Will Anti-Woke Free Press Join CBS? Philip Morris Falls on ZYN Slowdown & Coke’s Cane Sugar Shift

Summary

Prof G Markets Podcast Summary

Episode Title: Will Anti-Woke Free Press Join CBS? Philip Morris Falls on ZYN Slowdown & Coke’s Cane Sugar Shift
Release Date: July 23, 2025
Host: Ed Elton Nelson
Network: Vox Media Podcast Network

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1. Market Overview

Timestamp: [01:59]

Ed Elton Nelson opens the episode by reviewing the previous day’s market performance:

• Major Indices: The S&P 500 achieved its 11th record close of 2025, while the Nasdaq experienced its first negative day in seven sessions due to declines in tech stocks.

• Meme Stock Movement: Kohl's emerged as a significant meme stock, surging 37% amid volatile trading, spurred by high short interest and buzz from the Reddit community on WallStreetBets.

• Automotive Sector: General Motors saw its shares drop over 8% following the announcement of a $1.1 billion profit hit attributed to tariffs.

Key Insight: The mixed performance of major indices highlights investor uncertainty driven by fluctuating earnings reports and sector-specific challenges.

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2. Philip Morris and ZYN Slowdown

Timestamp: [03:00 - 05:41]

Philip Morris Overview:

• Market Performance: Philip Morris has outperformed major tech giants like Microsoft and Nvidia in 2025, primarily due to strong demand for its vaping product, ZYN Pouches.

• Earnings: The second-quarter earnings surpassed expectations with a 7% year-over-year revenue growth, surpassing $10 billion. The company also raised its 2025 earnings outlook.

• ZYN Pouches: Since acquiring ZYN's parent company, Swedish Match, for $16 billion in 2022, Philip Morris’s smoke-free business doubled its revenue, and ZYN shipments surged by 440%.

Stock Decline Reason:

Despite robust performance, Philip Morris’s stock fell over 8% due to a reported decline in ZYN shipments, marking the first-ever slowdown. This slowdown is characterized as a “normalization of demand” following previous supply chain shortages, leading to overstocked inventory with slower sales turnover.

Notable Quote:

Claire (Producer) [04:50]: "It definitely seems like investors expected the growth, which, I mean there has been quite a bit of growth in sales of that product and it seems like investors kind of expected that ball to keep rolling longer than it actually did."

Analysis:

Ed Elton Nelson draws parallels between ZYN's role in Philip Morris and AI’s significance in big tech companies like Microsoft. He emphasizes that without sustained growth in flagship products like ZYN, legacy businesses face decline, underscoring the market's heavy reliance on single growth drivers.

Key Insight: Investors are highly sensitive to the performance of key growth products. Even minor setbacks in dominant segments like ZYN can significantly impact stock valuations, reflecting broader concerns about long-term sustainability.

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3. Coca-Cola’s Cane Sugar Shift

Timestamp: [06:00 - 13:18]

Quarterly Performance:

• Revenue Growth: Coca-Cola reported a 1% year-over-year revenue increase to $12.5 billion, primarily driven by price hikes to mitigate inflation impacts.

• Operating Margins: Operating margins improved to 34% from 21% the previous year.

• Volume Concerns: Global unit case volume declined by 1%, affecting soft drinks like Sprite and Fanta. However, Coke Zero experienced a robust 14% volume growth, maintaining a four-quarter streak of double-digit increases.

Health Movement Impact:

The “Make America Healthy Again” (MAHA) movement is influencing consumer behavior, shifting preferences towards healthier alternatives. This trend is adversely affecting traditional sugary beverages, prompting Coca-Cola to innovate.

Cane Sugar Initiative:

Coca-Cola announced the introduction of real cane sugar in its beverages, contrasting the prevalent use of high fructose corn syrup in American Coke products. This move aligns with consumer demands for cleaner, natural ingredients.

Notable Quotes:

Peter Galbo, Senior US Consumer Staples Analyst [09:38]: "Coke is about 4% of what Coke sells globally. Not all that's going to get converted. Actually, not really any of it is going to be converted."

James Quincy, CEO of Coca-Cola [12:53]: "We're always exploring ways to meet evolving consumer preferences for great tasting refreshment... we plan to expand our trademark Coca Cola product range with US cane sugar to reflect consumer interest in differentiated experiences."

