Christmas Story

The customer got a catalog. They were a regular, going on five years. Ordered every holiday. They called the service star. The service star was a veteran and knew them well. Had spoken to them many, many times.

Bad news. The customer wouldn't be placing an order for themselves this year. Just a couple gifts. Nothing wrong with the company. It was something else. The neighbors, a one income family, lost their one income. The job was gone. The customer was spending a portion of their holiday money on helping the neighbors. Food, mortgage payment, the works. Not enough left for the annual box from the company.

The phone call ended. The service star looked up the customer's order history. Entered a new order. Sent it out, no charge.

--- --- ---

Thanks for all the many small acts of kindness that are happening, have happened, and will happen soon. I thought I'd just share one as this season begins to wind down. It reminded me yet again why this is such a wonderful place.

We're off!

Thanksgiving week always marks the unofficial start of the holiday season in my mind. I know we’ve all been working on various parts of the holiday. For weeks, for months. The catalogs have arrived in mailboxes. The service stars have been trained; they’re answering calls left and right. But the Monday before Thanksgiving, that’s the day that we have a huge rush of orders and a bunch of new people here to pack them. It’s the first day with an 8pm UPS deadline that’s always a little tough to reach. (Some years it’s been much tougher than others, that’s for sure. There were days when a hundred orders would put us in a spasm.)

After that week ends, right around now, I begin to remember the emotional rhythms of the holiday. The anxiety of hiring — it’s like throwing a party, will anyone come and if not what does that say about me? The training shifts — who’s late? who are you? The sales that never seem to come when you expect them. The food we run out of and the food we have too much of. The last box on the truck, please just one more! The guy who calls who swears Mo always gives him this discount and can he talk to Mo now? All the dread and elation that small business in America offers, and a lot of laughing. I swear I laugh more in December than any time of the year.

As the rhythm comes over the next few weeks and I have a moment to write about it, I will. For now, if you’re new to it, my advice is don’t fight the wave too much. Surf where it goes. There will be stress. There will be some kooky people. Just ride it and laugh as much as you can. After all, in the end, it’s just food. Glorious, delicious, amazing handmade food, yes, but food all the same.

Does buying local reduce fuel consumption?

Yesterday I was walking down Houston Street (here in New York it's pronounced "HOW stun") and saw a handwritten sign on butcher paper in the window at Whole Foods. "Buying local reduces fuel consumption."

It's one of those things that seems so obvious it's not worth stating. It has to be true, right?

I'm not sure it's so clear. Consider this scenario, which for some reason is on my mind this Thanksgiving week...

A mail order company ships a loaf of bread made in Ann Arbor 250 miles to Chicago. The recipient in Chicago could have driven three miles round trip to get local bread. Does the shipped bread use eighty times more fuel?

Maybe if it was driven there overnight by one person, hands sweaty on the wheel. But if it was delivered by UPS it went as part of a route combined with other packages. And before that, in Ann Arbor, it was delivered from a bakery to the distribution warehouse on a route. And later, within Chicago city limits, it was delivered by a courier on a route.

How much fuel does each route take? I don't have any hard data here, but we can make some reasonable assumptions and probably get pretty close. Let's look at one leg, Ann Arbor to Chicago. I'll guess a full truck carries about 2,500 boxes, which is a pretty fair assumption given what I know goes in our trucks out back. That means for this 250 mile trip each box only travels one tenth of a mile, fuel-wise. Let's say an 18 wheeler gets 5 mpg. That means the loaf used 1/50 of a gallon on its Ann Arbor to Chicago route.

Use the same logic for the other two routes and you can work out hundreds of ways a 250 mile bread actually travels less than two miles and consumes less fuel than a local loaf.

There are lots of good reasons to shop local. I'm not knocking it by any means. I've made the scenario deliberately simplistic. Change a few numbers and things can go a different way, of course. I just wanted to show the economics are not necessarily as cut and dry as some signs may make them out to be.

Roasted Cauliflower & Tarragon

Time for another fall recipe using a cheap, plentiful, seasonal ingredient.

This recipe is much simpler than brussel sprouts with pancetta. In fact, it's so cheap, easy and ridiculously healthy you should probably stop reading and start the oven. Put it on 375.

Cauliflower is from the same vegetable group as brussel sprouts, so if you hate them you probably have something against it, too. I say give it a chance. When cauliflower is roasted it looses much of its cabbage-y aroma. Plus, at three bucks a head it's not a risky investment. If you don't like it you can make delicious compost.

Fresh tarragon is a fragile, thin-leafed herb. Its flavor is slightly minty, with a hint of anise. When you have a huge amount of the bunch left over from this recipe, you can use with other roasted vegetables, green, salads, with fish or chicken.

~ Roasted Cauliflower & Tarragon ~

RECIPE

Cut a whole head of cauliflower into florets. Turn the head upside down and chop off any green leaf stems. Then hold the stem in your hand while inserting the knife inside to sever the florets at the stem. Try to keep most of them the same size — on the larger side.

