Outrage
Every other week, I receive a copy of Food Business News to our Nifong location. And honestly, you would think that is an aggressive publishing schedule, right? I mean, how much food business news can there really be? Though, how many pie stories can there really be to have a whole blog about it? I guess it’s all relative.
But don’t kid yourself, I’m just nerdy enough to read the Food Business News because it’s pretty interesting if selling food is your livelihood. (Or if you like Hostess snacks…you wouldn’t believe how many new products Hostess drops into the supply chain each month.)
This week I read an interesting article about a prepared foods manufacturer named Tattooed Chef and their plans to file Chapter 11 bankruptcy. I’ve actually had cauliflower pizza from Tattooed Chef and it was pretty good (considering cauliflower crust will never be as good as regular carbohydrate laden crust). But Tattoo Chef also sells a lot of their items at Hy-Vee and Sam’s, so it is a familiar brand.
The point is that in 2022, Tattooed Chef lost $141.8 million dollars. Which is worse than 2021, when the company incurred a loss of $87 million. It’s anathema to me how a company can lose that sort of money but then state that “the company plans to continue operating through the bankruptcy process.” Can you even imagine if a small business lost millions of dollars and made the same statement? Actually, it wouldn’t even be an issue because a significant loss is more than most small businesses can endure.
And then after my outrage, I read the story to Jason and listed off why I was annoyed. And then he said that Uber has never made a profit. Like ever.
OUTRAGE. And here’s why:
Do you know what it like to finance a small business in America today? So difficult that we didn’t for the first five years because the bank needs hefty collateral, such as the cars you drive and the homes you lose sleep in about sales. And even once you grow past that stage, you need sales data, tax information, forecasted sales reports, and a veritable mountain of supporting documentation. But if you are a massive company like Tattooed Chef or Uber, money flows like water. Even when you lose it apparently. (And I’m sure they have their share of due diligence, but if they are losing $141.8 million dollars a year, I’m going to need a single spaced multipage page essay from the CEO with all the reasons for the loss before I buy one share of stock.)
People keep investing in these large companies like Uber - it raised $120 billion in the IPO - on the promise that eventually it will pay off with a huge return. If a small business doesn’t meet the exceptionally high standards of some customers every single time, they promise to never return. In fact, someone told us Saturday they wouldn’t come back because we don’t print receipts. So why the double standard for large versus small business? Uber drivers have literally kidnapped and killed passengers AND they don’t print receipts. But people pour in investments every single day to Uber because they hope it will eventually pay off. Or so they hope. Can you imagine a world with that faith in small business?
How are we fine when large companies lose millions of dollars but if a small business loses money, it’s a conversation about when to close the doors? I would bet it all that most small business owners care more about their business than Mr. Uber does. And they literally have to because their house secures their financing. (And actually Uber was founded by Travis Kalanick and Garrett Camp, neither of whom currently still work at Uber.)
Banks and private equity firms benefit from debacles like Tattooed Chef and I’m guessing that’s because there’s more money to lend at higher rates and then there’s interest profit to the lender. Once Jeanne and I couldn’t get a small line of credit unless our husbands signed. That double standard is ridiculous.
And finally, the willingness we all have conditioned ourselves to with the failure of large companies is insane. Massive corporations lose money, file bankruptcy, and then take another run at it. It’s financial theater and we all show up for it because our options are limited and there’s no way to expect more from a large company.
In the first quarter of 2023, Tattooed Chef has lost $19.1 million dollars. And meanwhile, we have poured over numbers and sales reports to make sure that we keep PJP on an upward trajectory. The American economy owes us 191.8 hours of sleep back from the stress of it all. But I need to know…does Sam Galletti, chairman and chief executive office of Tattooed Chef, stress in the same way? Is it different when you don’t build the company? Is it just a job that he can leave someday and go somewhere else like Build-a-Bear and just do the same thing in another market?
It all begs the same question…when does small business become big business? And are the perks of big business worth the concerns of big business? I have no answers at all, I’m just throwing the question out to the vast Internet void in case someone has an answer.