High Stakes Summit, New Zealand’s Talent Troubles, Stablecoin Adoption, Sparkling Water Boom

Summary

Wall Street Week – May 9, 2026

High Stakes Summit, New Zealand’s Talent Troubles, Stablecoin Adoption, Sparkling Water Boom

Hosted by David Westin (Bloomberg)

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Episode Overview

This episode of Wall Street Week, hosted by David Westin in New York, weaves together several global stories at the intersection of capitalism, geopolitics, and consumer trends. The discussion opens with the much-anticipated, now-rescheduled summit between U.S. President Trump and China’s President Xi in Beijing, framed by the backdrop of ongoing conflict in Iran. The episode next examines the intensifying brain drain from New Zealand, explores the real impact and future promise of stablecoin adoption in finance, and finally turns a discerning eye to the booming, overcrowded sparkling water market. The narrative deftly connects shifts in migration, technological innovation in finance, and shifts in consumer goods—all vivid illustrations of contemporary capitalism.

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1. U.S.–China Beijing Summit: High Stakes, Modest Hopes

Key Speakers:

• David Westin (Host)
• Myron Brilliant (Senior Counselor, DGA Albright Group)
• Elizabeth Economy (Senior Fellow, Hoover Institution)

Key Discussion Points

• Economic vs. Political Preparation

  • The economic teams on both sides (led by Vice Premier Helo Fong, Secretary Bessant, Ambassador Greer) have made solid progress through multiple rounds of talks. (“…I think on that side, they understand where the guardrails are, what can be done.” —Myron Brilliant, 01:13)
  • Political groundwork is less robust due to the administration’s distraction with the Iranian conflict. (“It’s not had the same level of political connectivity... I’m not sure the infrastructure… has been as deep and broad as you would expect.” —Brilliant, 01:53)

• Trade Disputes & Critical Minerals

  • Recent history: 2025’s tumult with escalated tariffs, China leveraging critical minerals/rare earths against the U.S. and Japan.
  • Now: Both seek stability and incremental progress—optics and “a concrete list of deliverables,” not sweeping breakthroughs. (“It’s not a ceiling, it’s a floor.” —Brilliant, 03:33)

• Expectations for the Summit

  • U.S. wants: Market access (beef, soybeans, Boeing), movement on trade barriers.
  • China’s wish list:
    • Guardrails (limits) on export controls—unlikely to be granted due to U.S. national security concerns
    • Clarity/reductions on tariffs (“…I think that is negotiable.” —Brilliant, 05:23)
    • Concessions/statements on Taiwan—seen as a potential “game changer” and high-risk (Brilliant, 05:45)

• Iran’s Role

  • China has supported Iran in limited ways (technology, drones) but is focused more on stable U.S.-China relations. (“Their stakes in the Middle East are not as high as their stakes in the U.S.-China relationship.” —Brilliant, 06:19)

• Business Perspective

  • U.S. business leaders will watch for signals of stability, reduced regulatory friction, and possible protocols for managing AI risks—potentially even the idea of an “AI hotline.”
  • “Deliverables … are not going to be home runs, they’re going to be singles.” (Brilliant, 08:14)

Notable Quotes

• “It’s not because they want to be friends, but … stability is in their self interest.” —Myron Brilliant [02:56]
• “Should we create an AI hotline? … This is the kind of thing that would be stabilizing in the relationship.” —Brilliant [07:34]
• “The deliverables … are going to be singles. Singles matter. You get enough singles, you score runs.” —Brilliant [08:19]

Timestamps

• [00:02] Introduction and framing of the Beijing summit
• [01:13] Myron Brilliant on negotiation progress
• [03:49] Multiplicity of summits reducing urgency for breakthroughs
• [05:01] Chinese objectives and U.S. responses
• [06:10] Iran’s influence on the agenda
• [07:13] What U.S. business should monitor at the summit

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2. New Zealand’s Brain Drain: Economic Stagnation and the Talent Leak

Key Speakers:

• David Westin (Host)
• Sean Collier (Lawyer, NZ expatriate in Australia)
• John Key (Former NZ Prime Minister; ex-Global Head of FX, Merrill Lynch)
• Gillian Tett (Provost, King’s College, Cambridge)

Key Discussion Points

• Why Kiwis are Leaving

  • Younger New Zealanders are crossing the Tasman for better pay, lower living costs, career and lifestyle opportunities. (“I basically doubled my income in less than a year and the cost of living went down.” —Collier, 14:48)

• Magnitude of the Brain Drain

  • 41,000 New Zealanders emigrated to Australia in 2025, highest in 12 years; >50% aged 20–39.
  • Even high-profile figures like ex-PM Jacinda Ardern have left (“…all of our children are leaving or the healthcare services are better…” —Key, 15:44)
  • Auckland/Wellington slumping from house price falls; rural sector remains strong.

• Will They Come Back?

  • Traditionally, Kiwis returned home after accumulating wealth and experience, but Collier observes that increasingly “it’s looking less and less realistic” [18:38].

• Structural Problems

  • Gillian Tett points to self-inflicted wounds: housing supply (NIMBYism), intergenerational inequality, wage stagnation (“…creating in New Zealand a real intergenerational inequality problem…” —Tett, 19:03).
  • The example of other countries’ (Poland, Ireland, Portugal) talent flows—sometimes returning benefits with the right incentives.

• Is Talent Flow Zero Sum?

  • Tett argues cross-border intellectual capital can benefit both countries, provided people and ideas move, not just one-way.
    • “To get innovation, you ideally need … clusters of brilliant minds … but you also need … serendipity…” —Tett, 20:15

• Possible Solutions

  • Tax/financial incentives for returnees; embracing openness; strengthening economic opportunities.
  • John Key: Don’t let “perfection get in the way of the possible”; lean into global strengths.

• Perspective & Optimism

  • NZ remains “kind of paradise … incredibly beautiful … really safe.” —Key [24:59]
  • Need to create conditions where “if you work hard … you’ll actually be able to have a good quality of life.” —Collier [25:35]

Notable Quotes

• “The grass was very much greener.” —Sean Collier, on moving to Australia [14:48]
• “You can’t fake velocity, you can’t cheat velocity.” —Nicole Bernard Dawes (later in episode, relevant here in context of growth/business success)
• “It makes my blood boil when I see governments trying to shut the doors on people.” —Gillian Tett [21:21]
• “I think we let perfection get in the way of the possible.” —John Key [22:52]

Timestamps

• [14:12] Framing New Zealand’s brain drain
• [14:48] Sean Collier’s story of emigration
• [15:44] John Key on NZ economic challenges and open labour market
• [18:03] Collier: fewer Kiwis returning
• [18:54] Gillian Tett on housing and productivity
• [20:15] The fallacy of zero-sum intellectual capital
• [22:07] Incentive policies and business/political reluctance
• [24:59] Key on NZ’s unique advantages and potential solutions
• [25:35] Collier on what will really bring young people back

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3. Stablecoins: Trajectory from Crypto Niche to Financial Utility

Key Speakers:

• David Westin (Host)
• Sebastian Gunningham (CEO, Coins PH)
• Matt Higginson (McKinsey)
• Sabnendu Mahante (ex-Monetary Authority of Singapore)
• Elizabeth Economy (Hoover Institution, perspective via remittance worker)

Key Discussion Points

• Cutting Through Crypto Hype

  • Stablecoins marry blockchain speed with fiat currency stability.
  • 2025 marked as “the year of the stablecoin.” Main use: cross-border payments/remittances, with growing regulatory clarity in the U.S. (Genius act).

