Bloomberg Businessweek Weekend: November 14th, 2025

22:04Yeah, 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. Our thanks to Peter Atwater, president of Financial Insights, an adjunct lecturer of economics at the College of William & Mary.

22:32Carol Massar:Coming up, how one auto parts manufacturer is faring under the president's tariffs. The CEO of Magna International is next. You're listening to Bloomberg Businessweek. This is Bloomberg. What if data didn't sit still? What if intelligence moved with us? Not buried in reports, but activated in real time. Where lives are being shaped. Where decisions are being made. It all starts with a question. Where is the potential? Cotality turns data into clarity. Intelligence into insight. Insight into action. Because when intelligence moves, we all move forward.

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24:21Carol Massar:Real-time menus, seamless updates, big league reliability for any business. That's Genius. You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 p.m. Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App. Or watch us live on YouTube. When Magna International reported earnings on Halloween, shares of the auto parts manufacturer rallied as much as 7 % intraday in response to third quarter sales and adjusted EPS beats. Magna Management also raised its fiscal year sales forecast thanks to strength in North America and China.

25:00Carol Massar:There was a lot going on. Company based in Canada, biggest automotive supplier in North America, 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. Back with us is Swami Kotagiri, president and CEO of nearly$14 billion market cap auto parts maker Magna International. The stock up close to 18 % 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 the playbooks from past rotating UAW strikes, COVID, the great financial crisis, the chip crisis, all rolled together.

25:44We were pretty shocked about those comments because you said it was big. Is it still that big of an impact? Has it been that big of an impact? Yes, there has been a lot of dynamic challenges in the industry, as you know. And when you spoke to me last, 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$200 million. But we continue to work with our team, with our customers, with our supply base, and mitigating as 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 10 basis points, which means about 30 million for Magna this year.

26:34Carol Massar:So I will say our BI team reacted to our Bloomberg Intelligence team, Swami, reacted and they said they believe that your company's continuous cost cutting and operational excellence could further release margin gains in 2026. And they talk about in the U.S. major customers are benefiting from a more profitable sales mix with higher sales of pickups and SUVs offsetting lower EV production, which should enhance Magnus program economics for upcoming 2026 launches. Do they have it right? 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 mentioned, cost restructuring, optimizing our operations.

27:18We have really worked through about 40 divisions in terms of restructuring, consolidation, bringing things together. And when the mix and the volume 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 150 basis points over the last three years. And I'm glad to say we have an additional visibility of 35 to 40 basis points going into 2026. So this is a journey. It's never going to stop. You're in an industry that we need to constantly work on improvements.

27:56We call them continuous improvements, and we're starting to see the result of that.

28:00Carol Massar:But you did talk about demand destruction in the short term when we talked with you in April, right after Liberation Day. Has it played out as bad as you expected? And where are we today? Your top customers are a who's who of the global auto industry. So where are we today in that demand destruction? Are we done? I wish I could have that crystal ball, but the way I look at it is we peaked out as our industry in North America about 17 and a half million units. Interestingly, I was looking at the data, go back 20 years in 2004, 2006 timeframe, North American production volumes were somewhere between 15 to 16.

28:37We are still at 15 to 16 million units today. I think the volumes held up this year, but I always like to stand back a little and see where was Magna. Magna 20 years ago was a$20 billion company. Today we are a$40 billion company. And it's the result and the efforts of the team to continue to gain CPV and to diversify our customer base. And that's where our focus 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 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.

29:22Your company is based in Ontario. We are curious about the U.S. and Canada trade negotiations or lack thereof. given the impasse between the US and Canada. How is that affecting your industry and you specifically? Yeah, as you know, auto industry is a 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 obviously we are following the footprint of our customers looking at the economics, looking at transportation, looking at logistics.

30:07And 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 just going to be a tailwind to everybody, the OEMs and the supply base in all.

30:26Carol Massar:But Swami, is it broken, the U.S., Canada? I mean, it's been so intertwined, really, the North American, you know, global auto supply chain. But is it, especially the U.S. and Canada, is it changed forever? Again, I'm not an international trade policy expert, speaking from a common perspective. But you have a great vantage and a great window on how it has worked and how it feels today. It's definitely been strained, right? There is no question about that. But I've lived in this industry for 26 years, and what we're talking today is going to impact maybe 27 or 28. So we're always looking at what we're doing today impacts three or four years down the road.

31:13What we're doing today has been planned and decided three or four years ago. So I tend to think a little bit in longer cycles. you know, I'm still hopeful that the policy is going to get to a point where it's mutually beneficial to everyone. The president in the past, the president of the U.S., has talked about his back and forth in his conversations with executives at North American auto companies. Have you had conversations with the president or his team? We have had, obviously, a seat at the table in being able to communicate facts, their possible impacts, the challenges of the industry and what could benefit.

31:51I 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 the jobs that we have, what is the investments that we have made and how it could impact, right? Definitely that is the conversation that's always ongoing.

