Ben and Jerry's Done with Ice Cream? & Dell Says Work Remote, No Promotion

0:00Tonight on NBC, Jimmy Fallon and Bozma St John host the highly anticipated new competition show. I hired 10 creatives from all walks of life. They will be battling it out to see who can impress the world's biggest brands. This is a huge opportunity. This is the battle for the next big idea. This is not play play. We're spending millions of dollars. I'm so excited to embark on this adventure with all of you. Make the best I do win! On Brand with Jimmy Fallon. Series premiere tonight on NBC. Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, Donald Trump needs to scrounge up a half a billion dollars to secure a bond by next Monday.

0:40Can he do it? Then to pour out a melted pint of Cherry Garcia because Ben & Jerry's is getting kicked to the curb by its parent company. It's Wednesday, March 20th. Let's ride.

0:57The moon has become a subject of exploration again in recent years, with another space race of sorts kicking off to see which country can establish a lunar presence first. The U.S. doesn't want to get left behind, so DARPA has been running a 10-year lunar architecture project to help envision what a lunar economy might look like. And it recently tabbed Northrop Grumman was scoping out what would be required to build a lunar railroad. Yes, DARPA wants to build a moon train. Neil, you're kind of our resident train guy of the two of us. What do you make of this effort? First of all, I am shocked that Amtrak didn't win this contract.

1:34Wow. They were totally in the lead. The haters will say that we shouldn't be building a moon train when we can't build trains here on Earth. But I don't see it that way. It's not mutually exclusive. We can build a moon train and an Earth train and maybe even use the information we learn from building a moon train to help out our situation here on Earth because it's not so great. That's a very optimistic take because, yes, I had written down, we're getting a high-speed rail on the moon before we get it here in the U.S., but, hey, I'm all for it. We need to move stuff on the moon, so why not get out ahead of it?

2:05So lunar economy, definitely something to keep an eye on in the future. Now let's hear a quick word from our friends over at Factor. Something that I know a lot of my young professional friends struggle with when it comes to food is balancing costs, taste, convenience, and healthiness. It does feel like an impossible Venn diagram to construct. If you want something that tastes good, it probably costs a lot. And if you want something convenient, it's probably not going to be too healthy. But Factor sits right in the middle of all those requirements. Every meal is fresh, never frozen, chef crafted, dietician approved, and ready to go in just two minutes.

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3:19Whether you prefer talking in person, on the phone, or using the award-winning app, it's nice knowing you have help finding coverage that best fits your needs. Like a good neighbor, State Farm is there. Japan put a wrap on one of the world's most radical monetary policy experiments on Tuesday when its central bank raised interest rates out of negative territory. It was the Bank of Japan's first rate hike since 2007, and a sign that its economy has finally returned to growth mode after decades of stagnation. But the move will echo well beyond Japan's borders, and that's because, say it with me, everyone, it's the end of an era.

3:58Yes, I had to whip out one of Morning Brew Daily's most overused cliches, because the move out of negative interest rates does symbolize the conclusion of one chapter in the global economy and the beginning of a new one. rewind to right after the Great Recession. Economic carnage was everywhere, and it wasn't totally crazy for central banks to have negative interest rates to kickstart growth. The European Central Bank did it, Sweden and Denmark did it, and the Bank of Japan shocked everyone when it set rates below zero in 2016. These days, every central bank has returned rates into positive territory, and Japan was the final holdout before Tuesday.

4:35Toby, I think this is as dramatic as it gets in the central banking world. It truly is. More dramatic than a Jerome Powell press conference, that's for sure. Negative interest rates are always a bit of a mind twister to just wrap your head around, because depositors are paying the bank to leave their money with it. It also means that borrowers can take out loans very, very cheaply. And both, again, are incentives to get people to spend money, to do deals, to generate economic activity. And Japan has been trying to bring some life to its economy for years now, almost decades now. And it's something that it looks like it finally has accomplished.

5:11All the signs of growth are there. Inflation, after being low for years, has finally sped up a little bit. There's been larger than unusual increase in wages. And then also some of the things that we're hearing thrown around is that the words virtuous cycle keeps getting tossed around, which is basically a lot of stuff going right feeding into other stuff. So rising GDP growth, wages, prices, corporate profits, all on the way up. So the end of an era is here. You said that we say it a lot, but I do think that for Japan, they finally have turned the page here. In the central banking world, people mostly, they don't zigzag.

5:46It's very much a sheeple thing where if the Fed does something, then the European Central Bank does something, then the Bank of England does something. Everyone kind of follows the herd a lot. The Bank of Japan has always been zigging where others have zagged or zagged where others have zigged. that's because it's just been a laboratory for weird monetary policy experiments. So the Bank of Japan is known for doing these really far out things that not necessarily the world, the rest of the world is doing. And when it did this negative interest rate, the whole world was watching to see what would happen.

