Invest Like The Best
Episode 208 Breaking Down the Food Ecosystem
Invest Like The Best

Episode 208: Breaking Down the Food Ecosystem

Invest Like The Best

Episode 208

Breaking Down the Food Ecosystem

Zach Fuss is a Vice President at Continental Grain. We cover where profits tend to sit in a specific value chain, how legacy food businesses are creating their 2nd acts as digital businesses, and explore what makes Domino's Pizza so interesting and special.

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[00:03:42] – (First question) – Key components of the food management business

[00:05:12] – The most defensible businesses in the food chain

[00:07:51] – Law of conservation of attractive profits in the food business and food delivery 

[00:11:05] – Legacy food businesses and ones that have adapted well to changes today

[00:15:42] – Dark stores and cloud kitchens

[00:17:11] – Breaking down the Domino's Pizza business

[00:19:45] – Being a Domino's franchise owner

[00:21:03] – Why they offer such high returns to franchise owners

[00:23:22] – The tech company aspect of Domino's

[00:25:25] – Same-store economics for an owner

[00:28:15] – When Domino's realized their food was not great

[00:29:45] – Why Domino's owns the delivery and won’t go on other platforms

[00:32:47] – Most portable pieces of Domino's business

[00:34:03] – Parts of Domino's history that are intriguing 

[00:35:51] – Build once, sell many times

[00:40:09] – Lessons from the best retail businesses

[00:43:26] – Has it become harder for smaller companies to win with larger ones being more nimble

[00:46:39] – Watching the alternative meat companies flourish

[00:49:49] – Interesting trends in the food space

[00:51:22] – Global trends in food that we can learn from

[00:54:04] – Impact of Covid on the food industry

[00:57:44] – Businesses outside of stores that he finds fascinating

[01:00:08] – Why he’s impressed by Chipotle

[01:01:48] – Approaching buying a franchise

[01:05:30] – Creating a new QSR business and differentiating from the pack

[01:07:58] – Frontiers that he’s interested in today 

[01:10:17] – What he is saying in the competitiveness in public equities

[01:13:48] – Kindest thing anyone has done for him

Breaking Down the Food Ecosystem

Introduction

Patrick
My guest today is Zack Fuss, an investor at Continental Grain, a 200-year-old family-owned business that is focused on investing and operating businesses through the food and agriculture ecosystem. Prior to his work at Continental, Zach was an analyst at Tiger and at Citadel. This is a must-listen for those interested in any aspect of the food ecosystem but also for those trying to understand value chains more generally. In our conversation, we cover where profits tend to sit in a specific value chain, how legacy food businesses are creating their second act as digital businesses and explore what makes Domino's Pizza so interesting and special. I hope you enjoy my conversation with Zack fuss.

The Food Ecosystem

Patrick
Zack, I think an appropriate place to begin is with sort of how the ecosystem breaks down. So if someone's new to this area, what are the key sort of components? You can break it down however you want, value chain, supply chain. You give us the right taxonomy for thinking about this. What are the meaningful areas that you think it's important to develop special expertise in?

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