How Budget Airlines Change Markets

The New York Times: “Even as a wave of mergers has cut the number of major carriers to four and significantly reduced competition, lower-cost airlines continue to play a role in moderating ticket costs. While such airlines offer a no-frills passenger experience and charge plenty of fees for such luxuries as additional bags or extra legroom, they are able to stimulate new demand from occasional fliers with relatively cheap prices and even take passengers from the major carriers.”

“This dynamic is not new: In 1993, researchers at the Department of Transportation called the same trend the “Southwest effect,” named for Southwest Airlines, which grew rapidly thanks to basic, low-cost flights. A recent study by a University of Virginia professor and a consultant at the Campbell-Hill Aviation Group calculated that average one-way fares are $45 lower when Southwest serves a market with nonstop flights. Researchers have shown other low-cost carriers also push down fares.”

“Carriers like United and American do not compete with carriers like Frontier and Spirit on every type of passenger … But the low-cost carriers nonetheless force the big airlines to figure out a way to draw the most price-sensitive fliers in any given market — those who scour the internet for the cheapest tickets possible. Those customers make up a significant portion of travelers, meaning the major carrier cannot just ignore them.”


Amy’s Drive-Thru: Meat-Free Fast Food

Fast Company: “Amy’s Drive Thru is America’s first vegetarian, organic, gluten-free-optional fast-food restaurant, and much to the surprise of the owners, it’s doing more than holding its own against its greasy competitors … Business has been so booming at Amy’s Drive Thru in its two years of operation that it’s beginning a chain.”

“For 29 years, the Petaluma, California-based Amy’s Kitchen has gained a cult following as a purveyor of family-style, vegetarian frozen meals, from macaroni and cheese to burritos, all handmade fresh in three operating facilities across California, Oregon, and Idaho, and shipped nationwide … The drive-through is powered by solar panels, and the tableware is recyclable. Using mostly organic and local produce for ingredients is more expensive, but it’s what customers expect from the company.”

“Whereas a standard fast-food restaurant has around 15 employees per outpost, Amy’s Drive Thru employs over 90 because it takes many more people to prepare the food … A true cross-country empire of Amy’s locations is still far off … The company wants to expand slowly, to ensure that they can partner with local farmers and producers around each location … and to understand where the drive-throughs could have the greatest effect in breaking up health-food deserts.”


Zuck Asks Not: What Are You Willing To Give Up?

Quartz: Facebook CEO Mark Zuckerberg “explains his theory to LinkedIn co-founder Reid Hoffman as it pertains to Facebook’s former value statement, Move fast and break things:

“So the value is actually ‘move fast.’ And my whole theory on values is that a lot of organizations have values which don’t mean very much—because they’re just table stakes, things like ‘Be honest.’ Of course you’re going to be honest! That’s not an option—you’re not giving anything up to be honest, that’s an automatic. That shouldn’t be a defining principle of the company, that should be a principle of every company. So ‘move fast’ I think is interesting because you actually have to be willing to give something up to get it. And the question is, what are you willing to give up?”


Eataly Regulars: Try Some & Buy Some

The New York Times: “Eataly NYC Flatiron, which opened in August 2010, has become a popular attraction for tourists. They pack the 50,000 square-foot Italian food emporium, cameras in hand, to buy Italian imports and dine at its several restaurants. But in the produce section, there’s nary a tourist in sight. This is where regulars … stock up on their fruits and vegetables. Produce is delivered and restocked twice daily. Some of it, like blood oranges, Italian frisée and radicchio di Castelfranco (a red-streaked, bitter yellow leafy vegetable) is shipped in from Italy while the rest is from around the United States and nearby farms.”

“On the hunt for fresh baby corn or purple baby cauliflower? They’re here. So are about 17 kinds of mushrooms, including lobster and blue foot, and all sorts of radishes like Easter egg and Cincinnati. The staff of 14 is well-versed on the produce, and tasting is encouraged.” Produce manager Lenny Espinal comments: “I’m a big believer in the try-before-you-buy philosophy. If you don’t like it, you won’t waste your money buying it.”

“One of the department’s most interesting features may be the vegetable butcher, Nicole Williams, who stands at a counter with a sink at Eataly’s vegetarian restaurant, Le Verdure. She washes and chops customers’ fruits, herbs and vegetables for free. She also prepares samples. Recent offerings included watermelon chunks and jicama rounds dressed with olive oil, salt and lemon.”


Cultured Coffee: Fermented Beans

The Wall Street Journal: “Pickles, kimchi and even sauerkraut juice are becoming more popular. Could the next big thing in fermented offerings be coffee? Afineur, a Brooklyn-based biotechnology company, is selling just that—a product called Cultured Coffee in which the beans have gone through a special fermentation process … coffee often is fermented as a way to break down and ultimately remove the ‘mucilage’ that covers the bean. But Afineur employs a secondary fermentation, adding water and specific microbes to the cleaned beans and letting science take over. The additional step ensures that the coffee is less bitter and easier to digest.”

“The company was launched with the help of a Kickstarter campaign that raised $55,000 … It now sells its coffee via online—a 5-ounce bottle of beans costs $19.99 on the website—and in a few New York City stores … The company has plans to introduce items beyond coffee that also take advantage of the fermentation processes it is developing.”


Sey What? A Nordic Coffee Experience

The New York Times: “This season, two New York roasters are unveiling shops that are designed to impress. One, the airy Sey Coffee, which opened this month in Bushwick, Brooklyn, is all raw concrete and whitewashed walls, a skylit showcase for a roaster with a following among coffee-heads who favor the bright, clean profile of the so-called Nordic style … Its owners, Tobin Polk and Lance Schnorenberg, started roasting in 2011 in a fourth-floor loft around the corner from the new shop … Mr. Polk built the burnished maple bench that runs along a cinder-block wall himself, and the ceramist Erin Louise Clancy will set up a work space in the back that will supply the shop.”

“A roaster taking a similar tack is Nobletree Coffee, which … is unveiling a shop in front of its Red Hook, Brooklyn, roasting facility that sets out to make a statement, a state-of-the-art coffee bar with all the shiny toys: a gurgling Steampunk brewer, a streamlined Modbar brewer and espresso machine, kegs of nitrogenized cold brew on tap. While the other Nobletree locations are built for speed, this is a place to nerd out, a destination coffee bar. It helps that the roaster is in a mid-19th-century warehouse, on a pier with a postcard view of the Statue of Liberty across the harbor.”

“Eric Taylor, the general manager of Nobletree, says the purpose of the coffee bar isn’t to make sales but to create a tasting room, a place where you can refine your palate. Nobletree is a part of FAL Coffee, which owns coffee farms and a processing mill in Brazil. Some of the beans that make it to Brooklyn are the cream of those crops — the baristas behind the counter are familiar with every link of the supply chain.”