Beef Prices at an All-Time High a Good Thing?

In the recent months, commodity prices have soared to record highs, with the sharpest increase being in the price of beef. The reason for this increase is partially due to last summer’s drought, but it is much higher than most analysts predicted. This has begun to affect the profits of large restaurant chains such as Burger King, Wendys, and most importantly McDonalds.

1C7301038-130509_angus_hmed_1213p.blocks_desktop_smallIn early May, McDonalds announces that it would remove its Angus Third Pounders from their menu. The company said the removal of this burger was done to make room for other food options, but most experts agree that the profit margins are too low for beef items like these to remain profitable.

This has resulted in McDonalds and other restaurant chains to begin to retool their supply chain to put a heavier emphasis on chicken products, which is more profitable than beef. McDonalds has already begun to roll out new items such as the premium chicken wraps. This will definitely be more costly in the short run, but with rising prices, and more health-conscious consumers, it is a good long-term strategy.

With obesity at all time highs, and consumers becoming more health-conscious, this rise in beef prices could not come at a better time. Chicken is much healthier that beef, having significantly less calories and fat. With chicken prices being low, this could benefit both the restaurants and the consumer.

This situation can be compared to gas prices hitting an all time high in 2008.  Once prices hit the high, there was a sudden demand for more fuel-efficient vehicles, planes, trains, etc. They use less fuel, are much more efficient, and produce significantly less emissions that harm our environment. Similar to beef prices, consumers had no reason to switch to the better option until it became cost-effective.

In any industries of this size, change has to be gradual. Switching from beef to chicken is easy for consumers. On the contrary, in order to fulfill demand, restaurants like McDonalds have to completely re-tool their supply-chain. Farms need to change their facilities to accommodate more chickens, processing plants need to change all their machinery, and restaurants need to change how they cook and prepare the final product.

I personally believe that this will benefit both the profit-minded producer, along with the health-conscious consumer. The fast food world is changing, and these companies know that innovation is essential to adapt to the changing taste buds of consumers.

What is your eating preference at these fast food chains? Do you think this rise in commodity prices is a good thing? Have you become more health-conscious?

Apple Lacking Innovation? Or Master Plan…

In the recent months, Apple has been the hot topic of debate for almost every media source. This can be derived partially due to its 25% stock price decrease in the past year, but also because of an increase in competition from companies such as Samsung. Despite record profits, critics argue that Apple is “lacking innovation,” which is vital for its continued growth. Does apple not understand what consumer’s want/desire? Or could their upcoming innovations be so groundbreaking that it just takes longer to unveil?

Despite popular belief, Apple produces almost none of the components that are in its products. What makes Apple products both beautiful and efficient is their ability to integrate the hardware and the software so seamlessly. This is done through their remarkably efficient and streamlined supply chain.

In my opinion, Apple tends to innovate backwards. Apples innovation can be described like this; Apple solves the puzzle first, and then finds the pieces they need to make their vision a reality. Apple’s size, power, and money give them the ability to do this, but the actual timeline for a finished product may not be so clear and defined. This is why an efficient and communicative supply chain is so important to Apple.

Most analysts would agree that the biggest upcoming feature on the iPhone 5S is its fingerprint sensor. This is not a new concept, but the way Apple will use it will be remarkable. The mobile payment system is the way of the future, yet is has failed to take off. This is not due less to lack of technology, but more because of security concerns. By having someone’s phone password, one could gain access to every credit card they own. A fingerprint sensor would basically eliminate this problem, and would allow the mobile payment system to grow exponentially.


Apple sold over 50 million iPhone 5s, so a small glitch in hardware or software can be detrimental. First, Apple needs to make sure the hardware is functioning properly. Last week Reuters reported this, “A supply chain source in Taiwan said Apple was trying to find a coating material that did not interfere with the fingerprint sensor, and this may be causing a delay.” Second, Apple needs to make sure its manufacturers can produce the product that keeps up with demand. Third, the software needs to be 100% accurate to prevent possible fraud. Last, Apple needs to beta test the product until they know it is absolutely perfect.

Personally, I believe that Apple’s master plan is much smarter and more innovative then any analyst can predict. Critics thought the first iPhone would fail because it didn’t have a keyboard. They thought the iPad was just a “big iPhone,” and no one would buy it. Currently, these are two of the most successful and profitable consumer devices on the market. Apple’s master plan is bigger than we think. Supply chain issues may slow its product cycle down now, but I think it will only be a minor speed bump in Apple’s continued dominance.

What is your current view on Apple? Are you continuing to buy Apple products? Will a fingerprint sensor on the iPhone 5S be the deciding factor on whether you will upgrade or not?