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| Here's your daily business briefing. - 🥗 Food giants adapt to weight loss trend
- 🚗 Deep Dive: Global automakers learn from China's EVs
- ☕ Nespresso gains ground in Keurig-led U.S. pod market
Make sure to continue reading the Quarterly Earnings Report and the Quick Hits. Shriram
p/Shriram | |
| 1 | | Food companies are responding to the popularity of weight-loss drugs like Ozempic by developing natural alternatives or companion products. Investors worry that the broader adoption of weight-loss drugs may threaten food companies' sales, leading them to explore protein-centric offerings as patients seek to offset muscle mass loss. More: - The largest food manufacturer in the world, Nestlé, is developing companion products to help people use weight-loss medications, addressing issues with nutrition and loss of muscle mass.
- Abbott Laboratories is developing a nutrition drink high in protein to help people on weight-loss medications gain more muscle mass.
- General Mills, which produces Bisquick and Lucky Charms, is developing goods for drug users who want more protein.
- Certain businesses, like BellRing Brands, are investigating novel formulations with micronutrients to appeal to patients using weight-loss medications.
- Dubbed "nature's Ozempic," startups such as Supergut sell products containing blends of prebiotic fiber meant to replicate pharmaceuticals' effects on gut hormones.
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What the numbers say: As of now, Volkswagen is China's leading car manufacturer in terms of sales in the year-to-date period. Volkswagen and Nissan are accelerating their electric vehicle manufacturing processes to compete with China's local rivals. VW aims to cut its development time to 2.5 years, striving to be among China's top three carmakers by 2030. Relevance: China's rising influence in EV manufacturing is prompting Western automakers to quickly adopt Chinese practices, emphasizing faster development cycles and local partnerships in response to evolving market demands. This shift marks a significant change as Western companies seek strategies and insights from China in the automotive sector. More data: China constitutes 40% of Volkswagen's vehicle sales, leading the company to invest billions in local firms like XPeng and Gotion High-Tech. Nissan plans to launch six new EV models in China by 2026, while Toyota shifts its China R&D focus to electric and smart cars, aiming to cut costs through local suppliers of intelligent electric vehicles. | | | |
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| 3 | | Alaska Airlines is set to acquire Hawaiian Airlines in a $1.9B deal, with Alaska agreeing to pay $18 per share and take on $900M of its debt. This sale is seen as a strategic move for Hawaiian amid challenges from wildfires, increased Southwest Airlines competition, and a slow Asia travel recovery due to the pandemic. More: - The goal of the agreement is to establish the combined businesses as a "market leader" in Hawaii's premium travel industry.
- Subject to shareholder agreement and regulatory approval, the transaction is anticipated to be completed in 12 to 18 months.
- Alaska CEO Ben Minicucci cites increased rivalry with the four largest carriers, 1,400 daily flights, and 12 overlapping markets for his confidence in regulatory clearance.
- The merged company, based in Seattle and led by Minicucci, will operate under a single platform with both Alaska and Hawaiian brands, marking a strategic move by Alaska Airlines for enhanced financial performance and network expansion.
Zoom Out: - In 2022, Amazon signed up with Hawaiian Airlines to operate its first Airbus cargo planes, making the carrier the latest passenger airline to join forces with the retail giant to replace older jets.
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| 4 | | Nespresso, Nestlé's coffee pod brand, is making headway in the U.S. market, challenging the dominance of Keurig. With Keurig reporting U.S. coffee sales of approximately $4.3B and machines in over 38 million households last year, Nespresso's estimated U.S. sales of $1.5B by JPMorgan indicate substantial growth from its earlier challenges in the country. More: - Though Nespresso has generally been a tiny participant in the U.S. coffee business, it has gained success globally in an industry worth around $100B.
- The Vertuo machine, which can brew full-size coffees and conventional espresso and boost sales, began Nespresso's shift in 2014.
- Prior to launching the machine, Nespresso's 2013 revenues totaled $300M.
- Keurig notes that there are still over 50 million households in the U.S. coffee market that it hopes to target and sees room for expansion.
- In the U.S., the single-serve coffee market has grown significantly, and Keurig and Nespresso are vying for younger coffee lovers' attention with various beverage options.
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| 6 | | In a surprising move, Amazon has bought three rocket launches from SpaceX for its Project Kuiper, a venture competing with Elon Musk's Starlink in the satellite broadband market. This decision comes after Amazon's previous orders from SpaceX competitors, such as Jeff Bezos' Blue Origin, triggered scrutiny and a shareholder lawsuit alleging influence in the rivalry. More: - As the leading global rocket operator, SpaceX will launch competitors' satellites alongside its Starlink project, as evidenced by the recent undisclosed deal with Amazon for three Falcon 9 launches in mid-2025.
- Amazon's Kuiper strategy is changing as it works to comply with FCC rules, which demand that half of its 3,236 planned satellites be deployed by July 2026.
- Amazon has rearranged its launch schedule because of delays in the manufacturing of rockets; the corporation is ordering more than 77 launches from different suppliers.
- Amazon has started building a $120M pre-launch processing facility in Florida and plans to invest over $10B in the Kuiper project.
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| 7 | | Quick Hits: - The Kubernetes Cookbook is your comprehensive companion, equipping you with the knowledge and techniques to harness the full potential of Kubernetes.*
- Meta is being sued by the Asociacion de Medios de Informacion, a Spanish media association, demanding over $598.6M in relation to advertising practices.
- IBM unveiled a new quantum computing chip and machine, aiming for these advancements to form the foundation of more extensive systems by 2033.
- Walmart has joined the trend of advertising exits by discontinuing ads on X, citing poor performance rather than a boycott.
- Twilio Inc is set to lay off 5% (295 employees) by Q1 2024 for profitable growth, incurring an estimated $25-35M restructuring cost in Q4 2023.
- Toast to 2024: Key affiliate marketing trends to help your campaigns start off on the right foot in the new year. Get the free report.*
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 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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