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Companies/
Industries
Tesla is pulling into
GM's lane 20
Burt's Bees—a bargain
in the U.S., a splurge
in Korea 22
Magic fans are
spellbound in D.C. 21
Briefs: Turbulence
at Boeing; Bud, the
czar of beers 23
Aspartate aminotransferase
April 4 - April 10, 2016
Mean corpuscular hemoglobin concentration
Total Cortisol
Lactate dehydrogenase
Magnesium
Sodium
Platelet count
Potassium
Creatinine
Non-HDL cholesterol
Albumin/globulin ratio
Glucose
Protein total
Hemoglobin
Mean platelet volume
Cholesterol/HDL ratio
Red blood cells
White blood cells
<•
f
Free Cortisol
^
Monocytes
Chloride
Hematocrit
Iron
Calcium
•
Corpuscular volume
HDL
Urea nitrogen
Eosinophils
Immunoglobulins
Red blood cell distribution width
Triglycerides
• Looking for a lucrative market, Quest has created a blood test for well-to-do endurance athletes
• "You have to wonder how much good they do that a regular screening with an internist wouldn't"
The m o d e r n amateur athlete loves
data. Marathoners a n d triathletes
devour i n f o r m a t i o n about t h e i r workouts, gleaning stats f r o m sophisticated
gadgets strapped to t h e i r w r i s t s ,
chests, a n d bikes.
Richard Schwabacher wants to give
t h e m m o r e , b y going deeper inside
the body. He r u n s Quest Diagnostics'
Sports a n d H u m a n Performance u n i t ,
the m e d i c a l testing giant's effort to
take a p r o d u c t d i r e c t l y to consumers.
Not j u s t any consumers, b u t endurance athletes w i l l i n g to spend a l o t o f
m o n e y to enhance t h e i r performance.
Take t h e I r o n m a n , the p o p u l a r t r i a t h l o n , w h i c h asks p a r t i c i p a n t s to
s w i m 2.4 miles, bike 112 miles, a n d
t h e n r u n a m a r a t h o n (26.2 miles).
A 2015 survey for I r o n m a n operator
W o r l d T r i a t h l o n f o u n d t h e average
annual h o u s e h o l d i n c o m e o f its participants was $247,000; t h e m e d i a n
for the U.S. i n 2013 was $51,939. More
t h a n h a l f a m i l l i o n people i n t h e U.S.
r u n marathons each year.
T r a i n i n g for a n d p a r t i c i p a t i n g
i n an I r o n m a n isn't for the frugal,
Schwabacher says, n o t i n g that i t
can r u n u p to $15,000 a year i f y o u
buy a bike a n d w e t suit a n d figure
i n the cost o f p o o l t i m e , travel a n d
l o d g i n g , assorted gear, a n d massages.
" I f y o u ' r e going to spend that m u c h
m o n e y o n y o u r s p o r t , isn't i t w o r t h
spending a couple h u n d r e d dollars to
make sure the food y o u ' r e eating is
r i g h t ? " he asks.
Quest is i n the early stages of bringing a diagnostic tool called Blueprint
for Athletes to those free-spenders. It's
recruited what i t calls ambassadors-a
couple dozen hard-core weekend warriors w h o regularly w i n or place i n tri¬
athlons and ultramarathons-to test the
product. It's also rolled Blueprint out to
consumers i n endurance athlete havens
including Houston, Denver, and Quest's
home base i n n o r t h e r n New Jersey.
Blueprint was b o r n i n p a r t f r o m an
effort w i t h the New York Giants football team, for w h i c h Quest became
a sponsor i n 2013. Late that year,
Quest's chief executive officer, Steve •
Companies/Industries
Rusckowski, m e t w i t h Giants cogets a r e p o r t that can be dozens o f
owner John Mara a n d the team's senior
pages long, w i t h details o n everything
vice president for medical services,
f r o m v i t a m i n D to platelet c o u n t . The
Ronnie Barnes, about collaborating.
r e p o r t defines each b i o m a r k e r a n d
The organizations ultimately created
gives advice o n h o w to combat a defia p r o g r a m t o help players get faster
ciency. For example, a h i g h b i l i r u b i n
and stronger by measuring n u t r i t i o n ,
level typically means an athlete needs
h y d r a t i o n , a n d food allergies "Not only did I feel
t o consume m o r e i r o n to boost
like I'd done the
using detailed b l o o d tests.
her r e d b l o o d cell c o u n t .
work, I was
Quest a n d the team doctors
»
As a weekend cyclist,
prepared in the
w o u l d analyze dozens o f bioSchwabacher sees endurright way."
m a r k e r s - f o r everything f r o m
Blueprint
ance athletes' obsession w i t h
Ambassador
a l b u m i n to l y m p h o c y t e s gadgets a n d data firsthand.
