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Hi everyone, Welcome to the Bloomberg Business Week Weekend Podcast. Happy New Year, and as we wrapped up one year kicked off another. Some of the main themes for twenty twenty six definitely came into focus just in the past week or two. A focus on the FED, the conundrum of the US consumer, the AI spend and build out, and political division, debate and disruption. Yes, sounds a lot like how we began twenty twenty five one year ago.
So this hour we explore the health of the consumer and how AI impacting the retail space, and more broadly, where the AI spend may take investors in twenty twenty six. On politics, we check out what New York City's political shift could mean for business in the Big Apple. A well known voice to the city's executive suite and member of the transition team of the city's new mayor, Zo run Mamdani stops by.
Plus, we've got the story of the Donald Trump meme coin launch and how the team behind it made an estimated three hundred and fifty million dollars while many other investors lost money. Then, in our second hour, in honor of New Year celebrations, we kick back and dig into some of our favorite conversations of the past year with leaders in the wine and spirits businesses.
Perfect for a little New Year's celebration.
Yes, I feel like we've earned it this past week.
Yeah, I think that's fair to say. All that to come. We begin, though, with AI affecting a lot in our world, with much more forecast to come. We may get a peek into that this coming week at CEES. It's the annual Consumer Technology Conference and it gets underway in Las
Vegas this coming week. The biggest names in tech, including Nvidia, AMD, Samsung, and more, will make the case for AI their target audience, investors, corporate clients, and perhaps just as importantly, ordinary shoppers who've yet to be fully sold on the idea of AI infused gadgets.
And speaking of we ordinary shoppers. They we are increasingly using AI agents to perform deep discount hunting, real time product comparisons, and personalized gift curation that according to data from the AI Shopping Optimization platform.
Novy, retailers including Macy's, Sephora, Target, and Alta, along with thousands of other consumer package goods brands, rely on Novy to optimize their product data for AI driven discovery. Kimberly Shank is the company's CEO. She joined Carol and Bloomberg's.
Vonnie Quinn Novi's technology.
We're actually helping retailers and brands increase their sales by ensuring their products are found and trusted and then ultimately recommended by AI models. So thank CHATCHBT, Gemini and Claude and so we do this. We work with leading retailers including Macy's, Sephora, Target, Aulta, thousands of CpG brands, and they rely on us to optimize their product data for AI driven discovery by consumers.
So when you say that, it's basically a consumer who does something and their data is processed and recorded, and they're saying, oh, you bought that pair of pants, maybe you would like this pair of pants is that is it as simple as something like that or is it more sophisticated.
It's a little bit different in terms of consumers now flocking to chat shipt or Gemini and asking questions to actually do their shopping. So they're outsourcing a lot of their research, discount hunting, you know, personalized gift curation to the AI agent who's then gooing and finding products and recommending it to them based on just questions and prompts.
So who are your competitors and how do you stand out from them?
It's interesting.
So there's a couple of different up and coming competitors in the tech space who are helping brands and retailers stand out in AI shopping. But we also have a lot of the older, more traditional data companies because we are a data company and we feed data with throw our partnerships with our retailer partners. So think about Syndigo or Salsify or even Nilsen Iq some of those older
data partnership players. So a lot of what we're doing in these partnerships, and we'll be able to announce some of them really soon, is feeding trustworthy, personalized information to the models themselves, which is what we have seen at NOV to increase your potential as a brand to show up in AI shopping. So we found that you know, products that have verified trust signals are a selected two hundred and fifty nine percent more often than random chance
to think like certifications, reviews, badges, third party testing. And we're feeding this directly to the retailers and the models so that they help the brands show up in AI recommendations to consumers.
So one of the things I always think about, Kim is like, how much of what is spent on AI to kind of attract consumers retailers or folks to retailers. So, in other words, that AI driven traffic to retail sites, how much of it is productive that results in actually a consumer buying something.
Yeah, that's actually a very interesting question. So we're seeing the traffics start to increase. There's actually we saw from Adobe Analytics, like we just said, five hundred and twenty percent over last year from AI.
But what we're not sure about yet is conversion.
And this is just because CHATCHBT, Gemini, none of them are publishing the conversion.
Results, but we at no V.
What we did see is that chatgbt's shopping research answers sent consumers directly to the brand's website eighty six percent of the time, which means that the remainder of traffic, you know, only about fourteen percent was sent to the large retailers like Walmart or Target. And so what brands are starting to see is more and more direct consumer traffic to their website, which is driving conversion in sales for them.
So would you say, based on the data that you see, could you see so much data that the consumer's doing well, that retail's doing well? Like how much could you can obviously break it down? Probably a lot, So give us a little bit of insight as we get ready to wrap up this hotiday shopping season.
Well, so what we're actually seeing is, you know, consumers are using AI as their category manager.
So think of.
It is we all used to trust the big box retailers for their ability to manage each shopping category, do the curation for us.
And that's why you walked into a Target, right.
They scoured the earth for the best, most compelling products and we trusted them to do that. But now, and what we say saw play out this holiday season, the consumer has shifted their trust to AI to do the research and curation for them. So we're seeing strong numbers and users using chat to BT and shopping, but it's just not quite played out yet and we'll see that in twenty twenty six.
Is where that conversion is going to happen.
If it's going to happen direct on the brand websites are still in retail.
Kimbridy, just a word on yourselves, how difficult is it to raise money?
What are the key words that.
Investors are looking for these days? And you know the key ideas.
Yes, AI is definitely the hot topic.
If you are not involved in AI, doing something future with your company that's progressing AI.
So for example, we're an agentic commerce.
That is what is hot for investors these days, and that's what is raising money and getting the majority of the cowpit.
In Soldier Valley.
That was Kimberly Shanks, CEO of Novi Vonnie sticking around for this next conversation.
Yeah, that's right, Tim, and it was a chat where we explored what may be the next AI trade for investors. Chip makers, no doubt have been the biggest winners of the artificial intelligence spending frenzy this year and really for a couple of years now, and Wall Street will look for that momentum to continue for some of the biggest names in twenty twenty six.
And Yet, as Bloomberg's Ian King wrote in this week's Tech and Deaf newsletter, quote, watching the less publicized chip makers may be a better way of assessing the future of artificial intelligence than keeping an eye on market leader in Vidia. To talk the AI trade and what we may expect this year, Carolyn Vonnie spoke to Bloomberg opinion columnist Dave Lee.
This will be a year when we start to say, you know, to what degree is AI actually being used in real world applications? How is it changing logistics and healthcare and medical.
Story, how the return on investment?
Right, well, precisely return on investment, the practical use is and that is something that for all the talk in our current year about this that's kind of been missing.
It's all down the road, right And so Ian in his PC highlights companies like Texas Instruments and Analog Devices, And these are companies that specialize in kind of the sort of lesser hailed parts of chip making, things that go into cars, things that go into any you know, sort of less sophisticated devices than say smartphones and so on.
They and when it comes to AI, what we're talking about there is what we call edge computing, So not AI that happens in a big cloud somewhere, but something that happens on a device or inside a robot or does something that needs an immediate response from AI that could be incredibly transformative. And so when investors are looking at chip makers that are you know, that are on the markets and want to say, well, who might be an unsung hero those those companies may may may be a clue.