32:12Carol Massar:Hey, Swami, 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 Ford considering killing the F-150 Lightning, Stellantis killing the Ram EV, and GM taking a$1.6 billion impairment charge on its EV assets. That feels pretty chilling. How is that impacting you guys? In the past, we've always looked at EV. And if you look at some of the comments that we made, I think we were a little bit conservative, but definitely the The North American EV penetration has had an impact on us.

32:50We came back and talked about the impact of our revenue going forward in the August, I think, of 2024. But the key thing has been how we've been able to pivot. We had our peak CapEx spend in 23, 22. We got back to the sales to CapEx ratio. shows our agility in being able to get back and, you know, look at optimizing how we can reuse 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 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, the take rate is very different than what we all expected a couple of years ago.

33:34So, but with the investments already there, with the development that's behind us and our ability to hit, whether it's an internal combustion engine or a Bav or a hybrid, that flexibility in our product line has helped us weather the storm pretty well. And, you know, I think that's what we need to continue to do going forward. 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 to help make supplies for more gas-powered vehicles? Yes, Tim. I think we have had a lot of content in, obviously, the internal combustion engine platforms, right?

34:15And 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 80 % of our product is propulsion agnostic. That means whether I make a mirror or a door or a structure or a seat, we'll make it for whatever propulsion it is, right? 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.

34:50Carol Massar:Swami, just 30 seconds here. Any signs of a U.S. recession, a global recession? What's the word that you would use to describe the marketplace right now? just quickly. Yeah, I think there is a science of stress, I would say. And obviously that, you know, puts us all on a cautionary foot. But like I said, from our auto industry, the inventories seem normal. The average age of the fleet is pretty high. So we are looking for auto demand not to be impacted that much, but we still remain very cautious. That was Swami Kodagiri, President and Chief Executive Officer of Magna International. I really do love talking with him, Tim, because we get a great read on the global supply chain.

35:32Carol Massar:I mean, Otto, if you think about how many different countries have been involved, how many times there are 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. Yeah. 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, OK, if this is what we're going to do in 2030, this is the decision we need to make right now. And one area that I think has sowed a lot of confusion, not just for automakers, but for the parts suppliers is the fate of EVs, at least here in the United States.

36:08I 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, OK, well, what does demand look like? What does adoption look like? And how does that reset what these auto companies are doing in terms of what they're offering to consumers and when they're offering it?

36:24Carol Massar: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 I love getting his perspective. 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, 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.

36:59This is Bloomberg. This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at 2 p.m. Eastern on Apple CarPlay 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, play Bloomberg 1130.

37:21Carol Massar: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 its shares slumping 20 % in extended trading despite reporting record revenues. So, investors definitely turned sour on that report. On top of that, Axon agreed to buy emergency tech company Carbine. And that's a deal valuing the company at$625 million. Still, it is worth noting that stock got more than 3 ,300 % since the end of 2015. That was when Axon was just$17. Yeah, it's not a$17 stock anymore.

37:59Carol Massar:In fact, when you look at it on the Bloomberg, this is a stock that now trades at about$570 a share. So as we said, it's been on fire. But investors, a little bit of a rethink. For more, we caught up with the CEO of Axon, Rick Smith. he is still feeling optimistic. Yeah, I'd say the business is the strongest it has ever been. You know, it's a public CEO for like 24 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.

38:34Where we stay focused is building the long-term business. 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 fuses 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 the mission critical voice space, which we think is going to be a huge opportunity over the next decade. So what are you guys seeing that investors and analysts are not seeing?

39:05Because the narrative that you have and your tone doesn't necessarily match the reaction from the straight? 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 incentive 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. 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 EBITDA, if you take that noise out, we managed to turn in, we've got like seven consecutive quarters, over 30 % top line growth.

39:48And we turned in right at 25 % or 24.9 % adjusted EBITDA while maintaining the growth rate. And if you listen to our president, who used to be the head of sales, he was very close to the customer. He was pretty bullish on our conference call telling people we think the fourth quarter is going to be a monster from a bookings perspective. So we're feeling really good.

40:08Carol Massar:All right. 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 priced 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 398 times current earnings are nearly 94 times future earnings. You've got a$47 billion market cap with projected 2025 earnings of$2.7 billion. So your price to sales, or at least in terms of your market expectations, I mean, there's a lot there that they expect everything to kind of just hit perfectly.

40:51Carol Massar:There's also concerns about tariffs and 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 Prepare, which was an AI-powered emergency communications platform. So why is that valuation or why is that market cap versus sales justified? Well, first, I probably get a note from my general counsel telling me not to use words like monster when talking about future performance. I bet. Is your phone going off right now next to you? 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, you know, the stronger the operating business, the more gap EPS gets punished with stock compensation expense.

41:36So I think something like looking at a multiple of revenue is probably a little more like going to be a little more instructive. But look, yes, 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 30 % growth. And it's our job as a management team, we keep delivering on that. And if the stock takes a breather, that's kind of outside our control. And you have an optimist. It creates a great entry point for some of our long-term investors. And we're just going to keep chugging away, working on the business to make sure we keep growing.