Put them in a big heavy skillet and toss with olive oil, salt and pepper. The skillet should be big enough to hold all the florets without them stacking on top of each other. Roast with the lid off in the 375 degree oven for about thirty minutes. Turn with tongs every ten minutes or so. They'll char and get soft. Take a bite to test the texture. If they're too hard for your preference, leave them in longer.

When they're done to your taste take them out of the oven. Pour on some good olive oil (don't skimp). Shake them about. Sprinkle them liberally with Marash Pepper. Take a few stems of tarragon, strip the leaves and scatter them across the cauliflower. Eat while warm.

Brussel Sprouts with Pancetta

Brussel sprouts (or Brussels sprouts — either spelling is OK), the little miniature cabbages that we love to hate, are in season. They're cheap, plentiful, and, popular opinion aside, pretty tasty. At the farmer’s market you can buy them right on the stalk, which is kind of fun. Go ahead and walk around like the Queen Mum with her weird vegetable scepter.

I cook them regularly. Usually some variation of this recipe. This week I had some of the new La Quercia pancetta, which is outstanding.

~ Brussel Sprouts with Pancetta ~
RECIPE

Chop the pancetta in small cubes, about a quarter inch on each side. Warm them on a low heat till they're translucent. They'll look otherworldly, like they're glowing from within.

Cut the base off the brussel sprouts and peel off the outside leaves. Cut them in half if they’re bigger than in an inch or so across. Add them to the pan with a couple pats of butter.

Brown them for a bit. Add chicken broth so it covers the bottom of the pan (water is a distant second as an option). Throw in a couple leaves of fresh herbs if you have them. I added some sage.

Put a lid on and let cook for a bit till they're as soft as you'd like. It can take a half an hour or more.I prefer a little al dente, just a little firm to the bite.

Taste and season with salt and pepper.

I had an ear of corn so I cut the kernels straight off the cob into the pan near the end. It adds a nice bit of sweetness, which is good if your dining partner thinks sprouts are a little too bitter on their own.

Finish them uncovered in a 375 degree oven if you’d like them crispy.

Ad the end, serve on a warm plate with a twist of black pepper and maybe a pinch of Marash pepper and a squeeze of lemon.

Ingredients
A pound or so of sprouts
A couple ounces of bacon (or pancetta)
A little bit of butter
A half cup or so of chicken broth
Salt, pepper

Optional
Fresh sage
Fresh corn
Marash pepper

London, final notes.

Over three quarters of the cheeses for sale on the counter at Neal's Yard Dairy's are "new" cheeses. That is, non-traditional cheeses that have been made for the first time in the last couple decades. That surprised me. I expected a lot more of the counter dedicated to old traditional cheeses like Stilton, Lancashire, Cheddar. Instead there are lots of cheeses I'd never heard of a few years ago, like Ogleshield, Cardo and -- my favorite name -- Cornish Yarg.

This mirrors what's happening in the USA. In the last five to ten years dozens and dozens of new cheese makers have started businesses. Other longstanding makers have become newly invigorated. In part I think some their strength is being derived from the weak dollar. European cheese costs a lot more than it did a few years ago. Next to a $35 per pound English Cheddar, American farmhouse cheese at $25 a pound looks like a relative bargain and more is certainly being sold because of price. But a lot of the success is thanks to hard work. When the dollar strengthens again we'll continue to have a much more diverse cheese landscape in America than we did before.

I think it's important to note that these cheeses might not have become great if it weren't for trade with Europe. There are simplistic arguments for local eating that miss out on the benefits everyone gets from trade. Because we can sell great cheese from Britain and Italy and elsewhere, because we developed a taste and awareness for this kind of cheese, because we created a market for greatness, we've built a foundation for great cheese to grow in America. U.S. farmers and entrepreneurs tasted, learned, and worked to make something as good as what Europe offered. Today a few American makers are creating cheese as good as you can eat anywhere. Imagine how much longer it would take if we had a closed market and we couldn't import these great cheeses to learn from? A bit of global trade helps local flavor.

I've added some photos from the trips to Montgomery's Cheddar and Linconlshire Poacher.

Thursday, Montgomery's Cheddar

Cheddar was born in Somerset county, in south western England. Unlike Stilton, which protected its name, cheddar's name got loose in the world. It has been used to brand hundreds of copycats. But they're like shades of the original, haunting the edges of the earth. Today there are only three farms making traditional cheddar. That is to say, cheddar from a herd of cows located on same farm where it's made, unpasteurized milk, traditional animal rennet, hand-formed in 25 kilo forms, wrapped in cloth, larded, aged at least twelve months. They are Keen's, Westcombe, Montgomery's. I visited Keen's and Montgomery's, our regular cheddar.

Some jargon. Cheddar is the name of a cheese and the name of a particular process that makes cheddar what it is. After the rennet creates curds and before the curds are milled there is cheddaring. The mass of curds — a big, rubbery, gelatinous blob — is cut in the vat, stacked, flipped and stacked some more. The stacked weight, sloped against the vat, stretches the curd. It also squeezes out whey and increases acidity. When everything is right, an hour or two later, the texture of the curd is like cooked chicken breast. They're also very tasty, some of the best cheese curds I've eaten. It was hard to stop nibbling on them.

