# Disney+ Price to Jump 13% to $21.49 Per Month

An episode of [Bloomberg Intelligence](https://invisiblenetwork.ai/podcast/326301337), 23 Sep 2026, 22 min.

Audio: https://podtrac.com/pts/redirect.mp3/tracking.swap.fm/track/UVBrz8bN8aM2Xe47PEPu/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/7f534b8c-9e91-429a-b102-ae3c00090c6d/8882ef87-81c9-4a49-9592-b4ce01128c6d/audio.mp3?utm_source=Podcast&in_playlist=0ad812bf-fd15-4012-a18c-ae3c00090c76

Watch Paul and Scarlet LIVE every day on YouTube: http://bit.ly/3vTiACF. Bloomberg Intelligence hosted by Paul Sweeney and Scarlet Fu • Geetha Ranganathan, Bloomberg Intelligence Analyst on US Media, on Walt Disney raising prices on several of its streaming subscriptions, with users being notified as early as Wednesday, according to people familiar with the matter. • Brian Egger, Bloomberg Intelligence Senior Gaming and Lodging Analyst, on Royal Caribbean Cruises agreeing to buy a 50% stake in Sandals Resorts International for about $3 billion, a deal that will give the cruise operator access to its all-inclusive resorts across the Caribbean. • Emily Cohn, Bloomberg Consumer Team Leader, on General Mills leaning into new products higher in protein and fiber as the company works to restore sales growth after a wave of earlier price cuts. See omnystudio.com/listener for privacy information.

## Transcript

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[0:24] Speaker 2: Are you a Disney Plus subscriber, either of you guys?
[0:27] Speaker 4: I was. I go back and forth.
[0:29] Speaker 2: I think that's a big jump, 13%.
[0:31] Speaker 4: I know.
[0:31] Speaker 3: Double-digit percentage change and, like, to 2149, that's a different
[0:35] Speaker 3: level of, you know, do I want to partake in
[0:37] Speaker 3: this or not? I was just thinking, while you were
[0:39] Speaker 3: reading some of the latest headlines, if you type Top
[0:42] Speaker 3: Worldwide Go on the Bloomberg Terminal, every... not every, but
[0:45] Speaker 3: many of the headlines are all reaffirming this inflation theme.
[0:49] Speaker 3: The big take today is about how a $ 5, 000 bike
[0:52] Speaker 3: shows why it's hard to build in America. You talked
[0:54] Speaker 3: about the Disney Plus price hike, U.S. mortgage rates climbing
[0:58] Speaker 3: above 7%, Treasuries swooning because this PMI data is reviving
[1:02] Speaker 3: inflation woes. You can't get away from it.
[1:04] Speaker 2: No, inflation is everywhere seemingly, and including in the streaming business.
[1:08] Speaker 2: So let's check out this Disney News here. We can
[1:10] Speaker 2: do that with Geetha Ranganathan. She covers all the media
[1:12] Speaker 2: stocks for Bloomberg Intelligence. Geetha, I don't know, 13% seems
[1:17] Speaker 2: like a big jump here. What's behind it for Disney
[1:20] Speaker 2: raising the prices here on Disney Plus?
[1:23] Speaker 5: Yeah, they're just keeping up here with the Joneses, Paul. So,
[1:26] Speaker 5: you know, everybody in the streaming world has obviously been
[1:29] Speaker 5: raising prices. And really the narrative for all of the
[1:32] Speaker 5: streamers and all of the media companies has shifted away from,
[1:34] Speaker 5: you know, chasing subscriber growth to chasing profitability. And the
[1:39] Speaker 5: one way that you chase profitability is implement these price
[1:42] Speaker 5: increases from time to time. But I will point out that, yes, while,
[1:45] Speaker 5: you know, all of the streamers have been, you know,
[1:47] Speaker 5: increasing prices.
[1:48] Speaker 4: At periodic intervals.
