July 14, 2025 • 20 mins
Watch Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Intelligence hosted by Paul Sweeney and Lisa Mateo
-Craig Trudell, Bloomberg Global Autos Editor, discusses the latest on Tesla. Tesla shareholders will vote on whether to invest in Elon Musk’s xAI, the billionaire said, after the Wall Street Journal reported that SpaceX agreed to pump $2 billion into the artificial intelligence startup.
-Jennifer Bartashus, Bloomberg Intelligence Senior Analyst, Retail Staples & Packaged Food, discusses the potential breakup of Kraft Heinz. Kraft Heinz may be preparing to spin off much of its grocery business, as reported by the Wall Street Journal, marking a shift toward higher-growth condiments and away from legacy brands as the company faces volume pressure.
-Sam Fazeli, Bloomberg Intelligence, Director of Research for Global Industries and Senior Pharmaceuticals, discusses the latest in the biotech sector. The 30-month stay for FDA approval of Mylan's Wegovy generic expired in June, but the US regulator is still prohibited from approving any Wegovy generic based on data exclusivity expiring in December. A trial has been set to start in early March.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. You're listening to the
Bloomberg Intelligence Podcast. Catch us live weekdays at ten am
Eastern on Applecarclay, and Android Auto with the Bloomberg Business App.
Listen on demand wherever you get your podcasts, or watch
us live on YouTube.
Speaker 2 (00:23):
Tesla shares they are higher this morning. They're up about
three tens of percent, but there were some news. Elon
Musk said the company plans to pull Tesla's shareholders on
whether to invest in his other company, that's x Ai.
So here to break it all down for us is
Craig Trudeli's Bloomberg Global Auto editor.
Speaker 3 (00:41):
Craig I have to.
Speaker 2 (00:42):
Ask you, you know, this is something that came out. I mean,
what kind of message is this sending.
Speaker 3 (00:48):
It's sending that, you know, Elon's Elon's business empire is
becoming all the more intertwined. So this has been, you know,
sort of a case on and off for years. We
can think back to say, you know, the Tesla Solar
City acquisition, you know, and that's going back quite a
way is but uh, you know, in this case it
(01:10):
would be Tesla, you know, his most valuable company in
investing in in sort of his up and comer and
one where he's you know, spent an awful lot of
time and energy focused on. Lately, as Tesla's electric vehicle
sales have been slowing, he's been really sort of dead
set on taking on open Open AI and and sort
(01:32):
of standing up a competitor to chat GPT and as
with all the companies in the space, spending an awful
lot of money to to try and compete in that realm.
Speaker 4 (01:43):
So where do we stand here in terms of kind
of how investors are viewing their investment in Tesla. Are
they invested in a auto company or are they invested
in an AI company? Or they invested just an Elon Inc?
How did they think about it these days?
Speaker 3 (01:59):
Yeah? I mean, I think Musk has has been trying
for for several years now to to sell uh and
and position Tesla as much more than just a car company, right,
and uh, you know it's it's definitely in in the
energy space and and uh you know has a battery
business to to show for that, and in in AI.
(02:19):
You know, he's he's talked a big game about uh,
you know, developing self driving technology. He's not he's not
gotten there yet. Uh as as we've seen with the company,
you know, starting to offer rides in in Tesla's around Austin, Texas. Uh,
they still have uh you know, Tesla employees in the
front passenger seat to sort of take over in events
(02:41):
where you know, the cars have not been able to
handle uh, you know, navigating the streets on their own.
And and yet with with uh SpaceX, I think interest interestingly,
you know, for them to have just pumped two billion
into h x AI, I think there's a little bit
of fomo on the part of of some the Tesla
shareholder base where they've seen you know, XAI go from
(03:05):
you know, not all that valuable a startup to suddenly,
you know, an extremely valuable startup and they feel like
they've missed out on some of this appreciation and one
in on that.
Speaker 2 (03:16):
So with all that said, Craig, I mean, does must
support a merger between x AI and Tesla or maybe
x a hind SpaceX you mentioned space X two.
Speaker 3 (03:26):
He says he does not. And and I think there's
been talk about this for years, right that, you know,
and on and off again there's been you know, questions
as to whether or not Musk is you know, sort
of stretched too thin and doing too much. Would it
make more sense to turn his companies into into one
and and sort of you know, sort of the think
(03:46):
about it as sort of the general Electric of the
New age, right, which is kind of fascinating because of
course that didn't work out too well for ge. And
and yet you know, even some of Musk's own out
have sort of alluded to, you know, it's viewing him
and his empire as as sort of you know, modern
(04:07):
day general Electric. So he he did take pains to
say on an x that he does not support a
full blown merger of Tesla and x Ai, but he
has you know, signals on there multiple times now that
he would be in favor of of Tesla putting money
in and you know that's that's, of course, you know,
(04:29):
a proposition that could be helpful if Xai continues to
grow its valuation. We should note, however, that our colleagues
have reported just in the last month or so that
x Ai has been burning through about a billion dollars
a month. So this is a company that is really
sort of cash hungry and needy as it's trying to
(04:50):
stand up a business. You know, with all of this capability.