Dave, how much of two? Maybe in twenty twenty six will also be about more productive chips Like I do feel like with the energy crunch that folks who are looking to build out AI data centers or do AI or a large language models that they're looking for tips that are much more energy efficient, like how much will that be driving kind of the chip trate come twenty twenty six? Then who stands out in that or is it kind of a moving target?
Well, it's a moving target in the sense that with every new iteration, particularly within video, they say their chips get you know, vastly more energy efficient, you can do more with fewer of them. The problem is that for the companies that want to use these chips is that the prices are going down, right, the price these chips is still sky high. I think what was an interesting story this year was when Google announced it was going
to be working with Better Now. Their chips aren't quite as versatile and videos GPUs, but Google's TPUs they call them tensor processing units. They are specialized at doing what the companies want right now, which is training AI models, running AI models, and Google is saying, well, we can
do that more cheaply. And so for Google, which has Google Cloud as it's obviously its cloud business, that's a very attractive thing to companies that think, well we can't quite get hold in video chips, let alone afford them. So I think the efficiency question is an important one. Availability is kind of also the side question.
Now.
I am like always shocked when I hear like Google and their chips or Apple on the chips, and I know this is something that's been happening over the years. Are we going to see more of that where companies are doing more of this in house? And why are they because it's cheaper or what is it?
It's cheaper. I mean, Apple is an incredible case here because when you use an Apple product of you using your iPhone, you can throw something from your iPhone to your MacBook. You don't even have to have to send it.
It just happens, right.
A lot of this is because of them having this sort of vertical integration. They designed the chips, they designed the hardware and the computers, they designed the software computers. It all just works wonderfully. I sound like Steve Jobs on stage trying to explain it, but he was right, and that is what they achieved.
Now, if you're an AI.
Company, open aiy is perhaps the interesting case study here. Open ai doesn't design its own chips. It desperately wants to. It's entered into a deal with Broadcom to do just that. But it's quite a way down the line. And when you look at other companies like Google, just as I mentioned, and Amazon as well, they're much further along in that process. And what it means is they can specialize those chips
to do exactly what they want. And in Google's case, they decided to specialize in AI training and AI inference. That helped them do that quickly and do it. Do that more efficiently. I think as time goes on with the AI industry, having the same virtual integration that Apple has enjoyed for consumer devices is going to be just as valuable.
For Dave ab ask you. We were talking about bitcoin for literally fifteen years before it took off. We've been talking about self driving cars for ten years, and when we actually get full self driving it's going to be probably another five or more years. Is it going to be that long before AI is really.
That useful to us?
You know?
It's funny and one of the things that's because we'll.
Need another narrative if so, I can't talk about it.
I think, I mean, isn't it interesting because because the people and it's one of those stories that's broken containment. I was on a flight a few days ago and the people next to me we're talking about the AI bubble, and I was hearing it everywhere people, you know, and one of the things they say is will it be like the dot com crash?
Right?
In many respects, it might be. And I think this year we're going to see maybe some I p O s from Opening Eye Onthropy. They're going to kind of almost kick start that talk in a more intense way. But then when when I think about the dot com crash, the Internet will still revolutionary. So even though there we're on it right this moment, so you know that both things can be true. We can kind of have we need the new narrative, but I also think AI has
this promise. Now what I what I when I think of the dot com bust in particular, is you know, it took Amazon years to recover from its crash price. It took Cisco up until about a month ago to come from its crash price. And I think we may see some of the same patterns, but in terms of how that shapes throughout this year, I mean, your guess is as good as mine.
That was Bloomberg opinion columnist Dave lee Are Thanks to Vini Guinn for joining there as well.
Coming up, The New York Times has the connector of New York's powerful Well now she's part of New York City Mayor Zoron Mamdani's transition team.
Kathy Wilde, outgoing president and CEO of the Partnership for New York City, stops by. You're listening to Bloomberg BusinessWeek. This is Bloomberg.
You're listening to the Bloomberg Business Weekdaily podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
This past Thursday, New Year's Day marked a new political chapter in New York City as Zoron Mamdannie was officially inaugurated mayor, marking a significant political shift on the start of a new governing era for the city. This was an election the whole country was watching.
Yeah, and I think it's fair to say the country is going to be watching the first few months of this mayor in office. Bloomberg's reported about how some particularly the wealthy, are concerned about some of the priorities for mayor. Mom Donnie on that we caught up with someone NYC's billionaire whisper.
Yeah, not so sure.
She loves the nickname, but people have put it out there.
Air he did.
Hey, we were talking about Kathy Wilde.
It wasn't the first time she's heard no.
Totally that you knew she She's heard it before. Kathy Wilde, she is former President CE of the Partnership for New York City. That group represents much of the City's corporate leadership. It's a consortium of more than three hundred big companies, including banks, law firms, private equity firms, and real estate developers. Bloomberg LP, by the way, is a member of the Partnership for New York City. Kathy Wilde just left the Partnership and is now part of New York City Mayor
zoron Mumdani's transition team. She spoke with us in mid December. Bloomberg New senior reporter Miles Miller also joined us. Why did you want to be a part of the transition team for the Mayor elect of New York City?
Well, I think to the point that Ken Griffin of Citadel just made, and he's one of our members as well, and is a great corporate citizen of New York and Miami. He has he made the point about the concern yarns about the high expectations that Mayor Elect Mamdani gave to his voters, and he, to his credit, brought out one hundred and seventy thousand new voters, mostly young people, in the primary. The cutoff age for his voter his voter
support was forty five. So many of us are beyond that point and looking around and saying, oh, dear, does he have the seasoning to be able to do this? And I think that he's got the energy and the intelligence, and it's up to all of us who have a little more seasoning and to be helpful. And so that's why I joined the transition team and was happy to do that, and then working on the economic development workforce activities there, But in general, I think working with him
to capture the enthusiasm and the energy. We came out of the pandemic very negative and we lost a million jobs, and then concerns about the cuts from the federal government on entitlement programs, whether it's Medicaid and health insurance, that there's the fight going on now. This casts a real paull over New York City, which is very dependent on those funds.
So I think that what he's brought.
Is a positive energy and we ought to capitalize on that and hopefully he'll be the best marketer this city has ever had.
Your role on.
The transition team does it turn into a full time job in the Mundani administration.
I am definitely not at my age looking for a full time job.
I'm trying to get away from a.
Full time because you're outgoing as the president of the partnership.
I am outgoing and I do not plan to take another job, but I do plan to help the new mayor if he wants it.
So beyond the transition period, you would stay on as an advisor.
Well, I don't know in what capacity.
As I say I'm there, I'm certainly going to help Governor Hokeel deal with her challenges. Where I've worked closely with her, She's done a great job, and I think we're counting on her to continue to manage New York's relationship with Washington and the relationship between the state and the city, which.
Is very important.
Our affordability problems will not get solved by the city alone. This is going to take federal, state, city cooperation, and so I think all of us who are committed to New York City in the future, we have to be thinking of all three levels of government and how we work with the leadership at all levels.
You brought mom Donnie to meet with business leaders on several occasions. I wonder if you can talk about what his demeanor is in these meetings.
Right I've talked to bilde.
Blasio about how he works a room, Holmum, Donnie works a room and really gets the business community to be comfortable around him, but also talk about some of these policy proposals that business leaders wanted. Answers to, what are the things that business leaders set to him? Well, that sounds like a lofty thing that won't get done, or hey, that sounds like something that is much more than we're willing to back.
