Teremana Tequila: A Record Breaking First Year

tomorrow is Sinko to Mile, a big day. We're the tequila business, so we are very fortunate today to be able to talk about the tequila business, in the spirits business. And welcome Jenna Facton, co founder of Tara Montic Tequila. Jenna, thanks so much for joining us here talk to us about your tequila and the brand. It's great to meet you guys and chat with you today. Yeah, the care amount of tequila we launched right when the pandemic was starting.

We launched towards the end of March. And as an entrepreneur, you're in a situation where you think, wow, what do you do now? But our business partner, partner and Fearless founder GWayne, we call him dj Um. He said he you know, he he had been working on this and then wanting to do this for years. He grew up with a family who loved tequila and it was very much for him, UM one of those things that was about bringing people together, whether it was good times or bad.

He said, in his family, like if um, someone had just gotten a promotion, the family would crack open the tequila and have a drink. But also if you know someone unfortunately passed away, they brought them together as well. And so he said, you know what, let's just go

at it in a really soft, quiet manner. UM. But obviously anything but happened, and the consumer just really lashed onto Tara Monta tequila UM for many different reasons during the pandemic, and we had an incredible record breaking first year. Well our director Ken Fellow, who says it's very smooth, He says, it's it's quite good. I haven't had a chance to try it yet, but I love tequila and I love the rock. What's it like working with DJ?

He's so committed to everything that he does. I don't know if that would drive you crazy or if it's a benefit. Who doesn't love him? What you see is really what you get. He is so interested in the business and he was really committed to say, I want to understand it, I want to find out about it before I do anything, and I want to do it the right way, and so it it doesn't drive you crazy. You just have such incredible appreciation for someone who is

so busy, but he is. You feel like he's constantly working on the terremount of business and he ensured that he went down to Mexico really studied it. Um worked really closely with our Mexican family partners to develop this. He is all in and he's engaged every single day. Jenna, I'd love to get a sense of you know, this years industry for you guys launching right in mid of a pandemic. Good planning there, but the spirits industry just really took off in for obvious reasons. I guess then

you're going up against Clooney, Yeah, exactly. How do you think about the business kind of going forward? Yeah, it's really interesting. You're totally right. Spirits was up over in the last year. Um. What's interesting is tequila dollar sales were up over fifty three in the last year. So this there's just this real shift and consumer behavior away from say the older spirits such as vodka into something that is more flavorable and interesting, and consumers really are

carrying about providence and how something's made. And I think for us, for Tara Mona, that is we're really excited about that because when people ask questions about it, we have just such a really authentic, handcrafted story. Um that really people excite people. And of course, um, there's a new campaign. I've seen Dwyane make guawk on his Instagram account and and now that a restaurants are reopening, you have a campaign where you get people involved in social

and you pay them back for their avocado dip. Yeah. Obviously during the pandemic, it was a conversation constantly with DJ and the team, and he was saying, how do we help out when hospitality is such an important part of our economy And so we all felt like the time was right to really encourage people to come back into their restaurants however they safely, however they feel safe about it, whether it's take out, dine in, dine outside.

And so he said, let's let's go at this really hard, use his incredible social media reach that your reference um to encourage people to go out there. So um, right now, it was started May one, and everyone can still take advantage of it through Sko to Mayo, which is tomorrow through May fifth. Um and they go out to any restaurant that serves Tara Mona Tequila, they order a tamana and they will get their guacamali reimbursed by the Rocks.

Or take a picture on the Rock. You take a picture eating your guawk drinking your terramana, post it on Glack on the Rock dot com and Dwayne pays you back for your guac order. Fascinating business and we wish you, of course, the best of luck. Jennafagnen there Um co founded ter Mona Taramana Tequila with Dwayne the Rock Johnson. I've been making his pancake recipe, which I also found on Instagram. Let's continue our discussion of the cryptocurrency market.

I guess today you could sum it up on the word of volatility. I'm looking at Bitcoin. It's off four percent today. Bucks now trades at four thousand, five hundred dollars. Yet, when I got over to Etherem symbol uh tickers x eat Etherium Ethereum, thank you very much. Ethereum setting all time high again today. Matt Up another thirty four points thirty three thowy two. So going both ways here, let's get a clear view of what is going on. We

welcome Gregg King, CEO of Osprey Funds. So, Greg, when you see divergence in the crypto market like we see today with Ethereum and Bitcoin, does that tell you anything? Yeah, it tells me that we're in what they're calling all season. So this happened last time around, the big bull run with Bitcoin, bitcoins, the biggest, you know, the oldest crypto, that's what most people think of when they think about

crypto UM, and it leads the way. It's led the way this time in this bull market where it crossed its all time previous all time high that had been in place for about a thousand days in background Thanksgiving Um. But I think it's it's giving up leadership to Ethereum, the second biggest crypto out there and all the other coins that people like to call all coins um, and

I think the reasons for that are legitimate. Ethereum is the backbone for DFI, for n f T S, for a lot of the innovation that's happening in the crypto space, and people are coming to recognize that the fact that people like Mark Cuban are tweeting about it, that that helps the drive awareness as well. So it doesn't surprise me to see that divergence. And frankly I liked it because it's uh um. It shows that crypto is not just one big monolithic block. There's different things going on.

