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Its just another cut in the death by a thousand cuts. Thats how New Orleans restaurateur Neal Bodenheimer views the looming threat of potential tariffs on Mexican and Canadian goods. Bodenheimer is the managing partner of CureCo, which runs three restaurants in New Orleans and one in Washington, D.C. Hes most concerned, though, about VALS, his neighborhood Mexican restaurant. Tequila and mezcal are on his mind, yes; but he also worries about skyrocketing costs of other essentials, from straws to avocados to transportation costs. Bodenheimer is already balancing razor-thin margins, along with supply chain disruptions and changing consumer preferences. It all adds up to a lot of uncertainty in an already-fraught industry. And hes not alone. Spirits producers and importers are keeping a watchful eye on the news and scrambling to plan for a future of uncertainty. This week, President Trump announced a 30-day pause on his proposed tariffs for Canada and Mexico, but what will happen beyond that date is unclear. Impacts of tariffs on businesses and customers When you already have slim margins in restaurants and bars, you tap away little by little at the margin, until there’s nothing left, says Bodenheimer. Hes been through this wringer before, when President Trump imposed a 25% tariff on some European wines in October 2019. Back then, his restaurants and bars adjusted their menus to avoid tariffed goods. Some of his distributors warehoused extra wine, which Bodenheimer says did keep prices down for a few months. In the end, though, says Bodenheimer, restaurants are flow-through businesses. We’re going to have to pay more for the products, and we’re going to charge more to the consumer. Another pain point from the 2019 tariffs was fuel surcharges, which Bodenheimer expects to see return. We’ve seen many fuel surcharges that happen when costs go up and the surcharges never come off, he says. With Canadian products making up 60% of Americas crude oil imports, even a 10% tariff would likely inch transportation costs upward. He also expects greater transportation distances if hes required to source items from outside of Mexico. Sourcing local, in Bodenheimers case, means shipping produce further than he had before. It certainly seems like it would make things a little less green, he says. I’m closer to Mexico than I am to California. Stockpiling in anticipation of tariffs Also struggling to anticipate the tariffs: spirits producers. The skyrocketing popularity of tequila and mezcal might grind to a halt with the imposition of 25% tariffs, industry insiders warn. As the chief commercial officer for Mezcal Amarás, Mexicos second-largest mezcal producer, Holden Ching and his team have been in full production mode since late September. We do suspect that tariffs will happen at some point this year, which is why we got inventory into the U.S. a bit earlier than usual, Ching says. Beginning in October 2024, Mezcal Amarás harvested significantly more than its usual amount of agave, then distilling and bottling at a rapid pace. We really wanted to ramp that up with the ability to ship it into the U.S. prior to any change in hands from a political standpoint, says Ching. Instead of one month of inventory over the course of four weeks, we shipped six months of inventory by the end of 2024. Ching estimates that Mezcal Amaráss distributing partner, Suntory Global Spirits, is sitting on about 6 months’ worth of supply in its U.S. warehouses. That, he hopes, will keep prices stable and help retailers cushion the blow with gradual price increases rather than hiking retail costs by 25% immediately. Still, he expects that by the end of the year, if Mexican goods are tariffed at 25%, that cost increase will pass directly to the consumer. We definitely don’t want to be the first ones that have to make that move, but its likely inevitable, says Ching. That is in part due to the complex three-tier system of alcohol distribution in the U.S. Producers such as distillers and wineries sell to distributors, who then sell to retailers, either on-premise restaurants and bars or off-premise locations including supermarkets and liquor stores. With the three-tier system in the U.S., there’s fairly fixed structures for pricing, says Ching. Everybody works on a margin-based system, and so that margin generally doesn’t change from a percentage standpoint. So any front-end cost just filters its way all the way through to the consumer. Trading mezcal for bourbon Ching and Bodenheimer both expect to see changes at the retail and restaurant level as Mexican and Canadian spirits come at a higher premium. Ching is especially worried about the fact that a greater proportion of mezcals sales take place in bars and restaurants, as compared to other spirits. Where you see most other categories at about a 70%-off premise/30%-on premise split, he says, mezcal is a little bit closer to 50-50. This makes its sales more subject to the whims of beverage directors who might decide, faced with a steep increase in costs, to feature different spirits. Instead of featuring a mezcal, he says, restaurant and bar operators might choose to either feature a tequila that’s cheaper, or they feature another category for the time being. Bodenheimer agrees this is likely to be the case, at least in the short term. If we’re looking at our margins, and our margins are harder to make on agave spirits or Canadian whiskey, we’re going to use them less, he says. He hopes this might be a boon for the bourbon and American wine and vodka industries. I think you already see vodka producers are trying really hard to get market share back, he says, citing the immense popularity of the espresso martini in recent years. Still, he says, its anyones guess as to what the next year holds for the drinks business. It’s so hard to game out what the future looks like, he says. If you were an entrepreneur, would you bet your future that these conditions are going to be the same in four years? Tariffs on exports too Looming over all of this is the potential for another massive tariff increase. A 2021 tariff halt from the European Union on American whiskey is slated to snap back into place on March 31, 2025, unless further action is taken. If that happens, American whiskey will suffer a devastating 50% tariff on exports to the EU; currently, the EU is the largest export market for American spirits, accounting for 40% of all American spirits exports. It would take a staggering amount of Old Fashioneds and Manhattans on American bar menus to make up the loss of European consumers. Unless lasting agreements are reached, both Bodenheimer and Ching expect the American consumer to take the brunt of price increases. In the end, says Bodenheimer, you’re still going to pay more. You may kick the can down the road for a few months, but at some point you need to be prepared for higher prices.