Well, there's been quite an evolution since he won the primary, so in terms of his having a more nuanced position on a lot of the policies. You know, during the primary campaign there were whole slewer candidates and everything was one liners and the social media stuff was one liners or you know, show and tell. When you get into conversation with CEOs, they want to hear data, they want
to hear facts. And I have watched him evolve and grow over the last eight months where we had conversations last week, one on housing, one on childcare, where he was there with a pen and a notebook, taking notes,
asking questions and coming back with very substantive responses. So he has absorbed a lot and is now digging deep on these issues that you know, Ken Griffin expressed concern about the fact that he made a lot, you know, raised a lot of expectations, create a lot of idealistic notions out housing and childcare and how we can do all this for free. I think he's very quickly figuring out none of this is free. Raising taxes creates real issues.
You may raise the rates of taxes, but that may not result in more revenues if you scare people away, or if you scare companies away, or as we've seen lately, we've seen a real threat to jobs in New York for the first time, the first time in my experience over fifty years, are seeing a decline in the number of jobs in our financial services industry. Scary thing. That's forty percent of our state income tax revenues. We don't I mean, these are you know, we've got to pay attention,
and I think he gets that. But we've got to be at the table discussing these issues and helping figure out how to employers help solve the childcare problem.
Kathy, you know, one of the things I think about, and I remember, you know, being at Milken years ago and talking with very wealthy investors who said, yeah, it's about time we pay more taxes. So what is the balance? And I am curious among those folks that you talk to who are very wealthy, and a lot of times their wealth is not an income, it's assets and it's investment gained. What do they think, though, should be maybe more of their contribution. And I know they often contribute
in philanthropy and so on. I know that, but I'm just curious, what is the balance of willing to pay more when again, I've had side conversations with folks are surprised that they aren't pay more in taxes.
So what I've found and for somebody who's upper income earned income in New York, which is the you know, our biggest tax payers, we're paying fifty five percent of our income to the federal, state and city government with you all in so we're paying more more than half my paycheck goes to the federal government. So it's not like we're getting away with something. For the very wealthy
who are capital gains, et cetera. The big problem there is if they move their legal residents out of New York City, get we don't.
Share or get taxes.
They aren't taxed here on the basis of their global income, and so we may get their a piece of their paycheck.
But not their wealth. And that's a big question. It is.
But what I found is over many years, when business leaders and the big taxpayers are at the table and they see that number one government is doing what they can to figure out, how do we offer the most efficient, the most effective services at the lowest cost possible. How do we make government more fishient. On the one hand, then so then you begin to narrow, So what's the delta in terms of what what do we need to
raise revenues for. So for example, when Dick Ravage in two thousand and seven, for Governor Patterson led the effort to figure out how are we going to pay to upgrade our subways which were falling apart, we supported, and the business community supported, creating a payroll mobility tax where a portion of payrolls of corporations employers who were in the metropolitan region would go to that eighty two percent of the employees who work for our companies based in
Manhattan take the public transit to get here. That was something everybody signed off on. We supported. We supported an increase in that tax twice. Same thing with congestion pricing, we supported congestion pricing. Obviously a user fee where you get something reduce congestion more time in.
Your day, is easier to sell. So it is.
And actually, when Mike Bloomberg was elected mayor right after nine to eleven, the city had to raise real estate taxes in order to rebuild and recover from the nine to eleven shock. We supported that eighteen percent tax increase in real estate taxes. So it's not that we're anti all taxes. Is government doing what they can to keep
costs down, to be responsible in what they're spending. And then what is the contribution and how do we make it that makes the most sense, gets the most bang for the buck.
Just very briefly, because you spent such a big part of your career working on affordable housing, I'm wondering if the mayor is sticking to freezing rent as his solution for affordability, because not one person that we have spoken to over the last few months thinks that not increasing supply and rather freezing rent is the right way.
To approach the affordability crisis with housing.
Well, the new mayor is very well aware that those are not mutually exclusive options and that if there's no economic return, nobody's going to build housing. He's figured that out. So he has He has said really since pre primary that he understood the private sector had an important role in the supply side, and he was going to work
on that. So I think that again, his view is much more nuanced when he says now when he talks about freezing the rent, he says, and one thing that'll enable us to do that is if we do reduce property taxes on rent stabilized regulated buildings.
So he gets it. He can add and subtract.
So can you come back?
I said, you said, we had an hour of an hour hours worth of question barely scratched the.
Service, but we still appreciate Kathy. Thank you, Good luck, Thank luck having Kathy Wilde, president and CEO at going president and CEO of the Partnership for New York City, part of the transition team of the New York City mayor elect, and of course, our Bloomberg News senior reporter, Miles Miller.
This is the Bloomberg Business Week Daily podcast. Listen live each weekday starting at two pm Eastern on Apple car Play and the Android Auto. With the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa played Bloomberg eleven thirty.
It was billed as just another meme coin, a Trump branded token based on hype in a political spectacle.
But the rise of the trump Coin tells a much bigger story. A glitzy ballroom, anonymous wallets, lightning fast trades, and then came the crash that caused hundreds of thousands of people to lose money, except most notably the Trump team that launched it.
Writing about it for Bloomberg Business Week, Zeke Fox and Max Abelson. Zeke is Bloomberg News investigations reporter and author of Number Go Up. Inside Crypto's Wild Rise and Staggering Fall. Max Abelson is Bloomberg News Finance reporter.
We just got to start with some basics here before we get into the shadowy web that spans like cafes in New York City and Singapore, which you guys travel, which you Zeke travel to Singapore. Memecoin been arount for more than a decade. Started with the Doggie But what are they?
Yeah, So the first one was doge Coin. It was kind of intended as a joke, like a parody. This guy he liked crypto and he was like, why are people making these dumb cryptocurrencies. I'll make the dumbest one I can think of, And then it kind of took off. But in the last couple of years there's been this huge boom in meme coins. It's kind of like this trend where people just pick anything that's in the news, say a little like six seven, like the joke the
kids like, they'll slap it on a coin. The coin transparently doesn't do anything, but people just sort of gamble on the idea of it attracting attention and other people jumping in. They all sort of follow this pattern of going up and then crashing, and you're these gamblers are looking for the next one.
So Max, let's let's go back to January of this year, just a few days before the president is inaugurated for his second term.
What happens, Well, you know, there was so much going on that week and that it's easy to forget, but there was like an actual kind of crypto ball, and that might not have been like a real official title, but it was certainly this big crypto ball and it costs a lot of money, and it was like, it was like twenty five hundred bucks to get in, and we spoke to people who are there. Actually, I think maybe one of my favorite interviews this year was with
George Santos, the disgraced congressman. He was honestly a delight to interview. I have to say, he was there. He talked about how he skipped the line because he was like, I'm George Santos, Like George Santos doesn't wait onlines, and he.
Tim kind of says that too occasionally.
