It Ain't About Sharing, It's About Getting
I wrote a while back about this general phenomenon: as friction goes away, we turn from asset ownership to service consumption as our preferred model for fulfilling jobs-to-be-done.
Capital Thinking • Issue #764 • View online
This tweet made me think a lot:
Cooking As A Service
First of all, as much as I hate this idea, I think this notion is correct. This trend has been happening for a long time, and it’s going to keep happening.
I think it’s a great illustration of what really happens in “access” or “as-a-service” economies: as friction goes away, we turn away from owning assets and towards consuming services as a way of fulfilling our jobs to be done.
There are good parts to this, and there are bad parts; let’s talk about some of them.
The trend of increasingly outsourcing food production is new but not that new for North America. (In other parts of the world like India, where the economy and labour market is arranged differently, you’ll have a very different story.)
If we take a look at the data, we can see the meaningful long-term shifts in cooking practices that have taken place over the past two generations, up until today’s mobile era where the internet has started to reshape things again.
This paper goes extensively through fifty years worth of data on the relative prevalence of food prepared inside the home versus food prepared outside the home: Cooking As A Service.
The original graph is a little tricky to look at, so I added the coloured boxes and time arrows to make it easier to read. It’s first split into three sections: low, middle and high income, and then within each income group, the bars represent time periods: representative years from the 60s, 70s, 80s, 90s, early 2000s and late 2000s.
A few overall trends are pretty clear from this graph.
First of all, there’s a clear long term trend: outsourced Cooking As A Service has progressed from rare (<10%) to routine (28-35%) over two generations.
This transition took place over several decades, although if you had to pick one inflection point it’d probably the early 90s.
Second, the overall trend is not dominated by any one income group. While it’s certainly true that high income earners may be dining out differently than low-income earners, the long run trend is that low, middle and high income earners are all choosing to outsource food preparation at more or less the same rate.
So what are the most important forces behind this? There’s a few worth emphasizing:
- First of all, overall living standards have gone up since our grandparents’ generation. More people, for more of their meals, are opting to pay other people to do the work of cooking for them as a service. The flip side of this is that more people are employed in Cooking As A Service businesses each and every year, which makes sense.
- Second, ever year our incremental improvements in technology, management, supply chain efficiency, and so forth are turning food prep into an activity that can be increasingly done on top of a “back end cloud”. All of the line item costs in commercial food preparation, including labour, have become highly reliable, interchangeable, inexpensive component parts. Businesses like McDonalds at the cheap end, or say Olive Garden or Sweetgreen as we ascend the price ladder, are able to mass-produce hot cooked meals that are affordable, tasty and consistent (although not necessarily healthy). The same goes for the infinite varieties of international cooking that we’ve learned how to refactor on top of the North American food service ecosystem.
- As Cooking As A Service expanded from <10% to 25-30+% of our eating, we grew to consume and expect a far greater selection and variety of food compared to when we did all our cooking ourselves. Our consumption choices around what food we eat gradually pivoted from “What am I able to cook for myself” to “Is this exactly what I want to eat, yes or no?” Once you transition into “is this exactly what I want, yes or no” territory, it’s very hard to go back; it becomes a part of the standard of living that we expect.
I wrote a while back about this general phenomenon: as friction goes away, we turn from asset ownership to service consumption as our preferred model for fulfilling jobs-to-be-done.
The forward-looking example I usually use here would be turning from owning, driving and maintaining your own car (asset ownership) to increasingly relying on Ubers, micro-mobility, or other kinds of “functional” transportation (transportation as a service).
Cooking, we can see here quite clearly, is following the same trend except on a longer time scale and for a more convincing slice of the population.
(This is a good reminder that Access Economy style service businesses don’t mean “sharing”, as in “we all share the same coffee machine that is somehow passed back and forth frictionlessly between us”. It means “We pay someone at Starbucks to make the latte for us.” The access economy isn’t about sharing, it’s about getting.)
May 10, 2019 at 11:48 am