Olive Garden Points Out An Error In A Hedge Fund Manager's Takedown Of Its Overpriced To-Go Containers

Last week Jeff Smith and his hedge fund Starboard Value LP released a huge 294-slide presentation criticising Olive Garden and its parent company Darden for wasting money, among other things.

One of the things that Smith and his analysts went after was Olive Garden’s to-go containers — which they estimate the company is wasting around $US22 million on.

These to-go containers are “specified to be microwave and dishwater safe,” said Smith and his analysts. These are requirements which the hedge fund feels “over-engineer packaging and drive up costs signifcantly without necessarily driving any benefit associated with more foot traffic or increased pricing power on customers.”

And on one of the presentation slides, Starboard Value asked: “Why do the to-go containers need to be dishwasher safe?”

Today, Darden released a 24-page slide show response. Included in that response was a comment on said to-go container.

“Our packaging is primarily designed to maintain food quality. It meets competitive standards, is a more sustainable alternative to Styrofoam, and complies with local waste regulations. It has been specified to be microwavable — but not dishwasher safe.”

It seems like we’re now splitting hairs.

Here’s the slide from Darden’s presentation.

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