Can't Look Away the
Dangers of Social Media. It is a documentary that follows
a team of lawyers taking on the big tech giants,
advocating for families whose children have been deeply impacted by

(46:03):
social media. Now, the original reporting of Bloomberg News investigative
reporter Olivia Carvell is throughout this film, but there's a
lot more reporting too as well. The Bloomberg original investigation
exposing the real world consequences of harmful social media algorithms.
These companies have been gaslighting us for years.

Speaker 13 (46:19):
This is all about money.

Speaker 4 (46:21):
The purpose of all commercial adventures is to create a demand.

Speaker 3 (46:26):
Our children are the casualties we need to take back
the power from these companies. They've created a dangerous situation
and then manipulated these gives.

Speaker 10 (46:35):
They know the levels of addiction, sexual abuse, they know
the levels of suicide.

Speaker 9 (46:41):
They're not showing our kids what they want to see.

Speaker 14 (46:44):
They're showing you what they can't look away from.

Speaker 3 (46:46):
And that is the Bloomberg original investigation Can't Look Away,
the Case against Social Media, which is now available across
Bloomberg platforms. Perry Pelts and Matt O'Neil are the directors
and producers of the documentary and they join us here
in studio. Welcome, Welcome to both of you. I got
to say we've talked to Olivia a lot about her reporting.
We know you did as well.

Speaker 8 (47:05):
Perry.

Speaker 3 (47:05):
Let me start with you, when you guys decided, I
don't know, I guess when you first started reading her reporting.
What struck you?

Speaker 1 (47:12):
What struck us? And first of all, thank you both
for having us. We really appreciate it. What struck us
is that what's happening is these companies are looking at families,
at kids and parents and putting the blame on them.
This is actually a public health crisis and there's nothing
short of that. And I think that Olivia's reporting really
speaks to the fact that this is an algorithm problem.

(47:33):
It's not a bad parenting, it's not a bad kids issue.

Speaker 9 (47:36):
Yeah.

Speaker 4 (47:36):
The big question that I have as as a parent
and in a world where we're surrounded by this stuff, Matt,
is what is the solution here, because these companies don't
necessarily have the incentive to get us to look away.

Speaker 15 (47:47):
Well, I think the first part of the solution is
exactly what we're doing, which is starting a conversation because
a lot of these things. When we started this reporting,
we had no idea. I had this vague sense that
social media was bad. I'm a parent, I have young boys.

Speaker 3 (48:00):
We talk about it so much like we understand the
problems of social media.

Speaker 15 (48:04):
But what I didn't realize was that social media algorithms
were feeding suicidation to children, body dysmorphia to children. That
kids are being targeted with the absolute worst things on
the internet, and it's relentless unpack that.

Speaker 3 (48:19):
What do you mean by.

Speaker 15 (48:20):
That, Well, what happens is that these algorithms start off
in a way if someone lingers on a sad moment
because they broke up with a girlfriend or a boyfriend,
the algorithm catches that and it goes into what some
people have called a TikTok hole where it continues to
feed more and more sad content that goes deeper and deeper.

(48:41):
There's a whistleblower in the film that actually explains this
in more detail, who used to work at TikTok.

Speaker 3 (48:45):
Well, this is what's interesting, Perry, right, it's not just
about what you search on, it's basically what you linger on.
And the social media companies and you know, we're so
careful when we talk about this because it's alleged and alleged,
but this is where the whistleblowers come in and provide
some insight about what the companies actually knew.

Speaker 1 (49:02):
Now, the whistleblowers as well as internal documentation from these companies,
what they're prioritizing is having kids stay on these platforms engagement.
They're not prioritizing safety. So what happens is they bring
in neuroscientists, they bring in behavioral scientists to actually program
these algorithms so that kids stay on as long as possible,

(49:23):
and thus the title can't look away from their being
fed the material that they actually can't look away.

Speaker 4 (49:29):
From, because that's good for business. Like I said, the
incentives are not aligned with getting kids not to look
at this stuff. If you show them what they don't
want to see, they're going to do something else. We
live in an attention economy. So is there a solution
in a world where the incentives don't match from a
public health perspective.

Speaker 1 (49:45):
The incentives have got to change because we right now,
unfortunately have a legal system in section two thirty that
protects these companies in a profound way. It treats them
as passive pipelines. They are not passive pipelines. Algorithms are
company driven.

Speaker 4 (49:59):
That essentially says section two thirty is that companies these
social media platforms are not responsible for the content that's
on their platforms.

Speaker 1 (50:06):
That's exactly right. They are treating them like bulletin boards,
which is if you go back historically to nineteen ninety six,
before social media was even around, and you had these
sites that were more bulletin board driven, they would say,
it's okay, you can post what you want. The company
is not responsible. But that's not what our lawyers would argue,
the lawyers that we follow in this film, R what's

(50:27):
happening here?

Speaker 3 (50:28):
Matt talk to us about the lawyers because they really are.
You know, when you go up against big tech, you're
talking about high powered, expensive lawyers. This group of lawyers,
it's hard not to be impressed by them. And what
they ultimately figured out was the argument to do here.

Speaker 15 (50:42):
It's an incredible collection of lawyers led by Matt Bergman,
also Laura Marquez Garrett, who was that corner office big
firm lawyer who left because of what she saw happening
with social media and her concern for her own children.
What Matt and Laura and the other lawyers of the
Social Media Victims Law Center came up with is a
novel legal approach which holds the companies responsible under product

(51:05):
liability law instead of under the idea of Section two thirty,
where it's the content is that promising Well, it's made
its way through the courts. Snap in the case that's
followed in the film, tries to get it dismissed with
Section two thirty, and they successfully argue and give these
families a victory, the first of its kind, that they
can be held responsible under product liability law. And they've

(51:28):
moved to discovery and that case is making its way
through California.