Christina Ross
and offer specific advice.
" W h e n I ' m o n m y bike, I ' m
The results, Schwabacher
l o o k i n g at other people's bikes
says, were p o w e r f u l as the
and t h e i r e q u i p m e n t , a n d
athletes saw h o w they c o u l d change
we're talking about i t , " he says. The
behavior a n d quickly improve t h e i r
vast m a j o r i t y of purchases are based
performance o n the field b y altering
o n referrals. So Schwabacher's team
t h e i r workouts or diets. "The players
at Quest sought out guinea pigs-cumbecame way m o r e engaged," he says.
evangelists w h o ' d add Blueprint to
their workouts a n d , ideally, tell t h e i r
Soon after the meeting, Quest
friends about it. Over the next year, the
started h o n i n g B l u e p r i n t for serious
company plans t o use ambassadors'
amateur athletes as a way to help its
a n d consumers' feedback to determine
overall business grow. The c o m p a n y
w h i c h diagnostics are the most useful
has 2,200 labs; it's t h e biggest clinical
for specific types o f athletes.
testing c o m p a n y i n the U.S. W i t h sales
o f m e d i c a l tests flat a n d c o m p e t i t i o n
Ashley M e r r y m a n , w h o studied
f r o m companies such as L a b o r a t o r y
high-performance athletes for her
C o r p . of A m e r i c a , better k n o w n as
b o o k Top Dog: The Science of Winning
LabCorp., increasing, Quest is l o o k i n g
and Losing, says for testing t o be effecto several p r o d u c t s t o boost g r o w t h .
tive, athletes need t o spend a lot m o r e
time and money on it. " I ' m talking a
The consumer version o f B l u e p r i n t
daily basis," she says. T r u l y undercomes i n several varieties a n d costs
standing t h e i n d i v i d u a l athlete is crit$225 t o $ 5 0 0 per test. On B l u e p r i n t ' s
ical i n h e l p i n g someone stay healthy
website, athletes can choose test
a n d c o m p e t i t i v e , says Dr. N o r b e r t
packages designed to boost endurSander, w h o p r a c t i c e d sports medance, recovery, or n u t r i t i o n . A cliniicine for m o r e t h a n 20 years a n d is
cian at a Quest l o c a t i o n draws several
the founder a n d CEO o f New York's
vials o f b l o o d that are t h e n anaA r m o r y F o u n d a t i o n , w h i c h hosts
lyzed. After a baseline test at the start
dozens o f i n d o o r t r a c k meets yearly.
o f t r a i n i n g , an athlete can come for
Lab tests, he says, "have a great deal
follow-ups. Some get tested m o n t h l y ;
o f variability. You have to w o n d e r
others check i n quarterly.
h o w m u c h good t h e y do that a regular
Test results are reviewed by a physiscreening w i t h an i n t e r n i s t w o u l d n ' t . "
cian, w h o w i l l flag a n y t h i n g he or she
Quest, Schwabacher says, aims to
deems critical. The athlete u l t i m a t e l y
create s o m e t h i n g " t h a t ' s useful as one
o f t h e m a n y tools an athlete can use i n
t h e i r t r a i n i n g . " The company's chalVital Sign Weakness
lenge is to effectively distill the results
Annual change in Quest's revenue
15%
i n t o actionable advice. Christina Ross,
In five of the past six
a
B l u e p r i n t ambassador a n d a d o c t o r
years, sales grew less
10%
i n Minnesota, is a l o n g t i m e t r i a t h than 1 percent
lete who's recently t a k e n u p longdistance, single-speed m o u n t a i n bike
racing. " W h a t I like is that it's sciencebased," she says. Ross says t h e testing
showed her w h e r e to t w e a k her n u t r i -5%
t i o n , a d d i n g supplements w h e r e necessary. She got tested regularly d u r i n g
DATA COMPILED BY BLOOMBERG
t r a i n i n g , i n c l u d i n g right before a
race. " I t d i d n ' t show evidence o f overt r a i n i n g . Not o n l y d i d I feel like I ' d
done the w o r k , I was p r e p a r e d i n t h e
r i g h t way."
