Inflationary Burrito Tuesday

**Author's note: This post is meant to be funny but also thought-provoking. I'm not going to die on a hill defending the data or the assumptions that I make. My thoughts are my own and my primary goal is to provide insights and entertainment. Thanks for reading!**

Like you, a human that lives on earth, I'm constantly exposed to advertisements. One such Taco Bell advertisement recently caught my eye for two reasons: Hunger ?? and nostalgia ??

You see, back in 2008, my wife was pregnant with our first daughter and we pretty much lived at Taco Bell ??. I mean, it was a block away from our apartment, but they felt like roommates. We were even lucky enough to get some gift cards and got to try some off-menu items that they were testing out, but that story is for another time.

So when I heard an advertisement introducing the "New" Cheesy Double Beef Burrito ?? , I felt like I had traveled back in time, only to be jolted back to the present when they said it was $2. Not that $2 for a burrito is unreasonable these days (most of the Dollar menus of the past have long since been rebranded as "Value" menus and seem to have much less value - I'm looking at you McD's), but the price was a very key part of the Cheesy Double Beef Burrito. At this time Taco Bell had their 79/89/99 cent menu (which was one of the greatest value menus in fast food history), and one of their commercials featured this legend of a burrito at the amazing value of 89 cents. I hope you remember it as fondly as I do:

An instant classic. Brings me right back. ??

So this got me thinking: Inflation sucks. Remember the last time you talked to your parent or grandparent and they mentioned how much something cost them when they were younger? Whatever it was - a candy bar, a shirt, a car - it was ten cents. For a second you were angry, but then you realized that today, we get to appreciate things like Sliced Bread (1928), color TV (1928 - although the first consumer set wasn't available until 1954!), the discovery of Pluto (1930), the internet (1983), and who could forget the downgrading of Pluto (2006).

According to several recent articles, like this one:

"Inflation is regarded as one of the main reasons prices across the fast-food industry are rising."
        

It's easy to blame increasing prices on inflation, but how much does inflation play a role in the rising cost of burritos?

• $0.89 USD in 2008 is equivalent to $1.22 today, which represents ~37% cumulative inflation.
• $0.89 Cheesy Double Beef Burrito is now $2.00, which represents ~125% cumulative inflation, about 3.5 times as much. ??

Okay, okay, so the inflation excuse doesn't exactly line up with the math, but what else could it be? According to the same article mentioned above:

Fast-food companies having to pay workers more
        

Makes sense. So what does the data show us?

• $1.00 of wages in 2008 is equal to $1.40 in wages in 2021, for cumulative inflation of ~40%. This is only about 3% higher than the cost of inflation directly, so it doesn't explain the significant jump in prices. ??

I've given Taco Bell the benefit of the doubt when it comes to macroeconomic pressures, but I am starting to get suspicious. Taco Bell would never hurt us. I mean, their food, sure, but it's a good hurt. ??

What has Taco Bell (Yum Brands, Inc.) been up to in the past 14 years? Apparently, a lot. Growing market cap from $16.79B in 2008 when the Cheesy Double Beef Burrito was released, to a whopping $53.82B (YUM + YUMC), growth of about 221%.

What does growth look like throughout the industry?

Market Cap ($Billions) 2008 vs 2022

Wowza, the demand for pizza ?? and tacos ?? has REALLY increased. Like, a lot. It's crazy to think that McDonald's has grown by over 122 billion dollars, and they've still lost a significant share of the market (just comparing our list, they went from 55.13% to 45.9%).

I'd like to go on a tangent for a second and just say that I really love Dominos. They get so much hate, but they have the best taste:price ratio among almost any fast food. It goes without saying, but hate all you want, because their growth has been insane. 

To put their 3383% growth in perspective, in that same timeframe:

- Amazon grew 4055%
- Apple grew 3562%
- Microsoft grew 1165% and
- FB/Meta grew 790% (1579% at their peak last year)        

Okay.... So maybe we shouldn't be fooled by talks of inflation or the rising costs of hiring. Much of the price increases are just corporate greed. Returning more money to the owners (stockholders) at the expense of their underpaid and underappreciated workforce.

Of course, we can always place the blame on the corporations, but this is a much greater societal issue, and According to The Barbecue Lab, we're the ones to blame:

• 1/3 of Americans eat fast food each day, with about 45% of those aged 20-39 eating fast food on any given day ??
• The average American household spends 10% of their annual income on fast food ??
• Regular fast food consumption increases 2.2% every year ??

Not so coincidentally, obesity rates (in the US) follow a similar trend:

US adult obesity rates have increased 29% since 2008, with extremely obese rates increasing 44% over the same time period. While this isn't as jaw-dropping as the growth figures above, there's no question that Americans' food choices are one of the key contributors to this problem that shows no signs of slowing.

From experience, eating fast food pretty regularly for 9 months, without exercising much, I put on about 30 lbs way too easily. Coincidentally, this is about the average weight that women gain during pregnancy. (Of course, I cannot compare my sympathy weight to actually developing a human being inside of my body for 9 months. My "kicks" were just indigestion and other burrito-related symptoms that I won't go into detail about.)

With all of that said, ironically, maybe the problem is that prices aren't rising fast enough. Looking back at the advertisement, I see $2.00 for a 620-calorie burrito. Three of these in a day and voila, I've just reached my daily calorie intake for $6. That's $180 for a full month of eating and I didn't have to cook a single meal.

We have become hooked on "low-cost", high-calorie, high-convenience food, and we're slowly eating ourselves to death.