A Conspiracy of Hogs: The McRib as Arbitrage
One of McDonalds most divisive products, the McRib, made its return last week. For three decades, the sandwich has come in and out of existence, popping up in certain regional markets for short promotions, then retreating underground to its porky laironly to be revived once again for reasons never made entirely clear. Each time it rolls out nationwide, people must again consider this strange and elusive product, whose unique form sets it deep in the Uncanny Valleyand exactly why its existence is so fleeting.
The McRib was introduced in 19821981 according to some sourcesand was created by McDonalds former executive chef Rene Arend, the same man who invented the Chicken McNugget. Reconstituted, vaguely anatomically-shaped meat was something of a specialty for Arend, it seems. And though the sandwich is made of pork shoulder and/or reconstituted pork offal slurry, it is pressed into patties that only sort of resemble a seven-year-olds rendering of what he had at Tony Romas with his granny last weekend.
These patties sit in warm tubs of barbecue sauce before an order comes up on those little screens that look nearly impossible to read, at which point it is placed on a six-inch sesame seed roll and topped with pickle chips and inexpertly chopped white onion. In addition to being the outfit's only long-running seasonal special and the only pork-centric non-breakfast item at maybe any American fast food chain, the McRib is also McDonalds only oblong offering, which is curious, tooMcDonalds can make food into whatever shape it wants: squares, nuggets, flurries! Why bother creating the need for a new kind of bun?
The physical attributes of the sandwich only add to the visceral revulsion some have to the productthe same product that others will drive hundreds of miles to savor. But many people, myself included, believe that all these thingsthe actual presumably entirely organic matter that goes into making the McRibare somewhat secondary to the McRibs existence.
This is where we enter the land of conjectures, conspiracy theories and dark, ribby murmurings. The McRib's unique aspects and impermanence, many of us believe, make it seem a likely candidate for being a sort of arbitrage strategy on McDonald's part. Calling a fast food sandwich an arbitrage strategy is perhaps a bit of a reachbut consider how massive the chain's market influence is, and it becomes a bit more reasonable.
Arbitrage is a risk-free way of making money by exploiting the difference between the price of a given good on two different marketsits the proverbial free lunch you were told doesnt exist. In this equation, the undervalued good in question is hog meat, and McDonalds exploits the value differential between porks cash price on the commodities market and in the Quick-Service Restaurant market. If you ignore the fact that this is, by definition, not arbitrage because the McRib is a value-added product, and that there is risk all over the place, this can lead to some interesting conclusions. (If you dont want to do something so reckless, then stop here.)
*snip*
One of McDonalds most divisive products, the McRib, made its return last week. For three decades, the sandwich has come in and out of existence, popping up in certain regional markets for short promotions, then retreating underground to its porky laironly to be revived once again for reasons never made entirely clear. Each time it rolls out nationwide, people must again consider this strange and elusive product, whose unique form sets it deep in the Uncanny Valleyand exactly why its existence is so fleeting.
The McRib was introduced in 19821981 according to some sourcesand was created by McDonalds former executive chef Rene Arend, the same man who invented the Chicken McNugget. Reconstituted, vaguely anatomically-shaped meat was something of a specialty for Arend, it seems. And though the sandwich is made of pork shoulder and/or reconstituted pork offal slurry, it is pressed into patties that only sort of resemble a seven-year-olds rendering of what he had at Tony Romas with his granny last weekend.
These patties sit in warm tubs of barbecue sauce before an order comes up on those little screens that look nearly impossible to read, at which point it is placed on a six-inch sesame seed roll and topped with pickle chips and inexpertly chopped white onion. In addition to being the outfit's only long-running seasonal special and the only pork-centric non-breakfast item at maybe any American fast food chain, the McRib is also McDonalds only oblong offering, which is curious, tooMcDonalds can make food into whatever shape it wants: squares, nuggets, flurries! Why bother creating the need for a new kind of bun?
The physical attributes of the sandwich only add to the visceral revulsion some have to the productthe same product that others will drive hundreds of miles to savor. But many people, myself included, believe that all these thingsthe actual presumably entirely organic matter that goes into making the McRibare somewhat secondary to the McRibs existence.
This is where we enter the land of conjectures, conspiracy theories and dark, ribby murmurings. The McRib's unique aspects and impermanence, many of us believe, make it seem a likely candidate for being a sort of arbitrage strategy on McDonald's part. Calling a fast food sandwich an arbitrage strategy is perhaps a bit of a reachbut consider how massive the chain's market influence is, and it becomes a bit more reasonable.
Arbitrage is a risk-free way of making money by exploiting the difference between the price of a given good on two different marketsits the proverbial free lunch you were told doesnt exist. In this equation, the undervalued good in question is hog meat, and McDonalds exploits the value differential between porks cash price on the commodities market and in the Quick-Service Restaurant market. If you ignore the fact that this is, by definition, not arbitrage because the McRib is a value-added product, and that there is risk all over the place, this can lead to some interesting conclusions. (If you dont want to do something so reckless, then stop here.)
*snip*
