Recent reading

Scott Galloway explains NFTs.

When studying Big Numbers you often want a sweeping statistic, even if it's flawed. For the pandemic I think excess mortality is one key stat to watch.

Disc golf and its pandemic problems. I didn't know there were so many disc golf firms in Michigan! (Paywall.)

Recent reading, the You want it, You got it edition.

 

You want to drink ten gulps of water from a bottle you then throw away, this is what you get. (Hat tip Joe Cap for the astounding graphic story)

You want a $4.99 chicken at Costco, this is the meat industry you get. (More of my posts on animal husbandry.)

You want cheap shrimp, this is the aquaculture you get.

You want to replace walkable NYC stores with Amazon, this is the traffic you get. (More of my posts on online shopping.)

How Halifax's library deals with rule breakers.

Everyone has a vacation quirk. My family's is to visit libraries wherever we go. Last week we visited Halifax's central library and uncovered this brilliant scheme they have to make peace with rule breakers.

Recent reading

Put a tariff on imported aluminum and Wisconsin dairy farms go belly up. A tale of how tariffs do tricky things. 

More tales of inside an Amazon.com warehouse, where the people begin to imitate the robots.

I don't know why this makes me happy, but it does. And it makes me wonder what we could do with an idea like this at ZMO. (The author often has a perspective I learn from and admire. Worth reading.)

Recent reading

Women ranchers reclaiming the West, featuring our very own Cory Carman at Carman Ranch. What gives meat flavor: animal welfare edition has even more about her work.

A whole bunch of stuff I didn't know about Spanish cheese history.

Remove embarrassment, increase sales. Who knew? An article on growing sales by reducing obstacles to feeling bad.

What is going on in grocery retail?

This is a thought-provoking piece on innovations in grocery retail. 

Farmhouse Market in particular caught my eye. It's a shop in Minnesota that lets customers use a key code to enter and shop 24/7. You can buy groceries alone. There is no on there to help, no on there to watch you, no one there to check you out. For me it flips the downside of zero staff—the fact that no one can help you—into an upside—you can shop anytime you'd like. Many large grocery stores let you shop 24/7 too, but having the option to shop in a smaller shop close to home with better food and less carting around through endless aisles...it sounds compelling. It also upends the Amazon Go grocery test where they hung a zillion dollars worth of cameras watching every move in the effort to let you shop without cashiers. That model is crazy expensive and freaks many people out that they are turning the act of buying cereal into Orwell's 1984. Instead, this couple installed a fifty dollar lock. And Big Brother isn't watching.

One emotion that staff-free retail invokes is trust. Do we believe customers will steal if left unattended? I lived in post-communist Slovakia for a year just after the Berlin Wall fell. The way retail worked there was utterly devoid of trust. In many shops you had to wait in a queue and ask for someone to get your item for you. To buy some noodles I would wait, then point at a box of pasta behind a counter and ask for someone to get it for me. Part of the justification for this nonsense was communism's mission to maximize employment. Jobs for everyone, jobs doing everything. A job getting you a box of pasta. A job handing you a piece of toilet paper at the bathroom (I'm not making that up). But another reason was trust. Since everything was owned by the state, people probably felt about as bad stealing as people do cheating on their taxes in America. A little wouldn't hurt, right?

I haven't thought about what that experience meant to me for years. Then I read this article on Chinese ecommerce. It is fascinating. (I'm sorry it's behind the New Yorker's firewall, if you'd like a copy I can send you a PDF.) It had loads of interesting news. For example, if you're like me and thought Amazon's drone special on 60 minutes was a PR stunt intended to deflect holiday attention from the working conditions described in an undercover Mother Jones article, you may be surprised to learn that they were just copying the Chinese who already use delivery drones. Who knew? But it was the author's own experience coming to America that hit home for me. She is a Chinese immigrant and described shopping for the first time in America after, like me in Slovakia, having to queue-and-ask shop in China. Here is her description of the marvel:

I can still remember the first visit my mom and I made to a Stop & Shop in New Haven, Connecticut, soon after we moved to the U.S., in 1992. I interpreted the unguarded aisles of open shelves as a sign that everything was free. I’d never heard the word “supermarket” before, and it seemed likely that “super” indicated a market where no money was necessary. My mother was awed that store employees, instead of trailing our every move as they did in China, seemed indifferent to our presence. How had shoplifting not bankrupted the establishment? What sort of society would allow such a risk? 

