h. i should get paid more for this. you get paid when you win. from xfinity. home of the 10g network. a warning for wine makers. one analyst compares the wine industry to blockbuster video. and crypto currency has given an industry a bad name. and a new high tech shine for america's rust belt that's this week on "press: here." good morning, everyone. i'm scott mcgrew. you wouldn't know it if you were were coming out with some of my friends, but apparently wine is faulting out of fashion. to the point where the decline in demand is measurable. take a look at these headlines.

"the new york times," millennials aren't drinking enough. market watch, the biggest threat to the wine industry, irrelevance with younger people. young people escaped the blame here in europe, older generation to blame. but when you read the article, you realize the older generation's fault didn't teach young people how to drink wine properly. this all matters to northern california, the center of some of the greatest wine growing in the world, and it matters to our economy. silicon valley bank warning in is latest report, the only growth in wine is people in their 60s and older. good morning, rob. in the preface to the report, you suggest winemakers take a deep breath before reading your report. it's that serious? >> well, the industry doesn't like bad news, quite frankly. we're a very happy industry.

as you can imagine. so when i write these reports sometimes, i get comments from some customers and others that say, if you say these bad things, it might come true. >> now, your report says that a lot of people under the age of 60 are not drinking wine and a lot of people are abstaining from alcohol altogether. >> yeah, there's several things in play. one of them is that the older generation above 60, the boomers let's call it, when they came into wine in the mid '90s, it was a very different situation. beer wasn't very good and spirits had not premiumized yet. and the wine industry was remarkably young at that point, and boomers were looking for something to drink and they had money. the '90s were a very good decade to the economy. and so we started spending.

you know, it just took off. so we're till pretty loyal to wine. we have this affinity for the product. today, everybody districts across categories, clear spirits and wine, and the boomer generation is a little more loyal. no matter what you look at right now, there is a difference between age 60 and below and age 0 and above. 60 and above is the growth, 60 and below isn't. and the younger consumer, when they do buy wine, normally, it's for a special occasion. they're buying expensive bottles but for special occasions. >> what i'm understanding in some of that is back in the day, beer and spirits didn't have an upscale option, and a lot of people think as wine as the upscale option. these days, there are craft beers and vodkas and tequilas

and what not that you can argue are kind of the same thing. but have upscale prices and labels. that's where part is going, is that the person who wants to spend a lot of money is not necessarily spending it on wine. >> that's right. they're spending across categories when they choose to drink alcohol. and the other thing is abstinence. so younger consumers are looking at health messages, and they're more inclined to just skip alcohol all together. you go to the try january, sober september. those kind of things impact on total alcohol consumption, as well. >> some of the warn thags have come out from very credible studies and hospitals in colleges have been very specific. no alcohol is safe alcohol. >> yeah. that emanates from the world health organization and their goal is to try to reduce alcohol consumption by 10% by 2030.

and, you know, quite frankly, they are using science as marketing, and it's really easy to pick up a headline from some of the work they do. one bottle of wine is equal to ten cigarettes. that was one of the studies done here this last year. when you go and look at the option, what they wanted to do for the study, they say they wanted to relate cancer to alcohol consumption, in this case wine. that was the goal of the study. that's not science. science is you have a theory, and then you test it. this is, we want it to do this, and then we tap into it. >> let's talkt the high-end wine companies are going to need to do. if demand is falling, they can either lower their price or keep the price but they're going to sell a lot less wine. they may have to destroy some of that wine. >> probably not. i think it's really important to

say that what we're really seeing is a bifurcation. we're seeing the mass production of wipe, you know, that's the top seven or so wine production, 60% or so in volume. and those are the companies that are struggling. people are premiumizing in everything. you mentioned spirits, everything. hard kombucha. everything you can think of. if i'm going to consume something, i want it good is kind of the message. >> there's an arguable difference between good and expensive. we can have that argument all day. but are you saying one of the solutions, if i'm a producer, is to raise my price? >> no. i mean, it depends on the supply. you have to factor that into it. right now, i think price is reasonably stable.