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E-Commerce
The Super Bowl halftime show is a piece of Americana that draws more than 100 million viewers, making it the marquee musical performance of the year. The most-watched halftime show in history was Michael Jacksons 1993 performance at Super Bowl XXVII, which drew 133.1 million viewers. Last years show featuring Usher and a cast of surprise guests drew 123.4 million. So when Kendrick Lamarthe 22-time Grammy Award winner, who last week took home five awards for his song Not Like Ustakes the stage for the Super Bowl LIX halftime show, theres a chance it will register among the most-watched ever. And none of it would have been possible if not for a bold decision by Fox and its sketch comedy show, In Living Color, more than 30 years ago, which changed the Super Bowl halftime show forever. From marching bands to “Elvis Presto” For the first 20-plus Super Bowls, the halftime show was a bathroom break bridging the two halves of the gamea nonevent at best, and at its worst, cringeworthy. The first Super Bowl halftime show in 1967 featured the University of Arizona and Grambling State University marching bands, along with trumpeter Al Hirt. Marching bands were a mainstay throughout the ’70s and ’80s with themed events peppered in, including a Salute to the Caribbean (1979), a makeshift flash mob doing synchronized Jazzercise (1988), and a strange tribute to the Peanuts comic strip (1990). The halftime show may have reached peak cringe in 1989 when it brought us Elvis Prestohalf Elvis impersonator, half magicianfor a borderline-creepy display of bad music, worse dancing, and what was billed as the worlds largest card trick. Members of the University of Arizona marching band perform on the field during the halftime show at Super Bowl I (then called the AFL-NFL World Championship Game) between the Kansas City Chiefs and the Green Bay Packers at the Los Angeles Memorial Coliseum, January 15, 1967. [Photo: Robert Riger/Getty Images] With this kind of track record, the Super Bowl routinely lost most of its audience during halftime, something the NFL had come to accept as normal. Fox’s audacious bet During a routine staff meeting in 1991, as legend has it, despite CBS owning the exclusive Super Bowl rights, Fox president Jamie Kellner saw an opportunity. He proposed an audacious idea: counterprogram against the Super Bowl halftime show, television’s most predictable dead zone. Jamie started talking about how nobody watches the halftime,” Dan McDermott, then a Fox programming executive, said. He said, We should do a live episode of In Living Color. Well make a big deal out of it. We’ll convince America to turn the channel at halftime.'” For a network billing itself as the “Bad Boys of Television,” it was a perfectly on-brand act of disruption. In Living Color creator Keenen Ivory Wayans agreed. I thought, This is genius, he said. The Super Bowl was the biggest thing in television. No one would dare take on the Super Bowl. We have to do that. Fox’s plan was floated by a $2 million infusion from sponsor Frito-Lay, though the brand was nervous about potential live TV mishaps sparking controversy. To counter this, Fox agreed to air the show on a slight delay. It then launched an aggressive marketing campaign, flooding airwaves with promos and turning its studio into a star-studded party venue to host the live event. All that was left to do was see what the NFL had on deck for the Super Bowl XXVI halftime show to know what they were up against. How to steal 29 million viewers The NFL walked right into Foxs trap. The 1992 halftime show theme was “Winter Magic,” featuring figure skaters Brian Boitano and Dorothy Hamill performing on tiny portable rinks while surrounded by dancers in snowflake costumes and a 30-foot inflatable snowman. It was yet another tone-deaf production that didn’t appeal to NFL fans in any way. Viewers tuned out en masse, flipping over to catch In Living Colors Super Halftime Party. Nearly 29 million viewersabout 11% of the Super Bowl’s total audienceswitched over to watch the Wayans brothers, Jim Carrey, and the rest of the iconic sketch comedy team perform Super Bowl-related skits, taking aim at football culture. [Screenshot: 20th Century Fox] In the bottom left corner of the broadcast, Fox posted a clock counting down to the second half, so viewers didnt have to flip back over to CBS to check the game status. This kept viewers engaged throughout the show. The birth of the modern Super Bowl halftime show The NFL didnt even acknowledge Foxs viewership heist. It did, however, resolve to never let it happen again. In 1993, for Super Bowl XXVII, the league tapped Michael Jackson to perform at halftime. From there, they featured Prince, Madonna, Beyoncé, Bruno Mrs, Coldplay, Lady Gaga, Rihanna, Usher . . . and the list goes on. Today, the Super Bowl halftime show is one of the greatest spectacles in musica badge of honor worn by the worlds greatest acts. So if youre one of the 100 million-plus viewers looking forward to Kendrick Lamar performing at this years halftime show, you can thank Keenen Ivory Wayans, the Fox brass, and the team at In Living Color for pulling one over on the NFL.