42:09And 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, 10 % of our core business bookings this year are going to be on our AI services. So we're really delivering value to our customers. And we see doing that in 911 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 complimentary businesses prepared allows us to go fast into any 911 call center.

42:41And then Carbine allows those customers to then go deep and get out of the business of running all the hardware and move their entire 911 infrastructure to the cloud. And those two together, we think or like chocolate and peanut butter. It's going to be a great combo.

42:53Carol Massar:Well, I do want to ask you about those monster bookings for the fourth quarter. But having said that, tell us about, you said 10 % 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. Got it. Well, I'm terrible at 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 10. For the first time, we have a weapon that some of our customers in Europe are saying is a better weapon for their officers than even a handgun.

43:30And if we can prove that out this winter, we'll be testing it above the Arctic Circle in heavy, cold conditions with heavy clothing, which has 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 our other services right along with it. Well, let's talk about those other services, because if I go back into your earnings and look at 2017, connected devices accounted for close to 70 % of your total revenue.

44:04Software and services was just over 30 % of revenue. If we fast forward to just in recent years, last year, that pretty much flipped, where connected devices was 40%, and software and services is now close to 61 % of your business. How big does software and services get? What's the ultimate goal there? Well, that's sort of like asking me which of my children is my favorite. I love them all. But I mean, one of those has a higher margin, right? Oh yeah, one has a higher margin, but when you can do hardware and software together, when you can do body cameras, drones, in-car 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.

44:42So yeah, 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.

44:53Carol Massar:Hey, one of the things I want to ask you about is there's been a bunch of reporting. There was 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 footage is certainly being shared with law enforcement, whether it's ICE and others. Again, there's 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.

45:32So 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 concern. And so all of our approaches, we run through this ethics review up front with people that are naturally very concerned and skeptical on these issues. And we build safeguards in that help minimize the risk of abuse while maximizing the opportunity. Look, when a private consumer buys a camera to keep their home safe, they're buying it not to watch their dog when they're at work.

46:09They want to stop criminals from stealing their stuff, breaking into their house. I actually had 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 Ring, and by the way, we encourage open sharing standards. Ring is sharing with our competitors. We openly share on a reciprocal basis with our competitors. We think this is doing the right thing. With all these cameras out there, we should be using them to deter crime and criminal activity. And we think you can do that without having to track everybody, where they go to in their personal lives.

46:41we're talking about detecting dangerous criminal acts and deterring those acts in the first place. So that's with a lot of local law enforcement agencies. 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? Yep. We certainly work with the federal agencies as well. And I think where there is some controversy is like, look, people have different perspectives in different states and in different cities.

47:14And our system is built so that like, hey, if you are, you know, a city in a very deep progressive area, you can choose who and how you share your data. 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, we don't, it's not our position to try to dictate how government customers, and that's who we sell to, a private corporation shouldn't be telling government how to use their own data. But what we do is we enable them to make decisions so those elected officials can be responsive to their voters and we can be responsive to their communities.

47:51Carol Massar:One last question. Two acquisitions in as many months. Is there more to come? 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 sometimes you got to move quickly when opportunity knocks. And so, yeah, this was unexpected, but we're really excited about it. That was Rick Smith, the founder and CEO of Axon Enterprise. And that wraps up our first hour of the weekend edition of Bloomberg Business Week Daily from Bloomberg Radio. Ahead in our next hour, the dangers of social media and the urgent need to protect its youngest users.

48:28It'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 can RFK Jr. do anything about it?

48:48Carol Massar:And he gave up a career in a London office, moved his family to France to make rosé and do it in a way that is good for the climate. Mother Earth will be joined by the owner of Mizon Mirabeau. This is Bloomberg Businessweek. I'm Carol Nassar. And I'm Tim Stenevich. This dog salon? Operational excellence. Thanks to Genius from Global Payments. Scheduling? Personalized. Checkouts? Instant. Absolutely genius. Big League reliability for any business. That's genius. Never bet against American grit or American energy. Through innovation, Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost and a fraction of the time.

49:37So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy.

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51:41Or watch us live on YouTube.

51:44Carol Massar:Plenty ahead in our second hour of the weekend edition of Bloomberg Business Week, including the family who moved from the UK to Provence to live out the dream of owning a vineyard and being on a mission as well to make rosé wine, but in a very environmentally responsible way. Stephen Kronk, he's the founder and CEO of Maison Maribault. He was back to talk wine, regenerative farming, and so much more. And, well, we may have sampled a little bit. Hey, nothing wrong with that. Nope. It was Friday, wasn't it? It was. I think it was. It was definitely Friday. Well, OK, so the wine, not ultra processed.

52:18We also did speak about ultra processed foods. This is a danger to our bodies. And it's what the majority of Americans eat. Yet not all are unhealthy.