[1:50] Speaker 5: Disney, in fact, has been one of the most aggressive
[1:52] Speaker 5: in terms of pricing increases. So they introduced Disney Plus
[1:56] Speaker 5: in 2019. And just before this price increase that was
[1:59] Speaker 5: just announced, they have actually increased their prices by about
[2:03] Speaker 5: 170 percent. So it's been a really steep increase from
[2:08] Speaker 5: $ 6. 99 to almost $ 19 right before this price hike today.
[2:13] Speaker 5: You compare that to an established player like Netflix, which
[2:16] Speaker 5: has only probably raised its prices by about 45% over
[2:19] Speaker 5: the past five years. So Disney definitely has been one
[2:21] Speaker 5: of the most aggressive. But again, this all goes back
[2:24] Speaker 5: to that profitability equation and them chasing those high operating
[2:29] Speaker 5: margins in the streaming business.
[2:31] Speaker 3: Just for context here, the Disney Plus and Hulu with
[2:34] Speaker 3: advertising will cost $ 12. 49 per month on a standalone basis.
[2:38] Speaker 6: Okay.
[2:39] Speaker 3: And that's quite a bit to have to pay to
[2:41] Speaker 3: watch for commercials, too. Geetha, you mentioned that. Disney Plus
[2:46] Speaker 3: is now chasing profitability as opposed to chasing eyeballs, which
[2:49] Speaker 3: kind of was the former business model. At that time,
[2:51] Speaker 3: it was all about subscriber additions, and you got that
[2:54] Speaker 3: through global markets.
[2:56] Speaker 4: The U.S.
[2:57] Speaker 3: Was always seen as the more profitable user base. Does
[3:00] Speaker 3: that mean that these streamers are now recommitting to monetizing
[3:04] Speaker 3: their U.S. base and trying to target that U.S. base
[3:06] Speaker 3: more than they are looking to build on gaining market
[3:09] Speaker 3: share globally?
[3:11] Speaker 5: Yes, I think you absolutely hit the nail there on
[3:14] Speaker 5: the head, Scarlett. It has become all about monetization. And again,
[3:18] Speaker 5: you pointed to the advertising part of the business, the
[3:22] Speaker 5: Disney and Hulu bundle with ads. Advertising is another big
[3:25] Speaker 5: monetization mechanism. So for those subscribers who are unwilling to
[3:29] Speaker 5: pay the much heavier price for the ad-free product, you know,
[3:34] Speaker 5: they still do have that cheaper ad-supported version that they're
[3:38] Speaker 5: kind of pushing customers to. The one thing that I
[3:41] Speaker 5: would kind of try to point out with Disney, which
[3:43] Speaker 5: is different from other streamers, is Disney still gets majority
[3:47] Speaker 5: of its subscriber additions through the bundle. So the Disney
[3:51] Speaker 5: bundle is still kind of this inherent value proposition, which
[3:55] Speaker 5: none of the other streamers really have. I mean, you know,
[3:58] Speaker 5: Netflix doesn't have that, HBO doesn't have that, but Disney
[4:01] Speaker 5: has this unique value kind of value proposition with Hulu,
[4:04] Speaker 5: Disney +, as well as ESPN. And so, you know,
[4:07] Speaker 5: we have seen time and time again that even if
[4:09] Speaker 5: prices have gone up, churn necessarily hasn't because they've been
[4:13] Speaker 5: able to sell the bundle. But you're absolutely right. Monetization
[4:16] Speaker 5: is the new mantra for all of these streamers.
[4:19] Speaker 2: So, Geetha, how profitable is the streaming business today in
[4:23] Speaker 2: terms of maybe like profit margins and maybe where do
[4:25] Speaker 2: they want to get to?
[4:27] Speaker 4: Yeah.
[4:28] Speaker 5: So, you know, Paul, we've spoken about this so many times,
[4:30] Speaker 5: but just like two years ago, Disney actually posted about
[4:33] Speaker 5: a $ 4 billion loss on the Disney Plus streaming business. Today,
[4:38] Speaker 5: we're looking at almost about $ 2. 5 to $ 3 billion of profit.
[4:43] Speaker 5: But ultimately, the number, it all comes down to the margins.
