Tuesday Oct.08, 2019

Unilever believes sustainability = profits

"_Hope this thing is non-virgin, re-used, compostable material_"

Hey Snackers,

RIP iTunes (2001-2019). May the young Apple Music, Apple TV, and Apple Podcasts platforms carry on your legacy.

Markets barely budged to start the week as US/China trade talks kick off.

Activist

Unilever renews its sustainability vows with a major anti-plastic pledge

What's Anglo-Dutch and sold in every supermarket?... Unilever. The consumer packaged goods beast is dual-headquartered in London and Rotterdam — but its Axe body spray, Dollar Shave Club, and Dove soap are products without borders. Unilever doubled down on its global citizen-ness by pledging to cut the amount of virgin plastic it creates in half by 2025.

Sustainability. So hot right now... But former Unilever CEO Paul Polman was the trendsetter. Way back in 2010, he envisioned all its teas (including Lipton and a bunch others owned by Unilever) to be sustainably sourced by 2020 — fair working conditions, bribe-free deals, and environmentally safe processes. Now here comes the big BUT:

But Unilever is the #8 plastic trash creator on Earth — producing 700K tons of virgin plastic per year that's used once then moved to a landfill until the dinosaurs return.
That's not sustainable, so Unilever will use alternative materials and recycled plastic whenever possible. Aggressively.

Sustainability is not anti-profit... There isn't necessarily a trade-off. Check out Unilever's Vermont-quisitions: Ben & Jerry's and Seventh Generation. Both build Earth-friendliness into their business models — and their mission-oriented brands let Unilever charge a higher price. Unilever's CEO believes its anti-plastic pledge will be pro-spending among the Millennials and Gen-Z who hold companies to higher standards.

Purge

Walmart starts pulling the plug on its most innovative (and unprofitable) acquisitions

The brick-and-mortar store that wanted to become an ecommerce startup... Sounds like a lovely children's book. It's also the story of Walmart in the face of Amazon's growing domination. The historic retailer wanted to prove to itself and investors that it could fend off competition from ecommerce companies by beefing up its own online muscles.

If you haven't removed the tag, can you return it?... Walmart acquired a few key ecommerce startups the past few years (because that's easier than innovating itself) — but in the past couple weeks, it's trying to reverse those moves. Almost all of them.

2016: Jet.com is Walmart's 1st ecommerce pet, a purebred that cost $3.3B. But this summer, Walmart folded up all the Jet employees into Walmart corporate.
2017: Dude chino legend Bonobos was bought by Walmart for $310M. Yesterday it went slim-fit and announced dozens of layoffs.
2017: Extra faux vintage women's wear website Modcloth was acquired by Walmart just 2 years ago. Walmart already sold it last Friday.
Not sure when: Walmart incubated a fabulously unprofitable text concierge service for busy, high-end shoppers: Jetblack. Now it's looking for outside investors for the startup that loses $15K on every customer.

The reckoning for unprofitable companies just extended beyond IPOs... Ruthlessly efficient, Arkansas-based Walmart has a short patience. The old guard is annoyed that Walmart's ecommerce moves get all the media attention — those investments lose a reported $1B per year, while the old school stores quietly crank out profits. And profits are Walmart's north star.

What else we’re Snackin’

ETA: Postmates breaks down why it's delaying its IPO. The arrival window is now TBD.
Paste: Group Nine (the parent of Thrillist and NowThis) just acquired PopSugar for $300M in stock — the year of the media merger is real
Anti-fake: California passes a law banning "deepfakes," real-looking doctored photos or videos meant to misinform you about a politician during election season
Slashed: GE needs to cut its debt so badly that it's freezing the pension plans of a whopping 20K employees and offering to buy-out 100K retired ones
Sidelines: The NBA watched China cancel all business with the Houston Rockets after the team's general manager tweeted support for Hong Kong's democracy movement
Hancock: Livongo jumps 18% on word it signed its biggest contract ever, offering its diabetes management service to 5.3M federal employees

Tuesday

Earnings from Domino's Pizza and Levi's

Disclosure: Authors of this Snacks own stock of Amazon.

ID: 974658

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Tangential remarks

Nicolai Tangen, the CEO who holds the purse strings of Norway’s $1.6 trillion sovereign wealth fund, thinks that his fellow Europeans don’t quite stack up to US employees when it comes to pure hustle, telling the Financial Times in a recent interview that there is a difference in “the general level of ambition” and that “the Americans just work harder”.

Tangen has clearly been putting his money — or more specifically Norway’s — where his mouth is: the sprawling Norwegian oil fund, now one of the largest investors on the planet, has been pumping more capital into its US holdings in the past decade, while decreasing its investment into European entities.

The troublesome news for our European readers? Tangen might be onto something. According to data from the OECD, American workers are putting in almost 60 hours a year more than the weighted average for OECD nations… a benchmark that workers from countries in the European Union are already ~180 hours shy of.

Europeans ‘less hard-working’ than Americans | FT

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Sales of what are up 136% since 2019?

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$70B

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Google’s parent company crushed earnings expectations, initiated a cash dividend for the first time, and authorized a fresh $70B in share repurchases for good measure. The market likes it very much.

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No, Apple hasn’t cut its Vision Pro production estimates in half

Quite a few news outlets are reporting that Apple thinks it’s only going to sell 400,000 to 450,000 Vision Pros in 2024, compared a “market consensus” of 700,000 to 800,000. They’re all citing a note from Apple analyst Ming-Chi Kuo.

Obviously there’s no question that Apple’s $3,500 face computer will have a limited audience and could be a huge flop, but this also doesn’t seem like accurate news.

The issue is that 1) this 400,000 number isn’t new. Back in July of 2023, the Financial Times reported that Apple planned to make fewer than 400,000 units in 2024, reducing its initial projections of 1M units, citing two people close to Apple and, the Chinese contract manufacturer assembling the device. 2) It's unclear who was estimating 700,000-800,000 Vision Pros in the first place, but it appears that it was Ming-Chi Kuo himself?