Will's Profile

Great question, and agreed, I was shocked by those numbers! It’s the latter, i.e. the ways the leaves are treated post-harvest. Specifically, the care taken by workers during the fermentation process ensures that most of the leaves can be used. There are two fermentation processes, each lasting between 4 to 12 weeks, during which the leaves must be constantly attended to. Since Robaina’s limitation is the quantity of leaves produced, their employees are laser-focused on ensuring that the maximum percentage makes it through to be used in cigar production (ideally as wrapper leaves, which are the highest quality leaves).

Appreciate the comment! Agreed with the interesting analogy of daily cigar payments as a substitute for stock options. In visiting the factory and plantation, I didn’t observe any processes where machines could be easily substituted for manual labor while preserving quality. That said, in a country with labor costs ~50-100x higher, I’m sure that machines could provide some sort of creative solution. In particular, visiting a cigar factory in the U.S. to observe production systems would probably add to the conclusions above.

Thanks again Matt, great thoughts.

Thank you! One of the most unique businesses I’ve seen, I really enjoyed the on-site visit. Will certainly continue to follow their progress during the next several years …

Agreed, thanks for the comment. At the end of the day, fascinated by the capital vs. labor tradeoff, as I think this is too often overlooked by both business and economists.

Thank you – inspiration for the idea just hit me one day!

My view is this would fundamentally change how Robaina sells cigars, mostly for the better. The big limitation would remain production volume (capped by land availability), but the addressable market would skyrocket. Robaina-branded retail stores, for example, would be huge, both in the US and in Cuba. Perhaps there could be consolidation in ownership of the various Cuban brands? Or they could segment into labels of different quality now that they no longer have to pass a single government inspection? Lots of options, but I’m confident that they would be able to capture the value associated with the Cuban economy opening up.

This is a really exciting topic. As I think about the world in 20 years, I can only foresee aquaculture playing a much bigger role than it does today. Some questions about AquaChile: 1) Why Chile in particular?, 2) Could vertically integrating (my read is this means establishing a food chain?) make the operation more vulnerable to disruptions in part of the food chain? 3) Maybe an outside-the-box question, but is there any way to immunize fish / any companies that do this? Enjoyed the post, good choice.

This is a great post. I really like the insights in the distribution section in particular. Agreed that Krispy Kreme really missed out on the rise of complementary, convenience-driven products (coffee specifically) … and I think that explains their decision to keep larger-format locations. When walking into a Dunkin Donuts now, I’m always amazed that doughnuts account for such a small fraction of the total products available.

To answer your questions, I don’t think they can do both retail and wholesale. Dunkin Donuts has a huge head start with 10x the number of stores, and I think the franchise business model works much better to expand rapidly. But the factory stores can’t drive enough volume since people have switched to conveniently located stores for their morning coffee and/or doughnut. In short, fully agreed that they’re in a tough position!

Great post, really well-written. Agreed that there’s a lot that could be improved in reservation systems, and this post does an excellent job of laying out the benefits of the Alinea approach. A few questions this raised for me: Does this work for lower-priced restaurants? Does it only work for prix fixe menus or is there an adaptation for a la carte menus? Is this purely a financial decision that the restaurant is trying to justify using the customer experience card? Either way, I’m sure Tock will be quite successful.

On a related note, Danny Meyer’s no-tipping policy is another example of how fine dining could change soon (http://ny.eater.com/2015/10/14/9517747/danny-meyer-no-tipping-restaurants). As you point out, incredible to think that an industry that’s been around for 250 years could be disrupted in such a straightforward way!