and for the fine wine segment, the part that's more expensive, it's quite stable. so i don't think we'll see price increases. although we have inflation obviously, the costs of production have gone way up. so the fine wine, the family wine market, you'll see some modest increase, but we're talking about 5%, which is not close to inflation. >> that report had a lot of doom and gloom in it. you've got younger people just eschewing wine all together. you have inflation and recession. and then you've got these rains that could create a bumper crop, and you're going to have a lot of fruit and a declining number of people that want to drink that wine from that fruit. >> that's a possibility. we've had three short years of modest harvests. and, you know, we're still in balance basically. when you have these modest

harvests that are off 10%, 15%, and you're still in balance, that tells you what's happening with demand. but you have to look at where the demand is bifurcated. so it's that large production that's not doing well. the premium segment this last year grew about 9%. so that's still got growth. consumers still want premium wine, but the consumer as a whole, we've got to do something about trying to get them to adopt wine like the older consumers. >> well, and that's the campaign, right? it's one thing to advertise your winery and say we have a lovely tasting room or it's delicious on a summer's day, opposed to promoting wine in general. does the wine industry need a "got milk" campaign where they're just saying, you know, wine is something that is enjoyable, why aren't you kids drinking it? >> yeah, i think we do, as a matter of fact.

this report i did was the 23rd annual report i did on the state of the industry. and i've been raising the alarm bells on consumption now since 2010. and not wanting to sit on the sidelines, me and three other analysts volunteered. we got together and tried to figure out how to do a usda marketing order. one of the things that happens is they have mandatory assessments on everybody in the category. so they have the taxing power of the government, so they can collect. it's the best way to assure that everybody that is going to benefit from that marketing order pays into it. >> so a wine maker -- interesting. you said you attempted that but haven't been successful yet? >> no. we had it to the finish line, but when we got right to the

end, we found that one of the larger wineries that hadn't been involved in the process came in at the last minute and were very convincing to the steering committee and convinced them all to back away from it. so we don't want to play together at this point it sounds like. >> let's go to one of the most extreme warnings you made. you were very frank towards the end of the report. you warn them blockbuster video never saw its irrelevance coming. you mentioned other companies, general electric, you mention bear stearns as irrelevant. you know, blockbuster video, did that get anybody's attention? >> yeah. you know, that is where we are. in the report i talked about the harvard business school cases that we all got in business

school. and they set up their reports so you could come to a conclusion. you read it and go, what's wrong with those guys? how come they can't see it? so my encouragement to the industry is, let's not be a harvard business school case. we can see what's coming and we ought to do something about it. and right now the industry is not doing anything, and we're having the outcome of that. >> rob mcmillen is warning wine makers of tough times ahead and giving solid advice as to what to do about it. his report is available online. thank you for being with us this morning. "press: here" will be right back.

in las vegas, the most popular food is broccoli. yeah, that's the only food. they have broccoli smoothies, and broccoli pancakes, and broccoli ice cream, and broccoli hotdogs, and of course, they have raw unseasoned broccoli..... with stems. -daddy, i don't want to go to las vegas with you and mommy tomorrow.

oh, are you sure? are you sure you don't want to go, it will be so much fun! welcome back to "press: here." there are a lot of people working in cryptography in silicon valley who is not working in crypto. crypto is usually slang in cryptocurrency, which is falling out of fashion thanks to guys like this. cryptography is the study of secure communications, the thing that makes you feel secure when you swipe a credit card. michael gao has been working on

cryptography since he was 15. he's now the ceo of fabric systems. michael, i want to point out that martin helman has been on this show. >> amazing. >> and now you. so helman and gao. so you might have used bitcoins in my day. but i want to talk about cryptography. but you agree, the crypto currency has stunk up the pool for anyone with "crypto" in their title. >> i always say cryptocurrency is very different than cryptography. we have gotten away from the original mission. i got into bitcoin in 2011. back then, anyone who got into it was not getting into it for the gold rush. it wasn't about tokens and selling for, you know, exponentially larger amounts of money, but giving people