52:27Carol Massar:Wait, what? Yeah, we're going to explain. 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 social media. Now, the original reporting of Bloomberg News investigative reporter Olivia Carville is throughout this film, but there's a lot more reporting, too, as well.

52:58Carol Massar:The Bloomberg original investigation exposing the real world consequences of harmful social media algorithms. These companies have been gaslighting us for years. This is all about money. The purpose of all commercial ventures is to create a demand. Our children are the casualties. We need to take back the power from these companies. They created a dangerous situation and then manipulated these kids. They know the levels of addiction, sexual abuse. They know the levels of suicide. They're not showing our kids what they want to see. They're showing you what they can't look away from. And that is the Bloomberg Original Investigation.

53:35Carol Massar:Can't Look Away, The Case Against Social Media, which is now available across Bloomberg platforms. Perry Peltz and Matt O 'Neill 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. Perry, 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? 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.

54:11Carol Massar: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. It's not a bad parenting. It's not a bad kids issue. Yeah, the big question that I have 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. 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.

54:43I had this vague sense that social media was bad. I'm a parent. I have two young boys.

54:48Carol Massar:We talk about it so much. We understand the problems of social media. 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. What do you mean by 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.

55:28There's a whistleblower in the film that actually explains this in more detail who used to work at TikTok.

55:33Carol Massar: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 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. 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.

56:10Carol Massar:And thus the title, Can't Look Away From. They're being fed the material that they actually can't look away 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? The incentives have got to change because we right now, unfortunately, have a legal system in Section 230 that protects these companies in a profound way.

56:41Carol Massar:It treats them as passive pipelines. They are not passive pipelines. Algorithms are company driven. So what that essentially says, Section 230, is that companies, these social media platforms are not responsible for the content that's on their platforms. That's exactly right. They are treating them like bulletin boards, which is if you go back historically to 1996, 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, is what's happening here.

57:15Carol Massar: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. 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 liability law instead of under the idea of Section 230, where it's the content.

57:58Is 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 230, 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 moved to discovery. And that case is making its way through California.

58:18Carol Massar: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. 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 and the companies to say, they're abusing good products. That is not what we are, at least, that's not what the reporting is suggesting. This is very, very different.

58:51Carol Massar:These are algorithms that need to be changed. I want to just mention, because when you do a documentary and we're at the high level, and sometimes 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 fentanyl that he got on Snapchat. that. Anglin Roberts died after she copied a strangulation video she saw on Instagram. It was in her feed. Jordan Demay, six hours from initial contact by who he thought was a young woman, but wasn't, but was rather a sextortionist.

59:22Carol Massar:He killed himself. I mean, telling these stories. I mean, in the film, you're in the bedrooms, you're talking to the parents, Matt. There's a lot of people that were impacted. And there are thousands of cases. This is just the tip of the iceberg. And I appreciate what you were doing there. 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 he 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 social media.

59:57And 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 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.

1:00:30Carol Massar:Because you know what? My understanding, and I know you and I, we did a panel here. We need a discussion. What does, is it TikTok in China do? It's a great, it's a great question because TikTok, owned by ByteDance, the similar app in China has a shutoff time at night so the children can't access it. Instead of promoting whatever the kids are lingering on, it actually promotes practicing your musical instrument and doing math problem sets. Perry, what do you hope people, you know, run with after this film? We've only got about a minute or so left. What do you hope they do? They ask either their kids or I don't know.

1:01:07Carol Massar:It's a really important question because we don't want to scare everybody and not give them anything that's solutions oriented. And when Matt's talking about these other, 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 least high school. It's the best thing that we can do and change needs to happen at a regulatory level. Perry, one last one for you. You've got a really interesting background in journalism, but also in documentary filmmaking, but also in public health.

1:01:39Your documentaries have included subjects such as the opioid epidemic, excessive drinking. Is this as big of an epidemic in your view?

1:01:48Carol Massar: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 particularly. A public health crisis. A public health crisis. No question about it. Layer AI on top of it. And it's just terrifying. Our thanks to Perry Peltz and Matthew O 'Neill, directors and producers of Can't Look Away, the case against social media. The Bloomberg original investigation is now available on all Bloomberg platforms. I have to say, Tim, you know, I actually did a panel with Matt O 'Neill a couple of weeks ago here at Bloomberg for another.

1:02:23Carol Massar: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 can go back to elections and political misinformation, but just so much stuff that's out there. And for a lot of people, they see it as a truth, a reality. And I think there's been real push on social media companies to be responsible for what's on the platform. With this film, this documentary reminded us that you go back to a ruling that basically made these companies not responsible for the content on their platform.

1:03:02Yeah, Section 230 is what you're referring to. And Perry Peltz talks about it a lot.

1:03:05Carol Massar:Right, the Communications Act of, was it 1996, 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 open up a big question. Who is responsible for that? Well, how would the world be different right now if these platforms were held responsible for what was actually on their platforms? Well, and what they liken it to is to tobacco. Right. And when tobacco was kind of being marketed to kids and trying the whole idea is get them hooked early.

