Empty formula shelves (Samuel Corum/Getty Images)
Empty formula shelves (Samuel Corum/Getty Images)
Hey Snackers,
First, we had hot dog-flavored seltzer. Now, candy giant Brach's has created hot dog-flavored candy corn to attract customers pre-Halloween. It must be a hot dog summer.
The S&P 500 surged 2.6% yesterday after the Fed announced another 0.75 percentage-point rate hike, as expected. Notably, Fed Chair Powell said he doesn't think the US is in a recession. Today’s big GDP report should shed more light on that question.
A dystopian formula for success… As US parents scramble to feed their kids amid an ongoing baby formula shortage, British health giant Reckitt is raking in cash. Lysol-maker Reckitt and three other companies — Abbott, Nestlé, and Perrigo — produce 90% of US baby formula. Similac-maker Abbott (which also makes Covid tests) halted some formula production in February due to contamination, exacerbating supply shortages.
Food for thought… To ensure all US babies get enough nutrition, the formula biz is heavily regulated. But the federal program that subsidizes baby food — called Women, Infants, and Children (WIC) — limits competition in the industry. That may have worsened the shortage.
Emergency responses could create permanent changes… Biden temporarily invoked the Defense Production Act (DPA) to boost domestic formula production. The FDA also lifted limits on formula imports, temporarily allowing more foreign-made formula into the US. But some analysts expect the shortage to lead to reform of restrictive WIC rules, which could create more US formula competition — and shrink the big formula four's market share.
Eleven trading card… superpowers not included. Sports merch staple Fanatics nabbed a deal with Netflix to expand beyond athletics into pop culture. Now, Fanatics can sell everything from “Stranger Things” Hellfire t-shirts to demodog trading cards. Beyond Hawkins, Fanatics inked a merch deal with Legendary Entertainment for its “Dune” movie franchise. It’s a shift for the sports-centric brand:
From trading cards to NFTs… Fanatics’ fanbase is expanding. In March, Fanatics launched zerocool, a premium trading card company that collabs with media and pop culture brands. Now, it’s using Netflix's 221M-strong subscriber base to diversify its portfolio. Netflix has its own low-key merch store, but now it’ll get exposure to Fanatic’s 80M customers. Demand is hot: Ebay sold 142% more trading cards in 2020 than in 2019.
Fanatics is going wide to get far... It wants to be everyone's favorite merch company — and not just for sports lovers. That’s why Fanatics is planning more licensing deals with production studios, musicians, and even fashion brands. It’s not the only company going wide: yesterday, luxury reseller The RealReal expanded its fashion marketplace to include collectibles like trading cards and action figures. Going wide could be key to Fanatics' goal of becoming a $100B company over the next decade.
The space economy grew to $469B last year, expanding at its fastest rate in nearly a decade
Authors of this Snacks own: shares of Apple, Spotify, Netflix, Comcast, Spirit and Sirius XM
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