• Remittances & Real-World Impact

  • For expatriate workers (e.g., Filipinos), stablecoins reduce remittance costs to below 1%, potentially saving hundreds of millions.
    • “That’s like $400 million that goes back into the people’s pockets right away.” —Gunningham [31:48]
  • Most stablecoin users see only dollars and pesos; blockchain is invisible (the “stablecoin sandwich”).

• Market Size and Growth

  • Despite hype ($35T stablecoin volume claimed), McKinsey estimates only ~$390B in real-world payments in 2025.
  • “The volume of real payment transactions using stablecoins probably doubled over the last year.” —Higginson [35:25]
  • Vast majority of real payments are cross-border, with 60% originating in Asia.

• Asia’s Lead and Regulation

  • Singapore, Japan led by requiring 1:1 liquid reserves for stablecoin issuers; regulation as a foundation for adoption.
  • “Our focus on stablecoin has always been well-regulated, stablecoin issued under a strong regulatory framework.” —Mahante [36:50]

• Implications for Banks

  • Traditional banks who embrace stablecoin infrastructure are thriving (“…now a top three bank…” —Gunningham [39:11]).
  • Genius act (US law) expected to drive further mainstream adoption, especially among banks.
  • Still, big businesses prefer slower, less risky transfers for large sums, stablecoins appealing more to small/medium payments ([39:59] Mahante).

• Risks and Barriers

  • Trust, convenience, and education remain issues for mainstream users.
    • “Trusting an app is really important for me because it’s my hard earned money.” —Elizabeth Economy, remittance sender [39:29]
  • Regulatory clarity and robust compliance are expensive, but necessary for scaling responsibly.

Notable Quotes

• “For stablecoins, it is moving towards just another word for money.” —Sebastian Gunningham [33:30]
• “If there’s one thing you don’t want to be instant and quick, it is large transfers.” —Sabnendu Mahante [39:59]
• “Those that embrace this technology, embrace stablecoins, I think is going to grow leaps and bounds.” —Sebastian Gunningham [40:29]

Timestamps

• [29:26] Stablecoin market and hype
• [31:12] Case study: Filipino remittance via stablecoin
• [32:14] Coins PH and Remitly: the process explained
• [34:41] Market size, growth, and Asia’s dominance
• [36:26] Sabnendu Mahante on regulatory best practices
• [38:33] Genius act and expectations for U.S. regulation
• [39:49] Why big businesses are cautious, smaller payments benefit
• [40:29] Why banks’ adoption strategy matters

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4. Sparkling Water: A Sizzling Saturated Market

Key Speakers:

• David Westin (Host)
• Dave Berwick (CEO, Spindrift; ex-Peet’s Coffee/Boston Beer/Pepsi)
• Nicole Bernard Dawes (Founder, Nixie)
• Adam Wagle (Co-Founder/CEO, Butterfly Ventures)

Key Discussion Points

• Category Explosion

  • Grocery aisles now packed with brands: La Croix, Spindrift, Liquid Death, Waterloo, Nixie, and others.
  • Barriers to entry are historically low due to networks of “enablers”—co-manufacturers, packaging, outsourced marketers. (“…the infrastructure around creating these brands has enabled that.” —Wagle, 46:03)

• Shift from Soda

  • Global beverage market: Over $1TRL soft drinks, soda sales down 27% in 20 years, water consumption rising.
  • Health and zero sugar as main drivers. (“Zero sugar is still one of the largest drivers… for the conventional soda brand, zero sugar is their biggest part of the growth…” —Dawes, 47:51)

• How Brands Compete

  • It’s “easy to get in, hard to stay.” Retail shelf space must be earned by sales (“velocity”)—the true test.
  • Both Berwick and Dawes obsess over product taste and repeat purchases.
  • Spindrift expands from sparkling water to tea and soda, betting on “real squeezed fruit” as a differentiator ([49:34], [54:35]).
  • Many investors now focus on the “enablers” (flavor companies, co-manufacturers, distributors) rather than picking consumer brand winners. (“…we don’t have to take the brand risk.” —Wagle, 53:16)

• Risks and Realities

  • 80% of new retail products fail. Taste and repeat purchases, not branding or health claims alone, create survival.
  • Premium/“upper K-shaped economy” positioning is a focus for Spindrift (Berwick, [51:00]).

Notable Quotes

• “Nothing worth doing in life is really easy, and this is not easy.” —Dave Berwick [45:24]
• “You can’t fake velocity, you can’t cheat velocity.” —Nicole Bernard Dawes [51:43]
• “Taste always comes first, because if a product doesn’t taste delicious, it doesn’t matter how meaningful your mission is.” —Dawes [55:30]
• “The reality is that most things fail. … Just being … at the party doesn’t make you interesting or relevant necessarily.” —Berwick [55:18]

Timestamps

• [44:37] Trend overview: Sparkling water market glut
• [45:02] Atomization of the beverage category (Berwick)
• [46:03] Structural enablers and easy entry (Wagle)
• [47:51] Dawes on health drivers, “modern soda”
• [49:19] Business rationale for the vast category
• [51:00] Premium strategy and gross margins (Berwick)
• [51:43] The importance of “velocity” (Dawes)
• [53:16] Investment approach: enablers over brands (Wagle)
• [54:35] Product “truth” and long-term survival (Berwick, Dawes)

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Memorable Moments & Quotes

• “It’s not a ceiling, it’s a floor.” (on summit progress, Myron Brilliant, 03:33)
• “It’s looking less and less realistic.” (Sean Collier on returning to NZ, 18:38)
• “Taste always comes first.” (Nicole Bernard Dawes, 55:30)
• “If there’s one thing you don’t want to be instant and quick, it is large transfers…” (Sabnendu Mahante, 39:59)

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For Listeners Who Missed the Episode

This is a packed, diverse episode blending high-level global politics, migration trends, financial innovation, and retail competition. The tone throughout is analytical yet practical—the speakers emphasize incremental gains (“singles, not home runs”), industry realities (from remittance costs to beverage shelf wars), and the need for both regulatory and competitive adaptability. Anecdotes—like Sean Collier’s move to Australia, or Berwick’s velocity tracking—anchor macro themes in everyday reality. If you want a brisk yet richly detailed tour of how capitalism’s shifting gears show up on the world stage and the grocery shelf alike, this episode delivers.

