The Mega Deal Changing Snacking & Elon Musk's 'Demons'

0:00What should you invest in? And how often? Making investing decisions is easier with Fidelity. With their step-by-step experience, you can find investments based on your goals and comfort level. And if you'd like, you can decide how much and how often to invest with recurring investments that happen automatically. Ready to make your next investing decision? Head to fidelity.com slash trading. Investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC, member NYSE SIPC. Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. On today's pod, at long last, the Elon Musk biography is out.

0:36We'll give you the too-long-didn't-read version. And North Korean leader Kim Jong-un is in Russia for a rare international trip. We'll take you aboard the mammoth bulletproof train that got him there. Then Twinkies have a new home after a delectable mega merger between two iconic snack brands. Plus, a new Catan-themed cookbook is dropping today. So start thinking about a recipe you can make with ore, wheat, cheap brick, and wood. It's Tuesday, September 12th. Let's ride.

1:09Neil, we had a heck of a night last night. It was our first live event with Morning Brew Daily listeners, and you all showed up big time. We had a full theater for our advanced screening of Dumb Money. The movie was incredible, so it was talking to the producers, Jessica and Lauren. But my favorite part was definitely meeting people and hearing about their listening habits and actually how they stumbled across the podcast. My favorite story was from a listener who said that she was on a run when one of her podcasts ended and Spotify just recommended us. So I feel like we owe Spotify one shout out Spotify for giving us a listener.

1:43Who says all algorithms are bad? Yeah, exactly. And yes, it was such a great time. And before we get into our main stories, I also want to mention that the dispute between Spectrum and Disney that resulted in the blacking out of ABC and ESPN for 15 million Spectrum cable subscribers was resolved yesterday. The negotiation was billed as the battle for the future of cable TV, but in the end, the agreement was not really revolutionary at all. Really, the biggest news was that it allowed Spectrum cable subscribers to watch an epic Monday night football game between the Bills and the Jets. And that also kept me up, which is why I am on a little less sleep than usual.

2:18Aaron Rodgers did get injured and is not looking good. Classic, Neil. Okay, let's jump into our real top story of the day where we have a good old-fashioned snack merger. Yesterday, J.M. Smucker, the company behind the famous Jellies, Fulgur's Coffee, and other brands, announced it will buy Hostess, the company behind the famous Twinkies, Snowballs, and other brands, for a tasty$5.6 billion. If that feels like a lot of money, it is. The deal prices Hostess at$2 billion more than its current market value, but it could end up being a bargain down the line because, Neil, the snack business is booming.

2:54Hostess revenues jumped 50 % from 2019 to 2022. And for Smuckers, its indulgent snack lines have grown 20 % faster than its healthy ones in the last three years. Neil, I am a big Hostess fan and a big Smuckers fan, actually. So this is like an MCU crossover level event for snack lovers like me. Do you think it's a good deal, though? I am not deep in the company's financials, but looking at what analysts had to say, it does seem like they think Smucker may have overpaid for Hostess,$5.6 billion for a brand that may maybe have reached maturity in terms of its growth trajectory. So, you know, you had analysts at JP Morgan being like, you know, this is definitely better for Hostess than Smucker.

3:40For Smucker, it's like, well, we're really betting on the snack boom that has happened over the past couple of years during COVID, really extending into the future. So putting on my analyst hat, it seems like they may have overpaid. Yeah, and there's also some kind of weird synergy asynchroncies. I don't know if that's a word, but it's basically that Hostess has a bunch of snack brands that have a long shelf-like, shelf-stable snacks, as they're called. Remember, the joke is that Twinkies, if the apocalypse happened, Twinkies would still be on shelves. I looked it up, though. It's 45 days. 45 days, but there was one found that was on a shelf for 42 years and was still intact.

4:16That doesn't mean you can eat it. It was not edible. It just means it has some sort of structural integrity. But they were kind of looking at the two brands, and they see that Smucker has less, they have more perishable snacks. And so it is not quite the same synergies. Like, it's not the same supply chain. So some of those, you know, usually when we see these snack brand mergers, it's all about, like, building up their supply chain and their distribution network. So there could be some issues on that front here. I don't get that, though. Isn't peanut butter and jelly? Or isn't, like, peanut butter, you know, that is a very shelf-stable product.

