WEBVTT - The Hidden Supply Chain Making Every Menu Feel Familiar 0:00:02.720 --> 0:00:14.000 Bloomberg Audio Studios, Podcasts, Radio News. 0:00:17.960 --> 0:00:20.880 Hello and welcome to another episode of the All Thoughts Podcast. 0:00:20.960 --> 0:00:22.280 I'm Tracy Alloway. 0:00:21.960 --> 0:00:23.759 And I'm Joe. Wasn't thal Joe. 0:00:23.800 --> 0:00:27.760 I have a question, go on, what is your favorite 0:00:28.440 --> 0:00:31.080 chain restaurant. It has to be a sit down chain restaurant. 0:00:31.120 --> 0:00:34.800 Sit down chain restaurant. That's a really good question. 0:00:35.040 --> 0:00:35.199 You know. 0:00:35.240 --> 0:00:38.279 I actually really like Chilia's. I think they have Their 0:00:38.320 --> 0:00:41.120 fijidas are absolutely legit. And I say this as someone 0:00:41.120 --> 0:00:43.760 who is eating quite a lot of text mex Fijidas 0:00:43.800 --> 0:00:45.680 from my time in Texas, and so I think I 0:00:45.720 --> 0:00:48.040 have credibility and as a kid, and I haven't been 0:00:48.080 --> 0:00:50.560 there in years, but I still think my memory of 0:00:50.600 --> 0:00:52.280 the food is really good. I love Cracker Barrel. 0:00:52.440 --> 0:00:55.840 Oh, breakfast at Cracker Barrel is really really good. Well, 0:00:55.960 --> 0:00:58.240 I bring it up because today we're going to be 0:00:58.360 --> 0:01:01.480 answering the question of where all of these restaurants actually 0:01:01.560 --> 0:01:02.520 get their food from. 0:01:02.560 --> 0:01:04.360 That's a great question. I don't I don't know anything 0:01:04.400 --> 0:01:06.800 about it. I don't know anything about sit down chain restaurants. 0:01:06.800 --> 0:01:07.240 I mean, I don't know. 0:01:07.280 --> 0:01:10.720 I think about most chain restaurants period, let alone fast 0:01:10.760 --> 0:01:12.840 food ones. But the world of sit down ones that 0:01:12.920 --> 0:01:16.800 are real restaurants where there's waiters, waitresses, et cetera. I 0:01:16.800 --> 0:01:17.520 don't know a thing about it. 0:01:17.920 --> 0:01:21.160 You're not interested in my favorite restaurants. Oh, this is 0:01:21.200 --> 0:01:23.440 how it works. I asked you a question, and you 0:01:23.480 --> 0:01:24.160 were ciprocate. 0:01:24.480 --> 0:01:26.480 I was going to and I was planning to, and 0:01:26.520 --> 0:01:29.640 then you like turned a ninety degree angle to talk 0:01:29.240 --> 0:01:32.120 about to talk about we were going to start answering 0:01:32.160 --> 0:01:34.280 the question of where these comfort was like, oh, okay, 0:01:34.280 --> 0:01:36.160 I guess we're going on to some new direction here. 0:01:36.319 --> 0:01:38.840 We could just keep talking about favorite restaurant, Tracy, what 0:01:38.959 --> 0:01:40.560 is your favorite restaurant to sit down in? 0:01:40.680 --> 0:01:44.440 I actually have many? Okay, Red Robin, Oh, I still 0:01:44.560 --> 0:01:47.320 love that place. They had a salad that was basically 0:01:47.360 --> 0:01:48.760 just a plate of chicken tenders. 0:01:48.800 --> 0:01:49.520 It was so good. 0:01:49.920 --> 0:01:52.960 But build does a salad Fridays. You still love that place? 0:01:53.800 --> 0:01:54.000 I know. 0:01:54.160 --> 0:01:56.480 And there was one in London and it was like 0:01:56.760 --> 0:02:00.400 my anchor to America in the early two thousands. And 0:02:00.480 --> 0:02:02.360 Chili's Chili is with my Chili. 0:02:02.720 --> 0:02:05.640 Yeah, yeah, it's legit. Keep going. We're going to make 0:02:05.720 --> 0:02:07.160 up for the fact that I didn't ask you. But 0:02:07.280 --> 0:02:08.680 now I'm just keep going well. 0:02:08.520 --> 0:02:08.880 One thing. 0:02:09.000 --> 0:02:11.400 One thing I did realize recently. I've never been to 0:02:11.440 --> 0:02:13.320 an olive garden. I don't know why that is. 0:02:13.440 --> 0:02:16.440 I've been a few times. It's not that terrible. I 0:02:16.440 --> 0:02:18.880 don't think like I've been. I've even been to the 0:02:18.880 --> 0:02:19.760 one in Times Square. 