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End of Summary

Transcript

[David Westin]

Bloomberg audio studios podcasts radio news. This is Wall Street Week. I'm David Westin bringing you stories of capitalism losing valuable people to migration. Isn't that unusual? But what does it mean when even your former prime minister leaves to find opportun elsewhere? Plus, President Trump is a big booster of stablecoins. But what are they actually good for? And what do they mean for the banking system? And grocery shelves are packed with more varieties of bubbly water than you can count. Why are there so many? And how many will survive? But we start with the postponed Beijing summit between President Trump and President Xi, rescheduled because of a war in Iran that was supposed to be over by now. How much will it affect discussions between the two leaders, assuming that they happen as planned? Myron Brilliant is a senior counselor at the DGA Albright Group and recently returned from China.

[Myron Brilliant]

I think there's been a fair amount between the economic leaders. Right. So Vice Premier Helo Fong on the Chinese side and his counterpart here, Secretary Bessant and Ambassador Greer have had six or seven rounds of discussions. So I think on that side, they understand where the guardrails are, what can be done. There are some questions about, you know, how much can be done in areas like export controls. But I think, I think the United States thinks they're going to get something on, you know, market access, more beef, more soybeans, maybe Boeing planes, something progress in those kinds of areas. So I think that side of the equation is good. The side that is less clear is the political side. As you suggested, summits of this nature with this high expectations tend to take months to prepare. With the President and the administration distracted by the war in the Middle east, it's not had the same level of political connectivity between, say, Foreign Minister Wang Yi and his counterpart, Secretary of State Rubio. There is dialogue, but I'm not sure the infrastructure of the system has been as deep and broad as you would expect of a summit of this nature.

[David Westin]

If you think about the wish list from the two sides, you just mentioned some of the things the United States would like selling more soybeans, for example, Boeing planes or things like that. But this is the first meeting these two leaders since they really had sort of a trade dispute, particularly over things like critical minerals. Have they put it back together?

[Myron Brilliant]

Well, 25 was a tumultuous year in the US China relationship, right? There was the escalation on tariffs. And of course, you know, I think China was more prepared and they used their advantage. They leveraged the critical minerals, rare earth issue to their advantage. And they put some choke points on the United States. Not just the United States, Japan as well. So 2025 was an unpredictable and complicated year. 2026 has been made easier by the situation in Iran because that's another dynamic in the relationship. But both sides recognize that a global recession doesn't serve their interest. Both sides are trying to manage a further deterioration of the relationship. It's not because they want to be friends, but it's because each side recognizes that stability is in their self interest. So that's what they're managing. They're trying to create a concrete list of deliverables. It's not going to be a home run of a visit, but even moving incrementally forward and having the optics of the two leaders meet not just once, but possibly two or three times this year, that's progress in one sense. That creates some stability. But to me, it's not a ceiling, it's a floor.

[David Westin]

You mentioned that President Trump said he'd like to have several meetings this year. Does that reduce the likelihood that any one meeting will have a major breakthrough? Because the Chinese are thinking, wait a second, we've got more of these coming.

[Myron Brilliant]

Well, I was in Beijing, as you know, 10 days ago, and my sense is the Chinese are pretty confident. They think they've cracked the code on President Trump. They think they've, you know, they got a playbook. And their playbook is not to appease the Trump administration like they did try. And Trump 1.0 and Trump 2.0, they're punching back. And we see a little bit of this on both sides. Tit for tat, US Issues new regulations under the fcc. The Chinese issue new exit bans that affect supply chains on critical minerals. So each side is feeling each other out, so to speak. I think ultimately China will do enough to create some momentum out of this visit, but not so much that they deliver all that they can deliver in this first summit. They're going to test the market meeting. They're going to test whether they can count on Trump delivering. And that's, that's pretty unpredictable right now.

[David Westin]

What's on the Chinese wish list? What do they want Trump to deliver?

[Myron Brilliant]

I think a couple of things, and I think they're going to be hard to get. One is they want guardrails around export controls. But, you know, from the administration officials I talk to, they don't want to go there. They view that as a national security imperative in the United States, not something to negotiate in the China U. S Relationship. But that's clearly high on their list. Second, they want some kind of clarity on tariffs there. There's a little bit of give and take. The administration seems to like this idea of a board of trade, which side gives up something on tariffs. We want to get something back in return, obviously market access, but I think that is negotiable. The third thing is I think the administration has to watch out for is the Chinese want something on Taiwan. They'd love to see the president make some kind of statement around peaceful unification. We've had five decades where the United States has stayed the course on its policy on Taiwan. The Chinese think that dealing with the president of the United States, they might be able to get something done in Taiwan. I hope not. That would be a game changer.

[David Westin]

Is there any prospect that President Trump might ask for help from President Xi on Iran?

[Myron Brilliant]

I think that he'll lean in on that issue, but depending what you defer as help, I think he'll lean in in trying to get the Chinese to back off helping. But we know that China has already helped Iran on surveillance technology. We know that they've helped on on drone technology. So China has leaned in a little bit. But China has to be careful. Their stakes in the Middle east are not as high as their stakes in the U.S. china Relationship stability between China, United States is still a higher priority than coming to the aid of Iran. They know that they do have 10% of their oil coming from Iran, but they have diversified in the energy space, not just on oil and gas suppliers, but also in solar and renewables. So therefore they're less reliant on Iran than they used to be. And that also factors into their equation.

[David Westin]

You know China well. You also know US Business. Well, for US Business people, leaders in this country, what should they be looking at in this summit?

[Myron Brilliant]

Well, you know, symbols matter. So let's see what happens with China and, and the United States at the summit. Do the leaders embrace some kind of pact? Do they provide a little bit more business certainty? Do they create space on both sides where there's not going to be this tit for tat retaliation? There's a lot of sensitivity. There's a lot of competition. I'm looking for symbols on AI. Okay, we're going to compete intensely with China on AI, but we also have to think about the risk in the system. And China raised that. Government leader after government leader raised AI as is this an opportunity? I think business would encourage that. Look, you know, during the height of the Soviet Union, US Cold War, we had a hotline between Moscow and Washington should we create an AI hotline? Should we have red lines on AI? Should we create safety protocols? So this is the kind of things that I think would be stabilizing in the relationship. We're looking for that. We're obviously also looking for east side to pull back on some of the regulatory behavior that creates mischief in the relationship, that creates irritants and creates impediments, and we'll hope to see some of that come out of this summit. But the deliverables that we see at the summit are not going to be home runs, they're going to be singles. Singles matter. You get enough singles, you score runs. But I think we should be cautioned against having high expectations at first summit. But it's still important to have.

[David Westin]

It was the Iran war that caused the delay in the summit.

[Elizabeth Economy]

What we've seen over the past year, almost a half between the two countries has been this kind of tit for tat diplomacy around.

[David Westin]

But Elizabeth Economy, senior fellow at the Hoover Institution, thinks that that will not be the central issue for the leaders as they look for common ground. There is a summit scheduled between President Trump and President Xi in Beijing. First of all, will it happen?

[Elizabeth Economy]

I think it's going to happen. I think we're in the midst of a ceasefire. I think the President is determined to hold the cease fire in Iran in order to have the summit. If for no other reason.