[4:47] Speaker 5: So with that $ 3 billion of profit, they're going to
[4:50] Speaker 5: be posting about maybe 11%, 12% operating margin profit. But
[4:54] Speaker 5: the number that everybody is chasing in the industry is
[4:57] Speaker 5: the Netflix number, which is 30 percent operating margin. And
[5:01] Speaker 5: Netflix itself is trying to get to a 40 percent
[5:04] Speaker 5: operating margin. So everybody has, you know, the goalposts are
[5:07] Speaker 5: constantly moving. But really, the 30 percent or anything even
[5:11] Speaker 5: above 25 percent, it would really be very, very desirable
[5:15] Speaker 5: for any of these rather relatively newer streamers.
[5:18] Speaker 3: How does a Netflix get to 40% margins? Is that,
[5:21] Speaker 3: I mean, Netflix is now going to hike its price
[5:23] Speaker 3: as well? Is that the only way to do it?
[5:26] Speaker 5: Yeah, they're going to have to hike their prices, but
[5:28] Speaker 5: they're going to have to do it very, very carefully
[5:31] Speaker 5: because Netflix over the past few months, they've really been
[5:35] Speaker 5: battling this whole weakness in engagement. So people not engaging
[5:40] Speaker 5: with Netflix content as much as they used to before,
[5:43] Speaker 5: And there's a real worry on the streets, Scarlett, that
[5:45] Speaker 5: that is ultimately going to lead to a revenue decline
[5:48] Speaker 5: and possibly put pressure on margins. So this is something
[5:52] Speaker 5: that they're going to have to address. They do have
[5:53] Speaker 5: a few growth levers in terms of advertising, in terms
[5:56] Speaker 5: of price hikes. But again, it's going to be a very,
[5:59] Speaker 5: very careful balancing act, especially as their content budget keeps climbing.
[6:03] Speaker 5: So remember, this year, it is going up 10% to
[6:07] Speaker 5: $ 20 billion. So they are one of the hugest content
[6:10] Speaker 5: spenders in the media industry today.
[6:13] Speaker 4: All right.
[6:13] Speaker 2: We've got for the stock of Disney, 35 buy ratings,
[6:16] Speaker 2: three holds, and one sell. Why we have 39 analysts
[6:20] Speaker 2: following one stock, I have no idea. I'm assuming 35
[6:23] Speaker 2: of them are not getting paid commissions, but they're still
[6:26] Speaker 2: covering it. So yet the stock is down 8%, 9%
[6:29] Speaker 2: year to date. Geetha, what's the investor consensus about the
[6:34] Speaker 2: Disney story these days?
[6:36] Speaker 5: Yeah, we really need some kind of catalyst, Paul, some
[6:39] Speaker 5: kind of really big catalyst that can move this name. And,
[6:42] Speaker 5: you know, earlier this year, I think the big concerns
[6:44] Speaker 5: around Disney was, is consumer demand slowing? Are we going
[6:48] Speaker 5: to see weakness at the parks? We heard a lot
[6:49] Speaker 5: of noise about international visitation really kind of weakening. We
[6:54] Speaker 5: heard comments from Comcast about, you know, their universal parks
[6:58] Speaker 5: kind of seeing some weakness in Orlando. Somehow Disney has
[7:01] Speaker 5: managed to steer clear of all of that. They've kind
[7:04] Speaker 5: of shown us that they can grow park attendance, they
[7:06] Speaker 5: can grow park profitability. But there is this looming concern
[7:11] Speaker 5: about what is going to be the next big growth catalyst.
[7:15] Speaker 5: Is it going to be streaming? How are they going
[7:17] Speaker 5: to be able to achieve that? Especially as every day
[7:19] Speaker 5: you have newer and newer concerns especially with any of
[7:23] Speaker 5: these subscription models. The latest concern, of course, has been
[7:25] Speaker 5: with Muse, you know, the new meta AI agent, which
[7:28] Speaker 5: can basically go and, you know, cut out some of
[7:31] Speaker 5: your pricey subscriptions. So I think anybody with a subscription
[7:33] Speaker 5: model is going to have to be really, really careful here.
[7:37] Speaker 2: I didn't even think of that.
[7:38] Speaker 3: Okay, that is kind of a useful thing for that app.