everywhere alternatives to centralized institutions. and that's exactly what cryptography is really about. >> there are still exciting things in the block chain. i think some people who don't follow cryptocurrency may not understand. there's a big difference between bitcoin and block chain. block chain shows a shows a lot of promise. >> yeah. the block chain was supposed to decentralize all of these things. and people ask why hasn't block chain has its one killer moment. like, there was a killer app that spread like wildfire. and things like amazon came out people. block chain hasn't had that moment, because it has the fundamental entrances that if we could just get over them, it could do what the proponents promised it will. some of these hindrances are

things like privacy. block chains are the opposite of anonymous and private. you know, block chains typically reveal your entire transactions to anyone who wants to see. they reveal the entire source code, so it's not a private institution. >> you have developed special chips to encode information. we already have powerful chips. if i want a super complex chip, i can go to intel or nvidia. what do i need with yours if i want to do cryptography? >> it's built for kriping to -- for cryptography. what we do is we make a chip dedicated to it specifically. so we are building much faster computers specifically for the next generation of cryptography.

>> so your chips, are they subject to any of these export controls? i know the biden administration has been cracking down on what can go overseas particularly to china. are you affected by that? >> we don't believe we are. honestly, some of the applications that are the most exciting are right here in america. our chips are also capable of processing in ways that are proof to point in computers. there are quantum secure ways of doing encryption. so this new era of national security that we're entering into and this new geopolitical landscape requires us to develop things like this. >> it seems to me, i don't know how far away quantum is. i know some exists already, but that's going to change cryptography forever. so if i'm an investor interested in your company or interested in buying your product, am i

waiting around for quantum and not what you're making? >> the great thing about our processor is it's programmable. so you might have one algorithm, and then there are quantum secure algorithms people are developing. so in order to test them and deploy them, people are going to have to buy something that does something in large volume and that's what we can do for them. >> my last question is, you must have thought about this to some degree. somebody who makes a rifle or a knife or something that can be used in more than one way. cryptography can be used for bad. has that efficient given you any pause? it's certainly not your fault if somebody uses your product for something bad. >> this is one of the primary things we think about. we think there needs to be a new age of thinking about the

implications for technology. we're kind of done with people just coding and not worrying about what's going to happen after everything that's happened over the last 20 years. so we think one of the unique things about next generation cryptography is it's so good. this is something that only just builds trust between people. it allows people to rely on decentralized financial institutions in country where is they're printing dollars like crazy like venezuela. it allows people to rely on things they couldn't before. it allows people to trust each other when they couldn't before. this is something as chose to 100% good as you can get. >> well, we'll leave it on that. michael gao, ceo of fabric systems. thank you for being with us on "press: here." we'll be right back. plus my cla, curly fries, and a drink. [muffled] i can't hear you. oh sure...

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or live chat at calhope.org today. note the unprecedented neurophysiological response. your grilled chicken sandwich with good good sauce really stimulates craveability. dumb that down for me. big and squiggly is good. big and squiggly is real good. all i needed to hear. my grilled chicken sandwiches, tasty and healthy-ish. welcome back to "press: here." a lot of regions in the united states have nice nicknames. the inland empire, the bible belt, research triangle. and of course, silicon valley. the area around indiana and ohio gets the name "the rust belt." former steel towns now nearly empty as that industry moved overseas. but my next guest, ohio native

rebecca fannin has high hopes for the area. her new book hits stores in march. rebecca is a contributing writer to cnbc, as well. good morning. let me start with this question. all kinds of places have tried to rival silicone valley, nothing new. silicone prairie, silicone beach, it never sticks. what do you think is the difference this time around? >> the tipping point was the pandemic, with remote working. and another factor is the increased government spending in these heartland regions for regional information hubs like detroit, columbus, pittsburgh, dayton and cleveland. a lot of money is going in to boost these regions now. >> what city impresses you the most? >> well, columbus is certainly on the way up, with the new semi conductor plant under construction. pittsburgh is really big in ai

