Good morning brood daily show. I'm Neil Freiman and I'm Toby Howell today. Uh-oh Apple's foldable iPhone duo screen is cracking. Then Killian and Bope is losing all the sponsors in China over a me. It's Wednesday October 27th. Let's ride. Didn't see this coming, but the cheesecake factory is having a moment in the spotlight. It all started on Saturday when former president Obama, Bashkern president Trump for his proclivity for over the top renovations saying, quote, he's got the White House looking like Saddam Hussein opened a cheesecake factory. That sparked a response from Republicans who claimed Obama's dissing of the cheesecake factory showed he was out of touch with ordinary Americans who happened to love the place. Treasury Secretary Scott Besson made a point to eat lunch at the restaurant on Monday, quipping, I would tell the Martha's vineyard set to give it a try. Toby, we're less than a week out from the midterms and the politicians are fighting about whether it Louisiana, chicken, pasta is elitist. So while it's gotten pulled into this political maelstrom, people have also taken notice of its stock, which is up. Wait for it. 105% this year. In videos up just 15%. Suddenly this company who trades on the NASDAQ and whose ticker is cake is worth $5 billion dollars or $1 million dollars in market cap for every item it has on the menu. That also reported very solid earnings yesterday with CEO David Overting. It's crediting the change new menu items, rewards program and social media engagement for the growth in its sales. He did not address the feud. I think it may be smart to take that approach. When's the last time you had cheesecake factory? I have never been to the cheesecake factory. I know whether that makes me an elite. The Martha's vineyard set or the complete opposite. But we didn't have one near me when I was growing up, so I just have never been. I think it was maybe you stopped playing travel sports past a certain age because that was certainly a place you went after some soccer games. I don't like the cheesecake actually from the cheesecake factory, but everything else, you know what, it works for me. And now word from our sponsor Liberty Mutual. Toby, what's a piece of advice you'd give your younger self? Oh man, what wouldn't I tell him? Get eight hours of sleep, eat your vegetables, floss every single day. Toby, I think that's just a list of all the things you're not doing. Not true. So what would you tell your younger self? Probably that he doesn't need to be overpaying for insurance. I think I need to hear that now. Same here. You know, Liberty Mutual customizes your car and home insurance to save you money. That definitely would have been nice to know when I got my first car. It's never too late. Start your quote at Liberty Mutual.com. That's Liberty Mutual.com. The concept of zero was invented by the ancient Sumerian culture of Mesopotamia 5,000 years ago, but it's the Coca-Cola Company of 2026 that's turning it into big bucks. And it's financial report yesterday. Coke reported that it's zero sugar beverage grew 16% last quarter, driving the company to raise its sales outlook for the entire year. Don't forget about its ideological cousin Diet Coke, which also posted 6% growth. They're the lone bright spots in a soda industry that's mostly fallen flat with consumers, with overall Coca-Cola's sales volume completely stagnant in North America. To understand Coke Zero's recent surge in popularity, you need to go back nearly a decade. Despite the drink debuting in 2005, a recipe change in 2017 brought it even closer in taste to original Coke, which was the whole idea in the first place. Zero sugar zero calories, not too far off from the real thing you know and love. And execs know they've struck gold. CFO John Murphy said recently, Coke Zero, the current iteration of Coke Zero, has a taste profile that people like. It's not that complicated. Of course, Coca-Cola isn't the only soda game in town in Pepsi, along with Kierg Doctor Pepper, the owner of brands like Sunkist, A&W, and Canada Dry. Have all been investing gobs of R&D and marketing dollars into their own zero sugar products. Toby, there's nothing soft about these drinks. Do you think Gilgamesh would have been a Coke Zero or Diet Coke kind of guy. But zero sugar is obviously eating the soda game right now. And I think something that is emblematic of that is when Pepsi went on their Pepsi versus Coke tour last year. It was the first time that they busted out this marketing ploy again in 50 years. And instead of doing just normal Pepsi versus normal Coke, which is what it used to be, they did Pepsi zero sugar versus Coke Zero sugar. They claimed that they won the test in all 34 cities that they did it in. They might have won that battle, but Coke is winning the broader war when it comes to just zero and their broader brands in general. Remember, they just won the contract over from KFC. That was a big deal. And then Coke stock is up 30% this year, while Pepsi, co-shares are down 7%. So both of them are trying to highlight their zero sugar offerings. Coke seems to