food – Page 6 – Pertinent Observations

Karnataka’s bizarre liquor license policy

Karnataka has a rather weird liquor license policy. Some twenty years ago, back when S Bangarappa was the chief minister (if I’m not wrong) the state decided to freeze the number of bars. “Growing alcoholism” was the ostensible reason. Since then, if someone has to open a bar, the license has to be purchased from an existing bar owner who will then shut down his bar. Thus, the number of bars in the state (whose population has increased manifold since) has remained constant.

This is not the only funny aspect of liquor regulation in Karnataka. Till recently, there was also the rather bizarre requirement that each bar sell a minimum “quota” of liquor each month. If the bar failed to do so, it had to pay “short lifting” fines. While this regulation (minimum “lifting” by bars) went much before the time when number of licenses was capped, the two can be seen to be related. When the number of licenses is capped, the state needs to ensure that it gets a certain fixed revenue out of excise licenses and sales. Fixing a minimum sale quantity ensures that licenses are not “wasted” by bars with low sales, and in case they are, the government doesn’t lose out on such sales.

A possible reason that this rather bizarre regulation on minimum sales was lifted is due to it becoming moot thanks to competition. When the number of liquor licenses is limited, the price increases, and thus bars which are selling lower amounts of liquor find it more profitable to cash out on their licenses than continue their business. Thus, bars that continue to have their licenses are those that continue to sell significant quantities, which makes the quotas moot.

Nevertheless, the cap on the number of bars means that the liquor scene in Karnataka is rather bizarre, the point being that there are no “middle class bars”. Here in Barcelona, where I’m currently on holiday, pretty much every restaurant and cafe has an alcohol license (at least beer and wine), and it is possible to have a drink in an “ordinary setting” at a reasonable price. A glass of beer at any of these establishments, for example (small quiet places which are seldom crowded), costs about EUR 1.80 (~Rs. 120 by today’s exchange rate).

In Karnataka, on the other hand, thanks to the limited licensing regime, a bar needs to do a certain minimum amount of business before it is viable. This has led to bars in Karnataka adopt one of two opposing routes. Some play the volume route, setting up an atmosphere where there is quick turnaround of customers (it can be argued that atmosphere is set up to ensure customers don’t stay too long) each of who consumes in significant volumes so that the bar can make significant amount of money despite charging only a small premium on the liqour.

At the other end you have the rather fancy “value players”, who make their margins on rather large markups on the liquor they sell. These are typically fine dining restaurants where people’s primary purpose is eating (rather than drinking) and which have rather low table turnover. A combination of the above two means that volumes are low, but such restaurants more than make up by means of significant markups. These markups are extended to non alcohol items also (these restaurants can afford to charge a premium since all other similar restaurants serving alcohol also charge the same premium, and presence of alcohol is a hygiene factor for such restaurants). Here is an old blog post where I argue why liquor regulations imply high.

So the question is if the government can do away with the bizarre regulations on minimum sales, why can’t they increase the number of liquor licenses? The problem is that it is a classic case of baptists and bootleggers. The baptist case is that by issuing more liquor licenses, it makes things easier for people to drink alcohol and that’s not a good thing for society. And the bootleggers are existing licenseholders, whose licenses will get devalued if their supply increases. I just realised I’ve already done another blog post addressing this topic.

On tea being served before a talk

Later this evening I’m planning to go for this talk on Temples of the Badami Chalukyas, being held at the Max Mueller Bhavan in Indiranagar.

The text of the invite (not present in the picture above) says that “tea will be served before the talk”. Now you might think that it’s no big deal – but in my opinion that’s one marker that sets apart what can be a high-quality fulfilling event for the audience member than one that is merely good.

There are two reasons that people go to talks like this one – one is for the talk itself. For example, the topic of today’s talk looks extremely promising and exciting, and inherent interest in the topic itself is likely to spur audience participation. The other reason people like to go for such talks is that they are good places to meet with other like-minded people, and that is where the tea before the talk comes into the picture.