and robotics. cleveland is big in biotech. dayton in air force applications. and detroit in mobility. so each one of these places has its own unique characteristic, and i find that interesting. of course, the new build back better plan, there's a lot of new money going into these regional hubs. >> a city i was impressed by is des moines, iowa. not necessarily a high tech hub, but theless time i was there, i went to school in iowa and des moines was kind of a sleepy capital. when i was there last, it had gotten kind of hipster. the theory somebody gave me is the school places to live, the bolder, colorado, san francisco, california, seattle, had gotten too expensive, and some of those kids from des moines were staying home. but looking at the other towns and saying hey, we want that

cool coffee shop and that cool place to hear live music, as well. and they built it themselves. i think we're seeing that change, as well. >> definitely. the whole lifestyle environment has changed dramatically. when i was growing up, columbus was known as cow town. but today, there's a lot of new restaurants and hip hotels, boutiques and a real startup quality next to ohio state university. universities are a major driver of this happening in the midwest. they're drivers of this whole forward spin for the heartland. >> some of the people in silicone valley are famous throughout the world. steve jobs being the most obvious. there hasn't been a steve jobs of ohio yet. i mean, with the exception, of course, of oroville and wilbur wright.

>> yeah, that's right. they're good examples in dayton, for sure. of course, the industrial heartland had all these heros in the past, carnegie melon, goodyear, goodrich. but today, we have yet to see a steve jobs emerge from the heartland. it's happening gradually. we're starting to see this snowball effect, creating, you know, new funds for the heart heartland and giving back. you mentioned silicone valley types. john chambers is a champion of the midwest. he's from west virginia, and he has put a lot of money and energy and time into revitalizing the state at morgantown, west virginia, his alma mater. so the course is named after him. another tech icon, brad smith

moved back to his hometown in west virginia and became president of marshal university. so this whole idea of the champions giving back, it's part of the moving forward, as well. >> you mentioned the pandemic. there is this huge opportunity, if you are a state or county or a city, to look at what you're doing and say, there are a lot of people that want to move out of california, that want to move out of washington state, some of the traditional tech areas. what can we do to attract them. some are doing that. if you're a mayor doing this, what would be the number one things on the list? >> it's interesting that some of these cities are paying workers to relocate, and they have had success with it. tulsa has a remote working program, west virginia has a remote working program, and they're attracting a lot of

millennial talents to come to these places and tay and do startups. that's having an impact, as well. >> you spent years covering business overseas in asia. we talk about up and comers. we often mean asia and not the midwest of the united states. are those two regions going to compete? >> yeah, i think this is one of the things that's happening with the revival of the midwest. it's a counterpoint to china. you know, this u.s.-china tech conflict. china has been on the rise over the past two decades and become a dramatic story and when i wrote my first book "silicon valley" nobody believed that china could innovate. now we see it's getting bolder and bolder and we have seen many tech giants emerge from china. we have seen so much escalate. the story of the comeback of the rust belt is a counterpoint to china's tech boom, and we're

seeing money go into infrastructure, innovation hubs. this is all in sponsor reaction to china's tech climb. >> rebecca, thank you. the new book "silicone heartland" will be in bookstores next month. "press: here" will be right back.

that's our show for this week. my thanks to my guests and thank you for making us part of your sunday morning.

damian trujillo: hello, and welcome to "comunidad del valle." i'm damian trujillo, and today, we celebrate the mexica new year on your "comunidad del valle." ♪♪♪ damian: and that's where we begin today, the celebrating the mexica new year. it's coming up next month. with me is maestro pedro aquihua perez from calpulli tonalhequeh, on our show, back after a couple of years. pedro, welcome back to the show. pedro aquihua perez: thank you, damian. it's good to be here. damian: now, for those people who might not understand, pedro, because we celebrated the new year's--verdad?--on december 31. talk about what the mexica new year entails.