Kristen Heath is w o r k i n g o n a p l a n to
counter her h y p o t h y r o i d i s m a n d l o w
i r o n levels. "That's really difficult for
an athlete, w h e n t h e y ' r e n o t i n l i n e , "
says Heath, w h o lives outside Syracuse
and trains for long-distance races i n
her spare t i m e . She describes herself
as intensely competitive a n d always
l o o k i n g for an edge. W i t h o u t data, she
says, " y o u k i n d o f go b y feel."
Ross a n d Heath w i l l b o t h compete
o n bikes i n this year's Leadville 100,
for w h i c h B l u e p r i n t for Athletes is
the lead sponsor. The race, i n t h e
Colorado m o u n t a i n s , is a m o n g t h e
most famous u l t r a m a r a t h o n s . (The
" 1 0 0 " i n the title is t h e n u m b e r o f
miles c o m p e t i t o r s cover, at elevations
f r o m 9,200 feet t o 12,600 feet.)
Quest i n A p r i l w i l l l a u n c h a 30-day
challenge, i n p a r t n e r s h i p w i t h U n d e r
A r m o u r ' s MapMyFitness, t h r o u g h
w h i c h contestants can w i n an e n t r y to
the fully b o o k e d Leadville b i k e or r u n .
It's an easy way for Quest to i d e n t i f y
future B l u e p r i n t customers. People
n u t t y enough to r u n or r i d e 100 miles
i n t h e m o u n t a i n s are l o o k i n g for all
the help t h e y can g e t - a n d w i l l i n g to
pay for i t . — J a s o n Kelly
The bottom line Quest, whose clinical testing
business is flat, has created a performance test
for amateur athletes that could spur growth.
Cars
Showdown at the
Electric Garage
• GM and Tesla introduce vehicles
that target the same customers
• "Think of the Model 3 as... really
competing" with BMW and Audi
Forget about o l d grudge matches
like Chevrolet vs. Ford or H o n d a vs.
Toyota. The fight b r e w i n g b e t w e e n
G e n e r a l Motors a n d T e s l a Motors
is shaping u p to be nastier. B o t h w i l l
soon be going after the customer
w h o can spend $30,000 or m o r e o n
an electric car, as GM launches the
•
Companies/Industries
Fighting for the Socket
U.S. sales of plug-in electric vehicles*
120k
' Tesla
.
/
*
90k
Ford^^"60k
Nissan
Other
2011
30k
0
2015
•INCLUDES VEHICLES WITH A GASOLINE-ASSIST ENGINE
DATA: U.S. DEPARTMENT OF ENERGY. HYBRIDCARS.COM
Chevy Bolt at the e n d o f this year
a n d Tesla begins selling the M o d e l 3
i n 2017. GM showed off the Bolt i n
January, a n d Tesla unveiled the
Model 3 o n M a r c h 31.
GM is positioning t h e Bolt to sell
to the masses, w h i c h w i l l help the
company meet regulatory targets for
r e q u i r e d zero-emission vehicle sales,
and to highlight technology GM developed w i t h its first electric car, the E V l ,
i n t r o d u c e d i n 1996. W h e n GM stopped
E V l p r o d u c t i o n i n 2002, Toyota
became the darling o f green-friendly
buyers w i t h its Prius h y b r i d . Tesla,
meanwhile, is l o o k i n g to the Model 3 to
prove i t can sell battery-powered cars
to a mass market and t u r n a profit.
B o t h cars w i l l start at $ 3 0 , o o o - o r
less after federal tax credits o f $7,500
are a p p l i e d . A n d b o t h go at least
200 miles o n a fully charged battery.
The Bolt is a five-passenger hatchback that boasts cargo space and m o r e
l e g r o o m for rear passengers-frontseat backs are a n i n c h t h i n n e r t h a n i n
most cars. Tesla has kept details u n d e r
w r a p s , b u t the M o d e l 3 is expected t o
be about t h e size o f a B M W 3 Series.
A t t h e Consumer Electronics Show
i n Las Vegas i n January, GM Chief
Executive Officer M a r y Barra, describi n g the Bolt's v i r t u e s , said, " B o l t customers w o n ' t have to drive to another
state to buy, service, or s u p p o r t
t h e i r vehicle." Tesla owners outside
California must sometimes travel
l o n g distances for maintenance a n d
repairs; t h e c o m p a n y has fewer t h a n
100 stores n a t i o n w i d e , w h i l e Chevy
has 3,000 dealers.
I n February, Tesla CEO E l o n Musk
said he welcomes the Bolt to t h e
m a r k e t , b u t doesn't see i t as a r i v a l .