1:03:45Carol Massar: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. They kind of tend to stay with you until they're older. Well, I think what a big takeaway for 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.

1:04:17It's not how little did you get young people to actually use this platform. That's not what investors are judging them on.

1:04:25Carol Massar:Well, and it's exactly. So they're doing everything they can to get people to spend more time on the platforms. 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 and then target with you. So you might have been searching something that was optimistic and all 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.

1:04:57Carol Massar: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 it. Here in the U.S., the safeguards that are put on them by the companies versus in China and how the Chinese companies are required or at least what they do when it comes to the content on the platforms. Yeah. Check out the film. Exactly. Check it out. But 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.

1:05:35Carol Massar:Another addiction worth paying attention to, ultra processed foods. People want to avoid them, but experts are struggling to define them. That's next. This is Bloomberg. This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at 2 p.m. Eastern on Apple CarPlay 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, play Bloomberg 1130. 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.

1:06:14This according to a government study that was released back in August. This government study ran from 2021 to 2023. And it said that about 62 % of childhood diets come from highly processed foods. Think burgers, pastries, snacks, and pizza. This according to the U.S. Centers for Disease Control and Prevention's nutrition study. The same foods have a similar grip on adults, making up about 53 % of the calories that they consumed.

1:06:39Carol Massar:That's a lot. Yeah, 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.S. food supply is poisoning children. It's a question that I'll pose to Dr. 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 food affects our bodies. The Johns Hopkins Bloomberg School of Public Health is supported by Michael, our Bloomberg founder and majority owner of Bloomberg LP, parent company of Bloomberg TV and radio.

1:07:09Dr. 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 processed foods. I was kind of surprised to see pizza and burgers on that list. How do you define it? Yeah, so thanks for having me back. 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 extrusion, fractioning, where you break down the pieces of the food into different things and then put it back together again.

1:07:52And 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. And so the most common 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.

1:08:21Carol Massar: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 22, 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? Yeah, that is what we recommend as the way to know if a food or beverage you're considering purchasing or eating is ultra processed. 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.

1:08:59I don't even know how to pronounce that, that's a signal that's an ultra processed food.

1:09:03Carol Massar:So do we fix it by just infusing everything with protein and then it's all okay? But then it's still ultra processed. Like even a protein. Are you picking on the Pop-Tart? Yeah, protein packed Pop-Tart. We talked about this on our editorial call this morning. It sounds great. Protein with some glazing pop. Doctor, I'm going to let you weigh in. Yeah. So, I mean, thinking about what our, that's a strategy the food industry uses, maybe to signal that something is healthier for us by saying, oh, this is protein rich or whole grain rich or this has vitamins or minerals. Right. But if it still has these other ingredients, it's still an ultra processed food.

1:09:40And so, you know, the addition of, you know, other nutrients that we might think are beneficial does not change that food into something that is not an ultra processed food. It's still ultra processed. So just really shocking to see 62 % 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.

1:10:15Yeah, 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. You know, it's over half of adult diets. 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 to children for these products. And they're easier to, they're easier to grab and go there. A lot of them are ready to eat and, you know, their 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, That is one strategy to help kids have more, say, fresh fruits and vegetables to snack on or healthy snacks that are made ahead so that they can reach for easily.

1:11:02But again, that is extra work for parents and sometimes extra cost for parents as well. So there are really good and intractable reasons why these foods comprise so much of our diets and particularly our children's diets.

1:11:17Carol Massar:So you know what's interesting? The stat that Tim mentioned from the U.S. Centers for Disease Control and Prevention, their nutrition survey, when they talked about highly processed food, they said pizza. So this, you know. But not the pizza that you get and I get on Friday nights. That's what I want to ask you. Right? So, like, I go to a place where I know they are making their homemade crust from special weed. It's been featured in the New York Times. You know, and it's. No, no, no. I know you're having fun, but I mean, it's like, you know, fresh tomatoes, fresh basil. I guess maybe there's obviously some like homemade cheese there.

1:11:56But like what like how do we distinguish really, really bad processed food versus stuff that maybe isn't so bad? Yeah, I think that, you know, that kind of pizza that you're describing or let's think about bread, even pizza or bread make at home. Like you're combining wheat and flour and salt and yeast and you have your fresh tomato sauce. That's not an ultra processed food. So if that but that is not the majority of the pizza that people are eating. So when we talk about things like pizza, 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.

1:12:43or something like that. Those are the ultra processed things. So not 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 sourdough bread during COVID, for example, that's not a process bread you might get at the bakery 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 processed, that sliced bread that you see. And so but that includes even whole wheat bread.

1:13:22So, you know, there are some ultra processed products that are by definition ultra processed because they might contain some of those qualifiers or things that turn them into that product, but they might still be somewhere less of a concern than others, I would say. So just in the last two minutes that we have with you, that Health and Human Services Secretary Robert F. Kennedy Jr. has vowed to go after these food companies. So Americans do eat healthier thus far. How is he doing? Well, 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.