Speaker 3 (51:31):
So when we talk about product liability, you know, Perry,
I think of things like the tobacco lawsuits, and this
is what you can think about, right and I think
about so many products that are out there right now
that are facing a lot of scrutiny.

Speaker 1 (51:42):
Well, let's go back to tobacco. To your point, how
about opioids. It is another page out of the same playbook,
which is basically to blame in this case the parents
and the kids, and to not hold these companies into
the companies to say.

Speaker 13 (51:57):
They're abusing good products.

Speaker 1 (51:58):
That is not what we are at least that's not
what the reporting is suggesting. This is very, very different.
These are algorithms that need to be changed.

Speaker 3 (52:06):
I want to just mention because when you do a
documentary and we're at the high level, and as soon
as we have headlines, you have to remember that there
are people, right and you guys tell these stories. Olivia
told these stories. Whether it's Alexander Neville who died because
of taking a pill laced with fetnel that he got
on snapchat. England Roberts died after she copied a strangulation
video she saw on Instagram. It was in her feed.

(52:28):
Jordan de May six hours from initial contact by who
he thought was a young woman but wasn't, but rather
a sextortionist. He killed himself. I mean telling these stories.
I mean in the film, you're in the bedrooms, you're
talking to the parents.

Speaker 8 (52:42):
Matt.

Speaker 3 (52:43):
There's a lot of people that were impact and there
are thousands of cases.

Speaker 15 (52:47):
This is just the tip of the iceberg. And I
appreciate what you were doing there because you're saying their names.
I'll add Mason Eden to that, a boy who died
by suicide after a breakup because he went down one
of these TikTok holes where here was being fed content
that actually told him to blow his brains out with
a shotgun. Actually, these are the shocking sorts of things
that many of us adults don't know are happening on

(53:09):
social media. And these parents are taking the most incredible
tragedy in their lives and turning it into change. Yes,
they're holding these companies liable and suing them. What they're
looking for is not necessarily monetary damages. It's for real
changes to how these companies work. You asked about a
solution before if Instagram can figure out that I want

(53:31):
a lawnmower before I know I want a lawnmower, or
that I need a hair cream to try to grow
my hair back. It can figure out how not to
send content that promotes suicide to children.

Speaker 3 (53:43):
Christ you know what my understanding and you and I
we did a panel here and we did a discussion.
What does is it TikTok in China dot?

Speaker 15 (53:52):
It's a great question because TikTok is owned by ByteDance.
The similar app in China has a shut off time
at night so that children can't access it. Instead of
promoting whatever the kids are lingering on, it actually promotes
practicing your musical instrument and doing math problems.

Speaker 3 (54:08):
Sets Perry, what do you hope people you know, run
with after this film? We've only got about a minute
or so, Lef, what do you hope they do they
ask either their kids or I don't know.

Speaker 1 (54:20):
It's a really important question because we don't want to
scare everybody and not give them anything that solutions oriented
And when Matt's talking about these families, these families want
people to be informed so that they don't have the
same thing happen to them. And the answer is talk
to your kids, tell them about what's going on, keep
social media, phones and apps away from them until at

(54:40):
least high school. Wow, it's the best thing that we
can do, and change needs to happen at a regulatory level.

Speaker 6 (54:45):
Perry, one last one for you.

Speaker 4 (54:46):
You've got a really interesting background in journalism but also
in documentary filmmaking, but also in public health. Your documentaries
have included subjects such as the opioid epidemic.

Speaker 6 (54:56):
Excessive drinking. Is this as big of an epidelt in
your view?

Speaker 1 (55:01):
I think this is a cataclysmic epidemic in my opinion,
because now these companies are targeting our children and that
is different than what was happening in a lot of
these other None of them is good, but this one is.

Speaker 6 (55:14):
Particularly a public health crisis.

Speaker 3 (55:15):
A public health.

Speaker 15 (55:16):
Crisis, yeah, question about it.

Speaker 3 (55:18):
Laire Ai on top of it, and it's just terrifying.

Speaker 4 (55:20):
Thanks to Perry Pelts and Matthew O'Neil, directors and producers
of Can't Look Away, The Case against Social Media, the
Bloomberg original investigation, it's now available on all Bloomberg platforms.

Speaker 3 (55:30):
I have to say, Tim, you know I actually did
a panel with Matt O'Neil a couple of weeks ago
here at Bloomberg for another we did a viewing of
the film, had an audience and then talked with the audience.
But you and I have done so many interviews about
social media misinformation that's out on the platform. You know,
we can go back to elections and political misinformation, but

(55:51):
just so much stuff that's out there, and for a
lot of people, you know, they see it as a
truth or reality. And I think, you know, there's been
reals on social media companies to be responsible for what's
on the platform. With this film, this documentary reminded us
that there is you know, you go back to a
ruling that basically made these companies not responsible for the

(56:13):
content on their platform.

Speaker 4 (56:15):
Yes, section two thirty is what you're referring to. Fry
Peltz talks about it a lot, right.

Speaker 3 (56:18):
The Communications Act of was it nineteen ninety six, I think?
And so what's interesting is that, you know, in an
environment where we are inundated by a digital world and
people spending a lot of time on social media, when
it comes to something like kids, children, teenagers, what can
possibly happen as a result of that content, it does

(56:39):
open up a big question who is responsible for that?

Speaker 4 (56:42):
Well, how would the world be different right now if
these platforms were held good question responsible for what was
actually on their platforms.

Speaker 3 (56:48):
Well, and what they like it too is to tobacco, right,
and when tobacco was kind of be marketed to kids
and trying, the whole idea is get them hooked early,
and the same thing with social media, get them at
least allegedly from some of the inside documents I had
at companies about this idea of kind of you know,
targeting kids because you get a customer when they're young,

(57:10):
they kind of tend to stay with you until they're older.