I had always thought of the Slovak model as weird. Here was someone describing how she felt the model I grew up with was weird. I took our get-it-yourself shopping for granted. But a hundred or so years ago, we shopped in America like they did in Slovakia, like they did in China. We lined up in a queue and asked. It made me realize that, of course, duh, retail changes. In high school I had a job at a video rental store. (It was there I watched Better off Dead about a hundred times.) That job no longer exists—for anyone. People don't rent videos from stores. Blockbuster used to employ almost 60,000 Americans. Where did they go? What do they do now?

Of course retail is going to change. Here is a mind boggling list of recent grocery innovations alone. How else will it change? Will it go backwards, like it's done recently adding delivery, something our grandparents took for granted? What will it add? What will it eliminate? Will we eliminate  the next queue — lining up to have people take our money? It seems the answer is inevitably Yes. There are many places, like CVS, where we line up and a machine takes our money. Or there are shops like Apple —or Zingerman's Mail Order, during our warehouse sale — where almost anyone walking around can take your money. There's no need for a single queue. Amazon wants their invisible app to take your money at Amazon Go. Surely that's just a stage, too.

But all that payment stuff, in context, seems like small potatoes now that I think about it. That's just the last part of retail. The money. There is so much more. One of the cornerstones of Toyota's lean operation tools, kanbans, came from how American supermarkets replenished shelves. That idea, born in retail, transformed manufacturing around the world. What else will come from retail? What else will come to retail?  How will we react to it? 

Recent reading

California, Coffee and Cancer: One of these Doesn't Belong.

California is considering putting cancer warnings on coffee. The reason is that it contains a compound called acrylamide that causes cancer in rats in large doses. The problem is acrylamide is also present in half the foods we eat. An article that makes a good case for the public health risks of over-warning about a problem.

It's not about running a pick and pack food line, but it might as well be. Explanations—with aniumated illustrations—about the systems and culture behind slowdowns on New York City's subway.

Do you think that online site changed its prices just for you? Maybe it did. How dynamic pricing works. 

Recent reading

This is essentially how our strattu is made.

We buy meat like this.

Not like this.

Recent reading in batches

The benefits of batching the news.

The benefits of incrementalism.

The benefits of grocery shopping more frequently.

The crazy story of why the fax machine is the way all doctors talk to each other

"The Obama administration spent upward of $30 billion encouraging American hospitals and doctor offices to switch from paper to electronic records. The program was a wild success, in one respect. The number of hospitals using electronic records grew from 9 percent in 2008 to 83 percent in 2015, a huge change in less than a decade. 

But the program didn’t account for a critical need: sharing. Hospital and doctor offices generally remain unable to transfer electronic information to other hospitals and doctor offices. Billions of dollars later, they are left printing out documents and faxing them."

From the article The Fax of Life.

I was wondering how fax machines were doing since Office Space!

The article is a fascinating look at yet another hunk of waste that fills our health care, helping to make the U.S.A.’s health system one of the most expensive on the planet. (I’ve written about another waste, called coding.) You know this particular waste from visiting a new doctor and filling out those endless forms, but let's lay it out:

1. You enter your patient information on one of their faded clipboard forms

2. Someone in the office types what you wrote into a computer 

3. When another provider requests your info, they print it out and fax it

4. The other provider enters that info into their computer by hand — or with a "fax reader"

Expensive to retype all that? You bet. But even worse, I'd suggest, is that I count at least three chances for something to be entered wrong. If there's even a slight chance of entering any particular piece of information wrong, the sheer amount of data to be entered and the times it must be re-entered means the likelihood of something on your medical record being incorrect is pretty darn high. I'd say it's nearly certain. Hopefully it's not something critical. 

This is how you can have a health care system like ours that is both more expensive AND worse than almost any other industrialized nation. Or, as my CFO Ron Maurer might put it, "You can get better health care, but you can’t get more expensive."

Another fancy coffee roaster bought by a gigantic company. So what?

In a short period of time most of the 3rd wave coffee roasters that have a national profile have either taken on major outside investors or been bought outright: Intelligentsia, Stumptown, La Colombe, and now Blue Bottle. 

Is this a good thing or bad? Some will say, "It depends," but don't count me as one of them. To me it's pretty much all bad. None of these investors have any track record of making food better. They primarily make more of it and, typically, more cheaply by using cheaper ingredients, cheaper labor, cheaper whatever. They don't say any of that of course. They say "We'll expand Brand X's reach so more people have access to it," making them sound like they're doing it for the good of humanity. But the way they expand comes at a price, it always does. Look, these aren't crack coffee people buying coffee businesses. These are money people buying a chance to make more money. Conglomerate acquisitions are what they are, and they are not good for business creativity, they're not good for health, they're not good for the food. 

