Category: Food and Drink
Next Wins Appeal
A spot of good news for Britain. Next has won its appeal and may go on paying warehouse workers more than “equal value” retail workers. I’ve written about this case in Equality Act 2010, The Equal Pay Madness Just Got Madder and The Apples and Oranges Tribunal, and discussed it at length on the CapX podcast.
Note how crazy the headline is:
The landmark ruling allows the retailer to pay warehouse workers more than shop staff on the basis it costs more to recruit and retain them.
Pay more to recruit and retain people? A landmark! Eight years of litigation to establish that wages have something to do with supply and demand.
Some of the crazy has been disciplined. The Leeds tribunal had asked why Next failed to raise the pay of retail workers to the warehouse level. Wrong question, said Mr Justice Bourne on appeal. The right question is why Next needed to pay the warehouse workers more. It did so, he found, for sound business reasons, and those reasons did not apply to retail. Hilariously, he also noted that Next’s warehouses were 47.2% female as opposed to the retail workers who were 77.5% female. In other words, there was more gender equality in the warehouses.
Don’t celebrate too hard. Eight years of litigation isn’t over, Next lost on the basic finding of equal value, and everyone is appealing. Meanwhile the government is moving to replace market wages with committee wages. The consultation closing in October would extend equal-value comparisons to race and disability and it would extend the law up the supply chain so Next’s potential escape route of contracting-out warehouses would be foreclosed. In short, Bourne’s reason is lawful today. Whether it survives the future is another matter.
Hat tip: Stephen S. and Robert W.
Yerevan bleg
Any advice on this front is most welcome, thank you!
Costco facts of the day
Costco sold 157.4mn rotisserie chickens worldwide last year, almost double the number of a decade ago. “It’s $4.99 and for Costco members, that’s one fantastic deal. I don’t think you can produce it for that,” said Walt Shafer, who oversaw the construction and management of the Nebraska site before he retired from Costco this year.
Roasted in ovens in the rear of the retail giant’s hundreds of cavernous stores, the birds have cost only $4.99 since 2009 even as the US retail price of chicken almost doubled. The product has become a textbook “loss leader”, buttressing the loyalty of Costco customers who pay membership fees for the right to shop there…
Rotisserie accounts for only a portion of the chicken processed in Nebraska. The plant also cuts breasts, thighs and other cuts delivered in six-pouch “saddle packs” to stores. Raw breast meat, for example, sells for $2.99 a pound, helping make up for losses on rotisserie.
Here is more from Gregory Meyer at the FT. Via Mike Rosenwald.
Things you cannot buy in America?
3. Exterior roller shutters (Rollladen)
In much of Europe, homes feature heavy shutters integrated into the exterior of the window, enabling total blackout and better insulation. Sleeping in true, complete darkness—not “blackout curtain” darkness, but can’t-see-your-hand darkness—is an experience most Americans will never have. These shutters are nearly impossible to get in the USA because these shutters are built directly into the home during its construction. They are fundamentally incompatible with standard American wood-frame, siding, and drywall construction, meaning there is no domestic supply chain to support them, even if you built a house to fit them.
From Daniel Frank, here is the full piece, noting I am not convinced you cannot get a “grass roof,” among other items mentioned. In any case an interesting list, file under “possibly thwarted markets in everything.” Via Anecdotal.
AI and Marginal Revolutions in Wastewater Treatment
An interesting paper from French economists, including recent Nobelist Philippe Aghion, looks at the savings from a predictive machine-learning model applied to wastewater treatment:
This paper studies the environmental effects of a specialised AI aeration-control system deployed across French wastewater treatment plants operated by a global leader in water supply services. Exploiting quasi-experimental variation in both the timing of adoption and outages, we estimate the causal impact of AI on electricity use, carbon emissions, and energy expenditures. We find that full-time AI control reduces plants’ electricity consumption and carbon emissions by 5.4% and 6% respectively, and energy expenditures by 8.2%, resulting in negative abatement costs, while also improving water effluent quality. The additional electricity demand generated by AI models represents less than 1% of these savings. Beyond these effects, AI-equipped plants prove more resilient to high operational stress during extreme meteorological events and chemical pollutant peaks. They also improve load management by reallocating electricity consumption from peak to off-peak hours. Finally, we use the DICE model to assess the aggregate implications of our findings
in three diffusion scenarios. We find substantial global welfare gains from the CO2 reductions associated with this industrial AI use case.
One annoyance: The authors frame the paper as a contrast to worries about AI’s energy use and environmental impact. But those objections are almost entirely innumerate and pretextual and casting the paper as a rebuttal lends them more credibility than they deserve.
One note: Don’t misread the “less than 1%” line as being in the same units as the 5.4%, 6%, and 8.2% figures above it — it isn’t a comparable percentage-point offset. It means the AI system’s own electricity draw is a rounding error next to the savings it generates.
