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Americans Flock to TikTok Alternative & Bourbon Boom is Running Dry
00:31:41
No TikTok? No problem. Maybe & the bourbon boom is over
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- [00:01]
Neal Freyman
Good morning, Brew Daily Show. I'm Neal Freyman.
- [00:04]
Toby Howell
And I'm Toby Howell.
- [00:05]
Neal Freyman
Today, need to pee at a Starbucks. You're now going to have to buy a medium roast.
- [00:10]
Toby Howell
Then. Us TikTok users are fleeing to another Chinese app ahead of its potential ban. It's Wednesday, January 15th. Let's ride.
- [00:23]
Neal Freyman
You know what's been making me smile this week? The Australian Open on YouTube, the first tennis major of the year is now underway. And to get around broadcasting rights restrictions, the tournament has put its matches on YouTube but subbed in these oversized we looking digital avatars for the real players so they don't violate any rules. It looks like you're watching a video game, but the actual match is going on. And I got to say, showing a digital representation of the match is a pretty ingenious move and it's hilarious to watch, especially when a player loses their temper and smashes their racket.
- [00:58]
Toby Howell
Watching Medvedev smashes racket into the ground, but in we form was very funny. A lot of sports broadcasts have started to use this motion capture to recreate their games with this digital layer on top. I'm thinking of something like spongebob or the Simpsons being overlaid onto NFL games. They've been running those for the last couple of years. Usually it's a way to force a little bit of IP into these sporting events, bring in younger viewers, but at the same time, it is a legit way to watch a live sporting event without showing any of the footage. So I think it was only a matter of time until we saw this kind of digital sleight of hand to get around broadcasting restrictions. But if it brings in a new audience to the world of tennis, then all the power to them. I'm going to put you on the spot here, Neil. To any predictions for the Australian Open. I mean men's and women.
- [01:48]
Neal Freyman
On the men's side, I think Sinner is going to continue his scintillate. Janik Sinner, his scintillating run from last year. He's playing out of this world. And then on the women's side, let's go. Jessica Pegula from the United States. Her parents own the Buffalo Bills so they are also going for the Super Bowl. I think a Pegula family championship around February could be pretty amazing to watch.
- [02:11]
Toby Howell
If you looked at the top of the free apps in the US App Store in the last week, you were greeted with an unfamiliar name atop the rankings. Zhao Hong Shu, a Chinese owned short form video app which can be translated as Rednote, has been perched in the top spot since Monday as millions of Americans search for a replacement for TikTok, another Chinese owned short form video app. Over 300 million people, predominantly young women in China, use the app, where users share similar brain rotting video content alongside text based posts. Part of Red Notes Draw is the very fact that it is under Chinese ownership. Americans seeking it out have left comments like we are coming to the Chinese spies and begging them to let us stay here to spite US Authorities. Chinese users have been more than welcoming, calling the newly joined Americans tik tok refugees, providing tutorials on how to navigate the app that is primarily written in Mandarin and asking for help with their English homework. Neil Part of this is a joke, a meme about rebelling against the US government's involvement in the TikTok ban. But it is also a first of its kind cultural mashup where Americans and Chinese citizens are coexisting online. Though drastically different expectations when it comes to content moderation and free speech could stunt RedNote's growth within Western audiences.
- [03:29]
Neal Freyman
First of all, this is remarkable. What we're seeing there is a physical and digital border for decades between the US and China. We don't encounter each other on a daily basis, let alone a yearly basis. And now because of this app this week, for the past two days, the youth of both countries are talking to each other and exchanging information and helping each other with homework or learning Mandarin. So politics aside, what we saw yesterday and Monday was truly remarkable in terms of cultural exchange and bridging this cyberspace divide that had existed for so long between the US and China. So before we dive into, you know, maybe all the things that could go wrong here, which there are many, I just want to take a second to appreciate the fact of people interacting with each other across the planet that didn't really know each other, don't really know how each other live. So that has been kind of nice to watch.