4:46I mean, Smucker's has a bunch of brands as well. But yeah, and some of them are in the freezer aisle versus just the snack aisle. So just some synergy issues. That's all I'm bringing up. That is honestly, that whole grocery store layout is my favorite part about this, about how industry, about how CPG industry people talk about the grocery store. And they said that this deal allows Smucker to move into the center aisles, which I've been growing a lot more recently. because especially Gen Z and millennials are just snacking up a storm. They're snacking up 10%. They're eating 10 % more stacks than older generations.

5:23And I think we should talk about Uncrustables. Uncrustables is just an absolute behemoth. Smuckers bought it for$1 million back around 2000, and now it's on pace to do$650 million in annual sales. They see it as a billion-dollar brand going down the line. I love Uncrustables. I would die for Uncrustables. They're just the perfect snack food in my mind. And they're crushing it. So we'll see whether this pays off for Smucker. Definitely will take a few years to play out. Our second story, it's Elon Musk Book Day. The biography of the business mogul by author Walter Isaacson is released today. And in it, Isaacson explores the psychology and motivations of potentially the most powerful person on the planet.

6:05Musk effectively heads up six companies, Tesla, SpaceX, The Boring Company, Neuralink, X, and XAI that are really pushing humanity in a new direction from the shift to renewable energy to colonizing different planets. So understanding this guy, what makes him tick, why he does the things he does is a really important deal. So to learn about the man behind the tweets, Isaacson spent two years next to Musk's side, following him through his Twitter acquisition, the birth of more kids, and his outsized role in the Ukraine war. Toby and I haven't read the book yet, admittedly, but we have been reading all the excerpts and interviews, and there are so many juicy tidbits to chat about.

6:44Where I want to start is this idea that a single person can change human history. Because Elon Musk sure thinks that of himself. He has an epic sense of himself, Isaacson writes, almost as if he's a comic book character wearing his underpants on the outside, trying to save the world. And here's a good example. After SpaceX successfully sent a crew into orbit without a professional astronaut aboard in 2021, Musk reflected about the achievement to Isaacson. Building mass market electric cars was inevitable, he said. It would have happened without me, but becoming a spacefaring civilization is not inevitable.

7:18This flight was a great example of how progress requires human agency. Yeah, I mean, he clearly gets drunk off his own Kool-Aid, which you kind of have to do when you're running six companies. I mean, he called Tesla the company doing the most to solve climate change, talking to Bill Gates. And then, yeah, he said he built SpaceX to make us multi-planetary. And then he invented Starlink, which is the internet satellites, just to generate a profit while he's working on this interplanetary goal. So it really was this thing where he has a bold vision for the future and he thinks he's doing very important things for it as well.

7:52So those two things combined formed this potent mix to make this man just incredibly ambitious. And I think the problem with that for the rest of us is that he thrives on chaos. That's what I've picked up in all of these excerpts is that when things are going well, he gets a little bored and complacent. And that is just a very uncomfortable position for him. And you can see this in the episode about his takeover of Twitter, now called X. It does seem like he did it because things were going pretty well at Tesla after a few rocky years. And he just exercised some stock options that left him with$10 billion in his bank account.

8:28He loved Twitter. And so he called up his friend and was like his banker friend was like, what do you think about me buying Twitter? And we all know about the chaos that's that's happened ever since. So the problem, you know, he's extremely ambitious, but he does also seem to get, you know, very antsy when there aren't a lot of conflicts going on, which is which which seems to be a little bit problematic because he's so powerful. And when he gets into a conflict, there are a lot of ripple effects for the rest of the world. Yeah, he loves being in fight or flight mode. but he loves having his back against the wall.

9:00And sometimes he'll just manufacture chaos in order to have that feeling. I also loved one of the excerpts that he loves video games and he got obsessed with this strategy war game called Polytopia, which is like this really low res kind of low quality video game. And he was playing it during meetings, during family gatherings. He was late for some meetings just for this video game. And he said his, his reasoning for why he was so good at it was like, I'm just wired for war basically. So he has this idea of himself as kind of like that wartime CEO. He loves war strategy games and he sees himself almost as like a general.

