Friday, June 23, 2023

Where's the Beef?

One of the great advantages of being older is that you can draw on years of war stories: lessons you learned from personal experience rather than history books.  Don't get me wrong, history books are where I live most of the time, because I'm a confirmed believer in learning from other people's mistakes. But sometimes, there are mistakes made that simply don't appear in the history books. Sometimes, they occur for the first time ever, and if you're observant enough, you just might catch them as they happen. In fact, we're seeing one right now, in the case of imitation foods and they're inability to profitably sustain an ever-growing, ever-skeptical consumer population. 

Imitation food isn't itself that new.  Neither is the public's suspicion and rejection of it.  We've had everything from the "healthier alternatives" to disgusting facsimiles for almost a century (In fact, long ago, I wrote and recorded a song about it.  But that's another story).

More to the point, media such as Bloomberg, The Washington  Post, Forbes, The New York Times, The Guardian and all the other usual suspects are, as of this writing, reporting another aspect of the imitation food sector that has rarely been reported:

They're complete failures as investments.

As it turns out, legions of financial overlords (including Bill Gates, proponent of reckless vaccines and the doom of humanity in general) are hemorrhaging cash in an industry that's bleeding red ink.  The public, it seems, has no appetite for beef flavored sawdust.

But that's not the real story here. Here's what we're seeing that we've rarely, if ever, seen before:

A lot of companies bet big money on the gloom and doom that they thought would propel the imitation food business. In fact, if you look really, really closely at the entire sector, you'll see that the entire industry is based on whim, speculation and, well, fashion. I've been in conference rooms where new business are launched.  I've watched projections, assumptions and recasts of spreadsheets, and this I guarantee you:

Not one of these companies has ever had a business plan or a financially sound strategy.

On the contrary, all of these companies thought they could ride a wave of social justice propaganda that they themselves would supply, in effect creating a category which they would instantly dominate. These are not your fathers' or grandfathers' businessmen building real products people can use.  These are not your former giants of industry creating useful machines of iron and steel.  These are over-funded, lazy and ignorant adolescent  fashionistas raised on a few decades of overnight fortunes amassed from software, apps and tech.  

More typically, these types of enterprises are created with little or no discipline and absolutely no regard for the end user.  Whether it's technology or meatless patties, the usual attitude is "they'll eat what we feed them." The next step is to create a mirage of success by paying for wide distribution, creating the illusion of public acceptance. The third step is to set up straw man competitors to further the myth of consumer demand.  The fourth step, of course, is to manage consolidation of companies through cash buyouts and dump the stock for a hefty profit.

Does that sound smart to you?  Or really stupid? Well, in this case, it's beginning to look really stupid, Because like so many other undisciplined, failing non-businesses (Peleton comes to mind), these profit-at-any-cost hedge-funds are dying on this hill They're finding out the hard way that whether it's fake eggs, lab grown chicken or estrogen-loaded soy milk, you can't fool all of the people all of the time. 

Which has left Bill Gates and his hedge fund cronies with a very bad taste in their mouths.


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