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

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.

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Bibo Barmaid
Bibo Barmaid Is Like a Keurig for Cocktails—and You Can Buy It Now
Bibo Barmaid
Bibo Barmaid

To make great-tasting cocktails at home, you could take a bartending class, or you could just buy a fancy gadget that does all the work for you. Imbibers interested in the hands-off approach should check out Bibo Barmaid, a cocktail maker that works like a Keurig machine for booze.

According to Supercall, all you need to turn the Bibo Barmaid system into your personal mixologist is a pouch of liquor and a pouch of cocktail flavoring. Bibo's liquor options include vodka, whiskey, rum, and agave spirit (think tequila), which can be paired with flavors like cucumber melon, rum punch, appletini, margarita, tangerine paloma, and mai tai.

After choosing your liquor and flavor packets, insert them into the machine, press the button, and watch as it dilutes the mixture and pours a perfect single portion of your favorite drink into your glass—no muddlers or bar spoons required.

Making cocktails at home usually means investing in a lot of equipment and ingredients, which isn't always worth it if you're preparing a drink for just yourself or you and a friend. With Bibo, whipping up a cocktail isn't much harder than pouring yourself a glass of wine.

Bibo Barmaid is now available on Amazon for $240, and cocktail mixes are available on Bibo's website starting at $35 for 18 pouches. The company is working on rolling out its liquor pouches in liquor stores and other alcohol retailers across the U.S.

[h/t Supercall]

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iStock
An Eco-Friendly Startup Is Converting Banana Peels Into Fabric for Clothes
iStock
iStock

A new startup has found a unique way to tackle pollution while simultaneously supporting sustainable fashion. Circular Systems, a “clean-tech new materials company,” is transforming banana byproducts, pineapple leaves, sugarcane bark, and flax and hemp stalk into natural fabrics, according to Fast Company.

These five crops alone meet more than twice the global demand for fibers, and the conversion process provides farmers with an additional revenue stream, according to the company’s website. Fashion brands like H&M and Levi’s are already in talks with Circular Systems to incorporate some of these sustainable fibers into their clothes.

Additionally, Circular Systems recycles used clothing to make new fibers, and another technology called Orbital spins those textile scraps and crop byproducts together to create a durable type of yarn.

People eat about 100 billion bananas per year globally, resulting in 270 million tons of discarded peels. (Americans alone consume 3.2 billion pounds of bananas annually.) Although peels are biodegradable, they emit methane—a greenhouse gas—during decomposition. Crop burning, on the other hand, is even worse because it causes significant air pollution.

As Fast Company points out, using leaves and bark to create clothing may seem pretty groundbreaking, but 97 percent of the fibers used in clothes in 1960 were natural. Today, that figure is only 35 percent.

However, Circular Systems has joined a growing number of fashion brands and textile companies that are seeking out sustainable alternatives. Gucci has started incorporating a biodegradable material into some of its sunglasses, Bolt Threads invented a material made from mushroom filaments, and pineapple “leather” has been around for a couple of years now.

[h/t Fast Company]

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