Liquid Death Worth $1.4B & Boeing's Problems Keep Adding Up

0:26Race the rudders! Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howe. Today, how automakers are sneakily sharing your driving data with insurance companies. Then, after a recent funding round, there's a new billion-dollar beverage brand on the block. It's Tuesday, March 12th. Let's ride.

0:53If you have ever been afraid to ask for a raise at work, allow us to introduce you to NFL quarterback Kirk Cousins. The very much not elite QB has exactly one playoff win in his career, but just agreed to a four-year$180 million deal with the Atlanta Falcons yesterday. When you combine that with his$231 million in previous career earnings, he's on track to make over$400 million total, which would put him in the top three highest paid NFL players in history. Neil, what can we take away from this? Take away from the Kirk Cousins story is you do not have to be the best at your job. You just have to be better than the previous person.

1:33But even more importantly, always be available. While the better quarterbacks have been locked down into long-term contracts by their teams, Kirk has always been the best quarterback available during free agency, and he's earned himself a fortune despite just not being that great. I think it also shows how if you're willing to hop around jobs, you can make more money each time you switch. That's something we saw a lot during the pandemic. Not that it's advisable to constantly be switching jobs, but it is a way to maximize your earnings potential. And soon, this guy, Kirk Cousins, will have made more in the NFL than Tom Brady ever did.

2:08I feel like I just read a full LinkedIn think piece on what we could take away from Kirk Cousins' negotiation strategy. To me, it was also kind of like the adage about outrunning a bear. You don't need to be faster than the bear. You just got to be faster than the person next to you. Now let's hear a word from our friends over at Factor. So you've heard us tell you about Factor's delicious chef-made meals, but we haven't really gotten into the customization aspect of their meal plan. Yeah, Factor has a range of dietician-approved options. If you're looking to pack on muscle, go with their Protein Plus plan, where each meal has 30-plus grams of protein.

2:42Or if you're like Toby, who's training for a marathon, maybe their keto meals make sense to get those fat-burning systems firing. I'm personally a fan of their Chef's Choice plan, which fits any lifestyle, I'm so down to just put my dietary fate in Factor's hands and let them show me the way. You're so trusting, Toby. Hey, I've never been let down so far. Whether you're looking to eat healthier or just put your dietary needs on autopilot like me, head to factormeals.com slash morningbrew50, then use code morningbrew50 to get 50 % off. That's factormeals.com slash morningbrew50 with code morningbrew50 to snag that tasty 50 % discount.

3:21Eczema isn't always obvious, but it's real. And so is the relief from EBCLIS. After an initial dosing phase, about four in 10 people taking EBCLIS achieved itch relief and clear or almost clear skin at 16 weeks. And most of those people maintain skin that's still more clear at one year with monthly dosing. EBCLIS, LibriKizumab LBKZ, a 250 milligram per two milliliter injection is a prescription medicine used to treat adults and children 12 years of age and older who weigh at least 88 pounds or 40 kilograms with moderate to severe eczema. Also called atopic dermatitis that is not well controlled with prescription therapies used on the skin or topicals or who cannot use topical therapies.

3:57EbGliss can be used with or without topical corticosteroids. Don't use if you're allergic to EbGliss. Allergic reactions can occur that can be severe. Eye problems can occur. Tell your doctor if you have new or worsening eye problems. You should not receive a live vaccine when treated with EbGliss. Before starting EbGliss, tell your doctor if you have a parasitic infection. Searching for real relief? Ask your doctor about EPCLIS and visit ebglis.lily.com or call 1-800-LILY-RX or 1-800-545-5979. There's a new unicorn from VC land, but it's got nothing to do with artificial intelligence and everything to do with your compulsive need to hold something in your hand at concerts.

4:32Liquid Death, the buzzy and bubbly beverage business is now worth$1.4 billion after its latest round of fundraising, more than double its previous valuation. Neil, this brand has been inescapable recently. Its founder started it back in 2017 because he wanted to provide something that musicians or other fringe punk rock audiences like skateboarders could consume to stay hydrated that wasn't some cheap beer or sugary energy drink. The heavy metal branding and taglines like murder your thirst were partly a joke at first, but then this thing absolutely took off. One Catalyst was a partnership with concert promoter Live Nation, which made the brand the official water of huge music festivals like Governor's Ball and Austin City Limits.

