Tugged Toward the Middle
July 13, 2010
Occasionally, when I’m not reading the New York Times 'DealBook' or the Journal’s 'Private Equity Beat' blog or poring through the SEC’s Form D filings, there are a few websites I’ll turn to so I can tune out the M&A for a quick five minutes.
The Awl is one of these destinations. Last night, though, this was where I found the best commentary I've seen in a long time on the state of business and an economy that seems to have been inappropriately labeled a recovery. Brent Cox, in a post about Hamburger Helper and the “Entropic Degradation of All Things” manages to get to the essence of what’s going on at a micro level through his critique of the classic boxed supper.
He discusses General Mills’ decision to swap whatever “dehydrated milk substitute” that was formerly in the seasoning packet with actual milk -- another ingredient, besides the hamburger, supplied by the chef. I’d suggest reading Cox’s post, but for those short on time, he reasons that this is probably an economic decision. Either way, the result is a form of Hamburger Helper that pales in comparison to whatever glorified memory people may still have from their youth.
In Cox’s own words:
“Altogether sadder, however, would be that this was not a decision by General Mills, but just being the way things go, another example of entropy, tugging everything towards the middle and then below, without anyone noticing; a quiet inexplicable reverse engineering of lowered expectations.”
And with that, the idea of a ‘jobless’ recovery suddenly makes sense. It can also make you look at M&A in a different way.
A few years ago, when a consortium of private equity firms acquired Dunkin Donuts, the talk from the buyers was about how they would improve the menu, expand the company’s geographic reach, attend to the brand, et cetera. It's hard to argue with their efforts, although most New Yorkers probably choked when the saw the "bagel twist" added to the menu.
Still, as the CKE Restaurants’ sale to Apollo Management closes, my first instinct is wonder what kind of corners they’ll cut. I’ve steeled myself for the possibility of buns without sesame seeds.
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