1:13:59And 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. And so 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 ultra-processed 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 food would be a step in the right direction.

1:14:35Carol Massar:Why do we just real quickly 30 40 seconds here? Why do we have so much ultra processed food? Is it about keeping shelf life? Or like, what is it? Or is it just cheaper? Mass production food? 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 more shelf stable, they're oftentimes more affordable, and they're in high demand because they save people time. And they save people mental energy as well. 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.

1:15:08And, 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.

1:15:19Carol Massar:One last quick question, 25 seconds. Can we eat too much protein? 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 U.S. as a whole. Our thanks to Dr. 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. All right. So you have little kids. My daughter's older. I know we were obsessed. I know you are, too, with organic. Yeah, but I mean, that can only do so much.

1:15:52Truly.

1:15:53Carol Massar:It's hard. You know what's really hard for us? What? What they eat when they're out of the house. I was just going to say like when they go elsewhere, right? 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. And oftentimes in the after school programs, he comes home and he's like, oh, yeah, I got Doritos or whatever.

1:16:24I got, you know, candy from this after school. It's like, oh, you can only do so much.

1:16:29Carol Massar: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 ultra processed. I was going to say, was it in like a package or was it actually? It 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. You got to go home for lunch in grade school.

1:16:58We lived really close.

1:16:59Carol Massar:It was like a little town. That's pretty cool. The teachers just let the kids walk home by themselves? Yeah. I mean, I was literally a couple minutes away. That's really cool. So I could go home and make dinner. Not dinner, but make... Did you make the lunch yourself? I did. I made it for myself and my little brother. Now my mom was working. That's pretty cool. Especially when we got a little bit older. That was through eighth grade. Different world. It is, right? Yeah. That's pretty cool. But high school wasn't. That's the opposite. Were you closer in your high school? Well, I went to boarding school, so...

1:17:24kind of impossible to really relate here but was boarding school healthy yeah this i mean it was real food yeah which is good we did have one thing we did have what well two things that we had what which were crazy one chocolate milk okay so that was pretty good two i used to a frozen yogurt

1:17:45Carol Massar:machine and do you have a cappuccino maker no no no no uh so we could just go into the dining hall and just get frozen yogurt whenever we wanted, which was a little nuts. I don't know if they still have that. Oh, my God. And one thing you do as seniors, you're allowed to be out late. We'd all break into the dining hall and just eat whatever we wanted there late at night. It's kind of like allowed to do that. Wait, wait, you broke in? Yeah. Was there like a lock in the door? The locks that were meant to be taken off. To pull out those big wire things? No, they were just like little, I don't know, U-shaped things that they put over, like horseshoe kind of things.

1:18:20Carol Massar:You know those things you learn about your co-host? Yeah. Very, very interesting. Hey, we should point out that as one little news— I wasn't a bad kid, okay? Just want to let you know. I didn't get sent away. I'm going to bring it back to the news. I was kind of a bad kid. We do also want to mention a story that has come out and kind of associated, if you will, the Trump administration's deal with Eli Lilly and Novo Nordisk to lower the cash price of weight loss drugs. It's putting pressure on employers and insurers to negotiate better costs. But let's just talk about those GLP-1s are—no doubt about it, people are eating less.

1:18:52Carol Massar:there's kind of this healthier thing going on. I don't know if you want 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. Also on the GLP ones, did you see the news this week? Eli Lilly dropping CVS's drug benefit plan for its employers. Okay, this after CVS stopped covering its blockbuster weight loss drug in favor of a rival medication from Novo Nordisk. This is according to people familiar with the matter. So Eli Lilly was like, We're not going to use CVS's drug plan because you guys are not actually covering our product.

1:19:27Carol Massar:Sounds like a negotiating tactic. I mean, they're dropping the whole plan. Hey, it's going to cost them, right? All right. All right. A lot of stuff this week. Hey, 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. More on the other side with the owner of Maison Mirabeau. This is Bloomberg. This coffee shop? Running smooth thanks to Genius. From Global Payments, instant transactions, effortless inventory, and synchronized operations. Big League reliability for any business. That's Genius. Never bet against American grit or American energy.

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1:22:32Yeah, you quit your corporate job in London. Okay. You move to the south of France with your three kids, your wife. You make rosé. It sounds magical. It does. Well, it wasn't a fantasy for Stephen Krohn, the founder and CEO of Maison Mirabeau. He and his wife did exactly that. It was 16 years ago? It was, yep. Wow. At the height of the global financial crisis. Talk about timing. Stephen's with us right now here in the Bloomberg Interactive Brokers Studio, and he brought rosé. First of all, it's been a little while since we last spoke to you. Is it like two years? Yeah. Yes, yes, yes. How's business been since then?

