ENVIRONMENT

It's an Earth Day Like No Other

Empty skies. Empty roads. Empty factories. The organizers of the first Earth Day could never have imagined how we'd be celebrating its 50th birthday.

• In the U.S., the EIA predicts energy-related CO2 emissions will drop 7.5% this year because of the economic slowdown.
• The EU’s daily emissions are down 58% compared to pre-COVID-19 levels, according to consultancy Sia Partners. NO2 levels, typically linked to cars, have hit rock-bottom.

And even though Lisa Frank’s dolphins still won’t stick a flipper in the East River, some animals are reclaiming our neighborhoods while smog in major cities is vanishing. 

But this is likely just a blip

Scientists who track CO2 levels from Hawaii’s Mauna Loa volcano estimate fossil fuel emissions need to stay down 10% for at least a year to show up in their readings, reports the FT. 

• Whether that happens or not depends on the length of the economic crisis and on government policy. Climate activists argue "reopening" presents an opportunity for governments to prioritize environmental issues, but the reality is climate change has been pushed to the back of the agenda as lawmakers focus on containing the virus.

Still, this “big, natural experiment” could have some long-lasting effects: 

1. Increased adoption of renewable energy. In the U.K. and Europe, renewables delivered 46% of total power generation from March 10–April 10, an annual increase of 8%. In the U.S., coal now accounts for a historically low share of our electricity mix (15%). That was 50% a decade ago.
2. A reassessment of business travel. Execs might think twice about how often they need to see co-branded Patagonia vests IRL and forever banish those "one-meeting trips" that contribute emissions.
3. More collaboration. To face COVID-19, scientists have been sharing and publishing findings at record levels. If this kind of global teamwork continues, it could accelerate collective environmental action. Bill Gates said he’s “super positive” about “the way we can connect up and work together.”

FOOD

Chipotle to Pay 3.6 Million Burritos in Norovirus Case

Yesterday, LA federal prosecutors smacked Chipotle with a $25 million criminal fine to settle charges related to norovirus outbreaks at some locations. 

• Norovirus = a highly contagious virus that’s easily transmitted by workers handling food.

The charges: Prosecutors said Chipotle served food that made over 1,100 people sick in the U.S. from 2015 to 2018. That’s the largest fine ever in a food safety case, according to prosecutors. 

• As part of the settlement, Chipotle pledged to strengthen its food-safety policies and write “I will not make people sick” 30x on the blackboard.

Zoom out: Chipotle isn’t a stranger to the courtroom. It’s faced class-action and shareholder lawsuits over its sanitation practices in recent years. 

+ While we’re here: Chipotle also reported better-than-expected earnings yesterday, with digital sales growing 81% and same-store sales up 3.3%. But it also withdrew 2020 guidance.

MEDIA

Snap and Netflix Are Too Hot to Handle

With much of the global population stuck inside lapping their coffee table, online platforms are among the lucky few with good news to report this earnings season. Snap and Netflix took the stage first yesterday.

Snap surged over 19% after hours after beating (scaled back) revenue expectations by $32 million. It also grew daily active users 20% yearly to 229 million.

• Analysts were nervous. Snap depends on ad revenue, and marketers are pulling back their spending. Snap escaped the worst in Q1, but it’s expected to take a bigger hit this quarter.

Netflix added 15.8 million paying customers last quarter, more than double predictions, because if you didn’t have a hot take about Doc Antle you were no good to anybody. Revenue came in right at expectations while earnings per share missed. 

• To explain the miss, Netflix pointed to the strengthening U.S. dollar hurting foreign revenues, a $218 million loss from paused production, and $150 million diverted to supporting its production members. 
• Netflix warned that viewership will likely decline after people go back to work.

Looking ahead...earnings season is just gearing up. If EPS and EBITDA normally make your brain feel like mashed potatoes, check out our earnings guide.

SPONSORED BY THUMA

Bed Time All the Time

We’re all spending some extra time being horizontal these days. So for something like a bed frame that’s essentially the most important item in your bedroom, a cheap, janky, (and sometimes noisy) setup just doesn’t make much sense.

Thuma has dedicated all the hours they’re not in bed to making a bed frame you’ll actually love, which they’ve aptly named: The Bed.

Combining elevated design, quality craftsmanship, and modern convenience, The Bed is the perfect foundation for stretching out in luxury—it’s even been strenuously tested and proven to withstand any and all Bed Time activities, and is backed by a lifetime warranty.

The Bed is made of high-quality, eco-friendly materials and features Japanese joinery which you can assemble in just 5(ish) minutes without any tools.

