Efforts to Flatten the Coronavirus Curve

Week on iTunes, SoundCloud, or Bloomberg dot Com. You can also listen to our radio show weekdays at two pm Eastern only on Bloomberg Radio. So, as we mentioned at the top of our broadcast, certainly one of the themes that we are seeing is what's going on with food and restaurants. They are especially hard hit. Chris pop us as chairman, president and CEO of the Chef's Warehouse. It's

a distributor of specialty food products. They sell to restaurants, hotels, cruise lines, casinos, food specialty stores and more so they are on the front line of certainly seeing the impact of the coronavirus. Who joins us right now on the phone from Ridgefield, Connecticut. Chris, Nice to have you here. Um. First of all, tell us a little bit about your world. We you and your family are safe, tell us what

about your employees, how everyone's doing? Thank you. Obviously this was like, you know, a nuclear bomb for the whole hospitality industry, and uh you know, it's obviously not not easy for all our customers. You know, we saw a little a thirty five thousand of the top chefs in the country and most of these restaurants today are closed. So, uh, you know, we we started meeting. I have an unbelievable staff, and we got together and started thinking, so, you know,

what do we do? We know the retail uh supply chains are really being challenged right now. We're getting thousands of phone calls from people saying how do I buy from you? People? We know you have a thousand trucks and warehouse is full of food. So we've quickly pivoted. We've got our food safety teams out there and say, how do we keep our employees safe? Um, how do we get some trucks on the road. How do we

get food to people they're gonna want it delivered? And we really quickly transformed ourselves right now into a supplying retailers and going right to the consumer through our websites, whether it be our sites for Allen Brothers UH, our our Ellen Brothers dot com, which cuts the most uh the best steaks for the most famous steakhouses around the country, to our chef Warehouse dot com. We've added a new site says shop at Home, so UH, We're keep adding

more and more items. UM. It's impossible to put all thirty five thousand items uh in one week available, So what we decided was to tone it down, you know, not to offer two hundred different types of olive oil. Get it down to a really good selection. UM. You know the team that's at chef because we are pressed with supplying the best chefs in the world that we're

food experts. So I think the consumer could feel comfortable that maybe they've never heard of us before, but our reputation of a thirty five years supplying the best chefs in the world, they could feel comfortable that they're buying from someone who understands food safety, understands quality. And we've quickly put up new sites that they can come online

and they can either get it through ups UM. People are loading up their freezers right now with steaks and lamb chops and really great, great food that they would normally in the steakhouse. And they're also starting to order to their homes. Um an array of I think we have a few hundred items up already, and every day we'll keep adding and we'll keep adding new cities and

neighborhoods that the trucks will be rolling. Uh they can get online, they can pay with a credit card, and uh, we're trying to do it within you know, one to three days, we will be at their door with the greatest ingredients you can set you could find. Well, it's an amazing pivot, as they say, I mean, this is really impressive and we appreciate you giving us how the detail else there I do want to ask you, Chris, you know, given that you do work with some of

the best known chefs in the world. We're talking about Thomas Keller, Dan Barber, Nancy Silverton, Daniel Blue, who will be a guest on this program next week. I should point out jose Andre's obviously he has been very vocal about this. As you talk to those folks, you know them, Well, what are they saying about the future of restaurants the short term in mid term future? Yeah, well, short term. I think you know everybody is still spinning, very upset

with the insurance companies. You know this is uh, this we should you know, business interruption. Every restaurant should get business interruption. Um. If this isn't business interruption, I don't know what is. So um they're pushing that. I know they're on the phone with the White House. So h. I spoke to Thomas, I spoke to Danielle the other day, Jean George, and you know they're they're sitting there and they're you know, they're pushing um and the sun will

come out and UM, that's why, chef. You know, we are doing everything we can. You know, thirty fifth anniversary didn't plan this would be the way we celebrated it. But you know we're going to be here for the next thirty five years and they depend on us. When the sun comes out, you know, they'll start slowly and as it builds and people feel more comfortable going out.

We are social animals. I've been doing this for thirty five years, and UM, I watched people love to go to restaurants and they love to meet and have family gatherings and bar mitzvahs and christenings and weddings and do you name it so it will come back, Chris, I do wonder about when we get on the other side of this. That's certainly the restaurant industry. I mean I saw one number, was it like fifteen point six million

workers in the US restaurant industry. That is huge. But I do wonder about the safety nets, um, that are there for those kinds of workers. What changes on the other side, what can realistically change? I mean the restaurant business, it's a hard one. It's uh, it's always been a business.

But you know, people are resilient. Americans are resilient. Um. I've been through even I've been through the financial crashes, and UM, I'm always amazed how people come back to restaurants, you know, as soon as they're feeling a little better about themselves. Uh. But what but what financially can change to help some of those workers. I mean what in the business, um, or the financial structure of a restaurant industry, or whether it's insurance, like you said, what needs to

change so that those workers. I feel like this crisis is showing us really some of the weak spots in our society is certainly within our workers society, So what needs to change? Sure, well, you can see again most of the restaurants have closed down to most of their employees are unemployment, so they are receiving money. And they're talking about a package where especially small businesses can get up to I think three times uh their their payroll

to to keep their employees uh employed. So I think the government absolutely has to do something as long as well as with the insurance companies. But when we went through nine eleven, it was amazing how generous society is. And that's what we're doing right now in this new business. You know, we give over seven figures of money away to charities every year. The hospitality industry is so charitable um. And I think that people are going to rally UM. I see a lot of restaurants would go fund me

pages for their employees. We're gonna be donating a portion of our money. We want to double that seven the amount that we were able to give last year through new initiatives to raise money to take care of especially all the people on the front end of this sort are most you know that hurts the most. I think you're gonna have a tremendous rally of generosity and fundraisers, and we got to put these people back to work and America needs its restaurants. All right, We're gonna leave

it there. Thank you so much. We really appreciate your time. We know it's incredibly busy, especially as you launched this entirely new business in a lot of ways. Chris Poppas is the chairman and CEO of The Chef's Warehouse, joining us on the phone from Ridgefield, Connecticut. Carol, Uh, so interesting. I mean this is at the crux of what we've been talking about this industry, you know, truly one of the most affected by this massive, massive crisis. Yeah, exactly.

So good to hear from him and get some input on what is happening and what can be done. This is Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. Well around this time every day, Carol, we've been trying to go to a medical expert to really help keep us honest about where we are, what we should be doing, just as human beings, to try and get through this. Uh, get smart about the medical

aspects but also the social aspects of this. Uh. No better person to talk about than the dr Patrice Harris. She's the president of the American Medal Medical Association. Excuse me, joining us on the phone from Atlanta. Dr Harris, Great to have you with us. Well, thank you, it's good to be with you. All right. So here we are, Carol and I working from our respective homes. You know, we're working for a company like many that basically is

saying don't come into the office. Social distancing. Help us understand what we know so far. I know it hasn't been a super long time. Uh, it's been a couple of weeks for a lot of us here in the New York area. What are we learning about whether we are in fact going to flatten this curve? So let

me start with the endpoint. Social distancing works, physical distancing works. Certainly, we all hear about what's going on in New York as I sit here in Atlanta, our I see you beds are at or near full capacity, and we see the cases spike in New Orleans, and so it is important for everyone to know. People may not appreciate that individual accents lead to collective impact. And if everyone commits to staying at home, of course, you know, going out

for for groceries or or medical needs medicines. But if everyone stays at home when they can, they are not only helping themselves, but they are helping the medical community. So when you hear the presidents say let's let's talk about creating zones around the country, some of them not as hard hit um and thinking about reopening the economy, what do you think? What do you say? Well, here's what we are all going to have to commit to. We are going to have to commit to being led

by the science and the evidence and the data. There's no question we all want things to open back up, but that has to be defined and determined by the data. And as I heard Dr Fauci say, we just don't have the data to make those decisions right now, and and and and certainly we want to try to guard against a false choice here umbok health forces the economy.

You know, it's it's we're either going to choose to follow the science and the evidence and save lives or ignore the science and evidence and lives will be lost. So Dr Harris, let me ask you this because part of what you're saying, which I certainly believe in, and I know Carol does too, and many of our listeners do. Is this notion of the most important thing you can do,

this proactive thing, is to stay home. And yet I think a lot of us feel like, but are there other things we can be doing even from the safety uh and hopeful, hopefully for most people sort of comfort of their homes, to somehow help out. Are there places we should be supporting financially? Are there things that we can be doing from a distance to help this along? Well?

Certainly each individual locale will be different. But people are talking about while we are at home, if you can, and I want to say not everybody will be able to another conversation. Not The subject of today is we have to appreciate that there's a diversity of needs out there. For instance, I'll just give you a quick example and get back on topic. But we talk about handwashing, and we know folks who are homeless, uh, you know, don't have hot running water. There's a group in Atlanta that

filled up some water. Takes is going out to the homeless in Atlanta to do that. So we have to appreciate that. But the other things that we can do is again, check on a neighbor. I've heard folks talk about buying a gift card from a restaurant. Certainly, Um, they can get the money now and then can be used later once we get through this piece. Uh, make sure you stay connected. You know you could if you're

healthy and and no risk factors. And maybe you have a neighbor or a family member who um is elderly or is in a risk factor. Maybe a grocery shop when you grocery shop for yourself and your family grocery shop for them. So those are the other things that we can do. I do want to mention a headline crawl seeing the Bloomberg terminal autopy. US regulator is exploring whether to throw a lifeline to mortgage services that are stressed by the coronavirus pandemic, thinking about tapping a program

meant to address natural disaster. So watching that we're talking about Jenny May and they're weighing that disaster aid relief for virus hit mortgage services and Jason, this speaks to that very big story that people aren't paying mortgages or don't have the ability. You know, there is a trickle down effect. Uh, and then it becomes this health crisis becomes more of a financial crisis. We are talking with Dr Patrice Harris, President of the American Medical Association, on

the phone from Atlanta. Dr Harris, um, your members, You guys represent the decisians across the countries, but you also, you know, are tapped into, uh, the drugmakers, the healthcare industry in a big way. Are we getting to a point where our system is going to be overstressed and doctors will be making some critical decisions about who gets

what equipment because we just have enough. Well, certainly that's one of the reasons we want to be proactive about the number of ventilators, which is why the American Medical Association has called on the President to use all levels of government to be proactive and particularly the Defense Production Act to make sure we have the number of ventilators. I do know that there has been a conversation around

making choices. I can tell you that at the American Medical Association, we have a Code of Medical Ethics that talks and speaks to what to do when there are scarce resources, and that information is available on our websites. But hospitals and health systems are having these conversations ahead of time and developing policies, and that's as it should be.

Should the President though, impose the Defense Production Act. We just did a story about General Motors, and you know there are companies out there in the private sector who are ready to go and ramp up to make ventilators and so on. And yet there's a lot of confusion because the President hasn't done that. What conversation aation have you had with him or your or the A M A to do this And do you think it would

be the right thing to do at this point? Yes, we know it's my understanding that the President is signed the act, but we have UH communicated in writing UM and UH in other media forms to please invoke, activate

whatever the appropriate term is the Defense Production Act. And also, by the way, we we have asked for a national tracking system and right now, as you are aware, sort of ad hoc, but it would be I think much more productive to UM you know, have a database or tracking system where we know who has what, who needs what, and then we can prioritize that. We hope that the President activates that and also develops a tracking system. Dr

Harris just thirty seconds left. But I have to ask you, you're a psychiatrist, what can we do from a mental health perspective for ourselves right now. Well, just a couple of think First of all, it's important conversation to have because a poll released by the American Psychiatric Associations just the other day revealed that that folks were experiencing anxiety.

And so I would encourage everyone to practice self care, try to get as much sleep as they can, get some activity, even if it's walking around your neighborhood and putting on your favorite record today at and sometimes you have to you have to, uh stay informed, but sometimes you have to take a break from the news and social media. All right, Well, that's very very good advice. We really appreciate your time. Hope you'll come back and join us. Dr Patrice Harris, president of the American Medal

Medical Association, joining us on the phone from Atlanta. This is Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. Bloomberg Business Week Food editor k Crater writing this week about how the golden age of restaurants maybe over because of the coronavirus. Earlier, we talked with the CEO of the Chef's Warehouse and really got a um firsthand indication of how stressed this industry is. Kate joins us now along with Bloomberg business Week editor Joel Webber,

both of them on the phone. Joel, Uh, you know, we've been talking with Kate a lot. I mean, the restaurant industry, the hospitality industry, they've really been hit hard. I mean understatement, I think really and and I think as um Kate and Richard vines right in this story. You know, like keep in mind the context for restaurants. The past few decades have just been just literally this golden age where we've just seen restaurants coming to their

own chefs have become effectively celebrities. Um. And here comes a coronavirus that suddenly means that you're not eating in restaurants. And this is not just a New York or London phenomenon. It's like almost a global one at this point. And even pivots to delivery or take out have been hamstrung. So it's really this existential moment for restaurants and and about how they're going to actually even make it through this.

And Kate, what do you what is the future according to the people that you've talked to, what is the future of restaurants start to look like? Now? I mean, the future is so uncertain. It's really, as you say, it's just heartbreaking. And it seemed like there was restaurants are always there for you, and it seriously has been the Golden Age for maybe three decades now, building and building and unstoppable and suddenly stopped and its tracks. But

there's definitely a feeling. Certainly restaurants are trying pativo to take out, some with more success than others. But there's so many safty concerns now, a lot of stuff that I got to talk to Jonathan Waxman, who loved Master from Barbudo, and he had this fantastic take out service going for maybe like a week, two weeks, and he

shut it down. He was like, it's not safe, and so Kate, you know, it's so interesting because you know, we're talking to Chris Poppas earlier, who I know you've spoken to a lot about what he's doing with Chess Warehouse, and he was talking about some of the very famous chefs that he's supplies to and sort of how they're

both individually and collectively dealing with this. I mean, the economics have so radically changed here and that filters through not just obviously to diners like us, but to the owners, the operators and the workers. What are the good things that are being done at this point, because I know you're seeing a lot of them. I mean, well there's there's you know, there's like little silver linings. And also it must be said, um, the package that was past

age very good for employees seeing what it means for restaurants. Um, but definitely in terms of unemployment, for people who went from paycheck to being desperate, it's, um, it's very good news for them right now. But supter um sucter. You know they've turned some of them are turning to restaurants into corner stores and they even have toilet paper get they're throwing along with bottles of wine and they're take

out food. Um, but there is lots you can do for in it next week with Chris Poppas from Seft Warehouse about how the that's that Um, the fact that chefs aren't buying have they are and dancy teases and pastas and wade beat anymore means that customers, consumers can get them at a discount. So look out for that story next week. You know, Kate, you're talking to you know Danny Meyer, You're you're talking to all the all these big you know, Dan barbera the chef, and Cohner

a blue Hill. I mean, these these folks, Danny Meyer, you say, was forced to lay off eighty percent of his workforce, or two thousand people. Dan Barber is saying, this is the worst hard time. I mean, these are individuals who've been through nine eleven, They've been through the eight seven Black Friday crash, They've been through the AIDS epidemic, They've been through so many crises that our science society

has faced, and yet this is like no other. I mean, Danny Meyer, Danny Meyer, Well, Danny Meyers always like always has something to say. He really is always glass half fool, and he is devastated. He um, he absolutely for him to lay up one person's hard he had to lay up eight percent of the workforce, which is systematic of

what's going on in the restaurant industry right now. And for that, Jonathan Waxton said, he's seen like the financial crass, crass, the eighth crisis, so many things and this is by far the worst he's ever seen. And of course, right, I mean like this speaks to just how devastating. This particular scenario is where we're just seeing service, the service sector be the one that takes it on the nose here. Usually, you know recessions, and we have this in the current

issue of the magazine and our Eco section. Usually recessions start basically with the manufacturing sector sector. So the fact that this is UM hitting service so hard is going to be really one of the memorable things about this

particular precament. And when you think about all the cascading effects here, obviously, like you know, going out to restaurants is sort of out of the question at the moment, but you think about you know, restaurants have to pay leases, and leases being commercial real estate, and commercial real estate will be heavily impacted by this as much as frankly, like you know, residents. So it was going to be there too, because people are suddenly losing jobs and not

able to pay their mortgages. But we haven't seen a commercial real estate catastrophe that looks like this before, and restaurants will be a big reason for that. I think this is going to be really bad. I think this is gonna be really bad for cities like New York and San Francisco Ditive had um really high, relatively high rent.

The restaurant workers can barely afford to pay anyway. And I think now with no restair, you know, even even when it comes back, I think, um, a lot of a lot of workers are going to say, why am I even living here? Like why don't I just go home to Oklahoma? I think I think it's right. I mean, I I'm increasingly thinking that this is going to be this great reset button for many, many different um ways that we look at our life and asset classes and

all kinds of stuff. And I think you're right. Like, one thing that the last decade is really shown is that when you have a monetary driven rescue package, if you have capital, it was really good to you. And this this could be like that breaking point that a lot of people go, you know what, I need to reevaluate everything. Yeah, exactly, all right. Joe Weber, editor of Bloomberg Business Sweet Kate Crater, our food expert for Bloomberg

and Bloomberg Pursuits. This is Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. It is time for the Drive to the Close. Emily Rowland is with us, head of Capital Markets forgive me Co, Chief Investment Strategies at John Hancock Investment Management, on the phone from Boston, Emily, nice to have you here with us. So interesting week,

a little bit of a breather. It feels like when you look at the financial markets, the equity markets, the credit markets, do you feel like things are functioning as normal as they can be in this situation? Yeah, thanks for having me, I think certainly, you know, as it relates to fixed income markets, it was it was pretty jarring for investors over the past couple of weeks to see their bonds or what's supposed to be the ballast of their portfolio not really acting as diversifiers the way

that they are supposed to. So on those days where we saw the big declines and equity markets and seeing bond yields actually back up, um, you know, was it was a pretty remarkable thing to see, and it was really had a lot to do with investors just trying to raise cash and a lot of selling pressure in

the high quality bond market. Um. Now, of course we've got you know, the FED reacting to this, throwing the alphabet soup at the different types of liquidity measures that they've put into place, and that has restored some order to the fixed income markets, and we do think that bonds can continue to act as a ballast of a portfolio heading forward. So emily give us a report card for the FED so far. I mean, we've heard a lot of praise for for J. Powell and the team

Sam The FED presidents have been out talking. We had a couple of exclusive interviews with them with I believe Mr Kaplan and Mr Bostick today here on Bloomberg. We played that out earlier. How do you rate the FED here? Yeah, I think they're doing an exceptional job. I mean, they're they've reiterated that they're going to do whatever it takes here to prevent a you know, sinister type of credit crunch or solvency issue. They can't prevent a recession from happening.

We are likely in one or entering one right now, but they're almost acting as if this is a wartime type of environment right now and really throwing everything that they can. Um. I've been very busy trying to learn every single acronym here um and there again, the FED is working hard to kind of deliver like the liquidity that the markets so desperately need. Is the fed's cure worse than the disease? I think that's you know, that's

the key question. I mean, you think about the fact that we're going to be continuing to grow the amount of debt um that's that you know, the US has been um, you know, implementing for a long time now. I mean you look at the debt to GDP ratio for the US or right over right now. Certainly that's going to grow, you know, probably not to the levels that we've seen in places like Japan UM, but you know, that's going to be an issue that we need to

contend with down the road. Right now, I think there's much more pressing matters, and again that's really about providing liquidity and a set doing whatever it takes to be there for the market. And so Emily, how much do you were we I feel like we've heard a fayment fair a bit today, especially as sucks across all the major industries have traded off about you know, kind of a double dip or certainly the sort of roller coaster ride that we're in for. How do you plan for

something like that? How do you sort of position yourself correctly for that potential scenario. Listen, trying to call the bottom and markets as a feudal effort, and I commend people that are trying to be precise in doing but it's really challenging. So our view is that you need to dollar cost average into this market so you can have the ability to participate but also have some protection there. We may have further to go here in forming a

durable bottom. The low point in markets usually comes when the economic data bottoms. We're about to get some freely ugly economic data. Um, we probably need to see the number of cases in the US peak. We're still at least a few weeks away from that. And then sentiment, I mean sentiment is not, you know, fully washed out here. I'm hearing from a lot of advisors that I talked to every day asking me, where can I put money to work? How do I you know, should I go

into sick locality? How do I play this? I would look to see people become completely pessimistic before I would say, hey, look we've seen capitulation. This is a durable bottom. I'm open to it. I hope we get there soon, but we might have a little bit more pain here as we try to form that bottom. I want to go back, though, do you think the US is headed to being Japan? And you know, I think, yeah, you can talk about that, and yes, you know Japan, we've got this low growth,

low inflation environment. But as you know, if you think about it, Japan actually hasn't really done that poorly. Um. You look at you know their GDP. Yes, it's one and a half percent a year. Is that great? No, They've had a great employment market. Um, they've had a strong participation rate there. And all the predictions of this kind of fiscal catastrophe that everybody's talked about with Japan really haven't come to fruition. So is it great that

we're increasing the deficit? No? Is it? Would it be a disaster to be Japan? Maybe not? But I do wonder about the FED getting into other areas of buying. I mean, typically they can't do any buying unless it's you know, securities that have a that have a government guarantee. And yet we understand that the FED is is moving way beyond that. Um. And I do want her about

you know, what kind of danger we get into? And I do wonder ultimately what's the responsibility, especially those bigger corporations, to be ready to have some kind of safety net. Yeah. I mean, the FET has definitely done some extraordinary things. I never thought I would see the day where they were buying corporate bonds and even corporate bond ets like l QT. This is pretty remarkable. But back to Japan, we still haven't gone as far as Japan. I mean,

they've been buying equity e t F for a decade now. Um, So there's still some unusual tools that the FED hasn't even come close to using here. But again I think they're they're doing whatever it takes for now. There's still things kind of in that in that bag of tools that the FED could bring out, but for now, it looks like they've done a really nice job restoring order to the market. But bottom line, we don't want to

become Japan. This is not the model that everybody Okay, no, we don't, um, but it hasn't been a the disaster that I think it's it's made out to be, and in fact, a low growth, low and play an environment it does punish favors, but it's actually been a good environment for both stocks and bonds. If you think about it over the last number of years until very recently. All Right, we're gonna leave it there. Thank you so much.

We really appreciate your time. Emily Rowland is co chief investment strategist for John Hancock Investment Management, joining us on the phone from Boston. We hope you have a safe and healthy and hopefully RESTful weekend. I think we can all use a couple of days to kind of catch our breath, Carol, as we look around and uh, get through this week, which really was something. Thanks for listening to Bloomberg Business Week. You can subscribe to the podcast

on iTunes, SoundCloud, or Bloomberg dot com. You can also listen to our radio show every weekday at two pm Eastern only on Bloomberg Radio