Some trivia. Montgomery cheddar cows graze on a hill that most scholars agree was the location of Camelot. I asked Jamie Montgomery, the owner, if that's true. With typical British dryness he replied, "Yes. We own Camelot."

Photos of a cheddar as it ages.

Next stop: London.

Wednesday, Linconshire Poacher

Brothers Simon and Tim Jones run their family farm in Lincoln- shire, on the eastern edge of England, near the sea. The ocean is so close you can see it from the last cow barn. Besides pheasants and crows, gulls occasionally fly overhead.

Like many of the cheeses Neal's Yard Dairy sells, Poacher is relatively new to the world. A "new traditional cheese," as some like to call them. It has a lot in common with traditional English cheddar. The size, shape, color, and texture are similar. But it's made 350 miles east of the cheddar counties and it's got just enough other quirks to make it completely its own thing. Here it's pictured after it was washed, ready for boxing up and shipping out.

Simon, the agricultural college major, first started making Poacher in the early 1990's, about the same time that ZMO was born. Tim, his brother, the marketing and numbers guy, came on board in 1998, about the same time we started zingermans.com. Interesting symmetry there. We've been selling it at ZMO since 2006 or so, after our first visit to their farm. During that trip we tasted a great batch of thirty 45 lb cheeses -- a day's make -- and bought the whole lot.

We tasted about forty cheeses today, made on forty different days. There were a lot of good ones — it was hard to narrow it down! The finalists were all from 2007: March 21, April 27, May 30, July 20. Carlos, Grace and I settled on March 21, 2007. It's a savory-yet-sweet cheese with a full body that should last well into spring and summer of 2009. Look for it in late November.

Photos from Poacher.

Next top: Montgomery's Cheddar.

Tuesday, Stichelton.

When you arrive at the Stichelton cheese making operation at 7am, this is what you see. A twenty-five hundred liter tank of warm milk, just pumped a few hundred feet from the cow pen next door. The white stick on top is a paddle — for stirring by hand. Luckily there's not a lot of stirring to do. In fact, there's not a lot of anything to do. Stichelton is a cheese that takes a long time to make. Most of the time is spent waiting.

I keep saying Stichelton and you might be wondering "What is that?" Stichelton is the name cheese maker Joe Schneider and Randolph Hodgson of Neal's Yard Dairy (Joe's partner) have given to this cheese. In reality it's raw milk Stilton. They can't call it that in England since, there, proper Stilton can only be made from pasteurized milk (a rule that came into being a couple decades ago, though traditional Stilton had been made with raw milk for centuries).

This is Joe's third holiday season. (I say that because, like us, he thinks in terms of holidays. Stilton is the holiday cheese in Britain so he gets a big spike in orders then, too.) His cheeses are much better than they were in 2006, even better than 2007. He continually tests small changes to the recipe. The latest has been to use pre-ripened milk. He doesn't refrigerate the milk so its active cultures get a head start on making cheese. The results have been more interestingly flavored cheeses. Look for them in November.

Next stop: Licolnshire Poacher.

Monday, The Arches in London

I'm tasting and selecting cheese in England right now so I'll send some notes about what I'm learning.

Monday. Went to Neal's Yard Dairy's Arches, where they store their selected cheeses and pack them for shipping. They're named The Arches because they are actually Victorian brick arches under the London Bridge-to-Dover rail line. The train rumbles overhead every few minutes. We tasted dozens and dozens of cheeses over a few hours. The process, if you've been part of it is: Plug the cheese with an iron that removes a long pencil of cheese, take a bit with your fingers, chew, think, write down what you taste.

The left side of this board was in front of shelves of Doddington. That's a big maroon-rind cheese we've carried once before. Each date is a different "make" batch. There are different comments about the taste and texture. "Creamy." "Flat" "Dull" And my favorite: "Corky" I agreed with their taster about the one at the bottom made July, 20 2007. It haslots of flavor." Seven wheels available. Carlos reserved one. We might, too.

Next stop: Stichelton.

True North, Part Two

When Eric noticed we "86 a product because we prepped too many of one size and not enough of another" he was talking about chopped liver. We sold two sizes. Half pound and one pound. We sold out of one but had some of the other.

How can we apply the principles to chopped liver? Remember, True North is Make each product as needed, on demand.

True North is a direction, not a reachable goal. We can't make almost any product from scratch on demand. Take chopped chicken liver. Somewhere, sometime, a chicken was involved. It's unrealistic to grow a chicken each time a customer orders a half pound of chopped liver.

We head towards True North by shortening the time between demand and the make. How can we do that? Here are five ways.

1. Have all the ingredients ready. Make chopped liver from scratch after it's ordered.
2. Make the chopped liver in bulk. Portion it into the right size after it's ordered.
3. Make the chopped liver and portion it. Decide how much to make of each size by creating a marketplace with kanban cues. (The way we do it now.)
   
4. Make the chopped liver and portion it when a low level is reached.
5. Make the chopped liver according to a forecast.
   

These ways don't nearly exhaust all options. I just wanted to lay out five options that go from closer to True North to further away. No. 1 is closest. It has no premade inventory. The second option has a little more inventory. It's a little further away from True North. The third, even more inventory, even further away. By the time we reach No. 5 we have the most inventory and we're furthest away from True North.

