The Rise of the French Fry Cartel
jacobin.com
jacobin.com
Back in the day McDonald's or one of their fast food competitors would have built their own frozen potato pipeline, made a massive marketing gimmick about cheapest fries and shattered this cartel quickly. It sounds like the companies are taking a high margin and the farmers would love to sell to anyone else. But it feels like the current managers at these fast food companies have gotten so used to outsourcing every part of production they lack the knowledge/remit to even try to set up a competing supply line.
It feels like only it's only efficient to focus core competencies if the people in charge of those stay smaller. Given how big companies can squeeze suppliers I see how they would end up consolidated. But if everyone is doing one thing and consolidating horizontally to negotiate better it becomes kind of red queen race.
Maybe when you have a multi-billion dollar supply chain and complex contract structure you can't just learn to do something new to solve a problem anymore.
The small players can't do much. As mentioned in the article, either potatoes and DIYing are cheaper or they aren't, but medium to large firms presumably could/should do something.
McDonald's rejected Simplot's "Innate" in 2020, a GMO potato that they spent about a decade developing. Which basically turned the entire project into a loss. It's one of the main reasons that the Lanthrop plant is closing.
You can do, or think, the right things for the wrong reasons, even illogical ones.
It’s the mom and pops, the regional suppliers that can’t do anything, and likely pay much higher prices than the megacorps.
Here's an alternative theory that will disappoint the readers of Jacobian - potatoes are a commodity and commodity prices drive inflation. A bad crop, expensive fertiliser, a ground war in one of the largest potato-exporting countries in the world (Ukraine) - all these things would cause suppliers to increase prices in lockstep.
Inflation can be good cover for price collusion, sure, but the reason why it's such good cover is that its effects are almost indistinguishable without a smoking gun. Lets see what the FTC investigation brings up.
(Another note - inflation inflates profits as well as prices.)
Are you sure about that?
"Other potatoes, fresh or chilled " 2019 [0]:
- 1st: France, 2,119,100,000 kg
- 57th: Ukraine, 5,612,450 kg
"Seed potatoes" 2019 [1]:
- 1st: Netherlands 953,793,000 kg (No 1)
- 48th: Ukraine, 72,377 kg
[0] https://wits.worldbank.org/trade/comtrade/en/country/ALL/yea...
[1] https://wits.worldbank.org/trade/comtrade/en/country/ALL/yea...
Are we really sure that's the case?
I bet that mcDonalds has much better people focused on this problem than the Jacobin, and considering how much fries they sell, they have people on it for sure.
Maybe they know more about this market than we do, and have actually found that the prices are not as unreasonable as they seem?
[0] https://fred.stlouisfed.org/series/WPU01130603 Russet's so not a perfect analogy.
Where does Costco, which famously went vertical to make its own hot dogs, source its fries? (Admittedly, that was for their food court. And I don't recall that they've got fries on their food court menu.)
They sell frozen ore-ida fries, but no potatoes at all in their food court.
Cartels may work for luxury items like diamonds and cocaine, but they're inefficient. A lot more people notice flaws in their fries than in their diamonds and blow.
https://www.businesswire.com/news/home/20241216832356/en/JAN...
This is putting all those efforts to reduce domestic food waste into perspective.
> $80M of flawed french fries .. which they had to eat
I think it would take me a long time to eat $80m of french fries.
> Cartels may work for luxury items like diamonds and cocaine, but they're inefficient
And now a serious point: people have been complaining about food price inflation, and blaming the usual suspects of fiat money and Democrats, but .. what if it was actually the people making the food putting up the prices? Doesn't it often turn out that the secret ingredient is in fact some kind of crime?
What if it was increasing labor prices due to decreases in labor force participation rate and more preferable options for people to earn money?
https://www.voronoiapp.com/wealth/The-Growth-in-Real-Wages-b...
About 7000 person-years, I recon.
(Assuming €2.90 for a 231 kcal portion, which is roughly what McD seems to charge, but the search results give me a lot of different numbers and their own website didn't give me any specific price (do I need to place an order or sign in to get that?)).
It’s a lot easier to be shitty when customers don’t have other options.
"Lamb Weston and McCain alone control 70 percent of the market" hides that McCain holds about 30% of the US market.
McCain treat Simplot as their main rival in most jurisdictions, and have been involved in multiple legal fights with them - one of which is a patent issue that started in 2002 (no. 6,821,540), and is still ongoing. (Currently favouring Simplot).
There's a lot here that feels like... Bad statistics. Not to say that there's no truth in the accusations - but they don't seem to be acting in good faith, and that will wreck them when it comes to the court.
What exactly is objectionable about this sentence? The two companies are clearly outlined as separate in the article, and the fact that one company holds about half as much market share as both combined is... not surprising or misleading. Would you rather have the 40-30-20-7 split more explicitly outlined, and why do you think that has a big impact on the reader's takeaway from the article?
I would not say that elsewhere, the two companies are clearly outlined as separate. Weston is referred to on their own, but McCain tends to be prefixed with "Lamb Weston and".
Well…
There are a couple of cases here:
* 1:24-cv-11801, Northern District of Illinois (class action with Radner's Markets as lead plaintiff)
* 1:24-cv-11816, Northern District of Illinois (class action with Alexander Govea as lead plaintiff - a person who bought frozen potato products at supermarkets)
The complaints were filed only two days apart, by different lawyers; I wonder whether a lot of firms were looking into frozen potatoes and these two ended up first to file?
I hope one or both of these lawsuits goes far enough that we can get to discover and will get to see some emails. That's always the fun part.
No food, no food problems (head tapping meme guy pic)
I'm very surprised that there is not more work in Econ literature studying this. This is essentially breaking the efficient market hypothesis at scale, and is generalizable to every industry.
Especially here that it's painfully obvious, there's not enough actors to justify this third party anyways.
If you send your own prices and then you get other prices back in return, it's 100% price fixing without any doubt.
That what's making it different from a market study.
Telling your competition how your own business works sounds like a bad idea.
When I looked a couple years ago it seemed like there was some news about a year or two of crop issues, but plain potato prices haven't seen the same level of sustained rise in my experience (occasional purchaser, and haven't quite made the jump to just shredding my own).
Contrary to another comment, I'm not convinced that eggs are quite as bad - prices have gone up a lot, but they're much more cyclical and still regularly down where they've traditionally been. I'd absolutely believe that most of the price variation there has been due to flock destruction due to avian flu.
Ok, Cavendish is the 4th player, but the article couldn’t even mention their owners: https://en.m.wikipedia.org/wiki/Irving_family_(New_Brunswick...
Even the Wikipedia article doesn’t do them justice, but they basically own a province in Canada.
A 12-year-old federal antitrust case against the nation's largest egg producers came to a tentative close on Friday, after a jury delivered a verdict awarding four food corporations $17.7 million in damages.
The four plaintiff corporations first sued the egg producers in December 2011, accusing them of using multiple tactics to jack up egg prices starting as early as 1998. However, the jury found the corporations only suffered damages from the price fixing between October 2004 and December 2008. No individual consumers were represented in the suit.
https://www.courthousenews.com/jury-awards-corporations-17-7...
(edit, added link to quote source)
There is a reason we call practitioners of the law lawyers and not scientists
The expensive nature of the american court system could be improved in a way that you would never be worse off defending yourself, but these companies don't push for that because they LIKE having the power to bully people with stupid expensive lawfare.
Also, lol at the underqualified jury comment. It's a bit telling on your part. Juries are inherently underqualified? No, sounds like a corporation that doesn't want to face the extreme financial risk that occurs when they face judgment for their conduct.
https://news.ycombinator.com/item?id=42601569
Specifically this subthread:
https://news.ycombinator.com/item?id=42612782
Of course, all those comments could be fake, as could mine, but if you have any experience with the courts in the US, then you know going to trial means a lot of uncertainty.
I'm an attorney, I stand by exactly what I said. You pointing out there is uncertainty doesn't change my point at all. The majority of the uncertainty is the extent of the risk faced by the corp for its bad deeds. Don't be too obtuse.
Unless there were evidence that would come out in discovery that in fact there was price gouging going on.
https://zedshaw.com/blog/2018-03-25-the-billionaires-vs-bran...
This isn't right, "good sport" or not. It doesn't reflect well on this community.
Yall will never learn.
So tired of folks who uncritically think "this is the best way that things could have been". Voltaire literally wrote a whole book called "Candide" which tries to call out this exact thought-cliche.
[I totally agree if Microsoft had more vision and were competing on an OS that actually worked better for the owner of the computer in 2007, they wouldn't have ceded core parts of the computer's function to some two-bit VC-fuelled bodgers]
But to be the comment is wrong because - well - it wasn't and it isn't trivial to run a version control system on top of a network filesystem! Synchronous filesystems over the internet are awful. If the commenter had ever tried this for more than about 2 hours they'd find it hangs on the first network wobble, and probably loses data.
Anyhow we're getting off-topic. Do you think French fries deserve their success?
It's not that people don't know how to fry from fresh potato, it's just that the time it takes to do so is a lot. For restaurants especially, frozen is also just more cost-effective after accounting for labour.
Also the vast majority of that time is fire and forget since it's just doing its thing in the oven. Yesterday for example I made fish and chips for my family of four and made chips peeled, cut, par-boiled and twice fried in as long as it took to prep and cook the fish, make a salad and heat up some baked beans. Which is a heck of a lot more active than the easiest way to do it but hardly this huge time sink.
I suspect choice at home is more expectations and lifestyle related.
Except its totally the opposite in reality. A commercial kitchen is much better equipped to do all of that and probably doesn't also have to do it while managing children or having just gotten home from work...
> Yesterday for example I made fish
Good for you. What I fail to see you analyze in all your reasoning is what it would be like for someone that is *not* you.
When you can do that, there's no point in making french fries though.
But yes, lots and lots of work.
https://www.foodandwine.com/chefs-favorite-frozen-french-fri...
I'd argue that the quality of a fry/chip does depend on the type of potatoes used. My experience is frozen fries are mediocre at best.
Even on a commercial scale, its a peeling machine and a cutting/chipping machine, no worse than a mixing machine for making dough or similar industrial kitchen machines.
Probably depends how they’re cooked, see Chris Young’s video as an example.
Secondly, frozen fries aren't just sliced potatoes. They're a potato that is very precisely bred and grown specifically to make fries that is then blanched, coated in a specific mix of starches and part fried. Unless you're Heston Blumenthal, you aren't going to re-create that product in your own kitchen.
I make potato chips far more frequently than handmade fries because chips are much faster, end to end. Even with a french fry cutter to speed up the process.
Yeah, it tastes better, especially with garden-fresh potatoes, but usually the juice just ain't worth the squeeze!
It does, however, take too much advanced planning and frankly it's not worth the hassle of cleaning up. That said, I don't think it's really worth the hassle to fry frozen fries either - and even convection baked they're meh.
On a trivial point of view, I never understand why some people don't get that other people's existences diverge from their own experience... .
But in al seriousness, you fry them because you want to eat fries, not mashed potatoes, today...
Ah yes, the people without the time to homemake fries are simply dumb, that's all. No worries about all the people suffering, they're just dumb.
Where I live cheap frozen pommes frites costs about the same per kilo as washed good quality fresh potatoes, and personally I think slicing and putting them in the oven with butter, salt, black pepper and herbs is much tastier than fries. To me it's worth the effort.
My stove fan vents straight back into the room. Anecdotally maybe 75% of friends whose stoves I've observed do the same thing.
It's a travesty as far as I'm concerned, but there you are.