9:36Yeah. Isaacson said that his favorite historical character is Napoleon. There's a lot to unpack there. Yeah. No, I definitely want to read this book. Musk is just a hugely complicated, consequential character for our society right now. So it behooves us to learn more about him. Big word alert. OK, moving on to our third story. North Korean leader Kim Jong-un arrived in Russia today. No one knows exactly what he's up to, but U.S. officials expect he's going to meet with Vladimir Putin and discuss an arms deal that helps keep Russia flush with weapons as it continues its war in Ukraine. It's Kim's first trip outside the country in four years and a sign that North Korea is beginning to open up after it implemented strict COVID measures that made it even more closed off than usual.

10:24But here at Morning Brew Daily, we think it's important not to focus on the destination, but on the journey. And the North Korean leader's method of travel for generations is characteristically unique. Instead of taking a one-hour flight from Pyongyang to Vladivostok, Russia, Kim spent 20 hours traveling in his private train. That's because this train is not like the Amtrak Northeast Corridor. It's a ridiculous 90 cars long compared to Amtrak's typical nine cars. It is extremely lavish. So if you manage to snag a ride, expect to be served French wine and have ultra fresh lobster dropped in along the way.

10:59And it's heavily armored, which is partially why this journey took so long. This bulletproof train reaches a max speed of just 37 miles per hour, which is a snail's pace even by Amtrak standards. The Acela can reach 150 miles per hour. Toby, this unusual train is just another symbol of how deeply strange and isolated North Korea is. There's so many little details about this train that I want to talk about. One that I saw was sometimes two other trains travel with it, one to check the tracks ahead and one to carry his security entourage behind him. So not only is he traveling on one slow train, sometimes there's three trains on the tracks just covering all his bases.

11:38Also, one of the amenities on the train, you mentioned the lobster and whatnot, they also serve donkey meat sometimes, which is, again, a lot of this is kind of anecdotal because there's so much secrecy and so much mystery around this. And it's coming from like Russian officials who wrote on the train while Kim Jong-il, Kim Jong-un's dad was the leader of North Korea. But again, like the mystery only adds to kind of like the shroud. It is funny. There are no, there are so few people outside people that have been on this train. So every, every piece on what is on inside this, what is going on inside this train is just from like two Russian guys that managed to get aboard in like 2001.

12:19So it's just shrouded in secrecy. I also want to talk about another method of travel that Kim Jong-un's been seen in. And this caused a major stir in 2019 because people saw his, he has two armored Mercedes, a Maybach S600 Pullman Guard and a Maybach S62, which cost between 500 ,000 and$1.6 million each. And the international community was like, how did he get that? Because the UN has imposed sanctions for decades on North Korea getting luxury goods. So you had all these investigative teams exploring how these two Mercedes vehicles got into North Korea. And it's a big deal because if a Mercedes can get into North Korea, then there are a bunch of other luxury goods that could get into North Korea and also a lot more important things like weapons and things like that.

13:11So there was this whole scramble to find out what happened that led to these Mercedes getting smuggled into North Korea when there were all these sanctions in place. And it was a crazy journey from like Rotterdam to Netherlands to China to Japan to Russia and then flown in. So probably took a train, probably took a slow moving armored train to get in. All right, Neil, before we jump into our next story, we're going to take a quick break. Tonight on NBC, Jimmy Fallon and Bozema 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.

13:53This 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 idea win! On brand with Jimmy Fallon. Series premiere tonight on NBC.

14:12When did making plans get this complicated? It's time to streamline with WhatsApp. The secure messaging app that brings the whole group together. Use polls to settle dinner plans. Send event invites and pin messages so 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 all right neil we are back with another edition of toby's trends where i a devilish and dubious gen z-er educate you a solemn and sapient millennial on a trend i've had my eye on recently and today's trend is all about laxatives and their growing popularity they're so popular in fact that drugstores across the country are actually running out of brand names like miralax So are people just more clogged up than ever?