So why not just head on up to True North as fast as we can? For one, it's difficult and causes lots of problems. Big ones, some of which we feel every day. I'll talk about those in a post soon.

Travel Tip: Internet Maps To Go, Cheap.

A friend of mine has a neat travel trick. He takes pictures of his computer screen Google maps with his digital camera, like this. When he needs to get directions he looks up the picture on the camera. Using zoom and scroll he can read the map really well. Neat, cheap option to owning a smart phone -- or buying maps!

Good Design: Hours of Operation

The days of the week abbreviations look strange because they're French. From Montreal.

True North

Eric Farrell recently observed, "It's weird to 86 a product because we prepped too many of one size and not enough of another."

It's a very plain, direct statement. It goes to the heart of lean philosophy. And it's worth a little thought. While the problem seems simple, the solutions are complex.

Before I get into why it happens and how to solve it the first thing to note: it's a common problem. When you shop for a small T shirt and all they have are mediums it's the same problem. When you want the mint green iPod but they only have black and white it's the same problem.

What's the root cause of the problem? In each cases a product is made ahead of its need. Whether it's in our kitchen, at the t-shirt factory, or in China, the need was forecasted and products were made accordingly. When we forecast need it's always inaccurate.

What's the root level solution to the problem? That's the hard part! It's so difficult Toyota puts it at the heart of its work, calling it True North: Make each product as needed, on demand. A customer asks for something then it's made. In other words--and here's where it always plays tricks in my head to write it:

the only way not to run out of something is to not have it,
to make it when it's needed.

If that sounds hard it's because it is. More like impossible. That's why Toyota defines it as a direction (true north), not a location. Toyota isn't there and will never be (though they're closer than other car companies). The pursuit of True North causes many problems and loads of interesting intermediate solutions, too. I'll go into more detail about them on a future post.

Nitrate Cured Salami

I spent a few minutes this week talking to Francois Vecchio, the man behind the crespone, finocchiana, cacciatore and felino salamis we carry. He gave me a chemistry lesson on salami making that I thought was worth sharing.

People are often worried about meat cured with nitrates. Is it a valid concern? I’ll get to that in a minute. First let me explain how nitrate cures meat. Welcome to a brief voyage through high school chemistry with apologies to mad scientists if I get any of the specifics incorrect.

Sodium nitrate NO3 is added to salami ingredients before they’re stuffed into the mostly air proof casing. Inside, the bacteria and microbial organisms live in an anaerobic environment—no oxygen.

Their activity sucks one of the three oxygen molecules away, turning sodium nitrate into sodium nitrite NO2. Sodium nitrite is unstable and aggressive to microbes. It’s the compound that does the real work of curing, making it safe for us to eat.

While it does its job another oxygen molecule is leeched off. What’s left is nitric oxide NO. This fixes the pigment color, keeping salami red. This molecule is safe.

Even though we started the cure with NO3 we ended up with NO. While Francois adds 150 parts per million of sodium nitrate to start the cure, only 2 or 3 PPM are left. The traditional thirty day curing process eliminates the substance.

So if cured salami doesn’t have any sodium nitrate or nitrite left, why are people afraid of it?

While traditionally cured meat doesn’t have any sodium nitrate/nitrite, non-traditionally cured meat may. During the middle of the last century, in between inventing Twinkies and Cheese Whiz, food scientists deciphered the chemistry that I just explained. Until then it’d been a two thousand year process that no one understood – people just knew it worked. The scientists correctly identified sodium nitrite NO2 as the money molecule. It did the majority of the curing work. NO3 didn’t seem to do much, so they experimented with adding NO2 directly to the meat, cutting NO3 out of the game. It worked. It saved time. Meat could be cured almost overnight. It could go to stores faster. It was a huge success.

Sort of. The problem is when the cure is rushed, NO2 doesn’t disappear like it does when you cure traditionally over thirty days. It’s still present in the meat. NO2 is a carcinogen.

That’s the reason people are worried about nitrate cured salami. Meats may be cured with sodium nitrite – not nitrate – and rushed to market when the nitrite carcinogen is still present. This isn’t true for the salamis we carry.

What about the “no nitrate” meat at supermarkets?

Nitrates are necessary for curing meat. You can’t cure without them and keep meat pink and safe. But if nitrates are necessary for curing meat, how can places like Whole Foods carry meats they say are nitrate free?

The trick is celery. It’s high in nitrates. Concentrated celery juice is used in the curing, instead of the naturally occurring mineral sodium nitrate. The FDA allows it to be called “Natural Flavor” instead of “Sodium Nitrate.”

The Chocolate Exhibition at Henry Ford

This installment of ZMO Journal
comes courtesy of our first guest writer,
Tim Miller. Take it away, Tim.

Annette and I visited Chocolate: The Exhibition at The Henry Ford the Saturday before last. It was fascinating, and we'll probably return again before it finishes it's run on September 7th. I strongly recommend it to anyone who has an interest in chocolate. Here are some of the highlights and things I learned.