6:19Would the U.S. do it? And I think this came into question in 2020 when the COVID pandemic hit and the Fed was like, what should we do? We said he considered it, but eventually did not do negative interest rates because it's not considered, you know, the legacy of negative interest rates is not that great. People don't necessarily think it should happen or ever happen again. Yeah. The real question is, did it actually work? Is negative interest rates to kind of, should we give it its laurels for helping boosting Japan's economy? But, or is it more of a combination of some of the supply chain shocks that the COVID-19 pandemic kind of rot on Japan.

6:59Also, the Russia war in Ukraine ended up driving up prices. So if we're looking at that inflation number in particular, maybe the rising cost of the imports of everything, of energy to food to materials, is more to thank or to blame, whatever perspective you want to take, than the actual negative interest rates itself. So even though you might be saying this is celebration for Japan's central bank, the jury is still out on if they actually worked or not. Yeah, and meanwhile, more central bank news today. The Fed is meeting and Jerome Powell will give his dramatic press conference that you alluded to.

7:30But it will be dramatic, actually, because investors will be looking to see the forecast for future rate cuts this year. The big question is whether we'll get two or three rate cuts over the rest of the year for 2024. I don't think we're going negative. I can say that. Definitely not going negative. Our interest rates are at five percent. After a 24-year run, Unilever and Ben & Jerry's are parting ways like the chocolate and vanilla size of a pint of half-baked. It's been a relatively rocky road recently for the two companies. Unilever's ice cream division, which also includes brands like Magnum, pulled in$8.6 billion in 2023, but its profit margins are less than half of that of the company's personal care unit.

8:10As such, Ben & Jerry's was put on the chopping block by new CEO Hein Schumacher, who has been trying to slim down the consumer goods giant in the nine months he's been at the helm. Schumacher especially called out the ice cream arm as being problematic in a recent call to reporters. He said, quote, ice cream is truly a different business. It is already managed separately than our other activities. And most of that is because the cold supply chain is just such a nightmare. There's also been some political headaches along the way. So it looks like Unilever just wanted to be done with the brain freezes caused by Ben and Jerry's.

8:44Yeah, totally. And they own Breyers, too. And if listen, Unilever, if you need a buyer for Breyers, I'm the biggest fan of Breyers. So I will buy it from you. I probably already account for 50 percent of global sales. But Unilever's ice cream business is kind of huge for it. Sixteen percent of global sales. They've had an ice cream business since 1922. They have five of the top 10 global brands by sales. So this is not a small decision. This is a big part of their business, but it just got to be too much of a headache. Like you said, the ice cream business, when you read into the details about what it takes to run an ice cream business and get cold things from one place to another and you always need to have them frozen, sounds like an absolute nightmare.

9:24Yeah, the supply chain is super delicate because you have to keep it temperature controlled to ensure the product quality, basically, because you need to keep it out consistently below freezing temperatures to maintain the texture and the creaminess of ice cream. You don't want those ice crystals forming after you unfreeze and refreeze something. So just a nightmare that makes even remember we talked about the cold supply chain during the pandemic because vaccines need to be kept very cold. You don't leave or deals with that on a daily basis. Also, I was reading into the fact that ice cream is a rather seasonal business.

9:56Like, of course, we can wrap our heads around. You don't want to eat it during the winter when I'm glad you learned that. yeah no but this is the this is the insight here is that uh during the summer if it's too hot people also don't like ice cream they see falling sales and we were experiencing record heat waves last summer so unilever was saying that people actually move on from uh eating ice cream to just drinking like a more cold refreshing drink so there is such a thing as it being too hot for ice cream so that's been another kind of thorn in unilever's side as it's trying to manage this ice cream business.

10:28And ice cream is a very discretionary purchase. And we use that economic term a lot, but it just means it's very sensitive to price increases. So as inflation has kind of ravaged every sort of consumer good, ice cream has been really hurt because when ice cream prices go up, people buy a lot less ice cream. Underlying volumes for Unilever's ice cream business fell 6 % as prices rose 9%. So you'd see it. People are very sensitive when ice cream, it's true. When I see Breyers Gallon gets the$7, I just don't buy it, even though I love it. You can buy Breyers. I am a Ben & Jerry's fan. I'm a fish food guy.

