3 ms·

If food manufacturers could sell less for more, they'd already be doing it. Why would they wait?

by kadoban 2y ago

llamaimperative 2y ago
This is not how R&D works in practice. They don’t need to show 80% growth YoY. They need to show, say 8-12%. Easy enough, until an exogenous force defaults that to -20%. Suddenly your incentive to develop new methods and technologies has gone up dramatically. No company is operating at full-tilt life or death 100% of the time simply because that’s not how economics works. E.g. when an oil reservoir “runs dry,” it’s not that it is literally dry, but that the remaining oil isn’t economically worthwhile to extract. They don’t call that “losses” or “dry,” they call that “deferrals” because they’ll come back to it when it’s economically sensical to do so.
- kadoban 2y ago
  Oil is a bad metaphor. Those "dry" wells are only worth it once the price of oil goes up, that's what they're waiting for. Food doesn't seem to have anything similar. If you could make more profitable food _right now_, there's nothing stopping you, no reason to wait.
  - llamaimperative 2y ago
    R&D doesn’t happen by just theorizing what the maximum the market could sustain and then conjuring up those innovations out of thin air. It happens via sustained investment decisions over years. Those decisions are made in light of their costs and incentives, which change over time. Either food can be “improved” under certain economic conditions (which are probably amplified by GLP-1s), or we’re at the theoretical maximum. So you can give an argument why GLP-1s don’t produce strong incentive for R&D or you can argue that a stronger incentive won’t matter because we’re capped out, but historically the “if it could be better it would be better already” argument is disproved by capitalism on a daily basis.

3 ms·

If food manufacturers could sell less for more, they'd already be doing it. Why would they wait?

by kadoban 2y ago

If food manufacturers could sell less for more, they'd already be doing it. Why would they wait?

llamaimperative 2y ago
This is not how R&D works in practice. They don’t need to show 80% growth YoY. They need to show, say 8-12%. Easy enough, until an exogenous force defaults that to -20%. Suddenly your incentive to develop new methods and technologies has gone up dramatically. No company is operating at full-tilt life or death 100% of the time simply because that’s not how economics works. E.g. when an oil reservoir “runs dry,” it’s not that it is literally dry, but that the remaining oil isn’t economically worthwhile to extract. They don’t call that “losses” or “dry,” they call that “deferrals” because they’ll come back to it when it’s economically sensical to do so.
- kadoban 2y ago
  Oil is a bad metaphor. Those "dry" wells are only worth it once the price of oil goes up, that's what they're waiting for. Food doesn't seem to have anything similar. If you could make more profitable food _right now_, there's nothing stopping you, no reason to wait.
  - llamaimperative 2y ago
    R&D doesn’t happen by just theorizing what the maximum the market could sustain and then conjuring up those innovations out of thin air. It happens via sustained investment decisions over years. Those decisions are made in light of their costs and incentives, which change over time. Either food can be “improved” under certain economic conditions (which are probably amplified by GLP-1s), or we’re at the theoretical maximum. So you can give an argument why GLP-1s don’t produce strong incentive for R&D or you can argue that a stronger incentive won’t matter because we’re capped out, but historically the “if it could be better it would be better already” argument is disproved by capitalism on a daily basis.