[David Westin]

How much will Iran influence the agenda at the summit?

[Elizabeth Economy]

I think the Iranian issue and the war in Iran is going to be a secondary issue. I think for Xi Jinping and for Donald Trump, this summit is really about finding a degree of stability in the relationship. I think that's really the issue on which both sides are aligned. And I think that's going to come in the trade and the investment realm. So I think Iran will be there, Russia, Ukraine will be there, but they'll be very much secondary issues.

[David Westin]

Do the Chinese trust President Trump? Because President Trump is known for being sort of unpredictable at times.

[Elizabeth Economy]

Yes, I think that they trust that if he gets what he wants, that he will also give to them. And so I think they've spent a lot of time trying to understand what his priorities are and what he's prepared to give in return. Of course, they were very pleasantly surprised by the President's decision to allow the export of H2 hundreds last summer. That was a big win for the Chinese. So I think they're looking similarly for some new technologies to be lifted out of the export control bucket. I think they'd like to see a reduction in the tariffs, basically, they want to be treated as a normal power. They don't want to have, you know, sort of the highest tariffs, the highest number of export controls, and the most investment restrictions placed on them.

[David Westin]

A lot has been said about the competition in AI between the United States and China. Is there also a possibility for cooperation? I see now the White House is now saying maybe we should have some rules about releasing new models. Ll models. Do you think President Xi is open to some sort of a multilateral agreement?

[Elizabeth Economy]

I think that would be a very, very complex negotiation. What I understand is on the table for the summit at the very least is really a negotiation around both sides agreeing to terms for keeping AI models, certain AI models, advanced AI, out of the hands of rogue actors. I think that's the sort of starting point for where the two sides might come together.

[David Westin]

Coming up, the brain drain away from New Zealand. What's causing it? And can anything be done?

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[David Westin]

This is a story about a trade deficit not in goods or services, but in intellectual capital. The ebbs and flows of migration mean that any country's human resources fluctuate over time. But what happens when they go only one way and over an extended period of time? What can a country do to turn things around? That is the question New Zealand is asking itself right now. In Melbourne, the so called coffee capital of the world, lawyer Sean Collier has found a new thank you so much. The New Zealander moved to Australia in 2023.

[Sean Collier]

I would say pretty much entirely for economic reasons. I was working as a lawyer in Auckland for about a year and a half and I was essentially living at subsistence level, pretty much unable to save any money. Once you get paid, it would just be rent, groceries, gas. All the money's gone. Essentially everyone's got like a different sort of version of events, but for me at least, I basically doubled my income in less than a year and the cost of living went down. So the grass was very much greener.

[David Westin]

Collier is part of a growing movement. About 41,000 New Zealanders moved to Australia in 2025, the highest level in 12 years, with more than half of those estimated to be between ages 20 and 39. And earlier this year, former Prime Minister Jacinda Ardern joined them, a move which made international headlines and shone a light on New Zealand's economy.

[John Key]

There's a bit of a view that our economy isn't performing quite as well as Australia's economy. Then you're feeding the narrative that people are starting to hear at dinner parties that, you know, all of our children are leaving or the healthcare services are better or some other kind of thing.

[David Westin]

Like Ardern, John Key is also A former Prime Minister of New Zealand and before that was global head of foreign exchange at Merrill Lynch.

[John Key]

The New Zealand economy is not as strong as we'd like it to be and maybe not as strong as historically it has been, but it's not a story of universal lower growth. Actually Auckland and Wellington, the main centres have been weaker and largely weaker because of negative house prices. So that's had a big impact on construction and all sorts of activity related around housing and the sort of negative wealth effect of people living in Auckland. And when you think Auckland is home to 1 1/2 million people of a population about 5 million, it has quite a big impact. So yeah, that's been a bit negative, but the rest of the country been very strong actually rural prices have been strong. So we're a big food producer, basically started life as Britain's little farm and we continue to be that. We're very much a strong food producer. So that part of the country's been good and there's lots of exciting things happening. Well, New Zealanders have always left for Australia. The question is whether they come home. Largely they do, but not always. I mean, if you look at New Zealand, we're a home of say 5 million people now, about half a million, maybe as many as a million New Zealanders live in Australia, so it's quite a few. We're a little bit like Canada is to the United States. In the end, the United States is a sort of magnet for talent out of Canada. Pay packets are higher, opportunities are greater. It's a little bit like that from New Zealand to Australia and every New Zealander has a free option. So you're free to go to Australia. It depends on the conditions of how you go, but you are free to go. So it's a very open labour market and there's just no question that those jobs and opportunities are bigger and the lifestyle is very similar.

[David Westin]

But while New Zealanders have always sought the experience of living overseas, be it Australia, the UK or us, typically they would return home eventually to start a family and buy a house, often with more wealth and increased expertise from their time overseas.

[Sean Collier]

I've always thought I would raise my kids in nz. You know, I've always, like when I moved here, the plan was to sort of get a bunch of money together and go home. And I've spoken to a lot of Kiwis over here and that's very much their intention as well. But to be honest, like all of the, out of all the Kiwis I know that have moved here, I couldn't name more than like, you know, three or four that have actually returned. So I think, I don't know, it's a pretty big, it's a pretty big issue. Like it's looking less and less realistic

[David Westin]

for me and it's showing up in the numbers. New Zealand's net citizen migration is at its lowest since official Data began in 2001. In other words, people are leaving like they always did, but now they're no longer coming back.

[Gillian Tett]

New Zealand has got a very big productivity problem in that its economy is just muddling through.

[David Westin]

Gillian Tett is provost at King's College, Cambridge.

[Gillian Tett]

There's a lot of self inflicted wounds in New Zealand, not least, for example, the NIMBYism that prevents people from building enough houses to ensure that everyone could get access to a house cheaply and easily. So you're creating in New Zealand a real intergenerational inequality problem in that people who are inheriting assets are doing well, others aren't. So New Zealand has got a lot of problems and that's one reason why you've got New Zealanders leaving at the moment. But in terms of trying to attract smart people and smart talent, that really is the big new game in town.

[David Westin]

New Zealand's problem is not unique. Poland experienced a brain drain after joining the eu. Ireland did so in the wake of the great financial crisis and and Portugal is the latest in Europe. In all three examples, citizens saw new opportunities for higher pay and better jobs elsewhere. But Tet says the loss of intellectual capital isn't always a bad thing. Is the flow of intellectual capital necessarily a zero sum game? I saw a recent report that suggested actually both countries could benefit because people, when they go someplace else, maintain relations back with their home country and there can be a flow of capital of business across the border boundaries. Can it be something that could benefit both countries?

