The Economics of Everyday Things
00:01:19 · Norman Wong, Zachary Crockett, Jennifer Lee
[00:01:19] S3: Alright. He who throws mud loses ground. A day without smiling is a day wasted. A clean conscience is a good pillow. People will always hunger to feel that they are part of something greater. The cookie, you eat it, it's over in a minute, but it's the message that stays in your mind. [00:01:44] S2: That's Norman Wong. He's the CEO of Wonton Food, the largest manufacturer of fortune cookies in the world. Between its New York factory and additional facilities in Texas and Tennessee, it produces five and a half million of them every day. If you laid out their annual output of fortune cookies end to end, it would circle the globe two and a half times. [00:02:08] S3: We are most of the market, So primarily Chinese restaurants. They are the typical mom and pops that you see, but also national food chains. [00:02:17] S2: But it's not easy to be king of the fortune cookie. To keep your business alive, you have to convince restaurants to pay for a product that they give away for free. And even when you land the big contract, the profits might be measured in fractions of a penny per cookie. [00:02:38] S4: Fortune cookies are actually relatively complex. Right? Because you have to make the cookie. You have to get the fortunes. Have put the fortunes inside the cookies. You have to put them in plastic. You have put them in boxes. There's no margin in the generic fortune cookie.
00:02:38 · Jennifer Lee, Zachary Crockett
[00:02:38] S4: Fortune cookies are actually relatively complex. Right? Because you have to make the cookie. You have to get the fortunes. Have put the fortunes inside the cookies. You have to put them in plastic. You have put them in boxes. There's no margin in the generic fortune cookie. [00:02:54] S2: For the Freakonomics Radio Network, this is The Economics of Everyday Things. I'm Zachary Crockett. Today, fortune cookies. It's estimated that there are more than 45,000 Chinese restaurants in The United States. That's more than all McDonald's, Burger King, KFC, and Wendy's locations combined. These restaurants range from your small family run business in Wichita, Kansas to the Panda Express at your local strip mall. At many of these establishments, diners expect a fortune cookie at the end of the meal. [00:03:31] S4: So a modern day American fortune cookie is basically like if you imagine a Pac Man and it became three d. They're made in these little yellow discs, you just kind of fold them, and inside are little pieces of paper. [00:03:44] S2: Jennifer Lee is the author of The Fortune Cookie Chronicles, a 2008 book that traces the history of American Chinese food. Like most of us, Lee, who is Chinese American herself, had always assumed that the fortune cookies' country of origin was obvious. [00:04:01] S4: I was born and raised in New York City. And so when we went to our local Chinese takeout, they would also give me fortune cookies. So I grew up thinking that fortune cookies were Chinese.
00:04:01 · Jennifer Lee, Zachary Crockett
[00:04:01] S4: I was born and raised in New York City. And so when we went to our local Chinese takeout, they would also give me fortune cookies. So I grew up thinking that fortune cookies were Chinese. [00:04:12] S2: Years later, Lee took a deeper look at fortune cookies, and she began to grow suspicious. [00:04:21] S4: Chinese food is actually generally terrible at desserts. We have mooncakes, which basically taste and look like hockey pucks or these weird rice porridge things with a lot of stuff floating around in it. It's like fungus and little berries, and it is an absolute disappointment. If you look at a fortune cookie and you look at the dessert tree of China, there is, like, no genetic ancestry, not even close. [00:04:49] S2: Lee embarked on a journey to track down the birthplace of the fortune cookie. And in the course of her research, she found evidence that they likely originated in Japan in the mid nineteenth century. They were called sujira senbei or fortune crackers. [00:05:06] S4: They have a much nuttier miso flavor, and they're bigger and browner. But if you see them side by side, you're like, oh, this is an unmistakable family resemblance. In the late eighteen hundreds, there were waves of Japanese immigrants that came to California, some of whom opened bakeries and made these things.
00:05:06 · Jennifer Lee, Zachary Crockett
[00:05:06] S4: They have a much nuttier miso flavor, and they're bigger and browner. But if you see them side by side, you're like, oh, this is an unmistakable family resemblance. In the late eighteen hundreds, there were waves of Japanese immigrants that came to California, some of whom opened bakeries and made these things. [00:05:28] S2: How exactly those Japanese crackers ended up in Chinese restaurants in The United States is a little murky. A leading theory is that a Japanese bakery called Benkyodo sold them in San Francisco around 1906. One of their customers was Makoto Hagiwara, who ran the Japanese tea garden at Golden Gate Park. He started selling the cookies to local Chinese restaurant owners who were trying to cater to American diners' tastes. [00:05:57] S4: The Americans just expected desserts, and fortune cookies emerged as the quintessential, quote unquote, Chinese dessert. [00:06:11] S2: During World War Two, San Francisco was a major military port for ships to the Pacific. Soldiers came there from all over the country. And during their stay, many were exposed for the first time to fortune cookies at Chinese restaurants. [00:06:26] S4: And so when they went back to their local Chinese restaurants, they were like, why don't you have the fortune cookies like they do in San Francisco or California? And these Chinese restaurant owners, through the word-of-mouth network, they basically figure out what these fortune cookies were, and they become an expectation.
00:06:26 · Jennifer Lee, Zachary Crockett
[00:06:26] S4: And so when they went back to their local Chinese restaurants, they were like, why don't you have the fortune cookies like they do in San Francisco or California? And these Chinese restaurant owners, through the word-of-mouth network, they basically figure out what these fortune cookies were, and they become an expectation. [00:06:48] S2: Lee says that when Japanese Americans were put in internment camps, Chinese business owners bought up many of the fortune cookie operations. By the nineteen sixties, the government had introduced more favorable immigration policies that nearly doubled the Chinese American population. A wave of Chinese restaurants opened across the country, and that meant many more fortune cookies. [00:07:12] S4: They just really caught fire in The United States. [00:07:17] S2: Initially, Chinese restaurants had to place orders with small family run fortune cookie factories in San Francisco and Los Angeles. The cookies were handmade, and a top notch employee could fold around seven fifty cookies an hour. But eventually, the demand grew so large that humans could no longer keep up. [00:07:40] S4: You go from something that originally was handcrafted, made in mom and pop shops to the point where there's machinery and automation and, like, industrial scale. No one chooses what Chinese restaurants are gonna eat at by the fortune cookie. So it's basically a commodity product. It favor someone who can plug into a nationwide distribution network.
00:07:40 · Jennifer Lee, Zachary Crockett, Norman Wong
[00:07:40] S4: You go from something that originally was handcrafted, made in mom and pop shops to the point where there's machinery and automation and, like, industrial scale. No one chooses what Chinese restaurants are gonna eat at by the fortune cookie. So it's basically a commodity product. It favor someone who can plug into a nationwide distribution network. [00:08:03] S2: Today's machines produce 8,000 fortune cookies an hour. Most of those family run cookie factories have been put out of business, And the industry is now dominated by a few giants, one of which controls the bulk of the market. [00:08:20] S4: You basically have one really big gorilla that makes fortunes, which is wonton food. [00:08:25] S3: We're talking about millions of cookies a day. [00:08:28] S2: Again, that's Norman Wong, the CEO of Wonton Food. The company traces its roots back to his father, Ching Sun Wong, who immigrated to New York in the nineteen sixties. [00:08:42] S3: Just a typical story. You know, came with very little money in his pocket, did the usual jobs, restaurant, laundromat, construction. I guess he wasn't really good at that kind of work because he kinda got fired and then rehired and so forth. [00:08:56] S2: But Ching Sun possessed a special skill. His family members in China had taught him how to make noodles.