0:02:20.040 --> 0:02:23.360 Yeah, but I feel like it's very hard to make 0:02:23.440 --> 0:02:26.720 carbs badly. Right, it's just pasta and bread. 0:02:26.960 --> 0:02:29.919 Yeah, uh, it's good. 0:02:29.800 --> 0:02:32.400 Okay, all right, I am going to move the conversation 0:02:32.480 --> 0:02:33.440 on now Apple Bee's. 0:02:33.440 --> 0:02:35.560 Have been to the one in Times Square? There, solid 0:02:35.680 --> 0:02:36.919 I do not like it. Why do we have to 0:02:36.960 --> 0:02:38.720 move the conversation on. I don't get it. Why can't 0:02:38.760 --> 0:02:41.480 we just keep talking about it? Sit down restaurant? 0:02:41.520 --> 0:02:43.359 All right, Well, we'll get back to them. We'll get 0:02:43.360 --> 0:02:46.400 to our recommendations. But on a serious note, one of 0:02:46.440 --> 0:02:49.600 the reasons we are interested in this subject is because 0:02:49.760 --> 0:02:53.320 we did a series last year called Beat Capitalism, where 0:02:53.320 --> 0:02:57.480 we talked a lot about agriculture and the chicken industry specifically, 0:02:57.720 --> 0:03:00.680 and anti trust and monopolies and things like that. And 0:03:00.720 --> 0:03:02.919 one of the things that stood out to me from 0:03:02.960 --> 0:03:06.120 that series was a comment from Doha Mechi, who is 0:03:06.160 --> 0:03:10.519 the former Assistant Attorney General, where she talked about the 0:03:10.680 --> 0:03:14.440 tyranny of the middleman in the economy, and I think 0:03:14.480 --> 0:03:17.440 this is something that people are, you know, perhaps just 0:03:17.600 --> 0:03:21.080 waking up to. There are all these companies out there 0:03:21.160 --> 0:03:24.799 that you have probably never heard of, but have massively 0:03:24.919 --> 0:03:28.720 dominant positions in the economy and charge a lot for 0:03:28.840 --> 0:03:32.160 their services. And one of those happens to be a 0:03:32.280 --> 0:03:36.440 very large company that provides food for all these sit 0:03:36.520 --> 0:03:37.920 down chain restaurants. 0:03:38.160 --> 0:03:39.960 You know, I'm going to play Devil's advocate on this 0:03:40.280 --> 0:03:41.400 episode because, as. 0:03:41.280 --> 0:03:44.120 You know, because you love chili so much, because I love. 0:03:44.080 --> 0:03:48.280 Chili's, and I love food production at massive scales, and 0:03:48.320 --> 0:03:48.960 I love. 0:03:49.440 --> 0:03:49.840 All of this. 0:03:50.200 --> 0:03:52.600 But it is true that there are all these companies 0:03:52.640 --> 0:03:55.200 that are really important that sort of sit between whether 0:03:55.240 --> 0:03:58.320 the retailer, the customer, or more in the case of food, 0:03:58.520 --> 0:04:00.880 more frequently the farmer and the end retailer of the 0:04:00.880 --> 0:04:04.280 farmer and the restaurant do we literally know nothing about. 0:04:04.360 --> 0:04:06.080 And they're huge and they're massive, and they don't get 0:04:06.080 --> 0:04:10.320 any attention, and so I am very interested in this topic. 0:04:10.360 --> 0:04:12.440 All right, Well, we do have the perfect guest. It 0:04:12.480 --> 0:04:15.400 is someone who has been on the show before I 0:04:15.440 --> 0:04:19.280 think maybe a year or two ago. Now, yeah, wow, 0:04:19.400 --> 0:04:21.880 time flies. But we're going to be speaking with Austin Frerik. 0:04:21.960 --> 0:04:25.800 He is an anti trust and agricultural expert and also 0:04:25.839 --> 0:04:29.159 the author of Baron's Money Power and the Corruption of 0:04:29.200 --> 0:04:32.680 America's Food Industry. It's a great book even if you're 0:04:32.720 --> 0:04:36.440 not interested in agriculture or anti trust specifically, it says 0:04:36.480 --> 0:04:39.559 a lot about the US economy, so I would highly 0:04:39.600 --> 0:04:43.480 recommend it. And Austin actually has just written a new 0:04:43.560 --> 0:04:47.839 chapter for his book that is all about this particular company, 0:04:47.839 --> 0:04:49.520 and I guess I should just say what it is. 0:04:49.800 --> 0:04:50.919 It's called Cisco. 