Posts Tagged ‘business’
“Gain not base gains; base gains are the same as losses”*…
When inventor Frederick Banting discovered insulin in 1923, he refused to put his name on the patent. He felt it was unethical for a doctor to profit from a discovery that would save lives. Banting’s co-inventors, James Collip and Charles Best, sold the insulin patent to the University of Toronto for a mere $1. They wanted everyone who needed their medication to be able to afford it. [see here]
Today, Banting and his colleagues would be spinning in their graves: Their drug, which many of the 30 million Americans with diabetes rely on, has become the poster child for pharmaceutical price gouging.
The cost of the four most popular types of insulin has tripled over the past decade, and the out-of-pocket prescription costs patients now face have doubled. By 2016, the average price per month rose to $450 — and costs continue to rise, so much so that as many as one in four people with diabetes are now skimping on or skipping lifesaving doses…
Why Americans ration a drug discovered– and given free to the world– in the 1920s: “The absurdly high cost of insulin, explained.”
* Hesiod (See also Proverbs 28:20: “he that maketh haste to be rich shall not be innocent”)
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As we ponder pleonexia, we might send healing birthday greetings to Edward Lawrie Tatum; he was born on this date in 1909. A geneticist, he shared half of the Nobel Prize in Physiology or Medicine in 1958 with George Beadle for showing that genes control individual steps in metabolism. During World War II, his work was of use in maximizing penicillin production, and it has also made possible the introduction of new methods for assaying vitamins and amino acids in foods and tissues. Tatum and Joshua Lederberg (the winner of the other half of the 1958 Nobel award), discovered genetic recombination in bacteria.
His discoveries were made freely available to the scientific community.
“You don’t win friends with salad”*…
The best meal I had all pandemic cost $1.14 and took about 90 seconds to make. It was a Margherita pizza inhaled in the car on a desolate day in late April. I know the precise cost because my husband is the chef who made it: 61 cents for a few slices of fresh buffalo mozzarella, 24 cents for the San Marzano tomatoes and salt, a quarter for enough basil leaves to supply the rest of the menu’s needs for free, and just 11 cents for the dough, made from a mix of top-shelf imported Italian flours. In normal times, his restaurant sold a Margherita for $20, but he could get away with selling it for $10 and still reach 10% food cost.
We are a nation in the throes of an unprecedented eight-month pizza binge that shows no signs of abating. Multiple pizzerias in Los Angeles reported a 250% rise in sales on Election Day, and on Thursday, Papa John’s reported quarterly same-store sales growth of 23.8%. For months now, the underlying forces for the sustained pizza craze have been as hotly debated within the restaurant industry as the election results have been parsed by professional pollsters. Stress eating is a major cause; quarantine-induced failure of imagination and the return of three major-league sports within weeks of one another over the summer certainly didn’t hurt.
But the actual reason that doesn’t get nearly enough notice is that pizza is one of the few genres of food that is actually more profitable than — and almost as addictive as — booze. Fries and fried chicken — not wings, but tenders and drumsticks — are the only other foods that come close. If that reminds you at all of the suggestions that await you on Grubhub and Uber Eats, well, that’s what’s left of the menu when restaurants lose their alcohol sales and are forced to fork over a third of their gross revenues to delivery app commissions. There are not a lot of foods where taste collides so perfectly with profit: Pizza stands alone…
But times are nothing if not desperate, and the financial case for making a pivot to pizza is anything but ambiguous. Tens of thousands of independent restaurants have closed permanently since March, but independent pizzerias listed on the delivery app Slice have seen sales grow 60%. The chain Marco’s Pizza, which just opened its 1,000th location, in Kissimmee, Florida, has seen sales surge roughly 50% every week since mid-April, according to the consumer data analytics firm Sense360. The pandemic has even breathed new life into the forgotten Pizza Hut chain, which reported a 9% rise in U.S. same-store sales last quarter despite the July bankruptcy of its debt-saddled biggest franchisee, NPC International — which said in a filing that its Pizza Hut division’s 2020 earnings (before interest, taxes, depreciation, and amortization) had exceeded its internal forecasts by a factor of eight. And mediocre pizza behemoth Domino’s, which was starting from a much higher base after reporting 38 consecutive quarters of same-store sales growth, reported a 16% uptick in same-store sales in its second quarter.
The losing side of this stark new restaurant reality is a virtually endless list, but the unequivocal biggest loser has been the so-called $15 salad genre embodied by the fast-food cum tech unicorn Sweetgreen, which recently announced it would be laying off 20% of its corporate staff in its second round of post-outbreak job cuts. Hard numbers on this mostly privately held category, which includes Chopt Creative Salads, Just Salad, Fresh & Co, and True Food Kitchen — all of which have at one point been hailed as the “next Sweetgreen” — were easier to come by in more prosperous times, but the few out there are ugly. Sweetgreen sales fell about 60% during the eight weeks after the first shutdowns, according to Sense360, and the one publicly traded chain in the salad business, Toronto’s Freshii, reported a 51.4% plunge in its second-quarter sales…
Learn how pizza won the pandemic—and Sweetgreen got left behind: “The Death of the $15 Salad.”