"You s h o u l d t h i n k o f the M o d e l 3 as
sort o f really c o m p e t i n g i n k i n d o f t h e
BMW 3 Series or A u d i A4 m a r k e t , " he
Shoppers
in Korea
said. Musk has successfully targeted
l u x u r y brands such as A u d i , BMW,
and even P o r s c h e w i t h the M o d e l S,
Tesla's first full-size EV, w h i c h h i t
U.S. streets i n 2012. It n o w starts
at about $75,000 a n d can go w e l l
b e y o n d $100,000.
Chevy w i l l m a r k e t t h e Bolt o n
its value a n d practical features.
" F r i v o l o u s gadgets" w o n ' t cut i t , says
D a r i n Gesse, m a r k e t i n g manager
for electrified vehicles at GM. Are
the falcon-wing doors o n t h e Tesla
Model X frivolous? " T h e y ' r e i n t h a t
n e i g h b o r h o o d , " he says. Musk has said
that the doors aren't j u s t for show;
o p e n i n g u p w a r d , they make i t easier
to get i n and o u t o f t h e car.
Tesla first pushed its cars as sporty
and unique, and t h e n as electric and
green, says Alexander Edwards, president o f San Diego marketing consultant Strategic Vision. That's w h y sales
have increased even as cheap fuel has
battered hybrid-electric cars like the
Prius. Despite the companies' different
marketing approaches, Edwards
says, the 8 percent o f new-car buyers
interested i n an electric car w i l l look at
b o t h the Tesla and the Chevy models.
—David Welch
The bottom line GM and Tesla have a lot riding
on the release of their newest EVs, as both
companies go after the middle market.
Cosmetics
Burt's Bees Goes From
Big-Box to Upscale
• The personal-care brand has a
fancier reputation abroad
• In the U.S., "the positioning was
not to its best interest"
A best-selling i t e m at t h e B u r t ' s B e e s
store i n Seoul's IFC M a l l , a 0.6-ounce
package o f Res-Q o i n t m e n t for cuts
and scratches, sells for 18,000 w o n
(about $l5.47)-almost three times the
U.S. retail price. A 113-gram t u b e o f
diaper cream goes for about $26; the
average p r i c e i n A m e r i c a is $10.
Located a m i d major retailers such
as A r m a n i Exchange, Jill Stuart, a n d
U n i q l o , t h e store is one o f 13 standalone boutiques the C l o r o x - o w n e d
Exported Buzz
Burt's Bees fetches
higher prices abroad
b r a n d operates
outside t h e U.S. I n
A s
[^
w
h e r e con-
sumers place a
~
s
p r e m i u m o n all' Bi nt's
n a t u r a l , gentle-onthe-skin beauty
p r o d u c t s , Burt's
i
- J
Bees has great
Rosewater toner
appeal. " T h e y ' r e
In the U.S. $11 •*
using less chemiIn Korea $31.27
cals t h a n some o f
BURTS
the local brands
BE£S
here," says Lee Jee
Ha, w h o shops for
her Burt's Bees
favorites, especially its baby o i l ,
Peach & willow bark
at any o f several
deep pore scrub
Seoul branches
U.S. $8 -» Hong
of South Korea's
Kong $26.95
Olive Y o u n g drugstore c h a i n . Burt's
Bees is also f o u n d
W1U»
i n upscale departm e n t stores such
as the U.K.'sJohn
L e w i s a n d some
Baby Bee bubble bath
drugstore chains
U.S. $9 •* U.K. $15.84
in London.
A t a t i m e w h e n large consumerp r o d u c t s companies are struggling
w i t h sluggish sales, Burt's Bees a n d
the p r e m i u m prices i t commands
overseas represent g r o w t h p o t e n t i a l
for Clorox. " T h i s is a very profitable
business internationally," says Chief
Executive Officer Benno Dorer. The
company, best k n o w n for its bleach
a n d H i d d e n Valley r a n c h salad dressi n g , b o u g h t the small, Maine-based
maker o f l i p balms a n d honey-infused
creams and cosmetics for $925 m i l l i o n
i n 2007. At the t i m e , t h e l i n e was sold
i n five countries outside t h e U.S.; n o w
it's i n m o r e t h a n 40. I t entered h a l f of
those markets i n the last three years,
Dorer says. The newest i n t e r n a t i o n a l
(
+
Companies/lndustri
outpost o p e n e d o n M a r c h 9 i n
Tokyo's Shinjuku n e i g h b o r h o o d .
Initially, Burt's Bees loyalists
w o r r i e d Clorox w o u l d strip i t o f
its authenticity. But t h e b r a n d
has h e l d o n t o its all-natural
cachet a n d g r o w n steadily. Its
co-founder, B u r t Shavitz, d i e d
i n July 2015, b u t his likeness
w i l l remain o n products, the
c o m p a n y says.