- [04:23]
Toby Howell
It was nice to watch. It's very funny to watch too, because US users are asking Chinese users to share memes within their kind of localized culture. And a lot of the times they don't make sense, but sometimes they do make sense and it does translate, you know, across borders. That being said, though, there's definitely some hurdles to Red Note becoming an actual one. For one TikTok alternative, one of the issues is that it's also a very localized app. It's not just short form video, it's something of a TechCrunch described it as a Chinese Yelp or a Google alternative, offering these hyper local recommendations in addition to the video feed and then also the it is a strictly censored app, like most of the things coming out of China when it comes to the Internet, things like politics or socially sensitive topics like LGBTQ issues, even drugs on the app are not allowed. So you are seeing a lot of these Western users getting their accounts banned almost immediately. I saw people from TikTok trying to post their TikTok videos on the app. They were taken down because they had the Tik Tok watermark in them. So it is probably more of a meme than an actual one for one TikTok replacement.
- [05:32]
Neal Freyman
But, but it's interesting to watch American TikTok users that are fearing that this app is going to be banned on Monday flee to other Chinese platforms instead of American ones. If you go right past number one on the App Store, number two is Lemon 8, which is TikTok's sister app and that is, that has been downloaded a ton too in the past few weeks. So seems like people on TikTok are, are going to Chinese owned apps instead of American ones. You don't see Instagram climbing up the list or X or any other American social media platform. So that's been an interesting phenomenon to watch. In addition to the censorship issues of these Chinese apps, the question is, will they be banned too? The law that is going to ban TikTok singles out TikTok specifically. But Lemon 8, the number two app on the App Store, is also owned by ByteDance. Red no is owned by a Shanghai. It's literally owned in a company in Shanghai. So TikTok's. TikTok's domiciled in Singapore, so it's even more tied in to the Chinese government. So those apps probably don't have a bright future in the United States, but it's, it's been interesting to see them flock to Chinese owned apps.
- [06:51]
Toby Howell
Yeah, the US Officials are probably thinking they're playing whack a mole with all these new apps that are popping up. If they do in fact ban TikTok, maybe Red Note is falling close on its heels.
- [07:00]
Neal Freyman
Meanwhile, this app, this ban is coming in five days and TikTok authorities are scrambling to figure out a way to save it in the United States. Reports from multiple outlets say that they are thinking about selling it to Elon Musk. The US operations of TikTok selling its Elon Musk as a sort of olive branch ahead of these big negotiations that are going to take place between American and Chinese officials. ByteDance said that that is pure fiction, but this might be above Them Chinese authorities might be negotiating with the US government around this. So the time, the time is ticking here on a TikTok ban and there's been massive changes afoot. Tennessee whiskey is a song people love to sing along to, but it's no longer a beverage people want to drink. Yesterday, Jack Daniels and Woodford Reserve owner Brown Forman said it was cutting 12% of its workforce, nearly 700 people, amid a downturn in American whiskey drinking and looming tariff threats. Bourbon sales after soaring during the pandemic, have gone into reverse, meaning pain for distillers large and small. Despite your best efforts on Father's Day, sales volumes of US whiskey, including bourbon, Tennessee and rye, dropped into negative territory for the first time in nearly 20 years in 2023. Then through the first nine months of 2024, they dropped even more, 4%. That's forced distillers such as Brown Forman to lay off workers and figure out ways to move a record amount of bourbon inventory aging in their barrels. It's a boom bust cycle as old as time. Bourbon began to catch on in a big way in the early 2000s. And it seemed like every bachelor party I was invited to was hitting the bourbon trail in Kentucky. Then the pandemic came in juice demand even more because everyone was at home making their own old fashioned. In 2022, American whiskey sales were surging by double digit percentage points. But now the bubble has popped as more people turn away from liquor and alcohol more generally. The heavy jobs cuts at Jack Daniels show how dramatic this collapse has been.
- [08:59]
Toby Howell
There have been a lot of headwinds. Drinkers in general are just cutting back. Also, potentially they are moving through some of the bottles that they accrued during that pandemic boom. They also could be trading down at cheaper brands as inflation has, you know, weighed on the average American consumer. You're also seeing a lot of competition. I don't know if competition is the right word, but anti obesity drugs have led people to start drinking less. The rise of cannabis and these no alcohol drinks have also started to take market share away from the harder spirits market. And then the US Surgeon General isn't helping bourbon sales either. He recently came out and said alcohol should carry cancer warning labels. It all just combines together to you see why less people are drinking bourbon, less people are drinking hard spirits in America right now due to this confluence of a bunch of factors.
