Canada Pulls US Liquor From Shelves & Can Fries Save Sweetgreen?

Summary

Morning Brew Daily Podcast Summary
Title: Canada Pulls US Liquor From Shelves & Can Fries Save Sweetgreen?
Hosts: Neal Freyman and Toby Howell
Release Date: March 7, 2025

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1. Introduction

In the March 7, 2025 episode of Morning Brew Daily, hosts Neal Freyman and Toby Howell delve into significant economic and business developments impacting both the United States and Canada. The episode navigates through a variety of topics, including the latest jobs report amidst government workforce reductions, escalating trade tensions affecting the liquor industry, advancements in private lunar exploration, and notable shifts in the corporate landscape.

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2. Daylight Saving Time Changes

Neal Freyman [00:48]:
Neal begins the show by reminding listeners that Daylight Saving Time (DST) is commencing that weekend. Clocks will spring forward at 2 AM on Sunday, resulting in the loss of one hour of sleep but granting an extra hour of evening daylight. For example, the sun in New York City will set at 6:57 PM post-DST, up from 5:55 PM the previous day.

Toby Howell [01:23]:
Toby humorously contemplates the pros and cons of DST, noting benefits like extended evening activities and drawbacks such as challenges for parents and morning-oriented individuals. He concludes that the automatic updating of clocks mitigates personal inconvenience.

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3. Jobs Report Amid Federal Workforce Cuts

Neal Freyman [02:36]:
Neal emphasizes the significance of the upcoming jobs report, the first since President Trump and "DOGE" (presumably a governmental body or policy) initiated significant reductions in the federal workforce. With economic growth indicators raising recession fears, this report is pivotal in assessing the labor market's resilience.

Toby Howell [04:00]:
Toby speculates that the current jobs report may not yet reflect the impact of recent federal job cuts due to timing delays. He highlights February’s unprecedented surge in layoffs, particularly within government agencies, noting a 245% increase in Christmas-related job cuts compared to January, totaling 62,000 positions.

Neal Freyman [05:13]:
Neal discusses the potential ripple effects of federal job reductions, while pointing out that federal employment constitutes less than 2% of total U.S. employment. He suggests that unless these cuts significantly affect the private sector, the overall impact on the jobs market might be limited.

Toby Howell [06:00]:
Toby presents forecasts predicting over 500,000 job losses by year-end, which could negate a quarter of the job growth from 2024. He also notes state governments are actively recruiting displaced federal workers, with initiatives like New York’s “You’re Fired, We Say You’re Hired” campaign aiming to fill 7,000 state positions.

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4. US-Canada Trade War Impacting Liquor Industry

Toby Howell [07:23]:
Toby reports that Canadian provinces are removing American liquors, such as Jack Daniels and California wines, from shelves in retaliation against U.S. tariffs on Canadian imports. Premier Doug Ford of Ontario declared American alcohol products "done, gone," severely impacting Kentucky's $9 billion bourbon industry and over 23,000 jobs.

Neal Freyman [08:30]:
Neal elaborates on the symbolic nature of targeting spirits in trade wars, explaining that while liquor sales to Canada represent only about 1% of Brown-Forman’s total revenue, the move serves as a strategic message in the ongoing trade conflict.

Toby Howell [09:17]:
Toby highlights that the U.S. is the largest export market for Canadian alcohol, with over $763 million in sales. The Distilled Spirits Council of the United States estimates that these tariffs could lead to the loss of over 31,000 U.S. jobs, exacerbating the industry's challenges amid pre-existing post-pandemic sales declines.

Neal Freyman [10:06]:
Neal updates listeners on President Trump’s recent delay of tariffs on Canada and Mexico under the USMCA agreement, while Justin Trudeau confirms that the trade war will persist. This uncertainty has led to significant stock market volatility, with the Nasdaq experiencing a sharp 10% decline from its peak.

