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Iran’s President-elect Raisi rules out meeting Biden, oil markets look to nuclear deal’s future

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Iran’s President-elect Ebrahim Raisi attends a news conference in Tehran, Iran June 21, 2021.

Majid Asgaripour | WANA News Agency | Reuters

DUBAI, United Arab Emirates — Iran’s president-elect Ebrahim Raisi gave his first press conference since the country’s election, saying Monday that his government’s priorities would be to improve ties with regional neighbors and revive the 2015 nuclear deal — and at the same time squarely ruling out meeting with U.S. President Joe Biden. 

“We support the negotiations that guarantee our national interests … America should immediately return to the deal and fulfil its obligations under the deal,” Raisi, the hardline cleric who is himself under U.S. sanctions, said according to a Reuters translation. 

The 2015 Iranian nuclear deal, officially named the Joint Comprehensive Plan of Action and led by the Obama administration and several other world powers, lifted sanctions on Iran in exchange for curbs to its nuclear program. Former President Donald Trump pulled out of the deal in 2018 and reimposed harsh sanctions on Iran, crippling its economy. 

Tehran has since ramped up its nuclear activity far beyond the deal’s limits in what it says is protest against the sanctions — sanctions that Washington says it will not lift until that increased nuclear development activity, like dramatically increased uranium enrichment and stockpiling, is reversed. 

And despite ongoing negotiations between JCPOA signatories in Vienna and talk of “progress,” the two adversaries still appear to be at a stalemate on major sticking points, such as Iran’s transparency with nuclear inspectors. 

Oil markets are now watching the talks and Raisi’s messages to glean what this might mean for the world’s supply of the commodity. 

Iran’s oil exports were slashed to a mere fraction of what they once were as a result of Trump’s sanctions; a revival of the deal and lifting of the levies could bring back 3.8 million barrels per day of oil output to the market over time from a current 2.1 million barrels per day, its oil ministry officials say. But that could be a long process due to underinvestment in oilfields and its recent years of reduced output. 

Pressure on oil prices?

The deal “if revitalised, would provide a substantial lift to Iran’s economy — it could plausibly expand by 8-10% per year in 2021-23,” Jason Tuvey, senior emerging markets economist at London-based consultancy Capital Economics, wrote in a note before the election. But he added that its higher crude output would pressure other dynamics in the region. 

“Higher Iranian oil output would act as a drag on global oil prices and could prompt governments in the Gulf countries to keep fiscal policy tight, weighing on their recoveries,” Tuvey said. 

If and once Iran is able to return its barrels to the global market, there won’t be any shortage of demand for it, according to Herman Wang, senior oil writer at Platts. 

“Many of Iran’s former oil customers, particularly in Asia, have said they are eager to resume buying, as soon as they get the sanctions all-clear,” Wang said. He added that many of Asia’s refineries are well-suited to Iranian crudes, “which would add competition for neighboring Saudi Arabia, Iraq, Oman and other producers of heavier, sourer grades, and Iranian condensate would vie with similar condensates produced by Qatar, the US and Australia.” 

“This could well put pressure on oil prices, though OPEC and its allies will be hoping that rising demand will mean a bigger pie for everyone,” Wang added.

No ‘imminent return’ of Iranian oil?

“At this stage we’re still watching the negotiations among JCPOA parties in Vienna as the more significant variable for oil prices in the near term,” Ed Bell, director of commodities research at Dubai-based bank Emirates NBD, told CNBC.

Despite Raisi having signaled that he would support a deal, “that doesn’t address the differences that still exist among JCPOA parties, including the fact that Raisi himself is under U.S. sanctions,” he said.

“The timeline for a return of freely exportable Iranian crude keeps getting pushed back later into 2021 and as such we don’t see any imminent return that would help to alleviate the tightness currently in the market,” Bell added.

Meanwhile, oil doesn’t seem too bothered by the prospect of a revived deal; international benchmark Brent crude continued its steady upward climb on Monday, trading at $74.65 a barrel at noon ET, up 45% year-to-date and up 70% from this time last year. 

A more pressing longer-term issue, Bell said, would be how a Raisi administration positions its relationship within OPEC and its oil-producing allies. Would Iran accept a production quota if sanctions are lifted, or would it try to maximize its market share to compensate for lost time?

“While Iran on its own wouldn’t be enough to push oil markets back into surplus this year, a race for market share could push other members of OPEC+ to do the same and risk putting downward pressure on oil prices,” Bell said.