Speaker 4 (57:12):
Well, I think what a big takeaway from me from
this conversation was misaligned incentives. You know, we report on
these companies each and every day and quarterly. We talk
about the metrics that investors look closely at, the ones
that actually move the company's stock price. Right, it's time
spent on the platform, right, It's users on the platform.
It's not how little did you get young people to

(57:34):
actually use this platform. That's not what investors are judging
them on.

Speaker 3 (57:38):
Well, and it's exactly so.

Speaker 4 (57:39):
They're doing everything they can to get people to spend
more time on the platforms.

Speaker 3 (57:43):
And what's interesting is what they found is that you know,
kids will search for stuff, and what happens is it's
not necessarily what you search on that you get targeted for.
It's what you linger on, how much time you spend
on an individual post, and then the algorithms seem to
kick in, yeah, and then target with you. So you
might have been searching something that was optimistic and all

(58:04):
of a sudden you get something that's kind of dark
and you spend a little bit more time because our
brain is kind of wired to go to those dark things,
and then all of a sudden, you're getting a lot
more dark content. I'm making it very simplistic, but that's
kind of you know here in.

Speaker 4 (58:16):
The US, the safeguards that are put on by the
companies versus in China, and how the Chinese companies or
are required or at least what they do when it
comes to the content on the platforms. Yeah, that watch.
Check out the film exactly.

Speaker 3 (58:28):
Check it out. You can find it on Bloomberg platforms.
It's definitely a must watch if you have kids. Schools
are watching it, they're doing viewing sessions if you will. Anyway,
it's really something that is a must viewing, all right,
you're listening to Bloomberg Business Week. Coming up from junk
on social media to junk on supermarket shelves. Another addiction

(58:49):
worth paying attention to ultra processed foods.

Speaker 4 (58:52):
People want to avoid them, but experts are struggling to
define them. That's next. This is Bloomberg.

Speaker 2 (58:59):
This is Theloomberg Business Week Daily Podcast. Listen live each
weekday starting at two pm Eastern on Apple car Play
and Android Auto with the Bloomberg Business app. You can
also listen live on Amazon Alexa from our flagship New
York station, Just Say Alexa played Bloomberg eleven thirty.

Speaker 4 (59:17):
Here's a stat that may shock you. Americans get more
than half of their daily calories from ultra processed foods,
with salty and sugary items accounting for an even bigger
portion of kids plates. This according to a government study
that was released back in August. This government study ran
from two thousand and one twenty twenty one to twenty
twenty three, and it said that about sixty two percent
of childhood diets come from highly processed foods think burgers, pastries, snacks,

(59:41):
and pizza. This according to the US Centers for Disease
Control and Preventions. Nutrition study, the same foods have a
similar grip on adults, making up about fifty three percent
of the calories that they consumed.

Speaker 3 (59:53):
That's a lot.

Speaker 6 (59:53):
Yeah.

Speaker 4 (59:53):
The question I have is whether or not Health and
Human Services Secretary Robert F. Kennedy can actually make some
headway on this. He said that the u US food
supplies poisoning children. It's a question that I'll post to.
Doctor Juliet Wolfson, Associate Professor in the International Health Department
at the Johns Hopkins Bloomberg School of Public Health. The
research focuses on how ultra process food affects our bodies.
The Johns Hopkins Bloomberg School of Public Health is supported

(01:00:15):
by Michael our Bloomberg, founder and majority owner of Bloomberg LP,
parent company of Bloomberg TV and Radio. Doctor Wolfson, good
to have you back with us. It's been about a
year since we last spoke. I just want to start
with the definition of ultra process foods. I was kind
of surprised to see pizza and burgers on that list.
How do you define it?

Speaker 13 (01:00:33):
Yeah, so thanks for having me back.

Speaker 12 (01:00:35):
And ultra processed foods are defined by the list of
ingredients that are included in them. So these are foods
and beverages that are industrial produced using processes that you
wouldn't have in a home kitchen, and ingredients that you
also wouldn't have in a home kitchen. So these are,
you know, industrial produced products used by processing techniques like

(01:00:58):
extrusion fractioning where you break on the pieces of the
food into different things and then put it back together again,
and they contain things like additives, emulsifiers, sweeteners, thickeners, artificial
flavors and colorings, and other kinds of substances again that
you wouldn't use in a home kitchen.

Speaker 13 (01:01:18):
And so the most common.

Speaker 12 (01:01:19):
Definition we have is called the NOVA classification system, which
actually uses the ingredient list on a product to look
for these kinds of ingredients that signal that a food
or beverage has been through this industrial processed thing.

Speaker 3 (01:01:34):
So if we turn around, which I think increasingly we
have a population that is doing that, and especially I've
got a daughter who's twenty two, younger generation looking at stuff.
But if there are a ton of ingredients and ingredients
you don't understand, should you assume that that's ultra processed.

Speaker 12 (01:01:53):
Yeah, that is what we recommend as the way to
know if a food or beverage you're considering purchasing or
eating ultra process you flip over that package and if
you look at that ingredient list and you see even one,
but certainly a bunch of ingredients where you think, I
don't know what that is. That's not something I would
cook with. I don't even know how to pronounce that.

(01:02:13):
That's a signal that's an ultraprocessed food.

Speaker 3 (01:02:16):
So do we fix it by just infusing everything with protein?
And then it's all.

Speaker 4 (01:02:20):
Open, but it's still ultra processed, like like even a.

Speaker 3 (01:02:24):
Protein Are you picking on the pop tart?

Speaker 11 (01:02:26):
Yeah?

Speaker 4 (01:02:26):
Protein packed a cop tart. We talked about this on
our editorial call this morning. Sounds great, protein, doctor, I'm
gonna let you weigh in.

Speaker 12 (01:02:35):
Yeah, So I mean thinking about what are That's a
strategy the food industry uses, maybe to signal that something
is healthier for us by you know, saying, oh, this
is protein rich or whole grain rich, or this has
vitamins or minerals.