5:15And now it's raising additional funding to broaden its product offerings, to loop in new flavors, and even foray into the electrolyte drinking powder game. Neil, this brand is cool. Toby, when your kids arrive at Stanford Business School for their MBA, their first class will be about liquid death. Because this company is just a perfect case study of how you build a brand that resonates with consumers. When it launched in 2017, everyone thought it was a gimmick. This guy, Cesario, who started Liquid Death, spent$2 ,000 worth of Facebook ads. That's it. He hadn't manufactured a single can. Everyone thought it was kind of a joke.

5:51And then they started building buzz around that particular niche community, skateboarders, tattoo parlors, all of that. It caught on like wildfire. And now it did, in 2022, it did$130 billion in sales. And last year, is projected to do double that? I think the big insight that lots of people overlook with kind of the fun branding that it has is that people really do want to have something that they can hold onto at a place like a concert. But beer, energy drink, cocktails, these things are expensive. They make you feel awful as well. I mean, you could hold water, but again, no one wants to be the person holding like an Aquafina or Dasani at like a heavy metal or just a cool music concert.

6:30So Liquid Death comes in, gives you a good tasting water, with fun branding that fits kind of into the environment. And it gives you something. You don't stand out in the crowd, but you have that thing to hold on to, have that thing to sip, but it doesn't make you feel bad. I think also Liquid Death's been very good at expanding into new business lines. This is something that has tripped up a lot of D2C emergent companies over the past few years where they do one thing really well. And then when they try to get into a new product category, they fall on their face. I'm thinking not to shade Allbirds, but Allbirds is a good example of they had this particular shoe.

7:02They tried to do a bunch of other stuff. It didn't do really well. But Liquid Death has expanded into drinking powder called Death Dust. They have bubbly water, too, seltzer. And they also have this new iced tea, which is number one on Amazon right now in the entire iced tea category. So they've been very smart about growing their business beyond canned water. And I think that iced tea, there's another story about it that is emblematic of the brand. They first got in trouble when they released their iced tea because they named it Armless Palmer, which is obviously a play on Arnold Palmer. It got sued by the dead golfer's estate.

7:38So they changed the name to dead billionaire. And again, they are walking this very fine line. It kind of goes in the whole brand ethos of their punk rock, their heavy metal. They push back against the establishment and only someone like Liquid Death could pull off calling their iced tea brand Armless Palmer and then changing it to dead billionaire. Overall, I think it just shows the power of brand and marketing. And Mike Cesario, who started Liquid Death, admits this. He says 98 % of purchases are emotional. Why would I buy this particular water over another particular water? And he says it's because we have a brand that resonates with consumers.

8:14So what is the exit strategy here? I mean, what do you think is going to happen next? Are they going to IPO? Are they going to sell? He says that they're positioned in the non-alcoholic beer industry, which is a huge booming industry right now. So, I could totally see someone like AB InBev or Molson Coors, a huge brewer conglomerate that wants to expand. Beer sales are shrinking right now, so they want to expand into non-alcoholic areas. I feel like liquid death would make a lot of sense there. Yeah, that does make a lot of sense. I also look at comps like Celsius, whose market cap is$20 billion.

8:45Monster Energy is$62 billion. So, I could see it debuting as kind of this niche beverage brand that just goes nuts once it hits the public markets. OK, moving on. A plane rolling off a runway into the grass, an engine catching fire, a tire falling off shortly after takeoff, two pilots falling asleep for a half an hour at the same time. These are just a sample of incidents that happened in aviation in the past week alone. And just yesterday, 50 people were treated for injuries after a LATAM flight going from Sydney to Auckland experienced a strong shake that fell to passengers like the plane took a brief nosedive before leveling off and landing safely.

9:24The airline industry and Boeing specifically has been under intense scrutiny since a door panel blew out on an Alaskan Airlines 737 MAX 9 in January. And of the five mishaps that happened last week, all but one involved a Boeing plane. If all that wasn't spooky enough, the BBC reported last night that a former Boeing employee who was known for raising concerns about the company's quality controls was found dead of a self-inflicted wound over the weekend. Toby, what is going on? I think the question everyone wants to know is, are these airline incidents happening more frequently? Are we just way more aware of them now?