- [09:46]
Neal Freyman
And then if all that wasn't enough, if you talk to the head of the Kentucky Distillers association, the number one thing he's concerned about, about is tariffs. He said. Literally, the one thing that is everyone here scared to death is tariffs. And that is because when Trump was in the White House last time he put tariffs on the EU. The EU retaliated by putting 50% tariffs on American whiskey exports to Europe. That's their second largest market. It cost them a half a billion dollars. Those tariffs are currently suspended, but barring no further changes, they're going to come back in March. And Trump has vowed to add more tariffs to the EU when he comes back into office. So they are, they might see one of their largest export markets dry up. In addition to the fact that Americans are drinking less. So they're getting hit from all angles now.
- [10:38]
Toby Howell
And then. The final piece to this bourbon puzzle is the fact that makers of eight spirits have to almost live in the future. The key word there is aids. When they lay barrels down, they're making a bet on future demand. If you miscalculate, if you lay too many barrels, then five years, seven years, 10 years down the line, you will be dealing with this supply gut which is what we're experiencing right now. A lot of these makers lay these barrels in Covid when demand was booming. And now here they are coming to maturity and suddenly no one wants to drink them. So it is a really complicated supply and demand balancing act that right now the industry is not walking very well.
- [11:17]
Neal Freyman
And when we talk about bourbon, you might think, oh, we're talking about whiskey made in Kentucky. But no, a little myth busting. Bourbon can be made anywhere in the United States. So when someone you know sticks up their nose at you is like, bourbon has to be made in Kentucky. You can say, no, it can be made in Tennessee. It can be made anywhere. It just has to be made in the United States.
- [11:36]
Toby Howell
Starbucks unveiled a new policy this week that calls for less loitering and more ordering. The coffee chain is reversing its 2018 third place policy in implementing a new code of content that requires customers to make a purchase in order to use a cafe's spaces. That means no posting up with your laptop for a work session and no quick bathroom breaks unless there's some latte ordering involved. Baristas are also empowered to request non paying individuals to beat it and even get law enforcement involved if necessary. The policy shift comes as new CEO Brian Niccol works on revitalizing the struggling business with a focus on turning around the customer experience inside the cafes that is degraded in part due to a boom in mobile ordering. Despite the new policies, Starbucks insists they are still trying to Create a welcoming environment, just one that prioritizes paying customers instead of anyone who drops in off the street. Neal, this is a pretty big vibe shift moment for Starbucks.
- [12:36]
Neal Freyman
Yeah, but did you have any idea you could just chill in a Starbucks and go to the bathroom without ordering anything? I didn't know that existed. And it started 2018 after this incident that I'm sure a lot of people remember, which is when two black men were arrested in a Philadelphia location. They were there on a business meeting, just had a bottle of water. One of them got up to go to the bathroom. They were accused of being trespassing from the people who worked there. They brought in the police. They were put in handcuffs. It led to a ton of outrage and backlash In. In response, Starbucks closed all of its cafes for a day, sent everyone to racial sensitivity training. And Howard Schultz, the CEO at the time, made this policy change to make Starbucks more welcoming to the community. He said, we don't want to become a public bathroom, but we're going to make the right decision 100% of the time and give people the key. So this is the reversal of the reversal from back in 2018. There have been numerous incidents at Starbucks where people were feeling unsafe. They closed 16 locations in the past few years, six in Los Angeles, six in their hometown of Seattle, over drug use at their restaurants. So they're saying, we want to make this a more welcoming place. That's Brian Nichols big, you know, mission here. And the one way to do that, he thinks, is to, you know, prioritize customers and keep people who aren't ordering from entering the cafes, because that is the.