As you enter the exhibit, there is a life-sized photo of an old-fashioned chocolate shop to set the mood. As you stroll further into the exhibit, you learn about the life cycle of cacao trees and their fruit. (You may notice that each display contains both English and Spanish versions of the text--very appropriate considering the origins of cacao.) There are several stations that allow a closer look at the cacao fruit along with associated trivia. In the center of this area stands a life-sized (though sadly artificial) cacao tree. It's interesting to see the flowers attached to the trunk of the tree rather than nestled among the leaves like most flowering trees we are familiar with. The flowers are pollinated by small flies or midges. When the fruit (or pod) ripens, it looks a lot like a large (think football-sized) papaya, which can get up to a foot long. Each pod contains about 20 to 40 seeds or beans, surrounded by a white pulp. (We sold a preserve made with this pulp, until we discovered how quickly it ferments!)

Further on is a series of displays that document the history of cacao and its use by Mesoamerican cultures. The Mayan civilization was among the first to use cacao. The Mayans believed that cacao was given to humans by their gods after humans were created from maize. The Mayans eventually traded cacao with the Aztecs. Cacao was very valuable to the Aztecs since the trees were difficult to grow in their environment. The cacao beans became so valuable that they were used as currency among the Aztecs and other Mesoamerican cultures. (In some areas, cacao beans were still used as currency up to the 1840s.) The displays include art of the Mayans and Aztecs, pottery and other interesting artifacts.

In 1519 the Spanish Conquistadors arrived in Tenochtitlan, the Aztec capital, where they observed Montezuma consuming cacao in the form of a beverage. The Spanish returned to Europe with cacao beans and the knowledge of how to create this elixir. Cacao was a well kept secret in Spain for years, but eventually the secret was revealed and cacao spread throughout Europe quickly. In Europe the drink came to be called chocolate, a Western pronunciation of the word xocolatl (Aztec for "bitter water"). Both the Aztecs and the Europeans believed that chocolate was an aphrodisiac and drank copious amounts. Europeans added sugar to the chocolate drink, making it even more popular. To keep up with the demand, Mesoamerican peoples were enslaved. Eventually the more reputable chocolate companies refused to deal with the slavers. A reproduction of a letter written by John Cadbury denouncing the slave trade is included among the displays of delicate chocolate cups and pitchers.

In the 1870s, the process of solidifying milk chocolate using condensed milk was invented. Chocolate manufacturers were very interested in milk chocolate since it was more affordable than other forms of chocolate. In the late 1890s, Milton Hershey invented a process to mass produce milk chocolate bars. The bars were successful and the Hershey Company grew accordingly. The displays include vintage advertisements and recipe books from Hershey's, Cadbury, and other popular chocolate makers. There are also some vintage chocolate molds on display.

Included among the displays is a description of the chocolate making process, from bean to bar. When the pods from the cacao tree are fully ripe they are harvested, the beans are removed and fermented for about a week and dried to prevent molding. The fermented beans are then roasted at high temperatures. The beans are hulled, the nib (the inner part of the bean) is extracted, milled, and a liquid called chocolate liquor is produced. (Despite it's name, this liquor sadly contains no alcohol.) The liquor is blended with varying amounts of cocoa butter, sugar and possibly milk, vanilla, nuts and other flavorings, then conched for up to 78 hours. The conche is an agitator that evenly distributes the cocoa butter and polishes the cacao particles producing a much smoother and more flavorful chocolate. The conching process was invented by Rodolphe Lindt in 1879. Prior to conching, solid chocolate was gritty (similar to the Bonajuto and Oaxacan chocolates we sell today at Zingerman's).

The largest cacao producer today is the Ivory Coast. The third largest cacao producer, Brazil, is the only country that consumes most of the chocolate they produce. (Brazilian cacao exports have suffered due to the effects of mixed weather patterns and infection by the witches-broom fungus since 1989.)

As you approach the end of the exhibition, there is a wall that looks like a giant box of chocolates standing on it's side. The wall contains a few monitors that feature interviews with various chocolate lovers waxing philosophical on their favorite treat. There are even seats that look like chocolate truffles sitting in their wrappers. Beyond the wall is a chocolate shop that has chocolate scent piped in and products ranging from chocolate candles and bubble bath to all kinds of chocolate bars including Mo's Bacon Bar! Outside the exhibit is a chocolate cafe featuring different kinds of brownies, and other delectable treats. Rumor has it that on certain weekends, their are free tastings from their sponsors in the lobby near the Imax Theatre. For more information, visit the website for Chocolate: The Exhibition .

Be sure to visit this exhibit before it disappears like all great chocolate does!

Tim Miller

Free marketing idea, worth repeating.

Why is gas so expensive?

Simple answer: it's because oil is expensive, right?

Pretty much. But why is oil so expensive?

There the answer gets more complicated. Are we running out? Is someone hoarding? Are India and China drinking it all? I'll leave those answers to others. But here's one answer that may make things slightly more clear.

Oil is always traded in dollars. No matter where you buy a barrel of oil in the world you have to pay the man in greenbacks. That means the value of our dollar has a direct effect on how we perceive oil's price. When the dollar devalues the price of oil goes up for us because it takes more cash to buy a barrel. Similarly, when the dollar increases in value the price of oil goes down for us.

As we know, the dollar has devalued--like crazy! Let's go back six years. In 2002, oil cost $25 per barrel. The Euro and the dollar were at parity (one dollar bought one Euro). Fast forward to 2008. Oil costs $125 per barrel. But it now takes $1.60 to buy one Euro. The dollar has devalued. The price of oil had to go up. How much of the oil price rise can be explained by the devaluation? Well, you can just look at Europe. They only pay 75 Euros per barrel. If we were still at parity that's what we'd pay, too. In other words, $125 - 75 = $45 of the price increase of oil--almost half the $100 increase--can be explained by the dollar's devaluation.

Removing dollar devaluation, the price of oil has tripled in six years. Sounds bad, sure. But historically it's not unique.

Gift Card Graph (Fixed Link)

Jessica Hagy is a conceptual artist who makes
interesting graphs on index cards.

This one makes me think about our customers,
and whether it's true for some, maybe not for others?

You can see more of Jessica's work here.

What's down with revenue?

Puns aside, we don't know.

Mother's Day week's revenue came in 6% below last year. That's only the fourth week we've fallen below last year's numbers since January 1st. All our other weeks have been well above 2007. In fact, at the end of April – even though we were down compared to plan – we were up 12% over last year for the winter/spring season (all of 2008). Lots of businesses would give a kidney to have growth like that.

Because we share financial numbers I know bad sales news has a tendency to seep into your bloodstream like cough syrup. It makes us numb, groggy, a little depressed. Don't let it get you down too much, though. As Betty likes to say, "It is what it is." We move on. Our food is good, our service is great, these blips and blops will pass. Hopefully I'll have an answer for what the dilly happened with the revenue soon. In the meantime stick to the things you know you can improve; focus on the sphere you influence around you. Keep giving great service on the phone and to each other. Keep knocking down code reds to reduce mistakes. Eat some of the great lunch Colin has been making.

Thanks for reading.

Oprah & NPR, The Last Check In.

Answers to a couple questions people have asked:

Q: Does this data include or exclude Zingerman's folks looking at or using the site at work?
A: It includes them.

Q: How does this compare to other days?
A: I don't know. We just started getting this data Friday! (when we moved our website to our new host, IAS).

Q: Did the NPR visitors buy things?
A: I hope so, but I don't know. The problem is this: we often don't know where people come from when they shop online. There are only three ways we can tell.
1) We already have their address (then they usually come because of a mailing)
2) We gave them an offer and they needed a code to get the deal, or
3) They clicked through a Google Ad we bought.
If they didn't match one of these three we can't tell how they found us. It's a mystery.

SITE VISITORS
Friday: 2,119
Saturday: 2,857
Sunday: 3,979
Monday so far: 3,227

SOLD
45 lbs of BBQ Beef Brisket
119 Challah Buns
21 Pints of Beans
77 Pickles

CATALOG REQUESTS
300

50 and 12 Hours Later

50 hours after Oprah, 12 hours after the NPR story (which seems to have spiked our web attendance even more), here are the numbers from ZMO:

SITE VISITORS
Friday: 2,119
Saturday: 2,857
Sunday so far: 3,544

SOLD
40 lbs of BBQ Beef Brisket
103 Challah Buns
20 Pints of Beans
79 Pickles

CATALOG REQUESTS
180

28 Hours Later

28 hours after Oprah, here are the numbers from ZMO:

SITE VISITORS
Friday: 2,139
Saturday so far: 2,417
Friday's peak hour: 500
Saturday's peak hour: 600

SOLD
32 lbs of BBQ Beef Brisket
81 Challah Buns
16 Pints of Beans
75 Pickles

CATALOG REQUESTS
150

Oprah, Hour 2

It's 2 hours after Oprah's major airing. Here are some numbers from deep inside the heart of ZMO:

SITE VISITORS
1-2 pm: 100
2-3 pm: 80
---OPRAH---
4-5 pm: 500
5-6 pm: 250

SOLD
14 lbs of BBQ Beef Brisket
33 Challah Buns
8 Pints of Beans
41 Pickles

CATALOG REQUESTS
60

We're calling it a light wave here, no Oprah tsunami. We'll keep you updated tomorrow around the same time. Thanks for everyone who has been helping!

Mo

Potatoes & Mushrooms Recipe

The first ZMO Journal recipe might deserve a little bit of introduction.

I cook at home a fair bit. I'm not a great cook by any means, but I've learned it's not too hard to cook really tasty stuff quickly. Even when they're not quick most of the things I make don't take a lot of time in front of the stove.

Most of my cooking is very simple. Now I know everyone says that about cooking, so let me explain what simple means to me.

There aren't a lot of ingredients
I use the same ingredients often so I don't have to buy a things that'll go bad
I don't use a lot of pans that I have to wash
I don't use many specialized tools

From time to time I'll post something that I made that I think is tasty enough you might want to make it at home. It'll feature an ingredient we sell. Call it education, demystification, or food porn...whatever you name i, I'm simply posting in in the spirit of sharing so that we can each feed our friends, families and loved ones just a little bit better. Enjoy!

