The cost of food

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It’s not easy to make money selling food. Dear daughter and I have been engaged in a summer long project of exploring an artisanal jam-making business and once you use those calculators to figure your retail price, well, let’s just say now I know why stuff at a farmer’s market costs so much. Once you add up the cost of top quality ingredients, transportation, packaging, etc., and do it on a small scale (so you don’t get the kind of wholesale discounts Wal-Mart can command), you come up with a pretty big price. On the other hand, you can also come up with a fresh and excellent product.

So, if I have to sell an excellent product for $9 a jar, how can these big companies make money selling for $4? Besides the economies of scale and bulk pricing, read the ingredients. As Michael  Pollan says, how many? Ones your great grandmother would recognize?

In his book In Defense of Food, Pollan describes how the food industry can and does make money. After all, it’s a somewhat inelastic market—even a dedicated trencherman can only eat so much. After we lick the plate at around 3,500 calories, most of us are way beyond caloric needs, and probably at as much capacity as our stomachs will hold. So how to make money? Repackage the plain stuff in ever more attractive ways—Go-gurt instead of the plain variety—using ever cheaper ingredients, otherwise known as high-fructose corn syrup, chemical flavorings, and value-added vitamins, fiber, or health ingredient of the moment (whether oat bran or Omega 3). You can charge more for the fruit leather than the amount of apples that might be in it, and individually packaged containers can make more money than a tub. A lot of it is fake, not very good for us, and high calorie.

Pollan, in his many books, blasts the food industry (organic is not spared!) but blasts us, too—our willingness to trade “convenience” for effort, our loss of taste in favor of a shot of sugar or salt, the demise of conviviality and unity represented by a sit down meal with friends or family.  It’s all a sad cycle. We grab a convenience dinner because we’re too tired after paying time and money to work out at the health club, we eat at a restaurant after a too-long day working to pay for that restaurant meal (the restaurant  spending is probably the single most outsized cost I see in budgets); we invest in family vacations because otherwise the only time we spend with our kids becomes driving them to after-school activities.

Yet, I can’t help feeling a certain utopian-ness to Pollan’s works. As anyone knows who has ever cooked primarily from scratch, day after day, it’s real work. And not only the cooking, but the shopping, and just plain thinking up what to eat, week after week, year after year. Add to that the cost of organic, of pasture raised meat, of the inevitable spoilage of some portion of the fresh vegetables, and you’re looking at a big bill.

If anything, Pollan’s books might slow up your buying a little, when you realize how long a chain is attached to any purchase decision you make—environmental, taste, time management, employment issues, government price support policy, nutritional bang for your buck.  I don’t have the right answers here, but he’s given me a lot of thought provoking questions.  The most pressing of which, for the moment, is whether I can wrap my mind around ordering a heritage turkey that will cost about what I normally spend on a week’s groceries.

Posted in Cash flow & Spending, General Financial Planning.

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