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CONSUMER GOODS

Share a Coke With...No One. You’re on Lockdown.

Yesterday, Coca-Cola reported a 25% drop in sales volumes this month. Which means starting now, Warren Buffett’s crushing nine cans a day to protect Berkshire Hathaway’s third-largest investment. 

After a brief surge from stockpiling, consumer sales have leveled off. But the real hit has been in the B2B market: Coke does almost half its sales from movie chains, events like concerts, and vending machines. Locations that are now, we hate to break this, closed.

The pandemic’s impact on Q1 wasn’t actually that bad. Globally, sales dropped 1% annually through the end of March. But in the Asia Pacific market (where the COVID-19 outbreak was several weeks earlier), sales fell 7%. 

• By the start of Q2, European and American markets were in full lockdown mode. Which means Q2 prospects are not looking good, for Coke or Buffett’s dentist. 

Plot twist: The oil price crash might also play a role in Q2. Reduced ethanol production has caused a worsening shortage of CO2, which is used to carbonate soda as well as treat drinking water and produce beer.

ENTERTAINMENT

States Make Movie Biz an Offer They Might Refuse

Some states are itching under the wool sweater of social distancing restrictions, and have moved to lift them. But without clear direction, businesses are wary of the brave new world.

Georgia Gov. Brian Kemp is allowing movie theaters in the state to reopen on Monday. But chains like AMC and Regal Cinemas say they can’t just fire up the popcorn machines. 

• Those companies have furloughed almost all their employees. It takes time to rehire people, then train them for extra safety measures.
• Even if trained ticket-takers grew on trees, blockbusters definitely don’t. No movies from Hollywood studios are scheduled to drop before late June. 

And even if both of those issues magically resolved themselves, there’s always legal liability. Theaters may not want to reopen if they could be held responsible for any customers or employees contracting COVID-19. 

That’s a common concern across sectors. Some biz lobbying groups are asking Congress to protect firms that restart operations from coronavirus-related lawsuits.

+ Speaking of lawsuits...Attorney General William Barr suggested the DOJ would support legal action against state governors who impose lockdowns that may go above and beyond the threat presented by COVID-19. 

EARTH

Happy Earth Day From the Grand Tetons

You'll find stunning landscapes all over the world, but there's something different about the American West...

WHAT ELSE IS BREWING

• Black and Hispanic families are taking the biggest economic hit from the coronavirus, new studies show.
• Canceled: Spain’s Running of the Bulls, Germany’s Oktoberfest, and our beloved national spelling bee.
• The United Auto Workers union endorsed Joe Biden for president.
• U.S. videogame sales increased 35% annually in March to $1.6 billion, according to research firm NPD. That includes hardware, software, and accessories.

BREW'S BETS

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Work Learn from home: Enroll in NYU Professor Scott Galloway’s two-week crash course that breaks down the winning strategies of tech behemoths like Amazon and Apple. Take your career to the next level through an online experience that's flexible with your schedule. The May course is only open to Brew readers, so sign up today.*

For Earth Day: Here’s a guide on how to compost at home. You can also create a compost worm bin if you want some wriggly new friends for your quarantine. On a similar note, aspirational recyclers should read this list.

^{*This is sponsored advertising content}

FROM THE CREW

Brew's Q's

Yesterday, we asked whether larger chain restaurants like Shake Shack and Fogo de Chão should have been eligible for Paycheck Protection Program loans from the government. 85% of you said no. Here are responses from across the spectrum:

“While restaurant chains can have different corporate structures, in general they have greater access to funds that can and should be poured back into the individual stores that generate all the profits. Leave the big fund for a true small business.”

“The purpose of the PPP is to put people back to work, and there are strict rules on how the funds can be spent. With that, is a job in a restaurant owned by a multiunit operator worth less or more than a restaurant owned by an independent? Restaurant jobs are restaurant jobs. Let’s focus on who can put the most people back to work, not who owns the restaurant.”

“Chains are too big to receive the small business loans by definition of # of employees. But they are too small to be ‘too big to fail.’  Not an enviable position to be in.”

LANGUAGE TRIVIA

It's Earth Day, so let's do a quiz about what unites us. We'll give you pairs of countries that share an official language. Can you figure out the language they have in common? 

1. Brazil and Angola 
2. Cameroon and Haiti
3. Kenya and the Philippines
4. Jordan and Somalia 
5. Suriname and Belgium 

LANGUAGE TRIVIA ANSWER

1. Brazil and Angola: Portuguese
2. Cameroon and Haiti: French
3. Kenya and the Philippines: English
4. Jordan and Somalia: Arabic
5. Suriname and Belgium: Dutch