Page 15 of 128

How industry consolidation affects you: meat

December 19, 2013 /

Buying some steaks or pork chops for dinner tonight? If you’re buying a name brand at a supermarket, chances are it’s coming from one of the four major players in each market segment.

As of 2007, the four biggest beef packers in the U.S. supply more than 83% of our total supply, with Tyson and Cargill owning the majority. That’s right: more than half of America’s beef comes from one of two meat suppliers. Swift & Co. and National Beef Packing Co are three-four but their combined total is barely more than Cargill’s alone.

The same consolidation exists in the pork packing industry, although Smithfield Foods is the leader, with 26% of the market. The top four players control two-thirds of the market and include—surprise!—Tyson, Swift and Cargill.

These five companies are providing most of our protein nowadays, which makes the locavore movement just a bit more interesting. (Source)

This is the latest in a series of summaries of industries whose corporate consolidation has led to a small number of players controlling the majority of the market, creating oligopolies in the mass market. Previously

On quality

November 25, 2013 /

I discovered Energy Kitchen in 2004 or 2005, when it had but one lonely outpost, randomly, on Second Avenue near 59th Street in Manhattan. I wandered in looking for a fast meal and emerged with freshly grilled chicken and brown rice in a healthy wrap. Low calorie, fresh and delicious—oh, and by the way, low-calorie and low-fat, too. Genius!

A few years later, Energy Kitchen went into expansion mode, and in short order had what felt like a dozen or more outlets around the city. One opened on West 23rd Street by my then-office. I excitedly stopped in shortly after opening, and found an updated menu—now with more nouveau options, like bison—as well as modern decor and a ticketing system for the lunch rush. Oh, and by the way, every entree was under 500 calories. Still genius.

Only now, Energy Kitchen wasn’t a friendly novelty restaurant. It was one of a growing chain, and it showed. The lunch rush at the store on 23rd was poorly managed; staff actually set up a holding pen for people to wait for their food, forcing us to loiter uncomfortably next to the trash cans. The wait times were often rather long. And despite the new fast-food underpinnings, the prices stayed high; if memory serves, that bison burger was a $12 item. (I never got around to trying it.)

And, most importantly, the food went downhill. As a burgeoning quick service chain with a fair number of stores, Energy Kitchen had to harness economies of scale. That meant pre-packaging some food items rather than cooking them fresh, which degraded both the quality and the flavor of a meal. I once watched in disappointment as the cooks carried a tray of chicken up from the basement: many small plastic bags of parboiled chicken, already cut, ready for a quick spin in a microwave and an unceremonious dump into a wrap. So much for fresh and grilled.

So today’s news of Energy Kitchen’s demise, while unexpected, is not that surprising. The chain positioned itself as having a smart product: healthy, flavorful and satisfying. But Energy Kitchen charged upscale prices for a product that ceased to be upscale, despite the claims on the front window. I imagine many health-conscious customers went looking for organic and locavore cuisine rather than save a few calories on pre-bagged poultry. It’s a classic case of failing to deliver on the brand’s promise.

Which is a shame, because at the outset, Energy Kitchen had a great idea and great execution. Above all else, the quality of the product will ultimately define the success or failure of an organization.

Fifteen

November 1, 2013 /

When I launched the Ideapad, on November 1, 1998, it was rather ugly, it cribbed off others, and it didn’t even have its own directory.* But what it was, it miraculously still is: a home online for me to publish independently, everything from mundane thoughts on shopping and puppies to important perspectives on usability, digital life, the Internet business and my own evolution.

Fifteen years on, the Ideapad is one of the world’s oldest and longest-running online blogs, which I take less with surprise or pride so much as contentedness. The good ol’ ‘Pad is still here. I’ve gone through a couple of phases where I almost stopped writing—once, I even blogged about not blogging, and promptly lost half my audience–and in retrospect the best thing about this page is its consistency.