Speaker 4 (04:54):
Yeah, and Craig, it's been I don't know a month
or two since Elon Musk left the US government, doje
is there any evidence that he is meaningfully engaging with Tesla?
Speaker 3 (05:05):
You know, I think he's messaging more about, you know,
sort of what Tesla's up to than he was while
he was in Washington. He did also post just within
the last day that you know, he was in Tesla's
design studio and sort of hyped up how excited he
was about what he saw. But you know, the company
(05:27):
is is, you know, sort of in this really sort
of challenging state from a sales perspective, and you've you've
sort of gotten indications that, well, maybe he doesn't necessarily
fully have his his finger on the pulse in the
sense that he told us just within the last few
months that sales have turned around. You know, a couple
of months later, the company reports that its vehicle deliveries
(05:49):
had fallen thirteen percent in the second quarter. So either
he was you know, not necessarily up to speed on
the state of sales, or perhaps he was optimist more
optimal stick that they were able to is going to
be able to turn things around. Then they ultimately were
able to last quarter.
Speaker 5 (06:05):
Okay, Greg, thanks so much for your reporting. Appreciate it.
Speaker 4 (06:07):
Kraig Trudeau is a Global autos editor for Bloomberg News.
He's based in London, joining us via zoom.
Speaker 1 (06:13):
Here you're listening to the Bloomberg Intelligence podcast. Catch us
live weekdays at ten am Eastern on Apple, Cocklay and
Android Auto with the Bloomberg Business app. Listen on demand
wherever you get your podcasts, or watch us live on YouTube.
Speaker 2 (06:29):
This is Bloomberg Intelligence. I'm Lisa Minteo alongside Paul Sweeney. Paul, So,
summer barbecue. You think hot dogs, right, Robert? Okay, what's
your favorite?
Speaker 5 (06:37):
What's you go to? Hot dog? Oscar myern the question,
Oh yes, okay.
Speaker 2 (06:41):
See I'm a Brooklyn girl.
Speaker 5 (06:42):
I go Nathan's.
Speaker 2 (06:42):
But okay, that's title said. There are some big news
when it comes to your barbecue. So a company may
be splitting up sources in craft hends, could break itself up,
spin off into this large part of the business, into
this new entity.
Speaker 5 (06:56):
What is this all about?
Speaker 2 (06:57):
Let's bring it someone who knows about it. Jennifer bartash
More Intelligence senior analysts Retail staples and package food Jennifer.
I know it's sources are saying a lot of things.
What's the latest that you're hearing about this breakup?
Speaker 6 (07:09):
Yeah, good morning. So this is an interesting breakup because
it's ten years after they merge together, and it seems
that the main portions of that initial merger are going
there will go their separate ways. The way we look
at it, it looks like there's a core group of
what they consider their taste Elevation platform, which is what
is in the seasonings Taste Elevation.
Speaker 4 (07:30):
Oh please, that's Gott mackenzie written all over. It has
that spices and Condiments.
Speaker 6 (07:36):
That's Spices inc. Yeah, exactly, and then they have you know,
that's kind of been their growth area for the last
couple of years. So we think that that's really going
to be what will be the residual part of Heinz.
And then there is it's undetermined yet exactly what'll go
into the rest of the business, but it'll be largely
those grocery categories where they've invested a lot to try
(07:57):
to revitalize brands and it just hasn't worked in terms
of really rejuvenating sales.
Speaker 4 (08:03):
You know, when I think about brands in the shop,
you know, going to the supermarket. Boy, those house brands
private label. Talk to us about the growth of private
label in general, Boy, and if you're a brand like
an Oscar Meyer or something that you spent jillions of
dollars over one hundred years, it seems to kind of
go by the wayside almost.
Speaker 6 (08:22):
It's true. You've got a good point, Paul. Private label
has been consistently growing and got a huge bump since
the pandemic. And part of that is that they've the
retailers have really invested in the quality and the the
differentiation of those private label brands, so where consumers now
really consider them not just a replacement for national brands,
but in some instances just regular brands of their own right.
(08:46):
And so you know, Craft Times actually had reduced some
of its exposure to private label when they sold off
the planter's business, when they sold off the cheese like
the shredded cheese business with Craft, but the core grocery
business they do still have a lot of exposure to
private label.
Speaker 2 (09:00):
So is this a lot of competition from let's say,
startup food companies appealing to younger consumers? I mean, what
kind of sparked this.
Speaker 6 (09:08):
Well, there's really been a shift in the way consumers
are looking at brands. Unless you own a long legacy
brand that you can reinvent and really you know, drive
interest from younger generations, it's really hard to keep that going.
And so what we've seen is that they've done a
good job with revitalizing things like Philly Cream cheese. But
(09:31):
despite a lot of investment, brands like Caprice, son Oscar Meyer, Maxwellhouse,
you know, these brands just aren't resonating with younger consumers,
and that means that the growth prospects for those brands
are a lot lower, and that makes it hard to
really build yourself as a growth type oriented company.