- [14:00]
Toby Howell
The center of this kind of tension is that Starbucks simultaneously does want to make the cafe a more inviting place. They're doing things by giving people who sit within the cafe and order in store orders incentives to stay and sip for a while. Beginning at the end of January of this year, customers can get a free refill if they got. If it's served in a ceramic mug or a reusable glass. That used to only be for Starbucks loyalty program members, but now if you have a drink there and you're sitting there with, you know, that physical ceramic mug, they will give you a free refill. To try to encourage this, you know, coffee house environment of just sitting and sipping on a coffee. It is funny, Neal, that you say you didn't know that you could pop into a Starbucks to, you know, go to the restroom. If you've ever been running around a city or had, like, an emergency bathroom break, the first thing you do is always you open Starbucks because you know that their bathrooms were available. So you're I'm glad you've never had an emergency.
- [15:00]
Neal Freyman
Hospitable. There's like a code I have. I have plenty of other places. I'll tell you my secret bathroom map that I have on Google Maps, but I don't usually go to Starbucks.
- [15:10]
Toby Howell
Please do. Please do. Up next, don't go anywhere because Neil is going to talk about cottage cheese.
- [15:18]
Neal Freyman
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- [16:09]
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- [16:40]
Neal Freyman
Okay, for this next story, I want you to close your eyes and imagine you're opening your fridge and identify a product in there now that five years ago would never have been part of your diet. For many of you listening, that product is cottage cheese, the soupy mixture of curds and cream you associate with your grandparents. Been skyrocketing in popularity, with sales in the US growing more than 50% since 2019, the love affair is only accelerating. Sales were up 16% in 2023, and the numbers are in for 2024. 17% growth. Even better, many of you won't be surprised by this, because it's nearly impossible to scroll on social media for five minutes without some ecstatic youngster pitching the health benefits of cottage cheese. And that's really the driving force of the cottage cheese renaissance. People are looking for foods with high protein content to complement a healthy lifestyle. And cottage cheese checks all the boxes. It's become a viral sensation, driven by Gen Z discovering cottage cheese for the first time and finding that they actually enjoy it. Bill Simmons voice Toby Best comeback story at the grocery store since Brussels sprouts.
- [17:48]
Toby Howell
I do think so. Here is why. My, my theory why cottage cheese is doing so well is the big gripe that people have with cottage cheese is the texture. But then they figured out, wait a second, we don't have to deal with that soupy, lumpy texture. We can just blend it and include it in a lot of recipes. A lot of these viral recipes include something that turns into something that looks nothing like cottage cheese. I'm talking about cookie dough recipes with cottage cheese pasta sauces. I've seen ice cream with cottage cheese at the base. I've seen bread with cottage cheese as the base. So I think it's versatility. And the fact that people realize they could transform it from this lumpy, soupy thing into something delicious is why we've seen such a tailwind for this product in recent, recent years.
- [18:33]
Neal Freyman
And it's really thanks to, honestly, one company called Good Culture, and they decided to put cottage cheese in single serving cups similar to what you'd see with yogurt. And they made the texture different, they put fruit at the bottom and they projected that their sales would grow 35% in 2023. It turned out that their sales grew 85% in 2023, and then they grew another 85% in 2024. So this is one of the hottest brands around in the entire food industry. And they have done a lot to change what people, how people view cottage cheese. And their whole thing is we don't want you to tolerate cottage cheese. We want you to actually enjoy it. And so that's their mission.
- [19:15]
Toby Howell
And Neil, my eyes right now in the studio are looking at a Good culture cottage cheese. You wanted to live, taste test this on air because you haven't had cottage cheese, you said, in over 30 years. So you're opening it right now. You're going to give it a taste, tell the people what you're saying.
- [19:32]
Neal Freyman
Ok, so this is Good Culture cottage cheese, pineapple flavored. On the, on the COVID of this package, it says 3 grams of sugar. You said that was kind of a lot that you thought.
- [19:42]
Toby Howell
I thought that was a little.
- [19:43]
Neal Freyman
All right, so I'm opening it up and the. I got to say, it looks very lumpy. I don't think they've done a ton to change the. The texture. It is extremely lucky. Lumpy. Extremely curdsy. So I'm about to put this in my mouth. It's been. I think it's been 30 years since I've eaten cottage cheese. I'll get some pineapple from the bottom there. So hopefully it tastes like pineapple. Here we go. Big spoonful. Not bad. Way better than I thought. Here, taste some.
