Why Chicken Sandwiches Don't Cost $1500

Andy George spent six months and $1,500 making a chicken sandwich entirely from scratch. His experiment, published on the YouTube channel How to Make Everything, attracted millions of views and raised a question: why does a homemade sandwich cost hundreds of times more than a commercially produced one?

A supermarket chicken sandwich costing £2, approximately $2.50, was 600 times cheaper than George’s version. Wendover Productions used this comparison to explain economies of scale, the principle that producing larger quantities can substantially reduce the cost of each unit.

George personally produced nearly every ingredient in his sandwich. He grew vegetables, harvested and ground wheat for bread, raised and butchered a chicken, and traveled from Minneapolis to Los Angeles to collect seawater for making salt.

Specialization of labor laid the foundation for economies of scale. Once agricultural productivity allowed individuals to produce more food than they needed, other people could specialize in research, writing, manufacturing, and other activities. This supported the development of cities and an economy based on exchanging specialized goods rather than producing everything individually.

Modern production costs depend heavily on three activities: obtaining raw materials, processing them, and transporting the finished product. The video uses George’s salt-making experiment to demonstrate how businesses reduce expenses by optimizing these activities at progressively larger scales.

George's initial salt-gathering trip involved $298.88 in airfare, $57 for a boat, and $6.41 for a five-gallon container. The video reports a total of $362.40 for approximately six ounces of salt, illustrating how fixed expenses become disproportionately expensive when spread across a tiny quantity of output.

George could have produced substantially more salt without increasing his initial travel expenses. Each gallon of seawater yields approximately 4.5 ounces of salt through evaporation. His five-gallon container could therefore have supplied 22.5 ounces, or roughly 1.4 pounds, reducing the reported production cost to approximately $16 per ounce.

Using ten five-gallon containers would have reduced the cost to approximately $1.87 per ounce. Purchasing nine additional containers at $6.41 each would have increased total expenditure to about $419.98 while allowing approximately 14 pounds of salt to be produced.

Transport capacity eventually limits the benefits of simply increasing container numbers. The video considers a maximum airline carry-on volume of 45 liters, or 11.8 gallons, and estimates that this could accommodate approximately 213.6 pounds of salt by volume. This hypothetical calculation assumes that airline baggage-weight restrictions would not prevent transporting such a load.

Producing approximately 214 pounds of salt would have reduced the calculated cost to $0.64 per ounce. The scenario required 153 five-gallon containers and 16 boat rentals because the original boat could carry only approximately ten containers. Including airfare, the estimated total expenditure was $2,191.58.

Switching from air transport to a commercial truck makes much larger production volumes possible. The video estimates that hiring a 40-foot semi-truck in Los Angeles costs approximately $2 per mile. Transporting salt 1,912 miles from Los Angeles to Minneapolis would therefore cost $3,824.

Truck weight restrictions matter more than available cargo space when transporting dense products such as salt. The example truck offers approximately 2,395 cubic feet of usable space, equivalent to 17,916 liquid gallons. Although the video estimates that this volume could accommodate 325,000 pounds of salt, the United States' 80,000-pound gross vehicle weight limit restricts the assumed salt payload to approximately 40,000 pounds.

Producing 40,000 pounds of salt would cost approximately $349,814 under the video's assumptions. The calculation includes 2,857 boat rentals costing $162,849, approximately 28,571 five-gallon containers costing $183,141, and $3,824 in trucking expenses. This brings the reported cost to approximately $0.54 per ounce.

The large-scale calculation deliberately assumes that containers cannot be reused. Eliminating this restriction would create another opportunity to reduce costs because reusable equipment would spread its purchase price across multiple production cycles.

Economies of scale produce diminishing cost reductions as production increases. Increasing output from approximately 1.4 pounds to 214 pounds reduces the calculated cost per ounce from $16 to $0.64, a 25-fold improvement. Increasing production to 40,000 pounds reduces the reported cost only from $0.64 to $0.54 per ounce, despite the much larger production volume.