You know what Tim Tim would, Yeah, we zeke and I wait online. So they go into the Crypto ball So it's a room full and this is the Melon Auditorium in Washington by the Washington Mall. Is if it is a fancy space and it's a room full of of course, you know, crypto people, crypto investors, crypto executives, influencers, and phones start going off. At one point I think it's just before Snoop Dogg is about to perform, I believe, and they find out that Donald Trump has launched a
mean coin. And I think one of the first thoughts on people's minds was like, this can't be real. And the thing is it was real. And one thing that I just loved about working with Zeke is that he explains in our Business Week story sort of the shades of realness. On the one hand, it really was true, Donald Trump really did launch a meme coin, right as he was on the edge of becoming, you know, the
most important person in the entire universe. But on the other hand, it's it's lacking in a certain kind of realness as we usually think about assets, A meme coin has a certain kind of like existential nothingness, you know, it's it's sort of it's it's vacant by design. It doesn't give you rights to future profits. It basically represents nothing but itself. And it's investigators, excuse me, it's investors, as Zeke and I wrote, are basically investing in sort
of nothing but speculation. It's speculating in speculation itself, as I believe this man said.
And because of that, nobody makes money. Right, So it's kind of like sarcasm.
I mean, it's kind of like a it's a zero sum game, right, Like some people are going to get in early and make money. Other people are going to get in late. They're going to be left holding the bag, except that whoever created the coin, their goal is obviously to get paid, and they're going to suck out a lot of like the total amount that's been gambled on this coin.
You guys write a little bit about pump and dump schemes like Wolf of Wall Street boiler room style in the piece, and you draw distinction between what's happening with meme coins from a regulatory perspective versus what would happen with a traditional stock penny stock.
Talk about that a little bit, Zeke.
Yeah, I mean, if you think about what was happening at Stratton Oakmont, like the boiler room depicted in the Wolf of Wall Street. You've got all these salesmen who are on the phone calling you know, retired dentists and being like, you got to get in on this hot new gold mine stock, and this would drive the stock up. And then eventually whoever had like created this promotion would secretly have holdings of it they dump, the stock would go back down, but the sale, the people who bought
these stocks were had to be tricked. You had to convince them like this was a pretty cool gold mine that should invest in with meme coins. The people who are gambling on them. Basically know the drill, and they know that whoever creates the coin is going to want to dump once it gets going, and that they are like seeking out this pump and dump game.
Then the SEC does not look favorably on the equity, the stock side of this, But what about the meme coin side of this?
So the meme coins were in a pretty like gray area. No one really knew what to make of it. There hadn't regulators, hadn't really taken any action. It'd been weird enough that most of the better celebrities had stayed away before Trump. The most famous was probably Caitlyn Jenner, but.
I forgot about that one.
Three weeks after Trump's inauguration, after he had created his own meme coin, the Trump administration's Securities and Exchange Commission came out and said, Hey, you know what, these meme coins. They're fine, not securities, not our business. That wouldn't stop maybe someone else from regulating them, but no one has stepped up at this point.
So let's talk about the money. This is an administration. We talk about it being transactional. We talk about some say grift going on, and so on and so forth.
There's a lot that goes back.
And forth, but this is made right the president and his family some real money, hundreds of millions of dollars.
Yea.
Yeah, so Trump made about three hundred million from launching his meme coin, according to estimates from crypto tracing firms, and then that same weekend, Mulania launched her own meme coin and likely create collected another forty or fifty million. I mean, this is like the easiest money they've ever made for like a couple tweets.
And now those of the as we mentioned, those cryptocurrencies have plummeted more than ninety percent from their peak. So Max, let's get into a little bit of the shadowy global network that helped the president make these meme coins. Were we look at the blockchain as this entity that kind of allows us to see who does what, But it was kind of a challenge to get to the bottom of who actually helped the president. Who are some of the characters that you and Zeke found.
Yeah, honestly, it would be so much cooler if we could sit here and look at you and be like, we honestly did crack this, and there's like no mystery left and we can explain it all. The truth is, I cannot look you in the eye and say that in good faith does.
Not mean you did not meet some people along the way.
We did.
It's all about the friends you make along the way. That's why we get to journalism. And you know, I have to say for viewers who haven't ready yet, you know, my co writer on this story wrote a book called Number Go Up that I mean, it's certainly the funniest and probably realistically the best book about the crypto industry that exists. And so I felt a little bit by comparison, kind of like a babe in the woods as we started this, because I was working with someone who really
really understands how this works. But he was very generous with me, and we kind of took it a step by the time, a step at a time. I think the first thing we did is to meet someone who you'd really want to stop it and talk to you if you're trying to understand meme coins, and that is one of the creators of something called pump Fun And this young man and his name is Alon Colin.
I mean, I'm in my forties.
I believe Allen was like twenty one when we met him maybe twenty twenty two. He is part of this small group that has launched this marketplace for meme coins where if you want, like right now, you could go and start the Carol coin and you could do it with how long.
Would it take a few minutes.
Like ten seconds.
And it's this.
Remarkable, slightly gross, certainly immature marketplace because the whole idea that I think if you were here, he would say that the grossness is it's not a bug. It's a feature that people get to do whatever they want, and that whatever people find funny, whatever grabs people attention, it can be commodified and it can be sold. Now, to be fair, that is not where the Trump point launched. So after we sort of understood pump on, then we had to go sort of make a slight pivot.
Yeah, so we got nobody. Last you said, nobody took responsibility for helping the Trumps. Was just a little weird. But a clue emerged a few weeks later when another president launched a meme coin. This was Javier Marlay, the president of Argentina.
Of Chainsaw fame.
Yeah, and it's kind of weird in meme coins everyone, So, like I said, everyone knows the drill, but still they have their own.
Code of ethics.
And the Malay coin really set people off because it crashed. Instead of waiting like a couple of days to crash, it crashed within hours and Malay, who had promoted it with a tweet, deleted his tweet, which was just not seen as fair play. And after this Malay coin debacle, this previously unknown crypto bro named Hayden Davis came forward. He's twenty eight years old, he'd kind he'd been in involved in NFTs, he'd sort of but was not like a well known guy. And he said, I am Javier
Malay's advisor. We were creating this coin for the people of Argentina. And then he gave a series of uh increasingly ill advised interviews in which he talked about how meme coins are rigged, how they're sort of insider trading of a sort within meme coins, and then he said that he had helped uh Milania Trump with with her coin.
And you know, I.
Thought to myself, like, could the could this be? Is this really? Is this really true? How did and how did he connect with Milania? And it turned out that luckily for us, he had been quite a boastful guy who loved to text like crazy stuff to his friends, and we were able to review some messages that he'd sent to associates where he clearly did know that Milania's coin was coming, like suggesting this was true, and where he even hinted that maybe he'd been involved in Trump's coin.
We got to leave it there, guys, Zeke Max, check out the story. It's the Bloomberg A big take. You can find it at the Bloomberg terminal. We just scratched the service.
We know you want more.
This is Bloomberg.
You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
Let me a hend our second hour of our first weekend edition of Bloomberg Business Week of twenty twenty six. It's an hour dedicated to something we like to feature from time to time here on Bloomberg Business Week. And we were talking about the wine and spirits industry, from market trends to the story behind the label. And yeah, sometimes we do a little sampling.
This hour, the perfect wine pairing for your next dinner party with the CEO of Duckhorn tapping into a mega wine experiences in Uruguay and regenerative farming techniques in wine making with the CEO of Maison.
Mirabau, plus the business of bourbon with the retired Kernel behind Lofted Spirits first up this hour. It's not been an easy year though for those in the business of selling alcohol, thanks to a consumer pullback, changing tastes and trends, high costs, supply chain disruptions, and of yes, tariff uncertainty.