Speaker 4 (09:50):
So I know, as I think back to my M
and A Memory Banks ten years ago, Crafton Hines Berkshire
Hathaway had a big hand in putting these two companies together,
and look now they're still the largest shareholder with just
under twenty eight percent of the stock. I assume Berkshire
Hathaway Warren Buffet has kind of signed off on this
deal or is open to it.
Speaker 6 (10:08):
At least I would assume that they're open to it,
you know, I mean over time, you know, Berkshire Hathway
has actually done quite well out of this deal, even
though Kraft, heindes as an overall entity, is probably disappointed
in the overall analysis. But you know, the merger was
in twenty fifteen. It's been ten ten years. The value
(10:29):
of the deal at the time in twenty fifteen was
forty five billion dollars. Today's market cap it's thirty two
billion dollars, so it you know, and yes they've sold
off a couple of brands, but it just hasn't materialized
to be the type of growth that I think Berkshire
Hathway and initially envisioned it would happen.
Speaker 2 (10:44):
Tenfer can you dig more into some of the advantages
but also the risks associated with breaking up the company.
Speaker 6 (10:51):
Some you know, obviously some of the advantages. And this
seems very similar to what Kellogg did when they spun
Kelenova and W. K. Kellogg out into two separate companies.
They separated the growth prospects and then those from the
slow growth areas. That's very similar to what Kraft Time
seems Craft Time seems to be doing. Obviously, if you
(11:14):
can focus on growth areas, that gives you undivided attention
to really expand and grow. That would be an advantage,
I think one of the disadvantages, And this is something
that's kind of a broader question to consider, is you know,
whether there's a cycle that's starting because we've seen companies
like Kelenova split, we see Unilevers spinning off their ice
(11:34):
cream business, and those new entities are now being bought
up by others. So you've got Mars acquiring Kelenova, you
have Ferrero acquiring W. K. Kellogg. But those in order
to get regulatory approval, you have to have categories that
aren't overlapping. And so you're you're you're seeing a new
(11:55):
birth of new kind of conglomerates, of dissimilar portfolios. And
so it makes me wonder if we're setting up another
cycle where in another five years, ten years, we're going
to see these companies that have been buying up the
underperforming brands going through a similar type of activity.
Speaker 5 (12:11):
What's driving all this?
Speaker 4 (12:12):
It doesn't it feel like this MNA activity, whether you're
buying or divesting, is out of a position of strength.
It always feels like I don't know, I'm just I'm
doing it because anami growth. Then I got to do something.
I got pressure from shareholders to do something. So I'm
either buying or selling because your business doesn't have a
lot of growth.
Speaker 6 (12:31):
No, it's true, Paul, and I think one of the
crises that we've sort of seen in packaged food at
least is the North American companies is a lack of real,
true innovation. So what's happened is a lot of companies
have fallen into his pattern of innovation being a new
flavor or a new extension, a new size of the product,
and that's not really what gets consumers excited. You need
(12:54):
to bring new and different products to market, and that's
an expensive endeavor and companies have sort of shied away
from that. And although they're trying to reinvigorate that innovation pipeline,
we just haven't seen a lot of home runs coming
out since the pandemic. And so, you know, I think
when you've got that backdrop, you have to evaluate for
your portfolio and say, how do we focus on the
(13:15):
strengths that we have and can someone else do better
with the categories where we're not doing as well?
Speaker 5 (13:22):
All right, Jen, thanks so much for joining us.
Speaker 4 (13:24):
Jim Bartasha is seening your retail Anams Bloomborg Intelligence, or
at least the key question.
Speaker 5 (13:27):
You know Nathan's hothawks. Are you ketchup or mustard?
Speaker 2 (13:31):
Oh, mustard with salacrad and red onions.
Speaker 5 (13:33):
Okay, solid solid.
Speaker 4 (13:35):
I'm a mustard person too, But if somebody put a
hot dog with ketchup in front of me, I would
not eat it.
Speaker 5 (13:40):
Well, here's the thing.
Speaker 2 (13:41):
I just came back from Chicago and they said, if
you put ketchup on your hot dog, no, that's a
big no.
Speaker 6 (13:46):
No.
Speaker 5 (13:47):
They do not do that in Chicago. Okay, good, good
to know, Good to know you. Yeah, you know.
Speaker 4 (13:52):
I'm definitely a mustard person. But again, you throw a
hot dog in front of me with ketchup.
Speaker 5 (13:56):
Off, probably eat it as well.
Speaker 1 (14:00):
Listening to the Bloomberg Intelligence podcast catch us live weekdays
at ten am Eastern on Applecarclay, and Android Auto with
the Bloomberg Business app. Listen on demand wherever you get
your podcasts, or watch us live on YouTube.
Speaker 2 (14:13):
Welcome back to the Bloomberg Intelligence. I'm Lisa Matteo alongside
Paul Sweeney, Weight.
Speaker 5 (14:17):
Loss, drugs, right, all the rage. I always want to
know what.
Speaker 2 (14:20):
Is the latest with it? So here with that and
much more is Sam Fazelli, Bloomberg Intelligence, Director of Research
for Global Industries and Senior Pharmaceuticals. Sam, thank you for
joining us this morning. Just want to ask what is
the latest because we hear so much about weight loss
drugs and different companies. What's the latest you can here
you've been hearing so far?