(I live in an apartment; otherwise you can bet I would have done something about it before now.)
If you didn't check and put one yourself, you might not even have a carbon filter at all.
But in all cases this setup is totally insufficient for frying things without stinking the whole place.
Yes, unless you have equal amounts of outside air entering your domicile, a vent leading outside is not effective. A recirculating vent, however, still has a filter.
Hood filters capture airborne grease, smoke, steam, heat, odors, and other substances that are produced during cooking under the hood. Without the proper hood filter, your kitchen will be filled with airborne particles you don’t want your staff breathing! [0]
Not leading away moisture from the kitchen when cooking doesn't sound like a good idea to me but I'm just a child of a craftsperson working with these kinds of things, not one myself. Except if you live in like a hut with a lot of openings or something, but I'm kind of assuming this is about apartments and houses with isolation and so on.
Here in Belgium people just go to the nearest fry shop for their fries, they're better than home fried and it's easier and faster.
Since I'm not Belgian myself, I cut my potatoes into cubes and fry them in duck fat with rosemary instead. It's a whole other level of stink though.
Something like this:
https://www.swedishfood.com/swedish-food-recipes-side-dishes...
Related: why is it so hard finding a house with a range hood (and not the useless recirculator with carbon filter)?
Now none of that is a great excuse, it isn't that hard to do, but with how most buildings are subcontracted out piece by piece for every little part, and how some things like the kitchen appliance location is not super well finalized until cabinetry is actually installed, nobody before the cabinetry wants to take the responsibility of is positioning and the cabinetry guys are not expected or expecting to install such features.
It is time, expense, and the liability of punching a hole in the roof before someone decides they want the stove on the other side of the room, or coming in months afterwards and punching a hole in a brand new roof as someone not the roofer. If everything is well established in the blueprints and nobody is going to be changing their mind, or if one guy/company is doing 90% of the work themselves its not a problem. But often things are changed kitchen wise after most of the house is built or is done by 10+ different contractors, none of which want to be held responsible later on for it. Often one company does the structure, another the roof, another the siding, another the drywall, another the plumbing, another the electrical, another hvac, another cabinetry, etc, and only the plumbing and furnace vents are going to be putting holes in the roof which happens long before any finished features like the cabinetry is put in.
However currently there is a movement to (more expensive, luxury) solutions that do not have a vent hood and instead vent through a recirculation filter (Bora).
However, two friends who love to cook or have an SO who does have had full outside vented range hoods installed when they remodeled. One is so serious they have a commercial hood over a 6 burner stove. That guy brings his own lunch almost daily complete with their own fresh baked bread. His SO has a library of cookbooks and enough kitchen equipment to feed an army.
There's also the belief that it will somehow break the main ventilation motor because of the large volume of air forced through it. But it shouldn't actually be a problem.
Due to cholesterol and LCL level through the roof (as in: doctor hadn't seen that in decades saying it became extremely rare nowadays to be that bad), sadly since a year I can't anymore. I used to love these greasy full carbs but then the stroke ain't far for me so... I'm now following a very strict diet and thankfully my levels are slowly coming down :-/
P.S: FWIW my mother-in-law still does it at home the traditional way.
I'm sure they're delicious, but seriously. Buy a french fry cutter and slice up a whole potato in one motion!
In an ideal world they should enable Flow of Value models.
If you are building data platforms, think about features that enable Flow. eg ONDC
Also: you can buy them yourself. You just fry them straight from frozen. I haven't tried; I don't need to know for sure that I can make perfect fries in my house with zero effort.
https://www.foodandwine.com/chefs-favorite-frozen-french-fri...
What makes a defence vigorous?
Right alongside with promising to end the Ukraine war within 24 hours of his winning the election, sure. (As far as I can tell, that promise was broken.)
I fully expect tax cuts and environmental fuckery... but I also expect anti-competitive big business cartels to have a freer reign when Lina Khan is no longer FTC chair.
The complacency of regulators is staggering.