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5. Private Lunar Landings: Intuitive Machines vs. Firefly

Toby Howell [11:01]:
Toby discusses recent developments in private lunar exploration, specifically Intuitive Machines' Athena lander and Firefly's Blue Ghost lander. Athena's uncertain landing near the moon's south pole raised concerns due to unexpected performance issues reminiscent of its twin craft, Odysseus, which tipped over after landing.

Neal Freyman [12:24]:
Neal explains the technical challenges of robotic lunar landings without an atmosphere, comparing them to re-entry procedures on Earth. He notes that Athena attempted to slow from 25,000 mph to 6 mph using jet engines, a difficult feat that has so far been unsuccessful.

Toby Howell [13:15]:
Toby contrasts Athena’s tall and narrow design with Firefly’s short and squat Blue Ghost lander, suggesting that Athena’s design increases the likelihood of tipping over. He humorously recommends design changes to prevent repeated failures.

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6. Stock of the Week & Dog of the Week

Stock of the Week: Sweetgreen’s Ripple Fries

Toby Howell [16:06]:
Toby highlights Sweetgreen's introduction of Ripple Fries—air-fried avocado oil-coated fries—as a strategic move to diversify beyond salads. The stock surged 5% following the launch, reversing a 34% decline since February. Despite Sweetgreen’s $90 million loss last year, Ripple Fries aim to attract more customers and improve profit margins.

Neal Freyman [17:09]:
Neal connects the launch to cultural trends like "girl dinner," positioning Ripple Fries as a complementary item to Sweetgreen's salads. He notes that the product’s low grease content, achieved through air frying, has been positively received in reviews.

Dog of the Week: Management Consulting Firms

Neal Freyman [18:32]:
Neal identifies management consulting firms as the "Dog of the Week," citing significant stock declines for companies like Booz Allen Hamilton and Accenture due to federal government contract cuts under DOGE's initiatives. Booz Allen’s shares plummeted over 40% since November, heavily impacted by reliance on public sector revenue.

Toby Howell [19:44]:
Toby elaborates on the unprecedented scale of contract cancellations, with over 30 contracts terminated in six weeks. He discusses the implications for the consulting industry, including stalled growth and reduced bids for future government contracts, signaling a major industry upheaval.

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7. Additional Headlines

Walgreens Takes Company Private

Neal Freyman [20:59]:
Neal reports that Walgreens is being taken private by Sycamore Partners in a leveraged buyout valued at approximately $10 billion, a stark decline from its $100 billion valuation in 2015. The move aims to facilitate a turnaround away from public market pressures.

Eurostar Suspensions Due to Unexploded Bomb

Neal Freyman [22:02]:
Neal informs listeners of the suspension of Eurostar services between Paris and London following the discovery of an unexploded World War II bomb near a major Paris station. This incident has halted over 226 million travelers’ routes across Europe for the day.

Air France Shifts Focus to Wealthy Travelers

Toby Howell [23:19]:
Toby discusses Air France’s strategic pivot to cater to affluent American travelers, introducing $24,000 first-class tickets and enhanced premium cabins. This shift compensates for the loss of corporate travelers post-pandemic, leveraging high-paying passengers to sustain revenue.

Denmark Ends 400-Year Postal Mail Service

Toby Howell [25:05]:
Toby announces that Denmark’s state-run postal service, Post Nord, is discontinuing letter deliveries due to a 90% decline in volume since 2000. The shutdown affects 271,000 individuals who still rely on physical mail, reflecting a global trend towards digitalization in postal services.

Neal Freyman [26:17]:
Neal underscores that Denmark's decision mirrors moves in other countries, such as Germany and the UK, where postal services are cutting jobs and reducing services. He highlights President Trump's proposal to privatize the U.S. Postal Service, indicating a widespread decline in traditional mail usage.

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8. Conclusion

Neal and Toby wrap up the episode by encouraging listeners to share the podcast and reflecting on the day's discussions. The episode underscores significant shifts in government policies, international trade, private sector innovations, and corporate strategies, painting a comprehensive picture of the evolving business landscape.

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Notable Quotes:

• Neal Freyman [00:48]:
  “This weekend at 2 AM On Sunday, clocks will split spring forward, which means you will lose an hour of sleep but also gain an extra hour of daylight in the evenings.”