Last night's dinner was a store-bought rotisserie chicken with some greens and this homemade side:

Potatoes & Mushrooms

Parboil whole potatoes (peeled, unpeeled, your choice) in well salted water for a few minutes. Parboil means you can poke a fork in them easily but they're not completely done. It took me about 10-15 minutes when I started from cold water with potatoes the size of small apples.
Slice into thick cuts, about a quarter inch at least.

Sauté some shallot, garlic in olive oil in a large skillet.
Add some salt and black pepper.
I also added some Merken, the smoky pepper we have from Chile.
Add the potatoes in one layer.
Add a little chunk of butter and enough liquid to just cover the potatoes.
Broth is best, but water is OK (you can even add half a bullion cube to water).
Add thick slices of some decent, small mushrooms on top.
If you've got some herbs, add those. Rosemary, bay and thyme are nice.
Put a lid on at first.
Take lid off about 10 minutes in.
Flip the potatoes gently so they don't fall apart.
Let the liquid cook off until it's gone.
Potatoes should be done now.
Eat.

The Margin. Part IV.

Last post about The Margin I said we make $30 profit on every order. That sounds like total bunk so let me explain. I should have said we would make $30 profit on every order. How could we do that? We could if we didn't have any other expenses.

What are the other expenses? Well, we've included all our variable costs when we calculated the margin. What's left? The pesky fixed costs! Let me show how they affect profit. And, forgive the possible ridiculousness of this, but I'm in a certain mood so I'll explain with nautical pictures.

Imagine it's last summer. August 1st, 2007. We're about to start our fiscal year. We begin the year at break even, neither profitable nor with a loss. Imagine break even as the surface of the sea. Above lies fresh air and profit.

Before we take our first sale we commit ourselves to paying for some things like rent and manager salaries. Since we're going to pay for these things whether we take a sale or not we think of them as "fixed." We call these expenses fixed costs. (Variable costs are the other kinds of costs, the ones we pay only when we take a sale.)

Since we're going to pay fixed costs no matter what we essentially start the first day of our fiscal year with a big loss. The loss is equal to our fixed costs for the year. This year fixed costs were $3.5 million. You can imagine fixed cost like a weight that drops us under sea level. Down, down, down we go, 3.5 million dollars below the break even surface.

How do we get back to the break even surface and, hopefully, above to fresh air and profit? We take sales. Each sale is like a step that lets us get closer to the surface. How fast do we rise? That's where the margin comes in: each step puts us $30 closer to the surface. In other words, each order gives us $30 to pay fixed costs and step closer to break even for the year.

How many sales does it take to get to break even? I'll save you the math.

$3.5 million ÷ $30 profit per order = 116, 667.

That's how many orders we have to take to break even this year. As soon as we take order 116,668, we make our first bit of profit. How much? Well, we know that number now: $30.

Puerto Rican Sandwich

There’s a venerable diner in old San Juan called Café Mallorca. It’s the kind of place I like a lot. Big counter. Old guys working the sandwich press with ties on. Regulars eating and drinking alone.

They make a sandwich that’s kind of famous in San Juan called–no surprise–a Mallorca. Ham and cheese, stuffed in a buttered, split sweet roll (that’s the mallorca part), grill-pressed, then topped with lots of powdered sugar. In spite of its odd-sounding finale, it’s pretty tasty. And easy to make at home. A challah roll would make a good stand-in if you can’t find a mallorca roll around town.

A couple other interesting notes about Puerto Rico.

The Piña Colada was invented on the island in 1954. Odd, I thought, I didn’t see it on bar menus much. But loads of roadside stands had handmade signs offering it for sale. I laughed at first. They looked like lemonade stands selling cocktails to drivers. Later I learned: no alcohol.

Wild oysters are harvested on the northwest coast, near Aguadilla. I'd never seen wild oysters before. They look a lot different than cultivated, which is what you see for sale almost anywhere. They grow in a big craggy mass that looks like coral. The oysters are broken off the mass like barnacles off a hull. Their shells have odd shapes, twists and turns, it's hard to find a place for the knife. In Boquerón, a town 40 miles south, cart vendors line the last street before the water to shuck and sell them, six for two bucks. They may be ugly, but they’re tasty, sweet and punchy and go great with the local condiments—a squirt of lime juice and a dab of Bohia hot sauce.

If you’re heading off to a new place and are interested in some tips feel free to drop me a line. If I’ve been there—and sometimes if I haven’t—I keep notes.

The Margin. Part III.

Our margin is 35.71%.

So what? How does that help us decide whether to take one more order? Well, it doesn't. We can't make decisions about percents very easily. We need to turn it from a percent into cold hard cash.

Margin is the amount we make per order. If we multiply margin (percent) times the average value of an order (dollars) we'll get a margin in dollars. For the past couple months our average booked order has been worth over $80. 35.71% x $80 is about $30. That means our margin per order is about $30.

Now we have something to sink our teeth into. When we're faced with a choice of whether or not to take one more order, how do we value the decision? How much does it cost to say "No"?