What used to sell itself now needs a sharper story and an even sharper strategy. Robert Hanson is CEO of the Duckhorn Portfolio. It's a premium American wine company known for high end Napa Valley Coastal California wines. He discussed his strategy along with a wine tasting with a fun trio Bloomberg's Alexis, Christopherus, Christina Quino, and Bailey Lipschultz, who filled in for us while we were.
Out Just for context. So Dughorn Portfolio is the twentieth largest wine marketer in the US by volume two point eight million cases this year, so not a small place. And you know, you know some of their brands, Yards, Golden Eye, Paradox, Migration. Oh, you're pouring wine for us. Now what are we what are we having?
Baileies normally in equities.
Yeah, So this is the Decoy Featherweight caps off twenty twenty three. Low Caw we were talking about it in the green room, so low Caw low alc. Kind of catering to the younger generation.
Sure, first, thanks for having me, you know, excited to be here on your Netflix and.
Chill day, I guess.
Yeah.
We're we're going to taste first.
As we talk, We're going to taste the Decoy Featherweight Cabernet Sevignon. It's the recent launch, most recent innovation in our Decoy Featherweight offering, which is the largest and fastest growing low lower alcohol, lower calorie offering within the wine category. The cabernet is really unique. It's about nine percent alcohol, about eighty calories per serving. That's about a third less alcohol than a typical cabernet and about fifty percent of calories.
It's tough to achieve a great tasting cabernet. Somnil that's low Alcan locale. So give it a taste and tell us what you think.
It's delicious and you know what, I don't need to necessarily have it with food. It's just like good straight up on its own.
Yeah, it's it's addressing. You know, there's a lot that's been reported about the dislocation of the wine market. You know, we're excited about what we've achieved this year. We're excited about twenty twenty six. Twenty twenty six is the fiftieth
anniversary of the founding of the company. Dan and Margaret Duckhorn founded the company fifty years ago on Murlau, which we're going to taste as well at the different a different end of the market that when we just tasted about twenty five dollars a bottle, the Murleau will taste is one of our high end luxury estate Murlau's. But we're excited about what's happening. This wine we just tasted is leaning into one of the trends that's impacting, especially
younger consumers consumption in the category. All younger consumers are looking for value. Pricing matters a lot they're looking for. They're very conscious about consuming things that are better for them, so having a better mint, introduction and innovation in the.
Category is important.
We're about to celebrate the first year anniversary of taking the company private with Duckcorn, with Butterfly Equity our sponsor. They only invest in food and beverage. They understand craftsmanship. You know, if you're going to put it across your lips, it's got a taste yummy. And we've got a strategy of competing in the best neighborhood, the best street in the neighborhood, in the best house on the street.
So that was about a year ago that they came in. So and this company has been has been public, has been taken private a couple of times, a few times. What changes have happened? I mean you actually started with the company earlier this year February, so, but what changes have been made now that this private equity company has come in and just sees this past year.
Yeah, well, look, we for the reasons I just explained, we think Butterfly Equity is a great sponsor, a great partner for us. What I would say is one of the superpowers of the company I respected when I first got to know it is the agility, the ability to innovate at the pace of the consumer marketplace, and the market is demanding, and consumers expect you to meet them on their place field, on their terms. That's how Butterfly
thinks what's changed. I would say the agility is the pace of the agility of the company has picked up. We've made some significant progress in a very short period of time. If I reflect upon the analogy I just provided, neighborhood street house, we compete in the fifteen and above price segment. The market's been dislocated a bit. We can talk about that, but that's been driven by below fifteen and especially below ten, so we compete in the right neighborhood.
One of the best examples of what's changed, we did a portfolio construction exercise over the past nine months.
Where we looked at our whole portfolio.
Eleven brands we've concentrated on seven and four are really high growth core brands because we're winning with fewer things and focusing on the winners that matter, big clear lanes of competition, exceptional lines that compete against the best in the category, and we've actually increased our addressable market by almost two billion dollars from two billion to four billion in that exercise and then the proofs in the putting
so Best House on the Street. The team, I'm really proud of them, have grown our market share from ten point four percent to eleven point seven percent during our whole period. So it's been a busy, busy year. We've got a lot of air to travel. You'll hear Duck analogies. We don't talk ground.
We talk to air.
You'll hear Duck analogies when we talk a lot. But we have a lot of air to cover. But we're excited about what we've accomplished so far.
I just want to ask before I get ready to pour them or low when you think about kind of the recovery we have so much.
Dailey likes this part. He likes more this is the best.
But when you think about kind of the state of the economy, it does seem like the upper five to ten percent of the US consumer is better off than really the bottom ninety percent. Thinking about higher price wine, better wine. As you mentioned best house on the best block, how do you think about attacking that consumer and whether you're seeing growth from them.
Yeah, great question, Bayway. We're very conscious of it is to remain a premium, fine and luxury still wine competitor. However, and I'll give you two examples, specifically on price, We've talked about the better example, and then I want to talk to you about consumer experiences with the focus, especially for younger consumers, on purchasing power. There's a little nervousness around the social, political, and kind of economic environment. We're
conscious of that. So two ways we've reacted. One, we introduced an amazing new brand called green Wing, which is a fifteen to twenty dollars a bottle winery brand with amazing cabernet from Washington and a Pina noir and pinogrigio from Willammett Valley and organ that fifteen to twenty dollars bottle of wine can translate into a twelve dollars by the glass program if you're at a restaurant. A lot of younger consumers say they get more value out of
spirits or other categories. This is providing them an entry point into the wine category, kind of not telling them what to drink. That inviting them into our portfolio into the wine category based on value. And on the higher end of the market, we had our We made a price adjustment on our Duckcorn vineyards Knap and Valley Cabernet.
It was it was priced at seventy two dollars. We took the price down to sixty because it's a larger addressable market and frankly even for a fine wine consumer that can buy wine at that level, recognizing we could produce the same or better quality, maintain or really we've got a structurally advantaged operating model with great margins. We could maintain our margins and put out a more sharp
price point for them. We're just meeting people on their terms in this economic environment and growing as a result.
If you heard the pouring behind us and the popcorn the core popping is because we are having some Duckhorn portfolio wine.
Right.
This is what we're about to taste is the twenty two Murleau. And remind me, why is this a particularly nice Merlow?
This is an exceptional Marlo. Now I'm going to tell you I've got a personal bias. I'm a Merleau fan. Not everyone can remember, but I remember Sideways I was gonna make the jew I filmed from twenty years ago that said you shouldn't drink Brlow completely wrong.
Murrellau, in my opinion, is the best varietal.
Loved that movie.
Love the movie, didn't love what it did. For Merlou Murlau is the easiest drinking wine. Super great to pair with lots of different food choices. It's an easy drinking Barrietal. This wine is my favorite in our entire portfolio for two reasons. One, Dan and Margaret Duckhorn, who respected nature, the craft of wine making and hospitality, introduced this wine as their first introduction fifty years ago. And we're celebrating our fiftieth anniversary next year and feel really good about
the momentum of the company. It's an estate wine. It's a blend of ninety two percent me low, seven percent cabin one percent Cabernet franc It is a luxury wine, so it trays for between one hundred and twenty and one hundred and fifty dollars a bottle. But it's a beautiful wine, and I encourage all of your audience.
It is a great right right here.