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Shanghai lab’s fake pork dumplings help China go beyond meat

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A visitor tries a Beyond Meat plant-based protein substitute at the Restaurant & Bar and Gourmet Asia expo at the Hong Kong Convention and Exhibition Centre in Hong Kong on November 11, 2020.

Peter Parks | AFP | Getty Images

If a Chinese-based business owner has wanted to create and sell a meat-free pork dumpling over the past decade, they might well have visited a three-story restaurant-laboratory in a commercial district of Shanghai to seek the help of Dr. Dong-Fang Chen. 

He earned his PhD from Cambridge by focusing on plant molecular genetics, then worked at AstraZeneca, and now as vice-president for R&D in Asia-Pacific, he manages a group of several dozen scientists in Shanghai. They’re part of a global research workforce of roughly 1,000 at a Swiss firm called Firmenich, the world’s largest private business focused on developing flavors and aromas. 

Chen’s team is tasked primarily with helping global and Chinese food businesses improve the taste and texture of their products, and these days, particularly those made using meat and dairy alternatives. Firmenich, doesn’t reveal its client list, but it includes some of the world’s largest food, fabric, beauty and household care businesses.

Beyond Meat increasing China focus

The plant-based protein market in China is attracting more attention. Just this month, Beyond Meat announced it was launching an online store for the Chinese market, in partnership with the e-commerce platform JD.com, and plans to expand beyond its current retail partners in China, including Starbucks and Yum China Holdings, to around 300 Chinese cities at a time when local consumers are more frequently buying fresh food online. 

Both Beyond Meat and its main U.S. rival Impossible Foods see big opportunity in China and are aware success requires more than importing successful ideas from Western cuisine. “I will work very hard to make sure that we’re not exporting American taste,” Beyond Meat CEO Ethan Brown told CNBC last September.

Late last year, Nestle launched a brand called Harvest Gourmet, offering non-meat burgers and nuggets, but also pork belly and kung pao chicken, among others, through Alibaba Group‘s internet Tmall site and its Hema grocery store chain. 

Both Nestle and Beyond Meat have built faux-meat manufacturing facilities in Tianjin and Jiaxing respectively, in competition with local giants Zhenmeat and Starfield. 

Plant-based meat dishes are seen offered at a Starbucks store on April 22, 2020 in Shanghai, China.

VCG | Visual China Group | Getty Images

This explosion of interest in plant-based consumables is reflected across Asia. West Coast start-up Eat Just received approval from Singapore regulators to sell its chicken replacement, developed from animal cells in a laboratory, around the same time as NR Instant Produce of Thailand went public after the success of its jackfruit-derived faux-pork product. Then in June, Philippine food giant Monde Nissin went public on the Philippine Stock Exchange, the largest public offering in the country’s history, as it sought to expand its own successful line of plant-based meat products. 

Recreating a local favorite like the pork dumpling

While many of the plant-based products are based on Western cuisine, Beyond Meat has said it is adding new lines on JD.com to appeal to the Chinese market, including Beyond Pork and other locally-targeted cooking ingredients, such as lion’s head meatballs and pork dumplings. The latter are a hugely popular dish in China, but as a research subject Firmenich’s Chen says dumplings are challenging to reverse engineer, since the “pork flavor is very, very subtle, very sophisticated.”

His team has delivered a large variety of client briefs focused on meaty favorites — some local, like pork dumplings, some more universal, like chicken nuggets. They do this by figuring out why the original product tastes and feels and smells the way it does, then they replace the meat-derived building blocks — proteins, carbohydrates, fats — with their plant-derived counterparts, before combining them microscopically to mirror the flavors and smells of the original. 

(From left) Chef Nicolas Maire and flavorists Liliana Favaron and Mark Rubin taste vegetal steak at the headquarters of Swiss group Firmenich, one of the world’s leading flavor manufacturers, near Geneva. Firmenich is advising and supplying a host of start-ups and food giants with technical expertise in recreating meat taste and texture.

Fabrice Coffrini | AFP | Getty Images

Sometimes the process can take just days, if they already have an off-the-shelf solution prepared, but occasionally it requires months of intensive research by a team of twelve with varying forms of expertise — formulators, chemists, flavorists among them. “This sounds easy to do, but actually it takes lots of science,” Chen says, referring excitedly to advanced techniques like gas chromatography or mass spectrometry. “This is not trivial.” 

