Understanding McDonald's as a commodities broker with a restaurant sideline: the McRib

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45 Responses to “Understanding McDonald's as a commodities broker with a restaurant sideline: the McRib”

  1. SomeGuy says:

    “…..McDonald’s is only secondarily a restaurant, and primarily conducts the business of a commodities brokerage.”

    Does that mean I can trade my old gold jewelry in exchange for McRib sammiches?

    • Zach Peterson says:

      Gold4Ribz

    • irksome says:

      “Does that mean I can trade my old gold jewelry in exchange for McRib sammiches?”

      You CAN. That doesn’t mean you SHOULD.

      Here’s a suitable analogy: I can get a McRib when available. Should I? No; and yet, despite the inevitable gastro-intestinal distress, I DO.

    • taintofevil says:

      You think you are kidding, but there is a large, sad man in a tiny hut in the parking lot of the Firehouse Subs near campus who will buy your gold jewelry so that you might then buy a sandwich.

  2. Bookburn says:

    This is an interesting postulation, but I’m more inclined to buy into an idea put forth by the “Wait Wait… Don’t Tell Me” blog series “Sandwich Monday” . The McRib appears in October as a Halloween food.  “It’s non-food wearing a food costume.” And that it only comes once a year is because it will take twelve months to digest.

  3. phisrow says:

    It’s too bad that Chef Arend lacked the technology to create Chicken Little, and put an end to chicken nugget supply problems forever….

  4. jnievele says:

    There’s actually a flaw with the McRib thesis – the McRib IS permanently available outside the US, for example in Germany. 

    • Luke says:

      But the fact they are available in Germany all year round ties in with this theory given the Germans love of pork and pork products as it means there is cheap enough meat on the German pork market. 

  5. bcsizemo says:

    The idea of the McRib was born from eastern style BBQ?

    Beyond being of a pork base where did that come from?  Lexington style maybe…at least it has a sweeter sauce.  It’s like saying the idea for Guinness came from a nice single malt Irish scotch.

  6. journey46 says:

    It makes perfect sense to me that McD’s Chef Errant could translate NC Low country pulled pork BBQ into the McRib.

    Nothing at McDonalds resembles it’s original recipe.

  7. Jonathan Badger says:

    Apparently, getting a potato contract from McD’s is the key to success in that field, leading to the wonderful (if ambiguous) headline McDonald’s fries the holy grail for potato farmers

  8. Mordicai says:

    I read this in the Awl & it was probably the best thing I saw online yesterday.  Super great.

  9. This is considered a conspiracy?  So day traders buying gold on the dips are involved in some clandestine conspiracy to make money on commodities as well I take it?

  10. bcsizemo says:

    Ironically there are half a dozen BBQ places around me (not chains, local NC places) that I can get a BBQ sandwich cheaper than I can a McRib….

  11. lknope says:

    I’ve always thought that fast food chains like McDonalds should not be able to call what they sell “food.”  I think they should be able to sell it but I think it is misrepresentative to call it food.  Food satiates your hunger and has nutritional value.  McDonalds is neither with the added bonus of absurd amounts of calories.

  12. jemather says:

    I wonder if Mr. Arend ever got out the basement or got his points on the package.

  13. While interesting, this article uses terms like “violent” and “brute” when describing voluntary transactions, which are, by definition, not violent.  It hints that perhaps the author has an anti-capitalistic sentiment.

    While McDonald’s may be a big, stupid company, in the eyes of some, their suppliers sell to them voluntarily, and the people who buy their products do so voluntarily, not by force or violence.

  14. hassan-i-sabbah says:

    Here in Scotland , Chip shops still sell them. Deep fried. In batter.  The KING RIB SUPPER!   (shudder..)

  15. usfoodpolicy says:

    You may be interested in the history of McRib’s alleged origins as a project of the federal government’s semi-public pork checkoff program.

  16. Richard Lack says:

    The sentence starting with “I once proposed a line of perverse vegan aerosol meat substitutes…” is the most epic run-on sentence ever.  Like Daniel Defoe, only way more fun and with organ meat.

  17. Rider says:

    What’s with all the McRib stories this year.   Seems every other day I see a new story about the history and economics of the McRib.

  18. This is two stories.  And one of them is odd.  Story #1: the McRib is a strange molded product.  Story #2: McDonalds is more likely to serve pork when they can get it cheaply.  Story #2 is not really surprising or sinister.  And it doesn’t make McDonalds anything other than a restaurant chain.

  19. Rayonic says:

    I don’t really understand the aversion to meat slurry. Wherever it came from now it’s just protein paste — homogenous and sterilized.

    Kinda reminds me of gelatin actually; and I can eat a cup of Jello without thinking about all the bones and hides that went into it.

    Oh, and food dyes are great example too. By the time I’m eating Cochineal (http://en.wikipedia.org/wiki/Cochineal ) it’s far removed from the bugs it came from.

  20. Kevin Pierce says:

    It was in the book  “Fast Food Nation” that McDonald’s was described as being primarily a REAL ESTATE corporation, “the nation’s largest proprietor of commercial real estate.”, as the corporation owns most of the land that their restaurants sit upon.  

    http://www.upxsuccess.com/fast_food_nation_summary.html

    Combined with the commodities brokerage point of view of this article we can see the true “what sells where” nature of any successful business.