Well our for audiences who are just joining us right now. We are here in the studio talking line and drinking wine with our guests.
Here.
Robert Hansen CEO of the Duckcorn portfolio, as well as Bluer News equities reporter Bailey Lipshaltz. So, Robert, you know, I want to touch on what you said earlier, right about the process of kind of going public, then private and then back again. And so you know, you mentioned agility was one thing that really kind of was sustained in the company throughout those changes, and you know, talk to us about how that's serving you now that the
market is changing so rapidly. We have, on the one hand, gen Z drinkers who just consume less alcohol overall, and it seems like that's something that is maybe permeating throughout the broader American public.
Right.
I think a Gallup was saying that just fifty four percent of Americans in general say they drink alcohol.
That's a right.
How is the company thinking about these kind of structural changes among consumers?
Yeah, well, I meant great question. And as I mentioned earlier, it's true as reported that the market's been dislocated. That being said, we compete in the segment of the market that has tailwinds fifteen and above, and we're segmented from fifteen dollars a bottle up to three hundred dollars a bottle.
So in still Wine, we are.
The best house on the street, and we're growing because we're competing from fifteen to three hundred. We've got a segmentation of our portfolio that meets most consumers' needs. More specifically, though, you know, a lot's been written about the betterment trend, about drinking less but better quality. That is the focus of this portfolio. So you ask the question, what's different. We've got our eye on the horizon. We're very much focused on meeting the consumer on their playing field, on
their terms. They want to buy great value, they want to buy great quality, they want lower alcohol content in some cases, want to drink less but better quality. Our whole portfolio is about that. We encourage our consumers to drink you know, less but better quality, drink responsibly. We're meeting the consumer on their playing field.
There's kind of.
Three trends that we've addressed, value, betterment, and then the consumer experience of consuming wine.
Here's one point I'll make.
Though wine's been around for six millennia, it's a community based product right there, all right.
Bloomberg's Robert Hansen of Duckcorn portfolio.
This is the Bloomberg Business Week Daily podcast. Listen live each weekday starting at two pm Eastern on Apple car Play and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa played Bloomberg eleven thirty.
I know you are always ready.
We're ready, always ready.
So our Bloomberg Purceeds team out with a last minute gift guide for whiskey, wine and spirits lovers, and it states something I think we can all agree with, Carol, an unexpected bottle of booze is allways welcome around the holidays.
Yes, indeed, retired, We're expected.
We're expected.
I didn't expect that from you, retired. Colonel Mark Erin is the CEO of Lofted Spirits. It's the parent company of Bardstown Bourbon and Green River Distilling Company. It's one of the largest distillers in the United States, and he joins us here in the Bloomberg Interactive Brokers studio along with David Weston, who is, of course the host of Wall Street Week and maybe partakes in bourbon. Everyone's great to have you both here with us. Mark tell us
about kind of your journey. I want to just start there. Because you served in the US Army over twenty five years. You're ultimately Chief of Staff of the US Army Special Operations Command. How do you go from there? And there's a lot of stuff in between as well, but how do you then get to hear?
Yeah, so walk and relationships. Bottom line, I've had great luck throughout my life. I've been a sports enthusiast all my life and grew up playing sports. The Army is really a sport in itself, a competition and a a team building exercise every day, and I spent twenty six years loved it. Got out of the military and wanted to do something different than government contracting, which is what
most people do. With my skill set, ran into some great people and a good friend that David knows well became a mentor and a good friend of me, John Mack, who you all will have heard.
Of obviously, head of Marshas Stanley.
John became a great friend and mentored me, and John was actually asked to be on the board of margetown bourbon company. He had loaned our founder Peter offten money throughout the years, and John thought I knew something about whiskey. I drank whiskey, but didn't know anything about the Spirit's business. But John asked me to check out the company. I went and checked it out, became on the board, and then ultimately about six and a half years ago, was
asked to come and run the company. Really a team of built a team, and that's what it's been about for me, just that kind of you know, creating something where people are proud to come to work every day is probably the most important thing for me.
Well, you spent the first part of your career leading a lot of people. You led a thirty five one hundred man task force in Operation Iraqi Freedom. You teamed with coalition partners in Iraqis conducting stability operations throughout Iraq. That's just like one percent of what you did over your career in the military. How do you How does leading a company differ from actually leading in the US Armed Forces?
Look or how is it?
There's a thing out here in this in the commercial world that I've run into called the what's in it for me?
Factor?
And that's a big issue, and not saying.
It's wrong, it's it's real.
People have to worry about their families worry about what they're getting paid. That's a that's something that I didn't deal with for twenty six years because everybody knew what they were getting paid, everybody was on a team, everybody had a goal in a mission. So fighting through those things to try to create a company where literally people place the importance of their job as something that's that's
a party that I am. Build an organization that folks are proud to be a part of and actually want to see that company succeed. That's the kind of thing that I came from in the militarym We've I think done a pretty good job of doing that. If you come visit us at Bortstown or Green River, you'll see that in our people. We get comments all the time about our people and our team, and that's what makes this place special for me.
Mark typically is being a little honest here because from my vantage point, because I saw John Mack persuade you a fair amount at his house, and what I understood is they had a great product, and John Mack believed it was a great product, but the company had, let's say, upside in what he could do with that product. And Mark came in as far as I can tell I want to say, turn it around, really built it into something really powerful, which had the potential all along.
I think Mark.
The company was in a great spot, had an awesome growth path. Unfortunately, our founder passed away three months after he pugged me in, so we needed to go look for a partner who could help us grow. We brought in a private equity firm out of Chicago that's been a fabulous partner to us and truly enabled the growth to where we are now the largest custom distiller for spirits in Kentucky. We've grown two great brands, and that business model allows us to do the things that most
brands cannot do. Young brands can afford right now to invest the way we're investing behind these two brands. And both Bartstown and Green River are two of the fastest growing brands in the US right now. And it's because of this making whiskey for others, copacking on bottling, all these different assets that we bring to our clients that enable us to go and invest in these two brands.
That's what I thought was interesting. And I'm going to start doing a little bit of a poor here so that you can tell us about some of what we've got here, But it is you work with others who want to start a brand. I mean, it's a crowded space. So I'm just curious how you think about who you want to partner with and how do you do something that stands out in the shell.
So we really have two different entities.
And what am I pouring here?
Okay, so you are pouring You're actually pouring the world's best bourbon according to New York Spirits Wine and Spirits.
Competition as of this year.
So that is the top top bourbon in the world. It's our Green River Weeded bourbon and that's a thirty.
Five dollars bourbon.
Compete togeinst all these other bourbons in a blind tape.
They do a bigger port.
You should do it. You should do a perfect court.
But that's a really low price.
That is a low price point.
Is a low price that's you know, we're in the super premium and ultra premium price points and those are the two price points in American whiskey that are growing. American whiskey is down over the last year, yeah, down two to three percent. You know, with all the different things that are going on around around spirits and international trade and everything else. So luckily, what we're doing behind these two brands is making them grow the way we need them to.
And before we all take a step take take us back to so that when you work with someone, how do you figure out who you want to work with?
Right?
And because it is, there's a lot out there.
Yeah, you know, look, I'll tell you.
Three years ago, we didn't have much competition and people saw the business model, and now there's a lot of competition.
We used to kind of get just to get choose who we wanted.
To work with.
Now there's competition out there. So we are truly the only ones who are providing grain to glass service, meaning we're going to help you design your whiskey, we'll make it for you, we'll store it for you, and then we'll get it ready to go to market. With our world class bottom facility. We're helping our clients in so many different ways, you know, whether it be unique financing modes.
You know, that's been probably.
The biggest issue for our industry over the last few years. People talk about tariffs, we had financing issues.
Before we had tariffs, there.
Was a lot of negative chatter about alcohol and spirits in general. You know, young people aren't drinking supposedly. See the GLP drugs and the impact that those are having. All these different issues creating some negative chatter. But what we're seeing today is an opportunity where I think savvy
investors are starting to get in. We're going We're getting a lot of inbound from family offices and private equity who want to create funds to specifically invest in whiskey because they see the low end of a market and an opportunity for reasonable rate to return, where four years ago I would have told you it was kind of a crazy rate of return. Yeah, now it's reasonable, and I think people are seeing that and coming back in well, not exactly the same.
I grew up though my dad made a mean whiskey sour and you would say Nazadrovia because I'm Slovak, So anyway, Nazdovia. But tell us cheers.
So this is again the number One's the number one bourbon in the world, according to New York Spirits Competition Blind Tasting Amazing. This is a weeded bourbon. So Bourbon is nineteen sixty four. It is our nation spirit, It's America's native spirit. And it has to be made in the United States and it has to be predominantly corn to be bourbon. And then typically you have a flavor grain. The flavor grain in this is people say wheat is sweet and smooth.
The wheat is really kind of.
Passive compared to rye and allows the sweetness of the corn to come through.
So that's kind of what you sense from this as you sniff.
It and as you taste it now carefully, it's a it's a good I don't I know David used to do the morning show and I don't know his drinking hours.
This is my first bourbon of to day. So anyways, cheers.
So while they're drinking, you've grown in a fair amount. Where's the sky? How far can you take this?
And what do you need?
So two different things. Really we have to uh two separate business lines. Our our core business is making whiskey for others. Again, that's that's our core.
That's what pays all the bills and allows us to invest in these two brands the way we need to. We're innovating on our core business. We're and small bottling lines as people want to downside to different package sizes. We're helping people were making wrong for the first time. For a client who's doing the ready to drink in
a can. We're bottling Vadkin gin for folks. So we're innovating on that side to make sure we give our clients everything we can so that we can continue to invest behind these two brands.
Both of these brands are going.
To be in the top ten of their price point by middle of next year.
So we've got to set a new goal.
That's been our goal for quite a while, and then we'll get into the international market. We're selling in London, we're selling in Sydney, and we're selling in Western Canada right now.
And you said Green River was about thirty five Bardstown, same thing.
Forty five dollars price point on that Bardstown bottled in Bond.
That's our you know.
The Bottled in Bond Act was the first really start of FDA, the Food and Drug Administration, where you had you were trying.
To get people to say what's actually in the product.
So they set the rules behind what it had to be and it had to be one hunter proof aged four years at one distiller in one season, so you know, premitting people from putting tobacco juice for coloring and other things in it.
So that's a great product. And again Bartstown Bottled and Bond.
What do you think, David, Well, I'm actually curious on the growing part.
Again, is it capital intensive?
Twenty second?
Is capital intensive? We're committing that's again.
Wow, We've got this unique business model that allows us to invest in these brands where most brands can't.
That was Mark Irwin's CEO of Lofted Spirits, David Weston, host of Bloomberg Wall Street Week, joining us there as well.
You know, David has always said wait, wait, wait, is this like, are you guys having an alcohol?
Hey, we finally Gotpapy to have We.
Finally got him to join.
It was really a lot of fun.
All rights still ahead.
On Bloomberg Business Week, how one family left the London suburbs for a small village in France all through the love of wine.
And then a wine experience by way of Little Tuscany and Uruguay. This is Bloomberg.
You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.
That's the stuff of fantasies, Carol.
We've talked about this.
Yeah, you quit your corporate job in London. Okay, you move to the south of France with your three kids, your wife, you make rose.
It sounds magical, it does well.
It wasn't a fantasy for Stephen Kronk, the founder and CEO of Maison Mirabo. He and his wife did exactly that. It was sixteen, sixteen years ago. It was yeah, wow, at the height of the global financial crisis.
Talk about timing.
Steven's with us right now here in the Bloomberg Interactive Brokers studio, and he brought rose. First of all, it's been a little while since we last spoke.
To here, at least two years.
Yes, yes, how's business been since then?
It's well, it's interesting question. It's been up and down. I would say, I mean, I think Provence Rose is still the benchmark for rose around the world, so we're very lucky we've got that. But there's been a lot of headwinds, as I'm srure you're aware.
Yeah it Look, there's the climate change headwind, but there's also the changing consumer tastes headwinds as well as tariffs exactly, which is the thing that is the biggest headwind.
They all combine together. This is the perfect storm. So the health kick, there's the cannabis movement, there's the no and low alcohol movement, there's the zimpic movement because that suppresses people's desire to have a drink. So it's like everything and then you load on top of that the tariffs. It's like, yeah, what has happened?
So what does that mean for you guys? Like how do you pivot? How do you adjust around that?
Well, there's a lot of things we can't change. But what we try and do is is with the tariffs, for example, we've tried to swallow as much as we can. We don't want mirror bou to be much more expensive in the store, so we've tried to swallow that, which is it's hard, but we're keeping our fingers crossed that maybe this is going to change.
Remind everybody the price range from the United States, so you don't want the price to go up in the US.
So we generally between twenty and thirty, I mean want to try and keep below thirty dollars because that's a price point.
So then how does that hit your margins?
Yeah, it's not great, but you know, I'd rather build a brand, and you know, i'd rather people carry on drinking Mirbo especially you know, we're coming out of Thanksgiving and Provence Rose is just so good with with turkey. So you know, I'm just trying to hope this goes away and just carry on pushing my wines here.
Yeah.
Well, you know, and I've said I wasn't a big Rose drinker, but I've got to say yours is pretty pretty magical, and I've really enjoyed it, and we're going to taste it and know Tim is sniffing it out. You're in the United States, talk to us about the US market specifically.
So I've started farming regeneratively for some of my wines, right, and the regenerative movement seems to be centered many around California. Now, yeah, so, I mean, I'm selling my wines in forty countries, but California is the epicenter of the regenerative movement. The California Department of Food and Agriculture has been the first state to to define the words regenerative agriculture, and meanwhile, we've got, you know, the wine regions, so Paso, Robles, Nappers and Oma.
They are the most regenerative wine areas in the world.
So what does that mean for one of county where t is from. But what does that mean that you would you do more here in the United States?
I'm just trying to sell more wine here. And so the retailers say, like air One and Sprouts and Bristol Farms and Hagen's, they're really getting behind the regenerative movement that they're looking to seek out regenerative.
Farmer because there's an awareness of it right.
Because they know what it means for farmers, they know what it means for people to.
Not everybody knows what regenerative farming means and especially how that is applied to farming the grapes that go into wine, that go into rose. So for for people who don't know what it is, explain regenerative farming in the context of Vina culture.