The markets these scientific breakthroughs are servicing are large. Chen’s group of Shanghai-based research scientists and chefs has tripled in size over the past decade, a process partially driven by the fact that successful start-up businesses in the United States, like Beyond Meat and Impossible Foods, have “triggered a revolution of using modern science,” Chen says. 

Future food for the Chinese population

For Firmenich, the growing demand for meat alternatives in China and the broader Asian market led them to launch a Singapore innovation hub focused on developing new plant-based protein products. Jun Saplad, based in Singapore as the head of the company’s savory division in Asia, had his own epiphany about the sector at a Beijing conference in 2019. 

“The government was the key driver for that forum,” he said, describing panel after panel in which Chinese officials, academics and business leaders promoted plant-based proteins, for a country that currently consume more than one-quarter of all global meat supplies, according to the USDA. “They’re effectively promoting future food for the Chinese population,” Saplad said.  

Thanks to accelerating urbanization and a growing middle class with rising income and consumption levels, Asia is also the fastest-growing region in the world for packaged food, not to mention its sheer scale. “Asia has 4.7 billion mouths to feed,” Saplad said. “That’s 60% of the global population, and in China and India alone it’s almost 3 billion.” 

The Asian portion of the meat-alternative market is currently worth only around $1 billion, Saplad estimates, but courtesy of its younger demographic, with rising awareness about the climate impacts of their culinary choices, he projects that could expand five-fold within the next decade.

And Saplad reckons Chinese firms have the potential to become major suppliers of plant-based meat alternatives too, for the rest of the world, including the U.S. and Europe. “You’re actually seeing companies, big global companies investing into China for China domestic consumption — as well as for exports,” he said.

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Dietitian shares the ‘power nutrient’ she eats to live longer—that 95% of Americans lack in their diet

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The benefits of fiber

As a dietitian, I always tell people that dietary fiber — the kind you get from foods, and not from supplements — is an essential power nutrient.

Adequate intake of dietary fiber is associated with reduced risk for heart disease, stroke, hypertension, certain gastrointestinal disorders and type 2 diabetes, researchers have found.

There’s also evidence that fiber’s benefits extends beyond any particular ailment: Eating more of it may lower people’s mortality rate. Even diets of residents in Blue Zones, places in the world where people live the longest, include fiber as a staple nutrient, especially in foods like black beans, chickpeas and lentils.

A National Institutes of Health study found that people who consumed higher amounts of fiber, particularly from grains, had a significantly lower risk of dying over a nine-year period compared to those who consumed lower amounts of fiber.

The analysis involved about 388,000 participants who were part of a larger NIH-AARP diet and health study who were between ages 50 and 71 years old when the study began.

How much fiber should you be getting?

How to increase your fiber intake

Fiber isn’t broken down by the body. Instead, it passes through the body undigested and helps regulate the body’s use of sugars, helping to keep hunger and blood sugar in check.

Fiber comes in two varieties, according to researchers at the Harvard T.H. Chan School of Public Health: Soluble fiber, which can help lower glucose levels, as well as help lower blood cholesterol and insoluble fiber, which can help food move through your digestive system, promoting regularity and helping prevent constipation.

Although you can easily take a fiber supplement, you’ll wind up missing out on all the other vitamins and minerals that whole foods provide.

The best sources of fiber are whole grains, fresh fruits and vegetableslegumes, and nuts.

Here are five fiber-rich foods I include in my diet to live a healthier, longer life — along with easy ways to enjoy them:

1. Avocados

Fiber: 10 grams per cup, sliced

Avocados

Loren Klein | Twenty20

In addition to their fiber content, avocados are full of healthy monounsaturated fatty acids, which have been linked with improving heart health.

Avocados are so versatile, and their uses go beyond basic dishes like guacamole. I typically add some to my smoothies, which creates a creamy, thick texture. Or I’ll smear a few slices on toasted bread in place of butter or mayonnaise.

2. Raspberries

Fiber: 8 grams per cup

Raspberries

Katherine | Twenty20

Raspberries also provide a handful of beneficial vitamins, minerals and antioxidants. They’re also lower on the glycemic index, meaning they won’t spike blood sugar levels.

A 2017 study suggested that eating fresh fruit daily, especially raspberries, may decrease your odds of developing diabetes by 12%.

You can eat a handful as a quick snack or get creative and add them to your salads for some tartness. And to satisfy my sweet tooth, nothing beats yogurt topped with raspberries and crunchy oats.