Speaker 1 (14:39):
Yeah, hi, Lisa.
Speaker 7 (14:40):
So in terms of what's happening in the market, we're
still waiting to see whether the prescription counts for Novo
Nordisks US WeGo V numbers are up or not. They've
been flat for pretty much most of this year in
terms of the number of scripts that doctors are writing
for their we go V. And the opposite is the
(15:02):
case for is Lily zeppound continues to keep going up
and it's a it's a pretty interesting battle which seems
to be currently being won by Lily, and time will tell.
What is interesting is that my colleague A. Girzbacker just
finished a deep patent analysis for so Astria exactly Paul
(15:24):
for we go V, and I mean the dates in
terms of pattern experience. Of course, they're important because that's
when generics can come in and compete with you. Here
we go from possibly she says twenty thirty one, twenty
thirty two in the US at least to twenty forty.
I mean, look, that's an amazing outcome, and she puts
a decent probability on it in terms of the ways
(15:46):
that they could protect it. So that could mean a
lot for a product that could be sending five or
ten billion dollars a year.
Speaker 5 (15:52):
Right, all right, we got to go to the elephant
in the room here.
Speaker 4 (15:55):
I mean, Jesus for our listeners on radio, Sam is
in some kind of contraption like he I'm guessing he
fell off a barstool and hurt his armor's shoulder.
Speaker 5 (16:04):
Here, what happens, Sammy.
Speaker 7 (16:06):
It's that cheap drink you guys selling the US. You know,
it just doesn't work for me. What I need is
are is classified growth, red wines and white wires, right.
Speaker 5 (16:14):
Pole, So what I mean, I'm assuming there's something going
on there.
Speaker 7 (16:17):
So all right, so rotate tickoff surgery. It's a ard.
Speaker 5 (16:22):
He's not an athlete.
Speaker 4 (16:23):
Bottle He stopping a bottle of bordeaux, threw out his
shoulder opening a bottle bordeaux. So talk to us about
what's what's the latest on the cancer field?
Speaker 5 (16:33):
Sam I know you got a lot of conferences in
here on top of the latest research.
Speaker 4 (16:38):
What should we as consumers and maybe even investors in
healthcare stocks and biotext what should we be thinking about
as the next frontier on the cancer front.
Speaker 7 (16:47):
Yeah, I mean, we have a bunch of conference's coming
up very soon, so the Myloma Conference in International Maloma
Society in September, the World Lung Cancer Congress, then there's
the big European Society for Medical Oncology conference in October.
During these we're going to hear about whether there's going
(17:08):
to be big step changes again in the treatment of
some diseases, particularly lung cancer. So we got some therapeutics
with possibly some data coming up, maybe a door world
lung cancer. We'll see the aura Desmo. And we've just
done a survey of US physicians which came back with
very interesting comments, which are going to write about tomorrow
(17:30):
about some other trials that are ongoing. So we'll say
I can't front run that the data will be published
tomorrow on the terminal. But there's stuff still happening in
cancer where we're seeing potential for paradigm shift, and that's
some of the things that we'll be referring to tomorrow.
Of course, in the middle of all this, we have
farmer companies continue looking for products to expand their pipelines
(17:51):
through M and A.
Speaker 2 (17:52):
Now, Sam, we've been talking a lot about tariffs lately.
How is a biotech sector, even pharmaceuticals, if you can
dig more into how they're being affected by tariffs.
Speaker 7 (18:03):
Yes, so that that's one area if you look at
the performance of the farmer stocks relative to the rest
of the market, I mean Max seven. I mean, I
don't know where they're going, but Paul I'm sure knows
more because of the background he has in analyzing tech.
But they just keep going up. I mean, there's no
there's no nowhere else for them to go if you
put them aside. Okay, there s a B five hundred.
(18:25):
Maybe hasn't been as magical as the when it includes
the Max seven, but pharma has been a little even less,
a bit more lackluster, partly because of this continuing conversation
about tariffs. That two hundred percent is something that President
Trump mentioned just very recently, although it's delayed till next year.
(18:46):
You've got your most favored nation pricing that's coming up.
You've got your possibility that the regulators are going to
be We don't know where the regulators going in the minute,
to be honest with you, positive, negative, favorable, not favorable
for the evolution of regulatory framework in the US. So
there's a lot of questions. And I know this is
(19:08):
four's favorite word, uncertainty that still dogs at the pharma sector.
Speaker 5 (19:12):
Yep, that's certainly the case.
Speaker 4 (19:13):
So maybe you know, August one might be a date
we get some more clarity there. Sam Fazelli, director of
research for Global Industries and his senior pharmaceutical analysts for
Bloomberg Intelligence. He's covalescing there in London and our London students,
but he makes it into the studio folks, even with
one arm in a sling. So we appreciate that playing
herd out there for us.
Speaker 5 (19:31):
That's what happens when you get old, Lisa. You know,
things happen. They just kind of go out and we
can see you in a sleep.