• Neal Freyman [02:36]:
  “This one feels like a big freakin' deal for a few reasons.”

• Toby Howell [07:23]:
  “It's not going to make a huge impact, but it is more symbolic.”

• Neal Freyman [10:06]:
  “The Nasdaq closed at a correction which is 10% down from its recent peak.”

• Toby Howell [16:06]:
  “Sweetgreen has been trying to break out of the $18 salad box for years now.”

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Attribution:

All quotes and timestamps are accurately attributed to hosts Neal Freyman and Toby Howell as per the transcript provided.

Transcript

[Discover]

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[Neal Freyman]

Good morning Brew Daily Show I'm Neal Freyman.

[Toby Howell]

And I'm Toby Howell.

[Neal Freyman]

Today the first jobs report is being released since DOGE began its drive to slash the federal workforce.

[Toby Howell]

Then a Jack and Coke in Canada is now just a Coke after Jack Daniels got caught in trade War CROSSFIRE It's Friday, March 7th. Let's ride.

[Neal Freyman]

It's going to be the last Friday you try to beat the darkness when leaving work because Daylight saving time starts this weekend at 2am On Sunday, clocks will split spring forward, which means you will lose an hour of sleep but also gain an extra hour of daylight in the evenings. For instance, here in New York City, the sun will set tonight at 5:55pm but on Sunday it'll set at 6:57pm this is absolutely huge for lazy people like me who held out strong on changing their microwave clock since Daylight saving Time ended in November. I've been living an hour ahead of you all for months, but soon we'll be synced up again.

[Toby Howell]

Living in the future I was making a little pros and cons list to figure out how I felt about daylight savings time because I always get confused for the pros. It's good for golf, great for evening picnics, great for people who never change their clocks. For cons, it's very bad for parents taking their kids to school in the morning. Also tough for morning people in general. So if your job is hosting a morning business news podcast, maybe not so great. So after weighing all of that, I realize I have no strong feelings. And thank goodness for auto updating clocks. Now a word from our sponsor, Invesco qqq. Neil, I've been thinking about if efficiency lately.

[Neal Freyman]

Oh, finally getting to inbox zero, are we?

[Toby Howell]

Well, some company called Morning Brew keeps sending me newsletters, so that's not happening anytime soon. No, I'm talking about the Invesco QQQ.

[Neal Freyman]

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[Neal Freyman]

Here at long last, the next Game of Thrones book. No, just kidding. It's the monthly jobs report due out this morning at 8:30am Eastern, giving us a key snapshot of America's employment situation in February. And while all jobs reports are big deals, this one feels like a big freakin deal for a few reasons. First, it is the first jobs report since President Trump and Doge have taken a chainsaw to the federal workforce in a bid to slash the size of the federal government. Second, a slew of recent surveys have raised alarms over slowing economic growth, prompting investors and analysts to up their bets on an upcoming recession and sell off stocks. The jobs report is one of the first pieces of hard data that that could calm those fears or jack them up even more. The hints we've been getting have not been pretty In February, US Job cuts hit their highest level in almost five years, according to an analysis released yesterday from Challenger Great and Christmas layoffs were up 245% from January and marked the highest total for the month of February since 2009. The firm said that more than one third of the total layoffs were attributed to the headcount reduction efforts of Dogecoin, totaling 62,000 job cuts across 17 agencies. But Toby, the government jobs report, due out in a couple of hours, is the gold standard for providing the most detailed picture of the labor market in America. What should we be expecting?