At the Pratap Bhanu Mehta lecture at IISc two weekends back, there was no tea being served prior to the talk. As a consequence, everyone who arrived walked straight into the hall and took their seats. When I arrived there there seemed to be no conversation whatsoever taking place, and so I went and quietly took my seat. Looking around, however, I noticed a number of acquaintances, and people I wanted to get to connect to (people who could connect me to these people were also in the audience). However, there was no chance of going up and talking to them and indulging in what some people uncharitably call as “networking”. And after the event was over everyone was in a hurry to get home and there was no chance to talk!

This is where tea before the talk comes into the picture. When tea is being served, people usually stand around the service area (not to be confused with Cervezaria) and mill around talking. It’s a great occasion to catch up with old acquaintances who happen to be there, make new acquaintances (that both of you have come for the same (usually esoteric) lecture indicates that you have some common interests) and generally talk to people. And meeting interesting people (new or old) at an event is always a good thing and attendees go home much more satisfied than they would had they only consumed the lecture!

Hence it is of paramount importance that tea (or coffee or milk or water or beer) be served before the talk, for it gives an opportunity for people to talk to each other, to network and to get more out of other attendees than they would from the talk itself. And if you are the antisocial type who doesn’t want to meet other attendees, you can quietly go take your seat while others are having tea – they won’t even notice you!

Coffee pricing at Bangalore airport

I had what I thought was a neat theory on coffee pricing at the Bangalore International Airport. However, on second thoughts, I think the theory is bunk. On third thoughts, however, I think I should publish it, even though I don’t believe it is true. So here goes.

There are two places where you get great filter coffee outside the terminal of the Kempegowda International Airport near Bangalore. At the Western edge, close to the departure gates, there is Maiya’s, which also sells South Indian snacks and food items apart from pre-mixed filter coffee (without sugar). The coffee here is priced at Rs. 30 per cup. At the Eastern edge, close to the arrival gates, there is an outlet of Hatti Kaapi. Now, this outlet has started selling snacks, too, and now sells coffee in cups and pots of various sizes. However, the “basic” filter coffee, which is mixed fresh on the spot (you can choose the level of sweetness, and strength) and is available in a paper cup the same size of that at Maiya’s, is priced at Rs. 15.

The argument I had in mind for this differential pricing was that the clientele of Maiya’s, it being at the departure gate, is mostly passengers on their way to board flights. Given that they can afford to fly, they can afford to pay a premium for good coffee. Hence it is good economics to charge a high price for the coffee. Also, given that departing passengers are usually short on time, it is unlikely that they will pay the additional time cost of walking down to the Hatti Kaapi outlet in order to save the Rs. 15 per cup monetary cost of coffee there.

At the other end, Hatti Kaapi is at the arrival gate, and its major clientele consists of drivers. Given the distance of the airport from Bangalore city, it has become almost unheard of for relatives and friends to go all the way to the airport to pick up people. So people waiting at the arrival gate are mostly drivers. And given that drivers are not particularly rich (not rich on an average as airline travellers at least), they are much more price-sensitive when it comes to their coffee. And so the coffee at this end of the airport is priced at a much more reasonable Rs. 15 per cup. This makes for a nice economic theory, right?

The theory falls apart, however, if you compare the prices at Maiya and Hatti kaapi outlets at the airport to their prices elsewhere in the city. A good parallel is in Jayanagar, where the same two establishments have outlets across the road from each other (intersection of 7th Main and 30th Cross).

The kind of service in the two establishments is similar. You stand in line, take a token and stand in line again to get your cup of coffee. Hatti serves its coffee in a paper cup while Maiya serves in a ceramic cup-and-saucer. Like at the airport, Hatti’s kaapi is mixed on the spot and you can set your sugar level. Unlike at the airport, Maiya also mixes coffee fresh on the spot, but like at the airport no sugar is added and you need to add it yourself. It must be mentioned here that the Maiya in question has been there for several years while the Hatti outlet across the road started only a few months back.

And how do Maiya and Hatti price their coffee in Jayanagar? Maiya is at Rs. 18 per cup, and Hatti at Rs. 10 per cup. So the ratio of prices of a cup of coffee between Maiya and Hatti at the airport (2:1) is not very different from the ratio of prices of a cup of coffee between Maiya and Hatti in the city (1.8:1). So the theory I mentioned above falls flat on its head.

Where the theory stands, perhaps, is in explaining why Maiya and Hatti are located at the airport at the ends where they are located – Maiya being a more premium brand in general captures the passenger crowd at the departure gate, while Hatti being a more price-sensitive brand captures the driver crowd at the arrival gate.