More generally, the effect of AI will be through many, many improvements of this nature.
Further progress in South America
The share of people who are hungry has been decreasing faster in South America than anywhere else in the world. It is down by one-third since 2020, according to a report published on July 21st by the UN’s Food and Agriculture Organisation (FAO). Just 3.5% of people in the region consume insufficient calories, the lowest level recorded. Eliminating hunger by 2030 is one of the UN’s “sustainable development” goals. “If there is a region in the world that can potentially achieve that, it’s South America,” says Máximo Torero, the FAO’s chief economist.
Lula, as the president is commonly known, made food security a priority when he returned to office in 2023. By 2025 Brazil had made it off the UN’s Hunger Map, which tracks countries where more than 2.5% of the population suffers from chronic hunger. Chile and oil-rich Guyana were also removed. Argentina is almost there at under 3%. Colombia and Paraguay are approaching at 4%, while Peru and crisis-battered Venezuela are making inroads near 5%. Even Ecuador and Bolivia have improved a tad, to 11% and 20% respectively. Only Suriname is moving in the wrong direction.
This decline rests on sturdier foundations. The first is macroeconomic stability. South America’s central banks are far more independent and adept at managing inflation than they were two decades ago.
Here is more from The Economist. If you are interested in further economic development, South America (plus Mexico and Panama and the DR) is really the place to look. What is your other choice? (Vietnam?) Most of these countries will continue to grow, albeit at a modest pace. Sooner or later they will get there.
Sub-Saharan Africa facts of the day
In aggregate its farmers are growing more cereals, such as maize (corn) and rice, than ever: nearly five times as much as in the 1960s, when many countries achieved independence. But most of those gains came from cultivating more land, which cannot go on for ever (see chart 1). Africa, once sparsely populated, is getting crowded. The amount of arable land per person has been falling for decades, and now sits at roughly the global average.
That might not matter if farmers were also growing more crops per hectare. But recently gentle growth in agricultural productivity has given way to stagnation, perhaps even decline. Consider figures drawn from national statistics in Africa by the Food and Agriculture Organisation (FAO), a UN body. Cereal yields did not grow between 2020 and 2024, the latest data point (see chart 2). Nor did total factor productivity (TFP), a measure of how efficiently inputs of all kinds (such as labour and machinery) are turned into produce. Most African countries had lower agricultural TFP in 2023 than a decade before.
This seems to be more than a pandemic blip. In a paper published in 2024, Douglas Gollin of Tufts University in Massachusetts and his co-authors analysed data from surveys of 55,000 household farms in six African countries between 2008 and 2019. They estimated that, for smallholdings, yields and TFP were already falling by 3-4% a year then. They found steeper declines than the FAO did, perhaps because their sample did not include large farms, or because official statistics are sketchy.
Here is more from The Economist.
The bullish case for Brazil
Start with the most important number in economics, even though no one on Wall Street talks about it: calories per acre. Human civilization runs on food. Ten billion people will inhabit this planet by 2050. The amount of arable land is not growing. It is shrinking, every year, to urbanization, desertification, salinization, and topsoil erosion. The countries that can grow food at scale will be the most strategically valuable territories on earth. The countries with the best apps and the most PhDs will depend on the countries with the best dirt.
Brazil has more unused arable land than any country on earth. That sentence alone should stop every allocator in their tracks. It means that Brazil can approximately double its total cultivated area, without touching a single hectare of the Amazon, simply by converting degraded pasturelands in the Cerrado and other biomes into productive cropland using technology that already exists.
No other agricultural superpower has this headroom. The United States is fully utilized. China is losing farmland to urbanization at a rate that should terrify its central planners. India’s agricultural productivity gains are hitting diminishing returns against water stress and soil degradation. Europe is hemmed in by geography and regulation. Sub-Saharan Africa has theoretical potential, but lacks the roads, the ports, the legal frameworks, and the capital to exploit it within a generation.
Brazil is already the world’s largest net food exporter. It leads the world in soybeans, coffee, sugar, orange juice, beef, and poultry. It is the second-largest exporter of corn, pork, and ethanol, and recently surpassed the United States as the largest cotton exporter. Agribusiness generates approximately 25% of GDP and more than 40% of export revenue. And the agricultural sector has been growing productivity at 3-4% per year for two decades straight, driven by Embrapa’s tropical soil science, satellite-guided precision agriculture, and the industrialization of protein supply chains that stretch from feedlots in Mato Grosso to dinner tables in Shanghai.