[Toby Howell]

Well, unfortunately. Will these cuts show up in this jobs report? The answer is probably not. February's official jobs report will not fully reflect these Doge cuts that are coming through just due to timing. March and April are probably going to be the the real tests as these layoffs continue to filter in and these federal cutbacks do ripple throughout the economy. They really haven't shown up in any official government data yet. The Labor Department said yesterday that the number of Americans filing for jobless Benefits actually fell 21,000 to 221,000 for the week ending March 1st. So these are just lagging a little bit. You'll probably see that unemployment rate stay pretty low, pretty solid at 4%. But that could change very fast because we just need to dive into this challenge regarding Christmas report a little bit. Some of the percent increases in layoffs when it comes to government jobs are astounding. That 62,000 government job cut number represents a 41,311% increase from last year. So obviously we're in unprecedented territory when it comes to shedding jobs. Also, the nonprofits and the companies that rely on those federal contracts are shedding jobs now too. So you do start to see just how big the ripple effects could be from these DOGE cost cutting efforts.

[Neal Freyman]

How big those ripple effects would will be is still an open question. Federal employment, while it employs a lot of people, millions of people, it still accounts for less than 2% of U.S. employment. So even when the job cuts from the federal government are factored in in future jobs reports in March and April and all those months after that, it will be unclear just how big the size of the impact will be. The if it's just limited to the federal workforce, then it probably won't be a huge impact on the jobs market. If it ripples beyond that into the private sector, say people aren't going into their jobs in D.C. anymore. So the people who, all the people who work servicing them from the, from the lunch counters or transportation, things like that, we'll see how big those ripple effects will be going forward.

[Toby Howell]

Some forecasts are suggesting over 500,000 job losses by the end of the year, which would actually erase a quarter of all job growth from 2024. So that obviously is a pretty solid lead, large number right there. I mean, a quarter of all job gains from the previous year. Also one interesting effect of this is as federal workers are kind of getting laid off, states are stepping in and trying to recruit them because they actually have open positions they want to fill. New York launched a doe said you're fired, we say you're hired campaign trying to lure some of those Federal workers to 7,000 open state jobs they have. Maryland is offering job assistance programs, but their officials are admitting there's not enough, you know, one to one replacements in the, you know, state roles to replace all these federal workers. But it is interesting to see them just like any other, you know, like tech companies sometimes sneaking in and saying like, hey, you're not working for the federal government anymore. Come work for the state government. We have a lot of open positions here.

[Neal Freyman]

So jobs report due out 8:30am Eastern. We're expecting strong job gains, 160,000, low unemployment. So perhaps this will be sort of the baseline or snapshot of what the jobs picture it looks like before sort of the shakeup that's been happening in Washington. And like I said, there's been other indicators indicating a Economic slowdown. So the jobs report will be very closely watched. At a time when the stock market.

[Toby Howell]

Is teetering, Canada is weaning itself off America's booze. It's not an intervention, but a counter move in the trade war between North American frenemies. Canadian provinces are yanking Jack Daniels, Kentucky bourbon and California wine off store shelves in retaliation to Trump's 25% tariffs on Canadian imports. It's Prohibition, but just for made in America drinks. Naturally, US liquor execs are losing their minds. The CEO of Jack Daniels maker Brown Forman called it, quote, worse than a tariff because while tariffs make things more expensive, this just straight up deletes their sales. Ontario alone carries 3,600American alcohol products before Premier Doug Ford declared them, quote, done, gone. This is not great news for Kentucky, where bourbon is a $9 billion industry supporting over 23,000 jobs. And while Brown Forman insists it can shrug off the Canadian losses, since they only make up about 1% of its total sales, things get dicey when you factor in the post pandemic sales slump the industry was already going through. Turns out that international beef, Neal, does not mix very well with the spirits industry.

[Neal Freyman]

No. Spirits and alcohol has long been a political football in trade wars. Even if it doesn't account for a huge amount of sales and, you know, Jack Daniels only does 1% of its total revenue in Canada, it's not going to make a huge impact, but it is more symbolic and is one of the levers that governments can pull to show their displeasure with what's going on in terms of tariffs and trade wars. Because Canada government can't, can't tell a random retailer to say, take that product off your shelf. But it does control the liquor stores. And so it's using that particular tool, that particular control that it does have, it has leverage there. And that's what it's using to kind of send a message saying you should buy Canadian and don't buy anything from America because we have the power to take it off the shelves.