Analysis:

Peter Galbo highlights that the cane sugar initiative is a strategic addition rather than a replacement, emphasizing Coca-Cola’s “all-weather strategy” with a diversified product portfolio to cater to varying consumer needs. This strategy positions Coca-Cola to better navigate the shifting landscape towards healthier options without compromising its existing market segments.

Key Insight: Coca-Cola’s proactive approach in introducing cane sugar variants demonstrates adaptability to consumer health trends, ensuring resilience against declining sales in traditional sugary beverages while capitalizing on growth in healthier product lines like Coke Zero.

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4. Media Acquisition: Free Press Joining CBS

Timestamp: [16:13 - 21:53]

Acquisition Talk:

Ed Elton Nelson discusses the potential acquisition of Bari Weiss’s media startup, Free Press, by CBS News:

• Free Press Background: Founded by Bari Weiss as an alternative to mainstream media, Free Press focuses on anti-establishment and anti-woke journalism, offering newsletters, podcasts, and events. It boasts over 1 million subscribers and generates more than $15 million annually in subscription revenue.

• Acquisition Details: Negotiations with incoming CBS News owner David Ellison are underway, with Weiss seeking a valuation of at least $200 million. Reports suggest Paramount is willing to pay a premium, potentially around $250 million, to integrate Free Press into the CBS News ecosystem.

Industry Implications:

Ed explores the irony and significance of an anti-establishment media company potentially joining a major legacy media giant like CBS. He traces the media landscape's evolution from high trust in legacy outlets to a current era marked by fragmentation and the rise of independent media.

Notable Quotes:

Ed Elton Nelson [16:13]: "An independent media company that was originally formed as an alternative to the establishment is now joining the establishment."

Jim Barksdale (Referenced) [21:53]: “There’s only two ways I know of to make money, bundling and unbundling.”

Discussion Points:

• Media Trust Decline: The episode notes a significant drop in public trust in mass media, from 72% fifty years ago to a low of 31% last year.

• Rise of Independent Media: Driven by dissatisfaction with legacy outlets, platforms like Free Press, The Daily Wire, and others have successfully attracted audiences by offering alternative narratives.

• Potential Trend: This acquisition may signal the beginning of a “rebundling” phase in the media industry, where independent outlets start consolidating with major media companies to leverage established distribution and resources.

Key Insight: The potential acquisition of Free Press by CBS underscores a shifting media paradigm where anti-establishment voices are being absorbed by mainstream entities, potentially reshaping the landscape of media trust and independence.

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5. Conclusion

Ed Elton Nelson wraps up the episode by reflecting on the dynamic interplay between market movements, consumer trends, and media industry shifts. He emphasizes the importance of adaptability for companies navigating changing consumer preferences and the broader implications of media consolidation on information dissemination and public trust.

Final Thought:

Ed Elton Nelson [21:53]: "There's only two ways I know of to make money, bundling and unbundling."

---

Overall Summary:

This episode of Prof G Markets delves into significant movements within the capital markets and broader industry trends. It highlights the intricate balance companies like Philip Morris and Coca-Cola maintain between innovation and market expectations. Additionally, the potential merger between an anti-establishment media startup and a legacy news giant like CBS illustrates the evolving landscape of media trust and consolidation. Through insightful discussions and expert analysis, host Ed Elton Nelson provides listeners with a comprehensive understanding of the forces shaping today's financial and media environments.

Transcript

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[Ed Elton Nelson]

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[Claire]

If money is evil, then that building is hell. The show goes on.

[Ed Elton Nelson]

