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


Willy Staley's "A Conspiracy of Hogs: The McRib as Arbitrage," is a lyrical, insightful conspiracy theory about the appearance and disappearance of McDonalds's McRib sandwich. Staley argues that the McRib's appearance correlates with falls in the pork futures market, and represents a way for McD's to cash in on cheap pork, representing a kind of triumph of restaurant automation, logistical acumen, and financial engineering. In Staley's view, McDonald's is only secondarily a restaurant, and primarily conducts the business of a commodities brokerage.

I've long been fascinated with injection-molded protein slurry masquerading as some recognizable foodstuff. I once proposed a line of perverse vegan aerosol meat substitutes like "I can't believe it's not organ meat" and "I can't believe it's not marrow bones" that would come as a soy spray in a mousse can whose nozzle mated with a dishwasher/microwave-safe mold (with plastic "bones" as appropriate) that you could nuke for a minute before ejecting the piping hot reformed slurry on a plate and popping the mold right into the dishwasher.

Fast food involves both hideously violent economies of scale and sad, sad end users who volunteer to be taken advantage of. What makes the McRib different from this everyday horror is that a) McDonald’s is huge to the point that it’s more useful to think of it as a company trading in commodities than it is to think of it as a chain of restaurants b) it is made of pork, which makes it a unique product in the QSR world and c) it is only available sometimes, but refuses to go away entirely.

If you can demonstrate that McDonald’s only introduces the sandwich when pork prices are lower than usual, then you’re but a couple logical steps from concluding that 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.

The McRib was, at least in part, born out of the brute force that McDonald’s is capable of exerting on commodities markets. According to this history of the sandwich, Chef Arend created the McRib because McDonald’s simply could not find enough chickens to turn into the McNuggets for which their franchises were clamoring. Chef Arend invented something so popular that his employer could not even find the raw materials to produce it, because it was so popular. “There wasn’t a system to supply enough chicken,” he told Maxim. Well, Chef Arend had recently been to the Carolinas, and was so inspired by the pulled pork barbecue in the Low Country that he decided to create a pork sandwich for McDonald’s to placate the frustrated franchisees.

A Conspiracy of Hogs: The McRib as Arbitrage (via Kottke)

(Image: McDonalds McRib Sandwich, a Creative Commons Attribution (2.0) image from io_burn's photostream)

Alan Turing's hand-drawn Monopoly Board


Update: William Newman has the true history of this artifact: "May I confess to being the perpetrator of said 'board', which I drew on a sheet of paper back in the 1950s when I was in my early teens and lacked the money to buy a proper set. My brother and I played on it, and when Alan asked if he could join us in a game we played a threesome (Alan lost). Later the board fell into disuse and I lost track of it about 50 years ago, but it recently turned up (together with the rules), see http://www.bletchleypark.org.uk/news/docview.rhtm/644565. The Roman numerals indicated property prices. I forget why I added the diagonal. "

Yesterday, I had the delightful experience of attending a fundraiser for Bletchley Park, the birthplace of modern computing and cryptography, where the Allied WWII cipher-breaking effort was headquartered. Cold War paranoia caused Churchill to order Bletchley broken up, its work kept secret, its machines destroyed, and, very slowly, it is being rebuilt.

Earlier this year, the Bletchley Trust acquired Alan Turing's papers for the collection with a grant from Google.org, and I got this shot of Turing's awesome hand-drawn Monopoly board -- the cryptographers of Bletchley were sequestered from the rest of the world and desperate for distraction, hence this great bit of historical ephemera.

I also learned that Turing didn't believe the UK economy would survive WWII even if the Allies won the war, and so he drew as much of his pay as he could in silver half-crowns, melted them down, created two enormous ingots, and buried them somewhere in the region. They've never been recovered -- as far as we know. (finkployd just reminded me that this was in Cryptonomicon, but the detail had slipped my mind).

Alan Turing's hand-drawn Monopoly board, the Turing Papers, Bletchley Park, UK