Saturday, March 29, 2008

Random Musing - Weekend Potpourri

Just a weekend version of the Random Musing with a twist: a collection of new risk issues and what to look for. After all, if you know where the cow pies are located, the lower your chances of stepping on one.

Great Beer Shortage? Maybe.
First wheat, soybean, and corn; now, its hops. Hops is the fragrant but bitter flower that give beer that distinctive bitter counter to the sweetness of the malt. According to Brew magazine, the global hop shortage due to the poor crop yield in Europe has reached a very critical level. This means beer prices will be going up and many of the microbrewers may be going out of business. Definitely a sad day for the common person’s beverage. Perhaps it’s time to stock up your favorite brew before the price spikes.

Risk Event: Improper vendor and supply management. The brewers did not coordinate their brewery growth projections with the hops growers. Hops is only used for beer. So, when the hop prices really tanks, farmers stop growing hops. This led to hops shortage in 2007. However, brewers really didn’t know the extent of the shortage as there were no predictive metrics to measure hops supply and crop yield.

Corrective Action: Implement an ongoing dialogue between brewers and hops growers to establish the total supply of hops required each year and to ensure steady global supply of hops. Contacts: U.S. Hops Growers Association, Institute of Brewing and Distilling, and Brewer’s Association.

Beer Version Of the March Madness: Fun and informative way to learn about beer. Personally, I am rooting for the Hook & Ladder Backdraft Brown. After all, it feels good to drink a tasty beer while knowing that a portion of the sale is going to help burn victims. Even if I do have to go to New Jersey to enjoy it. If you live in D.C. or Provident, RI areas then you are lucky.

Risk Event: By not having the Hook & Ladder Backdraft Brown available in the NYC metro area, NYC beer aficionados risk a bit of hazard going to the New Jersey to enjoy a great brew.

Corrective Action: Petition Hook & Ladder to bring their brew to local pubs in the NYC area.

Pizza And Beer As Inflation Indicators?
According to MSNBC report, the prices of “recession-proof” foods such as pizza, hot dogs, bagels and beer have increased substantially. Price for a bushel of wheat went up about 350%. Pound of pizza cheese went up 36%. Price of hops increased 10-fold. Even Gray’s Papaya will be increasing the price of its $3.50 “Recession Special” of two hot dogs and a 14-ounce drink.

Risk Event: As the price of “recession proof” foods are skyrocketing, the potentiality of a combined economic recession with price inflation of goods increases, resulting in people having to substitute their favorite foods with McDonald Dollar Menu. This will result in beer gut being formed without the pleasure of having tasted beer and pizza and bagel bulge without the crunchy-chewy taste of a bagel.

Corrective Actions: Suck it up. Prices were bound to go up. But if you still can’t stomach the price increase, ask people standing in line for pizza to split a whole pie with you; it will be cheaper than buying by the slice. For bagels, do the same, except get 12 people together, that way you’ll get a baker’s dozen (13), making yours free. For hot dogs, bring along couple of extra hot dog buns, split the hot dogs length-wise and viola, you’ll make four hot dogs out of two. Also, load up on the free condiments to bulk up the hot dog and you won’t even notice the skinnier frankfurter.

Or better yet, see if you can get a job as a food taster for the Food Network. Hey, you never know.

Continue Having A Great Weekend!

Ed Kim

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