[Gillian Tett]

One of the biggest mistakes people make is to regard intellectual capital as a zero sum game and to assume they have to hang on to their brilliant minds at all costs and stop them from going around the world. That was a disastrous mistake because history shows very clearly that to get innovation, you ideally need to have one or two things happening, ideally both at the same time. On the one hand, you need to have clusters of brilliant minds who can bump into each other, ideally from different disciplines, to create that kind of interdisciplinary collisions and creativity. But you also need to have some diversity and serendipity that allows people to bump into entirely different ideas in a way that enables them to be more creative. But in terms of people moving around and spending stints of research time in different intellectual hubs and environments. It's absolutely crucial if you want to keep ideas flowing for the benefit of everyone and spark new ones. And it makes my blood boil when I see governments trying to shut the doors on people, whether it's the European Union, the uk, which have not yet implemented a youth mobility scheme. That makes my heart break, frankly. The fact that it's become harder to move scientists back and forth across borders, or not just scientists, but social scientists and humanities scholars as well, but also what America's doing at the moment is not helpful in terms of sparking that extraordinary, if you like, you know, chemical mix of brilliant minds coming together.

[David Westin]

A healthy flow of intellectual capital may be a good thing for a country, but it needs to flow in both directions. Poland provides tax incentives and other support for citizens to return. Ireland's corporate tax rate, attracted foreign direct investment to promote job growth. And Portugal is looking to stem its brain drain by offering tax exemptions for a worker's first decade of employment.

[John Key]

As politicians and I think even as business leaders, we feel unclean about any kind of incentive to do something. So, for instance, in my day I put up pretty big incentives for movies to be made that led to the Hobbits and so many other things happening at Avatar. And you imagine the skills and technology and capacity that came off that. But it caused a massive outcry that we were essentially giving back some of the indirect tax that we got in the form of subsea because we didn't normally do that. But Ireland's done that. It's been quite prepared to do that. I mean, Israel probably has incentives all over the show, I'm guessing in the technology space. So I'm not arguing that we need to go back to a sort of stupid world where politicians allocate resources and the wrong outcomes come. I'm just saying I just wonder whether we sort of. We let perfection get in the way of the possible.

[David Westin]

During Key's time in office, HSBC labeled New Zealand a rock star economy, praise that enhanced its global reputation and helped the country experience positive net migration. With Australia, for the first time in

[John Key]

24 years, we had political stability. You know, I was starting to go through Australian prime ministers pretty rapidly. We'd had one myself. And by the end of it, that period of eight years in office, HSBC described us as a rock star economy. So people started saying, wow, there really are some great opportunities over in New Zealand. They started coming over. So it's not an impossible thing to get, sadly, what you See is. I mean, in a lot of ways it's a good thing. But we have a very much an integrated economy with Australia. So cei, Closer Economic Relations is our free trade deal. And it's about the most comprehensive free trade deal you can get, extremely comprehensive. So goods can travel either way. There are no conditions. Basically, investment can do the same. So one of the reasons why you see less Australians coming over is their investment comes into New Zealand, but then they stay in Australia and has someone running the operation here, but they domicile the operation in Australia. So look, it's a challenge, there's no question about that. But then you've had isolated parts of the country, like if you look at say, Queenstown, it's had enormous connectivity with Australia, deemed to be kind of of beautiful, the Aspen of the south. It's attracted an enormous number of migrants, both from the United States, United Kingdom, but Australia, and you are seeing positive net migration there. So it's not every place, but it's certainly been hardest felt in Auckland where people have left. I think

[David Westin]

New Zealand's government has also introduced a range of measures including active investor visas for wealthy foreigners and tax incentives for investment. It's not yet driven the sort of economic opportunities to attract Kiwis back home. But for now, Key says New Zealand should lean into what it's known for.

[John Key]

It can be a little bit negative, but I don't know, I look at New Zealand and say, okay, yeah, I understand all that, but we're 5 million people. We really are the last, last bus stop on the planet, but we kind of paradise as well. In a world where there's global insecurity, we seem like a really safe place. We are incredibly beautiful. I mean, there's a lot of things going for New Zealand. So I'm kind of of the view to say, yeah, we need to acknowledge that the economy needs to be a bit stronger and create more opportunities. But let's not sort of panic that all is not fixable, at least in New Zealand, because I actually believe it

[Sean Collier]

is in terms of actually fixing these problems. I think, yeah, like in a nutshell, we need to be looking at things that will actually attract young people back to the country. I think so many people have left now, it's not going to be good enough to just stop them leaving. We actually need to look at things that will bring people back. And for my generation, like the main problems are being able to afford property, being able to have kids, job stability. You know, AI's ruining job stability for a lot of people. So I think our government should be looking at ways to sort of guarantee that if you work hard in New Zealand, you'll actually be able to have a good quality of life, which is not the current situation over there.

[David Westin]

Up next, President Trump likes them and the Genius act provides a US Law to regulate them. But what is the real use case for stablecoins and how much will they transform the banking system?

[Public Sponsor Voice]

Support for the show comes from Public. Public is an investing platform that offers access to stocks, options, bonds and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R and D spend, small cap stocks with improving operating margins, or the S&P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on Public, you just type in a prompt and their AI screens thousands of stocks and builds a one of a kind index. You can even backtest it against the S&P 500. Then you can invest in a few clicks, go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by

[Dave Berwick]

Public Holdings Brokerage Services by Public Investing Member FINRA SIPC Advisory Services by Public Advisors SEC Registered Advisor Crypto Services by ZeroHash. Sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete [e-mail] disclosures a business gift

[4imprint Sponsor Voice]

is never just a gift. It's a thank you, a milestone, a moment of appreciation. It's a message about how much someone matters and what your brand stands for. At 4imprint, you'll find thousands of customizable options like premium apparel, branded drinkware, tech totes and more, each chosen not just for function, but for meaning. You can tailor every detail. Your logo, your message, your presentation so your gift feels personal and on brand. And with expert support, dependable service and thousands without a setup fee. Creating something thoughtful doesn't mean making it complicated. Every order is backed by 4imprint's 360 degree guarantee, so you can be 4imprint certain it'll arrive exactly as expected, on time and with the care your brand deserves. Because when the moment matters, the right gift speaks volumes and the right partner makes it easy. Explore gifting with purpose and [e-mail] for imprint for certain travel smarter not harder at America's Best Value Inn by Sonesta. With convenient locations from coast to coast and value packed comfort at every turn, it's a practical choice for road trips, quick getaways and everyday travel that keeps things simple without sacrificing comfort. And when you're a Sonesta Travel Pass member, staying at America's Best Value Inn means earning points toward free nights, upgrades and more every time you stay. Go to Sonesta.com to book your stay and unlock the best rates with Sonesta Travel Pass here today, Rome tomorrow. Join [e-mail] terms and conditions apply.

[David Westin]

This is a story about cutting through the noise I think bitcoin is the

[Public Sponsor Voice]

king of this market. It will remain the king of this market.

[Dave Berwick]

I'm laser like focused on bitcoin. I think bitcoin is digital capital. I think it's going to outperform the S and P index over the indefinite future.

[Myron Brilliant]

There was nothing that couldn't be done in crypto Better, faster, cheaper, more transparently.

