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CEO Daily: The Best in Business Reading

Good Morning.

Has sugar become the new tobacco? And what does that mean for the multi-decade quest to find a no-calorie sweetener that tastes as good as the original…and now needs to be perceived as “natural”? Those are the questions raised byFortune’s Beth Kowitt in “Sugar Rush,” and the answers may not fill you with optimism. Sweeteners, Kowitt reports, are a $100 billion market, and 74% of packaged foods and drinks in the U.S. contain some form of natural or artificial sugar. Kowitt takes readers on a journey through the labs and offices of companies that make ingredients—there are many, both new and old—which are grappling with the problem. She focuses much of her attention on stevia, a natural sweetener that was briefly viewed as the industry’s salvation before it became apparent that up to 40% of the population perceives as disturbingly bitter. My favorite moment in the piece comes when Kowitt recounts a visit to the Illinois offices of the ingredients giant Tate & Lyle, where a senior executive named Mike Harrison shows her around.

I sample a cucumber lime drink with stevia cooked up by a team there. I find it light and refreshing, though a bit sweet, with a few hints of bitterness at the end. But I glance over at my host, Harrison, and catch him grimacing. “I can’t drink this,” he says. “It makes me go bleh.” An hour later, it’s still bothering him. Harrison cracks open a can of root beer to try to drown out the sensation that lingers in his mouth.

When even the company executive can’t put a good face on in front of a visiting reporter, I’d say your product has an issue. Read this article and you’ll not only learn about the business, you’ll glean surprising insights on how we perceive and think about food and sweetness itself.



Videogames Vs. Unemployment

I was just a hair too old to be of the videogame generation. Pong arrived just as I was getting interested in girls and music and I wasn’t paying attention by the time more enticing offerings emerged. So I’ve always been flummoxed by the phenomenon. “Why Ever Stop Gaming,” in New York, takes on some of the big questions, noting among other things that more people play videogames than voted in the last presidential election. (According to the article, 34 million gamers average 22 hours per week of play.) It’s not a business article per se, yet it raises profound question about the interplay of leisure and economic productivity for an entire generation, particularly of young American men. The passage below is unrepresentative of much of the article, which is more personal and essayistic, and yet I found it so fascinating that it’s worth quoting at length:

In June, Erik Hurst, a professor at the University of Chicago’s Booth School of Business, delivered a graduation address and later wrote an essay in which he publicized statistics showing that, compared with the beginning of the millennium, working-class men in their 20s were on average working four hours less per week and playing video games for three hours. As a demographic, they had replaced the lost work time with playtime spent gaming. How had this happened? Technology, through automation, had reduced the employment rate of these men by reducing demand for what Hurst referred to as “lower-skilled” labor. He proposed that by creating more vivid and engrossing gaming experiences, technology also increased the subjective value of leisure relative to labor. He was alarmed by what this meant for those who chose to play video games and were not working; he cited the dire long-term prospects of these less-employed men; pointed to relative levels of financial instability, drug use, and suicide among this cohort; and connected them, speculatively, to “voting patterns for certain candidates in recent periods,” by which one doubts he meant Hillary Clinton.

But the most striking fact was not the grim futures of this presently unemployed group. It was their happy present — which he neglected to emphasize. The men whose experiences he described were not in any meaningful way despairing. In fact, the opposite. “If we go to surveys that track subjective well-being,” he wrote, “lower-skilled young men in 2014 reported being much happier on average than did lower-skilled men in the early 2000s. This increase in happiness is despite their employment rate falling by 10 percentage points and the increased propensity to be living in their parents’ basement.

Wired has a shorter article that might be seen as a companion piece that examines whether playing videogames is the occupation of the future for the working class. Combined, they sketch out a future in which gaming shifts from being a diversion to becoming the center of life for millions.

The Coffee Shaman


A website calls Lucky Peach has an article entitled The Coffee Shaman that chronicles the story of George Howell, an innovator who, among other things, gave America the frappuccino. Howell remains on the leading edge of the latest coffee trends, which involve the fetishization of coffee terroir in many of the precious ways that wine has long been fetishized. Indeed, I found myself alternately amused and put off by what the article describes. Here’s a good example, based on comments from a fellow coffee-seeker who accompanied Howell during a coffee-bean scouting mission in Ethiopia:

“This is something I’ll never forget, and it’s something that everyone who’s traveled with George knows: riding around with him in Land Cruisers and then hearing him lean over and start taking notes to himself on his little audio recorder. It’s like listening to Morgan Freeman narrate some documentary, saying ‘The farm is at 2,300 meters, we are doing blah blah blah, 80 percent typica, this is their process.’ Because this is how much he’s into the details of terroir and everything he’s doing.”

Later, it gets taken to what—to my philistine ears—sounds like almost the level of parody:

Howell is postulating that great coffee doesn’t come from one year’s harvest from a single farm, but rather from an even more discriminating level: individual gems in plain sight, potentially inside every bag of coffee. The third coffee owes its deliciousness to the farmer, the workers who picked and washed the ripe coffee cherries, the coffee varietal that produced those beans, and even the farm itself—the dirt, the elevation, the rain that one week in early December last year—but it was also a measure of the taste and intuition of the roaster. Howell pronounces the coffee a masterpiece with a conspiratorial chuckle, like a new best friend showing you his favorite movie, knowing you’ll love it.

The idea of some artiste individually extracting each bean—at that point, I’m guessing, you’d need to be a millionaire to afford a cup of joe—couldn’t help but remind me of the most notorious coffee-origin story some of us have heard in the past: The beans that are harvested after being digested by a cat-like animal in Indonesia. Um, I guess, it’s true that everybody poops, but I’d prefer to keep that process separate from my morning coffee.


Nicholas Varchaver