    • Rayonic says:

      That’s kind of a pointless conjecture. McDonald’s doesn’t make money buying and selling real estate. They mainly make money from their restaurant business. That’s how (and why) they pay for the real estate.

      It’s just a lame rhetorical device for saying “McDonalds isn’t a food company!”

      It’s like saying GM is mainly a retirement benefit company.

  21. aynrandspenismighty says:

    Don’t care. I know they’re crap slathered in garbage. But dammit I like ‘em.

  22. Quiche de Resistance says:

    Pork?  I thought it was made from something smaller, and with more legs.

  23. Quiche de Resistance says:

    If you think the pork has been mistreated, you will be aghast when you find out what’s been done to those slices of cucumber they serve on a McRib.

  24. Art says:

    Thank you, Cory, for the insight here.  I will quoting your article to friends all week!

  25. Mycroft says:

    “sad, sad end users who volunteer to be taken advantage of.”

    Oh, wow, I didn’t know I was being taken advantage of when I ate a thing I enjoy once in a while. One that is convenient and reasonably cheap. I’ve been living a lie apparently.

  26. McDonald’s that’s classed as food now? Who would have thunk it

  27. Spieguh says:

    I broke down and had a McRib for the first time last night. It tasted exactly like…nothing. The sauce was sweet with no discernible flavor, the meat packet had less texture than firm tofu…what’s all the fuss about?

  28. Stefan Jones says:

    McRibs were available in the Portland area a year ago this month. (I had to check my “sent mail” box to get the date.)

    The taste wasn’t bad. The texture and mouth-feel were kind of odd. A little firmer than a hot dog, way mushier than a McD burger. I looked at the interior of the “meat” with the sauce sucked off. It looked “bubbly,” kind of the way the inside of a thick pancake looks.

    I won’t be buying another.

  29. Optic says:

    For what it’s worth, Marginal Revolution linked this too, and included the chart that suggests a simpler explanation: McDonald’s likes to make the McRib available every October. They skipped 2009, but that can’t be explained by the cheap pork theory either — it’s the lowest price point since 2005.

    http://marginalrevolution.com/marginalrevolution/2011/11/the-mcrib-arbitrage.html
    http://www.theawl.com/wp-content/uploads/2011/11/pork-e1320757338994.jpg

    The needless invocation of “conspiracy” (really, buying low and selling high is a conspiracy?) along with extraneous troll-words like “violent” and “sad, sad end users” sets off my “axe to grind” alarms.

  30. lecti says:

    “McDonald’s is essentially exploiting a market imbalance between what normal food producers are willing to pay for hog meat at certain times of the year, and what Americans are willing to pay for it once it is processed, molded into illogically anatomical shapes, and slathered in HFCS-rich BBQ sauce.”

    Why is the quoted article worded so strangely? All the above sentence is saying is that McDonald is buying pork at a bargain price that people would like to pay for fast food.  Throwing in verbiage like “violent”, “exploiting”, “brute-force”, and “taken advantage of” didn’t really convince me that the restaurant franchise should be called a commodities broker than just restaurant franchise with a lot of money.  For the name change to happen, it has to be both buying AND selling raw pork material, in addition to cooking and selling pork sandwich.  

    Am I missing something here??

  31. sam1148 says:

    Ironically, if  Heston Blumenthal created a similar dish; using ground pork and offal and reshaped with Transglutaminase (aka Meat Glue) and cooked sousvide and served on a miniature ciabatta bun with pickles and a BBQ sauce thickened with agar agar and agave nectar. It would only cost about 20 dollars and yet basically be the same thing chemically speaking and be praised for its economy of using tail to snout transformations for foods.

  32. James Gettinger says:

    Selling a sandwich is not arbitrage. Short cattle, long hogs is arbitrage.

    http://www.financeandmagic.com/2011/11/mcrib-arbitrage-its-all-in-spread.html

    • S P says:

      That’s not arbitrage. It’s an intermarket spread. Arb would be simultaneously buying cattle in one place while selling for a higher price elsewhere.

  33. Palomino says:

    I call B.S., I think it’s their sausage patties (meat) with McRib sauce. 

    Americans thrive off of “For a Limited Time Only” and buy it, even if they don’t want or need it. 

    Even this post boost’s McDonald’s internet rating. 

  34. caipirina says:

    say what you will .. I LOVE the McRib … and yes, countries like Germany have it all the time (conspiracy theory there? constant fear of mad cow desease) … 

    Since I never have the time to do a pulled pork, that is as close at i can get …  well .. no I live in a country that does not even have a McDs …

  35. Greg Van Antwerp says:

    On November 19th it will be exactly 9 years since I have eaten in McD, or BK, KFC, ETC! It’s not food, so why would you eat there if you were hungry? I’ll try not to get all farmy on you, but think for a minute if Franchises didn’t exist… All those privately owned burger stands and sit down restaurants all using local farms for meat and veggies…o! wow! sorry, I was dreaming there for a sec. It’s gone now-just a dream.
    http://videomartyr.blogspot.com/

  36. Maddy says:

    I fear the Duke Brothers hand in all of this,  shortly after they got an erroneous crop report …

  37. tmdpny says:

    I’m not surprised by this theory because my uncle was the CFO for a large group of supermarket chains.  He would take the gross receipts from the day and leverage them on the overnight exchange market, adding a huge profit to the day’s sales.  Without this, their profit margins were almost too thin to operate.  I am sure financial leverage – either through supply of basic materials or through same day sales – is a major portion of most retail. 

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