[David Westin]

There's been a lot of noise about cryptocurrencies. It's sometimes hard to sort out the crypto noise from the signal. But whatever the reality behind all the hype, there is one particular version of cryptocurrency that is growing in use, that seeks to deliver on the promise of combining the speed and ease ease of blockchain with the relative stability of currencies and that you may be using without even knowing it. According to supporters, 2025 was the year of the stablecoin.

[Dave Berwick]

In five years or 10 years, the

[Public Sponsor Voice]

overwhelming majority of the payments that happen in the world just by sheer number of payments are happening via stablecoins.

[4imprint Sponsor Voice]

It can be fundamental to changing not

[David Westin]

just the financial system, but the way the broader economic system works. And as of last year, the stablecoin subset of crypto now has the regulatory backing of the us.

[Myron Brilliant]

This could be perhaps the greatest revolution

[Sebastian Gunningham]

in financial technology since the birth of the Internet itself.

[Dave Berwick]

A lot of people are saying that. I don't know. What do you guys think?

[David Westin]

Yes, the answer to President Trump's question may lie in the wallets of people around the world who simply want to send money across national borders. According to Bloomberg Intelligence, the total amount of money sent using stablecoins will will reach over $56 trillion by 2030. But however big it ultimately gets, it's starting small, with many people sending just a few hundred dollars at a time. People like Hannah Nicole Danoy.

[Elizabeth Economy]

I have been living in New York for eight years and I am A restaurant manager. I send money home to the Philippines. I would say about like between $500 to $1,000 a month. I prefer sending money home through apps like WorldRemit or Remitly.

[David Westin]

Danoy is one of 2 million Filipinos living abroad. Together they sent $35 billion back to the Philippines in 2025, equal to over 7% of the country's GDP. For Wei Jo, the CEO of Philippine based Coins PH, this is stablecoin's biggest opportunity.

[Sebastian Gunningham]

Ten years ago, the cost of remittance for every dollar, it was 8%. With technology, with better connectivity and banking Rails, that cost went down to like 2 to 4%. By using stablecoins, we can lower that cost to anywhere between, you know, 0.5% or 50bps. And we hope to lower that even to like 20 to 30bps. When you're running $40 billion with Mittens, for every 1% that you save, that's like $400 million that goes back into the people's pockets right away.

[David Westin]

Coins Ph partners with online money transfer platform to bring stablecoins to users wallets. It partners with, among others, Remitly. Its CEO is Sebastian Gunningham.

[Myron Brilliant]

Every time that you do a send

[David Westin]

transaction, we have a transaction engine that

[Myron Brilliant]

chooses the best way to send that money at low cost and at speed.

[David Westin]

So we use the stablecoin Rails. The machine decides is the stablecoin Rails

[Myron Brilliant]

better, faster, cheaper than any alternative?

[David Westin]

And therefore we use it. So we're adopting it where it makes sense, where it beats price, where it beats speed. This process is called a stablecoin sandwich. A user in the US deposits dollars with remitly which converts the funds into stablecoins. These stablecoins travel instantly across a blockchain to Coins PH in the Philippines where they are converted into local pesos. Although users can hold the stablecoins in a digital wallet, for most the blockchain path is entirely invisible. Customers interact only with the dollars at one end and the pesos at the other end. Enjoying the speed of crypto without the complexity of managing it. We have crypto, we have stablecoins. There's been a fair amount of volatility in cryptocurrencies. Does that affect stablecoins?

[Sebastian Gunningham]

For stablecoins, it is moving towards sort of, you know, just another word for money. Stablecoins are a type of crypto, right? But it's sort of like it has grown out of crypto and can be its own segment now.

[David Westin]

What do you regard as your largest opportunity for growth?

[Sebastian Gunningham]

Basically lowering the transaction cost and then Decreasing the transaction time for to move money in and out of the Philippines. I think right now what we see is that there's like almost 15 or 20 million Filipinos that work overseas either as domestic helpers, work on cruise liner, as factory workers in the Middle east and Korea and Japan. The financial services they need are actually back home in the Philippines, whereas they get paid in the local dollar. We really believe that by sort of using stablecoins as sort of the conduit, we can actually be able to deliver financial services that they need at home here in the Philippines while working overseas.

[David Westin]

Last year, some estimates put the volume of stablecoin transactions at around $35 trillion. But a new report from McKinsey's Matt Higginson suggests the reality is much more modest. How large is the stablecoin market right now and how fast is it growing?

[Matt Higginson]

So you'll hear in the media the trillions of dollars of stablecoin payments today, 99% of that is crypto related, not the sort of payments we think about which is company to company or even paying remittances person to person. And so we look at this situation today and say, how much real payments volume is there out there? And we think it's probably the order of a billion or two a day, which is tiny. The latest estimates we have are $390 billion in the total year. And that compares with several trillion dollars of regular payments per day.

[David Westin]

So a small amount right now, how does it compare, compare with last year and how does it compare with forecast for next year?

[Matt Higginson]

The data shows that the volume of real payment transactions using stablecoins probably doubled over the last year. When you look at the volume of stablecoins in circulation, that went from around $150 billion to $300 billion today, it's doubling, which by any measure is substantial in terms of growth.

[David Westin]

How much of that is cross border international? Essentially how much of it is domestic?

[Matt Higginson]

The vast majority is cross border. It's interesting. We've been looking at the geographic source of those payments with our research partner, Artemis Analytics. What they found is about 60% originates from Asia. And that surprised us a little bit because a lot of the talk has been in North America or Europe about the potential of stablecoins.

[David Westin]

Asia was one of the first regions to recognize the utility of stablecoins and became a frontrunner in regulating the space for over a decade. Sabnendu Mahante was the chief fintech officer at the Monetary Authority of Singapore, where he built the country's digital asset strategy,

[Sabnendu Mahante]

the single biggest Unsolved challenge in the world of payment is the cross border payments where today we have to depend on traditional correspondent bank in that particular use case. A stablecoin is a great product.

[David Westin]

Singapore generally is recognized as a leader in the use of and regulation of stablecoin. Why? Why Singapore?

[Sabnendu Mahante]

As a country we look at options innovation and we actually relentlessly focus on use case. We don't do technology for sake of technology. In Singapore's case, our focus on stablecoin has always been well regulated. Stablecoin issued under a strong regulatory framework.

[David Westin]

Japan and Singapore were among the first to establish a framework requiring companies to maintain liquid reserves representing 100% of the stablecoins they issued. Mahanty says robust regulation must lead the way for stablecoin to scale.

[Sabnendu Mahante]

The principle of regulation should not change because payment is a payment. Know your customer. Money laundering, terrorism financing checks are, I will say hygiene. They are like non negotiable. I personally believe an existing payment regulation with some incremental coverage for a stablecoin's unique technical requirement is good enough to be consistent, good enough regulation to manage

[David Westin]

this risk and payment Companies agree. Regulatory clarity allows companies to bring the product to more customers.

[Myron Brilliant]

Scale matters, which means once you have

[David Westin]

the infrastructure, we can move $100 billion

[Myron Brilliant]

a year in that infrastructure, but we

[Matt Higginson]

could also move a trillion dollars a year without much more.