Sales have increased at
least t w i c e as fast as those for
the p a r e n t c o m p a n y overall. Today
Burt's Bees accounts for 4 percent
o f Clorox's sales, w h i c h last year
t o t a l e d $5.7 b i l l i o n . I n t h e last fiscal
year, 82 percent o f t o t a l sales came
f r o m t h e U.S.
Dorer is l o o k i n g for 10 percent t o
15 percent g r o w t h i n Burt's Bees'
sales, c o m p a r e d w i t h 3 percent t o
5 percent f o r Clorox overall. O r u
M o h i u d d i n , a b e a u t y analyst at
Euromonitor
Increase in visitors in
International i n
the final three months
L o n d o n , says
of 2015 vs. a year earlier
at Whistler Blackcomb.
competition from
The Vancouver-area
such brands as
ski resort says a snowy
L'Occitane and
winter and a weak
Canadian dollar brought
W e l e d a is s t r o n g ,
more people to the
b u t h a v i n g babyslopes.
care p r o d u c t s a n d
being p r i c e d i n b e t w e e n mass a n d
p r e m i u m brands gives Burt's Bees
a niche. A n d there's a l o t o f u n m e t
p o t e n t i a l , she says. I n t h e U.S., w h e r e
its largest d i s t r i b u t o r s are big-box
retailers like W a l m a r t a n d Target,
" t h e p o s i t i o n i n g was n o t t o its best
interest," M o h i u d d i n says. Given its
n a t u r a l ingredients, she says, t h e
c o m p a n y c o u l d have m a r k e t e d t h e
b r a n d as a n upscale p r o d u c t early
o n . Clorox says selling t h r o u g h mass
retailers has d r i v e n g r o w t h .
W h e t h e r U.S. customers w o u l d
spend m o r e for t h e balms a n d lotions
is unclear. Candy L e u n g , i n H o n g
Kong, is h a p p y to pay a p r e m i u m .
She was i n t r o d u c e d t o t h e p r o d ucts w h i l e visiting f a m i l y members
i n t h e U.S. " I f I need i t , I b u y i t . "
—Lauren
Coleman-Lochner,
with
Cynthia Kim and Annie Lee
The bottom line When Clorox bought Burt's Bees
for $925 million In 2007, It was sold In five countries
outside the U.S. Today it's in more than 40.
o
Edited by Dimitra Kessenides
Bloomberg.com
Briefs
Job Cuts at Boeing
By Ira
Boeing plans to eliminate about 4,000 jobs
from its commercial airplanes division by midyear
as part of a broader effort to reduce costs amid
strong competition from Airbus. The plane maker
doesn't plan any involuntary layoffs for now; the Boston-based startup
Kuvee began selling
reductions will c o m e among 1,600 w o r k e r s a Keurig-style smart
bottle for $199. It
who've e l e c t e d to leave under a voluntary keeps wine fresh for
30 days after opening
program and through attrition. • < > • The outlook and has a touchscreen
to order more bottles.
for SunEdison darkened as the U.S. Securities and Exchange Commission probed whether the solarenergy giant lied to investors about cash
reserves. Since early 2014, SunEdison has
spent $3.3 billion to acquire renewableenergy projects, taking on sizable debt to
do so. • • > - • Alaska Air Group and JetBlue
Airways have put in bids to take over Virgin
America, the carrier started by billionaire Richard Branson.
Virgin, which started flying from San Francisco in 2 0 0 7 and
is now the ninth-largest airline in the U.S. by traffic, put itself
on the market in March.
Budweiser is enjoying unlikely
growth in Russia. Overall brewing output has fallen more
than 3 0 percent in the country since 2 0 0 8 , but the head of
Anheuser-Busch /nBevs Russian unit says sales of Budweiser
are growing by double digits. Made in Russia and pitched
CEO
as a premium beer, it appeals to younger
Wisdom
drinkers.
MetLife defeated a U.S.
is not a direction
attempt to label it too big to fail. In a sealed "This
In which states move
they are seeking
ruling, a federal judge rejected the Financial when
to provide successful,
hubs for
Stability Oversight Council's arguments for thriving
business."
CEO Tim
classifying America's largest life insurer as a CookApple
and 89 other
in a letter
systemically important financial institution. signatories
to Governor Pat
after
The designation would've put MetLife under McCrory
North Carolina
a bill
closer government scrutiny and could have passed
rolling back
protections for
forced it to place more money in reserves.
LGBT citizens.