Speaker 4 (19:36):
I hope, I hope, not exactly so, Sam Fazzelli. There so,
and Emina, you mentioned M and A. I'm just so
far in the first quarter. This is according to Sam's notes,
so far in the first half thirty two billion of
M and A in farmer thirteen deals.
Speaker 5 (19:53):
Last year it was.
Speaker 4 (19:55):
Sixteen billion for six sixteen deals, so dollar amounts certainly
bigger this year.
Speaker 1 (20:01):
This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
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Bloomberg Audio Studios, podcasts, radio news. You're listening to the
Bloomberg Intelligence Podcast. Catch us live weekdays at ten am
Eastern on Applecarclay, and Android Auto with the Bloomberg Business App.
Listen on demand wherever you get your podcasts, or watch
us live on YouTube.
Speaker 2 (00:23):
Tesla shares they are higher this morning. They're up about
three tens of percent, but there were some news. Elon
Musk said the company plans to pull Tesla's shareholders on
whether to invest in his other company, that's x Ai.
So here to break it all down for us is
Craig Trudeli's Bloomberg Global Auto editor.
Speaker 3 (00:41):
Craig I have to.
Speaker 2 (00:42):
Ask you, you know, this is something that came out. I mean,
what kind of message is this sending.
Speaker 3 (00:48):
It's sending that, you know, Elon's Elon's business empire is
becoming all the more intertwined. So this has been, you know,
sort of a case on and off for years. We
can think back to say, you know, the Tesla Solar
City acquisition, you know, and that's going back quite a
way is but uh, you know, in this case it
(01:10):
would be Tesla, you know, his most valuable company in
investing in in sort of his up and comer and
one where he's you know, spent an awful lot of
time and energy focused on. Lately, as Tesla's electric vehicle
sales have been slowing, he's been really sort of dead
set on taking on open Open AI and and sort
(01:32):
of standing up a competitor to chat GPT and as
with all the companies in the space, spending an awful
lot of money to to try and compete in that realm.
Speaker 4 (01:43):
So where do we stand here in terms of kind
of how investors are viewing their investment in Tesla. Are
they invested in a auto company or are they invested
in an AI company? Or they invested just an Elon Inc?
How did they think about it these days?
Speaker 3 (01:59):
Yeah? I mean, I think Musk has has been trying
for for several years now to to sell uh and
and position Tesla as much more than just a car company, right,
and uh, you know it's it's definitely in in the
energy space and and uh you know has a battery
business to to show for that, and in in AI.
(02:19):
You know, he's he's talked a big game about uh,
you know, developing self driving technology. He's not he's not
gotten there yet. Uh as as we've seen with the company,
you know, starting to offer rides in in Tesla's around Austin, Texas. Uh,
they still have uh you know, Tesla employees in the
front passenger seat to sort of take over in events
(02:41):
where you know, the cars have not been able to
handle uh, you know, navigating the streets on their own.
And and yet with with uh SpaceX, I think interest interestingly,
you know, for them to have just pumped two billion
into h x AI, I think there's a little bit
of fomo on the part of of some the Tesla
shareholder base where they've seen you know, XAI go from
(03:05):
you know, not all that valuable a startup to suddenly,
you know, an extremely valuable startup and they feel like
they've missed out on some of this appreciation and one
in on that.
Speaker 2 (03:16):
So with all that said, Craig, I mean, does must
support a merger between x AI and Tesla or maybe
x a hind SpaceX you mentioned space X two.
Speaker 3 (03:26):
He says he does not. And and I think there's
been talk about this for years, right that, you know,
and on and off again there's been you know, questions
as to whether or not Musk is you know, sort
of stretched too thin and doing too much. Would it
make more sense to turn his companies into into one
and and sort of you know, sort of the think
(03:46):
about it as sort of the general Electric of the
New age, right, which is kind of fascinating because of
course that didn't work out too well for ge. And
and yet you know, even some of Musk's own out
have sort of alluded to, you know, it's viewing him
and his empire as as sort of you know, modern
(04:07):
day general Electric. So he he did take pains to
say on an x that he does not support a
full blown merger of Tesla and x Ai, but he
has you know, signals on there multiple times now that
he would be in favor of of Tesla putting money
in and you know that's that's, of course, you know,
(04:29):
a proposition that could be helpful if Xai continues to
grow its valuation. We should note, however, that our colleagues
have reported just in the last month or so that
x Ai has been burning through about a billion dollars
a month. So this is a company that is really
sort of cash hungry and needy as it's trying to
(04:50):
stand up a business. You know, with all of this capability.
Speaker 4 (04:54):
Yeah, and Craig, it's been I don't know a month
or two since Elon Musk left the US government, doje
is there any evidence that he is meaningfully engaging with Tesla?