Speaker 13 (01:02:48):
Right, But if it still has these other.

Speaker 12 (01:02:50):
Ingredients, it's still an ultraprocessed food. And so you know
the addition of you know, other nutrients that we might
think are beneficial does not change that food.

Speaker 13 (01:03:02):
Into something that is not an ultra process food. It's
still ultra process.

Speaker 4 (01:03:05):
So just really shocking to see sixty two percent of
childhood diets come from highly processed foods. That was wild
to see. But at the same time, I'm thinking about
my own family and how difficult it is to get
my kids who are six and two to eat food
that we would consider not ultra processed. What is the
best way to do that. What are strategies that work
for kids? I think a lot of parents struggle with this.

Speaker 12 (01:03:28):
Yeah, I mean, I think it's a struggle for all
of us, right, you know, it's not just kids, it's
adults as well.

Speaker 13 (01:03:33):
You know, it's over half of adult diets.

Speaker 12 (01:03:35):
And I think there's a lot of reasons for that,
and it's you know, our taste preferences are shaped very early,
and there's a lot of marketing, particularly the children, for
these products.

Speaker 13 (01:03:46):
And they're easier to they're easier to grab and go.

Speaker 12 (01:03:49):
There, a lot of them are ready to eat, and
you know, they're snacks. They save time, and a lot
of them are more affordable too, So that's something to consider.
I think it is the more snacks that you can
have out that are not processed, that are easy to
grab and go that you know, that is one strategy
to help kids have more say fresh fruits and vegetables

(01:04:09):
to snack on, or healthy snacks that are made ahead
so that they can reach for easily. But again that
is extra work for parents and sometimes extra cost for
parents as well.

Speaker 13 (01:04:20):
So it's there.

Speaker 12 (01:04:21):
There are really good and intractable reasons why these foods
comprise so much of our diets, and particularly our children's diets.

Speaker 3 (01:04:30):
So you know, what's interesting the stat that Tim mentioned
from US Centers for Disease Control and Prevention their nutrition survey,
when they talked about highly processed food, they said pizza.

Speaker 6 (01:04:42):
So this is not the pizza that you get and
I get on Friday nights.

Speaker 3 (01:04:46):
That's what I want to ask you. So, like, I
go to a place where I know they are making
their homemade crust from special weed.

Speaker 4 (01:04:55):
It's been featured in the New York Times, you.

Speaker 3 (01:04:58):
Know, and it's no, no, no, I hear you have fun
but he but I mean it's like, you know, fresh tomatoes,
fresh basil. I guess maybe there's obviously some like homemade
cheese there, but like what like how do we distinguish
really really bad processed food versus stuff that maybe isn't
so bad.

Speaker 12 (01:05:18):
Yeah, I think that, you know, that kind of pizza
that you're describing, or let's think about bread, even pizza
or bread that might make at home, Like you're combining
wheat and you know, flour and salt and yeast, and
you know, you have your fresh tomato sauce.

Speaker 13 (01:05:32):
That's not an ultraprocessed food.

Speaker 12 (01:05:34):
So that but that is not the majority of the
pizza that people are eating.

Speaker 13 (01:05:38):
So when we talk about things like pizza.

Speaker 12 (01:05:40):
It really could be those frozen pizzas that you get
in the grocery store, or maybe more mass produced pizzas
that are made at scale and therefore have some sorts
of preservatives or other kinds of ingredients that you know,
change the say, the softness of the dough or something
like that.

Speaker 13 (01:05:57):
Those are the ultra process things.

Speaker 12 (01:05:58):
So not all all ultra processed foods, though, are equally concerning.
I would say, you know, I mentioned bread, so you know,
the bread that we might make by ourselves at home,
like if we were some of the people who started
making sour oaught bread during COVID, for example, Yeah, that's
not ut processed bread you might get at the bakery

(01:06:20):
in your neighborhood that is made by scratch is not
ultra processed. But most of the bread that we see
on our supermarket shelves is ultra process that sliced bread
that you see and so, but that includes even whole
wheat bread. So you know, there are some ultraprocessed products
that are by definition ultra process because they might contain

(01:06:43):
right those alifuyers or things that turn them into that product,
but they might still be Some are less of a
concern than others.

Speaker 4 (01:06:50):
I would say, so just in the last two minutes
that we have with you that Health and even Service
As Secretary, Robert F. Kennedy Junior has vowed to go
after these food companies so Americans do eat healthier.

Speaker 6 (01:07:00):
Thus far, how is he doing well?

Speaker 12 (01:07:03):
I mean, I think it's good that he's focusing on
this as an issue. I think there are, as I mentioned,
you know, there's a lot of reasons why we eat
these foods, and one of them, a big one is
they're more affordable. They tend to be more affordable than
scratch ingredients. They save time, and they're more accessible.

Speaker 13 (01:07:21):
And so.

Speaker 12 (01:07:23):
I think some of the policies of the administration say
cutting or even eliminating snap benefits is not helpful for
people to be able to avoid ultraprocessed foods. But thinking
about labeling or getting ultra processed foods out of schools
in a way that also balances with giving schools the
resources they need to source and prepare less processed foods

(01:07:47):
would be a step in the right direction.

Speaker 3 (01:07:48):
Why do we just real quickly thirty forty seconds here,
why do we have so much ultraprocessed food? Is it
about keeping shelf life or like, what is it? Or
is it just cheaper mass production food?

Speaker 12 (01:07:59):
I don't know, just quickly, yeah, I mean it's the
majority of the foods in our grocery store shelves. Right.
They make food large, shelf stable, they're oftentimes more affordable,
and they're in high demand because they save people time
and they save people.

Speaker 13 (01:08:11):
Mental energy as well.

Speaker 12 (01:08:13):
You know, it's a lot easier to say, have a
frozen dinner than it is to make all the components
of the frozen dinner yourself. So there's demand for it,
and you know, they've really dominated our food supply for
decades now, so it will be really difficult to make
that switch at a large scale, but it's worth considering
how we can do it well.

