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This is Bloomberg Business Week Daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy, plus global business, finance and tech news as it happens. The Bloomberg Business Week Daily Podcast with Carol Masser and Tim Stenebek on Bloomberg Radio.
Hi everyone, Happy Thanksgiving and welcome to the Bloomberg Business Week Weekend Podcast. We are normally so focused on bringing you everything from Wall Street and politics and anything from the world of business, that we're always grateful when we can take a step back and focus on other important issues, especially on this Thanksgiving weekend.
In this hour, we bring you to Boston and to the work that's being done at the Boston Children's Hospital. It's really a healthcare hub for all of New England. It's at the forefront of medical research and treatment and that includes cutting edge tech for orthopedic surgery and also using AI in medicine.
That's all coming up in the first hour. It's some really great conversations. We were Tim and I were both blown away by our visit there. Then coming up in our second hour, Well, it's a little bit of a holiday special. We've got some travel, hosting and drinks. We also get an update on the domestic travel market with the CEO of Travel and Leisure.
Plus a CEO who you can count on to be candid when she stops by, Christina Stembel, the founder and CEO of farm Girl Flowers. She joined us on getting ready for the holiday season and the health of the consumer.
Also, we have a drink with the CEO of the spirit's company, Kraftco. At a time when the industry's facing a lot of headwinds.
That's coming up a drinker too. I saw the way you poured that.
All right, All that's coming up in the second hour.
Two all that to come. First though, we head to Boston Children's Hospital. It's the leading recipient of pediatric research funding from the National Institutes of Health. It's also the primary pediatric teaching hospital for Harvard Medical School.
We're so grateful to them for hosting us. And first up, we've got a conversation around medical advancements using artificial intelligence and the importance of providing a comforting environment for patients and staff alike.
That's what doctor Joan La Rovere is trying to achieve. She's senior vice president. She's also interim Chief Medical Officer of Boston Children's She's also the co founder and president of the NGO, the Virtue Foundation. It's delivering healthcare to over twenty five countries. We began our conversation with the description of the room where we broadcasted from earlier this month.
We're in the hail Roof garden on the tenth floor of the Hale Building. The Cardiac I See You that I work in is two and three floors below us, because we cover two floors our Cardiac I See You, And we need spaces like this for families to be able to step away and really, you know, think and decompress, and for staff. You know, these very challenging complex patients that we're taken care of in this building. Are the anatal Intensive care unit is here or Cardiac I See
You is here. We have operating rooms in this building. You know, there's a lot of the cath labs are here. So it's wonderful that we can have these magical spaces where you can just feel that you're in a PEDIAFTERC hospital and there's a place to relax and think.
Can I just say, it's like you're sitting on a tree, like a tree bench. There's like, I don't know, is this a rainbow. It feels like above us. It's pretty it's pretty cool, you know.
Carol mentioned the energy that we feel when we walk into a space such as Boston Children's and we're reminded that it's it's not just a teaching hospital, a research hospital, it's also a place that treats kids from really all over the world. I'm wondering how you prioritize where resources go, whether it goes to treating patients right now versus thinking about research, thinking about development, thinking about ways to actually help patients in the future, versus working with them right now.
How do you allocate those resources?
Well, that has always been part of the DNA of Boston Children's Hospital. It's been our mission. We deliver the highest, best quality clinical care. Really that is the foundation of it all. And you see that, you know the motto of where the world comes for answers. There's a lot
of complex patients from the Boston area of Massachusetts, New England. Obviously, we provide primary services for all levels of care for children in this community, However, there are many from across the United States and across the world who really seek that type of care and come to us, usually the most complex cases, and I think that's really where we thrive. And the other piece of our DNA is the science we as you talked in the beginning.
That makes a difference, right when there's science involved. I feel like it's practition. Yes, you're dealing with patients, but it's people who are like, I want to understand how this works.
That's everybody here. Yeah, that's the doctors, that's the nurses, that's the social workers, that's the physical therapists, that's the respiratory therapist, it's the pharmacist. I just could keep going. So I think that's what draws people to work here and to stay here, because that purpose that we're gonna actually change things and we're going to be able to
find newer ways of doing things. We're going to help more children survive but also thrive, and that takes a real concerted effort, and you need the science here with the clinical.
One of the things I think when you joined Tim and I back in New York and listen, everybody's talking about AI and I know that but I think we all are thinking about what it could do for medicine and R and D and innovation. And I guess what we're trying to understand too is what's the reality of what AI is used within the medical community or R
and D specifically? Where is it today? And you, as someone who understands this space so well, and I'm curious the conversations you guys have, where do you think you could go? Well?
AI has been a very important part of Boston Children's Hospital for a long time. This isn't something new. We have incredible research groups and an incredible innovation team here who've been really standing up AI initiatives for a very long time. We talked about some of the work I personally have done in terms of you know, Virtue Foundation and the Global Health AI mapping and being able to match resource and need.
You work with Yeah, firms that are like specifically in AI.
Yes, with data breaks and data robak. I you're building those real platforms that people can use. But I think about, for example, when chat GPT first came out, we had Boston GPT immediately we were looking to get that behind our firewalls. How can we integrate that, How can we use that for real purpose and improving both the care that we get to pay since but how can we
use AI to also discover new things? I think the levels of data that we have, and I think you talked upon in the beginning in terms of rare diseases, genetic diseases, we are the epicenter of that, and we've already been extremely successful in bringing new therapies to market for children. But when I look at the infrastructure that we're building, and I think you've had doctor Wendy Chung come and speak, and she's heating up.
A lot of that work.
I think her best days are ahead of us, and AI is unlocking that type of potential.
I like hearing that the optimism about our best days being ahead of us. And I think about, just even during your career, how much treatments have changed in a pretty short time. I'm curious about the connection between kids and adults and treating children. And of course, if kids are healthy, then they turn into healthy adults. But this is a children's hospital that does a lot of research,
it does a lot of teaching. Also, are there learnings that can be taken from what works with kids and even applied to a larger population as not just those kids grow up, but as adults also need treatment.
I think there's two points that strike me there. One is that the decisions they were making early in life have long term impact. It's something I've thought about my entire career in the cardiac space and cardiac intensive care. The decisions to have surgery on day two or day four, the decisions to use this drug or that drug, all of those things are shaping your long term self. But it was very hard to be able to look at and analyze that type of data until you've opened up
big data AI. So I think again along the lines of our best days are ahead of us, that we're going to be able to see so much more through that. And then you said the innovations. Now many patients that I took care of are adults. Right, we have this huge growing adult population that we provide care for. Science is that's discovered here, it's in a pediatric hospital, but
it's bringing forth therapies that are actually treating adults. So I think it's it's incredible to see how this innovation engine drives so much.
If you could change one thing just got about thirty seconds. If you could change one thing in terms of the work that you guys are doing and the R and D that would maybe make it easier.
What would it be, make it easier?
Okay backward. If you could change one thing though that would help you guys and what you're working on. It sounds like you don't need it. Sounds like you've got a great team, and we have.
A great team, but we're always needing, you know, support and engagement and we're just trying to drive the next level and partnerships to move in that direction. We are the leading children's hospital, so we're doing well, but we're always trying to push the envelope of what we can do.
Yeah, it's fast. You could feel it. I felt, you know, like walking in.
You can write the purpose.
It was busy, it was lots of families, lots of kids, and yeah, everybody on a mission.
It's a privilege to be part of that mission.
Well, thank you so much, thank you, thank you for inviting us, and good to get some more time with you. Doctor Joan la Rovere. She is an interim Chief Medical Officer at Boston Children's Hospital, Director of Innovation and Outcomes. So delighted to talk with you.
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.