So regenerative, as the name suggested, is about regenerating soil, fertility, and regenerating nature in simple terms, So you know, it's the if you think about it, what was organic farming called before the First World War? Farming right, and then there was a huge amount of pressure here. Everyone's still worried about industrial farming, so the heavy tillage and in particular heavy use of chemicals. So there's been a move certainly since the First World War and the Second World
War as well. We've seen a lot of nitrogen being used in farms and a lot of heavy tillage, and a lot of chemicals pesticide and so on, and that's just been killing our soils. This is a catastrophe. You know, we were worried about famine at the end of the Second World War, so rightfully, we were worried about feeding our population. But we haven't been measuring food in the right value. It've been measured by calories rather than nutrient density.
So I didn't mean to interrupt, but it was just interesting. We just came off a discussion of talking about the cost of meat and just what's going on in that world. But I do think about, like is our soil globally, how tortured is it or how bad is it because of the industrial farming.
A lot of it, most of it, I would say, is on life support. It's really it's catastrophic. So when I I was gonna say, when I drive out from Na to Pazzerobuls, which is one of the most regenerative regions in in wine up the I five and you see thousands of acres of fruit trees and nut trees that are on life support. It's like the moon's surface, and so it's they're kept life by these excen inputs and what you end up with a product, but they're
not very tasty and they're not very nutritionally dense. So we need to actually start restoring soil health globally, and regenerative is a way of doing that.
So you can do that in terms of all that soil, how long does it take the process of getting it back.
It can happen quite quickly, and that's one reason why we so I run a nonprofit as well called the Regenerative Viticulture Foundation. So viticulture is agriculture for vines, and
we're launching these initiatives called one block challenges. So we did one in Paso, we've done one, we're doing one in Napo Opus one in fact a great winery and winery, so we're doing one there on the eighteenth of November, and we're challenging the growers in Napa and as we did in Pazo, to just transition one block of their vineyard to regen for a year and then come back and see the difference. It's incredible how generous mother nature is coming back.
That's Stephen Kraut, the owner of Meissan Mirabeau.
Hey.
Before we go, how about another story of a family owned winery, this time in the luscious region of South America.
Since nineteen ninety nine, Bodega Garzone has been making wine and developing a mega wine experience in Uruguay. Christian Wiley is Bodega Garzon's managing director. He stopped by to tell us all about it. You know, when we think about so called New World wines, I think a lot of people often think of in South America, maybe Argentina or Chile. Uruguay not really on the map as a wine destination as much as other areas.
Why as the world.
I mean, it's not on the map because they've been drinking all their wine they've been making for the last three three centuries. But then Darson comes into play, and this is an incredible investment of Don Alejandro Rulgeroni.
It's two hundred and fifty million dollars capex.
It is the largest investor investment ever.
In the industry of wine. And this is right now in the region or in the world, in the world world. Wow, this is.
Right next to the beach to the Uruguayan rivie Era. So you have josseig Nacio, which is like the centrope.
Yeah, if you're watching us on YouTube Bloomberg Originals, you can see the stunning photos right now.
And that was showing kind of the investment that you guys have been making.
So it's and it's it's done in a in a very if you like, forward thinking way of the most.
Committed to sustainability.
We were the first winery in the world to be one hundred percent LEADS certified, and we work, you know.
To express the place.
It's a new taroire that is, you know, the vision is for Albert Antonini, who's like the top wine maker from from Tuscany. And then one of our pillars is the experiences, so we have Francis Malman is our chef, so you experience these beautiful wines with an incredible view right next to the ocean in a place that it's like the centerpe of South America.
You don't spend two hundred and fifty million dollars on capex unless there's growth going on. Tell us about the business and in terms of topline growth, but it also sounds like it's also experiential that you guys have incorporated. So give us you know, we're Bloomberg. We love all the numbers, So give us an idea in terms of the growth that you guys have seen.
Well, we've basically gone from a place that didn't grow vines to a vineyard that has more than a thousand little parcels, little blocks. We've gone from zero to sixty markets. We're selling all over the world. It's become the main brand in Uruguay, but it's also the leader in the States, to Brazil, to Japan, China, UK and it's it's growing very fast normally.
And what's fast is it high teens? Is it above that?
Many years?
Wow, doubling the business many years in a row, including Covid, and as you said, all the different cycles right now. We've yesterday we toasted to our first year with our new partners in the US with a wine bow, and again we did really well in a very tough year.
But you.
Have a level of investment that it's really projected very very long term.
We have projects for hotels, We have a real estate on the beach.
Mister Voolgeroni has an incredible a golf course designed by Phil Michelson and Acha Caa that it's a PGA tour preferred golf course. We make our own extra virgin olive oil. So we talked about there are some.
Universe what is the biggest revenue driver. Is it the winer, is it the real estate? Ask if it's even the olive oil.
Yeah, the first one was the olive oil, extra virgin olive oil, and it's one like the best extra virgin olive oil in the world. A couple of times. The winery is the wines. It was driving the revenue. And it's not just setting wine as a product, it's also the experiences. So we have fifty thousand visitors a year and this is in the middle of nowhere, as you just mentioned other why Yeah, and it's all very high
income and networth people. It goes from twenty thousand people living there in Punta de les De and Garson to two million tourists around New Years. It's a lot and a lot of them are celebrities like Clooney or Winneth Paltrow or Messi or it's.
Christ say that's kind of our crew.
Care well, I'm here to invite you. You have to corroborate this.
Story, right, we only have unfortunately about a minute and a half or so left. You did bring in some bottles of wine and tell us about.
What you brought.
I don't want to mispronounced blasto, tant Alberino, Alvardino.
It will start with the white wine. Yeah, it's this is Alberdino. We are the main grower of Albardino in the Americas. It's the white great variety that like the Queen of Spain. We have the same kind of granite and Atlantic Ocean influence, similar to Galicia. And this is actually our best selling wine in the US, perfect for summer or the end of the of the spring of your top one hundred wine spectator.
So an awesome valley. This is like a twenty two dollars retail.
That's great.
So there's a beautiful opportunity there.
Tell us about the other the reds, which I am a red kind of gal.
Okay, if that's so, this is for you. Uruguay is the country of Tanat, like Maulbek would be Argentina. Yeah, this is a great variety from southwest France. It's known to be rustic and really tannic. We have kind of tamed that so it's very fresh and vibrant. And it's also been top one hundred Wine Spectator, so we have insane accolades. Actually, well there, our son is is one the new World Winery of the year. That's among another like ten thousand producers.
I mean those things matter because it really gets people, whether it comes up in a surge or people you know, gets noticed. I just got about twenty thirty seconds for Pilaster tell us about this one.
So this is our this is our grand one our but astors. Actually the soil is the meteorized granite. It gives mineralities, so the wines are quite ethereal. We have a lot of rainfall, so we have very nice natural Asiniti makes your mouth water.
That was Christian Wiley, Bodega, Garzon's managing director. And be sure to check out Ellen McCoy's story on the Bloomberg and at Bloomberg dot com on how wine will change in twenty twenty six due to everything from climate impacts to gen Z's interest in wine bars.
And that wraps up the weekend edition of Bloomberg Business Week from Bloomberg Radio. Thank you for joining us today and always, as you have throughout twenty twenty five, We're looking forward to more this year.
I'm Tim Stenebek. Happy New Year.
Everyone, and I'm Carol Masser. Have a good and safe weekend, Peace and prosperity, health and happiness. In twenty twenty six, we so look forward to sharing the new year with you.
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