Uber Rides Advertising

Plus: Heineken is high on non-alcoholic beer ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

February 16, 2023

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TOGETHER WITH

Good morning.

Feeling like a candle being burnt at both ends? Join the club.

A Future Forum survey found that more than 40% of people with desk jobs reported struggling with burnout. It’s even worse than at the height of the pandemic. Whether it’s the constant downsizing, the smorgasbord of apps every employee needs to know how to operate, or the ever-looming threat of a recession, workers are tense. Don’t quit (or quiet quit) just yet. The Mayo Clinic recommends making time in your work day for physical activities like walking and yoga, and remember to discuss concerns with your supervisors, which can be very awkward, but beneficial. If all else fails, then you can pull a Jerry Maguire.

Morning Brief

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Rideshare giants are delivering passengers to advertisers.

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Heineken spends more so you will too.

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Salmon is the new oil.

Ridesharing

Uber, Lyft Find Big Bucks Selling Ads

Ride-sharing has only taken Uber and Lyft so far. Both believe their futures will be a lot brighter by sharing data on their passengers.

After years and years of struggling to turn consistent profits as people-movers (and food deliverers), the ride-share leaders realized their apps were perfect vehicles to drive in-house advertising businesses. It’s a tale nearly as old as Silicon Valley: When all else fails, there’s always money to be made sharing user data (especially ultra-valuable location-specific data) with the mad men on Madison Avenue.

Five-Star Audible

Both ride-share companies announced their most recent quarterly earnings reports last week, but the results couldn’t be more dissimilar. Uber’s $8.6 billion in revenue in the last three months of 2022, a nearly 50% increase year-over-year, helped deliver a $595 million profit — giving the company enough confidence to claim it will achieve operating income profitability at some point before the end of 2023. Lyft, meanwhile, continues to be the perpetual baby brother of taxi disruptors. It barely beat analysts’ $1.16 billion revenue expectations, but still found itself with a $588 million net loss for the quarter — and projected first-quarter revenues well below most expectations. “Last night’s Lyft call was a Top 3 worst call we have ever heard,” Dan Ives, a senior equity analyst at Wedbush Securities, wrote in a note. Yikes.

Differences aside, the two companies both have a lot riding on their burgeoning ad-tech businesses, which share aggregated user data and specific location details to sell ads both before, during, and after rides:

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Uber, which launched its ad-tech business as an Uber Eats trial balloon in 2019 before launching a dedicated division last year, passed $500 million in annual run rate for ad sales and is targeting $1 billion in revenue in the high-margin division by 2024, according to a Wall Street Journal report.

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Lyft, which also launched its ad business last year, opted not to discuss it in last week’s earnings report, though the WSJ reports that its fourth-quarter sales were nearly seven times that of the previous quarter — with Chief Business Officer Zach Greenberger saying it surpassed internal goals.

Lyft’s share price has crashed more than 30% since Thursday’s earnings call. Meanwhile, Uber, finally shifting into second gear, has seen its share price climb some 42% so far this year — almost entirely reversing the downturn from last year’s tech rout.

Grounded: Lyft just can’t figure out where and how to spend money. In 2020, it launched a little-used food courier service called Lyft Delivery, which was unceremoniously canceled last month, according to a New York Times report. And now, it’s spending less money to keep drivers driving. In the past six months, according to the NYT, Uber was paying an average base pay nearly 20% higher than Lyft, while Lyft drivers subsequently drove six fewer hours per week. Quite a feat, making Uber look like the better not-quite-employer.

– Brian Boyle

Beverages

Heineken Pushes Premium and Non-Alcoholic Brands

(Photo Credit: Gerrie van der Walt/Unsplash)

With high inflation and rising interest rates, people are learning how to scrimp again… just not on beer, Heineken says.

The Dutch brand upped its marketing spending in 2022, particularly on its premium products. Despite the increased cost of living, well, pretty much everywhere, “budget” does not seem to be in these drinkers’ vocabularies.

Another Round

Premium is a rather ambiguous word, and the meaning changes depending on who says it. By Heineken’s standards, it just means the beer is more expensive than the average market price. A 12-pack of traditional Heineken might sell at the grocery store for $17 while Lagunitas IPA, which Heineken also owns, would go for $19. So it’s not like consumers are emptying their bank accounts just for a drink.

Last year, the brewer increased marketing spending by a fifth, to €2.7 billion, and CEO Dolph van der Brink told the Financial Times Heineken aims to spend even more on marketing its premium brands this year. “There are many concerns about . . . pricing and the resilience of consumers,” he said, “but we really see, all the way to the fourth quarter, our premium portfolio outperforming our total portfolio.”

In addition to its more expensive brands, Heineken is high on non-alcoholic beer, a product that’s increasing in popularity as post-pandemic crowds want to socialize more and not worry about calling an Uber or dealing with a hangover:

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This past Sunday, the brewery ran the first non-alcoholic beer ad ever during a Super Bowl. It featured Paul Rudd in character as Marvel’s Ant-Man, drinking a Heineken 0.0.

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The non-alcoholic global beer market grew to $22 billion last year and is projected to reach $40 billion by 2032, according to GMI Insights. Nielsen reported non-alcoholic beer sales in the US grew by 20% last year.

Big household name brews are well-positioned to cash in on the sober beer craze. In the craft sector, Chris Ericson, a New York State Brewers Association board member, told The Daily Upside, “Non-alcoholic beer has caught the attention of the larger players in the craft industry, but other than the top 10 producers in the country, the other 9,000 of us don’t really have the technology or the bandwidth inside our breweries to make a true NA beer.”

Barroom Brawl: New data from the Distilled Spirits Council of the United States found that liquor surpassed beer for market supremacy, but just barely. Spirits accounted for 42.1% of alcohol sales in the nation while beer did 41.9%. That’s some stiff competition.

– Griffin Kelly

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Is A Recession Looming? Here’s 6 Ways To Prep Your Finances

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Aquaculture

Salmon Producer Rails Against Norway’s Salmon Tax

Not since the Cod Wars have Nordic fish been so contentious.

The CEO of Mowi, the world’s largest salmon producer, took a swipe at Norway’s plans to introduce a 40% tax on salmon farms in an interview with the Financial Times, calling them a “dark cloud for the Norwegian salmon industry.” The proposed tax is predicated on the idea that salmon farmers profit from a natural resource, and would echo the 78% tax Norway imposes on oil. To be fair, fish are pretty oily.

Swimming Upstream

Norway first proposed the fishy new tax in September, sending producers’ stocks diving. The move was met with some outcry, which meant the government is on the hook to reassess the framework by March. But whatever it does settle on will apply retroactively from the beginning of this year.

Aquaculture is the world’s fastest-growing food sector, and Norway produces around half the world’s farmed salmon, according to the Food and Agriculture Organization, so a 40% tax could shift the balance substantially:

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Mowi CEO Ivan Vindheim told the FT the tax was “anti-business,” would lead to job losses for Norway, and that it would increase prices for consumers worldwide.

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Salmon has been subject to inflationary pressures seen all over grocery store aisles, and the producers have been doing swimmingly. Mowi boasted record earnings in 2022, topping €1 billion in profit for the first time ever.

Teach a Man to Feed a Fish: The sustainability of fish aquaculture varies widely, and a new study published this week in Current Biology suggests the majority of environmental pressures caused by salmon farms boil down to the feed the fish are given. Scientists are researching low-impact feed alternatives including algae and insects. Grass-fed beef is so passé, cricket-fed salmon is the next big thing.

– Isobel Asher Hamilton

Extra Upside

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High rollers: US casinos scored a record $60 billion in revenue last year.

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Oh, great: The arctic ‘Doomsday glacier’ is melting faster than we thought.

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Just For Fun

Giant chopsticks.

Perfect shot.

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