Speaker 3 (05:05):
You know, I think he's messaging more about, you know,
sort of what Tesla's up to than he was while
he was in Washington. He did also post just within
the last day that you know, he was in Tesla's
design studio and sort of hyped up how excited he
was about what he saw. But you know, the company
(05:27):
is is, you know, sort of in this really sort
of challenging state from a sales perspective, and you've you've
sort of gotten indications that, well, maybe he doesn't necessarily
fully have his his finger on the pulse in the
sense that he told us just within the last few
months that sales have turned around. You know, a couple
of months later, the company reports that its vehicle deliveries
(05:49):
had fallen thirteen percent in the second quarter. So either
he was you know, not necessarily up to speed on
the state of sales, or perhaps he was optimist more
optimal stick that they were able to is going to
be able to turn things around. Then they ultimately were
able to last quarter.
Speaker 5 (06:05):
Okay, Greg, thanks so much for your reporting. Appreciate it.
Speaker 4 (06:07):
Kraig Trudeau is a Global autos editor for Bloomberg News.
He's based in London, joining us via zoom.
Speaker 1 (06:13):
Here you're listening to the Bloomberg Intelligence podcast. Catch us
live weekdays at ten am Eastern on Apple, Cocklay and
Android Auto with the Bloomberg Business app. Listen on demand
wherever you get your podcasts, or watch us live on YouTube.
Speaker 2 (06:29):
This is Bloomberg Intelligence. I'm Lisa Minteo alongside Paul Sweeney. Paul, So,
summer barbecue. You think hot dogs, right, Robert? Okay, what's
your favorite?
Speaker 5 (06:37):
What's you go to? Hot dog? Oscar myern the question,
Oh yes, okay.
Speaker 2 (06:41):
See I'm a Brooklyn girl.
Speaker 5 (06:42):
I go Nathan's.
Speaker 2 (06:42):
But okay, that's title said. There are some big news
when it comes to your barbecue. So a company may
be splitting up sources in craft hends, could break itself up,
spin off into this large part of the business, into
this new entity.
Speaker 5 (06:56):
What is this all about?
Speaker 2 (06:57):
Let's bring it someone who knows about it. Jennifer bartash
More Intelligence senior analysts Retail staples and package food Jennifer.
I know it's sources are saying a lot of things.
What's the latest that you're hearing about this breakup?
Speaker 6 (07:09):
Yeah, good morning. So this is an interesting breakup because
it's ten years after they merge together, and it seems
that the main portions of that initial merger are going
there will go their separate ways. The way we look
at it, it looks like there's a core group of
what they consider their taste Elevation platform, which is what
is in the seasonings Taste Elevation.
Speaker 4 (07:30):
Oh please, that's Gott mackenzie written all over. It has
that spices and Condiments.
Speaker 6 (07:36):
That's Spices inc. Yeah, exactly, and then they have you know,
that's kind of been their growth area for the last
couple of years. So we think that that's really going
to be what will be the residual part of Heinz.
And then there is it's undetermined yet exactly what'll go
into the rest of the business, but it'll be largely
those grocery categories where they've invested a lot to try
(07:57):
to revitalize brands and it just hasn't worked in terms
of really rejuvenating sales.
Speaker 4 (08:03):
You know, when I think about brands in the shop,
you know, going to the supermarket. Boy, those house brands
private label. Talk to us about the growth of private
label in general, Boy, and if you're a brand like
an Oscar Meyer or something that you spent jillions of
dollars over one hundred years, it seems to kind of
go by the wayside almost.
Speaker 6 (08:22):
It's true. You've got a good point, Paul. Private label
has been consistently growing and got a huge bump since
the pandemic. And part of that is that they've the
retailers have really invested in the quality and the the
differentiation of those private label brands, so where consumers now
really consider them not just a replacement for national brands,
but in some instances just regular brands of their own right.
(08:46):
And so you know, Craft Times actually had reduced some
of its exposure to private label when they sold off
the planter's business, when they sold off the cheese like
the shredded cheese business with Craft, but the core grocery
business they do still have a lot of exposure to
private label.
Speaker 2 (09:00):
So is this a lot of competition from let's say,
startup food companies appealing to younger consumers? I mean, what
kind of sparked this.
Speaker 6 (09:08):
Well, there's really been a shift in the way consumers
are looking at brands. Unless you own a long legacy
brand that you can reinvent and really you know, drive
interest from younger generations, it's really hard to keep that going.
And so what we've seen is that they've done a
good job with revitalizing things like Philly Cream cheese. But
(09:31):
despite a lot of investment, brands like Caprice, son Oscar Meyer, Maxwellhouse,
you know, these brands just aren't resonating with younger consumers,
and that means that the growth prospects for those brands
are a lot lower, and that makes it hard to
really build yourself as a growth type oriented company.
Speaker 4 (09:50):
So I know, as I think back to my M
and A Memory Banks ten years ago, Crafton Hines Berkshire
Hathaway had a big hand in putting these two companies together,
and look now they're still the largest shareholder with just
under twenty eight percent of the stock. I assume Berkshire
Hathaway Warren Buffet has kind of signed off on this
deal or is open to it.
Speaker 6 (10:08):
At least I would assume that they're open to it,
you know, I mean over time, you know, Berkshire Hathway
has actually done quite well out of this deal, even
though Kraft, heindes as an overall entity, is probably disappointed
in the overall analysis. But you know, the merger was
in twenty fifteen. It's been ten ten years. The value
(10:29):
of the deal at the time in twenty fifteen was
forty five billion dollars. Today's market cap it's thirty two
billion dollars, so it you know, and yes they've sold
off a couple of brands, but it just hasn't materialized
to be the type of growth that I think Berkshire
Hathway and initially envisioned it would happen.
Speaker 2 (10:44):
Tenfer can you dig more into some of the advantages
but also the risks associated with breaking up the company.
Speaker 6 (10:51):
Some you know, obviously some of the advantages. And this
seems very similar to what Kellogg did when they spun
Kelenova and W. K. Kellogg out into two separate companies.
They separated the growth prospects and then those from the
slow growth areas. That's very similar to what Kraft Time
seems Craft Time seems to be doing. Obviously, if you
(11:14):
can focus on growth areas, that gives you undivided attention
to really expand and grow. That would be an advantage,
I think one of the disadvantages, And this is something
that's kind of a broader question to consider, is you know,
whether there's a cycle that's starting because we've seen companies
like Kelenova split, we see Unilevers spinning off their ice
(11:34):
cream business, and those new entities are now being bought
up by others. So you've got Mars acquiring Kelenova, you
have Ferrero acquiring W. K. Kellogg. But those in order
to get regulatory approval, you have to have categories that
aren't overlapping. And so you're you're you're seeing a new
(11:55):
birth of new kind of conglomerates, of dissimilar portfolios. And
so it makes me wonder if we're setting up another
cycle where in another five years, ten years, we're going
to see these companies that have been buying up the
underperforming brands going through a similar type of activity.
Speaker 5 (12:11):
What's driving all this?
Speaker 4 (12:12):
It doesn't it feel like this MNA activity, whether you're
buying or divesting, is out of a position of strength.
It always feels like I don't know, I'm just I'm
doing it because anami growth. Then I got to do something.
I got pressure from shareholders to do something. So I'm
either buying or selling because your business doesn't have a
lot of growth.
Speaker 6 (12:31):
No, it's true, Paul, and I think one of the
crises that we've sort of seen in packaged food at
least is the North American companies is a lack of real,
true innovation. So what's happened is a lot of companies
have fallen into his pattern of innovation being a new
flavor or a new extension, a new size of the product,
and that's not really what gets consumers excited. You need
(12:54):
to bring new and different products to market, and that's
an expensive endeavor and companies have sort of shied away
from that. And although they're trying to reinvigorate that innovation pipeline,
we just haven't seen a lot of home runs coming
out since the pandemic. And so, you know, I think
when you've got that backdrop, you have to evaluate for
your portfolio and say, how do we focus on the
(13:15):
strengths that we have and can someone else do better
with the categories where we're not doing as well?
Speaker 5 (13:22):
All right, Jen, thanks so much for joining us.
Speaker 4 (13:24):
Jim Bartasha is seening your retail Anams Bloomborg Intelligence, or
at least the key question.
Speaker 5 (13:27):
You know Nathan's hothawks. Are you ketchup or mustard?
Speaker 2 (13:31):
Oh, mustard with salacrad and red onions.
Speaker 5 (13:33):
Okay, solid solid.
Speaker 4 (13:35):
I'm a mustard person too, But if somebody put a
hot dog with ketchup in front of me, I would
not eat it.
Speaker 5 (13:40):
Well, here's the thing.
Speaker 2 (13:41):
I just came back from Chicago and they said, if
you put ketchup on your hot dog, no, that's a
big no.
Speaker 6 (13:46):
No.
Speaker 5 (13:47):
They do not do that in Chicago. Okay, good, good
to know, Good to know you. Yeah, you know.
Speaker 4 (13:52):
I'm definitely a mustard person. But again, you throw a
hot dog in front of me with ketchup.
Speaker 5 (13:56):
Off, probably eat it as well.
Speaker 1 (14:00):
Listening to the Bloomberg Intelligence podcast catch us live weekdays
at ten am Eastern on Applecarclay, and Android Auto with
the Bloomberg Business app. Listen on demand wherever you get
your podcasts, or watch us live on YouTube.
Speaker 2 (14:13):
Welcome back to the Bloomberg Intelligence. I'm Lisa Matteo alongside
Paul Sweeney, Weight.
Speaker 5 (14:17):
Loss, drugs, right, all the rage. I always want to
know what.
Speaker 2 (14:20):
Is the latest with it? So here with that and
much more is Sam Fazelli, Bloomberg Intelligence, Director of Research
for Global Industries and Senior Pharmaceuticals. Sam, thank you for
joining us this morning. Just want to ask what is
the latest because we hear so much about weight loss
drugs and different companies. What's the latest you can here
you've been hearing so far?
Speaker 1 (14:39):
Yeah, hi, Lisa.
Speaker 7 (14:40):
So in terms of what's happening in the market, we're
still waiting to see whether the prescription counts for Novo
Nordisks US WeGo V numbers are up or not. They've
been flat for pretty much most of this year in
terms of the number of scripts that doctors are writing
for their we go V. And the opposite is the
(15:02):
case for is Lily zeppound continues to keep going up
and it's a it's a pretty interesting battle which seems
to be currently being won by Lily, and time will tell.