And regarding the coffee itself I’ve had coffee at all four outlets and can confirm that both in the city and the airport, the quality of Maiya’s coffee is much superior to Hatti’s. In fact in Jayanagar, where the two outlets are a 5-minute walk from where I live, I prefer to pay the price and time (the lines at Maiya are generally longer than at Hatti) premium to drink coffee at Maiya rather than to drink the more “reasonably priced” stuff at Hatti.

Pricing markets in cabs and beer

Earlier this evening Udhay and I shared a cab back after beer and biryani. We don’t stay particularly close by (using the place we met as point of reference), but I think it was pareto optimal for us to share the cab rather than take two cabs. I got off first at my place and Udhay went on to his place. We used Uber’s fare splitting feature for the trip.

I just got the bill and saw that I’ve been charged exactly half of the total bill. Given the distance from our meeting point to my place and Udhay’s place it perhaps was pareto optimal but had we met any closer it may not have been a fair split – if the place we met was closer to my place than my place is to Udhay’s, then splitting the fare equally would have been unfair to me – for I would have paid more for sharing the ride than I would have had I taken a cab by myself! Can Uber do better?

Once we have enabled the ride sharing and splitting thing, Uber knows who all are travelling, and Uber knows where each of us gets off (if our phones are on, that is). Based on where we break off from the cab, can Uber estimate where each of us got off and split the fare accordingly? Given how good their app has been so far, I would expect them to tweak their ride splitting algorithm and introduce this measure soon.

Going a little back in the day, Udhay and I were at Punjabi By Nature in SuddgunTepALya. We were there during the restaurant’s “happy hours” where they have a buy-one-get-one-free offer on beer. However, it was after we had ordered a “tray” of samplers that we were told that the Bogof didn’t apply to the tray. We also ordered another glass of beer, which duly arrived with a “partner”.

There are two things about Punjabi By Nature’s pricing that I found interesting. The first bit was the non-applicability of “happy hours” to the tray. Is it a measure by them to reward their regular customers who know what to drink at the cost of first-timers who invariably ask for the sampler set? Any other explanation for happy hours not applying to the tray?

The second interesting bit is about the pricing of the drinks itself. A 500ml glass of beer was priced at Rs. 240 plus taxes, which is par for the course for a microbrewery in Bangalore. In most other microbreweries, the sampler trays are priced “reasonably”, approximately at the same per-ml price as the glasses of beer. Here, though, the tray (on which we didn’t get Bogof, remember) was prices at Rs. 625 per taxes! Of course, there were six beers that were sampled in the tray and the quantity was also significantly more than at other sampler trays (here it was at least 150ml per glass if I’m not wrong; in other microbreweries in Bangalore it’s more like 100ml), yet the premium in pricing for the samplers was significant!

I wonder what makes other microbreweries price their samplers at about the same per-ml cost as their glasses – given that the standard practice is to incentivise customers to buy in larger units. I also wonder what makes Punjabi By Nature impose a “penal” price (assuming it was 150ml per sample, it works out to about 70 paisa per ml. The glass of beer (not accounting for happy hours) costs 240/500 = 48 paisa per ml, so the sampler is 50% more expensive) on its samplers. For now that I know how it’s priced, the next time I go to Punjabi By Nature I’m going to order glasses of beer (hopefully in happy hours) and not the sampler!

Pricing is a funny game, I tell you!

Communists and Chintamani

My grandmother Narasamma, who was my last surviving ancestor before she passed away earlier this year, used to make roasted red peanuts. I don’t know the exact process for making them but it basically consists of applying a mix of salt and chilli powder to peanuts and roasting them (or the other way). If there is one thing I’m unlikely to forget about this grandmother, it’s the red roasted peanuts she would make.

I had never eaten these peanuts until when I was about eight years old when this grandmother moved in with us. I can’t really say that I ever got along particularly well with her, but these peanuts more than made up for all of that. Interestingly it was after she moved out a few years later that the supplies of these peanuts started going up. Anyway, in due course of time I had come up with the phrase “ajji kaDlekai” (grandmother’s peanuts) to refer to these peanuts.