[7:40] Speaker 3: Maybe I will download it. I will concede to that point. Geetha,
[7:44] Speaker 3: of course, there's a lot of big news around Paramount Skydance,
[7:47] Speaker 3: you know, settling with California and other states, but I...
[7:51] Speaker 3: Notice there was one story here, and this kind of
[7:54] Speaker 3: ties in with our conversation about streaming overall, about Pluto TV,
[7:57] Speaker 3: which is part of Paramount Skydance. There's a new ad
[8:01] Speaker 3: campaign for Pluto TV, which is a free streaming service
[8:04] Speaker 3: with the slogan, free is only getting more popular. And
[8:07] Speaker 3: it ties in nicely with everything we've been talking about
[8:09] Speaker 3: with Disney +, hiking its prices, Netflix having no choice
[8:12] Speaker 3: but to.
[8:12] Speaker 2: Do that as well.
[8:14] Speaker 3: I mean, what does Pluto TV do? Is it a
[8:17] Speaker 3: replacement for HBO, for Netflix, for Hulu?
[8:22] Speaker 5: It is not a replacement, unfortunately, for Netflix or Hulu.
[8:28] Speaker 5: But it does give you some of your older shows,
[8:31] Speaker 5: what people call comfort food television. And you're not really
[8:35] Speaker 5: going to be paying anything for it. Of course, you
[8:37] Speaker 5: have to watch a bunch of ads. Some people are
[8:39] Speaker 5: okay with that as long as they just want to
[8:40] Speaker 5: put something on their television but don't want to be
[8:43] Speaker 5: paying like $ 100 or $ 200 and all of these different
[8:45] Speaker 5: streaming subscriptions. So it kind of works well. We've seen
[8:48] Speaker 5: some of these services actually do really well. Roku Channel
[8:51] Speaker 5: is a great example. Tubi from Fox is a great example.
[8:55] Speaker 5: Pluto TV had a great run initially, but then fell
[8:58] Speaker 5: off the bandwagon a little bit. But I think with
[9:01] Speaker 5: the new management, with Paramount Skydance, with David Ellison, You know,
[9:05] Speaker 5: I think he's going to try and reinvigorate that whole
[9:08] Speaker 5: business just as things are kind of heating up with
[9:11] Speaker 5: Fox and its Roku acquisition. So I think all of
[9:14] Speaker 5: this is kind of going to tie in together nicely
[9:17] Speaker 5: once they all come together.
[9:18] Speaker 3: Stay with us.
[9:19] Speaker 1: More from Bloomberg Intelligence coming up after this. You're listening
[9:26] Speaker 1: to the Bloomberg Intelligence Podcast. Catch us live weekdays at
[9:30] Speaker 1: 10 a.m. Eastern on Apple CarPlay and Android Auto with
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[9:36] Speaker 1: your podcasts or watch us live on YouTube.
[9:40] Speaker 2: While I'm taking Scarlett, my first cruise ever. in about
[9:43] Speaker 2: 10 days.
[9:45] Speaker 3: Which one did you pick, by the way?
[9:46] Speaker 2: Viking cruise in France.
[9:48] Speaker 3: Okay. What prompted you to decide to take the plunge?
[9:53] Speaker 2: I was told I'm taking the plunge.
[9:55] Speaker 5: Oh, okay. All right.
[9:56] Speaker 2: That's the easiest way. I said, okay, I'm going with
[9:58] Speaker 2: an experienced cruiser, so I figured... And a river cruise,
[10:01] Speaker 2: I was told you need to walk before you can run,
[10:03] Speaker 2: before you take a big ocean.
[10:04] Speaker 4: Ah, okay, smart, smart.
[10:04] Speaker 5: So there you go.
[10:05] Speaker 2: So anyway, this story jumped out at me today. Royal
[10:07] Speaker 2: Caribbean buys a 50% stake in Sandals Resorts for about
[10:10] Speaker 2: $ 3 billion. So I figured we've got to get Brian
[10:13] Speaker 2: Egger on here to talk about this. Brian covers all
[10:14] Speaker 2: the cruise companies, the gaming companies, all the fun stuff
[10:18] Speaker 2: out there, the hotels, motels, all that stuff. Brian, what's
[10:20] Speaker 2: Royal Caribbean doing here? This is a little bit unusual.