What is interesting is that my colleague A. Girzbacker just
finished a deep patent analysis for so Astria exactly Paul
(15:24):
for we go V, and I mean the dates in
terms of pattern experience. Of course, they're important because that's
when generics can come in and compete with you. Here
we go from possibly she says twenty thirty one, twenty
thirty two in the US at least to twenty forty.
I mean, look, that's an amazing outcome, and she puts
a decent probability on it in terms of the ways
(15:46):
that they could protect it. So that could mean a
lot for a product that could be sending five or
ten billion dollars a year.
Speaker 5 (15:52):
Right, all right, we got to go to the elephant
in the room here.
Speaker 4 (15:55):
I mean, Jesus for our listeners on radio, Sam is
in some kind of contraption like he I'm guessing he
fell off a barstool and hurt his armor's shoulder.
Speaker 5 (16:04):
Here, what happens, Sammy.
Speaker 7 (16:06):
It's that cheap drink you guys selling the US. You know,
it just doesn't work for me. What I need is
are is classified growth, red wines and white wires, right.
Speaker 5 (16:14):
Pole, So what I mean, I'm assuming there's something going
on there.
Speaker 7 (16:17):
So all right, so rotate tickoff surgery. It's a ard.
Speaker 5 (16:22):
He's not an athlete.
Speaker 4 (16:23):
Bottle He stopping a bottle of bordeaux, threw out his
shoulder opening a bottle bordeaux. So talk to us about
what's what's the latest on the cancer field?
Speaker 5 (16:33):
Sam I know you got a lot of conferences in
here on top of the latest research.
Speaker 4 (16:38):
What should we as consumers and maybe even investors in
healthcare stocks and biotext what should we be thinking about
as the next frontier on the cancer front.
Speaker 7 (16:47):
Yeah, I mean, we have a bunch of conference's coming
up very soon, so the Myloma Conference in International Maloma
Society in September, the World Lung Cancer Congress, then there's
the big European Society for Medical Oncology conference in October.
During these we're going to hear about whether there's going
(17:08):
to be big step changes again in the treatment of
some diseases, particularly lung cancer. So we got some therapeutics
with possibly some data coming up, maybe a door world
lung cancer. We'll see the aura Desmo. And we've just
done a survey of US physicians which came back with
very interesting comments, which are going to write about tomorrow
(17:30):
about some other trials that are ongoing. So we'll say
I can't front run that the data will be published
tomorrow on the terminal. But there's stuff still happening in
cancer where we're seeing potential for paradigm shift, and that's
some of the things that we'll be referring to tomorrow.
Of course, in the middle of all this, we have
farmer companies continue looking for products to expand their pipelines
(17:51):
through M and A.
Speaker 2 (17:52):
Now, Sam, we've been talking a lot about tariffs lately.
How is a biotech sector, even pharmaceuticals, if you can
dig more into how they're being affected by tariffs.
Speaker 7 (18:03):
Yes, so that that's one area if you look at
the performance of the farmer stocks relative to the rest
of the market, I mean Max seven. I mean, I
don't know where they're going, but Paul I'm sure knows
more because of the background he has in analyzing tech.
But they just keep going up. I mean, there's no
there's no nowhere else for them to go if you
put them aside. Okay, there s a B five hundred.
(18:25):
Maybe hasn't been as magical as the when it includes
the Max seven, but pharma has been a little even less,
a bit more lackluster, partly because of this continuing conversation
about tariffs. That two hundred percent is something that President
Trump mentioned just very recently, although it's delayed till next year.
(18:46):
You've got your most favored nation pricing that's coming up.
You've got your possibility that the regulators are going to
be We don't know where the regulators going in the minute,
to be honest with you, positive, negative, favorable, not favorable
for the evolution of regulatory framework in the US. So
there's a lot of questions. And I know this is
(19:08):
four's favorite word, uncertainty that still dogs at the pharma sector.
Speaker 5 (19:12):
Yep, that's certainly the case.
Speaker 4 (19:13):
So maybe you know, August one might be a date
we get some more clarity there. Sam Fazelli, director of
research for Global Industries and his senior pharmaceutical analysts for
Bloomberg Intelligence. He's covalescing there in London and our London students,
but he makes it into the studio folks, even with
one arm in a sling. So we appreciate that playing
herd out there for us.
Speaker 5 (19:31):
That's what happens when you get old, Lisa. You know,
things happen. They just kind of go out and we
can see you in a sleep.
Speaker 4 (19:36):
I hope, I hope, not exactly so, Sam Fazzelli. There so,
and Emina, you mentioned M and A. I'm just so
far in the first quarter. This is according to Sam's notes,
so far in the first half thirty two billion of
M and A in farmer thirteen deals.
Speaker 5 (19:53):
Last year it was.
Speaker 4 (19:55):
Sixteen billion for six sixteen deals, so dollar amounts certainly
bigger this year.
Speaker 1 (20:01):
This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
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ten am to noon Eastern on Bloomberg dot com, the
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