A single farm in Mato Grosso can be more than twice the size of the state of Rhode Island. A literal fact. The Bom Futuro Group cultivates more than 700,000 hectares (roughly 2,700 square miles) of soybeans, corn, and cotton across 35 production units. This is farming at a scale that American and European investors cannot easily conceptualize, operating with GPS-guided machinery, drone monitoring, and soil analytics that rival anything in Iowa, but across an area that dwarfs it.
The post is interesting throughout and offers further points of interest.
Sao Paulo notes
The old saw “Brazil is the country of the future, and always will be” now seems so wrong. The place feels increasingly conservative, and it is aging rapidly. In the domestic airport you see couples with only a single kid, not two or three kids, never mind four.
Country and Western music, in their Brazilian incarnations, are very popular.
It does not feel like the next Pelé will be coming from Brazil.
Sao Paulo as a city is much improved. The murder rate has plummeted, and the nice neighborhoods are very nice and are growing in size. The business community is strong, interesting architecture abounds, and there is a real arts scene. It is arguably Latin America’s number one city, with only Mexico City as a rival. It has, along with Mexico City, evolved into a “must know” global city, though it is rarely treated that way by outsiders. In the three days I spent there, going around to many places, I did not see a single person who was evidently a foreign tourist. That is crazy, but also a sign there is good value here.
Sao Paulo has food to die for. It is top tier for Brazilian (of course), meat/steak, Japanese, and Italian, and pretty good in many other offerings as well. I had a wonderful fifteen-course omikase for $110 at a Michelin star restaurant. The establishment, Kan Suke, has only eight seats, but I could get a table by inquiring only an hour in advance.
For Italian food it is probably the second best country in the world? For meats it might be number one, at least if you are willing to put aside the small country of Uruguay. For beans it is top two, and the fruits are excellent as well. Chocolate ice cream and gelato abound. All constraints considered, I would rather spend a week dining out here than in London or Paris or Rome, or for that matter New York City.
People are very friendly, surprising few speak decent English, and Brazilian warmth still abounds.
I was very pleased with my stay at Hotel Unique, due to its architecture and also a perfect location.
Observers should be more optimistic about the Brazilian economy. Yes it is overregulated and the government is locked into far too much spending. But hyperinflation is now a distant memory, a reasonable fiscal consolidation occurred in the 1990s, and the country has plenty of its own energy. Keep in mind that for emerging economies, years of negative growth are a major problem. Brazil now has sidestepped most (not all!) of those risks. Slow, steady growth should be able to get them somewhere, albeit at a langorous pace.
My biggest worry about Brazil is demographics and shrinking population. In recent times TFR has been in the 1.3 to 1.4 range, hardly satisfactory. A shrinking population is bad per se, and also it will hurt many regions of the country due to imperfect market integration, both nationally and globally. More importantly, the country does not have an obvious and easy option for pulling in a higher number of desirable immigrants, at least not relative to its size. There is Venezuela and Bolivia, but the former of those may go away as a major source of people.
Will Brazilian fertility tick back up? Will Brazil re-attain its status as a highly influential culture on the world scene, as it was in the 1960s through early 1990s? Unclear. But if the question is “should you go visit?”, the answer is a definite yes.
Richard Feynman’s formula for the best holiday restaurant
According to Feynman’s approach, in this context, people should try a different restaurant each night until they find one that exceeds a particular threshold that reflects a desired quality.
In Feynman’s equations this threshold is not fixed. Instead it declines more and more rapidly as the number of days left in the city reduces. In other words, as the days go by there is increasingly less motivation to hunt for an amazing dining spot, because the time you will have to enjoy it has decreased.
“The thresholds are being guided by the best thing you might be able to find if you kept looking,” said Griffiths. “If you have a long time to look, finding something amazing has a lot of value because you can go back many times.”
Feynman’s approach assumed there is equal possibility of finding any restaurant within a fixed range of quality. However the researchers also explored other scenarios.
“We showed that if the distribution of restaurants varies, then the strategy you should follow will change too,” said Griffiths.
Here is the full story, and here is the PNAS article. I think of that as a pretty pessimistic approach to the problem. In most locales you should be able to find lots of very good restaurants, so if you find a quality place early on you do not return to it, rather you keep looking for more, in fact feeling emboldened by your early success. Maybe this algorithm applies to Cuba?
Via both Adam K. and Mike Doherty.
Campo Grande bleg, Brazil
Soon I will be there, in Mato Grosso do Sul, wishing to observe the foundations of Brazil’s burgeoning agricultural export economy, among other reasons. So what should I do, where should I go, and what should I eat?
What else is special about southeastern Michigan? (from my email)
Thanks for swinging by Southeastern Michigan. He are two things other things that this area continues to produce and export at scale that don’t get as much notice:
* Mortgages – The two largest residential mortgage lenders are located in Detroit: United Wholesale Mortgage ($164B of mortgage originations for 2025) and Rocket Mortgages ($113B). It’s a fragmented industry, but to give you a sense of their comparative scale, Chase is #3 lender @ $66B in originations. Detroit continues to be the home of financial services for many Americans’ largest purchase.
* Food – Michigan, not NY or Italy, is responsible for the scaling of pizza. Domino’s, Little Caesar’s, and Jet’s were all founded in Southeastern Michigan. Domino’s is the largest pizza company in the world, and in many global markets, Domino’s defines “pizza.” For instance, Domino’s market share of pizza in the UK is over 50%. So, the UK has adopted Michigan’s, not Italy’s, understanding of pizza.
One narrative for Michigan should be that it has continued to shape global culture, through scaled production of mortgages and pizza. It doesn’t get more American than cars + mortgages + pizza, does it?
That is from Jeff Withington.
My excellent Conversation with Bob Spitz
Here is the audio, video, and transcript. Here is the episode summary:
Bob Spitz has written major biographies of the Beatles, Led Zeppelin, Bob Dylan, and now the Rolling Stones — but also, somehow, Ronald Reagan and Julia Child. In rock, his credentials were hard won: he started out hustling gigs for an unknown Bruce Springsteen for six years, moved on to handling Elton John’s American business, and spent long enough in the world to find himself jamming with Paul McCartney and chatting with Bob Dylan on a stoop in the Village. The Reagan and Julia Child books are harder to explain, and perhaps that’s the point—Spitz seems to do his best work when he has no business writing the book at all.
Tyler and Bob discuss how the Stones became so great so quickly, what they added to the blues, how their melodies stack up against the Beatles’, whether Exile on Main Street deserves its canonical status, which songs are most underrated, what Charlie Watts actually got out of playing in a rock band, the rise and fall of Brian Jones, how the Stones outlasted nearly everyone, the influence of Mick’s London School of Economics training, why popular music has lost its cultural influence, what we should still be asking Paul McCartney and Ringo Starr, whether the Beatles’ breakup was good for the world, how senile Reagan really was in his second term and whether he was ever truly a communist, how good a cook Julia Child actually was, his next book on Lennon’s second act, and much more.
Excerpt:
SPITZ: Mick, from a very early age, was an exercise freak.
As we know from my investigation in the book, Mick’s father was the Jack Lalanne of the United Kingdom. He had a television show, an exercise show like Richard Simmons, and he always had a great person to show off the exercises, young Michael. He would say, Mike, get down, show him 50 pushups. Mike, do 100 chins, and Mick would jump to it and do it. That man still has a 27-inch waist at the age of 83.
Keith, on the other hand, is a medical miracle.
And this:
COWEN: Mick once said his favorite economist was Friedrich A. Hayek. Do you know anything more about that?
SPITZ: I do not, actually. I think it’s incredible that Mick had favorite economists. We do know that Mick was a scholarship student to the London School of Economics, and that for two and a half years, he attended and got pretty good grades. He did fairly well. The one thing that amazes me about Mick coming out of that London School of Economics is this. After 1967, when Andrew Loog Oldham stopped managing the Stones, they have never had another manager. They’ve had some money managers, but as far as managers go, Mick Jagger was their manager.
And:
COWEN: How good a cook was Julia Child? That’s another of your biographies. Actually, how good was she?
SPITZ: She was great. She was a wonderful person, but here’s the little secret. Julia was a great cooking teacher, but not a very good cook. There were people who left her house—and John Updike told me this. He was a frequent guest with her. Corby Kummer, who was a wonderful food writer, told me this as well. They’d leave Julia’s house. They’d go to a little park around the corner, and they’d get physically ill. They’d get sick. Julia used too much butter, too much cream. She really had no reins on her when it came to using things like that.
Bob was excellent throughout, and I very much enjoyed his new biography of the Rolling Stones.
Korean banana markets in everything
Did you know Korea sells “one-a-day” banana packs?
Instead of every banana ripening at once, each one is at a different stage.
One is ready today.
The next one is ready tomorrow.
The last one is still spiritually in college, “experimenting.”
Simple. Genius. Solves the entire banana problem.
What do you think? Would you prefer your bananas this way?
Here is the tweet from Sovey.
Mushroom facts of the day
You would be surprised to learn that almost 69% of the US mushroom production occurs in the borough of Kennett Square, Pennsylvania. It is a small town of about 6000 people, but mushroom-growing facilities around town produce almost 451 million pounds of mushrooms annually (2024). 451 million pounds of mushrooms would occupy about 45 American football fields or 35 soccer fields. The dollar value of mushroom production in the US is roughly $ 1 billion per year.
China is the undisputed leader in mushroom production. China accounts for 93% of the world’s global mushroom production.
That is from Rhishi Pethe, here is the full story, via Anecdotal. Much of the piece is about why mushroom production is switching to Canada.