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Hey Snackers,
More pixie dust. Disney shares jumped 5% after yesterday's earnings report, but that was just a trailer for the Disney+ streaming launch happening next week.
Stocks were busy hitting record highs on a hakuna-matata moment between the US and China over the trade war.
Sip
Coca-Cola re-enters the fight against LaCroix with a flavored, caffeinated seltzer
When your mouth just wants to relax... but you have 10,000 things to do. There's a sparkling water for that. Coca-Cola just announced AHA (actual name), a flavored sparkling water with almost as much caffeine as a soda. It hits shelves in March bursting with flavor combos like citrus+green tea or black cherry+coffee. But Coke's tried (and failed) with seltzer before:
- Take I (2014): Coca-Cola launches "Dasani Sparkling Water." It goes nowhere because the brand isn't fresh and it's too similar to every other seltzer option.
- Take II (2017): Coca-Cola acquires Topo Chico to get in on the pseudo-hipster craft mineral water trend (is it just us or does Topo Chico not make that easy to discover on its website or bottles).
- Take III (2019): Coca-Cola shuts down Dasani's version and starts from scratch with AHA — the brand is new and the differentiator is caffeine.
Coca-Cola drowned in the sparkling water industry... 5 years later, it's only earned 2.5% of the US flavored sparkling water market. Here's who really owns it:
- Polar = 7.7%
- Pepsi (Bubly) = 8.5%
- Nestlé (San Pellegrino, Poland Spring) = 11.3%
- LaCroix = 18%. It's the leader, but owner National Beverage Corp's stock is down 60% in the last year facing all that above competition (it fell another 11% Thursday on this AHA moment).
Sparkling Water became so big, it’s got niches now... While soda sales fell, sparkling water sales surged epically from 100M gallons in 2013 to almost 400M last year. That's created a demand for different types of sparkling water for niche needs: Bud Light Seltzer and Corona Hard Seltzer want to replace your evening cocktail, while Coke's AHA goes after your morning espresso.
Assimilate
Toyota stands out from its Japanese pals — SUVs and trucks are the key
Memorize the Bill of Rights... define what "unnecessary roughness" means, and reveal the size of your truck. That's the modern citizenship test for foreign carmakers in the US — and Toyota is the only one passing. Mazda, Nissan, Honda, and Mitsubishi all struggle to sell cars to Americans, while Toyota's total sales jumped 4.5% last quarter to 7.6T yen ($70B) globally. Here's why:
- Smaller cars: They represent just 28% of all vehicle sales in America last quarter. Picture little Civics, Accords, and Corollas (aka Uber driver go-to's).
- Trucks & SUVs: 4x4s, pickups, and 7-seaters are all the rage, making up a shocking 66% of new vehicle sales in America last quarter. This is one of Toyota's money-makers.
It's all about destroying muda... We're not shocked that Toyota's winning in cars, trucks, and SUVs. Its passionate culture is committed to eliminating waste — "muda," as the Japanese call it. It would be wasteful to produce tiny coupes and sedans that Americans don't want, so Toyota invested years ago in assembly lines for its hefty Tundra, Tacoma, 4Runner, and Rav 4 truck/SUVs.
America created the assembly line. Toyota perfected it... Thanks to Toyota's anti-muda obsession, it runs an insanely efficient shop, wringing more profits out of each vehicle sale than other car brands. We crunched some numbers on profit per car sold for last quarter:
- Tesla made $268 per car sold.
- Ford brought in $1,400.
- Toyota snagged a cool $2,300 in cold, hard, profit for each car it sold (and it expects to sell 9M of them this year).
What else we’re Snackin’
- Trimmed: Weight Watchers stock lost 15% because its new "studios" physical footprint strategy for 2020 isn't impressing investors
- Uber-ish: Uber's ex-CEO and co-founder Travis launched a ghost kitchen startup (we explain those in this podcast), which reportedly just raised $400M from Saudi Arabia
- Fancy: Ralph Lauren shares jumped 15% because those higher prices it's charging on polos offset its hefty sales slowdown in Hong Kong
- On: Dish shockingly added subscribers for the first time since 2017 — it was all thanks to Sling TV (not cord-cutting)
- Worn: Gap's CEO joins the record-sized list of execs stepping down this year (Gap's sales are down 35% this year)
Friday
- Earnings from Duke Energy and Madison Square Garden (fyi, an activist investor thinks the Rangers and Knicks teams are worth a total $7B)
Disclosure: Owners of this Snacks own shares of Tesla
ID: 1006719