9:59It seems like Kate Middleton and Boeing are locked in a war right now to see who can have the worst PR cycle. And honestly, I'm not sure who's winning, but I think you're totally right. It is a sense of increased scrutiny on the airline industry right now. A lot of those instances like the engine catching fire or the wheel falling off were captured by someone with a smartphone because now when you're at the airport or you're on a plane or something like that, you're a lot more on high alert, whereas previously you would hear about a maintenance issue and it doesn't even really cross your mind because the airline industry has been so safe.

10:31Now everyone is certainly focusing on these instances and they just keep coming. That's what it seems like. They do. And so Boeing obviously is the target of a lot of this scrutiny. And the Justice Department just last week launched a criminal investigation into the company over that Alaska Airlines blowout. The National Transportation Safety Board head testified in front of Congress last week, really lambasting the company for not being transparent with sharing documents, sharing video footage of how this door panel was assembled. So there's a lot of tension right now between regulators and Boeing over what happened.

11:10And Boeing has just been absolutely crushed in the stock market as well. Its stock is down over 25 % just to start the year. It's the worst performer in the Dow. Yeah, and if we look at some of that regulatory scrutiny, the FAA just conducted this six-week audit of Boeing's production of the 737 MAX. How about this for some of the audit scores? They conducted 89 product audits. The plane maker passed 56 of them but failed 33 of them. They also did a product audit of Spirit Aerosystems, which makes the body of 737 MAX planes. It passed six and failed sevens. If you dig into this FAA report, some of the ways that they failed this product audit are ridiculous.

11:50In one, they found an air safety, they found a mechanic using a hotel key card to check a door seal. In another instance, they saw a Spirit Air Assistance mechanic apply liquid Dawn soap to a door seal as a sort of lubricant. So clearly things are not up to snuff and the FAA audit is exposing Boeing for a lot of these. Yeah. I mean, meanwhile, you said, though, the U.S. aviation industry is very safe. I mean, getting on a plane is very safe relative to a car. There's been no fatal crash in the U.S. since 2009, which is the longest stretch on record. So overall, you know, if you get on a plane, you're likely to land safely.

12:31You're overwhelmingly likely to land safely. But the increase in incidence is obviously spooking people. Yeah. Boeing's got to get its ducks in a row. Let's move on. President Biden dropped his$7.3 trillion budget proposal for fiscal year 2025. And like Paul Atreides trudging through the desert of Arrakis, he's got a vision, folks. The proposal lays out a lot of Biden's familiar beats. It aims to lower health care, child care, and housing costs by increasing taxes on the wealthy and corporations and giving the IRS some of its bite back, all with the intent of shaving$3 trillion off the deficit in the next decade.

13:06Now, before Neil and I get into the details, it's important to remember that this is as much a campaign tool as it is an actual budget proposal. Remember, Biden might not even be around to enact it should he lose the election if it passes Congress, which is a gigantic if. So even though realistically not much of this budget stands a chance of becoming law in a divided Congress, it's still worth discussing because it gives a sense of how Biden aims to appeal to voters. With all that said, Neil, what jumped out to you from Biden's big budget? Yeah, this is like when a character in a movie gazes off to the side, the chimes come in and they daydream of their happy place where everything is as they want it.

13:45But what stood out to me were the initiatives to lower cost for families. I mean, a bunch of my friends have young kids and literally the cost of raising them and how much money they have to spend is the number one topic of conversation. So I know this is a topic that people care about. And Biden also doesn't want to be associated with inflation anymore. So lowering costs for families is a big part of that. A few of these initiatives are subsidized health care. Families making less than$200 ,000 a year would be guaranteed subsidized child care. Affordable housing is another big one. He's proposing building or preserving more than 2 million housing units and offering a series of tax credits for first-time homebuyers, which are the ones that really are stretched for money.