Where manufacturing takes place can be as important as how much is manufactured. The video compares evaporating seawater in Los Angeles before transporting the resulting salt with transporting the seawater to Minneapolis and evaporating it there.

Transporting unprocessed seawater wastes valuable cargo capacity. Seawater weighs approximately 8.6 pounds per gallon, meaning a truck carrying 40,000 pounds could transport only about 4,651 gallons. Evaporating that quantity would yield approximately 1,308 pounds of salt, far less than the 40,000-pound finished-salt shipment considered earlier.

The seawater transportation scenario requires substantially different resources. The video estimates 931 five-gallon containers costing $5,968, 94 boat rentals costing $5,358, and $3,824 for trucking. It reports a final production cost of $0.60 per ounce of salt.

Even small differences in unit costs become financially significant at industrial scale. The video compares its reported $0.54 and $0.60 production costs, noting that a six-cent difference per ounce amounts to $96,000 when applied to 100,000 pounds of salt.

Salt is an example of a weight-losing product. Manufacturing it requires processing a substantial quantity of seawater to obtain a much smaller quantity of finished salt. Processing the seawater near its source avoids transporting large amounts of material that will ultimately be discarded through evaporation.

Manufacturing plants for weight-losing products generally benefit from locating near raw-material sources. This reduces the distance that bulky or heavy inputs must travel before processing removes much of their mass.

Weight-gaining products create the opposite transportation incentive. These products become heavier or bulkier when locally available materials are added during manufacturing. Producing them near consumers can therefore reduce the cost of distributing the finished goods.

Coca-Cola illustrates why companies distribute production among many facilities. The video states that Coca-Cola operates more than 900 bottling plants worldwide. Because beverages combine relatively small quantities of concentrated ingredients with substantial amounts of water, bottling near consumers avoids transporting the full weight of finished drinks over unnecessarily long distances.

A single giant Coca-Cola factory might offer lower manufacturing costs but higher distribution expenses. Multiple regional plants sacrifice some potential advantages of centralized production in exchange for shorter transportation distances. The economically preferable arrangement balances manufacturing efficiency against distribution costs.

The optimal manufacturing location depends on what must be transported and when it becomes heavy. Salt becomes much lighter after processing, favoring production near the raw-material source. Bottled beverages become heavier when water is added, favoring production closer to the customer.

The video attributes an approximately 92-fold reduction in salt costs to scaling production. Its broader conclusion is that mass production reduces unit costs by distributing fixed expenses across more output, improving transportation efficiency, and organizing production around the characteristics of the product.

Further savings were possible beyond the scenarios examined. Larger boats, larger containers, reusable equipment, and other operational changes could have reduced costs further. The calculations were illustrations of economies of scale rather than a fully optimized commercial salt-production system.

The same principles apply to the other ingredients in George's sandwich. Commercial farms, mills, poultry processors, and food manufacturers benefit from specialization, bulk production, and efficient distribution. These advantages collectively explain how businesses can sell sandwiches for a few dollars when producing every component independently costs vastly more.

Several numerical claims in the video do not reconcile with its own figures. Spending $362.40 to produce six ounces of salt implies $60.40 per ounce, rather than the stated $52. Increasing production from 214 to 40,000 pounds represents approximately 187 times more output, rather than the stated 314 times. The listed $15,150 in expenses for producing 1,308 pounds of salt from transported seawater also implies approximately $0.72 per ounce, rather than $0.60.

The episode was sponsored by Lumerit, an education company promoting lower-cost college coursework. Its advertised Lumerit Scholar program offered up to three years of remotely completed coursework for $4,000 annually or less, with degree specialists assisting students in transferring credits to traditional colleges. These were promotional claims presented by the sponsor, not independently established findings.

Andy George also produced a related investigation into the economics of coffee. His follow-up video examined where consumers' payments for coffee go, extending his approach of investigating the costs behind familiar products. The Wendover Productions narrator participated in that project.