Hey Snackers,
We're trying to figure out if Rotisserie Chicken-Flavored Pringles will work out.
The US and China are still hashing things out too — Stocks popped Thursday on hopes that at least a "mini deal" will materialize between trade negotiators before the weekend.
Tootsie Roll is 100% all-in on candy — but its profits and stock price may surprise you
The bottom of the Trick-or-Treat hierarchy... Somewhere between apple slices and candy corn, you get Tootsie Roll. Its sales fell to $515M last year and have barely budged in 2019 — that's because it's fighting nearly every trend we talk about at Snacks.
- It's pro-sugar: Tootsie is doubling-down on dessert. Indulge in this portfolio of brands: Blow Pop, Charleston Chew, Junior Mints, and many more movie theater faves.
- It's anti-diversifying its biz lines: Hershey's just bought a popcorn company. Mars acquired a pet food one and invested in Kind Bar. Tootsie is still just Wonka-esque candy.
- But it's found an audience: The latest OECD report on developed countries found 60% of citizens are overweight and 25% are obese.
When you've been around this long... you do things your own way. We noticed the 123-year-old company handles a few things differently.
- The Gordon Family has owned a majority of Tootsie Roll for 60 years.
- After its 95-year-old CEO passed away in 2015, his now 87-year-old wife Ellen charmingly took over (she’s 87 and running the show).
- But they don't do earnings calls (they just release the reports) and no analysts cover the company (because it literally only does candy).
So why's the stock up 28% in the last year?... Dividends. Those are the payouts some profitable companies make to their shareholders when they're mature enough to have a steady stream of profits. And Tootsie Roll pays them, because its bare bones candy biz is profitable. It has actually raised its dividend every year for the last 50 years. Investors don't mind Tootsie's kale aversion, because it reliably pays them dividends.
Waze, the driver-powered carpool app, is one of Alphabet's secret weapons
Police in 0.4 miles... Ease off that accelerator. Waze gives its users the handy heads-up via emoji-ish car icons. Google dropped $966M in 2013 to acquire the Israeli app, and now it's Alphabet's other navigation app. Last month, a bank analyst knighted Waze a "buried treasure" for Google-parent Alphabet. Here's why.
- Network effects: The more people wazing, the more data Waze has on traffic and your ETA. More users ➡️ better product ➡️ more users ➡️ better product. Repeat (infinitely).
- Daily habit: 75% of smartphone users regularly use a navigation app.
- Near-monopoly status: Google Maps and Waze combined capture over 80% of the navigation app market — It's a shocker (and mistake in our opinion) that Google was allowed to acquire its main competitor.
"You can let me out right here"... Now that it's pretty much as good as Google Maps, Waze is differentiating itself with a carpool feature. If you're heading to work, you can use Waze to pick up fellow commuters. A 5-minute detour could earn you $5 driving Katie to that 9am all-hands meeting. Waze hopes that steals business from the ride hailers.
High engagement = High profit potential... Google Maps and Waze are some of Alphabet's least-monetized assets — so the analyst thinks Waze will start packing in ads to become a profit puppy for the parent company. Picture this:
- Take exit 13 to pick up your Waze carpool.
- Continue East on Hudson Parkway for 2 miles.
- There's a Starbucks just 0.1 miles away offering a refresher for this 98-degree sweltering summer day.
What else we’re Snackin’
- Fed: Uber Eats is partnering with Rachael Ray to bring her chicken chili expertise to a virtual restaurant that only delivers to your door
- Out: Victoria's Secret (owned by L Brands) just lost its head of stores because they were too much push-up, not enough bralette
- Unplugged: Dyson, the really intense vacuum company, is ending its plans to build an electric car
- Upgraded: Delta is hiring a hefty 12K new employees over the next year as it expands
- Fancy: Porsche and Boeing team up to build some luxury flying cars
- Censored: Apple shuts down the Quartz app after complaints from the Chinese government about how it was reporting on the Hong Kong protests
Friday
- The Consumer Sentiment Report tells us how we're all feeling about the economy
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