3. Lentils

Fiber: 21 grams per cup

Lentils

Ilona Shorokhova | Twenty20

Lentils have an impressive amount of fiber per serving, and they’re also an excellent source of protein (about 47 grams per cup), making them a go-to for filling meals.

Research suggests that getting a daily amount of 150 grams of lentils may help improve blood lipid levels, blood pressure and inflammation.

Lentils are delicious in a hearty soup or stew, but I find they pair just as nicely as protein in salads and tacos. When I want to cut back on my meat consumption, I’ll make some lentil patties for lunch or dinner.

4. Oats

Fiber: 8 grams per cup

Oats are a gluten-free whole grain that contain fiber and other important nutrients, including iron, zinc and magnesium. They may also help you manage your blood sugar, heart health, and even your weight, studies have found.

For breakfast, oats can be used as grain substitutes in muffins and pancakes. For more savory meals like meatballs, I like to use them as breadcrumbs.

5. Chia Seeds

Fiber: 10 grams per ounce

Chia seeds

Anna | Twenty20

Even a small amount of chia seeds pack in plenty of health benefits. They’re also a great source of omega-3 fatty acids, which have been linked to improvements in both brain and heart health.

These little seeds can be sprinkled in smoothies, oatmeal and salads. They gelatinize when placed in liquid, so you can easily make homemade jam with your choice of berries.

Lauren Armstrong is a dietitian and nutrition coach. She was also a nutritionist for The Women, Infant and Children (WIC) program. Lauren received her bachelor’s degree in dietetics from Western Michigan University and has written for several publications, including Livestrong and HealthDay.

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Zoom’s fast ascent to $100 billion made acquisitions a sudden priority

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Zoom founder Eric Yuan poses in front of the Nasdaq building as the screen shows the logo of the video-conferencing software company Zoom after the opening bell ceremony on April 18, 2019 in New York City. The video-conferencing software company announced it’s IPO priced at $36 per share, at an estimated value of $9.2 billion.

Kena Betancur | Getty Images

Salesforce needed 14 years as a public company to reach a market cap of $100 billion. Getting there required three multibillion-dollar acquisitions and four distinct revenue sources.

When Zoom topped the $100 billion mark last year, it had been public for just over 14 months. The company was reliant on a single product and had completed just one tiny acquisition.

While it’s still just a toddler on the Nasdaq, Zoom is now being forced to take on adult responsibilities for investors, thanks to its unexpectedly rapid ascent. The video chat company’s historic growth during the Covid-19 pandemic vaulted its market cap from $9.2 billion at the time of its 2019 IPO to a peak of $159 billion in October, putting it tentatively even with Cisco.

Zoom has lost about one-third of its value since then, despite reporting 191% revenue growth in the latest quarter, as investors prepare for a post-pandemic future and as competition picks up, most notably from Microsoft Teams.

Still, Zoom is among the 25-most valuable North American tech companies and the only one in that pack to go public in the last four years. Shopify and Snap, which went public in 2015 and 2017, respectively, are the only companies in the group that trade for a richer multiple to sales.

In other words, the stock market is giving Zoom the tools to become a major dealmaker. And Zoom is taking advantage, announcing earlier this week the $14.7 billion purchase of Five9, which sells cloud-based software to call centers.

“It allows them to use their currency to buy things that are impactful,” said Alfred Chuang, a partner at venture firm Race Capital who previously co-founded BEA Systems and sold it to Oracle for $8.5 billion in 2008. “I can’t imagine this will be last one.”

The Five9 deal is one of the 10 largest U.S. enterprise software transactions on record, according to FactSet, and is bigger than any acquisition ever by Amazon, Google, Oracle, Cisco or Adobe. At about 23 times Five9’s expected 2022 revenue, it’s also the second-priciest software deal on a price-to-sales basis, behind only Salesforce’s $27 billion purchase of Slack, which closed earlier this month.

Chuang, who has been friends with Zoom CEO Eric Yuan since his pre-Zoom days at WebEx, says Yuan is now in a position familiar to Salesforce CEO Marc Benioff, whose company has more than doubled in value since mid-2018 to $240 billion.

Both companies are set up to be cloud consolidators as automation changes the future of work and the enterprise software stack of the future gets built, Chuang said. In the three years since reaching a $100 billion market cap, Salesforce has completed four billion-dollar-plus deals, including Slack and the $15.7 billion purchase of Tableau.