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E-Commerce
Ahead of Super Bowl Sunday, online privacy groups Fight for the Future and the Algorithmic Justice League are reiterating a call for the NFL to put an end to the use of facial recognition in football stadiums, where the groups say the technology is used to authenticate employees, vendors, and authorized media. “That means that anyone who is going into a stadium to work on any football game has to go through a facial recognition system just in order to get to their job, which is a complete invasion of people’s privacy,” says Caitlin Seeley George, campaigns and managing director at Fight for the Future. The group has launched a petition demanding the NFL put an end to worker facial recognition. The technology isn’t specifically being used to target fans at the Super Bowl, which will be hosted at the Caesars Superdome in New Orleans, but Seeley George warns it’s possible that fans’ images may be captured unintentionally by camera systems. Other NFL stadiums have implemented programs to let people use facial recognition for ticketing and concessions purchases. The NFL didn’t respond to a request for comment from Fast Company. A risk with facial recognition, Seeley George says, is that biometric databases can be hacked, and the data within can be potentially used to impersonate people to other facial recognition systems, similar to how stolen passwords or credit card numbers can be used to access accounts or funds. But unlike passwords and account numbers, she says, it’s more or less impossible to change compromised credentials if they’re based on biometrics. “People aren’t going to be able to replace their face if the data from these systems is hacked or stolen, and we’ve seen that there’s no way that these databases can be secured to protect against that,” she says. Even voluntary use of facial recognition to buy food from vendors has the potential to do more harm than good, she says. The facial recognition policy has also faced pushback from the Las Vegas Police union, who didn’t want images of officers working at Raiders games entered into the system, citing privacy concerns. And groups including Fight for the Future have protested facial recognition deployments at other sports stadiums as well, including Citi Field, home to the New York Mets. “I think we will continue to organize events where fans can come out and rally against the use of this technology,” says Seeley George. Fight for the Future has also backed legislation to restrict facial recognition technology and encouraged people to opt out of it when possible, which she says might create economic incentives to limit its use. The technology has also been deployed by the parent company of Madison Square Garden and Radio City Music Hall in New York, where it was even reportedly used to deny entry to lawyers working for a law firm involved in a dispute against the company. Even when Super Bowl fans leave the Superdome this weekend, they may not be able to escape the use of facial recognition technology, Seeley George says. The New Orleans City Council in 2022 repealed an ordinance curbing police use of facial recognition, and Politico reported in 2023 that the system “has low effectiveness, is rarely associated with arrests and is disproportionately used on Black people.” City, state, and federal officials have heavily beefed up security in the city ahead of the Super Bowl, particularly in light of the deadly terrorist attack in the city on New Year’s, with measures in place reported to include overhead drones capturing real-time images of crowds. The AI company Dataminr will also reportedly be monitoring social media and public traffic cameras to detect signs of disturbances.
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E-Commerce
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