Speaker 3 (01:08:31):
L's quick question twenty five seconds. Can we eat too
much protein?

Speaker 12 (01:08:36):
I think it is possible to eat too much protein,
and Americans do eat a lot of protein, so we
are not suffering from a shortage of protein in the.

Speaker 4 (01:08:44):
US as a whole our Thanks to doctor Julia Wolfson,
Associate Professor in the International Health Department at the Johns
Hopkins Bloomberg School of Public Health, Her research focuses on
how ultra processed foods affect our bodies.

Speaker 3 (01:08:56):
All right, so you have little kids, My daughter's older.
I know we were obsessed. I know you are too
with organic and yeah.

Speaker 4 (01:09:03):
But I mean I can only do so much. Truly,
it's hard. You know, it's really hard for us what
what they eat when they're out of the house.

Speaker 3 (01:09:11):
I was just going to say, like when they go elsewhere, right.

Speaker 4 (01:09:13):
Yeah, and you know it's I'll tell you, New York
City public schools do not make it easy. Grateful that
they offer food at these schools breakfast, lunch, and dinner
at this point, which is a little crazy. Yeah, it's
not the healthiest stuff though, I know, granted they do have.
You know, my kids love apples, and they have like
New York apples, which we love, but it's the other stuff.

(01:09:33):
And oftentimes in the after school programs, he comes home
and he's like, oh, yeah, I got you know, Dorito's
or whatever, I got, you know, candy from this after school,
and it's like, oh, you can only do so much.

Speaker 3 (01:09:42):
I remember in high school, like we used to take
our own lunches in grade school, and I live close
enough in grade school that we could go home for
lunch and stuff. But I remember in high school you couldn't.
And I remember like you could eat some fruit, or
there was this like great cake and we would all
like get it. And it's like that was the choice
we made. And I'm sure it was.

Speaker 4 (01:10:00):
Ultimately I was gonna say, was it in like a
package or was it Actually it.

Speaker 3 (01:10:03):
Wasn't in a package, so maybe they had a bakery
that maybe they were making it in their kitchen, but
I don't know.

Speaker 4 (01:10:09):
You got to go home for lunch.

Speaker 3 (01:10:10):
In grade school. We lived really close. It was like
a little town, and it was.

Speaker 4 (01:10:13):
Like pretty cool that the teachers just like let the
kids walk home by themselves.

Speaker 3 (01:10:16):
Yeah, I mean I was literally a couple of minutes away,
so I can really cool. I could go home and
make dinner, not dinner.

Speaker 4 (01:10:21):
But make Did you make the lunch yourself or was
I did?

Speaker 3 (01:10:23):
I made it for myself and my little brother. No,
my mom was working.

Speaker 4 (01:10:26):
That's pretty cool, especially when we.

Speaker 3 (01:10:27):
Got a little bit older. Different that was through eighth grade.

Speaker 4 (01:10:29):
Different world, it is, right, Yeah, that's pretty cool.

Speaker 3 (01:10:32):
But high school wasn't like we had it.

Speaker 6 (01:10:33):
That's the opposite.

Speaker 3 (01:10:34):
Were you closer in your high school?

Speaker 4 (01:10:36):
Well, I went to boarding school, so it kind of
that was impossible to really relate here.

Speaker 3 (01:10:41):
But was boarding school healthy?

Speaker 8 (01:10:43):
Yeah?

Speaker 4 (01:10:44):
I mean it was real food, which is good. We
did have one thing we did have, what well, two
things that we had which were crazy. One chocolate milk okay,
so that was pretty good. Two milk are used to
a frozen yogurt machine.

Speaker 3 (01:11:01):
And do you have a cappuccino maker?

Speaker 11 (01:11:03):
No?

Speaker 8 (01:11:03):
No, no.

Speaker 4 (01:11:05):
So we could just go into the dining halloga whenever
we wanted, which was a little nuts. I don't know
if they still have that. And one thing you do
as as seniors, you were allowed to like be out late. Well,
we'd all break into the dining hall and just eat
whatever we wanted there late at night. It's kind of
it's kind of like, I'm sorry you allowed to do that.

Speaker 3 (01:11:21):
You broke in.

Speaker 8 (01:11:22):
Yeah, a lock on the door.

Speaker 4 (01:11:24):
The locks that were meant to be like those big
like things were just like little like I don't know,
like U shaped things that they put over, like horseshoe
kind of things.

Speaker 3 (01:11:33):
You know, those things you learn on your about your
co host. Yep, very very interesting. Hey, we shouldn't point
out that as a one little I.

Speaker 4 (01:11:40):
Wasn't a bad kid. Okay, I didn't get sway.

Speaker 3 (01:11:43):
I'm going to bring it back to the news.

Speaker 4 (01:11:45):
It was kind of a bad kick.

Speaker 3 (01:11:46):
We do also want to mention a story that has
come out and kind of associated if you want, the
Trump administrations deal with Eli Lilly and Novo Nordisks to
lower the cash price of weight loss drugs is putt
pressure on employers and insurance to negotiate better costs. But
let's just talk about the GLP ones are no doubt
about it. People are eating less. There's kind of this
healthier thing going on. I don't know if you want

(01:12:08):
to call it healthy, but it is making people lose
a lot of weight, and so you do wonder how
this plays into food consumption and what they really want
to eat. So just kind of out there.

Speaker 4 (01:12:16):
Also on the GLP once, did you see the news
this week, Eli Lilly dropping CVS's drug benefit plan no employers, Okay,
this after CVS stopped covering it's blockbuster weight loss drug
in favor of Arrival medication from Novo Nordisk. This according
to people familiar with the matter, So, oh my god.
Eli Lily was like, We're not going to use CVS's
drug plan because you guys are not actually covering our product.