11:02But do you find yourself being sensitive to price increases in ice cream? It really just, the sensitive part for me is if I feel like I deserve a sweet treat or not at the end of the day. And sometimes I feel like I do. Other times, not so much. So this is, in the big picture here, Unilever is a huge consumer package goods company. and is trying to just focus on its higher margin business, as we've seen a bunch of other conglomerates do. Moving on, does anyone have about a half a billion dollars available they could put up for Donald Trump before Monday? He's kind of in a tight spot. The Republican nominee for president must post an appeal bond for that amount by March 25th, or else face a potential financial calamity with New York going after his assets to get what it's owed.

11:46Trump's predicament stems from a ruling earlier this year when a judge ordered him to pay$454 million for inflating his net worth to secure favorable loans from banks and insurers. He's appealing the ruling, but in the meantime, he does need to get someone to spot him that bond by a Monday deadline in case he's not able to pay. And in exchange, they'll require about$1 billion in cash and liquid securities from him as collateral. Problem is, Trump's team hasn't found anyone to pay that bond. On Monday, his lawyers said they approached 30 companies, including Chubb and Berkshire Hathaway, to secure a bond, but they got denied by every single one.

12:24Throwing their arms up, they said getting a bond of this size is a practical impossibility. So Trump is in desperation mode right now to figure something out. Yeah. On the surface, this felt kind of cut and dry because Trump's net worth is obviously far larger than the amount of the bond. So shouldn't he be able to put up one of his properties, one of his real estate holdings as collateral and receive a bond from an insurance company? But since it is risky for an insurance company to issue a bond like this, the insurance company would want to be able to charge a rather large premium on that bond.

12:56Well, this is a surety bond, and it has regulations that don't allow that kind of business. Basically, it would be very risky for an insurance company to accept real estate as collateral because value is unpredictable. It's not easy to sell a giant real estate property very quickly, so it wouldn't be able to become liquid cash in an easy manner. And so given that, Trump has to find liquid collateral for this. And getting a billion dollars of liquid collateral is obviously not very easy. Yeah. I don't know what his Robin Hood looks like. But the New York Times found that he just has a little over more than$350 million in cash in stocks and bonds.

13:35So he just does not have enough liquid cash available to sort of put up the collateral for this particular bond. not helping matters. He has all of these other legal issues going on. He had to put up a hundred million dollar bond for his defamation case against E. Gene Carroll. So that took another huge bite of his bank account. He can't put up his real estate assets. And by Monday, if he doesn't, if he isn't able to secure this bond, then theoretically, New York could go and seize his assets, which include 40 Wall Street, potentially Mar-a-Lago, all of these properties that were involved in this case.

14:08They could theoretically go seize and it would be a big, you know, legal debacle. It would take a very long time for this to go through the courts. But in a theoretic world, in a hypothetical world, on Monday, if he doesn't post this bond, then New York could go after his properties. Yeah. Just to reiterate the final options he has, he can get a benefactor to pay, or he could try to stall some more, hopefully come into more money. He might sell his true social media company, or he could declare bankruptcy. But he obviously does not want to do that. It would be very bad for his brand, especially entering kind of like this election year where a lot of his brand is wrapped up with his net worth.

14:43So that apparently that option is off the table for Trump. But his back is certainly against the wall. And unless you can find someone with a rather big Robin Hood account, then yeah, it might get ugly. Up next, pour yourself another cup of coffee. We're going to discuss an insane return to office policy, an interesting longevity study in South Korean baseball right after this.

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16:08There are companies that are against remote work, and then there is Dell. Dell, long known as a great place to work precisely because of their lenient hybrid work policies, recently released a new policy that fully remote workers will not be eligible for promotions if they choose not to come into the office. In terms of intense return to office measures, this one is up there. But not only is it super intense, it's also opposed to things Michael Dell, the founder and CEO, said just a few years ago. In 2021, he told reporters that Dell's expanded home working culture was absolutely here to stay.

16:46And as recently as 2022, the company wanted 60 percent of its workforce to operate remotely on any given day. But when the economy soured a little bit, Dell got a little panicky and changed its tune. Neil, what's the logic behind a move like this? Ah, the logic is, I mean, we can only surmise, right? One of the theories of sort of creating a very stringent back to work policy or tying incentives of career growth to coming back to work is that essentially under the table, you want to reduce your headcount and your and the cringy term for this is quiet firing. But if you don't offer career advancement opportunities for remote workers, then eventually they're going to leave.

17:26So you have this sort of shaving of headcount that Dell may want to do. It did lay off 5 % of its global workforce earlier this year. But this is a particular way to say, hey, we are not certainly in growth mode here. We kind of want a decent amount of employees to leave. and maybe we should just choose the remote worker ones and push them politely to leave themselves. Yeah, a quiet firing. You push employees out without actually laying off, which means you don't have to pay out severance. It's not a very good thing for a company to do. A lot of Dell employees were anonymously talking to news outlets saying, we all know what's going on here.