I don't know the whole story behind any of these buy-outs. I do know that some of the companies, like Blue Bottle, had already taken on investors ($100 million in their case). That was several years earlier. After the first wave of investors came I noticed these 3rd wave notables started packaging cold brew coffee for supermarkets and opening shops and roasting plants far from home base. They were using investor money to expand their products and to expand geographically. The fact that they are now taking on more money—in some cases the new money is buying out the other investors—could mean the expansion went well. Or it could mean it went badly. Either way it'd be a good story. So far I haven't seen anyone writing about it, though. No one is talking about whether these deals were done in a climate of fear or opportunity.

One article that is particularly telling about some of the other elements in play is this interview with James Freeman, the founder of Blue Bottle. To him, fast growth is a given, as he says, "There are a few paths a company of our growth rate can take when we’re pursuing capital." To some extent you have to forgive the guy. He started his company in Oakland, just up the road from Silicon Valley. He had investors from Instagram and Twitter and elsewhere in tech. This is the way they all think. You must grow big. You must get capital big. You must sell out big. That is how success works in that world. It's classic Silicon Valley, down to the galling self-effacement of a mulitmillionaire shrugging off how rich he is after the buyout saying, "I’ve got kids at home, so security feels great."

The good news behind this, the news that enabled it in the first place, is that small roaster coffee technology has come a long way. You can install a roaster in a single shop and pretty much make the economics work. The big companies can buy what they will. They always do. I have faith the small coffee world will still thrive.

Assembling the Sears and Roebuck catalog, 1942

Recent Reading on Pricing Through the Looking Glass

The website you shop at may be charging you a different price than it charges me—for the same thing.

"They are comparison shopping us."

This is one of many articles I've read over the last year that detail the ways companies are looking at your browser history, location, time of day and other data to decide what to charge you for something they sell. It's called dynamic pricing and, for better or worse, it's something we can expect to continue, at least in some corners of the internet. Like shopping for airline flights. It's been part of plane ticket pricing for a long time and it's often maligned, sometimes frustrating, but it's worth remembering that the average domestic plane ticket costs almost half what it did in 1980 and dynamic pricing is part of the reason. 

There will always be some vendors (like my site Zingermans.com) who choose to not use dynamic pricing. My prices are fixed and to some extent I like it that way. Still, on December 22nd, after we've cut off orders for Christmas, it'd be interesting to see what someone might pay for a coffeecake...but it's not gonna happen.

Using data to have the price match the person's willingness or ability to pay is really a lot older than fixed pricing, as the article points out. It used to be called haggling. With web browsers and Amazon it sounds sinister but the principle is based in fairness. If people who can afford to pay more do pay more, then those who cannot afford to pay that much can be charged a lower price. Each pays according to their means and, in the end, the prices average out and the vendor makes the same revenue it would have if it charged everyone some hypothetical fixed average price.

In practice it's not so clear that's always what's happening. To top it off, almost none of this new big data computer haggling is transparent. The vendors hide their analysis of you in a black box. You have no idea what data they're looking at and how they evaluate it. (For more on the problems with non-transparent algorithms that segment people, the former investment quant Cathy O'Neil's book Weapons of Math Destruction is totally worthwhile.) In the end, though, I believe all secret codes don't stay secret for long. It's only a matter of time before someone cracks Amazon's dynamic pricing algorithms just like Farecast unlocked airline ticket prices. But in the meantime it does feel dirty, doesn't it?

What kind of sandwicher are you?

from @mattomic 

Packing tape art

I've always wanted an art installation at our Zingerman's Mail Order warehouse that reflected our work and materials. This would do nicely. A cocoon landscape of tape, from Paris.

Recent reading

Fast food "meat" is probably scarier than you think.

Many environmental footprint studies are flawed. This one appears to be pretty good. It shows the carbon footprint of a loaf of bread. You might be surprised at what's the biggest contributor to greenhouse gas. Hint: it's not transportation.

UPS taxed air and we cut back on shipping air. The same logic applies when you tax food — check out the eye-popping results of Philadelphia's soda tax.

Ibérico pig immigrants, coming to America.

I'm generally opposed to murals, but I'd totally love this on one of our building's garage doors.

Recent Reading, Food Visuals

A look at the scale of modern American farming.

What 2,000 calories looks like before you eat it.

Visual management, kindergarten style

Toyota's lean operations system emphasizes making work and data visible inside the workplace. It part what's been meant by the term "visual management". It's an idea you can see in practice in any kindergarten. And no one has more fun with it than them!

Marilyn Monroe's lard and bacon order

Delivered to the Beverly Hills Hotel in March of 1960 when she was filming "Let's Make Love."