Speaker 3 (01:12:40):
Sounds like a negotiating tactic. I mean they're dropping the
whole plan, hey' costume right? All right? All right, A
lot of stuff this week. Ky still ahead on Bloomberg
Business Week, how one family left the London suburbs for
a small village in France actually Provence. All for the
love of wine.

Speaker 4 (01:12:55):
More on the other side with the owner of Maison Mirabo.

Speaker 9 (01:12:58):
This is going.

Speaker 2 (01:13:02):
You're listening to the Bloomberg Business Weekdaily podcast. Catch us
live weekday afternoons from two to five pm Eastern Listen
on Apple CarPlay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube. It's the stuff of fantasies.

Speaker 3 (01:13:18):
Carol, We've talked about this.

Speaker 4 (01:13:19):
Yeah, you quit your corporate job in London, you move
to the south of France with your three kids, your wife,
you make rose.

Speaker 6 (01:13:26):
It sounds magical, it does well.

Speaker 4 (01:13:28):
It wasn't a fantasy for Stephen Kronk, the founder and
CEO of Maison Mirabo. He and his wife did exactly that.
It was sixteen, sixteen years ago. It was yeah, wow,
at the height of the global financial crisis.

Speaker 3 (01:13:42):
Talk about timing.

Speaker 4 (01:13:43):
Steven's with us right now here in the Bloomberg Interactive
Brokers studio and.

Speaker 6 (01:13:47):
He brought Rose.

Speaker 4 (01:13:49):
First of all, it's been a little while since we
last spoke to here, at least two years.

Speaker 6 (01:13:53):
Yes, how's business been since then?

Speaker 9 (01:13:56):
It's well, it's interesting question.

Speaker 14 (01:13:58):
It's been up, and I would say, I mean, I
think Province Rose is still the benchmark for rose around
the world, so we're very lucky we've got that.

Speaker 9 (01:14:07):
But there's been a lot of headwinds, as I'm srure
you're aware.

Speaker 4 (01:14:10):
Yeah it Look, there's the climate change headwind but there's
also the changing consumer tastes headwinds, as.

Speaker 6 (01:14:15):
Well as tariffs exactly, which is the thing that is
the biggest headwind.

Speaker 9 (01:14:20):
They all combine together, this is the perfect storm.

Speaker 14 (01:14:23):
So there's the health kick, there's the cannabis movement, there's
the no and low alcohol movement, there's the zimpic movement
because that suppresses people's desire to have a drink. So
it's like everything and then you load on top of
that the tariffs. It's like, yeah, what has happened?

Speaker 3 (01:14:37):
So what does that mean for you guys? Like how
do you pivot? How do you adjust around that?

Speaker 14 (01:14:42):
Well, there's a lot of things we can't change. But
what we try and do is is with the tariffs,
for example, we've tried to swallow as much as we can.
We don't want mirror Bau to be much more expensive
in the store, so we've tried to swallow that, which
is it's hard, but we're keeping our fingers crossed that
maybe this is going to change.

Speaker 4 (01:14:57):
Remind everybody the price range from the United States, so
you don't want the price to go up in the US.

Speaker 14 (01:15:02):
So yeah, so we have generally between twenty and thirty dollars, okay,
and we want to try and.

Speaker 9 (01:15:07):
Keep below thirty dollars because that's a price point.

Speaker 6 (01:15:09):
So then how does that hit your margins.

Speaker 9 (01:15:11):
Yeah, it's not great, but you.

Speaker 14 (01:15:12):
Know, I'd rather build a brand, and you know, i'd
rather people carry on drinking Mirbo, especially. You know, we're
coming out of Thanksgiving and Provence Rose is just so
good with Turkey, So you know, I'm just trying to
hope this goes away and just carry on pushing my
wines here.

Speaker 12 (01:15:25):
Yeah.

Speaker 3 (01:15:26):
Well, you know, and I've said I wasn't a big
Rose drinker, but I've got to say yours is pretty
pretty magical and I've really enjoyed it, and we're going
to taste it and know Tim is sniffing it out.
You're in the United States, talk to us about the
US market specifically.

Speaker 14 (01:15:41):
So I've started farming regeneratively for some of my wines, right,
and the regenerative movement seems to be centered many around California. Now, yeah, so,
I mean, I'm selling my wines in forty countries, but
California is the epicenter of the regenerative movement. The California
Department of Food and Agriculture has been the first state
to to define the words regenerative agriculture. And meanwhile, we've

(01:16:04):
got you know, the wine resions there, so pazoobils, Nappers,
and Oma. They are the most regenerative wine areas in
the world.

Speaker 6 (01:16:11):
So what does that mean for one of County.

Speaker 3 (01:16:14):
I know where t is from, but what does that
mean that you would you do more here in the
United States?

Speaker 14 (01:16:21):
I'm just trying to sell more wine here. And so
the retailers say, like air One and Sprouts and Bristol
Farms and Hagen's, they're really getting behind the regenerative movement
that they're looking to seek out regenerative.

Speaker 3 (01:16:33):
Farmer because there's an awareness of it, right, because they.

Speaker 9 (01:16:35):
Know what it means for farmers, they know what it
means for people to.

Speaker 4 (01:16:38):
Not everybody knows what regenerative farming means, and especially how
that is applied to farming the grapes that go into wine,
that go into rose. So for for people who don't
know what it is, explain regenerative farming in the context
of viniculture.

Speaker 14 (01:16:51):
So regenerative, as the name suggested, is about regenerating soil, fertility,
and regenerating nature in simple terms, So you know, it's
the if you think about it, what was organic farming.

Speaker 9 (01:17:01):
Called before the First World War?

Speaker 6 (01:17:02):
Farming?

Speaker 9 (01:17:03):
Right, But then there was a huge amount of pressure here.