1:23:09Well, it's an interesting question. It's been up and down, I would say. I mean, I think Provence Rosé is still the benchmark for Rosé around the world. So we're very lucky we've got that. But there have been a lot of headwinds, as I'm sure you're aware. Yeah. Look, there's the climate change headwind, but there's also the changing consumer tastes headwinds as well as tariffs. Exactly. Which is the thing that is the biggest headwind? They all combine together. This is the perfect storm. So there's the health kick. There's the cannabis movement. There's the no and low alcohol movement. There's the Zimpik movement, because that suppresses people's desire to have a drink.

1:23:45So it's like everything. And then you load on top of that the tariffs. It's like, yeah, what has happened?

1:23:49Carol Massar:So what does that mean for you guys? Like, how do you pivot? How do you adjust around that? Well, there's a lot of things we can't change. but what we try and do is, with the tariffs for example, we've tried to swallow as much as we can. We don't want Mirabeau to be much more expensive in the store. So we've tried to swallow that. That's hard. It's hard, but we're keeping our fingers crossed that maybe this is going to change. Remind everybody the price range? It's in the United States. So you don't want the price to go up in the U.S. So we're generally between$20 and$30. And we want to try and keep below$30 because that's the price point.

1:24:22So then how does that hit your margins? Yeah, it's not great. But, you know, I'd rather build a brand. And, you know, I'd rather people carry on drinking Mirabeau, especially, you know, we come 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.

1:24:38Carol Massar:Yeah. 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. I know Tim is sniffing it out. You're in the United States. Talk to us about the U.S. market specifically. So I've started farming regeneratively for some of my wines. Right. And the regenerative movement seems to be centered mainly around California now. Yeah. So I'm selling my wines in 40 countries, but California is the epicenter of the regenerative movement. The California Department of Food and Agriculture has been the first state to define the words regenerative agriculture.

1:25:16And meanwhile, we've got the wine regions there. so Pazerobos, Napa, Sonoma, they are the most regenerative wine areas in the world.

1:25:23Carol Massar:So what does that mean? One of, say, on the Spispo County. I know, where Tim is from. I know, I know, I know. Pazerobos. But what does that mean? Would you do more here in the United States? I'm just trying to sell more wine here. You're just trying to sell more wine? And so the retailers, so it's like A1 and Sprouts and Bristol Farms and Hagen's, they're really getting behind the regenerative movement. They're looking to seek out regenerative farm products. Because there's an awareness of it, right? Because they know what it means for farmers. They know what it means for people too. Not everybody knows what regenerative farming means, and especially how that is applied to farming the grapes that go into wine, that go into rosé.

1:25:59So for people who don't know what it is, explain regenerative farming in the context of viniculture. So regenerative, as the name suggests, is about regenerating soil fertility and regenerating nature in simple terms. So if you think about it, what was organic farming called before the First World War? Farming? Right. Well done. But then there was a huge amount of pressure. Everyone was worried about industrial farming. Right. So the heavy tillage, and in particular, heavy use of chemicals. So there's been a move, certainly since the First World War and the Second World War as well, we've seen a lot of nitrogen being used in farms, a lot of heavy tillage, a lot of chemicals, pesticides, and so on.

1:26:36And that's just been killing our soils. And this is a catastrophe. 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 values we're measuring by calories rather than

1:26:50Carol Massar:nutrient density 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 a lot of it most of it i would say is on life support it's really it's it's catastrophic I was going to say when I drive up from LA to Pazerobos which is one of the most regenerative regions in wine up the I-5 and you see thousands of acres of fruit trees and nut trees that are on life support. It's like the moon surface and so they're kept alive by these external inputs and what you end up with a product but they're not very tasty and they're not very nutritionally dense.

1:27:33So we need to actually start restoring soil health globally and regenerative is a way of doing that.

1:27:38Carol Massar:So you can do that in terms of all that soil. How long does it take the process of getting it back? It 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 Pazzo, we're doing one in Napa, Opus One, in fact, a great winery. Also a nice wine. Also a very nice wine. And winery. So we're doing one there on the 18th of November. And we're challenging the growers in Napa and as we did in Pazzo to just transition one block of their vineyard to regen for a year.

1:28:14Yeah. And then come back and see the difference. It's incredible how generous Mother Nature is coming back. You said you've driven up California on the five. But if you go a little west, you could drive up on Highway 1 or the 101 and then go on San Marcos Pass through Los Olivos, 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 yeah absolutely and and that's the point of my my my non-profit is to really encourage farmers give them the reasons to do it everything around regen as far as we're concerned is using science so you know if if we can 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 get Wean yourself off the synthetics and get yourself back into natural.

1:29:06Carol Massar:You know, it's kind of, I always think about, Stephen, what happened during the pandemic and the skies got bluer and the animals came out and just, and quickly. And it's just a reminder when we see the impact of climate change and it feels so devastating and it feels like there's no way back. I always go back to the pandemic and how the world seemed so much better. So we can do better. How expensive is it to do regenerative farming and the ROI on something like that? the return on investment? 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.

1:29:40Because 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 will be more or less the same as they are with regular farming.