0:04:51.560 --> 0:04:53.080 It's not the networking gear company. 0:04:53.279 --> 0:04:55.800 Not the networking gear company, although it does have the 0:04:55.839 --> 0:05:01.039 most generic origin story ever. So Cisco's stands for systems 0:05:01.120 --> 0:05:02.440 and services company. 0:05:03.040 --> 0:05:05.280 Yum delicious. 0:05:05.880 --> 0:05:07.719 All right, Austin, welcome back to the show. 0:05:07.839 --> 0:05:09.440 Thanks for having me on again. And I just want 0:05:09.480 --> 0:05:12.280 to say, you guys have me on last year really 0:05:12.320 --> 0:05:13.919 changed the course of my book, so I appreciate that. 0:05:14.040 --> 0:05:14.640 Oh, thank you. 0:05:15.000 --> 0:05:15.120 Well. 0:05:15.160 --> 0:05:18.160 It was genuinely excellent. I am not just saying that. 0:05:18.200 --> 0:05:21.520 I really enjoyed it. Okay, speaking of which, how does 0:05:21.560 --> 0:05:23.559 it work when you decide to add a new chapter 0:05:23.680 --> 0:05:25.520 to a book and why did you decide to do this? 0:05:25.560 --> 0:05:27.600 Yeah. So the funniest thing about this book was when 0:05:27.600 --> 0:05:30.360 I would do book talks, people kept telling me about 0:05:30.360 --> 0:05:32.840 barons I missed, Like I was in Idaho. They're like, 0:05:32.960 --> 0:05:35.000 let me tell you about a potato baron when I 0:05:35.040 --> 0:05:35.880 was in Indiana. There. 0:05:35.960 --> 0:05:37.520 We're going to get the name of the potato baron 0:05:37.560 --> 0:05:38.360 after the episode. 0:05:38.360 --> 0:05:40.320 So oh yeah, I have a whole purgatory folder that 0:05:40.320 --> 0:05:43.320 I just put this information into. But Cisco kept coming 0:05:43.400 --> 0:05:47.240 up and it was the weirdest placed origin story where 0:05:47.600 --> 0:05:49.719 so I talked fast and I know it. So I 0:05:49.760 --> 0:05:51.680 purposely been doing book talks and nursing. 0:05:51.440 --> 0:05:54.640 Homes, so you have to slow down and practice. 0:05:54.720 --> 0:05:57.719 Okay, I blame it on. I listened to podcasts like 0:05:57.760 --> 0:06:01.599 one point five point five, especially Midwestern and older people. 0:06:01.600 --> 0:06:04.960 You gotta take it down. And what kept happening when 0:06:04.960 --> 0:06:05.520 I was doing. 0:06:05.360 --> 0:06:07.800 You realize, if you're speaking fast because you're used to it, 0:06:08.040 --> 0:06:10.320 then people who listened to you on those podcasts are 0:06:10.360 --> 0:06:12.920 now listen you two and a half to three x speed. Anyway. 0:06:13.000 --> 0:06:14.560 It's bad because my husband listens to them on two 0:06:14.600 --> 0:06:18.160 x twos. We talked that way, and it's so a 0:06:18.200 --> 0:06:20.440 lot of times you do nursing home gigs, they'll value 0:06:20.520 --> 0:06:23.800 for dinner before and after. And it was people kept 0:06:23.800 --> 0:06:26.520 complaining about the food. And I mean, anyone that's been 0:06:26.520 --> 0:06:29.400 to a hospital or there's home in America, it's pretty bad. 0:06:29.480 --> 0:06:32.360 I mean, we're serving our most vulnerable people the worst food. 0:06:33.400 --> 0:06:35.120 And they kept coming up. But it's Cisco's one of 0:06:35.160 --> 0:06:37.320 those things everyone kind of complains about, but no one knows. 0:06:37.839 --> 0:06:39.599 And my mom used to have a bakery and I 0:06:39.600 --> 0:06:42.279 write about that in my Coffee chapter. And she had 0:06:42.320 --> 0:06:44.840 a Broadliner and her Broadliner disappeared. They got bought up 0:06:44.839 --> 0:06:47.360 by a bigger entity, and so I was just curious. 