[10:25] Speaker 4: Royal Caribbean, along with Carnival and Viking, have been developing
[10:29] Speaker 4: island-based destinations. This is part of a continued, maybe you'd
[10:34] Speaker 4: call it a land-based strategy, to augment their cruise assets
[10:38] Speaker 4: with destination ports of call and land-based assets. This is
[10:42] Speaker 4: a bit different because, obviously, they are all-inclusive, dedicated resorts.
[10:48] Speaker 3: Which are seeing a moment, right? Which are a big
[10:50] Speaker 3: thing right now.
[10:50] Speaker 5: Yes, exactly.
[10:51] Speaker 4: So while it is a departure, it's not entirely far
[10:57] Speaker 4: afield for them because they are already involved in island-based destinations.
[11:01] Speaker 3: I like that idea. Land-based strategy, island-based destinations. This is
[11:06] Speaker 3: a purchase of 50% of sandals. Why not go all in?
[11:11] Speaker 4: So, I mean, we don't know exactly the strategic reasons,
[11:15] Speaker 4: but I would say from our perspective, having that equity
[11:18] Speaker 4: exposure while... maybe only tapping part of its existing liquidity
[11:23] Speaker 4: and not having to lever up. And at the same time,
[11:26] Speaker 4: you know, it may be part of the consideration. They
[11:29] Speaker 4: get tax exemptions from being an international shipping operator. This
[11:33] Speaker 4: basically keeps that part of a separate joint venture. So
[11:37] Speaker 4: I think the scale of it makes sense. I think
[11:40] Speaker 4: had they done something that was more than 50 percent
[11:43] Speaker 4: of control would have levered up quite a bit.
[11:46] Speaker 2: All right, so I'm paying, I don't know, $ 4. 50 a
[11:50] Speaker 2: gallon to fill up the Vespa. If I've got a
[11:54] Speaker 2: big cruise ship and I'm loading, I could pull up
[11:57] Speaker 2: and I've got to fill up with, I guess it's
[11:58] Speaker 2: bunker fuel?
[11:59] Speaker 4: Yeah, yeah.
[12:00] Speaker 2: That's really expensive, too. What is going on there? How
[12:03] Speaker 2: did the cruise ship industry, how did they deal with
[12:05] Speaker 2: these rising fuel costs?
[12:07] Speaker 4: So, short answer to the question, they do some hedging.
[12:10] Speaker 4: Not Carnival, but Royal Norwegian. And we had a note
[12:14] Speaker 4: out this morning actually talking about the fuel cost exposure,
[12:16] Speaker 4: which we were more concerned about maybe a week ago
[12:19] Speaker 4: with brand of 110. Now it's down just about 100. But,
[12:22] Speaker 4: you know, we are aware of this fact because Carnival
[12:25] Speaker 4: reports earnings next week. When they last reported in June,
[12:29] Speaker 4: Brent was at 77 bucks. So they're all updated. There
[12:33] Speaker 4: are fuel cost exposure. They can mitigate it with some efficiencies.
[12:37] Speaker 4: This is only part of the picture, but obviously higher
[12:39] Speaker 4: fuel costs are challenging. There is a ticker on the
[12:42] Speaker 4: Bloomberg terminal for this bunker fuel stuff. I'm not sure
[12:44] Speaker 4: if I picked up the right one, but January, it was,
[12:48] Speaker 4: call it $ 425 per metric ton.
[12:49] Speaker 2: Now it's $ 845 per metric ton. Imagine pulling up and
[12:50] Speaker 2: filling up your....
[12:57] Speaker 4: Tank.
[12:58] Speaker 3: And have it be double what it was before. So
[13:01] Speaker 3: that raises a good point because we know that Paul
[13:03] Speaker 3: booked his Viking cruise, what, like a year ago?
[13:05] Speaker 4: Yeah. Okay.
