The Shake Shack Economy | Hacker News Reader

The Shake Shack Economy

newyorker.com

65 pointswallflower28 comments

After the Dust Bowl and the Great Depression, second possibly to the invention of soap, I'd venture to say access to cheap, plentiful food is what created the "American Dream" and the thriving middle class we all seem to mourn these days.

It was brilliant, really. It made America the superpower it is, and it never quite gets the credit it's due.

But it came at the cost of all kinds of food issues we're really understanding now. Factory farms, corn subsidies, pesticides, demonization of fat, preservatives, and fast food all came out of that era.

But in the Information Age, we get to know a lot more, and a lot of what we get to know is the long-term effects of fast, cheap food.

So now we demand that food also be safe. Not just safe in the FDA parts-per-million-of-rat-feces-in-peanut-butter safe, but safe in the way that food is processed between the farm and our mouths.

The average consumer is so much more educated now about food than they were in yesteryear, and because of that we're willing to put more of our hard-earned money towards "healthier" options (like Chipolte vs Taco Bell) even while not being willing to give up the "fast" and "access."

The educated consumer was bound to hurt some and bolster others. Chipolte, Shake Shack, etc., are the winners.

For now.

I think you definitely make a good point, but I suspect the key differentiating factor for most customers switching to "fast casual" is simply the taste. There's no denying the ingredient quality is a lot better; the food is just more appealing. Eating Taco Bell for 10 years and then trying Chipotle is probably sufficient to convert most customers who can afford to eat at Chipotle a lot, regardless of health or sustainability impressions.

I actually love the taste of Taco Bell and find Chipotle to be heaping piles of blandness. But all my friends and coworkers prefer it and would laugh at me if I ate cheap fast food, so I end up going to Chipotle more often. It's definitely not for the taste.

This may be because you're used to the relatively extreme, engineered flavors of Taco Bell. The Doritos shell is just the latest in that escalation.

After you've not eaten that stuff for a while, I think your internal scale resets.

I almost never eat it, but I still love it when I do.

It seems a little condescending to say the reason you like X is because you tastes are less developed.

In my experience what you have eaten in the past days/weeks has a whole lot to do with how things taste. Your taste buds can indeed be de-sensitized.

A couple years ago, I went 30 days with no processed foods, no wheat products, and almost no sugar. Everything had so much flavor and eating fruit was a mouth-gasm.

This being HN I expect some snarky response but maybe just try it. There has to be some science behind it but I haven't found any sources to cite.

*found a source http://www.ia.ucsb.edu/pa/display.aspx?pkey=3105

In high school I cut out all fat, added sugar(honey, etc), and only ate whole wheat in baked goods for about two years. I did it because I was worried about clogging up my arteries.(Yea, I was/am kind of neurotic.) It was the eighties, and a heart attack was a heart attack. I remember my GP saying he hasn't see a total cholesterol of 130 in a while. I wished I kept that diet.

I'm sorry if I seemed snarky. I didn't mean to.

I agree with you. But I think it's similarly correct to go the other direction, you like more natural foods because you get used to them. There are other issues relating to how people "taste" food, to do with how they feel about it.

Kids think McDonalds tastes better. If you tell them their vegetable soup came from McDonalds and packaged it up that way, they'd probably like it more. Adults have similar biases. Food from a nice restaurant tastes better, if they believe nice restaurants serve nicer food. Some believe organic tastes better. Home made. etc. It's not far from truth to say political positions affect taste. And since fast food seems to get huge traction wherever it goes and with whoever can afford it, I think it's probably less true to say that it is fake tasty fueled by habits and ads while real food is the real tasty. It seems to take a lot of conscious reinforcement to make real food win.

My point is that I don't think there is a "real" here, or if there is it's elusive.

But, I agree that by changing your habits you can change your tastebuds. Also by changing your beliefs. Maybe by changing your friends.

I think the fact remains pretty strong that fast food grew because people like it. It sticks around despite the fact that people probably tell others they like it less than they do these days.

I like to cook. I like nice restaurants. I like home cooking and fresh ingredients. I like the range of different foods from different places. I don't each fast food more than a few times a year. It's bad for you. But when I do, it's a treat. I feel bad, slightly ashamed, but I enjoy it. :) It's tasty.

"I suspect the key differentiating factor for most customers switching to "fast casual" is simply the taste."

There's also an industry wide framing effect. I don't eat much fast food, but there's no way to force me to spend $5 at McDonalds for McD quality level of food, when I can spend a mere $6 at the almost neighboring Culvers for something at least twice as tasty.

As a marketing framing technique it works across all categories, price sodium fat carbs simple calories, why spend them, whatever "they" are for you, at Mc Lowest Common Denominator when something far better at a minimal cost delta exists right around the corner?

This market positioning seems to be impacting McDonalds recent sales figures. Being in the market position of "almost as expensive as the really good stuff, but not nearly as tasty" isn't a good spot.

Then there are geographic pressures. If McD is dead to me if there's something better nearby, that limits their success to one horse farming towns in the middle of nowhere, which eventually "ruralizes" the brand and makes it repellent to urban yuppies. The biggest problem urban yuppies have with walmart is poor rural people shop there, as an example.

Its just a bad position for McD to be in, all around.

I think the biggest problem caused by the change in the cost and the availability of food was actually the cost itself. People can afford to consume more calories without going broke, and so they do - too many calories. I regularly eat fast food (probably 2-3x a week), but I get something that has a reasonable number of calories and skip the soda (which is just raw sugar) ... I have not become obese, and it has not had detrimental effects on my health. For example, a reasonable lunch at McDonad's might be a McDouble, and perhaps a small fry now and then. The McDouble is 390 Calories, and the small fry is 230. If you figure on fries every other time you get McDonalds, that averages out to a 505 Calorie lunch, which definitely will not add anything to your waistline.

The famous "documentary" by Michael Moore (who, personally, I can't stand) was based on the premise that he'd ALWAYS add any extras suggested by the restaurant (fries, coke, super-size, etc.) Eating like that, it's no surprise that he's morbidly obese.

Michael Moore never made a documentary (or even a "documentary") about eating at McDonald's. He isn't morbidly obese either. http://www.mensfitness.com/life/entertainment/12-extreme-cel...

The documentary you're thinking of is by Morgan Spurlock, Super-size Me

Sure, downvote the entire comment because I dropped the wrong name in the last sentence ... or is it because I stated that I dislike him, and most of you fall on the other side of that fence? Either way, real cool guys.

I live in NYC and have eaten in Shake Shack a few times. I believe they are popular because they pedal, greasy, unhealthy food. And customers buy into the "Hand-crafted / All-natural" marketing.

Comparison of McD Burger and ShakeShack burger. If you are on a Low-carb diet then, SS burgers are better.

(formatting the best i can in HN interface)

Header / McD / Shakeshack

Seving Size / 211g / Not Given

Calories / 530 / 490

Fat / 27g / 30g

Carb / 47g / 25g

Protien / 24g / 30g

Sodium / 895mg / 960mg

1. McD Nutrition - http://nutrition.mcdonalds.com/getnutrition/nutritionfacts.p...

2. ShakeShack Nutrition - https://www.shakeshack.com/wp-content/uploads/2014/11/SHA_Nu...

> pedal, greasy, unhealthy food

Just like so much of the American food market, then. In fact, most of it.

it's not just marketing i also live in NYC, and i worked at Shake Shack for about a year. I can say all of their food are natural and top quality.

Great point! Fast food tastes "good" because it is loaded with fat and sodium.

I just don't get why people eat out so often, unless they are incredibly short of time - and in that case maybe they just don't manage their time correctly.

There are so many healthy and tasty meals that an be made with 5 minutes of prep time (longer cooking time sure, but 5 minutes spent in the kitchen). It is also easy enough to make a healthy sandwich if you later need to eat on the go. It is more a matter of good health rather than money, but you will save money buying your own locally grown organic food. Also re: organic food: try doing a taste test of locally grown organic veggies vs. vegetables from a supermarket that were likely trucked in from a long distance from where you live.

My wife and I do eat out, but only for social reasons.

> I just don't get why people eat out so often, unless they are incredibly short of time - and in that case maybe they just don't manage their time correctly.

Why are you making value judgements on people's time management?

Personally, I don't understand how anyone who makes over $20/hour ever cooks.

I can buy a great meal for $20. Given my hourly rate of $100/hour, I'd have to be able to prepare an equivalently good meal in just 12 minutes. That doesn't seem likely at all—especially because this analysis doesn't include the cost of ingredients.

Have you considered that many people just don't enjoy cooking? I find your post incredibly laden with value judgements. Why can't you just accept that many people don't share your priorities?

Perhaps I didn't make this clear enough: I consider eating out a lot to be unhealthy. Sure, there are very rare restaurants that serve tasty food that is low in fat, sodium, etc. but they are a rarity.

Okay. I guess riding around on a high horse leaves you plenty of time to cook.

I make no where near $100/hour, but I usually feel my money is wasted when I eat a restaurant - rarely does the quality justify the price - even for a $20 meal.

For me this is by far the main reason. I do eat out, but only at a select few places. Pretty much everywhere else, I end up thinking that I could have cooked a much, much tastier meal for a small fraction of the price.

I think more and more places are capitalizing on people who don't cook. A local bakery is all about giant cookies. I bought some once and almost gagged. They are clearly made using vegetable shortening and I have to assume their customers can't taste the difference between that and real butter. Really, I'd happily pay the small difference if they used high quality ingredients. The places that actually care about the quality of their food and not just their profits are the ones that get my business.

You're also not accounting for income taxes, which dramatically lengthens the time you need to work to earn a marginal $20 in after-tax spendable money.

$100/hr is likely to be in the 33% marginal bracket, plus your state rate, plus FICA/medicare, and plus the employer's share of those if you're self-employed.

It's likely that you need to work an extra 24 minutes to earn that extra $20.

> It's likely that you need to work an extra 24 minutes to earn that extra $20.

I guess that's about right. I estimate my take-home pay at about $60/hour, which means working about 20 minutes to earn that meal.

Then again, I think it takes far longer than 20 minutes to prepare a $20 meal. Not to mention that I detest cooking.

I'm with you on the last point. There are many time-consuming hobbies I enjoy; cooking sure isn't one of them. My wife looks at me like I'm crazy when I spend an entire afternoon fiddling with some Arduino project. I give her about the same look when she spends the whole afternoon making a delicious, but time-intensive, meal.

Do you pay someone else to have sex with your wife (or girlfriend/S.O.)?

After all, you could be earning $100/hour with that precious time.

(Sorry for the somewhat crude example, but it underscores the point that some things just aren't measured in money. Maybe some people enjoy cooking, or don't actually want to work every waking minute, or need a break from their work.)

Reply on news.ycombinator.com