Hey Snackers,
Sparky can finally jam out to his go-to pup stars — Spotify launched personalized playlists for your dog.
The Dow popped 91 points Wednesday as the US and China inked "Phase One" of the trade deal (details below)...
The US and China (finally) sign a partial trade agreement — but Trade War's still on
Phase 1... Complete. After 2 years of trade-war-ing that shook up global markets, the US and China signed an agreement that de-escalates the situation. It looks like China's making (almost) all the policy changes and concessions:
- USA gets more exports: China agreed to increase the amount of American goods it buys by $200B total over 2 years (ship off the soybeans, grains, manufactured parts).
- USA gets access: China also agreed to open up its market to American financial companies (Mastercard, Visa, and AmEx got shoutouts), which were previously banned/denied.
- USA gets vague promises: China infamously forces US companies that want to operate there to first give up their biz secret sauce. China denies it does this (despite evidence) and promises in this deal not to. FYI, China won't change laws to enforce this.
- China still gets most tariffs: The US is keeping tariffs on 3/4 of what Americans import from China, aka $370B worth of stuff each year. Trump said these "will all come off" if future negotiations lead to agreement part-two (he kept them on as leverage).
Another thing China gets (but not part of the actual agreement)... The US will cancel planned tariffs on Made in China consumer goods that would've made Apple and Nike products 25% more expensive for Americans. Plus, it cut existing tariffs on another $120B of Chinese goods in half. Boom.
The goal of the Trump tariffs... was to get Americans to buy less Made in China goods, hurting China's economy and pressuring it to change. US imports of Chinese goods actually rose in 2018, but are now down 17% from 2017. Meanwhile, PBS estimates the average American household will pay $800 per year in higher costs thanks to tariffs — that's a total $102B annually in costs for Americans (those tariffs haven't gone away).
Build-A-Bear Workshop cashes in on Disney's Baby Yoda
"We now will have 'The Child'"... AKA, Baby Yoda. Your go-to elementary school bday venue, Build-A-Bear is debuting a Baby Yoda stuffed toy to satisfy the unquenchable thirst for Baby Yoda-anything (aka the Yodaconomy). The adorable Star Wars character should be available within the next few months.
"Trending higher than all the presidential candidates combined..." That's what Build-A-Bear's CEO thinks of Baby Yoda. She's not wrong. Because Disney kept Baby Yoda a secret, Hasbro missed a huge opportunity (and millions of $$$) by showing up late to the yoda-bae party. Here's the deal:
- Hasbro's the exclusive official toymaker of Disney franchises (including Star Wars).
- But there's a carve-out for stuffed ~~animals~~ Jedi.
- Since Hasbro won't get yoda toys out until May, Build-a-Bear could be the only Baby Yoda option for a few months.
Timing and partnerships are key... But monetization is endless. When a character is as popular (and memeable) as Baby Yoda comes out, Disney's money-making possibilities hit galactic proportions. Licensing deals with companies like Disney are critical to Build-a-Bear's success — Almost 1/2 its sales are now from toys meant for tweens, teens, and (Star Wars-loving) adults.
Califia Farms raises $225M to scale plant-based dairy everything
Got Plant?... Califia Farms does, and it wants to take over the nut-based dairy market. The alt-milk maker just got a $225M check in its latest funding round (led by a Qatar's state-owned fund). Califia makes Vanilla Almondmilk Creamer, Unsweetened Oatmilk, and even Nitro Cold Brew Latte (with oat milk, duh).
- Fruit-full: Founded in 2010, Califia started as a juice company for "imperfect" fruits (a weirdly-shaped carrot is still totally juicable).
- Plant-full: It's pivoted to dairy subs only, becoming the #3 biggest plant-based milk maker (you might recognize their dress-shaped bottle).
- Cash-full: The company will use its fresh cash to go deeper into plant-liquid-based options (think creamer, yogurt, and ice cream).
Feel-good mission + aesthetic packaging... But can that beat alt-dairy rivals like hipster Oatly, lactose-legend Chobani, or pea-based Ripple? We know plant-based milks have disrupted the dairy industry (US consumption of cow milk keeps dropping). So Califia is trying to stand out with its brand, but...
Does brand matter?... Customers will often pay more for a premium brand they know/trust/love. And brands matter for plant-based meat: Impossible Whopper and Beyond Breakfast Sandwich. But alt-milk... might just be alt-milk. Starbucks offers almond milk, but doesn't advertise the brand in your latte. Califia's using its fresh cash to build a brand to beat that.
What else we’re Snackin’
- Special Sauce: Shake Shack jumps 7% on a report that its exclusive Grubhub deal could define its 2020 — The Shack in the top of the delivery app is fresh marketing
- Megamerge: T-Mobile and Sprint gave their final arguments for why they should be allowed to merge — but a bunch of states think the marriage will jack up wireless bills
- Mario: Universal Studios Japan is opening a Super Nintendo World theme park (you get "Power Up Bands" that track your life in a coin-collecting video game)
- Missed: Target's stock fell 7% because holiday toy and electronic sales weren't what they expected
- Bezobills: Jeff Bezos says he wants to invest $1B in Amazon's India biz, but some small-business owners there weren't having it (see: "Bezos Go Back")
Thursday
- Earnings from Charles Schwab, Morgan Stanley and BNY Mellon
Disclosure: Authors of this Snacks own shares of Beyond Meat and Amazon
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