* Homer Simpson
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As we savor a slice, we might send well-preserved birthday greetings to the man who was ultimately responsible for that getting that especially- delicious tomato sauce to your pizzeria: Nicolas Appert; he was born on this date in 1749. A confectioner and inventor, he is known as “the father of canning.”
In 1795, Napoleon, who famously understood that an army travels on its stomach, had offered a prize of 12,000 francs for a method of preserving food and transporting it to its armies. Appert, who worked 14 years to perfect a method of storing food in sterilized glass containers, won the award in 1810.
Interestingly, that same year (1810), Appert’s friend and agent, Peter Durand, took the invention to the other side. He switched the medium from glass to metal and presented it to Napoleon’s enemies, the British– scoring a patent (No. 3372) from King George for the preservation of food in metal (and glass and pottery) containers… the tin can.
“The heart and soul of the company is creativity”*…
Creativity doesn’t have a deep history. The Oxford English Dictionary records just a single usage of the word in the 17th century, and it’s religious: ‘In Creation, we have God and his Creativity.’ Then, scarcely anything until the 1920s – quasi-religious invocations by the philosopher A N Whitehead. So creativity, considered as a power belonging to an individual – divine or mortal – doesn’t go back forever. Neither does the adjective ‘creative’ – being inventive, imaginative, having original ideas – though this word appears much more frequently than the noun in the early modern period. God is the Creator and, in the 17th and 18th centuries, the creative power, like the rarely used ‘creativity’, was understood as divine. The notion of a secular creative ability in the imaginative arts scarcely appears until the Romantic Era, as when the poet William Wordsworth addressed the painter and critic Benjamin Haydon: ‘Creative Art … Demands the service of a mind and heart.’
This all changes in the mid-20th century, and especially after the end of the Second World War, when a secularised notion of creativity explodes into prominence. The Google Ngram chart bends sharply upwards from the 1950s and continues its ascent to the present day. But as late as 1970, practically oriented writers, accepting that creativity was valuable and in need of encouragement, nevertheless reflected on the newness of the concept, noting its absence from some standard dictionaries even a few decades before.
Before the Second World War and its immediate aftermath, the history of creativity might seem to lack its object – the word was not much in circulation. The point needn’t be pedantic. You might say that what we came to mean by the capacity of creativity was then robustly picked out by other notions, say genius, or originality, or productivity, or even intelligence – or whatever capacity it was believed enabled people to think thoughts considered new and valuable. And in the postwar period, a number of commentators did wonder about the supposed difference between emergent creativity and such other long-recognised mental capacities. The creativity of the mid-20th century was entangled in these pre-existing notions, but the circumstances of its definition and application were new…
Once seen as the work of genius, how did creativity become an engine of economic growth and a corporate imperative? (Hint: the Manhattan Project and the Cold War played important roles.): “The rise and rise of creativity.”
(Image above: source)
* Bob Iger, CEO of The Walt Disney Company
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As we lionize the latest, we might recall that it was on this date in 1726 that Jonathan Swift’s Travels into Several Remote Nations of the World. In Four Parts. By Lemuel Gulliver, First a Surgeon, and then a Captain of Several Ships— much better known as Gulliver’s Travels— was first published. A satire both of human nature and of the “travelers’ tales” literary subgenre popular at the time, it was an immediate hit (John Gay wrote in a 1726 letter to Swift that “It is universally read, from the cabinet council to the nursery”). It has, of course, become a classic.
“Like the elite of ancient Egypt, most people in most cultures dedicate their lives to building pyramids. Only the names, shapes and sizes of these pyramids change from one culture to the other.”*…
“Corporate personhood” is– justifiably– a hot topic in the U.S. By dint of a questionable precedent and the legal superstructure that’s grown atop it, corporations here now have have the rights enjoyed by individuals (including the “free speech” right to make unlimited political contributions to PACs) even as they are free of many of a “real” person’s responsibilities.
But there corporations in other countries that are, in a very meaningful way, actually a person. The ever-illuminating McKinley Valentine points us to the intrigue surrounding one of South Korea’s leading chaebols (enormous conglomerates controlled by a single owner/family):
… if, like me, you enjoy mystery and conspiracy and watching too many political thrillers until they permanently damage your brain you will find this story fascinating.
A thread by John Yoo. He’s far from the only person talking about it, but he sums it up really well.
