Tuesday, August 30, 2011

America's top chef uses marginal analysis

Alinea, which opened in 2005, was named the best restaurant in America by Gourmet Magazine in 2006. The restaurant's co-founder and head chef, Grant Achatz, said his 23-course meal is motivated by what any econ student would recognize as marginal analysis:

So there's something that we call the law of diminishing returns in our cooking. That's why the steak is only two ounces, because by your fifth bite you're really, you're done. You're done with that steak. You know what it's going to taste like. The actual flavor starts to deaden on the palate.

If we were to make you take 10 more bites, by the time you got to bite 15, the steak's just not that compelling anymore. So if we have a series of 23 small courses, where it's a burst of flavor on the palate, and then you move on to something completely different and then completely different, that helps us set up a more exciting meal, and it's something that is easier to kind of be compelled to go through a 23-course menu.

12 comments:

  1. Having dined at Alinea, I must admit it's a phenomenal experience. Truly a pleasure for the gourmand.

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  2. That man is my hero. He is incredibly lucky to be alive, and to have the experience that he had to learn in such an unique way; by understanding the overall general themes and nuances of flavors as well as he did and then getting the opportunity to learn the distinct parts of the whole that he was so passionate about. Anyone who enjoys food the way that Achatz does, myself included, understands the diminishing returns associated with eating too many bites of anything. The brilliance comes in the first one or two bites. At the end of each bite your palate stops and approach the next bite from a completely different place, so your next experience will be different from the first. Presenting a spectacular meal means walking through each part and reassessing after every phase. It's great to see these econ concepts showing themselves across different fields and perspectives. Thank you for sharing one I relate to so well!

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  3. Definitely an inspirational story and a relatable example of marginal analysis. If I were to extrapolate, could I tell my wife that anytime we drive more than 30 minutes to dinner, I order dessert to achieve economies of scale? I want more food per dollar spent on the evening, and I'm just trying to reduce the total average cost of food consumed by including the fixed cost of transit to the restaurant.

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  4. When I was young, my grandfather educated me not to waste food by a sentence: eat more, taste less; eat less, taste less. Now, I finally knew marginal benefit also exists in life.

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  5. Does Grant's example of taste or sensation loss provide a strong business case to rotate employees to new positions throughout your organization? Perhaps this could overcome the monotonous "taste" of the same occupation. Any ideas on how we might measure job satisfaction (performance) to implement this approach using data? Any known companies that use this method? Thanks!

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  6. I agree with one of the earlier commenters - an inspirational story - but also was interested in Adam's reply relating the steak portion of the article - that after the first 5 bites you are 'done' to staffing. With a nursing shortage at our door, the idea of rotation through new positions in the organization sounds like a good one - and has been used in some areas with things like job sharing and special projects. But it doesn't necessarily lead to more bedside nurses - which is the greater need.

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  7. This mentality reminds me of a restaurant in Minnesota called Travail Dining and Kitchen Amustments, which prides itself on serving 20-25 small courses as part of an interactive dinner service. I appreciated the variety of dishes served, and also felt like it ended up being just the right amount of food after the final course.

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  8. When I first saw 23 course meal, I was really surprised but after reading the logic behind the decision, it all made sense.

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  9. Based on my experience working professionally with many Chefs, it is rare to see them pay attention to economic ideas such as marginal analysis and law of diminishing returns. By providing an enhanced experience, the Chef has effectively distinguished his brand and provided a strong competitive advantage.

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  10. It would be interesting to attempt to determine at which point for each food type that "profits" from eating each individual course would be maximized (MR=MC) and whether or not this would change from dish to dish based on content. Additionally, this could potentially lead to a determination of the order in which dishes are brought out.

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  11. This explanation makes a lot of sense and is useful in targeting gourmet "foodies". One of my good friends falls under this demographic. He says that he goes to restaurants for the experience he gets from the flavor profile of each individual bite. By viewing each course or bite as a distinctive experience (similar to how children view a trip to Disneyland), he maximizes his positive experiences and memories from food by optimizing the number of courses. Instead of experiencing diminishing marginal returns with larger portion sizes of courses (as Mr. Achatz describes), he is able to make the most of his experiences with more, but smaller course meals. This business model fits really well for its target audience.

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  12. I wonder how this intersects with the idea presented for female STEM majors (or dieting) that some marginal analysis leads to suboptimal outcomes (Dieting may not marginally benefit the dieter in the short run, or studying STEM subjects, but there is a large upswing in benefit that accrues in the long term if one "Stays the Course")

    I am sure Grant Achatz had to endure many non MR>MC days in his personal journey to become a practitioner of his caliber.

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