Speaker 14 (01:17:07):
Everyone's so worried about industrial farming, so the heavy tillage
and in particular heavy use of chemicals.

Speaker 9 (01:17:13):
So there's been a move certainly since the First World
War and the Second World War as well.

Speaker 14 (01:17:18):
We've seen a lot of nitrogen being used in farms
and a lot of heavy tillage, a lot of chemicals,
pesticide and so on, and that's just been killing our soils.

Speaker 9 (01:17:26):
This is a catastrophe.

Speaker 14 (01:17:27):
You know, we were worried about famine at the end
of the Second World War, so rightfully we were worried
about feeding our population, but we haven't been measuring food
in the right value. It's been measured by calories rather
than nutrient density.

Speaker 3 (01:17:39):
So I didn't mean to interrupt, but it was just interesting.
We just came off a discussion of talking about the
cost of meat and just what's going on in that world.
But I do think about, like is our soil globally,
how tortured is it or how bad is it because
of the industrial farming.

Speaker 14 (01:17:55):
A lot of it, most of it, I would say,
is on life support. It's really it's catastroph So when
I was gonna say, when I drive up from NA
to Pazzoobils, which is one of the most regeneritive regions.

Speaker 9 (01:18:05):
In wine up the I five and you see.

Speaker 14 (01:18:08):
Thousands of acres of fruit trees and nut trees that
are on life support. It's like the moon's surface, and
so it's kept they're kept live by these extern inputs
and what you end up with a product, but they're
not very tasty and they're not very nutritionally dense. So
we need to actually start restoring soil health globally, and
regenerative is a way of doing that.

Speaker 3 (01:18:25):
So you can do that in terms of all that soil.
How long does it take the process of getting it back, It.

Speaker 14 (01:18:30):
Can happen quite quickly, and that's one reason why we
so I run a nonprofit as well called the Regenerative
Viticulture Foundation. So viticulture is agriculture for vines, and we're
launching these initiatives called one block challenges. So we did
one in Paso, we've done one, we're doing one in
Napo Opus one in fact a great winery winery, so

(01:18:51):
we're doing one there on the eighteenth of November, and
we're challenging the growers in Napa and as we did
in Pazo, to just transition one block of their vineyard
to re for a year and then come back and
see the difference. It's incredible how generous Mother Nature is
coming back.

Speaker 4 (01:19:06):
You said, you've driven up California on the five, but
if you go a little west, you could drive up
on Highway one or the one oh one and then
go on San Marcos pass through Los of Libos where
there is a lot of agriculture and a lot of
vineyards as well. Is the movement expanding throughout the state
of California and beyond the state of California.

Speaker 9 (01:19:25):
Yeah.

Speaker 14 (01:19:26):
Absolutely, And that's the point of my nonprofit is to
really encourage farmers, give them the reasons to do it.
Everything around region, as far as we're concerned, is using science.

Speaker 9 (01:19:36):
So you know, if we can.

Speaker 14 (01:19:37):
Rebuild soils and rebuild the soil organic matter, rebuild soil carbon,
they end up with much better tasting wines. But also
you see nature coming back. My mother Nature owes us
no favors, but she'll come back. But you've got to
create that right environment. Getting wean yourself off the synthetics
and get yourself back.

Speaker 3 (01:19:52):
Into natural you know, it's kind of I always think
about Stephen what happened during the pandemic, and the sky's
got bluer, and the animals came out and quickly, and
it's just a reminder when we see the impact of
climate change and it feels so devastating, it feels like
there's no way back. I always go back to the
pandemic and how the world seemed so much better, so

(01:20:14):
we can do better. How expensive is it to do
regenerative farming and the ROI on something like that, the
return on investment.

Speaker 14 (01:20:21):
Well, we're working a little bit with UC Davis and
we're working with other growers to see the data points
coming out of it, because basically we think, and certainly
evidence to my farm is once you've made that transition,
your input costs drop, so you're not buying as many
external inputs, fewer tractor passes. You're letting nature kind of
get everything back into balance. So we think actually costs

(01:20:43):
will be more or less the same as they are
with regular farming.

Speaker 3 (01:20:46):
All right, So we're talking with Stephen Kronk. He's founder
and chief executive officer of Maison Mirabow. He's here in
our Bloomberg Interactive Broker's studio. So that leads us to
your product. There's three bottles that I'm looking at in
front of me, and there's one that we know we've
opened up up. Tell me what we're going to sample here?

Speaker 14 (01:21:02):
So this is one day by mirror both. This is new.
This is why I'm here. This is this the bottles Miraboa.

Speaker 9 (01:21:10):
So we're the.

Speaker 14 (01:21:10):
First certified regenerative organic winery in France soon and I.

Speaker 3 (01:21:13):
Are competing for the bottles.

Speaker 14 (01:21:16):
Well, this is no, no, no, So one day, one
day by Mirabeau. We call it one day because one
day all vineyards will be found like this.

Speaker 3 (01:21:23):
Oh I love that.

Speaker 14 (01:21:24):
And it's the first regenerative certified wine to come out
of France, to come out of Provence, and it's something
that we're really really proud of because rather like our
state wine, which is also the first certified regenda organic wine,
this is this is, this is us certifying our growers.
So we have to make this work at scale. You know,
you can't just have little niche boutique wineries enjoying the

(01:21:45):
benefits of.

Speaker 3 (01:21:46):
Regent and it can be done at scale.

Speaker 14 (01:21:47):
It can be done at scale, and migrowers in Provence
are just absolutely crazy about getting involved, you know, because
organic is I would say flat growth, but you know
a lot of basic organic isn't also for soil, you know,
so so we have to use common Why is that?

Speaker 3 (01:22:03):
So that makes me nervous because I think there's an assumption.

Speaker 14 (01:22:06):
Well, so organic is the best kind of farming you
can you can do when you're doing it properly, when
you're doing it regeneratively, so regendat ive organic is the
gold standard. Okay, But if you are a lot of
a lot of organic farms, certainly in the wine world,
can still be monocultures.