Now, we know AI has been the talk of here. Actually it's been the talk of is it almost three years already here? Yeah? Yeah, it's really nuts. It's nunds up a lot of AI when it comes to moving markets, analyzing data and automating simple tasks, but it may also impact neurosurgery in kids.
On that, we were joined by doctor Lisa Baird, director of Neurosurgical Oncology and co director of the Brain Tumor Center at Boston Children's Hospital.
I take care of kids that have branch tumors and it's all ages. All ages, yeah, from infants to really young adults, but all through childhood and work with a phenomenal team here. Requires a huge team to take care of these kids. They're very complex diseases and we work on all aspects of them, so active treatment. We do a lot of scientific research, we run clinical trials. We really support these kids not only through their therapeutic journal journey,
but through survivorship and surveillance afterwards. So it's a long journey for them and we really try to support them at every stage.
How are clinical trials involving children different than clinical trials involving other age populations.
Well, cancer in children is very very different. The diseases are different, the implications are different, especially with brain tumors.
Why is that? Is it development because of where the brain is or what?
Partially? I mean we're dealing with patients that have developing brains. I mean there are very different implications for that. But also the diagnoses vary quite a bit. You know, the common diseases we see in childhood brain cancer are very very different than that in adult cancer, and they require different treatments and the support and you know, network needs
to be different. We have to support these kids through developmental stages, through hormonal development, through cognitive development, emotional development. You know, the family needs are different, and you know, the diseases require very specific therapies. One thing historically that has happened is because pediatric cancer has not been as well supported. Historically, we have had to extrapolate data and treatments from the adult world and it just doesn't work, you know.
I have a good friend in the same her son went through it and unfortunately it didn't work out well. But when she started doing research, she realized there's just no money, no funding. And they actually started a foundation to kind of but selling kids, selling cookies and like, just to try and drum up money and interest and attention. And we talk about it with women that R and D like you just don't see it as much and
it's getting slowly better. But with kids, why is it that it's lagged in terms of time and money and effort, Not here obviously, but elsewhere.
Yeah, I mean, we definitely rely on philanthropy hugely to make advancements in the field. But I think you know, historically the numbers are lower. The financial support from government has been different. It follows volume, as does industry. You know, there's a complex, you know, complex reasons for that. But yeah, there needs to be a shift and focus and and more attention on specific pediatric treatments.
We are talking a lot about treatments, and it makes me wonder about if we understand what causes this stuff in the first place. And certainly treatments in recent years have gotten so much better. In gene therapy, has gotten better, but I'm wondering if we have an understanding in the medical community about why some kids get sick and why some don't.
Yeah, there have been huge advancements in pediatric brain tumors. It's really one of the most exciting fields right now because of how many things have really moved forward in the field. And so we know so much more about the biology of these tumors and the genetic underpinnings to them, and can really drill down with each individual tumor to find out what the molecular change has been in the
cells that is driving tumor growth. And that's really helped us understand them and opened up a whole new field of individual treatments. And so, you know, every tumor is different. In some tumors, we've discovered that there may be a cell of origin that the child is born with a lot of tumors. We don't understand why some kids are
getting them and some don't. Some may have familial implications and some may have environmental We don't understand everything, but we're learning more and more every day, and we know so much more about the individual genetics of the tumor.
Could we get to a point within our lifetimes where there is some sort of screening for kids when they're born or in their early days that helps identify what they could be susceptible too, and then we could allow for different different treatments ahead of that to prevent it actually from happening.
Definitely, I think so. And it may not be for every tumor, but I think we're already getting close to that for certain diagnoses where we know specific things that you know, we can potentially screen for, and we're finding certain you know, germline mutations that are you know, familial hereditary. So yeah, I think we may get to that point where we're screening is better for all tumors, but we're very close for certain types of tumors.
Is there differences in boys and girls when it comes to either tumors or what impacts.
For some Yeah, for some diagnoses and some have you know, greater percentages with boys and some with girls. It really just depends on the diagnosis and many many its equivalent.
I am also curious about, like you guys seem to certainly take a family approach, and you have to when it's kids, Like what's involved when you've got specific therapies, and it's not it's leading up to the surgery or whatever the treatment is.
In now, the treatment of these kids takes a village. We have a huge multi disciplinary team. I mean we have neurosurgeons, neurooncologists, neurologists, the neuropathologists, geneticists, neurorediologists, and we also have you know, the rehabilitation experts with physical occupational therapy,
the neuropsychologists and endochronologists. I mean, there are so many different expertise, you know, fields that are required to take care of these kids because brain tumors really affect every single aspect of their life and have the potential to affect every aspect of their physical and neurodevelopment. And so you know, we are really fortunate here to have so much expertise that we're able to really individualize the team needed for each specific child.
Thank you so much. This is heavy stuff. Thank you so much. Really appreciate it. Doctor Lisabert, Director of Neurosurgical on collegen co Director of the Brain Tumor Center at Boston Children's Hospital. This is Bloomberg.
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Neurological development and research is so key, especially in children, because healthy brain development can influence outcomes for the rest of our lives.
Doctor Ellen Grant is Director of Fetal Neonatal Neuroimaging and Developmental Science at Boston Children's Hospital. There, she leads to seventy person Neuroimaging and Computation no science center that's working to develop tools to better detect and understand brain physiology and development. The goal improve cognitive behavior and neurological outcomes
and fetuses, infants and toddlers, brain imaging, and children. If we have a better understanding of the brain and fetal development and for babies and toddlers, what will that allow us to understand what does it prevent, what does it treat?
Well, everything begins in uterul pretty much, so your life is an arc from infancy or one you're conceived through to adulthoods So the more we can understand the early development, the more we can start to understand how we make sure children are on the right trajectory. So the goal is to characterize brain development very early on, so we tell the very earliest point when to start to deviate from a normal trajectory so we can get things back
on tracked early as possible. And ideally we want in future to be able to prevent diseases from happening, not just try to deal with them and try to correct them later on when the damage is partly done.
So how early can we do it today and detect that there's something wrong? How early realistically do you think we can get it too?
Yeah, we start looking at fetuses at about eleven fifteen weeks something around there, at the earliest, right closer to around eighteen weeks, we start to characterize brain development, you know, eighteen nineteen weeks or so, So it begins quite early when we start to see and look at early brain development.
Well, you and your team did a study a few years ago that gave your results to argue for earlier MRI during pregnancy. Yeah, is that study enough to actually change the standard of care?
Well, we do use it early here at Boston Children, So when there's an indication we do it as early as we can to better characterize the entire fetus, because it's not just the brain, it's the body it's attached to too, So we won't understand not just the brain develop but how that brain is developing the context of the other organ systems.
So we can do because it doesn't necessarily run hand in hand, like it can be very different, right or like in terms of what's going on with brain development versus the rest of the system. They can disconnect.
No, they're intimately connected life.
So there's one. Yeah, So that's why we won't understand it.
So say, for example, we with a lot of congenital heart disease here that has effects from brain development. We deal with congenital dive fromatic hernias that have effects on brain development. So everything that's happening in the fetus, whether there's a brain or not, is it has the potential to have subtle effects on brain development.
Why do kids, I mean kids do need specialized tools her brain imaging to ask us about that one.
Yeah, that's the whole reason that it came to Boston Children's is industries not interested in fetuses in prints and young children. So it's really hard to get devices that are built specifically for these age range. So that's why I brought a team of technical people. So they're engineers, physicists, computer scientists, data scientists that help to either develop the devices or come up with better ways to analyze the data that we get with an ion trying to understand
pediactors actric disorders. So for example, we want to monitor and we're developing optical devices for the NICKU to monitors freequal bloodflow. But the heart of a heart rate of a neonate is one hundred, so we have to sample at a much higher rate than you would in an adult to get the same information. So we have to
build specifically devices to the physiology. And then if can think of ahead of a premature baby, it's very very small, so I can't take a probe that we use in adults and just put it on a pre term, so we have to develop the devices to fit the size of the infants.
I want to just go and I feel like we touched on this earlier. I mean, we are Bloomberg Business Week. We are Bloomberg and very entrenched in financial markets, and I feel like the more I've been doing this, money just follows everything money is why people do things or
don't do things. Is that really it is just the market I hate to even make it that way, the market size, and so you don't have medical equipment companies building the things because they just don't think the market size is big enough.
That is a big problem, and I think it's that's where we're trying to get into more of a business perspective. Like if we start to do a small startup that starts to answer those questions and a bigger company might buy it. But if we stay in the research realm, then it's sometimes really hard to go that last mile and get something into clinical practice.
So how do you do that? How do you cross that? So what do you do?
Yeah, this is what we're strategy strategizing on right now is trying to figure out how we do those small startups get industry interested I and a lot of things we're doing right now. Actually, one of the projects we're working on is you know AI strategies, right, and if we can get enough data on infants or thetses and so on, we can start to build models that predict not just group outcomes, but we want to get to individual outcomes because that's what parents care about, right, so
if we can figure out get those models together. So that's what we're working on now, is trying to create these AI models that are specialized for pediatrics and hoping to do startups around that particular concept.
I have to ask a more questiondent our venture capitalist is interested.
I don't know because we haven't really talked about that. I've heard about, but I think they always want something that's almost ready. So we're hoping to go further along. Yeah, a little bit further along.
Okay. Interesting?
Can what we learn and what you understand through imaging about the brain's development be applied to how adult brains are treated.
Everything in adult life has its genesis in infants, right.
So we were all there once.
Yeah, yeah, exactly.
And some of the ways of adult brain response is more prominent in a pediatric brain. So in some disorders you go to pediatric models to see a physiologist. More prominent in neonates or infants, but also occurs in adults.
You know, there was in doing the research. In the prep for our interview with you, there is a picture of a physician or a therapist doing some what's I think is called therapeutic hypothermia too a brand new baby's head. And my understanding is that oxygen deprivation around birth is one of the leading reasons that you actually see babies come into the Nike.
You, yes, that was one of the main reasons.
Yes.
And the therapy for this is as simple as.
Yeah, you cool them down or can be down there normal, Yeah, at least some normal thermic because when they have injuries, a response to that sort of the whole physiological response to an injury is to have a fever, and that is detrimental. So we want to keep them cool so that they don't set off these cascades of brain injury. And that's partly why we build this one device, because we want to be able to monitor through the NICK
you stay and optimize management. But it's interesting, we don't even know what the great blood pressure for a newborn is.
So this is.
Why we wanted to have a probe that could measures reable blood flow to the brain because there is no way to monitor whether there's enough brain or oxygen getting to the brain with the tools that we have right now.
I feel like we don't even talk about blood pressure when it comes to like infants, right, Yeah, we just don't. But you need to know. You did your residency and fellowship in the nineteen nineties. Curious how imaging has changed since then, and then where do you think, how will it improve in the next I don't know, ten years. You know what's a smart benchmark? Yeah, yeah, I know.
When I was in training, netmark was just starting and it was very slow. So where we come now is the acceleration position is just incredible. What used to take us an hour to do we can do in ten minutes now, So there was creed. The speed of acquisition
is huge. Were also developing a lot of analysis that we can do after the images are acquired to give us more quantitative metrics, because the whole thing in medicine to get past the qualitative read of a radiologist, which is helpful, but we want to put more numbers on it so we can have a more dynamic range on how we describe each child and this therefore we can
get into better precision medicine and help prediction. So we're getting more to that quantitative aspect of imaging now, and not just bringing but all body parts of course, and you know down to fetel age.
Is it for kids too? Every case is very personal and individual? Or are there trends and things that you can help in so that one case can help another. Is there a body of knowledge that gets built off of this?
Yes, there's body that of knowledge gets built off of this.
But this is where we come back to AI.
I only can remember some, you know, even though I've been in practice for a long time.
Things follow out crap.
So this is where I'm really excited about AI because I can, you know, mine oor databases to find where's an individual child just like that one I'm treated. Now, what did they respond to, what worked for them, and how are these two similar? So I can mind the databases to start to come up with individual outcome prediction, which is what we're doing right now.
With databases.
We've got some from some of the major trials for hypothermia, and so we can use this large database to start try to take individual outcomes. You can say, well, I have a newborn with this pH that had these you know, and I'm a mother of this age and put in features and they could give you from that database an
outcome prediction. So working on that and also working on making data more available to parents because I think a lot of parents are very frustrated with trying to read the literature, even if you're using chat, GPT or really hard.
It's really hard.
And then you get group statistics and then where does my kid fit in between the twenty five to seven five percent, you know, good outcome or something like that. To get chatbots that can work with some of our databases, so people anybody can talk to, you know, a physician, so to speak, to give the answers that they want.
That's that's pretty remarkable because you know, I just think about the tone of these chatbots and if there's a way that they can be you know, we talked about we talked earlier this week about what a challenge it can be for people to actually interact with them in an you quote unquote normal way. But is there a way for them to actually be empathetic and work with patients, work with parents and with families.
If you give us we've got about forty second.
Yeah, yeah, no, we're working on that. But I can't tell you all the secrets because we're.
Hang know, you go over the that. Can I ask you, when you guys do use AI in chat? Do you have hallucinations? Like do the AI hallucinations. Do you or how do you? Especially when you're dealing with medical y prevention.
There was a lot of safeguards who put around that, so it's we have again. This is sort of more the secret sauce that I can't talk about yet, but there are ways to constrain chatbots to give you reasonable answers that are statistically found.
All right, so when you can, when you come back, yes it will Okay, good stuff. So appreciate Doctor Ellen Grant, Director of Fetal Neonatal, Neuroimaging and Developmental Sciences here at Boston Children's Hospital. Thank you again. Thank you. You guys are all amazing, They're all behind us.
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.
We continue with more of our conversations from Boston Children's Hospital. It was a broadcast we did earlier this month of Remote where we spoke with some of the nations leading doctors on matters related to health, health policy and innovation when it comes to medical care, especially for kids.
Well a fixture at my high school in college was torn acls volleyball, across soccer, field hockey. That's torn ACL, the surgery to reconstruct it, weeks on crutches, and then months of recovery. This is doctor Martha Murray's world. She's orthopedic surgeon in chief of Boston Children's Hospital. She joined us from the hospital. Why do ACL tears affect women more than men?
Well, it's a really interesting question, and it's been one of much debate for the last few decades, and there have been things like, well it must be a hormone cycle, or it's the shape of women's hips and their valgus
angles to their knees. But a really interesting study came out very recently from the Harvard School of Public Health as well as Harvard University with doctor Danielson and doctor Richardson, where they actually showed that the studies that say that women tear their ACL more frequently than men were often based when the women's teams were smaller than the men's teams, and the way they calculated exposures was the number of practices or games you played in, not necessarily your playing time.
So if you're a man, who's on a hockey team versus as a woman who's on a hockey team. The women's teams were smaller, so those women were playing more so they were planting and hockey that's a bad example. Soccer would be better, but if the team is smaller, the women are going to be planting and pivoting and playing much more time per game or practice.
Some more stress, more use more stress, more use more TEK.
So maybe it's not Maybe women in all things equal, Maybe women and men don't have a different rate of torn ACL correct.
When when they corrected for unit of exposure, so kind of game time playing rather than just a game, the injury rates look very similar.
Wow, that's totally different than what's I mean, do you is that? Do you is this the standard now? I mean do you think this is?
It's relatively new work that's coming out, but it resonates with most of us who take care of women and men on their on their athletic teams.
Yeah.
I want to ask about your background material science and engineering. I know Tim said it not typical for a surgeon, but I think it's it's a really smart combination. Well, I have a doctor, a foot doctor, same thing. Engineering and like he is and just deal with my foot. He thinks about, Okay, what are you doing? What else is going on in your body? Tell me about that mix and why it's kind of unique and smart and ties things together.
Well.
For me, it was actually a necessity.
Right.
So I was an engineering graduate student and a friend of mine came into a party one night and then on crutches as Tim was saying and who had torn his ACL? And I said, oh, are they going to go sew it back together? And he was a med student. He was like, you, stupid engineer, We can't sew it back together. You have to take it out and replace it with the graft of tenant that they're going to take from the back of my leg. And then it's
all this rehab. And I thought that seems kind of excessive, right, Like that's a lot to have to go through. And so I spent the next six months or so in the medical school library just reading everything I could about why didn't the ACL heal? And I realized nobody really had figured out why it didn't. He know, they tried it sewing back together didn't work. So then went to grafts and we've been doing graphs for fifty years and
nobody really asked why doesn't it heal? And so for me then there was no biomedical engineering at that time, and so my choices were to continue on with my project, which was developing airplane wings were invisible to you know, to radar, and I thought, well, that's a really cool project, but I really want to figure out this ACL thing. And my advisor was like, well, I guess you could go to medical school.
This is a Netflix series.
Okay, Well, the advisor obviously had an impact in your friend obviously had an impact. But fast forward, you know, thirty years plus and you have actually invented a new way to treat ACL tears. The bear mackod you did figure out that there's a reason why acls don't heal like an MCL would actually heal. Why is that, Well, it's really interesting.
So both the medial collateral ligament and the anti a cruciate ligament are ligaments. When you look at them under the microscope, they look very similar. But interestingly, when the MCL tears, you can go on to brace in it about six weeks that ligament will heal fine in your back playing soccer. In contrast, the ACL. When it tears, even if we try to sew it back together, it doesn't heal, and so we wondered why, and so we did a series of studies where we looked and we
compared the two tissues in their response to injury. And what we found was that actually the response to injury is very similar in the two ligaments. So the tissue and the cells and the tissue were doing exactly what they were supposed to do in both tissues. But the difference was in the MCL. When it tears, the ends bleed, and that blood clots informs what we call a hematoma
between the two torn ends of the ligament. And then, in contrast, in the ACL, because it lives in this fluid environment of the joint, the ends bleed, but instead of making a clot or hematoma between the torn ends of the ligament, the blood disperses through the fluid of the joint, and so the two ends never have that scaffolding,
that biologic scaffolding to hold them back together. So once we discovered that, then it was a fairly logical step to say, is there some way we could immobilize the blood in between those two torn ligament ends and get that biologic signal where it needs to be to encourage healing of the ACL, and that's really what Bridge Enhanced ACL repair or BEAR is. So the magic is kind of the sponge that we've developed that can absorb the
patient's blood. You can place that blood laden sponge in between the torn ends of the ACL, so the acal back together.
But now you have the.
Biology plus the sutures and the repair and the ligament will heal.
So what is done in terms of numbers or percentage with the method that you pioneered, what you invented, versus actual reconstruction and using other ligaments.
That's a great question. So this is still fairly new. So we got FDA approval for this product in twenty twenty and so it's only been in practice for a few years now. There's studies coming out of Children's here, which is where we did the first studies, of course, but now other centers are coming along and doing follow on studies and those results are starting to come out and it's very exciting to watch it grow.
I'm also curious you mentioned but like FDA approval, like the approval process, is it a smart one? Is it the right one? In terms of making sure that what's being done and studied, the R and D, that it's safe for when it's finally done on patients, or is it preventing things from maybe putting put into you sooner? Like I'm just curious where you guys weigh in. You're in it, You're in it every day. Yeah, I think it's a delicate balance. But I would say in our
personal experience, the Fday was an amazing partner. Okay, So we were able to get into an early adoption program where they actually met with us and helped us and put together a panel of experts that would help us figure out how to make this the safest possible product and the most effective product before we went to patients, and we found their advice incredibly valuable. There was a lot of conversation and back and forth and just having them it felt like it was a team effort because
we were in alignment. I mean, as a physician, I was going to be shaking the hands of these patients that my partners were, and we wanted to make sure things were as safe as possible.
So they helped us with that.
Do we have data yet on long term impact or long term outcomes. Yet when it comes to the bare procedure.
Yeah, our longest data that we have is at about six years, and it's only in the small number of patients in those first studies that we did. But the reason that we want to study at longer term is because, as you may know, many of these patients will develop arthritis early in life, and as a pediatric orthopedic surgeon, I want to make sure we have a procedure that's going to last my patients for sixty or seventy years, not have the knee breakdown in ten or twenty years.
And so we're very interested in this arthritis question with bear and in our preclinical studies we were able to see that arthritis was actually much less in the subjects that we treated with an acl repair with the sponge versus a reconstruction. So we're interested in seeing if that same thing plays out in patients, and the early data suggest that it will it is true, but again that's very early data on small numbers of patients, so we're excited to see how that pans out.
We're talking with doctor Martha Murray. She's orthopedic surgeon and CHI for Boston Children's Hospital that's where we are Tim and me on this Friday. Preventive care. Like, so much of what we talk about often when we're doing interviews is preventive care. And I feel like the whole health community has been thinking about this for a long time. So what's the preventive care so that as much as we don't want you unemployed, like, how do we think
about taking better care if we're living longer? Like, how do we think about this?
So there's a couple questions on that. So one is how do we help our teenagers reduce their risk of injury? And I think the main thing for that for our athletes when they're in it.
If we push kids when they're younger. I think a lot of parents really push kids.
So some things we can do to help them is help them work on strengthening in addition to just play time. And another thing is cross training, So not playing the same sport all year round or playing the same sport every day, giving their body a chance to rest and heal between exposures to sport.
Does it's as simple as that?
I think?
So, Wow, does ACL tear happen more in kids than adults? Or and if yes, is it because kids are the ones who are playing sports, and you know we're just sitting at computers.
I think that's probably part of it. Again, it gets to this exposure question. How many times do you plant and change direction? And so the peak of a c. Andrews is really the high school athlete because there's so many everybody's playing a sport and so we see a lot of them there.
I want to ask you at social media and all of us sitting on phones, are sitting in front of screens, like I just I keep thinking that we're going to one day. I don't know whether it's fifty years from now we're going to have a neck that basically goes over there or maybe not because we're going to have glasses on. And that's like, how do you think about this digital world? You're laughing?
But can we surgically remove my phone from my hand? That's what That's what.
But I do think about what it's doing to us.
Well, I look at it not just one fixed for you. I don't know if I can fix the social media.
But physically, like I'm just thinking like how you know kids are in their phones constantly and stuff, and like the shape like like do we need to be thinking about what this is doing kind of to our spine and different things. I think so.
But I also think things come in cycles, right, And we see now if you walk down the street, you see everybody's on their phone. I think we're gonna five years from now, we're going to look at back at that and say why are we doing that? You know, maybe we'll start looking up at the sky more, I hope. So, yeah, that's what I hope too.
Yeah.
I mean, gosh, that's like your open air.
I know. I just I look around on the subway and just everybody and I'm just thinking the curvature and I don't know, whatever, what's the next thing you're working on or that you're excited about.
I'm really excited about a product that we' working on for rotator cuff injuries. And it's a product that's injectable, so that potentially.
It is great.
Yeah, you can have ultras on your shoulder, see where the tear is, and then inject the product into the tear, maybe in an office visit. So that's what we're going on, but very early day on that.
Again, a challenge with pediatric patients as well.
No, this is more adults but we were just we thought we could make this work for a ligament. Maybe we could try it for the rotator cuff ten And and the nice thing about the rotator cuff is it is accessible by ultrasound and injection and it's a pretty easy model for us to study if we can make that injectable work there, and there's lots of other places we could apply a meniscus other things.
Did you ever figure out the invisible airplane wings?
No?
Not too late?
Well, social media Visible Airplane Wings ACL wrote that you guys.
Are killing me.
Well, we are glad you ended up going into pediatric orthopedic surgery app.
Is there another career like to add on after this? You could do it. You could do it. This was so much fun. It was fun. Thank you guys very much, Doctor Martha Murray, she's orthopedic surgeon chief for Boston Children's Hospital.
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 alone from our flagship New York station, just Say Alexa played Bloomberg eleven thirty blendy ahead.
In our second hour of the weekend edition of Bloomberg Business Week, a special holiday edition, as we dig into travel, spirits and more. We're going to catch up with the founder and CEO farm Girl Flowers on running her multimillion dollar business. We'll hear about the consumer from her, and yes, we're going to talk even a little AI.
Plus we talk bourbon jen Rye ready to drink cocktails and changing consumer habits with the CEO of the US spirits brand Craft Co.
First up this hour, Thanksgiving weekend. No surprise, it is one of the busiest holiday weekends for travel. Triple A projects nearly eighty two million people will travel at least fifty miles from home over the Thanksgiving holiday period, which goes from Tuesday November twenty fifth to Monday, December first. This year's domestic travel forecast includes an additional one point six million travelers compared to last Thanksgiving, and if so, that would set a new overall record.
Travel is less subject to in flation pressures, but if consumers are feeling the squeeze, they still may cut back their travel spending. Somebody who's got a pulse on travel spending, as Mike Brown, who's president's CEO of travel and Leisure. It's got close to twenty resort, travel, club and lifestyle brands, including Margaritaville, Vacation Club, Club, Windom and more.
Well, ultimately we're one hundred percent leisure travel company and our demographic is around one hundred and ten thousand dollars of average income, average FIICO over seven hundred and thirty average FICO score, age group upper forties, low fifties. And really what when you start to think about who likes to travel with us, no matter the brand, They want bigger accommodations, they want consistency of brands, and they want good value for their money. And that's really the space
that we operate in. And if you think about these last five years, where inflation is running high and you've already locked in your vacation dollars, the value component has been really strong.
This propelled our growth here in the last five years.
How much of your business is sales of new memberships versus people actually just using what they bought maybe years ago.
Right, It's actually one of the best endorsements of people's love of the product is that every year about sixty five percent of our incremental purchases are from people who already own with us and want either more space or more vacation time. The rest are from our new owner base who are dipping their toe in the water and seeing what this type of vacation travel is all about.
So not only are we getting two thirds of our sale roughly from people who already own with us, what we also see is the people who've paid for their ownership already.
There's a ninety eight percent retention rate.
So two massive validations that once people own, they really love the product and keep buying more.
So, you know, timeshares, they get a bad rap, and they have a bad rap. I mean, if you like, just Google, get out of time share, there are legal companies that specialize in getting you out of time shares is yeah, I mean you know this. You know the industry. Is your product different than what people know as time shares? And why that?
Yeah?
Wrap, Look, it's interesting because I can even feel the a little bit uncomfortableness of asking the question because it has a history that predates the Great Financial Crisis. But I think the untold story here and why I love coming on shows like yours, beyond it being a great show, is that the industry has dramatically changed. Eighty five percent of the sales today are by companies that you might book your business day, whether it's Marriott, Hilton, Wyndham, Margaritaville,
Holiday and Disney. All of these are the brands that have come to the forefront in the last ten years. And the value proposition, the way of vacationing with a brand you trust, is not the reputation that it gained great financial crisis, where it was independent real estate developers. And I would just encourage everyone to do your own research about these type of advertisements. There's a lot of press out there that's shown some really negative stories about them.
That's for your people to do their own research. But what I will tell you is that our retention rate, as I mentioned, ninety eight percent, two thirds buy more. And this is now a massively branded industry that it wasn't when it gained that reputation you're referring to.
So what's like the trickiest component of your business? Is it properties? Management, labor? I'm just curious.
Yeah, it's a complicated business.
We run a sales and marketing business, we run a management business.
We operate the club.
So that we can get people from one of our two hundred and eighty resis orts to another, and we access the ABS market three times a year to sell our notes and gain cash flow. I think it's the management of all of that together when you look at our company's performance, the satisfaction of our customer base, and the growth of our brands. We've been highly successful and shown growth and showed a way to grow, and it's
shown through in our equity. But it's the experienced leadership to combine several very complicated businesses together to make sure that it's seamless for the consumer and that we're also ultimately fulfilling our mission, which is getting people on great vacations. So I would say it's the complexity of the management as opposed to an individual component that's.
Really hard to operate.
I would just add that one component that has become more complex is the development of real estate has become a lot more expensive ground ups, so we've moved to a conversion strategy and a lot of our new resorts.
So I want to talk a little bit more about the demographics here of your clientele, and certainly you know with twenty different brands, it depends on what actual brand we're talking about. You did give us some age demographics and where people are generationally, but in terms of spend, what are they spending? What do you know about where you know in terms of their other demographics like household net worth and what part of the economy you're able to get.
Right Well, what we find in our product is the vast majority, irrespective of the brands, are going to want to be in a situation where they want to know what they can expect from their vacation and a Margaritaville guest is going to want a sand, a drink in your hand, that type of lifestyle, Whereas our newest brand, Eddie Bauer, these are people that want to hike in Zion National Park or get to the great outdoors and
enjoy a family reunion. Either way are financial demographics or what I explained earlier, But what we see as the travel trend is people want experiences that match their personal lifestyle as opposed to four walls, and then they have to go find their experience outside of the resort. So that's why we're launching sports illustrated brand Eddie Bauer. We have Margaritaville Club Windham you mentioned, we see an opportunity to customize your experience inside the resort and outside as
opposed to over separating the financial demographics. I will say one of our big focus is to pull the average age down as we launch new brands over the upcoming years.
You know, it's interesting, like I do, think about how consumers relate to a specific brand. I mean that really moves the needle, doesn't it, whether it's Sports Illustrated. I'm just curious, And how do you guys think about what brands you want to affiliate yourselves with?
Right if if you know, I've I've I have two children that are children young men that are at a university.
Kids.
Yeah, they really are, they really are. But I'll tell you if I were to go go up to ann Arbor and I have the option to stay in an unbranded hotel with four walls or something that affiliates itself closer to the university, there's a natural pull to it. And you know, I can apply that. If you're going to go to a beach destination, you have a chance.
And if you're a parent head and you want to be in that Margaritaville environment versus a resort that's a brand that has thousands of resorts everywhere from the highways to the resort destinations. You're going to go to the Margaritaville location, and our club Windom has a similar type
of affiliation. So we just find that people are moving more and more to the lifestyle that attracts them, and we are therefore developing brands that allow them to just do that naturally, to enjoy their lifestyle inside of the resort and outside. And it's it's already been received with a lot of great reception and we're excited about what we can do going forward.
What's the brand? You have so many different brands. You mentioned Marguerite, we talked about wind Eddie Bowers. What what are you missing?
Yes, I think there's a few things that that we have to consider. We don't have any anything in the luxury space today, what I would say pure luxury. There's a lot of opportunities to tie our type of product to the crew to.
Cruise type of companies.
And then, as is always the case, someone you know, uh five years ago would have said, well, Eddie Bauer is not a hospitality name, but you immediately put that to an outdoor.
Outdoor living lifestyle.
And I think our challenge is there's the typical hospitality verticals, which would include luxury, but there's also just niche, niche lifestyle opportunities that we will look for. But you know, if I could just step back a second, the key to our success is whatever we do, we execute against it and we deliver on what we promised the street, and that success allows us more and more access to
more and more brands. So I would expect that to allow us to move into these spaces that we currently aren't in.
Well, I'd love to be sitting at Margaritaville Vacation, a Margarita vacation club with the Margarita in my hand. But having said that, before we go, Mike, any signs of stress, any signs of you know, economic you know, concerns as you look at your business, or maybe what it tells you about the outlook here.
Well, I would say my personal sentiment and what I'm seeing in our business is very similar to it was thirty days ago, which was there's still uncertainty out there, which causes us to be looking intently every day with any metric internally that would signal the economies.
Going one way, or the other.
Thirty days on from our earnings call, I would say that our performance and our outlook on the economy looks very similar than it did at the end of October when we reported our leisure travel demand is looking good for Q four. With the sound that the shutdown is coming to an end, I was starting to worry that we might start to see changes in behavior between air and drive to traffic.
Are you seeing that at all? Just very briefly, we.
Have not, And in fact, it looks like our twenty five bookings here in Q four are at or slightly above where they were last year, and we haven't seen a dramatic change. We've seen ever so slightly that changed from fly to drive to but I'm really confident that it hadn't gone on another week or two into the Thanksgiving season, we would have saw a noticeable shift of people in New York saying, look, let me just get to a drive to destination as opposed to flying to Orlando.
I don't want to deal with the hassle with my free time. Fortunately, it looks as if we will avoid that. But at this point we have not seen an indication that that has caused changing leisure Travel.
Mike Brown, President CEO of Travel and Leisure Company, joining us from Orlando.
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.
US consumer confidence led in November by the most in seven months, on growing anxiety about the labor market and the US economy.
Now.
Survey by the Conference Board, released this past Tuesday also found that confidence fell across nearly all income levels after several months of increasing.
For most groups, A gauge of expectations for the next six months declined to the lowest level since April, while measures of present conditions slumped to ing more than one year low. The ongoing slide in consumer sentiment reflects lingering concerns about the impact of persistently high prices and a cooling labor market on Americans finances as well as the broader economy.
The health of the US consumer is something we always focus on. With Christina Stembel, she's the founder and CEO of farm Girl Flowers. We've been talking to her for several years now that firm by the way she bootstrapped starting back in twenty ten making bouquets from her San Francisco apartment. I got to say, it's come a long way.
It's the first year that we're actually seeing any growth since twenty twenty, but very small a couple of points, and that's very intentional. We're really focused on the bottom line, you know, we want to make sure all these companies are doing layoffs. I want to make sure we're not that. You know, we're actually we have I don't know, ten or twelve open positions right now, which for a company our size.
Is a lot.
So we're just growing at a clip that we can do while maintaining our profit margins. Is the opening We're about thirty five million, you know, plus a little bit.
But yeah, and how many people right under thirty.
So you have like a third of your positions are open right now. Basically, are you having trouble finding those.
Employees or just going slow?
We're looking for the right people. So we have a lot of applicants, but we're just making sure we're bringing the right people. Yeah, I think I've learned that having the wrong people is actually worse than just not having anyone.
So that's a lesson, it's.
It is a good lesson. So in terms of fifteen years, tell us about like how you look back at the beginning and where you were in some of the stages you've gone through, and then where you are today. Yeah.
I just sat down and wrote, like, you know, fifteen lessons in fifteen years. You know, I might share them at the end of the year. I was just trying to think about, like, you know, where I'm at now versus you know, I feel much healthier right now personally and professionally.
And like why do I feel that way?
And I think the biggest lesson that I had written down was that nothing is as it seems like when I started, I wanted that founder story in Silicon Valley, I started in San Francisco. I wanted to be the cover of Ink or ch one of the big magazines, and you know where everybody was like she did it? Look at that, you know, and it was like all
my ego. I finally realized it was my ego. And we grew really really fast, and that like played into my ego and I felt like that was my entire identity, was that you know, all the press we were getting in with our you know, fast growth, and yet twenty nineteen, we did thirty four million in revenue and I did thirty six thousand in profit and I paid myself sixty thousand dollars.
Like this is not a success story.
But the outward you know, outward rule thought I was like so successful, and I'm like, I'm barely scraping by eating ramen. You know, so I think, you know, really figuring out that you know, I needed to be smaller, like we talked about before, you know, and focusing on profit margin being a smaller company doesn't feed your ego anymore. But I finally figured out that, like everything I thought the business world was isn't like all these sales, all
these like glossy pictures of people that made it. I'm like, yeah, it was like a fire sale most of the time. And it was like all these people I wanted to be that are the girl bosses that made it. I'm like, they don't own their companies anymore, and they're you know.
Well yeah, And it's you know, it's interesting because we've talked a lot, and I'm sure like through your head you went through some journeys about like where do I want to go. Do I want to keep doing this? Do I want to bring in partners? Do I want to do whatever? You know what I mean? And I'm just curious, you know, Tim, Like I think about all the folks that kind of think about that kind of thing. Did you go through some of that?
Absolutely?
I mean I built this to sell, Like I wanted to sell it in ten years. I mean, how many years can you work one hundred hours a week.
And not die?
You know?
So I wanted to sell it so bad.
That's hard and the reality.
Right really, and then we got an offer from one of our big competitors, like this big company, and I thought, yes, we're going to make it, and it was a horrible offer. And so now I'm building to keep in building to sell, and it's a completely different thing. Like we're making, we're investing in, you know, things for five years from now.
You're able to build to keep rather than build to sell because you built this company yourself and you didn't take on any financing, any funding, which is so strange for a startup that was built in Silicon Valley.
Absolutely. Absolutely, you know, I'm very fortunate. I'm in a CEO group with lots of CEOs that you know, are constantly telling me how lucky I am, even though I have never felt lucky in this because I don't go into every board meeting being where I'm going to be fired right now because there's the boss.
Yeah, I'm the boss.
I'm like, you know, we just you know, we bought a farm. You know, nobody, no investors would ever let you buy a farm. We you know, are farming. Now that's a lot term.
Well, I was gonna say, last time you're on with us. We're going to get to the consumer in a second, but last time you we're on with us, we talked about two things that that really stuck out. One was the effect of tariffs. Did you buy a farm to offset the effective terraffs?
No?
Absolutely not, but it's going to help us, it is. I mean, we bought the farm because we're like, let's let's do this because it's hard to get this type of flower at this time of year where we think we can get it where where we're at. We also built it because we're like, we're farm real flowers, Like let's actually we have ahouldn't we have a farm and do that?
You know?
But I mean that we're we're investing in you know, we do think long term, this spertical integration will allow us to keep a couple of million dollars more in our pockets every year.
Wow. Yeah, it's like you gave us such an education. I think about where flowers come from, and I think there's just as a subtion we go buy flowers. I don't know whether we thought they were all in the and there wasn't right, so much of the flowers.
Where's the farm south?
Well, the oregan We bought the farm in Washington, so we have a small farm in Washington. We also put in about forty thousand plants in Oregon last year as well.
And will you be able to cultivate those flowers yearly like throughout the year.
It takes three years for your first harvest. So again that's why investors would never let you put the money into it.
Now and the flowers that you produce at those farms on that land only go to you or do you sell them to others?
Yeah, we'll keep it, you know right now, the amount that we're growing, we can we can use that every year. If we decide to keep going, then we can wholesale it. It's another revenue chain for us.
What percentage of the flowers that are grown there? Like, does that satisfy of the flowers that you use in it?
A couple percent?
Okay, so still it's still yeah really, but you would never get you would never be able to get to the point because of the global supply chain where you could actually grow all the flowers you would want.
Never and we don't want to. It's too much of a risk, you know. I learned through COVID that I definitely need to diversify more than I have. I mean, having our facility that made ninety two percent of our bouquets closed down in one day in twenty Twentymber. You yeah, taught me that that wasn't very smart. Definitely making sure we're diverse by now talk.
To us about tariffs in the environment, Like, I just think, what again?
Why?
We love many reasons we love talking to you, but you really give us an idea of what it's like to run a small business, although you've made it a bigger business over the years. But stuff coming out of Washington tariffs, how has that changed? Has it gotten any easier yet? No?
We change, you know, and it actually hurts the consumers more. I mean, you know, because you raise prices, we raise prices, or we have to buy off the shelf instead of making custom things that are nicer for them.
We have to do things like that.
We have to make concessions because we don't want to price ourselves out of the market. Yeah, you know, we have to use different flowers even though they're not the ones that consumers want. You know, there are things like that.
Way, hey, when floorers do that.
Yeah, yeah, exactly, Like it's not what we want to do.
Right.
Also, I think we're the poster child for having tried to do this, like May in America grown in America. Like when we started, I only bought American grown flowers, right, and we ran out of flowers in twenty seventeen, just ran out. Now there's fewer farms than there were in twenty seventeen because labor's so high now with immigration issues, I mean there is. I mean I just came a couple of weeks ago. I was just down in our fields and we were just getting it ready for winter.
I couldn't walk for three days after doing one week of work in the fields. Like, there are not people here that are wanting.
To be farm workers. Let me just say, so, what would you.
Say to folks who are like, no, pushing back an immigration it makes sense, like we have to be doing this. What would you say to folks who are listening or watching right now?
I think that ship has sailed generations ago. There is no way, Like you know, we tried to buy American grown it wasn't possible. We're not going to bring farming back to this country unless we do something about immigration. There are too many ripple effects going on with why it won't work. Also, having production facilities of making bouquet in the United States, we do. We make about fifty percent in the United States and fifty percent outside of
the United States. Can I ask you we're outside South America South and most of them are in the United States, but the flowers are coming from South America. You have a few in South Amarket that are making bookuts as well. And you know, it's it doesn't work like you know I think. You know, Ford Motor Company is a good example of this when they're talking about open jobs or you know, I talked to a guy that has an engine rebuilding plant in the Midwest that had forty percent open positions.
We just don't have those people.
Yeah, you know, we're telling people go to college so you don't have to work a factory job. Nobody wants to work a factory job.
You also have an aging.
Population, right, So we talked about terrorists, we talked about farming. We talked quite a bit about your story to the consumer and the American consumer. How's the consumer in your view?
The consumer is definitely shifted. I think just like what you were talking about, you know, people right now, it's a little concerning with the economy where you know, people are still spending a lot of money, but people that can't spend a lot of money can't buy. Yeah, so you know, it's not the company I want to be where I'm only appealing to one type of consumer. So we're really trying to make sure that we're not doing that.
But with tariffs and rising prices and everything that, you know, put kind of backsh you in a corner.
What do you do?
You know, I don't want every boquet to cost one hundred and fifty dollars because the only people can afford one hundred fifty dollar bocke to send to the restaurant for their birthday you know. So we're looking at it and.
It's a consumer like I know, I definitely cut back. It's like you can't do as much as you would like to.
Absolutely, we're in the gifting space, so you just cut gifts out and we don't want that. So we're looking at trying to find ways to get closer to the end consumer so we can cut it and shipping instead of the flower cost and things like that, that we can be a little bit creative with wreaths.
How big, Like do you do a lot of wreaths?
We wish we could do more. We sell out of them all the time. We're working with a lot of new producers. They're high labor, really high labor. Yeah, so we are constantly looking at We work with small farms on our wreath making program, so very proud of that and trying to get more for us.
I love I would everything.
It smells really good.
It does not really get you booked into the studio. If you had to do a word to describe the outlook, how do you see it right now?
Bleak but hopeful?
Wow wow yeah yeah I think And this is with somebody who's got business going job openings.
Yeah wow.
In terms of the context of last fifteen years apart from COVID, whereas it like what year are we in ten seconds?
Fifteen bleak?
I would just say because of personally how I feel about what's going okay, but like we're doing okay, so I'm hopeful that we're going to make some change.
And you bought a farm, Yeah, got a farm.
I love that. I want to be able to say we bought a farm. Christina Stanbel, founder and CEO farm Girl Flowers always makes us feel good. This is Bloomberg.
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 eleventh.
All right, we've got something fun to talk about.
Well, Bloomberg Intelligence team is out with a really interesting note that could add to the woes facing the spirits industry.
Oh so not so fun.
Well, use, yeah, maybe not. Use of weight loss drugs stand a deep in alcohol's demand slump in the US and Europe as moderation and wellness gains trends gained grounds. So by twenty thirty five, consumption of beer and spirits is expected to drop twenty point three percent and nineteen point two percent, respectively among GLP one users. That's here in the US. This according to an analysis from Bloomberg Intelligence.
Yeah, total losses could reach twenty eight point five billion, translates to about a three to four percent sales drag in the US and two to three percent in Europe. There's that going on. The whole alcohol industry globally has had to deal with tariffs coming out of the United States. So that's going on, and so we'll see as the President and the administration has been looking at the cost
of things, some rollbacks. I'm not quite sure how that will ultimately maybe impact the liquor industry, but we'll be keep ending in that.
Well, it's the economic backdrop that informs our conversation with Ali Anderson. She's CEO at Kraftco. It's got a portfolio that includes more than two dozen spirits and liqueurs think Bourbon, jen Rye, Ready to Drink, Cocktails and more. The company also does co packing for other brands. She joins US from a distillery in Holland, Michigan. Last time you were on with us, we spent the whole time talking about tariffs and the effect of tariffs on your business. And
that's just one element that's a headwind. Other headwinds include changing consumer tastes and how people think about GLP ones and increasingly people taking GLP ones and that leading people to drink less. What is the environment for you out there right now?
Yeah, I mean, first of all, thank you for having me back.
Good to see you guys.
All of the headlines, they seem pretty bleak, right, but I think that's what business is today, especially in the spirits industry. So what's the name of the game. You have to pivot. You know, we certainly want to promote as much health as we can across all industries, but what we're looking at here is lifestyle shifts, and so the industry has to has to shift with it.
You know.
Anecdotally, I was out to dinner with a friend a couple of weeks ago who was who was on a you know, I said, healing great, and he said, I'm cheating.
It's it's a shot.
But we enjoyed two.
Cocktails and I'll love reop so I think you see people making healthy choices when and where they can and what they're actually choosing. What my friend shows that night was quality over quantity, and so those are the pivots.
And the shifts that we have to make industry as well. I'm super like that with chocolate, Like I just need a little piece of super good chocolate. I don't need a lot, and then I'm happy. And so yeah, same thing with alcohol. No, no, but let's go. Let's go there, because I do think price point is something increasingly. Yes, health diet that's certainly an aspect, but price point is certainly increasingly something that we know all consumers are looking at.
We saw that play out in the recent elections in some of the states. Like the economy does matter, the money that is in or not in your pocketbook, it matters, It absolutely does.
And you know, I've got premium brands, I have brands that cross the spectrum. And so what we're seeing is, yeah, our consumers down shifting just a little bit, sure, but we're also seeing tremendous growth with products that are, you know, over two hundred dollars.
So I think you are seeing.
A disparity across all of the price tiers. But at the same time, like I said, you're seeing people redefine what premium really means. I think it's coming maybe less about price point and more about what the purpose driven value is, what the occasion in their life they're using. They're using alcohol to celebrate with. So I think, you know,
at the end of the day, people want transparency. They want transparency in price, they want transparency and how we source, how we produce, how we give back, all.
Of those things.
In terms of the lineup that you have right now, you said people are choosing quality over quantity. Is there a certain you have a large range of what you do. I mean, dozens of different spirits and alcohols, liqueurs, ready to drink cocktails. Where's the strength.
It's inconvenience, variety, innovation? I think people don't. What we're seeing is people don't mind spending a little bit more for something that they haven't seen before, right, And that could be with an RTD. So maybe it's maybe it's a little more expensive RTD, but it's a flavor combination they haven't quite had before. Or maybe it's a really luxury whiskey with a finish or a blending technique in
our case that they haven't seen before. So again, I think people we vote with our dollars, right, and they'll consume what they think is new, interesting and what they can get information about what they connect with.
So RTD obviously ready to drink. I've had certainly some of those. Hey, you sent over to our team so that we could share with the audience some of the stuff that you guys I actually have. Next to be copper Craft distillery made in the US, say Holland, Michigan. It's straight bourbon whiskey. Tell me about this one. I'm actually gonna be It's been quite a day, it's been quite a week, it's been quite a year. I'm gonna I join you. Yes, I join you. We're so sick.
Yes, she's at You're you're here in the studio.
I'm here, I'm here in our distillery. I don't want to wait wait maybe.
Oh, there we go.
Okay. I didn't want to see a la I didn't want to spill it. Okay, so tell me, but tell me about this because it isn't certainly a brand that I think I'm familiar with. But you're right, people are looking. I know when I go to buy a winder. I like to try different things.
Right, right, So you know we're based out of Holland, Michigan, and you think I get this question all the time. Isn't whiskey just in Kentucky? And the great thing about an American spirit is that it can be in all fifty states. And so for us, we're in Holland, Michigan, on the west side of Michigan here on the Lake shore, and we create We've had this brand for for many, many years. And I think what you've got is it's a it's a straight bourbon.
W I could smell the whiskey sour that could also be made out of this bay.
This is finished in this is finished in rum casks. What does that mean?
Well, it means we took an already amazing whiskey. I think the one you've got is eight years old and we put it in, Oh, I don't have any casts in this room. We put it in a rum cask that it used to hold rum, and we just let.
It rest for about a year so it flavor. Then something that would be finished in a different type of cask.
But I see what you say, like you don't mean what. It reminds me of my dad who used to make whiskey sours for all of us as kids, and most of the times it was a lot more oranges and cherries in it than whiskey. But you could also just the variety. I feel like the craft industry even in the car, like you just alone, it's just something really nice, right Like what did Kraft used to be?
If we look back at beer, we think craft was small batch, craft, whiskey, small batch, and Kraft. Much like the way we'd redefined premium, craft has evolved too. So like you just said, up, you know, I've not heard of this before.
What is this?
And so craft is now evolving to be what is that experience? I can get? Who are the people that make it? How transparent are they about what they're doing? Can I go visit them?
Who are you know?
That's what craft is now. It's the process, the technique, the people, the story that you're telling about the whiskey right now.
The distribution of this is a question that I have because at least here in New York City, I don't know how it works in other parts of the world, but in other parts of the country, but you walk into a liquor store and I've talked to some of these folks in there, and again it's changes depending on where you live. But it's a challenge to get smaller brands on the shelves, especially with the big brands, the
large brands that own a good portion. They come in and say, okay, well, if you want to carry this, you have to carry this, and there's not much power that these small companies have. How do you make sure you get shelf space? And shelf space that's like premium.
What a great question.
Relationships, Like any business, any industry, it really does come down to relationships. And for a small you know craft right, We've got five brands, we cover forty two states and we're still crafts. What does that mean? We have to show up in market. You've got to show up at that retailer, You've got to show up with the distributors.
Those distributors are still my customers. So it's built on relationships and making sure they know just like we connect with our consumers online and tell those stories, make sure they know who we are and that we are a small business that every single sale matters to us and much like them, you know, we're just trying to connect with consumers. So I think it's finding that common ground through relationships.
Yeah, it always comes down to that. I feel like relationships for so many different industries. Hey, before you go, we've talked about copper craft and I actually sampled some, but you also shared with our team, just to kind of look at kind of the variety and different places you go. Elderflower. I'm a little obsessed with Elderflower right now. And you've got Thatcher's Organic, our tea Artisal Artisenal, Yeah, Artesian Artesian, Yeah, yeah, that's right. Sorry, Sorry, I couldn't
read it. I'm looking off my because we took a picture. You've got fox and is it Odenny Odin Odin?
Ok?
Sorry, I'm ashually get a small picture, but tell us a little bit about some of the other ones. And then Thatcher's vodka. It's not as I've been drinking. I just couldn't read the picture because I took a picture, so I can read on air, I'll join you.
No, it's a Thatcher's Organic, right, it's you know we think about spirits.
Does it really matter?
Yeah, sure it does. Something like Thattress is very culinary forward. So you mentioned Elderflower. I bet we're drinking the heck out of Hugo Sprits is right now with that elder flower totally amazing, right, yes, yeah, and again that's a that's a way to enjoy maybe a little bit of lower proof but still still feel great and be festive
in all of those things. So you know, then we've got like sox and Odin is luxury whiskey, and that's we've got a beautiful double oaked that was just up for We had two of the top five finalists for the best special barrel finished Whiskeys in the world a
couple sundays ago in San Francisco. So you know, we're super We're craft We're competing against all these big guys, but because of what we're able to do with our size, with our expertise, you know, we can deliver some really luxury things to the market as well, and we do.
That was Ali Anderson, CEO of Craft Co.
All right, so all of you who are maybe still leading some leftovers from Thanksgiving, it's kind of my favorite thing to have, like pecan pie, pecan pie for breakfast.
It's okay, call it what you will, but just just eat it, you know whatever.
But what you might have noticed over the holiday over Thanksgiving is that alcohol consumption. People are drinking less. Consumption here in the US when it comes to alcohol, has fallen to its lowest level in decades, driven by health fears GLP one, weight loss, drugs that can actually dull alcohol cravings, and of course rising cannabis use. About fifty one percent of respondents in a September Bloomberg Intelligence survey, so they now substitute cannabis for alcohol at least weekly,
So up about five percentage points from last year. And that includes in the Thanksgiving feasts.
Yeah, this is pretty wild. So the Wednesday before Thanksgiving, Yeah, some have started dubbing that Wednesday Green Wednesday. This is according to the BDSA, that's the cannabis Market tracker. Yeah, it's the second biggest day of the year for legal cannabis sales in the US.
Maybe everybody just wants to kind of mellow out, you know, before they see all their family. Well, or why aren't you married, Why don't you have kids, Why don't you like why don't you finish that degree? Like anyway, all I'm gonna say is whether you had a happy Thanksgiving or happy Thanksgiving? You know, I just hope you had a good and safe holiday.
I like that Thanksgiving.
Check out this story. It's on the Bloomberg.
There's a reason it was one of the most read.
Charles Grevin of Bloomberg News wrote it, Americans ditching wine to get HI on gummies this Thanksgiving, So maybe that was your Thanksgiving as well. All right, that wraps up this Thanksgiving weekend edition of Bloomberg Business Week from Bloomberg Radio. Thank you so much for joining us.
I'm tim Stennebeck.
Haven't you ever done the cousin Walk?
No, I don't even know what that.
Is the story? You know, I guess you are our producer. It's okay, yeah, and I'm Carol Masser. Have a good and save holiday weekend. Enjoy the leftovers.
This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from two to five pm Eastern on Bloomberg dot Com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal