🐄 Why is beef so expensive?


June 25, 2021

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The Hustle

Subway — the most ubiquitous sandwich franchise on the planet — has been facing an ongoing lawsuit that claims its tuna sandwiches contain… no tuna.

In the latest update to the saga, The New York Times had 60 inches of Subway’s tuna sandwiches tested in a lab and found “no amplifiable tuna DNA” present in the sample.

This means either: 1) whatever Subway uses isn’t tuna, or 2) the tuna they use is so processed that the DNA is untraceable.

Makes you wonder about the meatball subs…

The big idea
cow gif

Beef is more expensive, but who’s profiting?

Demand for beef is up and suppliers are struggling to meet it. Since March, wholesale beef prices have increased 40%-70% depending on the cut, causing prices to also surge at restaurants and grocery stores, per The New York Times.

Grocers have responded by increasing beef prices by ~5%-9%. Some restaurants are slightly bumping up prices or 86-ing beef dishes entirely for fear of alienating customers.

But restaurants, grocery stores, and cattle ranchers aren’t seeing those profits. Rather, the meatpackers are.

In the US, there are 4 meatpacking conglomerates

Known as the Big 4, Cargill, JBS, Tyson Foods, and National Beef control 80%+ of the country’s processed meat market.

Typically, JBS or Cargill might make ~$50 per head, rarely up to $150, per analysts at RaboResearch. These days, they’re pulling in as much as $1k per head.

Cargill is on track to hit its most profitable year ever, profiting $4.3B in the first 9 months of its fiscal year, per Bloomberg.

While there are many factors that can affect beef prices…

… including the weather and labor shortages, some are accusing the Big 4 meatpackers of manipulating the supply — which they’ve denied.

The Senate Committee on Agriculture, Nutrition, and Forestry discussed consumer cattle prices on Wednesday.

“There is clearly a need for greater transparency and competition in the marketplace,” committee chairwoman Sen. Debbie Stabenow said, noting that the committee is not done with the issue.

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SNIPPETS

Tomato jokes are taking over Twitter. Here is the back story. #hustle-picks

In Norway, Tesla will allow other vehicles to use its supercharging stations. This is a big change for the EV maker, which has long held its supercharger network as a business moat. #clean-energy

“Google delays blocking third party cookies in Chrome until 2023”, per The Verge. #privacy

The Long Term Stock Exchange (LTSE) will add Twilio and Asana to its exchange, as it continues to woo companies that value sustainable corporate practices. #emerging-tech

Figma — the design software startup — raised $200m at a bonkers $10B valuation. #emerging-tech

Microsoft’s new Windows 11 operating system is here (yay?). The Verge has a good breakdown. #big-tech

Visa drops $2B+ to acquire European open-banking platform Tink. The move comes not long after US regulators blocked Visa’s acquisition of fintech firm Plaid. #fintech-cryptocurrency

Chainalysis — which provides blockchain analytics — is worth Nabs $4.2B+ raising $100m (it’s now received $365m in total funding). #fintech-cryptocurrency

Nike’s latest quarterly result showed a record revenue of $5.4B in its North America segment (and $12.3B over all). Its Nike Membership program now has 300m+ users. #ecommerce-retail

Art Tech
Fair Art Fair

Fair Art Fair is like a dating app for fine art

Ever wanted a Tinder for artists and collectors? Well, it’s here.

Founded by London-based artist Stacie McCormick, Fair Art Fair is a new app that directly connects unrepresented artists and buyers.

It essentially cuts out the middleman (the gallery) and allows collectors to match with and buy art they love. It launches on July 31, per NYT.

The app takes 0% commission…

… and instead uses a subscription model priced at £15 (~$21) per month.

  • Artists get an account where they can digitally display their work, handle sales, and connect with opportunities.
  • Collectors can discover and buy art directly from vetted artists, catalog their collections, and access Fair Art Fair’s calendar of exhibitions.
  • Curators can develop their network, build exhibitions, and use a noticeboard to find staff or artists.

There’s also an “Art Curious” option that lets people browse art for free.

McCormick’s own art gallery survived the pandemic…

… thanks to a £35k (~$48k) emergency fund from Arts Council England. She used a second £150k (~$209k) infusion to build the app, and says she needs between 1k-1.5k subscribers to cover expenses.

Experts tell the NYT the app could be successful if well curated.

Now to find the perfect piece to hang behind you for your Zoom calls.

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Retail Tech
Wayfair room

Wayfair thinks AR/VR shopping is the future of retail

Try-before-you-buy has gone digital.

At the Jefferies Virtual Consumer Conference earlier this week, Wayfair co-founder Steven Conine predicted that “at some point in the future every home in the US will have a 3D model associated with it.”

Design teams use those models…

… to show customers how furniture would look and fit.

Wayfair previously experimented with AR in its View In Room feature, which lets customers digitally place furniture at scale in their homes.

Other furniture companies have similar tools:

  • West Elm’s Room Planner lets you map out a room, then drop in items from its catalog.
  • Ikea Place works like View In Room. You overlay items in your home using your phone’s camera.

3D tech is also hot in other retail:

  • Nike launched Nike Fit in 2019. Scan your feet with your phone’s camera and discover your true shoe size.
  • Warby Parker has added virtual try-ons to its app (read our recent Q&A with co-founder Neil Blumenthal).
  • Facebook announced a partnership with Modiface and Perfect Corp. earlier this month to add AR clothing and makeup try-ons to Instagram shopping.

Here’s a party trick for you: Use AR to let the people on 19 Crimes’ wine labels tell you their misdeeds.

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Podcast

Shaan gazed into a crystal ball and predicted the future of today’s biggest companies

And guess what? The next Apple isn’t a phone company.

It’s a health care monitoring device that gives a real-time look into what’s happening in your body.

And he didn’t stop there…

Shaan dropped predictions for the future of:

  • Amazon
  • Netflix
  • Facebook
  • Netflix
  • Pornhub
  • Domino’s
  • 7-Eleven

And a ton more.

Listen here →
SPAC of the day
portfolio

Source: Buzzfeed

Buzzfeed plans to go public via a SPAC. Per CNBC, the media brand is targeting a $1.5B valuation. As part of the deal, Buzzfeed will acquire Complex Networks for $300m.

In its investor presentation, the company highlights Buzzfeed, Complex, HuffPost (acquired in 2020), Buzzfeed News, and Tasty as its anchor media assets.

Buzzfeed was founded 15 years ago, initially growing in popularity on Facebook and with clickbait-y “listicles.” Based on its history, we recreated the cover of its investor presentation with a more on-brand title:

Shower Thoughts

  1. There’s a worldwide socially-acceptable culture based around the consumption of a productivity-increasing drug.
  2. “Large volumes are frequently measured in how many ‘Olympic swimming pools’ but most people probably don’t have a good perception of how big or small that actually is.”
  3. Somebody probably wanted to make an app for beekeepers and was pissed that honey and bumble were taken.
  4. Unless life also gives you sugar, you’re going to end up with some really bad lemonade.”
  5. John McAfee isn’t dead, he’s just running in the background.
via Reddit
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