The answer is it costs $30.

That number has some big implications. A couple examples can help us put it in perspective.

Let's say a customer rings us at 8:45 pm. The phones are closed, we don't answer. They decide to shop elsewhere. We lose the order. How much did we lose? $30.

A customer rings us at 3:30 pm on Wednesday. We can't take the add-on. They go shop elsewhere. How much did we lose? $30.

...

This has been a long trip to get to this number, this measly $30 lesson. I took the time because what I explain next usually is often mind blowing. So hold on to your hats, folks.

First Mind Blowing Lesson
In the bookings example: we could have paid someone $29 to work the extra hour after we're closed, from 8-9pm. If they took at least one order we'd still be ahead. Why? Let me put it this way. If I said, "Give me $29 and in one hour I will give you $30," would you take the offer? All day long!

Second Mind Blowing Lesson
The $30 we lost wasn't income. It was profit. Yeah, you're reading that right. Every order makes us $30 profit.

More on that soon.

The Margin. Part II.

What is our margin at ZMO?

Good question. Or rather, questions. Susan responded to my latte challenge by correctly inquiring, “Which margin do you want? Our plan margin? Our actual margin last closed week of fiscal year? Our margin through the holiday? Today's?”

If that makes you confused, it gets worse. Remember the definition of margin: The money that’s left over after we pay all variable expenses required to get a box out the door. That means margin changes with every box. An example:

Box A has one Ultimate Basket. Price is $200.
Box B has one Gold Label Balsamic. Price is $200.

Box A has over 20 items that need to be picked, checked & placed in a basket.
Box B has one item that gets picked, checked & placed directly in a box.

Looking at production labor alone, it’s clear the variable expenses required to get these two boxes out the door will be different. That means the margin for each order will be different. We'll ship 80,000 boxes this year. Does that mean we have 80,000 margins? In a way, yes. But don't freak out. We have a way around it.

It’s useful to recall our goal here. We’re trying to use margin to decide what the benefit is to shipping one more order. The order is in the future. We don’t know what it is yet. We have to predict it. How can we do that? Why not use an average of what happened in the past? It's probably as good a predictor as anything.

Here’s how to calculate our margin, using costs averaged over the period from August to December 2007. These are the final numbers off our December year-to-date financial statement. The real deal.

38.22% Cost of Goods including food and mistakes, subtracting shipping income
10.62% Direct Labor
1.00 % Payroll Taxes on Direct Labor
6.96 % Operating Overhead including credit card fees, etc.
3.09 % DSE Fees
4.40 % ZSN Fees

64.29% Total of all variable costs

35.71% ...is Our Margin (100% total - 64.29%)

So who guessed closest? The latte goes to Jason who said 42.3%. Congrats. I’ll bring it to you next week.

If anyone would like a try at Latte No. 2, here’s my next pop quiz. You know our margin in percent. What's is our margin in dollars? You pick your average box size. Show your math. One winner, chosen at random from correct entries.

The Margin. Part I.

During the holiday season I spoke to a number of leaders at ZMO about making decisions on the margin. By that I mean: when we're faced with a choice of whether to take and fulfill one more order, how do we value the decision? In other words, how much does it cost to say "No"?

Margin decisions are particularly poignant at the holiday. That's the time of year where customer demand almost always exceeds our capacity. They want more than we can give. For example, we might have orders coming in so fast we could take 8,000 for the Wednesday before Christmas. Yet we can only ship 6,500. But what if we could ship 6,501? How much does it cost to say "No"? Or, put positively, how much would we gain by shipping one more order?

Even though margin decisions are at their most poignant at the holiday, they exist all year round. And they're always important when we're chasing revenue--like now. More about that in a later post. First, let me answer what is our "margin" anyway?

Margin is the money we have left after we pay all variable expenses required to get a box out the door. Variable expenses like what? Food, for one. And direct labor. And then other sniggly things you might not think of. For example, since almost everyone orders with a credit card and the card companies charge us to accept them, credit card fees are a variable cost of doing business for us. Each new order means we need to pay the card company.

Which costs aren't variable at ZMO? Lots of things. Me, for one. Salaried people are not variable costs, we pay them whether we take the next order or not. And rent. And utilities. And so on.

It's useful to bring up an old economics adage at this point. In the long term all costs are variable. When we're thinking about the margin we're not thinking long term. We're only thinking about the next order. What are the costs we pay to take that one order?

Next time. What exactly are our variable costs? What is our margin?

The closest guess to our margin--in dollars or percent--from a non-marketing person wins a Next Door latte on me.

Blog One

Hi Mail Order,

This week I start a blog. It will feature short entries on food, design, business and lean. They will be quick to read, a couple minutes at most. The blog is primarily for you, the crew at ZMO. It will be publicly accessible so anyone can read it, though. I will send the entries by email to Phoenix and they will be posted to the blog.

If you haven’t experienced a blog before it’s nothing fancy--just an online journal. It keeps past entries organized well. (If I write a recipe you want to try or share with a guest, you can find it easily.) You can also post comments.

Short & sweet, that is all, take care, and happy reading,

Mo