1:29:59Carol Massar:All right, so we're talking with Stephen Cronk. He's founder and chief executive officer of Maison Mirabeau. He's here in our Bloomberg Interactive Brokers 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. Tell me what we're going to sample here. So this is One Day by Mirabeau. Is this new? This is new. I thought so. This is why I'm here. I know the bottles. That's why. So Mirabeau, we're the first certified regenerative organic winery in France. Tim and I are competing for the bottles. I know which bottle I'm taking home.

1:30:29No, no, no, no. So One Day by Mirabeau. We call it One Day because one day all vineyards will be farmed like this.

1:30:36Carol Massar:Oh, I love that. 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 estate wine, which is also the first certified regenerative organic wine, this is us certifying our growers. So we have to make this work at scale. Right. You know, you can't just have little niche boutique wineries enjoying the benefits of regen. And it can be done at scale. It can be done at scale. And my growers in Provence are just absolutely crazy about getting involved. Because organic is, I would say, flat growth.

1:31:10Right. But a lot of basic organic also isn't good for soil. So we have to use copper. Why is that?

1:31:16Carol Massar:That makes me nervous because I think there's an assumption. Well, so organic is the best kind of farming you can do when you're doing it properly, when you're doing it regeneratively. So regenerative organic is the gold standard. Okay. But if you are, a lot of organic farms, certainly in the wine world, can still be monocultures. So you don't want any weeds in the vineyard. You want it to look immaculate. So if the weeds come in, then plow them away. But actually, that's wrong. You need to let nature into the vineyard. You can't have these monocultures. It's funny, I was with somebody the other day, and they were saying, yeah, my husband's a real germaphobe.

1:31:49And he's sanitizing his hands, and everything is just so immaculate.

1:31:53Carol Massar:I know this one over here. I do not do that. I said, okay, tell me, how often does he get sick? And she said, all the time. And we need to rummage around in the dirt. We need to have those bugs, and we need to be healthy and build our resilience. And that's what regenerative does. Monoculture is the same thing as sanitizing a farm. 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. Cheers. Stephen, I just want to try this. Cheers. Cheers. Thanks for having me in. carol is drinking the wine as we speak that's what it's for the rose that's nice so this is the one day this is one day yeah yeah and rose i mean it varies right like it varies but the good thing about provence rose it's nice it's always dry so so because you can get some roses that are quite high in residual sugar and you can that's not very food friendly and not very healthy but provence rose is always always bone dry 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.

1:32:55Right. Why is that? Because it's just such a food versatile wine. That's great. It's got a little bit of acidity that cuts through the sweet flavors, the cranberry sauce, but it cuts through the gravy. It's just a refreshing mouthfeel once you've had a great big fork of potato or something. That's Stephen Cronk, the owner of Maison Mirabeau.

1:33:14Carol Massar:I have to say, this is the second time that we've talked with Stephen, 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, 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. Yeah, pre the Great Wars. Pre the Great Wars.

1:33:47Carol Massar:But like what we do now in terms of industrial farming and chemicals, it's a whole different ballgame. 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 U.S. and around the world. Right. You also had industrialization. So you had fewer people actually living on farms, farming for themselves and farming for a great number of people. Yeah. So you had to figure out how to do more with less. And I wonder if the regenerative movement will grow beyond sort of a niche or small number of players that don't cater to a whole host of people.

1:34:21Carol Massar:I mean, check out Chipotle's history way back when, when the original founder was there, Steve Ells. But that was kind of their mission of trying to do regenerative farming, farming responsibly. The only 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 same time, so many people 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.

1:34:54I don't know. We're a little guilty of it. I know. You end up finding something in the back of the fridge. It's like a little shriveled up. You're like, can't eat this now.

1:35:02Carol Massar:Smaller fridge. Smaller. You know, refrigerators are smaller. I have heard now over in like Europe and stuff like they shop every day. We listen. I had two refrigerators in a freezer growing up. Yeah, but there were how many of you? Nine? I know, but still, it was a lot of space. Yeah. I'm just saying. No judge. All right, how did we get there from wine? 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. Be sure to tune in to Bloomberg Business Week daily, Monday through Friday, starting at 2 p.m.

1:35:35Wall Street time on Bloomberg TV, Bloomberg Radio, and on SiriusXM channel 121. Also, listen to us on Apple CarPlay and Android Auto, free in the Apple App Store or on Google Play.

1:35:44Carol Massar:You can also watch our daily broadcast on YouTube. Just search Bloomberg Podcasts. We're simulcast on Bloomberg Originals, available at Bloomberg.com slash Originals. And streaming platforms, including Roku, Amazon Fire TV, Samsung TV Plus, and more. Find our Bloomberg Businessweek daily podcast at Bloomberg.com, Apple, or wherever you get your podcasts. The latest edition of the magazine. It's available on newsstands now at Bloomberg.com and always on the Bloomberg Terminal. I'm Tim Stenebeck. And I'm Carol Master. Have a good and safe weekend, everyone. This is the Bloomberg Business Week Daily Podcast.

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