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.

UK Burger King Restaurants Will Stop Giving Plastic Toys With Kids' Meals

Leon Neal/Getty Images
Leon Neal/Getty Images

Fast food companies don't have a reputation for being eco-friendly, but through small changes made in recent years, some of the biggest names in the industry are working to reduce their environmental impact. Just a few weeks after introducing the meat-free Impossible Whopper, Burger King announced a new policy for its United Kingdom locations. As CNN reports, UK restaurants will no long include plastic toys with kids' meals.

The change comes after two sisters from the UK started a petition on Change.org calling on McDonald's and Burger King to stop distributing plastic toys with kids' meals. Ella and and Caitlin McEwan, who were 9 and 7 respectively when the petition launched this summer, wrote, “children only play with the plastic toys they give us for a few minutes before they get thrown away and harm animals and pollute the sea." They went on to say: "It’s not enough to make recyclable plastic toys—big, rich companies shouldn’t be making toys out of plastic at all." Their online petition has received more than 530,000 signatures.

By cutting plastic from kids' meals, Burger King estimates it will avoid wasting 350 tons of single-use plastic a year. The chain has also installed containers in its UK stores for collecting old plastic toys from customers, so the material can be recycled to make playgrounds. The UK represents just a fraction of Burger King's market, but according to the company, non-biodegradable plastic toys will be phased out of all locations by 2025.

McDonald's has had a different response to the McEwan sister's petition. Instead of doing away with plastic toys completely, UK restaurants will give customers the option to swap toys for fruit with their Happy Meals later this year, and then allow them to opt for books instead for a period in early 2020. Meanwhile, in Canada and Germany, some McDonald's restaurants are experimenting with going totally plastic-free. The more sustainable restaurants feature paper straws, waffle cone condiment cups, and burger wrappers made from grass.

[h/t CNN]

How to Make 3 Delicious Fall Cocktails

Mental Floss Video
Mental Floss Video

As the leaves start to change color, it’s time to put away the White Claw and the rosé …OK, sure, you can drink whatever you like whenever you like. But if you live in a temperate climate, part of the fun of changing seasons is falling in love with new beverages and meals that complement the weather. That’s why we asked Eamon Rockey, the Director of Beverage Studies at the Institute of Culinary Education, to craft three cocktails that are perfect for fall. 

Pumpkin Spice Flip Recipe

Ingredients:

Blended Scotch
Maple Syrup
Pumpkin Puree
One Whole Egg
Cinnamon

Instructions:

  1. Add 2 ounces of blended scotch to a cocktail shaker
  2. Add 3/4 of an ounce of good maple syrup
  3. Add 1 heaping tablespoon of pumpkin puree
  4. Crack 1 egg and add to mixture
  5. Add one piece of ice and shake vigorously, to emulsify the ingredients
  6. Add ice to the top of your shaker and shake again, to chill and dilute the drink
  7. Double-strain into a cocktail glass. You want all of the volume and richness of the egg, without any solid matter or shards of ice. 
  8. Garnish with freshly grated cinnamon and serve

Four Apples a Day Recipe

Ingredients:

Calvados
Rockey’s Milk Punch
Hard Apple Cider
One Granny Smith Apple

Instructions:

  1. Add 1.5 ounces of calvados to a mixing glass
  2. Add 2 ounces of Rockey’s Milk Punch
  3. Stir with ice to chill
  4. Strain into a wine glass
  5. Top with 3 ounces of hard apple cider
  6. Garnish with fresh apple in any style you like

Old Fashioned Recipe

Ingredients:

Bourbon
Angostura Bitters
Simple Syrup

Instructions:

  1. Add 2.5 ounces of bourbon to a mixing glass
  2. Add 3 dashes of Angostura bitters
  3. Add 1/2 an ounce of simple syrup (50% sugar, 50% water)
  4. Add ice and stir, to chill and dilute the drink
  5. Strain into a rocks glass containing a large cube of ice
  6. Finish with a freshly cut twist of orange peel

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