Speaker 9 (01:22:20):
So you don't want any weeds in the vineyard.

Speaker 14 (01:22:22):
You wanted to look immaculate, so if the weeds come in,
then you know, plow them away. Yeah, but actually that's wrong.
You know, you need to let nature into the vineyard.
You can't have these these monocultures.

Speaker 9 (01:22:32):
It's funny.

Speaker 14 (01:22:33):
I was with somebody the other day and they were saying, yeah,
my husband's a real germophobe, and it's sanitizing his hands
and everything is just so so I.

Speaker 3 (01:22:40):
Do I know this one?

Speaker 14 (01:22:42):
I said, Okay, tell me how often does he get sick?
And she said all the time, you know, And we
need to we need to rough rummage around of the dirt.
We need we need to have those bugs, and we
need to be healthy and build out resilience. And that's
what regenerative does you know monoculture is the same thing
as sanitizing a farm.

Speaker 3 (01:23:00):
Well, I will say with kids, they say, like introduce
pets and dogs. It's a good thing for them to
be around germs and stuff. So Stephen, cheers, thanks for
having me in.

Speaker 4 (01:23:13):
Carol's drinking the wine as we speak.

Speaker 9 (01:23:15):
That's what it's for.

Speaker 8 (01:23:16):
The rose.

Speaker 3 (01:23:17):
That's nice. So this is the one day.

Speaker 9 (01:23:20):
This is one day.

Speaker 3 (01:23:20):
Yeah, and rose, I mean it varies, right like it varies.

Speaker 14 (01:23:24):
But the good thing about Provence roses it's always dry.
So because you can get some roses that are quite
high and residual sugar and you can that's not very
food friendly and yeah, very healthy, but Provence roses always
always being dry.

Speaker 4 (01:23:36):
So I always associate rose with warm weather in the summer.
But you argue that it's the perfect thing to drink
at Thanksgiving dinner, right, Why is that?

Speaker 9 (01:23:43):
Because it's just such a food versatile wine.

Speaker 6 (01:23:45):
It's great.

Speaker 9 (01:23:46):
It's got a little bit.

Speaker 14 (01:23:47):
Of a city that cuts through the sort of the
sweet flavors of the cranberry sauce or but it cuts
through the gravy. It's just a refreshing mouthfeel once you've
had a great, big, you know.

Speaker 4 (01:23:57):
Fork of potato or something that's Stephen Kronk, the owner
of me Son Mirabeau.

Speaker 3 (01:24:01):
I have to say, this is the second time that
we've talked with Steven, and we're hoping actually to get
his wife back soon because they have a book out
too about their experience and it's all about food and
recipes and cooking. I mean, Provence is a very very
special place. But it's interesting what he's trying to do
with regenerative farming. We have done several segments on this,

(01:24:22):
this concept where you basically don't strip the soil, and
I think farmers used to kind of try and do
that way back when of maybe like rotating crops and
so on and so forth.

Speaker 4 (01:24:32):
But yeah, pre the Great Wars, pre the Great.

Speaker 3 (01:24:34):
Wars, but like the what we do now in terms
of industrial farming and chemicals, it's a whole different ballgame.

Speaker 4 (01:24:40):
But it's such a big story because you know, post
World War Two, as Stephen explained to us, there was
such a demand for feeding a growing number of people
here in the US and around the world. You also
had industrialization, so you had fewer people actually living on
farms farming for themselves and farming for a great number
of people, so you had to figure out how to
do more with us. And I wonder if the regenerative

(01:25:02):
movement will grow beyond sort of a niche or small
number of players that don't cater to a whole host
of people.

Speaker 3 (01:25:09):
I mean, took a Chipotle's history way back when when
the original founder was there, Steve El's, but like that
was kind of their mission of trying to do regenerative
farming farming responsibly. The other thing I would say, Tim
that's always crazy is when you and I do any
kind of food story and we talk about how difficult
it is to kind of move beyond industrial farming. How
much food is wasted and ultimately thrown out at the

(01:25:31):
same time, so many people who don't have food. But
this idea of if we were maybe smarter in our
food production and consumption, maybe we wouldn't have we could
regenerative farming could be easier to do.

Speaker 4 (01:25:41):
I don't know, We're a little guilty of it at times.
I know you end up finding something in the back
of the fridge. It's like a little shriveled up and
you're like, I can't eat this.

Speaker 3 (01:25:49):
Now, smaller fridge, smaller. You know, refrigerators are smaller. I
have heard now over in Europe and stuff like they
shop every day. I listen. I had two refrigerators and
a freezer growing up.

Speaker 4 (01:25:59):
Yeah, but there were how many of you nine?

Speaker 3 (01:26:01):
I know, but still it was a lot of space.
I'm just saying, no judge, all.

Speaker 4 (01:26:07):
Right, how'd we get there from wine?

Speaker 3 (01:26:09):
I don't know the wine was good. I'm going to
just put that out there. Full disclosure. Hey, that wraps
up the weekend edition of Bloomberg Business Week from Bloomberg Radio.
Thank you so much for joining us.

Speaker 4 (01:26:18):
We shure to tune into Bloomberg Business Week daily Monday
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Speaker 3 (01:26:31):
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Speaker 4 (01:26:45):
Find our Bloomberg Business Weekdaily Podcast at Bloomberg dot com, Apple,
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Speaker 3 (01:26:55):
I'm Tim Stenebeck and I'm Carol Masser. Have a good
and safe weekend everyone.

Speaker 2 (01:26:59):
This is the Bloomberg Business Week Daily Podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live weekday
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You can also watch us live every weekday on YouTube

(01:27:19):
and always on the Bloomberg Terminal

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Tim Stenovec

Carol Massar

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Bloomberg Businessweek Weekend: November 14th, 2025