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37 sats \ 6 replies \ @kr OP 17 May \ parent \ on: Food Is Not A Commodity food_and_drinks
Why would one pay premiums for a “commodity” product?
You’ll never know the difference between the chicken or the broccoli in store A vs store B.
You don’t have access to the factories that produced them, you don’t get insight on the production methods, you don’t know what date your food was harvested.
And the reason you don’t get access to the information that differentiates two products is because regulators have a much easier job if all food is treated equal. Everyone stores and ships and packs their food in the same way, everyone adheres to the same safety standards, and farmers have a single, highly liquid market in which they can sell their food for reliable prices.
This made a lot of sense in the 20th century, but it hurts anyone trying to differentiate and produce better food. If you’re going to sell in a grocery store, your incentive is to be the low-cost producer, not the high-quality producer.
The highest quality food is found at local farms. This isn’t a personal preference, this is fact. The food is harvested that day, it doesn’t spend a week flying around to processing plants, farmers have real accountability to their customers, and you can observe growing conditions with your own eyes. The more time a tomato spends in transit, the less nutritious it is when you buy it.
This is why so many Michelin star chefs directly source their food from local farms.
But the local farms who choose not to fit the mold of commodity food production, often have their production levels capped, and their production prices are higher for using different processing systems. For example, a farmer in Canada can choose to raise exotic, more flavorful breeds of chicken, but once they produce more than 6,000/year, they must buy quota rights from the government which allows them to produce a set number of chickens for a set price.
So the exotic chicken breed that takes twice as long to mature, produces half as many eggs, but makes for higher quality and tastier food isn’t produced at scale. It just doesn’t make sense when every step along the food production chain values all chickens equally.
None of that is what I'm disagreeing with, though. You're right about the logistics/regulatory system favoring what you're calling "commodity" foods and I agree with you about their low quality.
You are overstating your case, though. There are different production modes on the market (organic, for instance), so we can observe willingness to pay premiums for quality. We can also observe how many people are willing to pay for products with better ingredients (seed oils vs olive oil, for instance). And, many people live in places with regular farmers' markets, where they could (if they cared to) buy directly from a local farmer.
Everything I see points towards what I'm saying about preferences. Most people prefer cheap to quality. The entrenched logistics system largely rose up around the varieties of crops and animals that delivered the cheapest prices to consumers, because that's what consumers were buying.
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we can observe willingness to pay premiums for quality
wrong. you don’t even know what is different about the organic apple and the non-organic apple. the non-organic one may in fact be of a better quality if it were analyzed for taste or nutrition. but in the grocery store, you have absolutely no idea.
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Purchases are always made based on ex ante beliefs. You never know which will be better, but people do expect "organic" or "pasture raised" or "grass fed" to be better on some quality dimension. They also expect the food from the farmers market to be fresher.
By and large, consumers aren't willing to pay much for those quality differences. It's consumers who force producers to compete on price more than quality. Producers will compete on whatever dimension gives them an edge. Some produce higher quality, or just different, products, but those are for the small minority of consumers who are willing to pay that premium.
It doesn't even take that many consumers to care about these things. That's why so much food is kosher, even in countries where less than one percent of consumers care about that. It's a quality dimension that some people care about and it manifests in the market.
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By and large, consumers aren't willing to pay much for those quality differences.
No. Your entire argument rests on the premise that consumers are able to judge quality in a grocery store. Consumers don't have the tools to assess quality that they might at a farm or a farmer's market, and grocery stores, regulators, financial markets, etc... have an incentive to downplay differences between products.
Further, because food is largely treated (and regulated) as a commodity, it's not even feasible for producers to make products with maximum taste, nutrition, etc... so it's likely people have never even tasted great wheat or heirloom corn.
How can you expect people to make make quality judgments when they've only ever tasted the foods that barely pass the USDA's minimum acceptable standards?
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I know from experience that the produce we buy is perceived by guests we've had over as being higher quality. It came from a normal grocery store. They continue not buying what they acknowledged as being higher quality produce.
You have also missed my point. People have quality expectations, whether from products in a store or products on a farm, and regardless of your opinion about their ability to judge quality. Decisions are made based on expectations.
Is there a version of your argument that is actually debatable or falsifiable, because it's starting to seem like you're just saying "If people knew what they were missing, they'd radically change their relationship with food." And, aside from the kinds of evidence I've brought up, we have no way to assess that claim. There definitely doesn't seem to be much evidence supporting it, though.
Anyway, it seems like you're committed to just denying that my perspective has any validity, so I'm going to disengage.
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People have quality expectations, whether from products in a store or products on a farm, and regardless of your opinion about their ability to judge quality. Decisions are made based on expectations.
Have you ever been to a farm? Or a farmers market? They let you taste their food samples right in front of them. You don't have to guess the quality of your food based solely on the "Made in USA" label.
Anyway, it seems like you're committed to just denying that my perspective has any validity, so I'm going to disengage.
Why would you ask me a question about my argument and then in the following paragraph tell me you're going to stop engaging?