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It's been a bad time for Lamb Weston. The stock is down over 41% since a year ago. I know this because it's been part of the most unsuccessful algorithmic tradi

It's been a bad time for Lamb Weston. The stock is down over 41% since a year ago. I know this because it's been part of the most unsuccessful algorithmic trading strategy I've ever run. That company has a CEO who's been using the private jet to party all over the place; had to throw out [edit: $120M] of raw potatoes they overbought; and sent $80M of flawed french fries to a major customer (probably McDonald's) which they had to eat back in the last year. I think something fairly major is going to happen soon to change that company's leadership. Cartels may work for luxury items like diamonds and cocaine, but they're inefficient. A lot more people notice flaws in their fries than in their diamonds and blow. https://www.businesswire.com/news/home/20241216832356/en/JANA-Partners-Sends-Letter-Board-Directors-Lamb https://www.businesswire.com/news/home/20241216832356/en/JAN...

masklinn 2y ago
Cartels don’t mean low quality though, that’s a completely separate and largely orthogonal issue. You don’t even remotely need a cartel for leadership to focus on value extraction and tank the products.
- lazide 2y ago
  Cartels are a simple type of monopoly. It’s a lot easier to be shitty when customers don’t have other options.
- boringg 2y ago
  Actually it does mean lower quality --> Lack of competition means that the product quality typically suffers as a result of rent seeking behavior.
- poulsbohemian 2y ago
  This is a key point: historically, Burger King, McDonalds, Wendy's, etc often sourced their fries out of the same factory, but to different standards. Think starches, batters, fry dimensions, even type of potato in some cases. These companies competed not only on price but also in product consistency.
pjc50 2y ago
> throw out $120M of raw potatoes they overbought This is putting all those efforts to reduce domestic food waste into perspective. > $80M of flawed french fries .. which they had to eat I think it would take me a long time to eat $80m of french fries. > Cartels may work for luxury items like diamonds and cocaine, but they're inefficient And now a serious point: people have been complaining about food price inflation, and blaming the usual suspects of fiat money and Democrats, but .. what if it was actually the people making the food putting up the prices? Doesn't it often turn out that the secret ingredient is in fact some kind of crime?
- selimthegrim 2y ago
  Maybe the CEO has been overpaying for his executive washroom nose powder.
- ben_w 2y ago
  > I think it would take me a long time to eat $80m of french fries. About 7000 person-years, I recon. (Assuming €2.90 for a 231 kcal portion, which is roughly what McD seems to charge, but the search results give me a lot of different numbers and their own website didn't give me any specific price (do I need to place an order or sign in to get that?)).
  - deleted 2y ago
    [deleted]
  - nisegami 2y ago
    I could do it in my lifetime I think
    - ben_w 2y ago
      You couldn't eat that much in a normal human lifetime, not even if you had cystic fibrosis and therefore both needed and were capable of consuming 10,000 kcal/day every day just to survive.
- lotsofpulp 2y ago
hooli_gan 2y ago
How much did you lose in which timeframe, if you don't mind me asking?
poulsbohemian 2y ago
There's a parallel here with a lot of other industries... back 10+ years ago, companies like Lamb Weston had a lot of actual farmers in the management ranks, IE: people who grew up working in the fields. The shift started sometime after 2000 to MBA types who (thought they) knew numbers, but had never been close to the product. My uncle was one of those farmer types who had helped these companies find serious success (he was part of the development of the curly fry, sweet potato fry, etc) and saw the writing on the wall when he retired and saw the type of new era corporate managers that were coming in.
eru 2y ago
Cocaine is a very strange business, because the competing suppliers can't appeal to the police or the courts.

masklinn 2y ago

Cartels don’t mean low quality though, that’s a completely separate and largely orthogonal issue. You don’t even remotely need a cartel for leadership to focus on value extraction and tank the products.

lazide 2y ago
Cartels are a simple type of monopoly. It’s a lot easier to be shitty when customers don’t have other options.
boringg 2y ago
Actually it does mean lower quality --> Lack of competition means that the product quality typically suffers as a result of rent seeking behavior.
poulsbohemian 2y ago
This is a key point: historically, Burger King, McDonalds, Wendy's, etc often sourced their fries out of the same factory, but to different standards. Think starches, batters, fry dimensions, even type of potato in some cases. These companies competed not only on price but also in product consistency.

pjc50 2y ago

> throw out $120M of raw potatoes they overbought This is putting all those efforts to reduce domestic food waste into perspective. > $80M of flawed french fries .. which they had to eat I think it would take me a long time to eat $80m of french fries. > Cartels may work for luxury items like diamonds and cocaine, but they're inefficient And now a serious point: people have been complaining about food price inflation, and blaming the usual suspects of fiat money and Democrats, but .. what if it was actually the people making the food putting up the prices? Doesn't it often turn out that the secret ingredient is in fact some kind of crime?

selimthegrim 2y ago
Maybe the CEO has been overpaying for his executive washroom nose powder.
ben_w 2y ago
> I think it would take me a long time to eat $80m of french fries. About 7000 person-years, I recon. (Assuming €2.90 for a 231 kcal portion, which is roughly what McD seems to charge, but the search results give me a lot of different numbers and their own website didn't give me any specific price (do I need to place an order or sign in to get that?)).
- deleted 2y ago
  [deleted]
- nisegami 2y ago
  I could do it in my lifetime I think
  - ben_w 2y ago
    You couldn't eat that much in a normal human lifetime, not even if you had cystic fibrosis and therefore both needed and were capable of consuming 10,000 kcal/day every day just to survive.
lotsofpulp 2y ago

hooli_gan 2y ago

How much did you lose in which timeframe, if you don't mind me asking?

poulsbohemian 2y ago

There's a parallel here with a lot of other industries... back 10+ years ago, companies like Lamb Weston had a lot of actual farmers in the management ranks, IE: people who grew up working in the fields. The shift started sometime after 2000 to MBA types who (thought they) knew numbers, but had never been close to the product. My uncle was one of those farmer types who had helped these companies find serious success (he was part of the development of the curly fry, sweet potato fry, etc) and saw the writing on the wall when he retired and saw the type of new era corporate managers that were coming in.

eru 2y ago

Cocaine is a very strange business, because the competing suppliers can't appeal to the police or the courts.