I’ve had more than my share of reminiscences in this space over the past few months, so it’s best to look forward here, to many more years of satisfying self-publishing. Thanks for reading.

-David

* My incredulous kudos go out to Net Access, my old web host, for fighting link rot and keeping my old directory live, for more than a decade of uptime since I deactivated my account. I’m not even sure they have individual user accounts anymore, but my old pages are still live. The World Wide Web purist in me is very appreciative of this.

Instead of just narrowing airline seats, charge for better ones, too

October 25, 2013 /

The Wall Street Journal’s expose on airlines narrowing coach-seat widths seems, to me, yet another market opportunity for the airlines, if only they’d position it correctly.

Now, I’m no advocate of skimpy seating. I want to travel in as much comfort as I can afford. But the key word there is afford.

Consumers have continually shown that they have strong price sensitivity when they fly. This forces the airlines to keep their base fares low, which in turn forces them to find ancillary revenue sources. Upcharges for baggage, exit rows, and priority boarding are all designed to offset the cost of keeping airfares at competitive rates and aid profitability. (It’s working, too.)

So why not use this seating to their advantage? Selling more-hiproom seats in the same manner as more-legroom rows would undoubtedly prove profitable by servicing that segment of the policy (such as this author) that is willing to pay a small premium for an upgraded experience. If that extra seat in a nine-across row generates another $300 fare, having a handful of eight-across rows generating $40 per passenger in upgrade fees would be similarly profitable.

I do not look forward to my first 17-inch-wide airline seat. Here’s to hoping the more-space movement hits the front of the coach cabins on these planes sooner than later.

On XOXO

September 23, 2013 /

Hey, I posted on Medium for the first time today, a retrospective on the XOXO Festival I attended this past weekend.

I’d like to append it here with a note of introspection. I am one of the old-school bloggers and creators that ushered in the community many years ago that, in its own winding way, led to the XOXO Festival. As I’ve noted in this space before, I’ve often been too slow to embrace my digital community in real-life settings, missing out on both the connections that I’d have made as well as the creative sparks that come from such settings.

Somehow last year I failed to learn my own lesson and missed out on the first XOXO. I was, frankly, miserable for weeks about it after the event concluded. This year I made no such mistake, and my determination rewarded me handsomely, as the event was every bit as wonderful as I’d imagined.

Six months into my 40s, six weeks into my new job, five weeks into a new apartment, and two weeks into being the father of a grade-school-age child, I have found energy and excitement in all the change. XOXO made a little bit of magic this weekend, and it couldn’t have come at a better time. I came back from Portland with dozens of new friendships and a renewed commitment to making great things. I’m excited to see where it goes.

WTC

September 11, 2013 /

In the summer of 1990 I worked at the old 4 World Trade Center on the commodities exchange, the one made famous in cinema in “Trading Places,” although somehow the gravitas of where I landed my first-ever paying job only partially sunk in at the time. As a high school student, I drove with another kid to the PATH train in Harrison and rode in every morning. Worked four days a week for $250 cash checking trades for a dollar futures trader. Nice work at 17 if you can get it.

At lunchtime I either went to the fancy Wall Street McDonald’s, the one with the piano player and doorman and carnations on the tables, or to a terrific old-world coffee shop that used to be across the street from 4 WTC, sort of a cross between a diner and Katz’s Delicatessen, where I’d get honest to goodness New York knishes, and I’d eat them with a sprinkle of salt.

I don’t think I ever went up into the towers. 4 WTC was a low-rise, maybe 8, 10 floors, high enough that the day the power went out taking the stairs was annoying. I remember thinking that the trade center was both impressive and mildly disappointing in a “gee, it’s kind of desolate at street level” kind of way. Finding that coffee shop and that McDonald’s, walking up to the music store at J&R on Park Row, meandering all the way over to the South Street Seaport, now, that was New York.

Of course, the Trade Center was New York, too, inimitably, and remains so in our hearts and our memories, 12 years on. Tomorrow morning I’ll be in the neighborhood again, commuting in the reverse of that summer, in what is now a rather different slice of the city. There’s an old-school deli on my walk between the 2/3 and the PATH that I like to stop in for breakfast on the way. I haven’t asked about their knishes. I think I may.

Correction: this post originally listed the futures exchange address as 7 World Trade Center.

Ten years

August 23, 2013 /

It’s been awhile since I’ve posted anything deeply personal on this site, but today deserves an exception, for today is the tenth anniversary of my marriage.

Had you asked me in the summer of 2000 how life would play out, I would not have painted the picture I have now, living on the Upper West Side, preparing to send my oldest child to kindergarten in the city, getting ready to take a vacation in a car older than my wedding vows, four weeks into a new job, a dog come and gone from our family, living in a rented apartment after moving twice in fifteen months. Who could ever guess such things? Not I.

That said, here’s what I hoped would happen, all of which has played out to plan: I’m married, I have two wonderful boys, I’m thoroughly jazzed about my career, and I love the new apartment and the fact that I’m still in Manhattan. And I’m beyond lucky to be married to my wife, Amy, who is sharing this wonderful moment in time with me and, frankly, continuing to make everything in our lives happen the right way.

We’ve made each other laugh, we’ve consoled each other when we’ve cried, we’ve celebrated personal and professional victories large and small. We routinely sacrifice our own desires to accommodate the other. We brought two amazing people into this world and we strive as partners to give them all the love and support and perspective they can handle. We see the world the same way, and when we don’t, we learn from each other. We are smarter, savvier, more thoughtful people by virtue of our being together.

Since we got married, Amy and I have traveled the world, together and separate, across five continents. We’ve spoiled ourselves at amazing hotels and, at least once, feared for our well-being in another country. We’ve indulged in everything from business class international travel to $13 ninety-minute footrubs in Beijing (you have no idea). We have seen many a Broadway show and Hollywood movie. We’ve swooned over foods of all stripes, not least of which include a spicy tuna roll in the Village and a spaghetti with clams on Amsterdam Avenue. We’ve bought furniture, art, china, gadgets, real estate. Almost always, we’ve done these things as a team, by mutual decision or consent.

We’ve supported each other countless times and ways as our careers have evolved. Amy has watched me explore five (sheesh) full-time employers, a handful of startups and freelancing and consulting opportunities, business trips from Staten Island to Sydney, and two years in business school. I’ve watched her make it 13 years at the same job, going on film shoots from Punta del Este (I went on that one) to Prague (hey! I went on this one too), advancing to the upper ranks of her field, winning awards and producing work that has, on more than one occasion, become an instant classic.

I have often joked that I am so bad at project management that I married a producer for balance. Our marriage truly lets us play to our strengths. We are the epitome of balance, to the point where we subconsciously stagger our emotions when we’re sad, so each of us can take a turn providing support and perspective for the other. I conceptualize, Amy executes. She packs, I carry. Amy does most of the laundry, I do most of the grocery shopping. Unique? Probably not. Satisfying? Unspeakably so.

All of which is prelude and subordinate to the other members of our home, Nathan and Eli, who are pure bundles of joy and pride in our lives. Neither would be here without my wife’s sheer willpower and determination, in myriad ways, and neither would be as bright-eyed, responsible, organized or well-dressed without their mother’s magic touch. Not a day goes by that I am not appreciative of the sheer parenting that Amy puts into running our home.

Ten years of marriage, two careers and two kids often puts a relationship into an operational mode. It’s rare that we get a chance to reflect on things and enjoy the moment. So we took a night for ourselves this week, going out to a fancy dinner to celebrate our enduring love as a couple; and tomorrow, we head to Martha’s Vineyard—our eighth visit to the island together—for a week away with the kids. It’s a great way to cap a milestone in our lives.

