🦃 The turkey industry, explained


November 24, 2020

PLUS: The state of vaccines.

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Founded in 1866, Sherwin-Williams is a $66B paint and coat manufacturer. Earlier this year, one of its employees (Tony Piloseno AKA @tonesterpaints) was making viral paint mixing videos in TikTok.

But — still trying to figure out how the telegraph works — Sherwin decided to fire him instead of leaning into potential marketing magic. To be fair to Sherwin, The Hustle team is also trying to figure out how the telegraph works.

(In case you missed it, we dropped our 2020 Holiday Gift Guide this weekend. Check it out.)

The Big Idea
turkey

How the pandemic shook up this year’s turkey market

Butterball — the 80-year-old food brand that sells 1 in 3 turkeys in America — will probably have the busiest phone line in the US this week.

According to Marker, its Turkey Talk Line (a free hotline staffed by 51 chefs, dietitians, and food stylists) is expected to field 100k+ inquiries from Thanksgiving newbs, including questions on how to deep-fry a turkey outdoors.

The calls are pretty standard fare for Butterball — but 2020 has been a very atypical year for the turkey market at large.

Americans eat about 40m turkeys during Thanksgiving

More than half of all turkeys sold over the course of the year in the US will be eaten this week, according to The Economist.

With social distancing measures in place, the biggest change in 2020 is the size of the bird. Smaller gatherings mean greater demand for smaller turkeys (known as hens; ~10lbs.) as compared with larger turkeys (Toms; 15-25lbs.).

But there’s a tiny problem: While demand for smaller turkeys is up, farmers have been culling their supply of hens since 2018.

It’s hard to pivot turkeys

Retailers order turkeys months in advance for Thanksgiving — and it’s been hard for them to provide an adequate supply of smaller birds.

Turkeys are an important loss leader, and grocers are doing everything they can to find alternatives to get people into their stores.

Per The Economist, Walmart has adapted by upping its turkey breast offering by 20-30%, while Kroger is upping its game with ham, beef, pork roast, and vegetarian options.

COVID nearly shut turkey production down

Butterball (~$1.5B annual revenue) operates 6 plants and has a force of 7k+ employees who work in very close quarters on the production line per Marker.

In March, there was very real concern from management that the plants would have to close up for the holidays. Butterball persisted, even as some employees expressed concerns over working conditions.

All things considered, Butterball is as prepared as it can be for Thanksgiving.

And if you’re wondering what to do with the inevitable leftovers, they have 70+ recipes just for you (the “Artichoke Turkey Noodle Bake” hits the hardest).

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Snippets

  • Another first: After serving as the first female Fed chairman, Janet Yellen is being tapped to be the first female US Treasury secretary under President-elect Joe Biden.
  • Wholly moly: Shopify rolled out its wholesale platform (Handshake), which gives retailers access to tens of thousands of suppliers.
  • Listen, we all knew it was coming: Snapchat released its TikTok copycat product, called Spotlight.
  • Return of the Merck: Drugmaker Merck bought OncoImmune, which is developing a coronavirus therapeutic, for $425m.
  • Jeff Spy-Zos: A report from Motherboard reveals Amazon’s extensive monitoring operation of warehouse workers, labor unions, environmental activists, and other social movements.
  • Bonus: “The Queen’s Gambit” is now Netflix’s most successful limited scripted series, with 62m household views in the first 28 days.
Who gets the credit?
money graphic

How much does a founder really matter?

Prevailing wisdom in the VC community holds that the founding team behind a new business is often the most important determinant of investment worthiness.

In certain cases — Bezos (Amazon), Zuckerberg (Facebook), and a South African entrepreneur who likes memes (Tesla) — this has held very true.

But, hold onto your seats…

A new study by Harvard Business School (HBS) egghead professor Tom Eisenmann suggests that management might not be the ultimate harbinger of success after all.

Eisenmann conducted a survey across 470 founders and CEOs, targeting companies that had raised $500k+ (and under $3m) in funding across biotech, energy, and material-science startups.

When it comes to founder DNA, Eisenmann concluded that founder variables such as age, education, and personality traits didn’t “move the needle” when it came to early stage company valuations.

Another HBS professor says, ‘Hold my beer’

Eisenmann’s colleague Paul Gompers threw some shade across the Cambridge quad, finding the research “problematic on several fronts” (e.g., small sample size).

In an earlier study, Gompers surveyed almost 1k VCs, and 47% said management was the top reason to invest, while 37% said the business itself was the primary driver.

Clearly, investors have been happy making founders the most important variable — contrary to what prevailing data might say.

If you want a nonacademic take, famed founder and investor Marc Andreessen believes that, of the 3 “core elements” of a startup — team, product, and market — the most important is market.

“In a great market — a market with lots of real potential customers,” writes Andreessen, “the market pulls product out of the startup.”

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Each level comes with tons of free add-ons and perks to help you run your eCommerce business, including…

They’re only handing out upgrades until November 30th, so head over to the eDesk site before you enter your post-Turkey food coma and take advantage while you still can:

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The Pandemic
virus

The state of vaccine development

Vaccine news has moved fast in the past few weeks:

  • Pfizer, Moderna Therapeutics, and AstraZeneca-Oxford are all in phase 3 of clinical trials.
  • 450+ other clinical-stage vaccine programs are in development.

The VC firm a16z is providing excellent coverage on the latest vaccine progress (this 22-minute podcast is a great primer). Here are a few nuggets from their assessment:

Pfizer and Moderna results are important for 2 reasons

Preliminary efficacy for Pfizer (95%) and Moderna (94.5%) were both found in clinical settings. There is no guarantee that these results will translate to the real world, but there are 2 takeaways from the trials worth noting:

  • Identifying a specific target: The vaccines for Pfizer and Moderna are targeting the same spike protein on the surface of the coronavirus. Whether or not these vaccines work more broadly, identifying the right target is crucial.
  • A new vaccine-development platform: In the traditional vaccine process, you grow and administer doses of the weakened virus itself. Pfizer and Moderna are also both using mRNA technology, which gives the body instructions on what proteins to react to.

Rolling out a vaccine comes with many downstream challenges

If these vaccines clear all the medical and regulatory hurdles, the additional challenges can be summarized by the “4 D’s”:

  • Durability: How long will the protection last?
  • Dangers remaining: We don’t have data on long-term effects.
  • Distribution: Many parts of the world don’t have the proper cold-chain infrastructure to distribute the vaccine. Also, which populations and demographics will get it first?
  • Denialism: The vaccine is as effective as the number of people who take it. Many valid concerns will have to be addressed to ensure maximum uptake.

These challenges are befitting a process that has been compressed from the typical 10-15 years into a 12- to 18-month time frame.

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Food of the day
Torchy's Tacos

Source: Austin Culture Map

Not turkey: We’re giving a special shoutout to Austin’s own Torchy’s Tacos, which — like Zoom, Shopify, and Peloton — has been growing like gangbusters this year. (Evidence that fried avocado is pandemic proof!)

The creator of “Damn Good” tacos just landed a $400m investment to expand to another 10 states over the next 4 years and prep for a potential 2021 IPO. Per Axios, Torchy’s currently has 83 stores in 7 states, with an average unit volume of $3.8m.

(Fun fact: The favorite beverage at The Hustle’s Austin office isn’t kombucha. It’s Torchy’s queso, which we drink by the gallon.)

TRENDS

Talk about thinking big: crowdfunding a mountain

Meet Ryan Begelman. You may not recognize his name, but he has impressively operationalized multiple successful businesses. Starting with Bisnow Media (which sold for $60m, doing $20m in revenue and $7m in profit), he went on to co-found Summit Series, a company that among other cool things…literally bought a $40m mountain (that Sam visited in August).

In this week’s exclusive Trends pod, Sam talked to Ryan about how he’s scaled these ventures and how to…

  • Hire and onboard talent
  • Structure tests and filter people for high intelligence (hint: he looks for people from unexpected backgrounds like bookies or party promoters)
  • Exactly how much to pay recruiters
  • And more…

The pod is only available for Trends subscribers, but you can listen to the first 15 minutes for free, or jump right in.

Your $1 trial will get you the entire episode, plus weekly Trends reports and access to our community, full of people just like Ryan. With some luck, you might just find yourself at Powder Mountain.

Get Access →

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