Chairman of Samsung is probably dead but we are all pretending he is alive because if he dies, the country will probably go into an economic death-spiral.
Samsung usually accounts for 20% of the exports of the entire country of South Korea. As a single group, it’s a conglomerate with either large or controlling market share in tech, construction, finance & insurance, hospitality, security, travel, food, retail producing 12% of GDP.
Almost $1 in every $5 in the country brought in from abroad is by Samsung.
[McK paraphrase: a whole ecosystem of suppliers and purchases has built up around Samsung, and is completely reliant on it. These would fail within months if Samsung collapsed] [not a whalefall situation, apparently]
Enter Korean tax code. Korea has 50% inheritance tax on assets above $2.5m. When Lee Gunhee dies, his family will owe the government $7b.
It is a fact that Chairman Lee Gunhee suffered a heart attack in 2014 and was hospitalized. Nobody but close family members have reported seeing him. People who claimed he was dead have either disappeared or been arrested.
When his death was reported in 2014, the entire country flipped and the story was deleted because the news site said that the whistleblower disappeared.
It’s been five years and nobody can tell us his condition with certainty. Nobody has seem him…
“The chairman of Samsung is almost certainly dead.” Do read the entire thread. And do consider following McKinley’s newsletter, The Whippet.
For more on the Samsung saga, see here (the source of the photo above); and for an explainer on chaebols, here.
* Yuval Noah Harari, Sapiens: A Brief History of Humankind
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As we stew over Succession, we might wish a stony-faced Happy Birthday to “the greatest actor-director in the history of the movies” (quoth Roger Ebert); Joseph Frank “Buster” Keaton was born on this date in 1895.
As a young vaudevillian, Keaton met silent star Fatty Arbuckle. Keaton borrowed Arbuckle’s crew’s camera, took it back to his boarding house, disassembled and reassembled it, then returned to ask for a job. He was hired as co-star and gag man on “The Butcher Boy”– and soon became Arbuckle’s “second director” and his entire gag department. Keaton soon earned his own unit, and began churning out two-reelers. Leo McCarthy (director of Charlie Chase, Laurel and Hardy, the Marx Brothers, Mae West, and others) recalled, “All of us tried to steal each other’s gagmen. But we had no luck with Keaton, because he thought up his best gags himself and we couldn’t steal him!”
From 1920 through 1929, Keaton made Our Hospitality, The Navigator, Sherlock Jr., Seven Chances, Steamboat Bill Jr., The Cameraman, and The General— gems all. Indeed, Henson collaborator Orson Welles considered The General to be, “the greatest comedy ever made, the greatest Civil War film ever made, and perhaps the greatest film ever made.”
With the advent of sound, Keaton’s career took a sideways turn. While he appeared in a number of feature films, guested on many television series, and even served as an advisor to Lucille Ball on I Love Lucy, he was never again the monster star that he had been on the silent screen… which adds to the power– and the poignancy– of his penultimate role: the lead in the only movie written by Samuel Beckett, the (nearly) silent Film.
“The golden rule when reading the menu is, if you cannot pronounce it, you cannot afford it”*…
Consider the restaurant menu.
By design, menus aren’t meant to spark conversation. But as restaurants take drastic steps to weather COVID-19, they are revamping their menus in a big way — and it’s hard not to think twice about the piece of paper in your hands.
IHOP is ditching its 12-page behemoth for a much cleaner 2-page menu. McDonald’s has slashed several items off its all-day breakfast menu. Applebee’s, Taco Bell, and Subway are all slimming down their offerings.
These high-profile shifts reflect what’s happening on a much more local level across the industry: 28% of restaurateurs are shrinking their menus because of the pandemic. That number is so large that New York Magazine recently asked, “Is It Time To Get Rid of Menus For Good?”
The underlying reasons for this are financial: Restaurants can’t bother with low-margin dishes. They have fewer employees on the payroll, so they want to be more efficient with a smaller set of meals. They’re prioritizing fewer — and cheaper — ingredients.
But rewriting a menu is no simple task. Every inch of text, from the typeface down to the order of items, must be workshopped for maximum profitability.
And when restaurants need help, they turn to a niche, little-known cadre of professional “menu engineers.”…
In a changing dining economy, restaurants are turning to a small group of experts who specialize in the science of menu design: “Meet the ‘menu engineers’ helping restaurants retool during the pandemic.”
* Frank Muir
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As we ask about the specials, we might recall that it was on this date in 1916 that Clarence Saunders founded the Piggly Wiggly grocery chain. His Memphis “flagship” introduced the the modern self-service retail sales model– for which he received U.S. Patent #1,242,872– thus initiating the development of the modern supermarket (and indeed of self-service retail in general). His Memphis store grew into the Piggly Wiggly chain, which is still in operation.
The first Piggly Wiggly store
Clarence Saunders