- [20:08]
Toby Howell
Oh, gosh. I have to try.
- [20:09]
Neal Freyman
Yeah, it's not bad. I thought it was going to be super sour. It is not a fan. Really. Okay.
- [20:16]
Toby Howell
It's too sweet. Oh, my gosh. I guess I've never had cottage cheese. I just realized because I've never had.
- [20:22]
Neal Freyman
The texture is still bad. I will say. Right. It's very lumpy.
- [20:25]
Toby Howell
It's just. I would rather have yogurt or pretty much.
- [20:27]
Neal Freyman
Me too.
- [20:28]
Toby Howell
Anything else. So I think I'm still on the bandwagon that you have to transform it in some way because going straight cottage cheese is still a little bit much for me. But yeah, cottage cheese is definitely something that we have been seeing. I'm sorry, I'm trying to get it out of my mouth right now. We need. We need a little water. But maybe we're not on the cottage cheese bandwagon is what it's sounding like now. Let's spread to the finish with some additional headlines you may have missed. Up first, Elon Musk and the securities and Exchange Commission are beefing again. The agency filed a lawsuit against the richest man in the world, alleging he violated securities laws by failing to properly disclose he had amassed an ownership of more than 5% of Twitter shares back in 2022, which likely would have pushed the stock price up. According to the complaint, Musk's delayed disclosure let him purchase stock at artificially low prices, resulting in savings of about $150 million. Now the SEC is looking for Elon to disgorge those ill gotten gains. Neal, this case is likely to be the first test of Elon's relationship to the new Trump administration as he will likely ask the commissioner's next head to withdraw the case.
- [21:35]
Neal Freyman
Is there anyone happier to see SEC Chair Gary Gensler go than Elon Musk? This is the third time the has gone to court with Musk. The first was over that I'm taking Tesla private funding secured tweet, which happened in 2018. That was the first lawsuit. Now, the SEC has been investigating this Twitter takeover in 2022 for multiple years.
- [22:02]
Toby Howell
Yeah, this rule, known as 13D it's this early mechanism, early warning mechanism for investors. They deserve to know if someone powerful is amassing a big stake in a company they're investing in at least 5%. At least 5% is. The threshold is also you need to disclose within 10 days. Elon disclosed 11 days later. So that's why he is pretty against it. He thinks that they're nitpicking here. That being said, the commission does routinely enforce this role. 13d is a rule that they actually do enforce very frequently. And some people familiar with the SEC said that in order to deter others from doing the same thing, you have to make an example of someone like Elon, because if he can get away with it and he's the richest man in the world and he makes front page news, then why would anyone else bother to comply with it as well? So I do think we could see the new administration be in a tough spot here because you can't necessarily let this just fade away.
- [22:55]
Neal Freyman
Mark Zuckerberg is on one right now. He announced yesterday that Metta was cutting about 5% of its staff, upwards of 3,600 people. And it's not because of cutting costs or the year of efficiency. It's because they're not good at their jobs. He said, I've decided to raise the bar on performance management and move out low performers faster. Whereas previously Metta would, quote, manage out people who aren't meeting expectations. He's laying them off instead, starting next month, but added they'll have generous severance. This guy is feeling emboldened right now to rip up the norms of the past.
- [23:30]
Toby Howell
Yeah, and Metta is in a really good spot too, which is why this is surprising for a lot of people. They're on track for record revenue, they're on track for record profits. They are still off these fresh memories of firing 25% of staff a few years ago in that year of efficiency. But here Meta is again, here Zuck is again kind of trying to create a new corporate culture, honestly at Meta in saying that we're cutting the fluff here. So this is not cost saving efforts anymore. This is trying to get leaner and just trying to get 5% better.
- [24:03]
Neal Freyman
But they're, they're backfilling the role. So it's not an overall headcount reduction. They're going to refill all of these roles. But this is something that banks and other big companies routinely do. They just say, we're doing like a 5% cut at the bottom.
- [24:16]
Toby Howell
And it's something that tech companies have started to do as well because last week Microsoft did the same thing. Cutting targeting are using job cuts to target underperforming employees as well. The FDA has a new idea to try and get people to eat healthier Front of packaged Nutrition Labels this new nutrition info box would give you a at a glance information about saturated fat, sodium and added sugar, classifying each as low, medium or high to go along with the existing nutrition labels on the back of products. The FDA is accepting comments on the proposal for a few more months, but expect food companies to lobby against the change. Industry groups have pushed back on research saying front of package labels would change consumer behavior and said normal nutrition labels offer enough information as is. Neil, what are some of the other reasons food companies maybe aren't too happy with this potential change?
- [25:09]
Neal Freyman
Well, they think people would buy less of their products, so they've been pushing back against labels for decades. There are also some people on the other side of the coin who say this is not a good idea as well to slap a universal food label even when those harmful substances are in low volume. Because you kind of inure the public to seeing these labels and you don't, you stop paying attention whether it's high sodium content or low sodium content. So they say you should just put it on if it's high sodium content. And just as we talked about with the sec, there's a changing of the guard here. Who's going to be leading federal health policy in the next four years? Probably RFK Jr. He is not a fan of large food companies, so this may be a little more acceptable to him than what we just talked about with the sec. But we'll see what kind of tack he takes with major food companies. We know he thinks they are the enemy. Okay folks, I know you are all civic minded people who want to help out your community and country, so I've got a volunteer position for you. The only qualification proficient in reading cursive. The National Archives, the US Record Keeper put out a call for citizen volunteers to help transcribe digitized Revolutionary War documents, in particular veteran pension files to help us understand what life was like around the time the Nation was founded. The agency is making a big transcription push ahead of the United States 250th birthday next year. The only problem? These documents were written in cursive because that's what people did back then. So it needs volunteers who can read this ancient tongue. If this sounds like you and you're looking to do some light reading about veteran pension files in the Revolutionary War, you can sign up Online and then launch right in fully remote. Toby, do you think you can read 18th century cursive?
- [26:59]
Toby Howell
Absolutely not. I was pretty bad at cursive all the way back in sixth grade. But a lot of people are saying in a lot of these National Archives, people are saying that it's not just whether you learned it in school, it's whether you actually use it on a day to day basis. If you, it's just like any other muscle, you use it or you lose it. And no one's using it these days. So it is becoming, they called it a quote unquote superpower these days to find someone who actually is up to date on their cursive. It is pretty remarkable that cursive has even hung on to this day because it was on the way out all the way back in the 1890s when the typewriter was first introduced. Here we are in 2025. It is still taught in multiple states. California still teaches cursive as well. I do think it is a rite of passage, even if it's not something that is, you know, so functional in everyday life.
- [27:45]
Neal Freyman
And when California passed that law in 2023 to bring cursive back, everyone kind of said, what? What's going on? Like it's 2023. And they said the reason for that was to help kids learn how to read primary source documents. And that's exactly what is going on here with the National Archives. So, Toby, I know you have a little time on your calendar today. I'm excited to see you log in and do some transcribing of some veteran pension plans from the Revolutionary War and help out the National Archives.
- [28:11]
Toby Howell
I'm just going to try to write my name first and foremost.
- [28:13]
Neal Freyman
Okay, let's wrap it up there. Thanks for starting your morning with us and have a wonderful Wednesday. For any questions, comments or feedback, send an email to Morning Brew daily at Morning Broadcom. And if you're enjoying the show, please share it with your friends and family. As always, Toby is here with some inspiration to send you along your sharing journey.
- [28:32]
Toby Howell
I want you to share the podcast with a cottage cheese lover. Now, this will probably be an older person, maybe your grandparents, and that is perfect. Feel free to admit or to not admit that you were wrong about cottage cheese all along because you maybe you probably were.
- [28:49]
Neal Freyman
Let's roll the credits. Emily Milian is our executive producer. Raymond Lu is our producer. Olivia Graham is our associate producer. Eugenia Ogu is our technical director. Billy Menino is on audio Hair makeup is on a playdate with our new Chinese friends. Devin Emery is our chief content officer, and our show is a production of Morning Brew.
- [29:06]
Toby Howell
Great show, Danielle. Let's run it back.