Welcome to Profit G Markets. I'm Ed Elton Nelson. It is July 23rd. Let's check in on yesterday's market vitals. The major indices ended the day mixed as investors digested the latest earnings reports. The S&P 500 hit its 11th record close of 2025, but the Nasdaq had its first negative day in seven sessions as declines in tech stocks weighed on the index. Meanwhile, Kohl's emerged as the next meme stock as its shares surged 37% in a day of volatile trading. The rally came after a high short interest on the stock sparked buzz on WallStreetBets. You'll remember that is the Reddit page where the meme stock movement of 2021 was born. And finally, shares in General Motors fell more than 8% after the company said it suffered a $1.1 billion profit hit due to the tariffs. Okay, what else is happening? The market's surprise outperformer this year. Not an AI darling or a defense company, but a nicotine company. Philip Morris has beaten Microsoft and Nvidia in year to date returns thanks to strong demand for its vapes and Zyn Po. The company reported second quarter earnings yesterday that exceeded expectations. Overall revenue grew 7% year over year to more than $10 billion. They also raised their 2025 earnings outlook. And Marlboro also continued to gain ground, notching its highest quarterly market share since 2008. However, despite all of that, the stock fell more than 8%. Investors saw a major problem, which was a reported decline in Zyn shipments for the first time ever. Now, if you're not familiar, Zyn is Philip Morris's line of tobacco free nicotine pouches. These pouches have absolutely exploded in popularity since they were first introduced to the US market a little over a decade ago. Between 2019 and 2022, unit sales of nicotine pouches in America increased by over 600%. So Philip Morris spotted that trend back in 2022. They acquired Zinn's parent company, Swedish Match for $16 billion. And since then, Philip Morris's smoke free business has roughly doubled in revenue. Zyn shipments have risen 440% and the stock is up about 75%. So a big deal for Philip Morris and its investors. But the question remains on the back of all that momentum, why did Zyn sales suddenly drop and what does that mean for investors? Our producer Claire spoke with J. Edward Moreno, a business reporter at Sherwood News, to get the answer.

[Claire]

The company described it as kind of a normalization of demand. Last year there was a problem with a shortage of this product. So it seems like maybe wholesalers and retailers overstocked and are taking longer than the company expected to to sell that inventory.

[J. Edward Moreno]

Do you think that basically this is just a story of the stock getting a bit ahead of itself and relying on Zinn a little bit too much for growth from Philip Morris?

[Claire]

Yeah, it definitely seems like investors expected the growth, which, I mean there has been quite a bit of growth in sales of that product and it seems like investors kind of expected that ball to keep rolling longer than it actually did. One thing that's kind of important to note about Philip Moore is so like it's actually outperformed the S and P and NASDAQ this year, as have other tobacco companies. But it's also, for the most part, for most of this year, has also outperformed other tobacco companies because of Zyn, because it has this kind of like really popular brand that other companies have found difficult to replicate or to, to find something that, that is as popular as that.

[Ed Elton Nelson]

So to reiterate, this stock drop was caused by a very small quarterly decrease in Zin shipments, A decrease that is essentially just a normalization of demand after previous supply chain issues, which doesn't really seem like that big of a deal. But it does start to make more sense when you realize what Zyn is to Philip Morris, and that is Zinn is to Philip Morris, what AI is to big tech. It is practically the only thing that Wall street cares about at this point. You think about Microsoft earnings. Microsoft could report record revenues for Microsoft Office or LinkedIn or Windows or any of their products. But if Azure, the AI business, isn't growing in the high double digits, we've seen this before, then Wall street will suddenly take the stock down. While the same is now true for Philip Morris of Zinn, without Zyn, Philip Morris is a legacy business that is likely on its way out. That is the reality that investors have had to grapple with. Cigarette sales have been on an almost constant decline for the past 40 years. But with Zyn, suddenly there's this world where Philip Morris might be a growth company. A company that has grown revenues 30% in the past five years. So that starts to explain the market's reaction. When Zinn so much as stumbles, the growth narrat starts to fall apart. America's leading beverage company offered a mixed picture of the sector. In its second quarter earnings report, Coca Cola revenue was up 1% year over year to $12.5 billion. That increase was mainly due to price hikes as Coke is doing what many consumer brands are doing right now and that is charging more to cover inflation. The company also raised its full year earnings forecast slightly. Margins were strong too. Operating margins hit 34% up from 21% last year. So far, so good. And the stock kind of reacted. Not really. IT closed down 0.6% yesterday. However, there was a problem and that is that global unit case volume fell 1% and that includes all sorts of soda. Sparkling flavors was down like Sprite and Fanta. Soft drink volume was down and also trademark Coca Cola was also down 1%. The one bright spot within soft drinks was Coke Zero. Coke Zero saw 14% volume growth this quarter and that is not a one off. Coke Zero has had a four quarter streak of double digit growth. Which brings us back to something we talked about two weeks ago on the podcast, and that is the Make America Healthy Again movement, the Maha movement, or as we should probably now call it, the Maha trademark. Whether it's due to Ozempic or ingredient bans or just general health awareness, consumers are now walking away from the junk food that they used to love and opting for healthier options. We're seeing that dynamic reflected in the earnings not just for Coca Cola, but for nearly every junk food company in America, from PepsiCo to Mondelez to J.M. smucker to McDonald's. As a general rule, if you're in the business of unhealthy food, you're struggling right now. Now, the other side to these earnings that you might have heard about is the announcement of a new Coca Cola product, and that is real cane sugar Coca Cola. As you probably know, American Coke doesn't use sugar to sweeten the drink. It uses high fructose corn syrup. Now they'll start using sugar. And this announcement comes just days after President Trump said that the company had, quote, agreed to start using real cane sugar in Coke, implying perhaps that he is the one responsible for this decision. Well, we wanted to hear more about this move, why they did it, and if it really was because of Trump. So Claire spoke with Peter Galbo, senior US Consumer Staples Analyst at Bank of America.