18:09They are trying to push us out. The thing that makes no sense to me, though, is the fact that they talked to one of the senior person at Dell and they said, I can't think of any team here that has everyone who lives in the same state. So like even though you're trying to foster in-person collaboration, get people to go back to the office, a lot of people are going to an office where their team doesn't even work in. So are you really trying to foster in-person collaboration if no one lives in the same state to begin with? So I think that that is another reason why employees are kind of seeing through what Dell is doing right here.

18:43And the hypocrisy. I mean, you can't boast about remote work two years ago and saying how coming back to the office is the stupidest idea and it doesn't do anything. And then reverse yourself two years later. Just don't. That's why I just advocate for not making any blog posts where you're making very big pronouncements. Just keep your mouth shut. And then that gives you a little more flexibility in the future to change your policies. But Michael Dell dug himself in the sand and now he's getting criticized for this particular thing. But overall, it's very fascinating to watch how the remote work sort of in-person office politics is playing out.

19:19Because what Dell is doing right now and a bunch of other companies have done is create two classes of employees. Essentially, you have one you have upper class where you come into work at least three days a week and you are you have career advancement opportunities. opportunities. You're able to collaborate and meet your superiors and obviously get more promotional opportunities that way. And then you have the remote workers who maybe they're mothers, new mothers or parents, or there's a number of reasons why you might have to work from home and they're a lower class. So you sort of see this sort of caste system emerging in various corporations.

19:55Yeah, it's not a good look any way you slice this. And it's never good when you also have the LinkedIn posts, the receipts from your CEO saying you're not going to do any of the things you do. And then you basically hold people's careers hostage with this new policy. But it's not just Dell. I mean, across the board, remote workers are getting promoted less than people who go into work. Over last year, 5.6 % of employees working full-time in an office were promoted, as opposed to just 3.9 % of remote workers. Okay, I'm going to draw a really weird connection for our second-to-last story of the day.

20:30Recessions may be good for your health. That is the conclusion of a recent paper titled Lives vs. Livelihoods from Four Economists published by Chicago Booth Review. The researchers found that during a recession, people tended to live longer and healthier lives. The question is why, of course. The study ruled out some options. People weren't using their free time to work out more. and infectious disease rates didn't suffer any noticeable drops. Turns out the answer is pollution. Pollution from industrial activity, electricity generation, and transportation tends to drop in periods of economic malaise.

21:07The data was pretty cut and dry. During 2007 to 2009, age-adjusted mortality rates dropped 0.5 % for every 1 % bump in an area's unemployment rate, and counties hit the hardest by recession also experienced the greatest declines in pollution. Neil, what do you make of this connection? Neil Milliken It's absolutely crazy. I mean, ask anyone and you'll say, is a recession good or bad for people's health or longevity? Let's probably say it's bad. I mean, they're unemployed. They're not doing anything. There's just general depression going on across the economy. People don't have work. So you're probably like, oh, they'll probably die earlier.

21:44That seems fairly obvious. But the fact that a recession will extend your life is absolutely mind-blowing. This is an even crazier stat. One in 20 55-year-olds had an extra year of life, which amounts to hundreds of thousands of Americans because of the Great Recession. This isn't to say recessions are bad. Maybe on net they are bad, but they're a lot less worse than we thought because of these longevity benefits. Yeah, it's definitely a counterintuitive idea that recessions improve the welfare benefits for some people. because if you look at particularly old people as well, who are no longer in the labor market, so they're not going to be as affected by a layoff or something like that, but they will be affected by the fact that the air might be cleaner, there's less pollution going on.

22:28So if you look deeper into this, though, if recessions save lives, does that mean boom times kind of cost lives? And technically, it's yes, according to the paper, because when you have an economy that's firing all cylinders, creating more jobs, it also is creating all sorts of these unseen harmful effects. And all you have to do is kind of look at the top countries right now with the worst air pollution in the world that kills an estimated 7 million people per year worldwide. A hundred of the most polluted cities are in Asia with 83 of them being in India in particular, a country that has experienced a very fast growing economy.

23:06So there's definitely trade-offs between economic growth and the health of the people in the economies. Yeah, but I refuse to believe that you want to put the brakes on economic growth for the sake of reducing pollution. I think you can have it both ways. The biggest takeaway here is to regulate pollution more. Because if you regulate pollution more, then you have economic growth and people are healthier. But this goes to show just how bad pollution is for your health in general. So I think that's one of the main policy prescriptions that the authors took away. They said, we can have an economic growth, but the fact that we're not regulating pollution as much as we do is a big miss.