The Enduring Enigma of Costco's $1.50 Hot Dog and Soda Combo

iStock // Tim Boyle, Getty Images
iStock // Tim Boyle, Getty Images

When Costco president W. Craig Jelinek once complained to Costco co-founder and former CEO Jim Sinegal that their monolithic warehouse business was losing money on their famously cheap $1.50 hot dog and soda package, Sinegal listened, nodded, and then did his best to make his take on the situation perfectly clear.

"If you raise [the price of] the effing hot dog, I will kill you," Sinegal said. "Figure it out."

Taking his words to heart, Jelinek—who became Sinegal's successor in 2012—has never raised the price on Costco's hot dog. Incredibly, it has sold for the same $1.50 since the retail club first introduced the dogs to customers in 1984. The quarter-pound, all-beef tube and 20-ounce soda combo appears to be inflation-proof and immune to the whims of food distributors. How does Costco do it?

Simple. When it comes to hot dogs, Costco doesn't price according to what the market will bear. They price according to their own cost and according to the value the hot dogs can afford them.

According to Jelinek, people would pay $1.75, and maybe more, for the deal. But is that extra 25 cents going to be more valuable than the goodwill and foot traffic generated by a combo that's stuck to its price point for nearly 35 years? Probably not. Customers coming in to shop at Costco are amused, satisfied, and fueled by the hot dog meal. If they get it just before leaving the store, they're left with a lasting impression of being treated well. That's worth more than keeping up with inflation.

That means Costco needs to maintain the food court staple with an eye on a steady price. When supply costs threatened to increase in 2009, the company made a major decision: They stopped using Hebrew National, makers of the all-kosher dog that they had used since 1984, and decided to move hot dog production in-house. A Kirkland's Signature hot dog plant was constructed in Los Angeles. When they needed to ramp up production, they built a second plant in Chicago.

They've also had to keep costs on the soft drink side in line. When their deal with Coca-Cola was set to increase the price, Costco opted to sign with Pepsi in 2013, ensuring that their trademark $1.50 price sticker would be kept intact.

Today, Costco sells over 100 million hot dogs annually, which is more than every MLB stadium combined. And they continue to prove surprisingly adept at anything that could add even a single cent to the deal. When California recently enacted a soft drink tax that would have raised the consumer's cost, Costco locations in the state switched the combo to include Diet Pepsi. (Diet drinks are exempt from the law.) The company's "effing hot dog" will continue to remain a steal for the foreseeable future.

Which Kind of Oatmeal is Best for Your Health?

iStock
iStock

Like a lot of nutritionally robust foods, oatmeal sometimes gets a bad rap for being boring. Even the sight of plain, cooked oats—often resembling a mushy kind of paste—can have people passing it up in favor of a sugary cereal or pancake stack. But oatmeal can wind up being one of the better breakfast choices, not only in taste, but also in its health benefits, Time reports. It all comes down to what type of oatmeal you buy and how you prepare it.

To determine your best oat option, it helps to understand that oatmeal isn’t really oatmeal. When oats are harvested, they’re wrapped in a hard husk that manufacturers remove to facilitate cooking. Inside is the groat, a complete grain full of fiber. When you buy oatmeal that’s labeled “instant,” "quick-cooking," "rolled," or "old-fashioned," the groat has been steamed and rolled flat to make it easier to cook. The mostly unadulterated oatmeal labeled “steel-cut” or “Irish” is actually made up of groats that have been chopped up but are otherwise whole.

Typically, the faster you can cook the oatmeal, the more it’s been processed and the less it resembles the groat from the field. Because they resemble kernels and remain thick, steel-cut oatmeal requires the longest preparation, simmering on a stovetop for 30 minutes or so. Processed oats are flaky and can easily be heated.

Nutritionally, both rolled and steel-cut oats have the same profile. Both are fibrous and high in vitamins E, B1, and B12. Steel-cut oats have a heartier texture, while instant tends to take on a loose, light consistency. But because steel-cut oatmeal keeps more of the whole grain intact, it tends to be higher in fiber and lower on the glycemic index and provides more of a slow-burn energy as opposed to the quick burst of the sugar found in flavored instant oatmeal packets.

If you want to opt for steel-cut oats but are short on time, there are solutions. You can soak oats overnight to reduce cooking time down to 10 minutes or so on the stove, or prepare a week’s worth so you can quickly re-heat portions. Topped with yogurt, peanut butter, or fruit, it’s one of the best breakfast choices you can make. And with a little foresight, you won’t have to sacrifice your busy morning to enjoy it.

[h/t Time]

An Avocado Shortage Has Triggered a Fruit Crime Wave in New Zealand

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iStock

In New Zealand, getting started as an avocado grower is no easy task right now. That’s because, according to Stuff.co.nz and The Takeout, the country’s nurseries are currently experiencing a shortage of avocado saplings due to high demand.

Avocado prices are especially high in New Zealand, in part because of the country’s strict import rules. New Zealand doesn’t import avocados, and homegrown harvests have produced low yields in the past two years. Prices for the fruit have spiked, and the average avocado goes for about $3.30 according to The New York Times.

Some New Zealanders have responded to the shortage by trying to get into the avocado cultivation game themselves, but the rush to buy avocado saplings has led to a shortage for wholesalers and nurseries. Several nursery owners Stuff.co.nz spoke to currently have a large backlog of orders they haven’t yet filled. If you want a sapling this year, you’d better get in line. Some nurseries ran out as early as April, and more saplings might not come into stock until late September.

Some opportunistic New Zealanders have taken a different tack to get their avocado fix. There has been a rash of fruit theft from avocado orchards, and thieves are taking more than just one or two avocados. One grower reported losing 70 percent of his harvest to theft in July, costing him an estimated $100,000.

People looking to plant avocado trees shouldn’t be in too much of a hurry to get their hands on saplings, though. Winter in New Zealand isn’t yet over, and if you’re going to plant a new tree, you should probably wait until spring, anyway. And growing avocados isn’t an instant gratification hobby. Newly planted avocado trees don’t bear fruit for their first few years. That baby tree might take as long as four years to start producing guacamole ingredients.

[h/t The Takeout]

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