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.

What's the Difference Between Apple Juice and Apple Cider?

iStock/Alter_photo
iStock/Alter_photo

In a time before pumpkin spice went overboard with its marketing, people associated fall with fresh apples. Crisp and fresh, they practically beg to be crushed and pulped into liquid. But what’s the difference between apple juice and apple cider?

According to the state of Massachusetts, home to a variety of apple-picking destinations, both apple juice and apple cider are fruit beverages. But apple cider is raw, unfiltered juice—the pulp and sediment are intact. To make cider, the apples are ground into an applesauce-like consistency, then wrapped in cloth. A machine squeezes the layers and strains out the juice into cold tanks. That’s the cider that ends up on store shelves.

Apple juice, on the other hand, takes things a step further—removing solids and pasteurizing the liquid to lengthen its shelf life. It’s typically sweeter, possibly with added sugar, and may lack the stronger flavor of its relatively unprocessed counterpart. It’s also often lighter in color, since the remaining sediment of cider can give it a cloudy appearance.

But that’s just the Massachusetts standard. Each state allows for a slight variation in what companies are allowed to call apple cider versus apple juice. The cider may be pasteurized, or the cider and juice may actually be more or less identical. One company, Martinelli’s, states in its company FAQ that their two drinks are the same in every way except the label: "Both are 100 percent pure juice from U.S. grown fresh apples. We continue to offer the cider label since some consumers simply prefer the traditional name for apple juice."

The US Apple Association, a nonprofit trade organization that represents growers nationwide, indicates that apple juice can be made from concentrate, which is why you might see water as the first ingredient on the label. Generally, cider is the hard stuff: Crushed apples with minimal processing. Because it can ferment, it's usually found refrigerated. Apple juice can often be found elsewhere in stores, where it can remain stable.

Which you should buy comes down to personal preference. Typically, though, recipes calling for apple cider should use apple cider. Processed juice may be too sweet an ingredient. And you can always try making a pumpkin spice hot apple cider, although we may stop talking to you if you do.

Have you got a Big Question you'd like us to answer? If so, let us know by emailing us at bigquestions@mentalfloss.com.

Europe's First Underwater Restaurant Is Now Taking Reservations

MIR, Snøhetta
MIR, Snøhetta

The choppy waters off Norway's coast may not seem like the most relaxing dining atmosphere, but thanks to the work of the architecture firm Snøhetta, the North Sea is now home to the region's hottest new restaurant. Under, Europe first underwater restaurant (and the world's largest), opens next year, as Forbes reports—and reservations are already filling up fast.

From the shore, Under looks like some sort of toppled ruin jutting out of the water. Guests enter at sea-level, then descend to the champagne bar and finally to the 100-person dining room, which is submerged 18 feet beneath the ocean's surface. From their seats, diners can gaze through the restaurant's 36-foot-by-13-foot panoramic window. Lighting installed both inside the room and along the seabed outside illuminates nearby marine life, providing a stunning underwater show any time of day or night.

A rendering of the top of Under jutting out of the ocean
MIR, Snøhetta

In addition to designing Under to be a breathtaking experience, Snøhetta built the restaurant to durable. The building's 3-foot thick walls protect guests and staff from water pressure and violent tides. The architects were so sure of the restaurant's safety that they intentionally built it in notoriously rough waters near the town of Båly off Norway's southern coast. According to Snøhetta's senior architect Rune Grasdal, a storm is the best time to dine if guests want a truly dramatic view.

A rendering of the exterior of the underwater restaurant
MIR, Snøhetta

The over-the-top atmosphere will be accompanied by a world-class meal. The seasonal menu comes from Danish chef Nicolai Ellitsgaard and dishes are served over the course of three-and-a-half to four hours.

Under doesn't open to the public until April 2019, but the restaurant is already taking reservations. Adventurous diners can attempt to book a table here, or, for parties larger than eight, email the restaurant.

[h/t Forbes]

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