Tuesday, December 28, 2021

Schemers, Dreamers and Cons In The Truffle Trade

From hedgefunder (Elliot Management) Paul Singer's Washington Free Beacon, so all pronouncements come with a "grain of salt" caveat. He may have some sort of Italian/French truffle pair trade going on.
With one leg being long Truffe noir de Perigord....

Or something.

The subject line of Shake Shack's email was unequivocal: "TRUFFLES FOR ALL." The Danny Meyer fine-casual chain was touting its latest seasonal offering, the Black Truffle Burger, with 100-percent Angus beef, melted Gruyère, crispy shallots, "and our real black truffle sauce, not fake ‘flavoring,'" for a mere $8.89.

This prompts two questions: How do we distinguish between real and fake truffle flavoring? And how can such a high-end commodity be had for cheap? Everywhere you look, there are truffles to be had: "Add a little luxury to your life guilt free," Live Love Pop's truffle salt popcorn assures us, while Kettle Brand potato chips touts a Truffle & Sea Salt variety as its "Bougiest chip yet."

To help us make sense of all this, Rowan Jacobsen has written Truffle Hound: On the Trail of the World's Most Seductive Scent with Dreamers, Schemers, and Some Extraordinary Dogs. With just one sniff of an Italian white truffle, he was hooked. "My world exploded," writes the James Beard Award-winning author. And although he says "no words can do justice" in describing the scent, he does give it a try: "It was more like catching a glimpse of a satyr prancing across the dining room floor while playing its flute and flashing its hindquarters at you." That's one way to put it.

What has Jacobsen so transfixed is an organism akin to a mushroom, "fruiting bodies of subterranean fungi that live their lives in the soil as rootlike filaments attached to tree roots." Except that truffles remain underground, thus requiring the assistance of a pig or a dog, whose sense of smell far exceeds a human's. Dogs are preferable because pigs tend to devour what they find. As the author notes, "Stories abound of nine-fingered truffle hunters."

It may be worth the loss of a finger. In 2007, a 3.3-pound white truffle was sold for $330,000 (to a casino mogul from Macau). And while most truffles go for less, even at $3,000 a pound it's nothing to sneeze at.

It's also best not to overhandle the truffle lest a piece break off, which can cost a seller hundreds of dollars in value. What Jacobsen learns is that although their scent is intoxicating, truffles are sold almost solely based on looks. "Nobody buys truffles based on smell," he writes. "Everyone wants smooth, round, golfball-sized truffles that they can shave tableside into perfect wafers for their big-spending clients."....