[Toby Howell]

Yeah. And even though Brown Forman is trying to shrug it off a little bit, Canada is the US's largest export market for alcohol. Over $763 million worth of American wine beer spirits end up there, get sold there. And this is a very interconnected industry. So something that happens in Canada too will result in, you know, potentially job losses in the us. The Distilled Spirits Council of the United States, which has the acronym discus, which is very cool, estimates these tariffs could result in the loss of over 31,000 US jobs. Obviously that's coming from a perspective of someone advocating for the industry. But yeah, I mean, Kentucky governor has also spoken out against these tariffs, calling them incredibly difficult and challenging for his state. So it is interesting how decisions made by the premier of Ontario filter all the way down to, you know, Kentucky's bourbon industry.

[Neal Freyman]

Meanwhile, we got some more updates on the trade war. Yesterday, President Trump delayed tariffs on Canada and Mexico for goods covered by USMCA, which is the free trade agreement he brokered in 2020 with those countries. So many goods are now being pushed back till April along with the automakers delay, which we got earlier this week. Still, a White House official said about 50% of U.S. imports from Mexico and 62% from Canada may still face tariffs under the new regime. And Justin Trudeau, prime minister of Canada, had a call with Trump and said that he can confirm after that what he called a colorful call. There will continue to be a trade war for the foreseeable future. So you saw stocks sell off in a big way yesterday after these tariff moves. The Nasdaq closed at a correction which is 10% down from its recent peak.

[Toby Howell]

Let's move on. Yesterday, Intuitive Machines made one small step for man and one giant leap for private companies Landing spacecrafts on the moon maybe Intuitive Machines Athena lander was supposed to touch down near the moon's south pole, making it the second private company this week to pull off a lunar landing. But as the clock hit landing time, Mission Control was met with a confusing situation. The craft didn't crash. Mission Control was receiving data from the spacecraft as it touched down, but it was clear that the spacecraft was not working quite as expected. NASA and Intuitive Machines cut their livestream without confirming whether the lander was fully operational, and a later press conference did nothing to clear things up. If this all sounds familiar, it's because Athena's twin craft, Odysseus, did the same thing last year, landing successfully but then tipping over like a lunar Jenga Tower engineers are now scrambling to figure out if Athena stayed upright or if history just repeated itself. NASA is footing the bill for this mission as part of its commercial Lunar Payload Services program, which hires private companies to deliver science experiments to the moon. Athena is carrying a drill to search for frozen water, a tiny rover to test a Nokia cell phone network, and a rocket powered hopper designed to explore tricky terrain. But it's also carrying the hopes and dreams of the Texas based private company whose stock cratered as a result of the craft's struggles to land near a lunar crater.

[Neal Freyman]

It's really Hard to land on the moon when you're trying to land back on Earth from going to space space Earth has an atmosphere which serves as a natural braking system. Apollo 11 entered, reentered Earth's atmosphere at almost 24,000 mph and splashed down at about 15 mph. It was helped by parachutes and that drag of the atmosphere that does not exist on the moon. So intuitive machines had to slow down this lunar lander from 25,000 mph to 6 mph using no humans and just jet engines. That is hard. Firefly pulled it off. It has not exactly pulled it off. It hasn't really stuck the landing like Simone Biles in two different attempts, but it just shows how hard it is to land on the moon with a robotic lunar lander in the absence of atmosphere.

[Toby Howell]

It's not like it's a rocket science deal, actually. Wait, in this case it actually is. But you did mention the Fire Fire Firefly spacecraft. They have this little rivalry going. They're both Texas based companies, they're both private companies pursuing moon landing missions. And it just so happened that they, they did them within the same calendar week. Firefly landing on Sunday was deemed successful. Intuitive Machines Athena lander. That fate is unclear. Part of it is due to the design of each spacecraft. The design of Athena is very tall and narrow, while the Blue Ghost lander from Firefly is short and squat. So it's literally because Intuitive is taller that it's more likely to tip over. And these, the craft that it's sent up this time is pretty much an identical copy of the one it sent last time. So what's the sign of insanity? Doing the same thing over and over again, expecting different results? Maybe they just need to go, you know, the Saquon Barclay route, make this thing shorter, make it squatter, make the center of gravity lower because it keeps tipping over. Although we'll see what actually happened in this case, because we still don't really quite know. Up next, it is stock of the week dog of the week time.