[13:06] Speaker 3: So, I mean, Viking had that booked for them. They
[13:09] Speaker 3: knew it was coming up and they have visibility. But
[13:12] Speaker 3: for the cruise line operators that are now booking people
[13:15] Speaker 3: for a year out, have those prices gone way up
[13:18] Speaker 3: because of the fuel prices?
[13:20] Speaker 4: They're not doing anything like fuel price surcharges. But that
[13:23] Speaker 4: being said, the underlying demand for leisure-based vacations for cruises
[13:27] Speaker 4: has been really strong. Overall, the bookings have been really
[13:31] Speaker 4: quite robust for cruises generally, with the exception of Eastern
[13:35] Speaker 4: Mediterranean cruises affected by the conflict in the Middle East.
[13:38] Speaker 4: So the conflict in Iran is- That's a separate thing.
[13:41] Speaker 4: Twofold impact. Although, but that's one of the causes, obviously,
[13:44] Speaker 4: of higher fuel costs. So it really has a dual impact.
[13:47] Speaker 2: Yeah.
[13:48] Speaker 6: All right.
[13:48] Speaker 2: Enough on that stuff. Let's get to the casinos. How's
[13:51] Speaker 2: Vegas doing? How's the strip doing? How are my friends
[13:53] Speaker 2: on the strip doing?
[13:54] Speaker 4: So better, I guess you could say, better or stabilizing
[13:57] Speaker 4: versus last year. 2025 is a tough year for Vegas.
[14:00] Speaker 4: A lot of softer midweek visitation, a little bit of
[14:03] Speaker 4: sticker shock from some more price conscious visitors. So visitation
[14:08] Speaker 4: was down last year. It's flattish this year to date.
[14:12] Speaker 4: So it's not exactly robust. The convention business has been strong.
[14:16] Speaker 4: But the midweek leisure business, particularly for more value-conscious consumers,
[14:21] Speaker 4: lower-priced casinos is softer. Where you stay, they don't lower
[14:24] Speaker 4: the prices.
[14:25] Speaker 5: Well, the Bellagio.
[14:26] Speaker 2: I state the High Roller Suite, of course.
[14:27] Speaker 4: Or the Bellagio. You have a lot of pricing stability.
[14:29] Speaker 2: Where does the lower-end... Because when I started going to Vegas,
[14:33] Speaker 2: there was a lot of stuff on the Strip that
[14:34] Speaker 2: you could go that was not the Mirage, which was
[14:37] Speaker 2: a high-end property at the time. Where do people go now?
[14:40] Speaker 2: Do they go downtown Vegas or go off Strip?
[14:43] Speaker 4: Yeah, I mean, there is a– and there are some
[14:45] Speaker 4: Strip properties that are more affordable, relatively speaking, some owned
[14:49] Speaker 4: by Caesars, etc., Wynn is the exception on the very
[14:52] Speaker 4: high end. But if you look at what's happening in Vegas,
[14:55] Speaker 4: it's pretty much analogous to what's happening in hotels. You
[14:57] Speaker 4: have the high end a bit stronger, the low end
[15:00] Speaker 4: feeling a bit more price pressure. Luxury high end consumers
[15:03] Speaker 4: are still spending. We're wary of that could change, but
[15:08] Speaker 4: there is that kind of C-shaped economy.
[15:11] Speaker 5: Oh, boy.
[15:11] Speaker 3: Okay, so I guess the question is, how has it
[15:16] Speaker 3: been responding to the flattish visitation growth that it's been
[15:21] Speaker 3: seeing the last few years? Did it change its strategy
[15:24] Speaker 3: in any way?
[15:24] Speaker 4: I don't think they've overall changed their strategy, but they've
[15:27] Speaker 4: probably been more conscious about consumers reacting to higher prices
[15:32] Speaker 4: for certain things that they might take for granted, bottles
[15:34] Speaker 4: of water, et cetera. So the consumer that wants a
[15:37] Speaker 4: luxury experience staying at Wynn they're going to pay those rates.
[15:40] Speaker 4: They expect that experience. For more value-based consumers, I think,
[15:44] Speaker 4: and MGM has even said this, they become more conscious
[15:48] Speaker 4: that that middle-tier consumer or more price conscious is going
[15:52] Speaker 4: to block it paying those super high prices. Stay with us.