[Peter Galbo]

As you think about cane sugar and Coke and what the addressable set is, right, of all of the cans of Coke and Coke's products that they sell around the world, the U.S. the red, red can, you know, kind of full sugar. Coke is about 4% of what Coke sells globally. Not all that's going to get converted. Actually, not really any of it is going to be converted. What Coke said today is, hey, we're going to launch an additional product, Coke, that's going to be made with cane sugar, but it's going to be a complement, not a substitute to our existing portfolio. So you're still going to have in the U.S. you know, we use a lot of high fructose corn syrup and this will be a complimentary product that will get launched.

[J. Edward Moreno]

I would love to just get your thoughts on this trend we're seeing. There is the Make America Healthy Again investment thesis that's following the GLP1 trend. And the more health conscious consumers and just declining junk food sales overall, what do you think is in store for companies like Coca Cola that are playing in that space?

[Peter Galbo]

I think when you look at companies like Coca Cola and the other Beverage companies, they've been significantly less impacted today. Part of that is that beverage companies have a broader suite or array of products. Right. And so what you're seeing is that Coke or even Pepsi or even a company like a bell ring brands that we cover are beefing up their offerings on things like ready to drink protein shakes. So maybe if there's one part of the portfolio that is being impacted by either of these trends, they have other options within the portfolio that are offsetting or more than offsetting from that perspective. And so the beverage companies are probably at this point less impacted than say, some of the snacking companies, like the salty snack companies that we cover. Where you're seeing a more concrete shift in terms of the products that consumers.

[J. Edward Moreno]

Are looking for, for that makes sense. So it seems like your thesis then is that Coca Cola is pretty well positioned to ride out this wave.

[Peter Galbo]

Yeah, I mean, Coke has and, and what they call it is their, their all weather strategy. But what they, you know, they really have a, a full portfolio. There's no real holes in the portfolio of, of different need states for consumers that they're not addressing, whether that be caffeine that comes in the form of a Coke in some formats of coffee, energy drinks. Right. And then also a suite of hydration protein. So you, you really can start to address a lot of different need states.

[Ed Elton Nelson]

So to Peter's point, there is a business case for moving towards cane sugar. As he mentioned, Coca Cola has an all weather strategy. And right now the wind is blowing towards healthier food, or at least those that are perceived as healthier. But that perception is where I think it is safe to say the Maha movement is having an effect. In fact, Coke CEO James Quincy acknowledged the President's enthusiasm for a cane sugar version of the drink on the earnings call.

[James Quincy]

We're always exploring ways to meet evolving consumer preferences for great tasting refreshment, including with our iconic Coca Cola brand. As you may have seen last week, we appreciate the President's enthusiasm for our Coca Cola brand. And as part of our ongoing innovation agenda this fall in the United States, we plan to expand our trademark Coca Cola product range with US cane sugar to reflect consumer interest in differentiated experiences.