Bitcoin is one thing, Etherium is another, and it goes on from there. You know, it's quite cool um the diversity and there are different use cases and they're set up differently. Ethereum doesn't have the scarcity that bitcoin does, right bitcoin um no more than twenty one million bitcoins will ever be mined, but there's no cap on ethereum.

Does that make it worth less? Well, it's just about the rate of that inflation, which I think the way they've set it up is done somewhat reasonably, and it's it's really about the supply demand dynamic and whether uh supply of coins would outstrip demand, in which case that

would of course be problematic for the price overall. But with the potential use cases for ethereum starting to um, you know, just thinking back through or four years, these were twinkles in the eye of a lot of people, a lot of people talked about a lot of ideas, but now these are real projects and real values being exchanged and traded. In the DeFi space, you have the whole non fungible tokens n f T s or people

are trading around digital arts and things like that. So they're actually use cases and and many of them, most of them are built on the Ethereum network. I gotta say to me, n f T S makes even less sense than coin. I mean, why do I care if you buy the n f T of a Lebron Dunk whatever that is. When I can watch the Lebron Dunk on YouTube all day long for free, I can't get

my head around it. Yeah, I'm started with you on that one, um, But but don't mistake that for kind of the only potential outcome for what an n f T is. Right. N f T just means a non fungible token. It means there's a finite supply of them,

and they represent certain things. So if you're tokenizing real estate, if you're tokenizing other assets that need a better way to be exchanged digitally and trustlessly, those two would be n f T s. So so I'm sort of with you on on you know, token izing random movie clip or something. I was never a baseball card collector either or an art collector, but you know, different strokes or

different folks. So I think that's the one of the easier applications UM to kind of gain some foothold in the retail mindset, especially when you have sports stars and and all those kinds of celebrities endorsing them. So greg A to get a sense of who's buying these things when we talk about bitcoin or ethereum, is it. Yeah, I'd love to get a sense of retail versus more institutional What what do you know about that? Well, again,

it's sort of cascades down. I think Bitcoin at this point is really getting a serious look by a lot of institutional investors. We don't have to you know, look very far to see, you know, whether it's announcements by insurance companies or Fortune five companies that are putting it on balance sheet. Uh. Bitcoin is is moving definitely into

the institutional space, as is ethereum. I think where UM retail investors are more involved is around the byproducts UM of these other tokens and f t s and things like that. But again, even that space is sort of barbelled, right, because you'll have um, let's call them retail investors, just just self starters, people who are digging around the space

and understand this and are following what's going on. But you also have extremely smart money, uh Silicon Valley vcs that are buying up some of these assets as well, So you really have it's kind of the middle of the spectrum. The more cautious, the kind of the pension funds, uh, the institutional investors that are managing public money, mutual funds, those types, those are the people that I think are

going to be last to participate. It's funny, you know, last week the European Investment Bank issued its first digital bond on ethereum, and it's so I mean, at this point, um, no one cares. Right. That would have ten years ago that would have been headlines galore. We would have been covering a wall to wall for a week. It would have been just insane to think about. And now it seems so normal when the European Investment Bank issues a digital bond on ethereum that it doesn't no one bats

an eyebrow. So the question is does this become is this just normal part of life now or does it go away? Does it become I hate to say the toolip fad because that didn't even really happen that way, But does it does it become a big bubble that we all regret like Bill Bottoms in ten years. No, No, no chance of that happening. In my opinion. Um, this is this is here to stay. It's just a question of how much is it going to continue to morph

and evolve. Take Ethereum for example, it's it's basically software, right, So for the European Central Bank to say we're issuing a bond digitally, nobody would care about that. The question is just who owns the software? You know? So maybe they in the prior world they would use IBM software. Now they're using a decentralized software that we call etherium. So I think it is getting normalized and I think

that's a good thing. Alright, Very cool to have some time with you, Greg, Thanks so much for joining us. He is the chief executive officer of Osprey Funds talking to us about digital currencies, digital networks just becoming a normal way of doing business. This is bloom work. Let's bring in Ira Jersey's our chief US rate strategist at Bloomberg Intelligence and ira UM. Today we're actually seeing some bond buying at least in the tenure right now, the

yield down to one fifty six fifty eight. But I saw an interesting story on the terminal when I woke up this morning that the Treasury has quadrupled the amount of money it's gonna need this month in order to pay for the stimulus to over a trillion dollars. Are we going to see mad issuance UM? So, no, is the simple answer, and and that that's from their original estimate back in February that the market was expecting pretty

close to what they announced. They announced the net borrowing of four hundred and sixty three billion dollars for for the current UM fiscal quarter, and that was compared to our four seventy five, and a lot of other people had four hundred four five. So it's right in the range of what most of us were expecting, you know, after we got the one point nine trillion dollar fiscal statement.

So ironically, the Treasury Department is still issuing so much debt um that they probably won't have to um increase any of their UM any of their coupon issuance right now, probably for the next year, and believe it or not, next year they might actually be able to cut it, which is something that maybe a lot of people didn't

think was possible just a couple of months ago. Alright, you know, the discussion that we're hearing in the marketplace here is centering around inflation more and more, and the concerns are, Okay, we see inflation whether we look at commodities or you know, other parts of uh, the economy. The question simply is is it transitory as per Federal Reserve Chairman Pow or is it something more? What are

you looking at to get a feel for that? Yeah, so I'm looking deeply at some of the components of the consumer Price Index and the PC deflator, which are the two kind of primary consumer price gages that that we look at. And what you see is your right ball.

You see things like goods prices going up. I mean, you just saw that we have a record trade deficit, right, Those numbers came out just a few minutes ago, and that suggests that you know, we are importing a lot, but those are goods, right, and in the US, only about of what we spend money on our goods. It's just that there are prices that you see when you go into a food store, you go to Staples, or you go to you know, home depot, or you go to your mom and pop shop at the corner, so

you see those prices regularly. But we consume services and and a lot of those services are not provided by big companies that are gonna have earnings calls and talk about how their import input prices are going up. So so it's the mom and pop places that I think where we miss a lot in the financial markets that

are going to be holding inflation down. So you look at at core services, so that services excluding energy and food, and inflation there has halved what it was in so you're talking about a really big slowdown in price growth of services, whereas goods prices have gone significantly higher. So so this this dynamic, if it, if it persists, is going to be um, you know, maybe keep inflation lower

than than the market is currently expecting. That's fascinating. I mean, listen, Paul and I have had a number of guests on recently, IRA from the northeast and UM from the south as well. I think someone from Myrtle Beach in a hotel, somebody in a restaurant chain in Florida. They all told us they can't get employees. So clearly a lot of those services haven't opened up yet, right, They haven't opened back

up yet, um. And I wonder if those figures will hold once they finally convince people, you know, the unemployment benefits run out in September UM to come to come into work. And if they're gonna have to pay them more to do that, then they're gonna have to raise prices, won't they. Well, they probably will, and and maybe compressed their margins a little bit to keep those prices competitive. I think it's it's not a or will we get inflation that gets to two percent for an extended period

of time. I think, like you mentioned it, it's a matter of timing, right, So if we can't open back up until October. But but remember it's not just all of a sudden week flick a switch and everyone gets rehired on October one because unemployment benefits went out. Right now,

it takes you six months to ramp up. You have to train these people you now have, you know, maybe new staff that weren't with you before and then so, so it's a matter of how long it takes for those services prices and and the input prices for services to feed through, which is all wages. By the way, it's wages is the only thing that really matters for for service prices. Um. So, So I can see it in say three US getting to a sustained two wish

percent inflation level. But that means for the FED is that they can they'll be able to afford to be patient until we see um that sustained two wish percent wage UH inflation growth, because you have UH sustained wage growth and that takes a long time defeat through the system. Um and and but I think it will. It's just a matter of you know, are we getting a little ahead of ourselves here thinking that we're going to have

three percent inflation for the next two years? I don't think. So. We didn't get to talk about the fourth May, the fourth May, the fourth peak with you always just just here a podcast. You're talking about star Wars. Yeah, we're talking about Star Wars. We're streaming. We talked about streaming with Ethan Rogan often about from b I about the future of streaming, and then I get on a nerd out with a couple of my other BI colleagues talking

about the Star Wars franchise of great stuff. For me, the first three movies are the only ones still, the only ones that I really enjoy. I don't know if have you have you not seen? Have you not seen Rogue One? Rogue One is I have, but it's not Empire. Don't get in any case. In any case, uh, Ira, thanks very much. I'm gonna check out the podcast as well. You can get that on SoundCloud or anywhere that you listen to find your your podcast. Ira Jersey is our

chief US rate strategists. This is Bloomberg. Well, this US economy is certainly beginning the reopening phase. We're starting to see that in a lot of the economic data come out in terms of durable goods orders, in terms of personal income. Uh and certainly the Federal Reserve is doing its part as well as fiscal stidulus that's gonna lay

of the land of this economy. We do that with the Edward Price, former British trade official and current political economy adjunct professor at n y U. Edward thanks so much for joining us here Again. The Fed met last week talking about continued lower for longer, but there are some persistent concerns creeping into this marketplace about inflation and that it might not be as transitory as the FED believes. What's your view there, thanks, guys. So honestly, I have

absolutely no idea. I'm confused, right, I'm confused, and I think that's because the FED wants me to be confused and wants us to be confused. You're right to point

to that contradiction. Um. And what's happening is we're seeing this incredible shift in money terry policy, add the FED towards this new approach called the Flexible Average Inflation targeting or FAITH right now, you know, you read through and you look at it, and it says FATE is a commitment to let inflation actually run above target before rate hikes, which is a big change from from the forecasting culture, a big change in the practice of economics. Um, and

maybe something that sounds sensible. But look, I said, I'm confused. Why. Well, it's also very strange because FATE redefines the two percent inflation target as an average, right, So how do you do that? You say, if inflation is below two percent in any first period, it should be above two percent

in any second period. UM. Now, apart from the fact that that kind of moves away from the stable prices fixation that central banks have had from years, it's also very very vague, and that means, I think, in my opinion, the policy is a deliberate injection of uncertainty. Nobody knows how long that second period will be. Are we looking at data that suggests the recovery or are we looking at this framework. It's it's really not clear. Well, and this takes us back to it wasn't long ago that

there was no inflation target, right. That uncertainty has been with the FED forever. That's right, and we've done almost too well on for guidance. And I think the problem now is that fate may well end up pitting the credibility of the FED against its mandate, right, or at least against one part of the FED mandate, which is

the aforementioned stable prices UM. So you know thought experiment, right, Let's say the FED does achieve something like two percent for whatever a sustained period means, and you're right to say, look, we're already seeing some inflation, but maybe that's superficial. So let's say we get into this good place that fate

suggests we can. That good place is where the problems start because, on the one hand, right the FED has to say, look, we promised to run above two percent to some period, so now we have to run above two percent to keep our promise. Um. That protects your credibility, but it damages stable prices. Now, on the other hand, if the FED says, oh, look, just kidding, we've achieved two percent, maybe it's time to abandon fate. Maybe it's time to start thinking about the future rate hikes. That

protects they will prices, but it damagees credibility. UM. So that's the fork in the word I'm talking about. That's why I'm confused. All right. It's fascinating, to say the least. And it just takes me back to Ben Bernankee. If you remember ten years ago, was on sixty Minutes and he said we're not worried about inflation. We can deal with that, no problem, and everyone seems to take him at his word on that. I'm sure they can deal

with it. But the no problem part is, um is the part I think that you have to think about. Kenneth fed easily tackle inflation if it comes on too strong, and then you know what happens to the markets. So yes, the fight contacted inflation is it wants to um, it can it can do what Paul Folker did famously, right, But if it does that, that's going to rail exactly against everything that it's been saying it wants to do, particularly with the labor markets. So you know, Banankee was

very calm, infident. You had a lot of reasons to be very confident at that time. Um, But there's always an element of uncertainty. And I think if you look at what Powell was saying at Jackson Hole recently, there's more of a confession as to uncertainty. So that makes the fact that fate is a departure from Ford guidance.

If I was being cheeky, I might describe it as Ford misguidance very very interesting, right, Yeah, it's very interesting that the central bankers have to introduce some kind of uncertainty. And you know the other famous meme in central banking is, of course married druggies. Whatever it takes, that was right, that was Ford guidance, that was confident. But that's because Gergi didn't think he was going to have to back

out of it. Right. He was promising not just right, he was promising not just a large scale of minitary intervention, but also a direction. So you know, last week Pal said something like, as long as it takes um Ford guidance isn't dead in the sense that he's still promising the conditions. But at the same time, he's not going to tell you when he's going to stop. Edward, it wasn't long enough. I hope I can't get you on

for longer next time you join us. Edward Price, former British trade official, currently a political economy adjunct at n y U. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews of Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller three. On Fall Sweeney, I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio.