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.

7 International Names for American Products

Maksym Kozlenko, Wikimedia Commons // CC BY-SA 3.0
Maksym Kozlenko, Wikimedia Commons // CC BY-SA 3.0

While available around the world, American products aren't always called by their red-white-and-blue names. Companies have to adapt to various languages and cultures, and what works stateside doesn't always translate. Here are seven American goods with unfamiliar international names.

1. Hungry Jack's (Burger King in Australia)

A Hungry Jack's drive thru sign
A Hungry Jacks sign in Bathurst, New South Wales

In 1971, Jack Cowin bought the Australian franchise for Burger King from Pillsbury Company (which owned the chain at the time). But because the name was already registered in Australia, he used the name Hungry Jack—originally an American pancake mix—instead. In 1999, Burger King began opening restaurants under its own name in Australia, but they combined with Hungry Jack's in 2003.

2. Doritos Cool American (Doritos Cool Ranch in Europe)

Cool American Doritos on a shelf
Cool American Doritos in Iceland
Funky Tee, Flickr // CC BY-SA 2.0

Cool Ranch is one of the most popular Doritos flavors in the United States. However, in many parts of Europe, the flavor is known as Cool American because Europeans often call Ranch sauce "American" sauce. Very cool, indeed.

3. Coca-Cola Light (Diet Coke in Europe)

Diet Coke is called "Coca-Cola Light" throughout Europe. The soft drink is exactly the same as its American counterpart, but the word light is associated more with lower-calorie items in Europe than diet.

4. TK Maxx (TJ Maxx in Ireland)

A TK Maxx in London
Tim P. Whitby/Getty Images for TK Maxx

The American department store TJ Maxx is known as TK Maxx in Ireland and throughout the United Kingdom as well as in Australia and parts of Europe. Its parent company, TJX Companies, re-named it so Irish and British customers wouldn't confuse the store with the established retailer TJ Hughes, which is quite popular in the UK.

5. Kraft Dinner (Kraft Macaroni & Cheese in Canada)

Boxes of Kraft Dinner wrapped in plastic
Alan Levine, Flickr // CC BY 2.0

In Canada, Kraft Macaroni & Cheese is known as Kraft Dinner or simply KD. Kraft introduced the product as Kraft Dinner in both Canada and the United States in 1937. However, in the late '50s, Kraft added the words macaroni & cheese to its packaging of Kraft Dinner when the term gained more prominence. It wasn't until the '70s that Kraft Canada started using bilingual labeling (French and English) on all of its packaging. As a result, Canadian Kraft products included the words Kraft Dinner in a bigger and bolder font on one side of the box with Díner Kraft on the other side. The words macaroni & cheese were in a smaller font, so Canadians adopted it as merely Kraft Dinner. (Americans can buy a box of the Canadian version for themselves on Amazon.)

6. Meister Proper (Mr. Clean in Germany)

Bottles of Meister Proper on store shelves
Alf van Beem, Wikimedia Commons // Public Domain
 

Procter & Gamble’s Mr. Clean is a global product, so its name has been translated into various languages, including Maestro Limpio in Mexico, Monsieur Propre in France, and Meister Proper in Germany. It’s the same product—with the same sailor mascot—as you can find in the United States.

7. Walkers Potato Crisps (Lay's Potato Chips in the UK)

Walkers potato chips on a shelf
Ben Babcock, Flickr // CC BY-SA 2.0

Founded in 1948, Walkers quickly became the United Kingdom’s leading potato crisps snack food company. However, Pepsi acquired Walkers and re-branded it with the Lay’s logo and products in 1989. The snack food is exactly the same, but PepsiCo decided to keep the Walkers name to ensure customer brand loyalty in the United Kingdom. Walkers also has more exotic flavors than its American counterpart, including American Cheeseburger, Lamb & Mint, and South African Sweet Chutney. Adventurous Americans can get some of them, including Prawn Cocktail, Tomato Ketchup, and Worcester Sauce as well as a variety of different meat flavors on Amazon.

A version of this article first ran in 2016.

This 3D-Printed Sushi is Customized For You Based on the Biological Sample You Send In

Open Meals
Open Meals

Many high-end restaurants require guests to make a reservation before they dine. At Sushi Singularity in Tokyo, diners will be asked to send fecal samples to achieve the ideal experience. As designboom reports, the new sushi restaurant from Open Meals creates custom sushi recipes to fit each customer's nutritional needs.

Open Meals is known for its experimental food projects, like the "sushi teleportation" concept, which has robotic arms serving up sushi in the form of 3D-printed cubes. This upcoming venture takes the idea of a futuristic sushi restaurant to new extremes.

Guests who plan on dining at Sushi Singularity will receive a health test kit in the mail, with vials for collecting biological materials like urine, saliva, and feces. After the kit is sent back to the sushi restaurant, the customer's genome and nutritional status will be analyzed and made into a "Health ID." Using that information, Sushi Singularity builds personalized sushi recipes, optimizing ingredients with the nutrients the guest needs most. The restaurant uses a machine to inject raw vitamins and minerals directly into the food.

To make things even more dystopian, all the sushi at Sushi Singularity will be produced by a 3D-printer with giant robotic arms. The menu items make the most of the technology; a cell-cultured tuna in a lattice structure, powdered uni hardened with a CO2 laser, and a highly detailed model of a Japanese castle made from flash-frozen squid are a few of the sushi concepts Open Meals has shared.

The company plans to launch Sushi Singularity in Tokyo some time in 2020. Theirs won't be the first sushi robots to roll out in Japan: The food delivery service Ride On Express debuted sushi delivery robots in the country in 2017.

[h/t designboom]

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