A few weeks ago, when I had to take our sick toddler to the pediatric emergency room, and my wife was orchestrating our well-being from two thousand miles away, and her sister the doctor was checking in on us feverishly while talking to both our pediatrician and our ENT, and a swarm of family support rained down, I took to Facebook and posted, simply, “I married well.” I couldn’t have been more accurate.

I love you, Amy. Here’s to many more decades of great things together.

On the business of pricing

August 9, 2013 /

Two interesting articles came out this past week that provide interesting perspective on pricing models for service businesses.

One, in The Economist, declares that businesses need to get better at charging more. In a typical competitive market, firms are always looking to undercut rivals in order to secure business, which leads to ever-decreasing margins. Instead, many consultants are now advocating that firm pricing structures, tangible benefits, well-managed customer expectations and smart framing can boost asking prices and, in turn, the bottom line. Finding differentiators is an effective counterpoint to price competitiveness that leads to higher grosses.

The other article takes this notion and runs with it. In the New York Times, Adam Davidson asks, What’s an idea worth? He then explores companies that have pushed themselves away from hourly billing into business models that value expertise over pure labor. By identifying a niche or selling a targeted execution, firms can balance predictable costs with more valuable, and thus pricier, customer acquisitions. An important takeaway here is that hourly billing dates to the 1950s—perhaps revealing that it, like many other twentieth-century business paradigms, is approaching the end of its usefulness.

“It’s clear that the fundamental nature of work has changed,” writes Davidson. “In today’s austere age many businesses cannot depend on rising sales volumes to lift their profits,” notes The Economist. Both pieces point to the same conclusion: selling more specific, high-quality services improves both profitability and customer satisfaction.

Ideapad’s new photos

August 5, 2013 /

Curious about the images atop this blog? The Twenty Eleven WordPress theme includes a randomizer, which I’ve populated with my own photos. As of summer 2013, this is the batch on display:

On the Li River, China, November 2004
Looking out my old bedroom window, New York, sometime in 2007
Sunset in the U.S. Virgin Islands (I believe the picture is of St. Thomas, although our fun was had on St. John and at Jost Van Dyke), February 2008
The last day game at the old Yankee Stadium, New York, September 2008
The deli on the corner of 21st and Broadway, New York, sometime in 2010
Inside a cafe in Buenos Aires, January 2012
Motif No. 1, Rockport, Mass., August 2012
Outside a boulangerie in Roussillon en Provence, France, April 2013

Moving forward, reaching back

August 1, 2013 /

I am pleased to announce that on Monday I became Vice President, Global Ecommerce at PR Newswire, where I’ll be evolving the company’s online ordering systems and collaborating across product, development, user experience and strategy teams.

It’s a fascinating place right now: with nearly 60 years as the inventor of and leader in content distribution, PR Newswire has been progressing with its clients into a targeting, tracking and monitoring and workflow company, all while staying true to its roots. As information delivery becomes increasingly digital, having the right tools in place for communications professionals to distribute media is key. I’m looking forward to finding the optimal solutions for company and customers alike.

For me, this is also an intriguing moment, because it’s the first time in my career that I’ve moved back. For nearly 20 years, I’ve constantly explored new paths, more than once moving laterally out of intrigue. I’ve said it elsewhere before, but in my career, I’ve been all of the following: editor, writer, designer, blogger, manager, director, information architect, user experience consultant, marketer, strategist, business developer, and chief executive. My positions have run the gamut from education to media to consumer products to small and large agencies, from startups to 14,000-employee holding companies, with nary a linear move in more than a decade.

This week, I decided to head back into the things I know and enjoy. Back into ecommerce. Back into an in-house environment. Back into media and digital content. Back, in short, into what I do best. I couldn’t be more excited for the opportunity to deepen my expertise and help lead a strong, smart organization.

Part of my mandate at PR Newswire is thought leadership for the industry, and I look forward to increased blogging and public speaking in the days ahead. Stay tuned.

Ideapad