“Not everything has worked out,” Chuang said, but he argues it’s important to take take big swings, even if the business is currently in good shape.

“When you have a very fast-growing company and become very successful, most people don’t want to rock the boat,” he said. “Acquisitions are not only useful to acquire customers but are super critical to satisfy a product vision you may have.”

The Cisco connection

Zoom’s initial talks with Five9 date back to last year, according to people familiar with the matter. The CEOs, who both previously worked on collaboration products at Cisco, know each other well and forged a product integration in 2019, when Zoom launched a phone offering.

Yuan was a lead engineer at WebEx when the company was acquired by Cisco in 2007, and Five9 CEO Rowan Trollope ran all of Cisco’s collaboration products, including WebEx, until taking the Five9 job in 2018. They never overlapped at Cisco — Yuan left to start Zoom a year before Trollope joined — but the connection is key as they both saw the challenges of retrofitting a legacy technology company for the cloud era.

Acquisition talks cooled for a while and picked up in the last three months, said people with knowledge of the transaction, who asked not to be named because the discussions were confidential. That’s when Goldman Sachs started advising Zoom on a deal and Five9 hired Frank Quattrone’s Qatalyst Partners.

Zoom also shuffled internal responsibilities this year, putting CFO Kelly Steckelberg in charge of business development, a job that had previously been held by operating chief Aparna Bawa, people close to the matter said. Yuan and Steckelberg drove the Five9 deal, the people said.

Bawa has assumed increased responsibilities elsewhere in the business. She oversees security, privacy and government relations, which all took center stage as Zoom became a widely-used service at large enterprises as well as in education, health care and among religious organizations.

Representatives from Zoom and Five9 declined to comment.

At a Morgan Stanley investor event in March, Steckelberg was asked about Zoom’s plans for the call center.

“Contact center is an absolutely really important part of the phone strategy,” Steckelberg said in response. “The way we approach that today is through partnering. We have great relationships with Five9. Eric and Rowan are very good friends.”

Zoom’s goal is to be not only a video service used for meetings with co-workers and clients, but to become the center of all work communication, including for customer service reps in call centers.

Yuan went a step further in June on Zoom’s quarterly earnings call. He responded to an analyst’s question about contact center expansion by telling investors, “Stay tuned, you will see something.” He followed by suggesting that details could be revealed around the time of the company’s Zoomtopia conference in September.

“I hope we will be able to do more,” he said, indicating that Zoom may go beyond integrations with call center technology providers.

Buy vs. build

A big reason why an agreement took so long to come together was because both stocks were so volatile, people familiar with the talks said. Shares of Zoom and Five9 moved 10% or more in a single week on several occasions this year, making it difficult to come to terms. Ultimately, the acquisition price was a modest 13% premium to Five9’s last closing price before the announcement.

The deal is projected to close in the first half of 2022 and Trollope will continue to run Five9 as a president of Zoom. Five9 adds a projected $650 million in revenue next year to the $4.8 billion in sales that analysts expect from Zoom, according to StreetAccount.

On the investor call following the announcement, Yuan and Trollope said that common customers have been telling them they want to count on a single vendor that can provide communications technology for internal purposes as well as customer service. Zoom could invest in building the product itself, but customers “do not want to wait,” Yuan said.

Analysts like BTIG’s Matt VanVliet said the decision to buy instead of build is the right one.

“Overall, we are encouraged by Zoom’s strategy to supercharge its platform with this acquisition rather than rely purely on its own internal R&D chops, which would have taken years to scale,” wrote VanVliet, who has a buy recommendation on Zoom, in a report on July 19.

Zoom has a long way to go before it can claim to have a portfolio of cloud software products, like Salesforce, Adobe and ServiceNow.

Late last year, the company entered the live events space with the launch of a homegrown product called OnZoom, expanding the video platform beyond the workplace and betting that online gatherings, in some form, are here to stay. In July, Zoom hired Abhisht Arora, a 21-year Microsoft veteran and Teams program manager, as its head of corporate strategy, reporting directly to Yuan.

Between development of new products and big acquisitions into parallel markets, Yuan is trying to ensure that Zoom is more than just a pandemic stock, and that its status as an enterprise giant remains long after we say goodbye to Covid-19.

— CNBC’s Alex Sherman contributed to this report.

WATCH: Zoom’s acquisition of Five9 is a ‘steal of a deal,’ says analyst

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