[15:55] Speaker 3: More from Bloomberg Intelligence coming up after this.
[16:01] Speaker 1: You're listening to Bloomberg Intelligence with Scarlett Fu and Paul
[16:05] Speaker 1: Sweeney on Bloomberg Radio.
[16:09] Speaker 2: All right, it's Scarlett Philp, Paul Sweeney, live here in
[16:10] Speaker 2: our Bloomberg Interactive Broker Studio in New York City. We're
[16:14] Speaker 2: also streaming live on YouTube as well. I'm streaming live
[16:16] Speaker 2: at Bloomberg.com as well. General Mills, consumer products company, they
[16:20] Speaker 2: reported some numbers. I thought they were pretty darn good.
[16:22] Speaker 2: Stocks pretty much unchanged on the day. Stocks down 24%
[16:26] Speaker 2: year to date. Consumer products companies hit with concerns about
[16:30] Speaker 2: inflation and the consumer and changing different diet habits out
[16:35] Speaker 2: there in the world. It's some challenges for those consumer
[16:37] Speaker 2: products companies. But we want to get the latest on
[16:40] Speaker 2: their results. We turn to Emily Cohn. She's a consumer
[16:42] Speaker 2: team leader for Bloomberg News joining us here in studio. Emily,
[16:46] Speaker 2: what did General Mills say about their business with their
[16:48] Speaker 2: most recent quarterly earnings?
[16:49] Speaker 6: Yeah, so they reported a quarterly earnings beat, but a
[16:53] Speaker 6: lot of, you know, some doom and gloom there on
[16:55] Speaker 6: the consumer and the consumer being stressed, especially the middle
[17:00] Speaker 6: to lower consumer. They talked about shoppers waiting to buy
[17:04] Speaker 6: products until they're on sale. These are all concerning signs
[17:08] Speaker 6: that I think are weighing on the stock.
[17:11] Speaker 2: Yeah, so I mean, it's down about half a percent today,
[17:13] Speaker 2: but again, down 24% on a year-to-date basis here. I mean,
[17:19] Speaker 2: what I've heard from a lot of consumer products companies
[17:21] Speaker 2: is some of these private label store brands are actually
[17:26] Speaker 2: taking some share away from some of the more branded
[17:28] Speaker 2: products out there on the on the shelves in the supermarkets.
[17:32] Speaker 2: Is that what General Mills is seeing?
[17:34] Speaker 6: It's a really good point. I think this is affecting
[17:37] Speaker 6: companies like General Mills and Kraft Heinz, where you see
[17:40] Speaker 6: two things happening. You see the private label getting more
[17:44] Speaker 6: premium and more people shopping down to private label. And
[17:47] Speaker 6: then you see on the premium side, brands like Goodles
[17:51] Speaker 6: that cost more than your Kraft macaroni and cheese, but
[17:54] Speaker 6: offer things in terms of fiber and protein.
[17:58] Speaker 4: So you see.
[18:00] Speaker 6: More in the private label, more in the premium side.
[18:04] Speaker 6: And then that really puts a squeeze on what I
[18:07] Speaker 6: think of as these middle brands, the General Mills. And
[18:11] Speaker 6: that's why you see General Mills coming out and saying,
[18:13] Speaker 6: I think their approach to pricing is to charge more
[18:19] Speaker 6: for things that have extras, Cheerios with protein, other foods
[18:25] Speaker 6: with fiber. So that's a way of raising prices with
[18:30] Speaker 6: maybe not raising prices across the board.
[18:33] Speaker 2: We've now had, I guess, several years of pretty widespread
[18:37] Speaker 2: GLP-1 use out there in the marketplace. What are these
[18:42] Speaker 2: food companies saying? Has it really impacted their business? Are
[18:46] Speaker 2: people really eating less across the board?
[18:49] Speaker 6: I think food companies tend to say when you look
[18:51] Speaker 6: at a family's basket size, there's not much changing. But
[18:55] Speaker 6: you definitely see consumption... habits changing, especially on these ultra-processed foods.