be doing it more successfully right now. And don't forget Kierg Doctor Pepper, which is a beverage giant in its own right. In 2020, it did not have a single zero sugar offering. Now it has more than 40, because it basically killed diet sunkist, diet and W and diet Canada to try. And then just rebranded or replaced it with zero sugar products. One thing it did keep, Diet Doctor Pepper, because people absolutely love Diet Doctor Pepper. And that's a good segue to talk about Coke's cousin of zero sugar, which is Diet Coke. And that has also seen a massive resurgence in the past couple of years. It's different than Coke zero, zero sugar, because they want Diet Coke to taste differently. And Diet Coke DC, as they say, has been branded as a fridge cigarette by people on TikTok and social media last year as just a little cheat as part of your day. So Diet Coke also sales were up 6% in the past quarter. So those two are the two-edit monster for Coke color right now. And it really is just a difference in positioning, because at the end of the day, these are both calorie free version of sugary sodas. And yet the way that they are positioned within the market just makes all the difference. The word diet according to Kevin Ryan of Malachite strategy and research is from a different era for a lot of younger consumers. It's radioactive. So for some reason, Coke zero sugar and Pepsi zero sugar benefit from this health halo of it just feels more natural for whatever. I mean, it sounds crazy to talk about any soda kind of benefiting from a health halo. But while Diet Coke is seen as this fridge cigarette, this little bit of guilty pressure, somehow Coke zero has taken on a health halo. And I don't have a dog in this fight. I know these two fan bases hate each other, but I don't drink either of them. So I'll let you guys fight it out. And one final reason why Coca-Cola is maybe winning, whereas Pepsi and other beverage brands are falling due to this lack of soda drinking is that Coke has just a huge portfolio of different drinks. It has fair life milk, which you have every single morning. It has overnight oats with fair life milk. That is what I eat every day. Right. So it has all this these water brands to these energy drinks. And and that's what the younger consumer wants. 72% of Gen Z in a recent survey said they try a new beverage every single month. That's compared to just 16% of boomers. So the more variety and more options you have on the table, the better position you're going to be in. That's the most Gen Z I've ever felt because I absolutely try a new beverage every single time I go to the boot. I like looking at them. Like you go into the bodega and see all the different labels there. So I feel I'm a customer. I could be Gen Z or millennial. This makes me feel like I'm Gen Z. Moving on. Killing and Bobby is one of the fastest players in the world, but even he cannot run the controversy swirling around him in China. The French national footballer has apologized for ill judge comments about Mao Zedong, which led to a major backlash in China and cost him several brand partnerships and Bob A put his foot in his mouth on a talk show and asked about his favorite internet meme. The one that makes me laugh the most and Bob A said is one where there's a video of a guy I think it's a Chinese dictator. Despite never mentioning him by name, the show provided an image of the meme, which is in Bob A's face superimposed on someone who definitely resembles Mao Zedong. Now you ask, why is this a meme? And the soccer world in Bob A is often jokingly referred to as the dictator because of how much power he has perceived to have, especially over his former team PSG and French football in general. Again, this is a joke, but the backlash has been very real in China with social media exploding with anti-embope sentiment. Yesterday, five of the top 10 trending topics on Weibo, a Chinese social network, were about in Bob A. By the time the dust had begun to settle both China's largest dairy producer and one of its major sports string companies had severed ties with him. People talk about cancel culture in the US, but China does not mess around with anything that quote, offens national sentiments as the dream company put it. Embape is radioactive in China right now. It's hard to wrap your mind around just how massive a deal this is over there. Let's hear first from some people in China about what they're saying about Embape and this whole controversy. They literally had the foreign ministry spokesperson get up there and make a comment. He said, words and actions that hurt the feelings of the Chinese people naturally be met with a collective boycott by all sectors of Chinese society, the state-back nationalist tabloid global times row. Embape is not an isolated case. He has now paid the price and deservedly so. A bunch of people don't even know what he said because it's been scrubbed by the censors of the Chinese government and one said, one person on Weibo said, I don't care what exactly he said. If it was insulting to China, then it hurt my feelings. I support boycotting him and that's exactly what's happening. This is a total boycott of Embape was making certainly millions of dollars in endorsements in China was a big people loved him over there. They love soccer, but now he is on the black list. It's not just Chinese these companies that are severing ties with us.
Austrian companies are also feeling the pain. Shares of on fell as much as 6% before pairing some of their losses after Embape apologized. Remember, on signed Embape, it was this big coup they took him from Nike to launch their soccer program. Nike, I think, feels like they obviously lost a major superstar, but now they're thinking, oh, we're already struggling in China. Maybe we dodged a bullet here with the fact that we skirted this Embape controversy. This is also Embape is a partner with LVMH. He partnered with Dior and one of their watch brands. And LVMH is struggling in China as well with a slowdown over there. So this is not helping them whatsoever. Also not the first time a Western person or a Western brand has offended the Chinese market. I think back to May of 2026, Lou Lemmon hosted a yoga festival on the Great Wall near Beijing. And people got mad because a double-sided drum used in the performance was actually a Japanese drum rather than a traditional Chinese drum. It seems like small things, but these cultural mix-ups can have much larger business implications over in China as we are seeing in this instance too. - Especially when for all these companies, it's either their largest consumer market or their second largest. So when they make a mistake, they apologize profusely as we've seen, I mean La Liga, which is the Spanish league that Embape plays in for Real Madrid had to issue, was groveling to its Chinese fans and markets saying, we are completely distancing ourselves from Embape's comments. We know and value your fandom to us. So yeah, kind of something that we maybe not think would be a big deal over here, but it's just a massive deal in China. And just to be clear, a bunch of political analysts and historians are pretty much all of them would say, Mao was a dictator at the very least in authoritarian leader. A and a couple of days from Embape who just lost the blonde or as well too, Harry Kane. - All right, breaking, iPhone duo screens. Mayor Days after Apple began selling its highly anticipated first ever foldable phone, a number of users have flooded social media saying their inner screens are cracking, leaving behind bright lines running across the display. One such victim, venture capitalist John King, said it happened as he was opening the $2,000 device. He told Bloomberg, I had all intent to post a positive review of my duo experience today, until it happened to me. The smaller outer screen works, just fine, but the inner screen is now unusable. This is a major embarrassment for Apple, which spent years trying to perfect the phone and reestablish itself as a technological innovator. The company said it was, quote, "aware of an issue impacting the inner display on a small number of iPhone duo units. If users experience issues with their iPhone duo display, they should contact AppleCare for a replacement." And to be clear, most duo customers aren't reporting crack screens. But the more this keeps happening, the bigger a crisis it becomes for Apple, which might need to issue a recall if the problem is more widespread than it thought. Toby, what is exactly going wrong with the engineering here? - So it's not a overuse in injury to the phone. It's not happening after 100, 300, 500 folds. It's happening really in the first couple of days that people have this, but essentially the hinge at the back of the iPhone becomes stuck. Everyone has reported feeling a little bit of resistance and then as they push through that resistance, it makes a crack or a popping sound. And then immediately after it's usually followed by bright lines appearing across the screen. One user told Bloomberg, I was reading Apple News and decided to open the display and that's when I saw the crack in bruising. There is no damage to the outside of the phone, as you mentioned, nor to the inner display surface. This isn't exactly true for all of them, but essentially it's damaging the electronics under the screen. It's not like fully cracking the screen wide open, but it becomes unusable when you have a squiggly white line across the middle of the screen. For me, it sounded weirdly satisfying to you opening an iPhone duo and you get a little resistance and then it just cracks snapples and pops right there. But obviously if you just bought a $2,000, $3,000 phone, not very satisfying at all. - This is a very tricky engineering problem to create a foldable phone. Apple thought it had cracked the code, but you know, other companies have struggled here before. Samsung tried to release its foldable phone back in 2019. That's how long foldable phones have been around how late to the game. Apple is, but they had to delay the launch because they had similar lines running across the screen. And also, I can't help but think when a phone starts breaking, as soon as it's released. I mean, the biggest example of this is the Samsung Galaxy Note 7 back in 2016. They launched this big phone and then all of a sudden the lithium ion batteries inside started catching on fire and exploding. And that was seen as perhaps the biggest failed launch of this entire industry. We'll see if this duo one eclipses that. - I thought you were gonna mention the iPhone 6. 'Cause remember that, this was back in 2014. It was a very thin phone and when people were putting in their back pocket and sitting, it would bend. So that's really the last time Apple has had, sounds pretty cool. - I know, it was their, almost their first foldable phone on accident right there. But Apple obviously has, you know, hasn't had an iPhone break like this in a long time. So people are giving them the benefit of the doubt, at least for now they're saying I understand it's a first generation where some frustrations are arising is when you go into replace your phone that you just bought, they don't even have any on hand. So that's where people start to get a little annoyed. Also, it is an egg on their face moment, especially for new CEO John Ternis. He had previously kind of wafaud at Android foldables. He's called them cheap and crappy. Now when your phone starts breaking fresh out of the box, that comment comes back to bite you a little bit. Again, a small number of units still very early, but not necessarily what you'd expect from a company that usually puts out quality products like Apple. All right, we're going to take a quick break and come back with a story about cereal right after this. - Toby, say I want to invest in AI. - Okay, I want to invest in AI. That's what the GlobalX artificial intelligence and technology ETF, AIQ is for. It gives investors a way to participate in the economic shift AI created. With companies across the AI ecosystem from development to utilization, all in one package. - AIQ casts a wider net across software platforms, semiconductor designers, cloud infrastructure providers, and more. - It tracks the INDXX artificial intelligence in big data index, which is positioned to give investors exposure to AI's evolution rather than just its headlines. - To learn more, head to globalxetf.com/funds/aiq. - That's globalxetf.com/funds/aiq. Toby, what do you think looks good to ACFO? - Horses. - Horses as far as the I can see. - I was thinking something more along the lines of good investments that generate high-ROAS. Like LinkedIn ads, they generate the highest-ROAS of all major ad networks. - Reach the right buyers with LinkedIn ads when you target by company, industry, job title, and more. - Spend $250 on your first campaign on LinkedIn ads and get a $250 credit for the next one. Just go to LinkedIn.com/mbd. That's LinkedIn.com/mbd, terms and conditions apply. - Looking good today, Toby. - Thanks, man. My StitchFix box came in, so I'm officially one of the top two most stylist co-hosts of Morning Brew Daily. - What a coincidence. I'm also one of the most stylish co-hosts here, thanks to my StitchFix stylist, which has been helping me look really good on camera. StitchFix makes it easy to look and feel good. Take a quick quiz to get matched with a human stylist who handles the rest. - Get styled today at stitchfix.com/mbd. That's stitchfix.com/mbd. - What's the German word for when you want to seal a bag of Cheerios up? But you can't because there's no sealing mechanism, which is upsetting because you want to keep the Cheerios fresh for future bulls. Well, luckily, you don't need the German word anymore because the cereal industry has finally innovated and addressed the issue. Cheerios is teaming up with Ziploc to put a new, resealable bag into its boxes for the first time. The new, pantry seal boxes hit Wal-Mart's online stores this week before rolling out nationwide. General Mills, the maker of Cheerios, unsurprisingly, has received hundreds of thousands of customer complaints about keeping cereal fresh as people struggled in vain with half solutions like rubber bands or clips. But it's not as simple a problem as it initially appears. Not only does the reseal need to actually work, but it also needs to work at scale and not slow down the assembly line. General Mills Buffalo Factory cranks out about one box of Cheerios every second. So Ziploc needs to fit into that well-oiled system without honey-nudding things up. The bag they came up with is a stroke of genius. It only has Ziploc seals on part of the bag, meaning when you open it up, it turns into a nifty pour spout too and zips shut two birds, one Ziploc bag, Neil. This is the type of innovation in preserving cereal crunch that we need in this world. - And we needed it yesterday, or like 20 years ago. Most people reacting to this news were saying, why did this take so long? And the reason is probably it's just way more expensive to make these cereal boxes with Ziploc bags inside according to Food Engineering magazine. Adopting Ziploc Closures requires significant capital expenditures, but desperate times do call for significant capital expenditures. People are eating less cereal. So $13 billion business, but shoppers last year bought 13% less cereal than in 2021. People are shifting their morning meals to things like bars or yogurt, things with, not going to be surprised. So you're this more protein than Cheerios. So the cereal industry is trying everything, rolling out, Proud the biggest innovation in its history.
history to try to win consumers back. - What was that food tech magazine? - Food engineering magazine, I can't say I was in every single morning. - Yeah, but another part of this is that packaging is a sell. Yes, it costs money to develop that packaging, but people absolutely pay attention and care about packaging, at least 80% of consumers in 2024 said they bought a new product because the packaging caught their attention. That's according to the data analytics firm, business, Dasher, and nearly three quarters of respondents out of that packaging can influence their purchasing decision. So essentially, when you're going down the aisle, you look at what the thing that is containing your food looks like, I think of Graza, they are an olive oil brand. All they did is take olive oil and put it in a squeeze bottle and now it's a multi-billion dollar company. So it seems like such a small thing. It seems like such an easy innovation to make. Let's make cereal bags resealable, but it could actually drive the bottom line. - And Cheerios was saying it was responding to all of these 90% of cereal eaters who said they did these various longevity hacks to make Cheerios last longer so they wouldn't get stale. So these all proliferate on social media. And I'm curious what your particular hacks are. I mean, some of the mechanics, the devices, one is the origami box fold, where you, you know, you do the origami with the top. What about the rolling clip? - That's what I do. - The rolling clip is a classic. And then there's the final one. And this seems a little desperate is where you take all the cereal out of the bag and then you put into a mason jar to a whole vacuum seal effect. So that's what you're doing with your Cheerios. But look, people's Cheerios were going stale. So they tried to literally everything to keep them longer. Maybe the Ziplag will be the solution. - I didn't know Cheerios still had its fastball. It is the top selling seal brand to this day according to Nielsen data. I don't know if I would have expected that, but I don't know what would have taken its place. But the fact that good old fashioned Cheerios is still chugged along and good for them. Now let's switch to the finish with some final headlines. Palmer Lucky's $90 billion defense startup, Andrewl is switching from drones to laptops. Yesterday, the company announced it is teaming up with Qualcomm to build Blue Chip, a line of heavy-duty waterproof computers for soldiers, police and first responders. It's attempting this on hard mode, promising to build the whole thing in the US, which would be the first American-made computer in decades. Andrewl says it is already figured out how to source 90% of the laptops materials from the US and its allies, while Qualcomm ships will come from TSMC's factory in Arizona. Blue Chip will be assembled at Andrewl's arsenal one factory in Ohio, right alongside its autonomous jets and missile interceptors. Niel, looks like Andrewl is trying to spread his wings from being just a defense contractor into an American industrial conglomerate of sorts. You ditching your MacBook for Blue Chip? - Well, hard mode is right. No one builds a made in the USA laptop. It's so much cheaper and way more accessible to get your components from East Asia, from Taiwan, from South Korea, from China. And in fact, remember, you said that there are 90% of these components sourced now, which is really hard, but they still don't have the final 10%, which is the display. And that's because LCD, OLED displays, they don't make them in America. They make them over there. So they have to figure out where they're going to get this particular display for their laptop in the United States, and that's going to take possibly months more likely years to find people to in the United States to make the display. And for these reasons is it's going to be really expensive. It's going to maybe cost according to Lucky, about 20% more than the typical high-end PCs. So he said, as much as I love Blue Chip, if I was just a normal consumer making a rational decision without a kind of patriotic basis, I'd be better off buying a Dell laptop than an Android laptop because it's going to be cheaper. - Although I have seen you spill tea or some liquid on some of your laptops. So maybe you do need a heavy-duty waterproof laptop just to do your podcasting duties. - Thanks for bringing that up. Up next, passengers boarded the cruise ship Villaville Odyssey, thinking they'd forever leave the land life behind. But on Tuesday, the ship just stranded everyone in Cambodia because it was shutting down thanks to fuel costs that had gotten out of hand. According to Insider, the Odyssey first set sale in 2024, pitching permanent cabins for up to $440,000 a piece, the concept, a perpetual cruise that would circle the globe every three and a half years, visiting 400 ports of call. But then the war in Iran happened causing energy prices to spike, the company's monthly fuel expenses per cabin jumped 344% from about $1800 to as much as $8,000. Try to everything to mitigate the cost increase like limiting the itinerary or spending more time at port. Ultimately though, the economics didn't work out, now the passengers have to figure out how they're getting home if they still have a home from Cambodia. - This story is crazy on every level. First of all, to be the type of person to sign up for a perpetual cruise, that is a unique person right there to give up your home and live in a cabin for the rest of your life, essentially. And then the second part is, now you're in Cambodia with no home, nowhere to go to. How do you, I keep wanting to say how do you get home, but your home is on the boat right there. So it is just confusing on every level. I feel bad for these people who probably had a much different view for what the rest of their probably retirement looked like. But maybe they're all just posting up in Cambodia and you got a lot of these tourists saying, like, I guess this is where I live now because there's nowhere else for me to go. - Finally, we close out every Wednesday show with suggestion box for Toby and I each share a recommendation to get you over the hump of the week. Toby, your raise just walked it off last night, so I'll let you take the first crack. - All right, my recommendation, it's changed my life in the kitchen, and that's to freeze your ginger. So I saw this on the YouTube account, follow chefs, any recipe worth cooking that calls for ginger is going to require fresh ginger, but peeling and grating it is obviously this massive hassle. But ginger is extremely fibrous. So when you are micro-planting it, that's the little grater that you use. The fibers tear and get caught, and it becomes just as fibrous enough. I don't know if you've experienced this, but just so annoying as you get to the end of your ginger, but when you freeze it, the water in the root becomes ice crystals, weakens the fibers, and instead of tearing, they kind of snap clean off. That means you get this beautiful, fluffy, grated ginger that doesn't stick to the bottom, doesn't become this wet mess, and it maintains its great ability. It changes your life. It sounds so simple, but I cook a lot of recipes with ginger, and it is so annoying to actually grate it, so everyone knows kind of the spoon hack for peeling it, but freeze your ginger, I promise you, you'll like it. - Good to know, I cooked with ginger last night. - It's annoying, right? It's so fibrous, yeah. - So fibrous, that's what I was saying. I mean, this thing is so fibrous. All right, my rec is a conversation starter in every sense of the word. A friend recently told me that for many popular idioms, we just say the first part of the phrase and never feel the need to complete it. It came up because I said when in Rome, and then she mentioned, you know, people never say the full thing. When in Rome, due as the Romans do, it's just implied, and this is far from the only one. You say, speak of the devil, but not speak of the devil, and he shall appear. You say, great minds, when life gives you lemons, and if the shoe fits, without ever completing the thought. Now, this is an actual thing. It's a device called an anapodon, and feel free to tell all your friends of this discovery. - Anapodon. - Anapodotons. - Anapodotons. - Anapodotons. - No, there's more. It's an anapodoton. - An anapolus is where it's called. - It doesn't matter what it's called. What do you think the actual thing? - Well, I kind of zone out there 'cause I was trying to finish the rest of every single one. So when life gives you lemon, make lemonade, if the shoe fits, wear it. Do you have any more that you can quiz me on because it seems like a pretty fart game, actually? - Great minds, think like, if you can't stand the heat. - Get out of the kitchen. - Yeah, you know them all. - Yeah, it is. - You just don't say 'em. It's pretty interesting part of our language. - I guess it was a devil and he fell up here. That was a difficult one. But yeah, now I just wanna keep coming up with them and keep getting quizzed by 'em because, so, you. - I'm thinking of it. I'm thinking it could be a good category for our next trivia show. All right, that is all the time we have. Thanks for starting your morning with us and have a lovely Wednesday to share your thoughts on the episode or anything else. Send an email to
[email protected] or DM us on Instagram @mbdailyshow. Let's roll the credits. Family Mill Iron is our supervising producer. Raymond Lu is our senior producer. Our producer is Olivia Graham and our associate producer is Olivia Lake. Technical Direction by Nina Miller. Hair and makeup. And our show is a production of Morning Brew. Did you get that? - Yeah, I got that. - Okay, so Daniel, let's run it back tomorrow. (upbeat music)
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