14:27And then he also wants to reinstate the expanded child tax credit. That came into force in 2021, but then was peeled back in the past few years. He wants to reinstate that to help people raise children. Now, the big question is, how are you going to pay for all that? So Biden did lay that out as well. It would increase the minimum tax on billion-dollar corporations to 21 % up from 15%. It would also raised the tax on U.S. multinationals for an income to 21 % up from the 10.5%. It would also impose a minimum tax on billionaires, including on that very hot topic issue of unrealized capital gains of 25%.

15:04He thinks that would bring in an estimated$500 billion a year in tax revenue over the next decade, or$500 billion total over the next decade. Also, the taxing capital gains at the same rate of those making more than$1 million. So, again, you did the chimes looking off in the distance. Again, this is a perfect world for Biden. And if everyone was on board with everything he wanted, again, not necessarily going to happen, especially given the state of Congress. Yeah. And speaking of Congress, I mean, there is it is the House is controlled by the GOP right now. And House Speaker Mike Johnson, after this budget released, basically staked out the Republican position, which is that Biden's budget was a glaring reminder of this administration's insatiable appetite for reckless spending.

15:50I think what Biden wants to do with this budget, though, is draw a distinction between him and Trump, especially when it comes to Social Security and Medicare. Trump went on CNBC yesterday morning and said that he floated the concept that maybe he could peel back spending on Medicare and Social Security, which is kind of the third rail for American voters. You cannot touch those programs, especially because Social Security is expected to be insolvent by 2033. Biden hopped on that and said, look, I'm going to protect Social Security and Medicare. Trump wants to take it away. Then Trump's campaign a few hours later said, no, no, no, no, no, no.

16:25You can have Social Security and Medicare. We're not going to touch it. Shows those two programs are so important to voters. Yeah, battle lines are being drawn. Up next, Neil is going to tell you about some of the sneaky ways your car might be spying on you. I'm Christian McCaffrey, pro running back, and Abercrombie is an official fashion partner of the NFL. I'm not kidding when I say NFL by Abercrombie broke the internet last year, and I think this season's lineup is even cooler. And so does my wife, who keeps stealing all my hoodies. Stay fit for the season and Abercrombie's newest arrivals.

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17:25so no one forgets mom's 60th. And never miss a meme or milestone. All protected with end-to-end encryption. It's time for WhatsApp. Message privately with everyone. Learn more at whatsapp.com. In this era of high-tech, internet-connected cars, automakers could be sharing your driving behavior with insurance companies without you knowing it, leading to a spike in what you pay for car insurance. This startling finding came from a New York Times report, which found that automakers like GM, Kia, and others are selling your driving history to data brokers such as LexisNexis. These data brokers use the data, for example, hard braking, sharp turns, speeding, to help insurance companies create personalized risk profiles for drivers and then set prices.

18:11In some cases, drivers have consented to this data sharing. Insurance companies have started to offer incentives for drivers to install dongles in their cars or download smartphone apps that monitor their driving. But in many other cases, the data collection is far more nefarious than New York Times found, with automakers' partnerships with insurance companies buried deep in the fine print and convoluted privacy policies. The practice has caught the attention of powerful lawmakers who are investigating whether this data collection violates consumer protection laws. These data collections are way, way deeper and more robust than you could possibly imagine.

18:48So this guy that the New York Times talked to, he saw his insurance jump up by 21%. One of the insurance agents said, hey, you should request your LexisNexis report. He didn't even know it existed. When he got the report, it was 258 pages of detailing the dates that he had driven, 640 trips that him and his wife had taken, start and end times, the distance they had driven, how fast they were taking corners, how hard they were breaking, essentially everything except for where they went and where they returned to. But it is just truly he's like, I felt violated. It felt so invasive. I had no idea this much data was being collected on me.

19:23But this is happening everywhere. And it's usually being used to ending for insurance companies to justify raising the rates. Right. And there is a concept called usage based insurance, which you can opt into. And that's basically like your insurance is set based on your personal driving habits. And if you know that's happening, experts say that's actually it's not a bad possibility because you are going to be safer because you know this is happening. You don't want to pay more for insurance, so you're going to drive more safely. But it kind of backfires if you don't know that you are on this usage-based insurance.

19:58Your driving behavior is being sold to the insurance, but you don't know it, so it's not really changing or affecting your behavior to become a more safer driver in any way. Yeah, I could definitely see the FTC getting involved here. I mean, there are laws that prohibit unfair and deceptive business practices that harm consumers. In collecting user info without their knowledge in order to jack up insurance rates, that feels very deceptive, feels like it will fall under the FTC's jurisdiction. Do you remember the report last year from Mozilla? It found that cars were the worst of any electronic for product safety.

20:32Nissan admitted that they were collecting data on driver's sex lives, but then they refused to explain how or why they get that data at all. And then Tesla was the worst-ranked brand in terms of privacy. And again, remember that story of a guy who totaled his Tesla. It was shipped to Ukraine somehow, but remained connected to his Spotify account so he could see what people in Ukraine were listening to his Spotify account. So in this Internet of Things environment that we live in, where everything is connected to the internet, data privacy and consumer privacy are only going to become more hot topic and hot button issues.

21:10Especially in cars. Especially in cars. Let's move on. I want you to imagine your best friend right now, probably a great person, a great pal. You might even live with them already, but would you ever want to own a house together? That is what we are going to dig into for today's edition of Toby's Trends, where I, a youthful Gen Zer, educate my WorldWise co-host Neil on a recent trend I've had my eye on. And today's trend is that more young people are buying houses with someone they aren't dating or married to. About 15 % of Americans have co-purchased a home with someone other than a romantic partner, and another 48 % say they would consider it, according to a recent survey from JW Surity Bonds.

21:54But put another way, buddies, pals, and even siblings are teaming up more frequently to make their starter homes more like co-starter homes. Gen Z is leading the charge here with over 70 % of respondents saying they'd be willing to form a platonic real estate syndicate and co-buy a home with a friend. Of course, this trend reflects the absurdly high cost of buying a house in the U.S. these days that is only getting higher. Co-ownership rates grew 21 % on average among non-married partners in 2023 compared to the previous years. Neil, I am very interested to hear your thoughts on this one. Look, in the housing market like it is, which is the least affordable since 1984, you got to get creative about buying a home.

22:35If that's, you know, if you don't have a romantic partner, you're still single. Why not call up your friend and say, hey, let's go in on investment property? I thought the generational breakdown was pretty interesting because Gen Z wants to co-buy a home primarily for personal residents. They're OK with kind of living with their friends in a house that they own. Meanwhile, older generations are doing it more as an investment opportunity. They probably have families of their own. The lawyers that are interviewed for all of these stories say, look out. This could go south in a big way. Make sure you have your ducks in order.

23:07Have a conversation with the person about all of your financial goals. Get something down on paper right away because who knows what could happen. Just like a romantic partnership could break up, so you could with your friend, especially when your friend now becomes your business partner. Yeah, absolutely. I think part of this, too, is a reflection that Americans are getting married later, having kids later. So young people still want to take that next step in life, even without an actual life partner to take it with. So the home is coming before the family aspect does in some cases. And it makes sense, too, because the alternative is waiting for the love of your life to come along and then letting your love life dictate your financial future.

23:49So why would you both are hard enough as they are? So why not get your financial future settled with someone that you feel close with, but you aren't romantically tied to and get the show on the road. And hopefully the romantic piece comes along later. All right. So where are we buying a house? Northwest Arkansas. That's what we always say. All right. Last story. Sales of vinyl are so hot right now that the U.K. is adding them to a group of items it uses to measure inflation for the first time since 1992. For some context, the UK and other countries like the U.S. measure inflation by tracking price increases in a basket of goods that reflect what people are buying.

24:28Each year, it rebalances this group of 744 items to reflect changes in consumer behavior. And yesterday, officials announced that among this year's tweaks, vinyl was back in, which is surprising because Spotify exists. Then again, you have to account for the T-Swift effect. Her album 1989 Taylor's version, as well as the Rolling Stones' new Hackney Diamonds, flew off the record store shelves last year, pushing UK sales of vinyl LPs to their highest level since 1990. But this vinyl resurgence is not a one-time blip. Sales have increased for 16 straight years now, and now Brits can blame them for inflation.