[David Westin]

Building trust is expensive.

[Myron Brilliant]

Doing compliance is expensive. Getting the license is expensive.

[David Westin]

Once you put all that in place,

[Myron Brilliant]

it's a highly scalable business.

[David Westin]

Today, stablecoins are still small players against a collateral colossal banking system. But they are gaining momentum with growth expected to speed up as the Genius act in the United States comes into effect.

[Matt Higginson]

The Genius act will come into force by the end of the year and other regulations I expect will follow. So we haven't really gone live yet at scale. So I think we have a little time before that train leaves the station. The sobering part of that is when it does leave the station, we're going to have adoption of scale. We've got groups of banks, potentially dozens of banks suddenly all participating together. And I think there will be a bit of a scramble to position myself as a bank between stablecoin and customer to provide the best interface.

[David Westin]

What does your success potentially mean for traditional banks?

[Sebastian Gunningham]

There was one bank here in the Philippines that was like top 10, maybe like six or seven. But because there were the only one or the first one to bank, you know, exchanges like ourselves, they're now a top three bank.

[David Westin]

Fast is nice, but when it comes to our money, there's Also something to be said for slow.

[Elizabeth Economy]

So stablecoins is something I would be willing to try. It's just going to be a matter of convenience and then I'm just not too educated about it. I would also consider if it's also going to be convenient with my family because they're not really tech savvy. So I want to make sure that it's going to be easy for them as well. Trusting an app is really important for me because it's my hard earned money.

[David Westin]

The use of stablecoin for cross border transfers is more for small and medium sized businesses rather than big businesses. Why don't the big businesses use it for that purpose?

[Sabnendu Mahante]

Well, I used to joke that if one thing you don't want to be instant and quick, it is large transfers because nobody is looking to instantly transfer $5 million. You want to be as slow possible as friction in between so that you don't make mistakes. But you don't want to apply those principles on a small $200 transfer across the border because you are taking a speed versus the amount calibrated risk here.

[Sebastian Gunningham]

I've been in crypto for about eight years and then, you know, when I first came in I was like, oh, let's go unbanked. You know, like, you know, let's take it to Wall Street. But now I've been in industry for such a long time, I've come to appreciate the role that banks serve. Right. Like sometimes you just feel safer with your money in a bank, right in a vault. And they've been attacked left, right, front and center by all kinds of, you know, bad actors. But I think for them to grow, you know, I think those that embrace this technology, embrace stablecoins, I think is going to grow leaps and bounds faster than those that do not work with us and grow together. Or you can continue just to be a bank.

[David Westin]

Technology might be driving us all toward a future that's faster, cheaper and more convenient. But it's not necessarily for everyone or for every transaction. And for stablecoins to reach their full potential, they may need more regulation with the aim of fitting in to the legacy banking system rather than replacing it. Coming up. From spindrift to liquid death, grocery shelves are packed with every kind of carbonated water. Why so many and how many will survive?

[Public Sponsor Voice]

Support for the show comes from public. Public is an investing platform that offers access to stocks, options, bonds and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called generated assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R and D spend small cap stocks with improving operating margins or the S&P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on Public you just type in a prompt and their AI screens thousands of stocks and builds a one of a kind index. You can even backtest it against the S&P 500. Then you can invest in a few clicks, go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by

[Dave Berwick]

Public Holdings Brokerage Services by Public Investing member FINRA SIPC Advisory Services by Public Advisors SEC Registered Advisor crypto services by ZeroHash sample prompts are for illustrative purposes only. Investment advice. All investing involves risk of loss. See complete [e-mail] disclosures a business gift

[4imprint Sponsor Voice]

is never just a gift. It's a thank you, a milestone, a moment of appreciation. It's a message about how much someone matters and what your brand stands for. At 4imprint, you'll find thousands of customizable options like premium apparel, branded drinkware, tech totes and more, each chosen not just for function but for meaning. You can tailor every detail your logo, your message, your presentation so your gift feels personal and on brand and with expert support, dependable service and thousands without a setup fee. Creating something thoughtful doesn't mean making it complicated. Every order is backed by 4imprint's 360 degree guarantee, so you can be 4imprint certain it'll arrive exactly as expected, on time and with the care your brand deserves. Because when the moment matters, the right gift speaks volumes and the right partner makes it easy. Explore gifting with purpose and [e-mail] For Imprint For Certain find home wherever you roam at Sinesta ES and Simply Suites, where longer stays feel comfortable, flexible and easy. Stretch out and enjoy spacious accommodations and homelike amenities designed to help you settle in and stay productive or relaxed for however long you need. And when you're a Sonesta TravelPass member, staying at Sonesta ES and Simply Suites means earning points toward free nights, upgrades and more with every eligible stay. Go to Sonesta.com to book your stay and unlock the best rates with Sonesta Travel Pass here today, Rome tomorrow. Join [e-mail] Terms and conditions apply.

[David Westin]

This is a story about saturation Walk down the aisle of your favorite food store and you're likely to find more varieties of bubbly waters than you can count. Everything from La Croix to Spindrift, not to mention Liquid Death and Waterloo and a host of others. Why do we need so many variations of what is essentially water? And why is there room in the marketplace for so many competitors?

[Dave Berwick]

The whole beverage category is atomized. At the end of the day, there's almost so much real estate in that grocery store that you go shopping down.

[David Westin]

Dave Berwick is now CEO of higher end fruit infused sparkling water makers Spindrift. After serving as CEO of Peet's Coffee and Boston Beer and spending 20 years at Pepsi.

[Dave Berwick]

All those brands have to prove themselves to those retailers who own those shelves that they're worthy of being on that shelf. So again, it's what makes the category really challenging for, for me, it's what I love about the category. Because nothing worth doing in life is really easy, and this is not easy.

[David Westin]

If it's hard to succeed in the carbonated water business, why are so many companies going into it? Part of the answer is that it is easy to get a foot in the door. Adam Wagle is co founder and CEO of Butterfly, a venture investment firm focused on all areas of the food industry.

[Adam Wagle]

It's become a lot easier, a lot lower barriers to entry to creating these brands than ever before because the infrastructure around creating these brands has enabled that. You know, in the last 10 years that we've kind of gotten into this space, this used to work in the past is you'd have to kind of do everything yourself from scratch, from kind of developing the brand to developing the formulation, maybe even getting into manufacturing, finding out how to get your product placed, et cetera. Today there are many different outsourced businesses that support this ecosystem. So you can in fact go to a co manufacturer who can actually make the product. They can formulate it for you. They'll usually work with a packaging company that can help you put the packaging together. And then you can go to outsourced marketing organizations that can tell you how to launch a brand online or from a social media standpoint and kind of get going in those kind of formats, if you will. So there's this sort of infrastructure of companies that we call enablers here at Butterfly that actually support the different infrastructure that a founder or CEO needs to go create a business from scratch.