0:06:47.480 --> 0:06:49.320 And then that's broadline distribution. 0:06:49.480 --> 0:06:51.719 Yes, right, thanks for that's an industry term. I think 0:06:51.760 --> 0:06:55.679 of them as grocery store for restaurants. They were Amazon 0:06:55.680 --> 0:06:57.440 Before Amazon, they were the everything store. 0:06:58.240 --> 0:07:00.640 This is really important because when we're talking about Foo distribution, 0:07:01.240 --> 0:07:04.680 so there are broadliners. You get everything there from well, 0:07:04.920 --> 0:07:08.200 you know, your huge jar of olives to cheese or whatever. 0:07:08.279 --> 0:07:12.640 But then also a restaurant might also have specialty distributors 0:07:12.680 --> 0:07:14.480 too that like just really focus. 0:07:14.240 --> 0:07:16.640 On one thing, right if they have the option. Okay, 0:07:16.720 --> 0:07:20.480 in certain markets, usually most rural communities, there's very few options. 0:07:20.520 --> 0:07:22.440 But like for example, New York has one most competitive 0:07:22.480 --> 0:07:24.840 broadliner market, so restaurants here have a lot of different 0:07:24.880 --> 0:07:25.640 source and options. 0:07:25.760 --> 0:07:27.800 Yeah, I should just say this is going to be 0:07:27.800 --> 0:07:34.280 a very odd, lotsy episode because it brings together baking, warehouses, logistics, trucking, 0:07:34.520 --> 0:07:38.800 anti trust, all that good stuff. So I'm very excited. Okay, Well, 0:07:38.840 --> 0:07:41.480 on that note, how did Cisco get to be a 0:07:41.560 --> 0:07:43.640 dominant player in this particular space. 0:07:43.840 --> 0:07:46.920 I love this origin story John Bot. He's a different 0:07:46.960 --> 0:07:49.360 type of character compared to other barons my book. I 0:07:49.400 --> 0:07:53.040 really like him, like he's like a model businessman where 0:07:53.080 --> 0:07:55.200 he's one of those people comes out of Waco, Texas. 0:07:55.720 --> 0:07:58.840 His brother and dad died young, dropped out of college, 0:07:59.200 --> 0:08:02.200 leap Baylor to support his mom, worked at AMP, got 0:08:02.240 --> 0:08:04.840 transferred to the AMP in Houston, and he's one of 0:08:04.840 --> 0:08:07.080 those people you see in business history that just saw 0:08:07.120 --> 0:08:10.120 things before other people. He saw two important things. Number one, 0:08:10.160 --> 0:08:12.280 the rise of frozen food. We're talking like right after 0:08:12.280 --> 0:08:14.160 World War two and how that was going to and 0:08:14.200 --> 0:08:17.000 then also frozen food mixed with women entering the work 0:08:17.000 --> 0:08:20.800 at workforce knowing that they want to make quicker meals. 0:08:21.280 --> 0:08:22.840 So he thought, oh, people are gonna eat out more. 0:08:23.080 --> 0:08:25.680 And the thing to keep in mind here is our 0:08:25.800 --> 0:08:27.960 norm of eating out is a very new thing in America. 0:08:28.680 --> 0:08:30.520 Historically used to like bring a dish to something, it 0:08:30.560 --> 0:08:32.880 was like a church function. Now we eat up about 0:08:32.960 --> 0:08:36.400 once a day. So he saw that thing ahead of people, 0:08:36.480 --> 0:08:38.840 and he didn't think amp was moving fast enough. So 0:08:39.000 --> 0:08:42.040 he founded a frozen essentially a frozen berry company. But 0:08:42.480 --> 0:08:44.400 going back to this point, you made Joe about all 0:08:44.440 --> 0:08:46.920 these different things. That's how the idea from Cisco came 0:08:46.920 --> 0:08:50.160 from where literally some Irish oil man was opening a 0:08:50.160 --> 0:08:52.959 fancy hotel in Houston, and he was working the loading 0:08:53.000 --> 0:08:55.440 dock that night and he saw in the day a 0:08:55.440 --> 0:08:58.360 frozen strawberries. A frozen strawberry. I don't have a competitive advantage, 0:08:58.440 --> 0:09:01.320 but what I can do is this food buyer has 0:09:01.360 --> 0:09:03.760 like thirty different vendors for all these different things. What 0:09:03.800 --> 0:09:05.840 I can do is offer him as much as possible. 