[19:04] Speaker 6: I think ultra-processed foods that don't offer any nutrition are struggling.
[19:10] Speaker 6: But where you see growth in the snacking area are
[19:13] Speaker 6: these what we call better-for-you snacks, snacks that offer some
[19:17] Speaker 6: kind of nutritional value, protein, fiber. That's where the growth is,
[19:23] Speaker 6: and that's what you see General Mills talking about where
[19:25] Speaker 6: they're leaning into.
[19:27] Speaker 2: And just so you know, this is a protein-free studio.
[19:30] Speaker 2: I hate that term, but all my kids use it.
[19:32] Speaker 2: I'm like, well, no, you ask if you want chicken
[19:33] Speaker 2: or shrimp or whatever. What protein are we having tonight?
[19:36] Speaker 2: That'll get you kicked out of my kitchen pretty, pretty quick. So,
[19:40] Speaker 2: but that's kind of where the marketplace is going. And
[19:43] Speaker 2: are these food companies keeping up with the, because oftentimes it's,
[19:47] Speaker 2: people talk about innovation, product innovation. What are they bringing
[19:50] Speaker 2: to the market? Is it a different– food? Is it
[19:52] Speaker 2: different packaging? Is it different sizing? How are they trying
[19:55] Speaker 2: to react?
[19:56] Speaker 6: I think it's all of the above. I think you're
[19:57] Speaker 6: going to see changes in sizing and assortment, and then
[20:01] Speaker 6: also these more premium products that they can charge more for.
[20:04] Speaker 6: We have a story today about Kraft Heinz seeing much
[20:08] Speaker 6: faster growth in its Heinz Simply label, which is their
[20:12] Speaker 6: ketchup that strips out all the, you know, quote-unquote bad ingredients,
[20:18] Speaker 6: and they charge more per ounce for it.
[20:20] Speaker 2: Do they? And it's selling.
[20:21] Speaker 6: I And the growth of the Simply Ketchup is outpacing
[20:27] Speaker 6: the growth of.
[20:28] Speaker 2: The regular ketchup. I wonder if my shopping basket has
[20:31] Speaker 2: changed much over the last 20 or 30 years. Probably not.
[20:35] Speaker 2: But for the younger demos coming in, younger parents coming
[20:38] Speaker 2: into the store, they have different tastes. And it's up
[20:42] Speaker 2: to the companies to keep up with it, I guess.
[20:44] Speaker 6: Totally, totally.
[20:45] Speaker 2: How is it in terms of getting shove space these days?
[20:48] Speaker 4: It's still.
[20:49] Speaker 2: Super duper competitive to get proper shelf space, not to
[20:52] Speaker 2: be done on the floor or way up out of reach.
[20:54] Speaker 2: Is that still a game they play?
[20:56] Speaker 6: Yeah, I think there's a lot of pressure coming from
[20:58] Speaker 6: the retailers. We had a story last week about the
[21:01] Speaker 6: retailers being warned by the food companies that higher prices
[21:07] Speaker 6: are coming. And I don't know if the retailers are
[21:12] Speaker 6: willing to play ball. We had a story also this
[21:16] Speaker 6: week about Boar's Head and Red Bull disappearing from some
[21:21] Speaker 6: Kroger stores over these price negotiations. Because Kroger, their whole
[21:25] Speaker 6: strategy right now is to bring prices down. But some
[21:28] Speaker 6: products are bringing their prices up. So- It's really a
[21:33] Speaker 6: question of who has more power in this negotiation.
[21:35] Speaker 2: I was going to say, I mean, Boar's Head and
[21:37] Speaker 2: Red Bull, those are major brands. Yeah. Brand value.
[21:40] Speaker 6: Well, Red Bull, I mean, that's a really competitive space
[21:43] Speaker 6: right now. So Kroger is saying that their energy drinks
[21:46] Speaker 6: are up despite not carrying Red Bull.
[21:49] Speaker 1: Okay.
[21:49] Speaker 6: So there are all these new entrants, Alani New, that
[21:51] Speaker 6: are selling like crazy. Maybe they don't need the pricey
[21:54] Speaker 6: Red Bulls.
[21:55] Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
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