[David Westin]

The bubbly water business is part of a global beverage market that sold over a trillion dollars worth of soft drinks last year. More than a third of that was sodas. Ubiquitous Cokes, Pepsis, and their brethren. But those soda sales have come down 27% over the last two decades, giving up market share to various forms of water, which now account for over a quarter of all beverage sales. Carbonated water is only a modest share of that, but it is growing noticeably faster than its peers in the US among the driving factors, a desire for healthier alternatives to soda. That's what led Nicole Bernard Dawes to launch her product Nixie.

[Nicole Bernard Dawes]

While the snack aisle and the produce aisle, even the dairy aisle, were getting more and more healthier organic products, the beverage aisle was still filled with sugar and plastic and almost no certified organic products. I really saw an opportunity, and I also really felt it was important to have zero sugar, because I think liquid sugar is just not a healthy thing for anybody. We knew we wanted to be a healthy beverage brand. That's our mission. That's who we are. We started with sparkling water, which, you know, we felt was one of the cleanest we felt it really defined kind of what we were trying to achieve. And then after we got that out into the market, we started working on a zero sugar soda. Zero sugar is still one of the largest drivers of even conventional beverage. For the conventional soda brand, zero sugar is their biggest part of the growth for their business. And I think that also was exciting to me because, you know, when you have a category that large, you know, there's a segment of the population not being served by the products that are the number one or number two products. You're hearing the term modern soda a lot. And if you went into a grocery store, you know, a few years ago, you might have two or three feet for this new type of soda. And now you're going in and you're seeing, you know, chains like Walmart expanding from 2ft to 8 or 12ft.

[David Westin]

That growth of the bubbly water segment makes more attractive a business that's easy to get into in the first place. A form of making it up on volume.

[Nicole Bernard Dawes]

It's a great business, which is why I do it. I mean, I. I love big categories because, you know, think about it. If you're talking about $10 billion category, you don't have to be a significant part of that to be a significant business.

[David Westin]

What is the opportunity you see for Spindrift?

[Dave Berwick]

When we came in, about a year and a half, was about a $300 million business. We'll be close to a half a billion dollar business at the end of this year. So after two years, and I think there's a clear path to A billion dollars and beyond for this brand. The sparkling beverage business is still growing 25 to 30% as more people come in. And when they do come in, they get to try our brand, which we think is better than others and we like that. But we're also looking at other adjacent categories where we can take sort of that core equity of what Spindrift is, which is real squeezed fruit. How do we take that real squeezed fruit and bring it to other categories? So most recently we launched a non carbonated tea product that we're really excited about. So between the core business of sparkling water adjacencies like tea, we've also launched a soda, a healthier, better for you soda product that can get us to a billion dollars.

[David Westin]

It's a growing business segment, but that doesn't mean it's easy to carve out a niche for any particular product product, much less succeed over the long term.

[Adam Wagle]

The concern though is there are many out there and to try to figure out for us as investors which companies are going to last and make it and really created something special. We got to really be picky about what we get behind because many can kind of get in business now. To also scale and get to a substantial level, you know, will require a lot more than that.

[David Westin]

What about price? Where do you want your product to exist in the spectrum on spot price?

[Dave Berwick]

We definitely want to exist in the high end as we know it's been much talked about. We were in a K K shaped economy, right now we serve that upper K. We want to bring everybody in. But you want to be in the premium segment. I think you want to focus on gross margin improvement. So you can, because that's really the oxygen of our business. So when we sell at a premium price point, we can, we can improve our gross margin then reinvest to grow, to grow the brand. Also interestingly, like within the health and wellness space where we play, we're seeing more and more low and middle income households actually trading up to premium brands when it comes to health and wellness.

[David Westin]

And there are very specific ways of measuring, even day to day, how successful a company is, including how it's doing in the water. Competition wars.

[Nicole Bernard Dawes]

Velocity is how many units of your product you sell in each store each week. And I think velocity is the truest measure of success. You know, you can't fake velocity, you can't cheat velocity. If a customer's coming in and buying your product and then they're coming back again next week and buying it again, you know, you can tell the health and success of a brand. And, you know, it's like, it's how we gauge new products, it's how we gauge new chains. And I think it's very important for brands to watch their velocity closely and make sure that, you know, your velocity is where you want it to be. And if it's not that, you're learning why and fixing it as quickly as possible.

[Dave Berwick]

Looking at sales, obviously, are we selling in, you know, to our, to our retail customers, so to Walmart and to Costco and to Target and all those folks. We got to look at that every day with what those, how the orders are building up. We also want to look at syndicated data. Right now we only have about 8% of households that buy us and during the course of a year, and that's pretty low. But that's a good thing because that means there's a lot more places we can go with this brand. So we'll look at that. We also look at things like trial, how many people are trying our product and what's the repeat purchase. That's another really important one. Everybody will try anything at any given time, but the real measure is how many people come back to your product for the second time and the third time. So we also look at that.

[David Westin]

It's a growing segment with an awful lot of competitors. But can it be a good investment? Wagle finds that the very factor that lowers the barriers to entry may be the key to investing.

[Adam Wagle]

One third of what we do at Butterfly is investing in consumer brands. And we think we're good at picking them and finding winners and making it work. But two thirds of what we do is investing in those enablers. It allows us to not have to take the brand risk. Right? We can just say, okay, we're going to bet behind hydration and the flavors that go into hydration. And so let's go find a flavor company that powers all these different hydration brands. And we don't have to sit here and determine which hydration brand is going to win. So if we can go against the packaging companies that supply those hydration businesses, I think it's a great idea. Flavoring, again, is a big flavors essence. Ingredients in general are another area where we play and find amazing companies that are supplying those different sort of vendors. And then finally, a huge ecosystem that we spend a lot of time on is co manufacturing. So a lot of manufacturing has been outsourced to these companies that are very professional at doing it and can do it for big brands, small brands. Finally, I'd say there's also the distribution and logistics of moving these beverages around, which are really interesting players, both national distributors, but also regional distributors that might specialize in certain channels.

[David Westin]

Those so called enablers may be good investments, but those at the center of the business believe there's no real substitute for doing it yourself.

[Dave Berwick]

I've always talked about how you want to start sort of with this product. Truth. What's the truth about your product that's really special for us? It's real squeeze fruit. It's been around since 2010 and it's really ridden the wave of consumers gravitating toward healthier, better for you beverages and that happen to be refreshing has a nice flavor profile.

[David Westin]

In most businesses, saturation is a bad thing. Success usually comes from scarcity. And when it comes to carbonated water, the fact is that many of the brands will likely fail. But those devoted to the business believe deeply that in the end, despite the odds, there's room even for all those versions on your grocery shelf, provided they have the right taste.

[Dave Berwick]

The reality is that most things fail. You know 80% of new products will fail just because just being just showing up at the party doesn't make you interesting or relevant necessarily.

[Nicole Bernard Dawes]

Taste always comes first, because if a product doesn't taste delicious, it doesn't matter how meaningful your mission is or how important all of the backstory of your brand. If people don't love the way they taste, they're not going to come back again and again to buy it.

[David Westin]

That does it for us here at Wall Street Week. I'm David Westin. See you next week for more stories of capitalism.

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