15:06Well, kind of. There is an actual health reason for this shortage. Some gastroenterologists are pointing to what they call post-pandemic bowel dysfunction as a reason for the rise in sales. Essentially, people ate worse, exercised less, and had more anxiety during the pandemic, which can all lead to bowel dysfunction. But there is also, of course, a TikTok angle to this too. people are treating laxatives as a budget ozempic in taking them every day the hashtag gut talk has over 1.1 billion views as people show off their concoctions of some sort of fruit juice and smoothies combined with the laxative that they drink every day to feel skinnier suppliers are noticing younger and younger people buying up stock which has led one company haleon to start selling gummy versions of its products that appeal to young adults so neil these two trends have combined to form some surprisingly empty shelves in the drugstore aisle.

16:01What does the medical community say about that? They are not happy with it because obviously there is a little bit of a dark side to this trend because some eating disorder specialists have seen a sharp rise in teenage patients abusing laxatives because apparently like people like the empty feeling that they get and they associate that feeling of lightness with weight loss when in reality that's not actually how weight loss works at all. So definitely the health community is not super proud of this. Also, another thing is we've seen kind of like this crossover into the girl dinner world. Remember how we talked about that trend where people are using that sound, but just showing them drinking laxatives.

16:37So there is a little bit of an unhealthy feedback cycle here on TikTok especially. But it was interesting to see people are still pointing to the pandemic as a reason for the rise in laxatives where all of our gut biomes got so messed up. What was our first story on the rise of snacks? We're like, everyone's eating much unhealthier. All these companies are buying sugary snack companies. And they think this is the main growth area in the food industry. And then later in the show, we talk about this. Laxatives. But when you first started talking about this story, you're like, oh, there's a shortage of laxatives.

17:10I was like, okay, finally, a Toby trend that doesn't have to do with TikTok. No, there's always a gut talk angle. Yeah. There's also a psychology angle to it as well. It's a classic case of wanting a quick fix over any long-term behavioral changes. And so a laxative, again, makes you feel empty and full and skinny on a day-to-day basis, but it's not actually a good long-term fix. So I don't know. It's actually a very interesting trend that captures a unique moment in our psychology as a nation, honestly. All right. Let's move on to our next story, which actually combines three big passions of ours, board games, cooking, and talking about things like board games and cooking.

17:50I am of course talking about the Catan cookbook that is dropping today. Inside lovers of Catan can find 77 recipes inspired by the game, including dishes like forest dwellers dip, tavern ale pie, and fireside banana boats. This is a real cookbook, Neil. Cassie Vogel, vice president of editorial at Ulysses Press, the publisher told the AP that there are recipes in here that you can and should definitely make. It's not just a gimmick or a gag gift by any means. It's coming out at the right time too, Neil. The Catan U.S. National Championships happen in just a few days in Minneapolis, Minnesota. Plus, Catan is still riding a high from a surge in popularity during the pandemic as people look to stay busy while in quarantine.

18:37I can't think of anything more in our wheelhouse to discuss than a board game that was turned into a cookbook. Would you buy this as a prolific home chef yourself? Absolutely not, but I would buy it for – these recipes do not sound good. Oh, come on. They don't. Homemade fudge bricks, Rick's Smash Burger, chicken under a brick. I think it's a little forced. Overnight oats with K and I. I like that one. They're punny. I mean, I take my food a little seriously, so I don't know if I would do this. I knew you would say no. I know. It doesn't sound good to me. It's all like medieval food. But I do think this is a genius gift.

19:16I was just thinking like this is going to – if I had any Catan friends, which I have plenty of, I will definitely give this to them for Christmas. Seems like a really good gift. Yeah, and if I just want to put my marketer hat on for a second, they're doing a lot of things right. One, they're putting it out in tandem with the U.S. World – or national championships, which is a big flagship event. And then two, it speaks to kind of the core of the product, which is gathering your friends, having a good time. Food and board games actually go together very nicely. And then it's also augmenting their existing product where you could totally cook a recipe from this book while playing Catan.

19:52So I do think it hits a lot of things, and it's this passionate community too. So I could see it having a great holiday season for sure. All right, we have to talk about this. This spurred a bunch of conversation within the brew about what other board games would have really good cookbooks. What do you think? Do you want to go first or do you want me to go first? You go first. Okay. I was thinking a little bit about expanding the scope beyond just board games to a cornhole themed cookbook where it's all just variations of different handheld dishes you can hold while playing cornhole. I feel like that'd be very functional for kind of the summer months.

20:25I also thought about a Jenga cookbook where I guess every dish is just shaped in the little Jenga blocks and you have to play with them. Because I've seen like potatoes kind of put into block form. So I could see that working. And then obviously a Monopoly cookbook as well where every recipe just takes so long to finish that by the end you're just like, should we just get takeout? What about you? I have a bunch of ones, but I'm just going to focus on one, which I have to admit was the brainchild of my brother as we were talking about this. And it would be Scrabble, where the recipes are only dishes that have very high scores.

21:01So basically, it would all just be variations of zucchini, gazpacho, kumquat, quiche, jerk chicken. I think that would be a really big thing. That is legitimately a good idea. I know. So shout out to Steven. Steven, it's a really good idea. All right. Our last story. Later today, Apple will hold its big annual hardware event where it will unveil the iPhone 15 and updates to its other gadgets like the Apple Watch. ahead of the event i just couldn't resist preparing some iphone trivia for toby who considers himself a bit of an apple historian so i've got six questions for him on the history of the iphone and i hope you all will play along too all right question one what new feature debuted on the iphone 4s in 2011 oh i two things immediately came to mind i guess one my first thought was the iphone jack went away but i guess that's not a new feature so it must be a software i think i think it's siri right okay correct that was getting at the end for for apple's like ai play because it's all been downhill since there all right one out of one great job what was the question number two what was the first iphone without the headphone jack oh interesting well it's not the four i guess so is it beyond then i'm gonna say the six just right iphone 7 in 2017 was the first without the headphone jack okay our third question right now you're you're bad in 50 percent what of the following i which of the following iphones is not real the iphone 12 mini the iphone xr the iphone 5c and the iphone 9s oh my gosh okay i know the mini's real okay there's no way there's an xr right what would that even stand for man the apple the apple fanboys listening to this right now that's wrong there's no there was never an iphone 9 okay it went from 8 to x sorry i'm yelling at you oh man i do remember that now okay i should what are you one for three still still a major league uh yeah successful batting average here all right question number four what was the first iphone that tim cook presented as ceo oh my god these are hard questions i you say i'm an apple historian i i should have brushed up on it okay let's let's think about was headphone jack him maybe i can use the other questions to inform myself so let's go to iphone 7 iphone 4s since 2011.

23:22He's been at the helm for a while. All right. Our final question. I'm going to skip the last one. We have five questions. This is our final one. Let's end it on a high note. I'll give you this. You can be within$50 here. Okay. How much did the original iPhone cost in 2007? Oh, I know this answer actually. $499. Let's go. Okay. I knew that one. Okay. So maybe I did on a high note. Two out of five. What was the last question? Just so I can get 50%. All right. It's not really an iPhone question, but of the top five free apps in the app store right now, two are owned by the same company. Can you name them?

23:53Okay. I'm either thinking it's Meta, ByteDance, or maybe Google. So it's one of those three. Okay. It is one of those three. Okay. CapCut and TikTok. I don't think CapCut's up there anymore. All right. I'm going to go out on a limb here and say it's Google, which is YouTube and Gmail. So close. You got the right company. N1, YouTube and Google. Oh, Google's an app there? Yeah. Yeah. All right. I'm actually That was very impressive. Let's go. All right. We have to end our show right there. Have a wonderful Tuesday, everyone. Hope you enjoy the Apple event. And if you pick up your book, if you pick up your Elon Musk book, I hope you get started on that as well.

24:29If you have thoughts on the show, but only if they're nice, write in to Morning Brew Daily at MorningBrew.com. Let's roll the credits. Samantha Veles is our editor and producer. Uber Batista and Raymond Liu are associate producers. Isabel Nguyen is our technical director. Billy Menino is on audio hair and makeup called in sick after making a recipe from the sorry cookbook. Devin Emery is our chief content officer and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow.