From the heart of where innovation, money and power collive in Silicon Valley and beyond. This is Bloomberg technology with Emily Jay. I met Ludlow in New York in Family Chang this is Bloomberg technology. Coming up in the next hour Bloomberg's conversation with Microsoft's CEO Sacha Adela and Linkedin CEO Ryan Ross Lanski, about monitoring productivity and why Nodela is so confident about approval from Microsoft's acquisition of activision.
Blizzard plus Mark Benioff is throwing dream force the biggest convention to hit San Francisco since the pandemic began. The Bloomberg Tech team was also on site and asked Benni off about his future at salesforce and the economy and impossible foods joins the climate pledge to reduce combon emissions to net zero by I'll ask CEO Pete McGuinness about the role his company's playing in the global warming battle. We'll get to that in a moment, but first let's get a look at the markets. And we had a
tech tumble following Wednesday's fed rate rice. Joining us all to break it all down. Bloomberg's Katie Gryfeld. Hi Katie, hi, and well, I have good news and bad news. The good news is that I think we're on set together for the first time ever, so that's huge. The bad news is that it was a terrible day in the stock market. Like you said, that hangover from the Fed on Wednesday continued. You could see it in the NAZAC one hundred, those big tech stocks at index falling over
one percent. Chips also taking a beating out, underperforming down almost three percent, and it was the riskier parts of the market that really took it on the chin the most of you look at these unprofitable tech basket down almost five percent today. All this coming in a backdrop of higher and getting higher treasury yields. You'll of the two year treasury yield right there, raising another seven basis points. Is traitor suggest to an ever more hawkish fed. And
let's look what that relationship looks like. If you look at the two year yield versus stocks, you're looking against the SMP five hundred. You can see that. For a while actually these two were rising together, but now is that two year treasury yield continues and continues to climb. You're starting to see that reevaluation going on in the broader stock market and the SP five hundred nearing its
lows from earlier in the summer. But let's talk about some of the specific single names you have on the board here. Some of the travel names taking a beating today. We're talking about expedia and AIRBNB, bulls falling as recession fears continue to build. You did see alphabet shares rise a little bit and activision blizzard, like you were saying, at Microsoft saying that they're still confident that that purchase will go through. All right, let's walk a little bit
about more about that now. Thanks, Katie. Employee say they're productive at work, but leaders say they're not so sure. This according to new data released by Microsoft and linked in. Microsoft is also releasing a new suite of productivity tools to facilitate better interaction between workers and their bosses to combat what Microsoft CEO sat in Adel Calls the productivity paranoia paradox. Bloomberg's Emily Chang spoke with him about all this and more, along with Linkedin CEO Ryan Ross Lanski,
on Wednesday. Take listen to what they had to say. This productivity paranoia, as we describe it. It's one of the things that's emerging where the managers and the leaders think that their employees are not productive, as employees feel that they're being very productive and in many cases even feel burned out. So I think one of the most important things for us in this new world of work and hybrid work is to bridge this paradox in some sense, because we have to figure out because both sides need
the same thing. Employees feel that they are thriving and they need to thrive. That means they need to really feel a sense of empowerment, they need to have that sense of energy to do meaningful work. And, after all, as a leader and as a manager, what do you need? You need your employees to thrive. So I think we need both new soft skills and managerial skills to make that happen, but you also absolutely need new tools. Now, Ryan, Microsoft,
speaking of those tools, is offering several products. You've got viva goals to help align workers with the business, Viva pulse to get a better sense of how employees are feeling. There's engaged, there's amplified to encourage interaction and communication. How do you think these tools, Ryan, are unique to the
products that are already out there. Well, I think you know, on on the via side, at the end of the day, if you want the productive workforce, the most important thing, first and foremost is that you empower the individual to be productive. Secondly, do you understand that an individ vidual doesn't work alone? They need to collaborate, so ensuring they
have the tools to collaborate as well. And on the end, now a new really important skill managers need is to ensure the well being of their employees and I think a lot of the Viva suite brings that together. Then obviously we're able to leverage a lot of what we see on Linkedin to help inform that. There is a ton of uncertainty obviously happening in the world. You know, the last time, I think we spoke and maybe eighteen months ago, we were seeing across the linkedin data an
unprecedented amount of movement happening in the labor market. We saw employees everywhere not only questioning how and where they work, but why they work, and it was leading to what we call the great reshuffle. We're actually seeing that now start to come down a little bit. Actually, for the first time in eighteen months, the year. Your trend and people changing jobs on Linkedin is flat. So things are starting to settle right now, but it's entering into a
new period of uncertainty. SATIA, in the early days of the pandemic, you expressed your concerns that we were burning social capital by spending so much time away from the office. Are you finding now, I'm curious about your personal experience, are you finding now that you were right, that that this has come at a cost to social capital and that needs to be rebuilt? Yeah, no, there's no question
that Um, social capital needs to be rebuilt. But the one thing, emily, I think we all also learned is how to build social capital in a variety of ways. One of the things, even during the pandemic, I personally learned is I met more people. For example, on a team's call, I would click on the profile of every person in the meeting learned so much more about them. Uh, and now when I see them in person, I know that I feel like I know them much more deeply.
So I think I picked up a new skill of how to build social capital and that's going to remain
with us. But to your other point, even in fact, one of the data points that in the work trends index we talked about, is people come to work for other people, not because of some policy, and so that, I think, should teach us as leaders something which is you, as a leader now should develop the soft skill to create, essentially those events which allow you to bring people together with other people in order to be able to accomplish
things that are important for your workplace. So to me, I think that social capital will always be important and I think we have learned maybe some new skills and some of the old skills that were there. I think I'm going to be really, really learned by all of us and exercised in different ways about depending on the team. There's a big debate happening right now about remote work surveillance, or at least that's what the critics call it, satia.
What's your point of view on companies that think they need to track their employees through technology and whether Microsoft's products or tools should enable that? No, first of all, I think any product, including all of our products, have to be built ensuring that privacy, privacy regulation, privacy laws by country are all built right into the product. So let's start with that. But if you sort of say what are all these tools for? Ultimately, for the business?
These tools are about really helping their employees thrive, because the only way of business is successful and productive is if employees feel that sense of empowerment, that sense of energy and connection for the company's mission and are doing meaningful work. And so to me it's not about surveillance, it's more about helping employees thrive. That needs to be the goal, goal of even using these tools. Satya, inflation is at a record high. We heard Ryan mentioned the
word uncertainty several times. One of your executives recently at a Goldmen conference, said it's the most uncertain economic environment we've seen in decades. How would you describe the level of uncertainty you are seeing right now and how that's impacting your outlook? Yeah, I mean the constraints are real. Um, you know, inflation, Um is definitely all around us, uh, and different parts of the world have different type of economic growth, but the constraints, I think, are being felt
by everyone. So to me, I always go back emily to the point that in an uncertain time, in an inflationary time, software is the deflationary force. So to me, staying super focused as a company ensuring that our customers are able to do more with less. I think is going to be the key thing that we have to accomplish in the quarters ahead. So, in terms of outlook, I am optimistic about Microsoft's value proposition helping our customers. I'm optimistic about our share, but we're not immune from
anything that is a macroeconomic headwind. But we go into this with knowing that fully well that the digital skills we have, the digital products we have and software fundamentally is probably going to be the most useful tool that will help us tame inflation where because it's a deflationary force. So Tim Cook told me apple is going to be more deliberate about spending as the macro economic crisis continues.
How would you describe Microsoft's strategy and if you are going to be more conservative, how much longer do you plan to be more conservative? Yeah, I mean two points. One is we've grown a lot in the sense in last year we grew seventy plus thousand people joined Microsoft. So I do think we are going to be more deliberate. When I said what does that deliberate mean? It means
wherever we need to grow, we will grow. Where we need to be more productive, which is everywhere, we will be also, in fact, taking the same medicine, which is
doing more with less. So I think it's a great opportunity, quite frankly, for us at Microsoft to practice what we preach, which is to be able to make sure that we take the seventy people, make them feel part of Microsoft's purpose and mission, really help us improve our culture because of all the things that they can contribute to our workplace. And then, of course, we have many businesses that are
really doing super well and we'll continue to grow. But we will also be looking at what the macroeconomic situation is. But I feel very confident that between the productivity gains as well as the growth we will have, we'll be able to navigate the waters. Bryan, tech stocks have taken a beating. You know, Microsoft, as as Satia said, has not been immune to this. This is a key way that tech companies have retained their employees by the the the attraction of equity. How do you see Microsoft and
other companies coping with this? It's really about attracting people who align with the mission and vision of what it is you're trying to build. You think about Linkedin when we build great products, people get jobs, they start companies,
they learn new skills. We sit at the intersection of what I call doing good and doing well and that's a very empowering thing to our employees who want to come and work on something like Linkedin that can have such an amazing, uh and productive and, uh you know,
valuable impact on professionals globally. So I see you know we recently just reiterated and revisited uh and enhanced our culture and guys of our company to ensure that we have the right foundation to attract the right employees moving forward. But again, I just really feel this strong move in the world towards uh culture and values being more important than it ever has, especially to attract the right talent your company. So, Satia, one more on this and then
we'll move on. But you know, we know Microsoft won't be filling some open roles. You've already said that you're eliminating some contractor positions, but give us a sense of the scope. Well, some of the key priorities like Azure or security be impacted? No, I mean our core businesses were of Microsoft cloud, whether security or our infrastructure, data and AI businesses, which is what predominantly is represented in Asia or Microsoft. Five, our dynamics. Six. Five. These are
massive growth businesses on a very large base. So there's going to be growth all around them, but it's all going to be about what roles have to grow. As I said, our job nuvel one is to make sure that the growth we've had is all sort of landing in a very productive way to drive the business is going forward. Even when it comes to our consumer businesses,
we want we know that. You know with windows and with our PC there was definitely a pull forward, but we just launched a new release of windows eleven because at some level now it's about being able to take that one plus billion installed base and making the experience better. So we have some fantastic opportunities. There are browsers growing share, our gamings growing share, so we're going to double down. Obviously,
Ryan talked about Linkedin. Again, we're not immune to the macroeconomic headwinds, but in every one of the businesses there are pockets of growth and that's where we will double down. And you know, since you're joining us from London, on a slightly different topic, I have to ask you know, Microsoft seemed to be expecting more regulatory scrutiny of the activision deal in the UK, but they've just said they're going to escalate their investigation. Have you been surprised by
the level of concern that regulators there have expressed? When I look at that, fundamentally we think that are sort of entry for us in gaming. We have one goal, which is to bring more games to more gamers on all platforms and provide more choice for publishers everywhere and developers everywhere. Uh, and so everything that we're doing with our content, with our sub our cloud and community really is about driving that choice and that opportunity, and so
we feel very, very confident. Of course, any acquisition of the size will go through scrutiny, but we feel very, very confident that will come out. You know, we are number four, number five, depending on how you count, in gaming. In fact, the number one player, in this case Sony, I think, even in this period, has acquired three companies. So if this is about competition, let us have competition.
That was Microsoft CEO sat in Nodella and Linkedin CEO Ryan Ris Lanski, speaking with our very own Emily Chang coming up. Millions of people turned to twitch daily to watch live stream videos. That includes predators exploiting kids through the site. Will share more that my colleagues investigation into which this is Bloomberg and eye opening. Bloomberg report is
shedding light on some dangers on the popular livestream platform twitch. Twitch, which is owned by Amazon and touts thirty one million daily visitors, is one of the most popular platforms for Gamers. Bloomberg reported that a network of child predators have used the platform to track children. Bloomberg Cecilia Denastasio, covers the video game industry and broke this story. Cecilia, what did you learn in the course of your reporting? Twitch says
it doesn't allow children under thirteen to use the platform. However, unlike streaming competitors, there are relatively few barriers preventing children from getting on the APP. Bloomberg found that there are people out there, over two thousand of them, who stramatically follow accounts that seem to belong to children on the platform, and around two dred and eighty thousand accounts that apparently belong to children were targeted this way, according to our research.
Sec I want to bring up the statement from the company, from twitch, and I'll read it to you. Preventing child harm is one of our most fundamental responsibilities as a society. We do not allow children under thirteen to use twitch and preventing our service from being used for harm is
one of our biggest priorities. We know that online platforms can be used to cause harm to children and we have made extensive investments over the last two years to better stay ahead of bad actors and prevent any users who maybe under thirteen from accessing twitch. So they underline the policy, which is no one under the age of thirteen can use the platform. What do we know about how twitch moderates that monitors the use of the platform?
Sure so. Twitch is a live streaming platform and, unlike platforms like youtube, where videos are recorded, it's very challenging to moderate live video because it's happening in real time, especially for child sexual abuse material Um. Twitch is figuring out solutions to a problem on the fly, and it's a problem that not a lot of other platforms face at the scale that twitch does, and so twitch has quadrupled its Law Enforcement Response Team over the last two years.
Twitch has done a lot of resources into preventing Um children from getting on twitch and from streaming however, Bloomberg's report has found that these solutions have fallen short and the problem has been exacerbated over the pandemic exaspected over the pandemic this this is an issue that we've covered in the show. Across the industry, social media platforms, online platforms generally speaking, what are regulators doing, I suppose at
federal level, to tackle this issue? It's a very challenging issue to tackle. One thing that is being paid at ten shoot attention to right now, of course, is advertising to children on these platforms. There's a lot of resources being dedicated to preventing children from UM receiving messages from companies when they are not age appropriate to receive those messages.
When it comes to moderation, it's a multi pronged issue that is highly technical and a lot of the time tech companies are the ones left in charge of moderating their own platforms. Your pole is out. What happens next?
What's the response? The response has been very large from the twitch community Um and from people who, you know, watch their favorite gamers livestream on the platform, and some of these gamers themselves have commented that this Um, that this is unacceptable for the company Um, through which they make a living. However, twitch itself has not made a move to change some of the features that have enabled predators to find and target children on the platform, so
it's to be seen whether that will happen. All Right, Bloomberg, Cecilia Denis Sassio, thank you. Meta platforms has been sued for Skirting Apple Privacy rules in a proposed class action lawsuit filed in San Francisco Federal Court to facebook. Users claim the company built a secret workaround two apples privacy rules and violated state and federal laws limiting unauthorized collection
of personal data. Bloombergs learned that the Securities and Exchange Commission is set to let Wall Street keep payment for order flow deals. According to sources, the practice can involve one brokerage routing retail stock trade orders to another firm for execution rather than onto a brokerage or exchange. Backers say it's led to commission free trading, championed by Robin Hood, but critics question whether the trade is actually get the best price. All this is part of an SEC overhaul
of stock trading rules. Amazon's first Thursday night football game of the season drew an audience of thirteen million viewers. That's according to data from measure measurement firm Nielsen, which suggests that NFL fans across the US could find the game last Thursday. That's despite it not being available on
TV nationwide. Amazon's guaranteeing advertisers it's exclusive coverage will reach more than twelve million viewers per game, but that's down from the sixteen point four million tuning in on Thursday nights last year across Fox, the NFL network and Amazon. Welcome back to Bloomberg Technology. I'm Ed Ludlow in New York. Dream Force is back in San Francisco and it's the biggest convention to hit the tech capital since the pandemic era.
Thousands heading to the annual salesforce conference, including Bloomberg Technologies Emily Chang. She sat down with salesforce chair and CO CEO Mark Nil Stalk about his next steps. To have forty folks here in San Francisco in the new mascony center is beautiful. Every hotel is sold out from here to San Jose. Every AIRBNB is sold out. It's amazing and they're all having such a good time and and learning about technology. And learning about how to connect with
our customers in a new way using sales worth. We're gonna talk a little bit about the state of the city in a moment. At first, you announced new profitability goals yesterday, long term profitability, aiming for adjusted operating margin in what makes you feel so ambitious in a downturn? Well, you probably saw this quarter we delivered seven point seven billion. It was larger than in an S A P, a
company that you know we both admire so greatly. But now we're the largest enterprise APPS company in the in the world. That's very exciting, and so we have the highest revenue and now we want to have very strong margins and we've taking a goal that when we get to fifty billion, which is right around the corner, we will have operating margin. So you're also doing these carbon offsets, which is fairly unique, more net zero offerings. Do you see this as philanthropy or do you see real revenue
generated from the carbon accounting market? Well, I think that when you think about a modern business today, you have to have great revenue, you have to have a great margin. You also have to look at your overall capital allocation. We're buying back ten billion dollars of our stock. We just promoted our lead director, Robin Washington. But when you think about the values of a company today, trust, customer success, Innovation, quality. We've spoken about all of those emily for a decade
or more. Now we're talking about sustainability. Everybody has a personal story about the environment. Everybody knows what's happening. So every company needs to go net zero, and so we have a new net zero cloud, we have a net zero market play, we have the ability to help all of our customers go net zero. This is extremely important and we even started, you know, our trillion tree program one t dot Org. We made phenomenal progresses. Is Very
important that we get a trillion trees. We need to sequester two gigatons of carbon and we need to energize an EGO Preneura Revolution. And we can do all that and we are doing it here at dream. Worse meantime, the economy is in a major slop. You've got record inflation, rising rate hikes and ongoing war. How concerned are you about the outlook and your level of uncertainty? What do you see? Well, what I see is that we just
went through a pandemic. Uh, and, I know we talked a lot during the pandemic for a couple of years and it was tough for a lot of folks, including me and you were at home a lot of the time trying to run our daily businesses and make things happen, and the government invested a lot into the market. And now we're coming out of the pandemic and I think those e commerce charts that we see a lot are great metaphors, you know, the ones that go like in
the pandemic, out of the pandemic. But if you connect e commerce from ten years ago to today, the chart is still quite up until the right. It's just that you had two years in the pandemic. So I think the economy is normalizing, the world is normalizing, currencies are quite aggressively fluctuating. We've been talking about that since May and uh, I think, look, what do I know? This is my first pandemic, but in the future I know that after a pandemic you're gonna have some adjustment period.
Meta and Google are just the latest companies cutting jobs. I spoke to Tim Cook. He said apple is going to be more deliberate about spending. Adela just told me today we're going to do more with less. I know sales force slowed hiring a bit earlier in the year, but are you expecting any job cuts or cost cuts? What's your strategy to navigate them? I think what you're seeing for all of these companies, including ours, as we all invested aggressively in the last two years and we
are absorbing those investments into our businesses now. So we have a lot online and moving forward and we need to enable that and energize it and motivate it. So you're right, we did slow slightly our hiring, but do I see other changes? You know, who knows what's going to happen? Is Not certainly not our intention. Our intention is to continue to get the fifty billion dollars in revenue by F Y last year we did twenty six billion.
This year we're gonna do thirty one billion and by fiscal year twenty six, we want to do fifty billion. You're Cocyo, Brett Taylor's chair of twitter. I know he's probably been a living little busy with that. I saw probably a little. I saw you in Brent on stage and bunny years. Yes, I want to know how it's going like? How is it going to have a co CEO? Are you spending a little less time on the day to day now that he's here? Well, as you know, I love Brett. I've loved him for a long time.
We've had a great relationship, a multi decade relationship. When he's started his company, I invested in it. I always wanted to acquire it. We're so lucky. We did acquire it and I moved him up slowly on the company, Chief Product Officer, Chief Operating Officer, now co CEO. I think we've got a fantastic leader of the company. Look, you have to understand these are big jobs. CEO, these CEOS,
I know them all. There's no s under here. If I take my shirt off and I'm just skin and bones, there's no s and I think that having a partner like Brett Taylor to help me is incredible and I could not be more grateful. Yeah, it's so much value and it's so impressive in a work are you going to be doing this co CEO thing? Well, as long as you know. Everybody wants me to do it. So far it seems to be working. You're giving another huge education grant. This is the Tenth Year of it. I
actually interviewed you, I believe, the very first year. You were very skeptical. You're like, there's no way you're going to do this for ten years, and we did it. We're given over a hundred million dollars toward San Francisco and Oakland public schools. This has been very important for them, especially as our exiting the pandemic. They're getting another million. This is not the end of the program it's set
up to go in perpetuity. Very exciting the state of the US education system right now and is the government doing enough? I think that our public education system has to be at the top of every leader's mind and you cannot delegate it to the government. You as a CEO or as a business leader or in another part of your organization. You need to go down to your local public school three blocks away from your house. You know where yours is, knock on the door, introduce yourself
to the principle and say how can I help? I built a new playground. Partner Harris painted the buildings. You know, we installed technology, we did volunteerism and mentorship. Everybody can do something. We cannot do everything. Companies have a lot of resources. We have some of the best, most exciting companies in the country. These companies need to be supporting our local public schools and also our local public hospitals. You know we've done a lot with UCS AF here
in San Francisco and public parks as well. We just open a massive, hundred million dollar public park called tunnel tops. You know that my wife is the chairman of it. It's incredible. These are the things that CEOS and companies should have their eyes on, figure out how to put a light on it, bring their customers in and bring all stakeholders together. That was salesforce chair and co CEO
Mark Benioff, along, of course, with Bloomberg's Emily Chang. You can watch the full interview at Bloomberg Dot Com or on Youtube. Coming up with seeing an exodus of executives at crypto firms. More than that in a moment. This is Bloomberg, time for it to early CRYPTO report. A number of cryptocurrencies, including Bitcoin, and lingering near two year lows. Is the Fed's inflation fight takes a toll on risky assets.
Bloomberg's Katie Greifeld is here to discuss. How are you by the way, I'm so great being on set with you. I thought you were a deep fake for the longest. Well, it's for context of the global audience. I'm visiting from San Francisco, but it's been a long week, the highlight which has been the Fed. Yes, and digital assets essentially did not escape the volatility that we saw across financial markets post fed, not at all. So you actually saw
bitcoin outperform traditional socks a little bit on Thursday. But if you zoom out, and people on twitter will always tell you to zoom out, it's just been a brutal stretch for Bitcoin. Down Fifty eight percent, almost fifty year to date. You compare that to the NASTAC One d these two tend to trade in lock step, but the magnitude of losses and Bitcoin so much greater. The NASAC one hundred down only only in votes, or so y're to date. I'm going to ask you the most question
I can. Whatever happened to bitcoin being an inflation hedge? Well, it's a bit of a tortured answer that I'm going to give you because again, if you posted torturing me, it's torturing the audience. So if you posted a chart of Bitcoin. On twitter everyone will always tell you to zoom out, and that's sort of the answer that I have to give about bitcoin as an inflation hedge. Advocates will still say in the grand fullness of time, it is an inflation hedge when you have central banks really
printing money. Is The answer you would get. I feel that right now we are at the test of that thesis, because now you have central banks around the globe removing stimulus, tightening liquidity, hiking central bank rates. We haven't seen this environment with Bitcoin as a mainstream asset. This has really never happened before, so we're watching that experiment. It's kind of funny because it's the first time in our lifetime at least, where we've had a pandemic but we've also
had inflation. So been a lot, a lot volatility in
digital currencies, digital assets, volatility in the industry. There's been a lot of, you know, well known founders CEOS of some of the more well known crypto related startups departing absolutely of course, the big headline, which this program covered well yesterday, Jesse Palell, the crack and CEO and Co founder, stepping down from the exchange, from that role of course chief operating officer, David Ripley is going to succeed him, but they're just that's just part of a trend that
we're seeing. To your point, of course, Michael Sailor stepping down as micro strategy CEO in August really kicked this off. A few weeks later you had Michael Morrow from Genesis do the same. So it's this interesting moment in the industry where you are seeing a lot of upheople in the C suite, a lot of transition ends. It seems like the face of WHO's actually leading the industry right now is changing. Of course, we do have a lot of stalwarts such as Sam Bankman reads, such as Michael
Novegrad's still in their positions. So it's not completely new, but definitely a time of transition. I'll go to my question, but you know, is somebody that's covered Silicon Valley startups forget, you know, necessarily crypto. A lot of this is like a changing of the God. Right. Sometimes they're pushed out exactly, sometimes they've had enough, sometimes investors get involved. Right. This is a really critical time for the industry. Talk to us kind of about that changing of the God and
the moment. It falls in to your experience to put this in your world covering Silicon Valley. It's hard to transition away from a founder leaving the company, and we are seeing a little bit of that. Of course, it will be really interesting to see where kracking goes from here, because the founder has become really the identity of the company. So it's gonna be interesting to see how the crypto
industry handles this moment. Who's going to step up to the plate and who ultimately continues to hang around in transition? Who becomes sort of the Mark Zuckerberg of the crypto industry in just the sense that he's been there? Hey, real quick, did the merge matter? Merge matter? That's a really good question. It turned. It mattered in that it looks like it turned to sell the news event. Obviously
ether rallied so heavily into the merge. It doesn't much matter for the end experience of your holder of ether. It's going to be important to see whether it does lead to this sort of influx of development in terms of the APPs on the ethereum blockchain. Uh, and we still have a few more tests to go through when it comes to the merge it's not completely over yet, but the bulk of it is out of the way. Did the merge matter? Bloom bows, Katie Roifeld, thank you
very much. At impossible foods to the list of nearly four hundred organizations that pledge this week to make their operations more sustainable. As part of climate week, impossible has joined e commerce giant Amazon's the climate pledge. Each company that signs the pledge commits to taking responsibility for decarbonizing their businesses and reaching net zero by twenty forty. Here with a Bloomberg exclusive interview is impossible food CEO, Peter McGinnis. Peter,
welcome well, thanks to be here. It's a pledge, right, it's a pledge. Fulfill the pledge. How do you make this happen in real, substantive steps? First of all, having the consciousness as a company. Secondly, your business practices. Thirdly,
your business model. So for us, climate has been at the center of impossible from the very, very beginning and if you look, if we sold fifty million pounds of impossible beef um we would, we would avoid one point three billion pounds of C O two, because you're doing a light for like with animal beef with real beef, right, Um, four point five billion gallons of water, thirty seven million trees of fifty million pounds of plant baste beef displacing
the animal prod right. So we're unique in the sense that it's central and core to omission and the better the company does, the more good it does for the planet. So if you put the comparatives to one side, forget animal products, focus on plant how do you improve your performance in that respect? Yeah, it's also how you run your facilities and your distribution network and your supply chain network,
and we all need to do better. Right, whether you're business is inherently better for the planet or not, we can all improve upon our operations over time. We've tech with technology will enable that improvement. Always right. So I always find it's fascinating one of your mission statements or at your core you are a food technology company. What is the technology that makes impossible different from any competitor? There are lots of generic names out there now, right,
making a plant based meat products? Sure, I mean, in the end we have four hund intend patents around how we make our food and I'm not going to get into all four tents, but no, no, no, no, but I mean technology enables us to make great food and we're biased, but we think we have the best plant based food in the market and that is enabled by technology and many, many patterns around that technology and some of our ingredients, like Hem. I want to know how
you grow sales. If I walk down to starbucks, I can, if I'm start in clients, try an impossible breakfast sandwich and it's kind of alongside an animal based products breakfast sandwich. You know, how do you boost sales? Not just through distribution? How do you get those new products in the face of consumers? Yes, so we're tech enabled food company, right. So we also have to behave like a food company.
Were on grocery shelves, were on Menus at restaurants, and so consumers have to understand our food better and why it's better for them and why it's better for the planet. So one piece of it is distribution and accessibility, and we have a lot of room to go. You know, we have four TDPS. We could go up to four thousand. We're in forty locations. We could go up to well
over a hundred thousand locations. So accessibility and distributions a piece of it, but there's low awareness around plant based meat and there's very low understanding of what it is, and I think the category in and of itself has done a pretty lousy job of communicating it and we haven't done a great job either. So look to us to explain it to consumers so that they're more attracted
to it. resums would say, actually, if you look at it, the ingredients, the caloric content, it's not healthy and you know, quote unquote. What would you say to those consumers? Say, well, this isn't not healthy? Yeah, I mean so you're get in that processed argument right, and to me process is a twinkie, okay, and it's artificial ingredients. So we do have many ingredients to improve texture, taste flavor so that it mirrors the animal product, but they're all plant based,
they're natural. So I think the definition of processed is another thing that's misunderstood and there's a lot of myths around it and that needs to be directly communicated and cleared up. We talked about the relationship with starbucks. You have a relationship with Burger King and you've tried other products kind of broader change. Yes, some of them have not. Stock what's your assessment of that? Now we've we haven't. So the original whoppers still available nation. Right of Burger King.
We've added the King Burger and we've added a southwest seasonal burger and now we're testing a chicken patty. So in some marks we have four menu items. So we continue to expand burger. How will that go? How will that rollout go? Expansion go? Depending on the test results, it will go national and so so far, so good. So we feel great about the Burger King Um partnership
and it's expanding. Inflation, how are you dealing with it? Listen, I think inflation is a really hard thing for most businesses and certainly for consumers right Um, for us it hasn't really affected our business growing at we've had a lot of fixed cost absorption, a lot of operating leverage off of that growth. That's the first thing. The second thing is we have long term contracts from with all of our key ingredient suppliers Um and so we haven't had that pass cost to us and so therefore we
have not passed it on to the consumers. So we've kept flat prices. As meat prices have gone up, depending on chicken beef pork anywhere from eighteen to so our gap to the animal product has never been tighter and the history of our country cut prices to be more competitive. We could cut prices from well, we'll look at everything. I think everything is on the table to make it more available and more accessible and displace the animal product
so we can maximize our mission. A reverse and climate change. You told about the messaging one of your competitors. Your meat is facing a number of challenges. Do you kind of zero in on them? Do you take a wide of you you know, how do you get on top of a busy field? Yeah, I think. Look, I think that will be consolidation in our category. I see one or two brands per press climate label moving forward. I don't look at him beyond meats playbook. We have our
own playbook. Um and again, we're trying to displace the animal we're not trying to displace other plant based meat companies. In fact we celebrate other plant based meat companies because we're doing right by the environment. So so our goal is not to steal share from other plant based meat companies really quick. You don't seem in any hurry to
I p o what are the conditions for that. We're in no hurry because we don't need to write because our balance sheet is strong and our cast position is good, Um, and so we will I P O when we want to end or need to, and the market is better than it is today. So we'll keep you posted on that. In a sentence. What will the next meat be? Plant based meat? We already have chicken, beef pork, right. So there's a lot of experimentation with seafood, where the be
tuna or salmon? Right, Um. But we cover breakfast, lunch, dinner, chicken, beef pork, so we're good. I cannot wait to see impossible food. CEO, Pizza McGinnis, thank you so much for being with us. Thanks for having me. That does it for this edition of Bloomberg Technolog G. Friday we have Bain capital Global Tech Practice David Crawford. He'll discuss how web three can rewrite the rules of digital user identity and disrupt some of today's largest tech platforms. So don't
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