[Neal Freyman]

So one day as I was scrolling the web, I got hit with an ad for patio furniture. Dude, I live in a small New York City apartment. Not relevant. So if that's happening to me, imagine the incorrect spaces your B2B marketing could be ending up. If you want to reach the right professionals, start with LinkedIn ads. LinkedIn has grown to a network of over 1 billion professionals and 130 million decision makers. And in this vast pool of potential, you can target your buyers by job title, industry, company role skills, seniority and more. If you can't believe it, if you think you're wasting budget on the wrong audiences, stop that first and foremost and start targeting the right people with LinkedIn ads instead. LinkedIn will even give you a $100 credit on your next campaign. So you can take LinkedIn ads for a spin. Just go to LinkedIn.com mbd that's LinkedIn.com mbd Terms and conditions apply only on LinkedIn ads.

[Toby Howell]

Neil, you've had the chance to work with plenty of leaders in your career. What traits do you think are most important?

[Neal Freyman]

In my experience, a few things stand out, like leading by example, taking risks and being passionate.

[Toby Howell]

And for all those influential leaders out there, there's the Range Rover Sport.

[Neal Freyman]

That's definitely a match made in heaven.

[Toby Howell]

Absolutely. Each model strikes an ideal balance between on road performance and world renowned off road capability, sophisticated refinement and visceral power.

[Neal Freyman]

Explore the Range Rover Sport at range Rover.com US/Sport that's range Rover.com US/Sport It's Friday and you know what that means pushing off emails and Stock of the Week Dog of the Week, the segment where Toby and I pick one stock that landed on the moon and another that can't stay on its legs. Toby, you won the pre show burping the ABC competition, so you get to go first.

[Toby Howell]

Very gassy over here for my Stock of the Week, it built its brand on kale in quinoa, but now it's making a play in the french fry game. Sweetgreen, the fast casual salad chain, just introduced ripple Fries, an air fried avocado oil coated take on french fries that are supposed to taste great and not weigh you down with a metric ton of grease. And Wall street is digging it so far. Shares popped 5% this week after the company unveiled the fries, making a rare win for a stock that's been on a 34% slide since early February. On paper, this move makes sense. Sweetgreen has been trying to break out of the $18 salad box for years now, rolling out dinner friendly protein plates in 2023 and adding steak permanently to the menu in 2024. To them, fries were the next logical step as they search for a craveable item that are designed to keep customers coming back. Now the company is still losing money $90 million last year. So it's not like ripple fries can save everything. But it's a bet that the salty snack can boost margins and drive foot traffic to continue its evolution beyond those pricey green bowls.

[Neal Freyman]

I mean, it's International Women's Day tomorrow. And I think this launch was timed for that because this is sweetgreen's attempt to complete the girl dinner, which has gone viral on social media, includes Caesar salad fries and a Diet Coke. It has a Caesar salad, it has the Coke and it needed fries. It's just another instance of a company noticing a trend on social media and hopping on it with a product introduction.

[Toby Howell]

I think you're definitely right on that. But also this, this term craveable is a term that industry execs use in the fast food industry, which is, you know, something like McDonald's fries that you just go in, you probably add them to your order because they're good, they're salty, like you know what you're going to get. And so they've been, sweetgreen's been looking for a craveable menu item like that. They want to drive these repeat purchases. They also want to differentiate themselves a little bit too that say, hey, we're not just salads like we do can. We can offer that comfort that fast food provides, but with a much healthier take on it. They're trying to trademark this name, Ripple Fries. Apparently they're pretty good too. I was reading some reviews of it and they said the biggest thing that you take away is like one, it tastes pretty much like a French fry. But two, you can, you know, use your phone afterwards because there's not this layer of grease on it and that comes from the air frying of it. So I do think that it will be relatively popular because of the fact that you don't feel, like I said, you're weighed down with a metric ton of grease. That is kind of the feeling they're trying to avoid with these fries.

[Neal Freyman]

My dog of the week is management consulting firms which are currently getting a taste of their own medicine by the federal government. Firms like Booz Allen Hamilton and EY that are hired to streamline operations are themselves at risk of being streamlined away as DOGE reviews government contracts with consultants and aims to rip up the ones that aren't providing value. It sent a chill through the sector on Wall Street. Shares of Booz Allen Hamilton, which relies on the public sector for 98% of its $11 billion in revenue, virtually all of its business have plunged more than 40% since the election of Donald Trump in November. Accenture, which gets about 8% of its total sales from the US government, is down about 14% over the past month. Whether they can stop the bleeding may depend on high stakes reports due today. The General Services Administration, the group that oversees procurement for the US Government, asked all federal agencies to justify contracts from the 10 highest paid consulting firms. With a deadline of Friday, March 7th. Dubbed Defend the Spend, they're being asked to identify which projects are mission critical and others that could be canceled with minimal collateral damage. Toby, it is a bit ironic for consultants to be asked, what would you say you do here?

[Toby Howell]

I mean, they are biting their nails and the nerves are definitely filtering through this industry right now because, you know, the scale and the speed of these cuts have been pretty unprecedented so far. More than 30 contracts have already been canceled in just six weeks. That is more than in any full year in recent history. So what's being targeted to While some of these modernization contracts will definitely survive, like projects where you're updating IT infrastructure, things like DI initiatives are on the chopping block. You have seen already explicitly linked diversity initiatives have been axed as well. So what does it mean for the consulting industry? It is just a scary time for it. The industry analysts are expecting zero growth in 2025 with potential revenue declines in 2026. Because as these contracts phase out, the next logical step too is that you might have to reduce your bids for them in the future. Because if there's just they're not as much demand from it, from the government, then how are you going to, you know, bid? If you're Deloitte, how do you win out over consent? Accenture, you might have to lower your bids for some of these contracts. And we're already seeing that happen. So just a major shakeup of an industry that has been kind of steady and stable. You know, you can say like piggybacking off the government for, for years and decades.

[Neal Freyman]

There is perhaps a bull case to be made though, because the federal government is trying to streamline systems, trying to update its technology, and as they cut workers, they might look for contractors to fill the void. So some, some of these consulting firms say, hey, this is literally our bread and butter. So they're weathering the damage right now and hopefully not, hopefully for them, they will come back stronger. Let's sprint to the finish with some final headlines. Walgreens, nearly 100 year run as a public company is winding down. The pharmacy chain agreed to be taken private by Sycamore Partners in one of the biggest leveraged buyouts in recent memory. According to the Wall Street Journal, the last decade has not been kind for the place you buy everything from cold medicine to candy. Valued at more than $100 billion in 2015, this deal gives Walgreens an equity value of around 10 billion, which highlights the challenges the company has faced as it's been squeezed by Amazon on the retail side and pharmacy benefit managers on the pharmacy side. The hope is that by staying out of the limelight of the public markets, Walgreens can better execute a much needed turnaround.

[Toby Howell]

Yeah, drug search chains have just been getting hammered left and right. You are right. They've been struggling for, for years with lower reimbursement rates for prescription drugs. But then you also have this new competition from Amaz. Also the front ends of drugstores just compete with everyone. When I say everyone, I mean Amazon. But you also, you've seen pressure from larger competitors like Target. Even Dollar General Stores, when they're opened near these pharmacies, hurt chains in rural areas. So that's just even, you know, the front of front ends of drugstores. We're not even talking about the back ends here who, you know, dole out prescription. So it's just been very, very tough. And it has been this long and winding road from $100 billion company to, you know, getting bought out for around $10 billion today.

[Neal Freyman]

Hope you're not planning on taking a train today from Paris to London because all Eurostar services between the two cities and others across Europe have been canceled for the remainder of Friday. Why? Because overnight workers discovered an unexploded bomb from World War II near a major station in Paris, according to the BBC. It's not a particularly shocking discovery since British and American bombers frequently targeted rail yards in Paris and other major cities to disrupt the Germans in the fight over France. But it is pure chaos out there on the French rail lines today until they dismantle it.

[Toby Howell]

Yeah, this is a big transportation nexus that was halted. I mean, they're canceling Eurostar chains from to, from France to Britain, Belgium, Netherlands that served over 226 million travelers in 2023. So it is definitely not the place that you want to find a bomb, obviously. Speaking of places not to find one, you said that this was a relatively common thing that happened. Last month. More than 175 practice bombs that were used for training in the Second World War were found under a children's playground in Northern England. So of the two places you do not want to find, you know, an unexploded World War II bomb. I think a train station and a children's playground are pretty high up that list. Speaking of Paris, a lot of Americans are heading that way, but only if their 401ks have more than 401k in it. The CEO of Air France, Ben Smith, said that the airline had been seeing amazing demand for its business in first class seats, primarily coming from wealthy American travelers. It's unbelievable what Americans are paying to come over here, he told the Financial Times. As such, Air France has shifted its business model to focus on wealthy Yanks in the premium end of the market. It is charging $24,000 for one leg of a first class ticket between New York and Paris in April and is also launching a new updated first class cabin this month. Neal it looks like people going on holiday are actually replacing corporate travelers as airlines chief moneymakers who take up those seats in the front of the cabin.

[Neal Freyman]

Yeah, pretty remarkable turn of events for airlines. They lost a ton of business and corporate travelers who made up the vast majority of their profits pre pandemic. They were like what are we going to do now? And then all of a sudden these rich Americans come along and saying hey, those first classes seats, I want those screw economy. And so they've found a really remarkable revenue and profit source in rich Americans.

[Toby Howell]

Denmark is officially breaking up with snail mail after 400 years. The company's state run postal service, Post Nord, is shutting down letter deliveries for good. Post Nord says that the move comes after a 90% drop in letter volume since 2000 and the increasing digitalization of society. It's cutting 1500 jobs and ditching 1500 post boxes as it focuses on package delivery going forward. 95% of Danes already use digital mail so most of the country won't lose sleep over it. But the 271,000 people who still rely on physical letters, many of them elderly, are left with a lot of stamps and Nothing to send. Neil 400 years of mail delivery. Poof. Gone. All because the youth aren't writing their thank you notes.

[Neal Freyman]

This is the most anti hygge thing I could think think it is not cozy to send mail electronically, but it's just the state of the world that we live in. Letter numbers in Denmark have fallen since 2000 from 1.4 billion to 110 million last year and then they've declined at 30% since then. So people aren't sending mail and you just have to wonder around the world when these state operated postal services are going to stop sending mail after Denmark.

[Toby Howell]

Yeah, it is not just Denmark. Germany's Deutsche post is slashing 8,000 jobs. The UK's Royal May is cutting services to save costs and then Trump has floated the idea of privatizing the US Postal office as well. So you are right this is not just a Denmark issue. No one's sending letters anymore.

[Neal Freyman]

Let's wrap it up there. Thanks so much for starting your morning with us and have a wonderful Friday. For any questions, comments or feedback, send an email to Morning Brew daily at Morning Broadcom. And if you're enjoying the show, share it with a friend, family member or co worker. Toby who should everyone listening share it with today?

[Toby Howell]

You can pick whoever whoever you want to share it with, but I want you to share the pod with someone via a letter. Together we can all save snail mail.

[Neal Freyman]

Let's roll the credits. Emily Milian is our executive producer. Raymond Lu is our producer. Olivia Graham is our associate producer. Eachena Ogu is our technical director. Scoopstar Darris is on audio hair and makeup is listening to the new Lady Gaga album on repeat. Devin Emery is our Chief Content officer and our show is a production of Morning Brew.

[Toby Howell]

Great show today Neil. I wish you all well.