As she grew older the supplies of these peanuts started drying up and I had to look for other sources. I soon settled upon Srinivasa Condiment Stores (more popularly known as “Subbamma stores”) in Gandhi Bazaar for my supplies. On my first few visits I would just point at it and be told a price and would buy without bothering what the name was. It was less than a decade ago that I discovered that these “ajji kaDlekai” actually had a name.

It was at Subbamma stores that I once went to procure such peanuts and couldn’t find them on display. I asked the shopkeeper if he had “red peanuts” (kemp kaDlekai) and he shouted to his associate deep into the store “one communist!”. It was then that I realised that the popular name of these red peanuts is “communist”.

The etymology is not hard to guess – the yellow “split” peanuts are called Congress (thanks to the congress split around 1970), and they wanted to come up with a political name for other varieties of peanuts also. Thus, being red in colour these peanuts came to be called “communist” (some disambiguation was required here – for there is another variety of red peanuts which are fried rather than roasted. They’ve been named “Oil King”). I don’t know how popular the name is but in Subbamma stores at least these peanuts are called “Communist”. Similar peanuts roasted with green masala are called “green revolution” (unlikely the name ever caught on! ).

When I moved to North Bangalore two years back I no longer had access to Subbamma Stores for my Communist fix. And I had to find stores close to my home there that would supply it. It was hard enough to find so I cultivated several sources (somehow Communist is not as popular as Congress in condiment stores – perhaps reflecting political parallels). Sometimes it would be from Ganesh Condiments in Rajajinagar first block. On other occasions it was the Iyengar’s bakery at the end of my road (but he never got the difference between communist and oil king and so I stopped buying from him). And sometimes as far away as the Ace Iyengar store in Malleswaram.

There was one thing common to the communists procured from these sources though – the label. Each of them were manufactured by a different small scale industry named after a different god. But the place of manufacture was the same – Chintamani town in Chickballapur district. It was after I had seen similar labels several times that it all started coming together.

I remembered that my father was born in Chintamani, which means that Chintamani is my grandmother’s hometown (given how births were conducted back in the 1950s one could infer this). And this explained how she had picked up this skill for making these Communist peanuts – something most of my other relatives (none of whom were from Chintamani) lacked.

I was reminded of all this a while back when I was eating Communists, procured from Gayathri Stores in Jayanagar 4th block (incidentally run by actor Kashinath’s brother). This one came without a label, and when I had asked the shopkeeper (Kashinath’s brother) for the source, he had replied “naave maaDstivi” (we get them made). Maybe the communists I had for a snack a while back weren’t made in Chintamani, but they were crisp and perfectly spiced!

The communists have moved beyond Chintamani!

What a vegetarian missed out on

This is the menu card that I was given on my flight from Paris to Bangalore on Thursday. Lets look at what all a vegetarian would have missed out on:

1. Mashed potatoes with vegetables
2. Camembert cheese
3. Pineapple
4. Chocolate Tartlet

I ate all of the above and can attest that they were all most excellent – even if I were to judge them by standards not normally applied to airline food.

But someone who asked got a vegetarian platter (or had a vegetarian meal pre-booked) would have had none of the above. They would’ve instead had to make do with a sealed cup of yogurt, and a saffron semolina cake with almonds. Sounds rather sad, even if it were part of a special menu created by the oberoi group.

The problem is that the number of travelers who are vegetarian and foodies is quite small – so small that it makes no sense for the airline to career specifically to them.

Serving food on board is expensive business for airlines, and the less the number of choices they offer the better it is for them in terms of slack they have to build into their system. Hence they offer only what they believe are popular choices and hope that people’s preferences are within one of the choices they offer.

There are special meals on offer though for people with special dietary requirements but they are on offer only for those who have specifically pre booked them – this restriction means airlines don’t need to carry slack on this count. But for everyone else it’s a choice between one of the main meals on offer, and for vegetarians who like to eat well it’s a rather sad choice.

If I were offered this menu three years back when I was still vegetarian there’s a high probability I would have asked for the French cuisine. And eaten everything but for the chicken (and perhaps the mashed potatoes since they came in the same container as the chicken).

Or better I might have tried to negotiate with the airline staff to give me everything from the French menu but for the hot stuff – which would come from the vegetarian option. Given its air France I don’t know if I would’ve succeeded but would’ve tried.

I remember this fight in 2011 on Aegean airways from Rome to Athens when we had pre booked vegetarian meals and were given sad looking fruit bowls in lieu of pastries. We has asked the staff if they could give us pastries instead of our fruit. And they ended up giving us both! But then not all airline staff are so empowered!

It’s not easy being a minority, on whatever axis. Markets are too illiquid to cater to you.

Where you get coffee and tea

An old cranky professor once joked that “cafeteria” should be pronounced as “coffee tea area”, since it was the area where you got coffee and tea. We had laughed back then, both at the poor joke, and at the poor professor who attempted the poor joke. He was out of his wits as usual, we had assumed.

After my recent trip to Spain, though, I realise that he was not actually joking. “-eria”/”-aria” is a Spanish suffix that indicates a place where the prefix is sold. So a place where they sell Cerveza (beer) is a Cerveceria. A place where they sell Bombon (chocolate) is a Bomboneria. I even saw a “Churreria”, where they sold Churros.

So what is a cafeteria? The Spanish word for coffee is “cafe”. The Spanish word for tea is “te” (pronounced thay or something of that sort). So what would you call a place where you get cafe and te?

Cafeteria, of course! The old cranky professor wasn’t so cranky, after all.

Drink structuring

At lunch yesterday it appeared like the men at the next table respectively asked for a cold coffee and an iced tea. What the waitress did was very interesting. She plonks a regular cup of “cafe con leche” (coffee with milk) in front of one guy, and a large cup of hot water with a tea bag in front of the other. They start mixing sugar into their respective drinks (it wasn’t added earlier). Then she brings two large glasses with lots of ice in them. The men presently pour their drinks into that glass and start drinking.

Two Tuesdays back I was at the Rijksmuseum in Amsterdam. Midway through my tour I saw this little cafe in the museum and decided to warm myself with some hot chocolate. After paying a princely EUR 2.75, I saw the barista take some canned cold chocolate from the fridge, use the steamer of the coffee machine to heat it up (in the process effectively adding copious amounts of water), and then hand it to me as “hot chocolate”. That was the last time on this trip I ever ordered hot chocolate.

It’s very interesting how “illiquid drinks” (an oxymoron if there is one – but as regular readers know, liquidity here refers to the economic concept and nothing physical) are structured here and offered without significant cost to the seller. Yesterday was the first time in two weeks in Barcelona, for example, that I saw someone drink cold coffee/tea. Given the low demand it doesn’t make sense for the restaurant to keep the infrastructure to make “real” cold coffee (a mixie and all that). Similarly with the chocolate at the cafe at the Rijksmuseum!

I haven’t seen this back in India – the only time I’ve seen drinks being structured thus was at that little overrated cafe in Alliance Francaise where I once had a lemon ice tea – the guy puts boiling water on a cup with a tea bag, waits for a couple of minutes for it to infuse, stirs sugar, throws out the bag, takes a large glass full of ice American-style, squeezes lemon into it, adds the tea and hands it over.

Maybe Indian restaurants could take a cue from how drinks are structured here – though it will be hard since the Indian customer is more demanding. Adigas, for example, can offer cold coffee (iced coffee to be precise). It will be an interesting experiment without too much cost (other than the ice).

While on the topic of drinks, one of the last great liquor advertising campaigns in India, before liquor advertising was banned in 2001 (and then had to go surrogate), was UB Export Strong Beer’s “yaake cool drink” series starring Upendra. It was incredibly low-priced beer, comparable to the price of a coke. So the tagline went “yella OK but cool drink yaake?” (everything is fine but why cool drink?). I had the beer for the first time two months back, when it was the only available beer at a party. Watch the ad here:

http://www.youtube.com/watch?v=LBAhtPUoJzA

Last night at dinner I ordered a Coke. It was the first time since I landed in Barcelona that I had ordered a soft drink. I began wondering why. It was clear when the bill appeared. I had been charged EUR 2.78 for the (Georgia green glass 350ml) bottle of coke. I remember seeing the menu and seeing that wine was priced at EUR 2.15 there. Beer similar. A clear case of “yaake cool drink”.

Metric

This picture was taken at a restaurant called metric, where we went for dinner tonight. It’s located on the diagonal, an arterial road in Barcelona.