0:09:06.200 --> 0:09:08.400 So the origin of Cisco was he brought nine companies 0:09:08.400 --> 0:09:11.120 together to create it, and you realized some's gonna fill 0:09:11.160 --> 0:09:13.080 this at some point. So even though they only did 0:09:13.120 --> 0:09:15.000 business in a few state, he registered in all fifty 0:09:15.040 --> 0:09:16.760 states so that's how Cisco is created. 0:09:16.920 --> 0:09:19.960 I am fascinated by this idea because it's just one 0:09:19.960 --> 0:09:22.480 of those things that hadn't really occurred to me until 0:09:22.520 --> 0:09:25.520 like a read ear chapter, just like yeah, like it's 0:09:25.640 --> 0:09:28.200 really weird how much we eat out or it's just 0:09:28.200 --> 0:09:32.120 really novel in terms of the prevalence of restaurants. I 0:09:32.120 --> 0:09:33.839 mean I eat out way more than I did, like 0:09:33.920 --> 0:09:35.080 when I was a kid growing up. 0:09:35.280 --> 0:09:37.600 I think about that all the time. Used like Bonanza 0:09:37.720 --> 0:09:39.679 was like a buffet was like a special occasion once 0:09:39.720 --> 0:09:39.959 a week. 0:09:40.000 --> 0:09:42.560 And now I sit down Pizza Hut. That's another one 0:09:42.840 --> 0:09:45.400 that was such a big deal. Yeah and yeah, no, 0:09:45.440 --> 0:09:46.199 I just you just do it. 0:09:46.280 --> 0:09:48.400 Now, Well, let me pose a question to you. What 0:09:48.480 --> 0:09:50.800 do you think? And there's a new king The number 0:09:50.800 --> 0:09:52.920 one sit down chain restaurant in America is where you 0:09:53.040 --> 0:09:53.720 order off the menu. 0:09:55.080 --> 0:09:57.800 Oh, this is tough. 0:09:58.160 --> 0:10:01.080 Before I tell you it's my favorite train, your favorite chain, 0:10:02.360 --> 0:10:03.280 maybe my husband. 0:10:03.280 --> 0:10:04.959 I'm worried that, like I'm not going to know it, 0:10:05.040 --> 0:10:06.679 and then I'm going to be really embarrassed at how 0:10:06.720 --> 0:10:08.480 out of touch because you're going to say it is 0:10:08.520 --> 0:10:10.280 going to be really obvious. What is it? 0:10:10.440 --> 0:10:11.640 Cheesecake factory? 0:10:11.840 --> 0:10:15.680 No are we are we talking about by dollar volume? 0:10:15.880 --> 0:10:16.520 Dollar volume? 0:10:16.720 --> 0:10:17.360 Okay? 0:10:18.600 --> 0:10:20.560 All right, yeah, you're gonna have to tell us. 0:10:20.640 --> 0:10:21.880 I think I'm having stage fright. 0:10:21.920 --> 0:10:23.199 What's the Texas Roadhouse? 0:10:23.559 --> 0:10:26.520 I love Texas Roadhouse? Oh my god. They have the 0:10:26.520 --> 0:10:28.040 best red rolls. 0:10:28.120 --> 0:10:30.760 My mom brings to block bags and like I should. 0:10:30.480 --> 0:10:32.719 Have said, that was my favorite. They had one of those. 0:10:33.480 --> 0:10:35.640 When I was living in Abu Dabi, they had one 0:10:35.800 --> 0:10:37.640 and it was absolutely fantastic. 0:10:37.679 --> 0:10:39.640 You want to understand America, go to a text roadhouse 0:10:39.720 --> 0:10:42.120 on Friday night. Yeah, I wasn't one to buke Iowa. 0:10:42.320 --> 0:10:44.680 I was on book tour last weekend. I got a steak, 0:10:44.760 --> 0:10:47.400 vegetable and mashed potatoes homemade fourteen dollars. 0:10:47.720 --> 0:10:50.880 Un ironically, their sticks are really good, Like they're good. 0:10:50.960 --> 0:10:51.600 I always have to pull. 0:10:51.760 --> 0:10:53.559 Where do they get there? Where do they get their food? 0:10:54.160 --> 0:10:55.840 Oh? I mean who knows how they I mean you 0:10:55.880 --> 0:10:58.240 need to get it from Cisco and they you don't. 0:10:58.360 --> 0:10:58.720 I don't know. 0:10:58.760 --> 0:11:03.199 They only charged fourteen because of the incredible miracle of capitalism. 0:11:03.240 --> 0:11:04.040 Have been scared, Joe. 0:11:03.960 --> 0:11:06.360 My hotic is two things they do scratch cooking. Most 0:11:06.440 --> 0:11:08.600 chain restaurants now do frozen food. They're actually kind of 0:11:08.600 --> 0:11:11.360 brocoling in the back and number two volume. Okay, yeah, 0:11:11.360 --> 0:11:13.600 their surfers only have three tables and they move you 0:11:13.679 --> 0:11:14.120 so quick. 0:11:30.080 --> 0:11:33.200 I love that you're doing in person research on the 0:11:33.240 --> 0:11:36.520 subject of chain restaurants. But you know, you mentioned that 0:11:36.840 --> 0:11:40.760 we're not entirely sure where Texas Roadhouse gets its food from. 0:11:41.080 --> 0:11:45.000 How does it work the contracts between a restaurant and 0:11:45.320 --> 0:11:47.679 someone like a Cisco. What do we know about those 0:11:47.720 --> 0:11:48.760 specific agreements? 0:11:49.160 --> 0:11:51.240 So a few things. One we can kind of figure 0:11:51.240 --> 0:11:53.800 out what chain Cisco does based on its website. So 0:11:53.840 --> 0:11:56.200 it has a subdivision called Sigma. So if you go 0:11:56.200 --> 0:11:59.240 to Sigma's website, it will rage about its corporate clients. 0:11:59.240 --> 0:12:01.760 Some of them are all Garden Red Robin's one, you know, 0:12:01.760 --> 0:12:05.760 different chains like that. The agreements, there's a lot. I mean, 0:12:06.920 --> 0:12:08.440 what I do know from these agreements is what we 0:12:08.440 --> 0:12:11.319 see with public universities, and even that are not transparent. 0:12:11.640 --> 0:12:14.320 There's a famous one at the University of Iowa. Someone 0:12:14.360 --> 0:12:17.600 wanted to know what's the contract for food here? And 0:12:17.640 --> 0:12:19.400 it went up to Supreme Court in Iowa and it 0:12:19.440 --> 0:12:21.400 was rejected, which is kind of a weird thing, Like 0:12:21.400 --> 0:12:22.959 you think that our cultural state would have a really 0:12:23.000 --> 0:12:25.040 good source in the food. You would know the contracts. 0:12:25.360 --> 0:12:26.559 There's not a lot of disclosure here. 0:12:26.559 --> 0:12:28.840 They filed to see the actual contracts. 0:12:28.920 --> 0:12:29.439 Keep it closed. 0:12:29.520 --> 0:12:32.559 Yeah, Okay, So let's say a red Robin is it 0:12:32.640 --> 0:12:35.400 or an olive Garden is a client of Cisco. Would 0:12:35.400 --> 0:12:38.920 that be a national contract that would cover every Red 0:12:39.000 --> 0:12:42.200 Robin or Olive Garden or would there be any variation 0:12:42.440 --> 0:12:45.880 and read in regional distribution or anything like that, Like I. 0:12:45.880 --> 0:12:48.360 Would think so I would contextualize Cisco as think of 0:12:48.360 --> 0:12:50.480 it as like fed extra food. Okay, A lot of 0:12:50.480 --> 0:12:52.800 these companies that pattern products, and Cisco's just moving their 0:12:52.840 --> 0:12:54.679 patent pattern fries, you know what I mean? Like they 0:12:54.720 --> 0:12:56.760 all have their kind of That's what Cisco's there to 0:12:56.800 --> 0:12:59.720 do is outsource that part or handle that. 0:13:00.480 --> 0:13:04.679 Is there some giant like Cisco food production center in 0:13:04.800 --> 0:13:07.199 like I don't know, the wilderness of Wyoming or something, 0:13:07.280 --> 0:13:09.959 or are they sort of like scattered around the United States. 0:13:09.720 --> 0:13:12.880 Scattered around? I mean, this is this is harder to understand. 0:13:12.880 --> 0:13:14.600 There was a good Wall Street Journal article like twenty 0:13:14.679 --> 0:13:17.599 years ago, how a lot of your Jollopeno poppers in 0:13:17.640 --> 0:13:19.600 a restaurant I'll be all being made at one factory 0:13:19.640 --> 0:13:23.080 in Mexico. You know, it's cheaper to pay someone offshore. Essentially, 0:13:23.160 --> 0:13:25.920 you know, stuff it, but then you are sacrificing taste 0:13:25.920 --> 0:13:29.440 at some point. But Cisco doesn't own production facilities. It 0:13:29.480 --> 0:13:31.320 owned a slaughterhouse in Iowa at one point, but then 0:13:31.320 --> 0:13:33.280 it sold it off. So I can't quite figure out 0:13:33.320 --> 0:13:35.480 what they got into that. My guess is is for 0:13:35.600 --> 0:13:38.559 most restaurants, people pick their vendor based on They called 0:13:38.640 --> 0:13:41.240 center of the plate the protein, so they were trying 0:13:41.280 --> 0:13:42.680 to do quality control. 0:13:43.000 --> 0:13:45.319 Yeah, I'm sure you're the center of the plate. Yeah, 0:13:45.640 --> 0:13:49.600 a restaurant to refer to whichever protein. I already but 0:13:49.679 --> 0:13:53.679 this is so they don't have production what basically it 0:13:53.760 --> 0:13:56.800 is and you already said it's like fed eggs at 0:13:56.800 --> 0:13:58.880 its core, it sounds like it's logistics companies. 0:13:58.920 --> 0:14:01.440 Yes, most of theirm place are truck drivers. Huh. 0:14:01.679 --> 0:14:03.640 Your dad was a truck driver, right, you talk about 0:14:03.640 --> 0:14:04.160 this in the book. 0:14:04.440 --> 0:14:06.760 Yes, he works from a corn start company. 0:14:07.960 --> 0:14:10.880 So what did that experience of growing up with a 0:14:10.920 --> 0:14:14.520 truck driver dad teach you about a company like Cisco. 0:14:14.760 --> 0:14:16.719 So my dad used to be first he's being in 0:14:16.720 --> 0:14:18.520 the beer business, so he's a beer truck driver, and 0:14:18.559 --> 0:14:20.560 then he worked in beer sales. So that's actually where 0:14:20.560 --> 0:14:23.520 a lot of my I love looking at displays and 0:14:23.560 --> 0:14:25.600 grocery stores because my dad used to merchandise, so I 0:14:25.640 --> 0:14:28.560 love good merchandising. So like, my favorite grocery store is 0:14:28.720 --> 0:14:32.720 HAP in Texas LOVEHV No One merchant, No One merchandise 0:14:32.800 --> 0:14:34.640 is like that, Yeah, this is a fact, and so 0:14:34.680 --> 0:14:36.520 you look at that. And so like my dad always 0:14:36.520 --> 0:14:40.080 taught me like he could, he knew the type of 0:14:40.080 --> 0:14:42.480 demographics of a grocery based on the number one beer, 0:14:42.840 --> 0:14:44.680 like oh, this is a blue Moon hivy or this 0:14:44.760 --> 0:14:49.320 is a you know, red red Dog hivy. So there's 0:14:49.320 --> 0:14:53.960 different price points. And so my dad now does corn products. 0:14:54.080 --> 0:14:58.520 But just understanding because there's independent truck drivers, there's in 0:14:58.600 --> 0:15:00.920 house truck drivers, and there's kind of hierarchy to these 0:15:00.920 --> 0:15:03.360 different worlds all that kind of stuff. 0:15:03.800 --> 0:15:06.760 So let's talk about the competitive landscape because that's an 0:15:06.920 --> 0:15:10.040 addition to the fact that you know, you are a 0:15:10.080 --> 0:15:12.760 big fan of the stakes at Texas Roadhouse. That's why 0:15:12.800 --> 0:15:16.440 we're here. What does the competitive landscape for sort of 0:15:16.480 --> 0:15:19.280 this sort of broadline or food distribution to restaurant really 0:15:19.280 --> 0:15:19.680 look like. 0:15:21.200 --> 0:15:23.560 So that I mean, that's that's the big question anti 0:15:23.560 --> 0:15:26.400 trusty market definition. I mean that is is like my 0:15:26.480 --> 0:15:28.720 little pet peeve is, how do you define a market's everything? 0:15:29.120 --> 0:15:31.520 So like Cisco try to buy us foods, you know, 0:15:31.560 --> 0:15:34.520 back in twenty fifteen, and they argue their competition include 0:15:34.560 --> 0:15:38.480 Sam's Club. I think people like I just remember personally 0:15:38.520 --> 0:15:40.880 anadoltically my mom, we only went to Sam's Club when 0:15:40.880 --> 0:15:43.080 she ran out cups and needed to get cups between 0:15:43.120 --> 0:15:47.120 her next truckload. Most people would not include Costco and 0:15:47.120 --> 0:15:49.200 Samski as a broadliner and Texas Roadhouse. 0:15:49.240 --> 0:15:50.800 Is it going to Costco to buy steakes? 0:15:50.840 --> 0:15:53.280 But in theory or restaurant, I mean, I take your point, 0:15:53.560 --> 0:15:57.440 it's not really a comp but in theory, there probably 0:15:57.480 --> 0:16:00.400 are restaurants that source from some of these whole Yeah. 0:16:00.560 --> 0:16:01.760 I mean you can tell when you go in certain 0:16:01.760 --> 0:16:04.680 local restaurants, you'll see Costco branded products in the back. 0:16:05.080 --> 0:16:07.600 My bigger thing here is right now, a lot of 0:16:07.640 --> 0:16:11.640 what is a market is defined by highly paid economists, 0:16:11.720 --> 0:16:15.000 and these things aren't publicly disclosed usually. I kind of 0:16:15.480 --> 0:16:17.040 keep in mind, I come out of the Treasury Tax 0:16:17.200 --> 0:16:19.640 Analysis Office. The beauty of that world is you have 0:16:19.640 --> 0:16:23.240 Treasury doing tax revenue estimates UFCCBO, and then you have 0:16:23.280 --> 0:16:26.840 independent academic institutions like you PEN doing revenue estimates, so 0:16:26.880 --> 0:16:28.560 you have three different estimates coming at you for the 0:16:28.600 --> 0:16:30.880 same thing. I will love if we did something like 0:16:30.920 --> 0:16:32.960 this with market definition because here's the thing, these markets 0:16:32.960 --> 0:16:35.520 are pretty stable. Having like there should be a government 0:16:35.520 --> 0:16:37.560 agency doing market definition reports. 0:16:37.880 --> 0:16:42.120 So based on how you so the merger attempt was blocked. 0:16:42.160 --> 0:16:47.400 It so based on however the regulators at the time defined, Okay, 0:16:47.440 --> 0:16:49.400 this is the market, this is the circle we're drawing. 0:16:49.440 --> 0:16:51.440 What are we talking about in terms of market share 0:16:51.440 --> 0:16:51.960 and so forth? 0:16:52.160 --> 0:16:54.480 So keep so at the time too, there's basically three 0:16:54.560 --> 0:16:57.400 national broadliners and they were number one Cisco is trying 0:16:57.400 --> 0:17:00.440 to buy number two US Foods. That was read. But 0:17:00.480 --> 0:17:03.680 what's really interesting here is basically, even though Cisco got 0:17:03.720 --> 0:17:06.000 stopped two things number one, number two is trying to 0:17:06.000 --> 0:17:08.439 buy number three. Right now, US Foods is trying to 0:17:08.440 --> 0:17:11.639 buy I have to write it down performance foed. But 0:17:11.760 --> 0:17:16.280 then Cisco basically is engaged. When people call roll ups 0:17:16.720 --> 0:17:19.560 to my calculations, it's buying over two hundred and sixteen companies. 0:17:19.840 --> 0:17:22.240 So even though it got stopped once for this big merger. 0:17:22.720 --> 0:17:25.159 It's market dominance really comes from rolling up you know, 0:17:25.600 --> 0:17:28.200 a local Miami seafood place, local produce place, and that 0:17:28.359 --> 0:17:29.679 Anaheim that kind of stuff. 0:17:30.240 --> 0:17:33.120 So I know, roll up strategies started to get more 0:17:33.240 --> 0:17:39.200 attention under the Biden administration, but historically it does seem 0:17:39.240 --> 0:17:42.840 like regulators kind of go after the big M and 0:17:42.880 --> 0:17:45.200 A deals and they kind of ignore all the small ones, 0:17:45.280 --> 0:17:47.680 even though once you add up all the small ones, 0:17:47.960 --> 0:17:50.880 it can get a company into a very very dominant position, 0:17:51.320 --> 0:17:52.120 like with Cisco. 0:17:52.400 --> 0:17:54.000 I think this is the biggest one of the biggest 0:17:54.040 --> 0:17:56.760