[Ed Elton Nelson]

So is this really about Trump? Maybe. But more importantly, this is about keeping up with a movement. A movement not necessarily to be healthy, but certainly to appear healthy. Because whether or not corn syrup is actually worse for you than sugar, the reality is the public is turning against it. RFK Jr called it, quote, a formula to make you obese and diabetic. So from syrup to seed oils. America is developing an allergic reaction to processed foods, but natural ingredients, clean branding, minimal processing. This is what the Maha movement is all about. And Coke is simply following that trend. After the break, Bari Weiss finds a buyer for her media startup. Stay with us.

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[Ed Elton Nelson]

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[WhatsApp Representative]

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[J. Edward Moreno]

Burgers deserve Pepsi.

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[Ed Elton Nelson]

We're back with Profg Markets. An anti woke journalism startup could soon join forces with a mainstream news giant. Bari Weiss has met with incoming CBS News owner David Ellison to discuss a potential sale of her media startup, the Free Press. She is reportedly seeking at least a $200 million valuation if the deal goes through. Ellison is said to be interested in positioning the media startup alongside CBS News. So the Free Press, the independent media company, is in talks to be sold to Paramount and eventually rolled into CBS News. A quick refresher the Free Press was started by Bari Weiss. The idea was to create an alternative to establishment media. You might remember Barry was a writer at the New York Times. She resigned because of issues of wokeness and cancel culture, which she felt was pervasive at the New York Times. And so she started this company, the Free Press, which is very much billed as an anti woke or anti establishment media company. They have newsletters, podcasts, they do events, et cetera. And it's all supposed to be kind of the opposite of the New York Times. They're not necessarily conservative, but they are certainly independent or anti establishment. So it's ironic that this anti establishment media company is now in talks to be acquired by basically cbs, which is one of the most establishment media companies in America. I don't think anyone had that on their bingo card, but it's worth discussing because it reveals something possibly quite important about the media industry and also where the media industry might be headed. So first off, how did we get here? Well, the Free Press was started because of a frustration with legacy media. Not just with the New York Times, but with everything. The Washington Post, the Wall Street Journal, cnn, msnbc, indeed probably CBS News. And Bari Weiss wasn't alone. The general public was also tuning out of these shows. We saw that in the ratings numbers and we also saw it in the surveys. Fifty years ago, 72% of Americans said they trusted mass media. That number started to slide, and last year it hit an all time low of 31%. For a variety of reasons which I won't comment on, the legacy media lost its touch. And so eventually we saw the rise of independent media companies. Not just the Free Press, but many others too. The Daily Wire, Barstool, Semaphore, Puck, even Prof. G Media. Some were more right leaning, others less so, but they were all united by this common goal of filling in some gap that legacy media couldn't. And it worked. Barry took many readers from the New York Times to her platform. She assembled a fleet of journalists. And now the Free Press has more than 1 million subscribers and they generate more than $15 million per year in subscription revenue. A huge success. And so in the same way that streaming disaggregated or unbundled television, independent media, in a way, unbundled legacy media. And we've watched that play out over the past several years. But this might mark the beginning of a new chapter for the media industry, A chapter that we might call the rebundling. And that is, now that the independent outlets have built their audiences, they've proven their worth. Now might be the time for consolidation. This might be the moment where the presidents of Paramount and Warner Brothers, Discovery and all of the other legacy media companies say, you know what, we're tired of competing with these guys. Let's just make them an offer they can't refuse. And that appears to be what is happening here with the Free Press. This independent media company that was originally formed as an alternative to the establishment is now joining the establishment. And it also appears that Paramount is willing to pay whatever to get it. They're paying this very hefty premium, nearly $250 million for this anti establishment branding. We could maybe call it the anti woke premium. So the question then becomes, is this a one off or is this the beginning of a trend? Might we see more rebundling? Could Fox acquire, I don't know, the Joe Rogan podcast or even the Tucker Carlson Network? Could Comcast maybe acquire Substack? Could Prof. G Media get acquired? Time will tell. But I will leave you with a famous quote from Jim Barksdale, who is the former CEO of of Netscape. He said, quote, there's only two ways I know of to make money, bundling and unbundling. This has been true of many industries, from software to air travel to insurance. And we see no reason why it won't be true of media as well. Okay, that's it for today. Thanks for listening to Profgue Markets from the Vox Media podcast Cast Network. I'm Ed Elson. I'll see you tomorrow. Muy pronto.

[J. Edward Moreno]

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