So we were walking, trying to find a place to have dinner. Pinky had a few options in her head but wouldn’t tell me. We passed a number of restaurants, all of which looked decent but not particularly spectacular, and I would wonder if she would take me into one of those. She didn’t.

And then we passed in front of metric. Even before she had indicated that this was part of her shortlist, i was walking inside. I couldn’t do much more though, since I don’t speak the language here

Some restaurants beckon to you just by the way they look. This one was brightly lit, done up in quirky furniture (we sat at an ordinary table but there were others where you has swings instead of chairs!!), with a great looking bar and the place was full. I didn’t care what kind of food they served, all the Tyler Cowen-esque economic reasoning I’ve been invoking before every single meal on this trip went out of the window, and I just walked in.

When traveling abroad, especially when in a country where they don’t normally speak English, it really helps to have someone around who speaks the local language and who can help you get around. Most times when I’ve been out by myself, apart from the time when I’ve been around touristy areas , I’ve been rather lost. I have no clue of Spanish, except for the odd word, and I’ve struggled.

I once had to go to the post office and get my mobile sim registered ( someone told me that was the procedure). I get there, approach the counter gingerly and before I know the lady assumes I’m there to receive a package from lycamobile!! After a few more minutes of futile attempt at conversation I moved on, defeated.

Given how awful I am at getting languages – I’m usually not bad with words but can never get grammar (and even today get confused between Telugu and Tamil because I learnt to understand the two languages simultaneously) – it’s a marvel how Pinky has picked up enough Spanish to get around, and even get complimented (by the waitress at metric) as to how good her Spanish is. She negotiated with the waitress about the menu, got the drinks menu “orally delivered” and translated it to enable me to make my choice (the passion fruit mojito was wonderful, btw) and even carried out some gossip with the waitress, as I looked on clueless, wondering how one can even learn a new language (I haven’t learnt one fluently ever since I was three).

Coming back to the restaurant, there’s something about places that have a very limited menu. It is generally an indicator that there are a few things they are good at, and that they like to stick to their area of core competency rather than experimenting around. A limited menu also means easier inventory management and the restaurant is likely to have fresh ingredients. While a large menu night be useful in terms of offering variety it more often than not comes at the cost is quality and reliability.

What you see in the front of the picture above us my burger. That’s how it arrived, and delicious though it was, I had no clue as to how to eat it. The lack of a covering bun meant I couldn’t pick it up and bite it. The side of bread at the bottom meant I couldn’t cut it with my knife! After a few minutes of fumbling (which included dropping a part of the patty on my jeans), I gave up and just separated the patty from the bread, eating the former with knife and fork and latter with my hands! It’s anyway not like I’m the types who cares what people think about me!!

Though I can’t rule out a stray thought in Pinky’s head on how she’s getting herself an international MBA and learning Spanish and becoming pseud and I’m still the same guy living in Bangalore!!

Tail piece: these Europeans take the metric system when beyond where Indians use. Nutritional information on food packages is in kilo joules, for example!!

Bakeries

One thing that I’ve fallen in love with in my last one week in Europe is the concept of the breakfast bakery. Every few hundred metres both in Barcelona and Amsterdam you have bakeries. These bakeries offer a large variety of bread products that are to be consumed as breakfast. Apart from this, the bakeries also offer coffee and tea so that one can have a complete breakfast in some of them.

And I say “breakfast” only figuratively – I’ve had lunch on three days of my trip so far in such bakeries – again it’s with bakery products such as pizza slices or sandwiches, followed by coffee (which I must say hasn’t been bad for most of the trip). If I’ve to move to Europe, the presence of such bakeries would be one very strong reason to do so!

I was wondering why we don’t have such bakeries in India. The problem is one of liquidity – a very small portion of India’s population wants to have croissants and doughnuts for breakfast – most people in Bangalore, for example, prefer idli-vada and dosa instead. And so you still have the “fast food” places in Bangalore (lots of them) that offer such foods and coffee. And you have plenty of them – all of which are very reasonably priced and offer excellent quality!

As I try to write more and more about economic concepts, I get further drawn to this whole concept of liquidity. And each time I write about it I claim that it’s an underappreciated concept in economics outside of financial economics!

Perhaps I should make a better effort in changing that!