Consumers shape food production systems

Although it is tempting to think that food production systems are created by agribusiness, they depend greatly on the choices and the attitude of consumers and society. For humans, food is not just about nutrition, but it is loaded with a high emotional content.

Consumer choices are highly irrational. To demonstrate this, here are some examples.

When the mad cow disease, or BSE, hit the UK in 1996, beef consumption dropped, but the behavior of consumers was odd. A leading retailer put British beef on sale at 50% off the normal price. They had their best weekend sales ever by then. When asked why they had bought beef, while there were concerns about health risks, some consumers gave answers such as “At that price it is worth taking the risk” or, even better, “ I will freeze it and eat it once the mad cow crisis is over”! At the same time, customers’ visits to the leading fast food chain drop sharply and beef burgers were not in demand, although their beef was from the Netherlands, a country free of BSE by then.

In Europe, mostly in France, consumers used to demand veal to be white. Not slightly pink, just plain white. To achieve this, calves were fed a milk powder diet, which kept them anemic. Yet, at some point, consumers denounced this technique as being against proper treatment of animals. The demand of white meat with a normal diet could not be reconciled. It took years before consumers finally understood that veal was supposed to be pink.

For most customers, white eggs are perceived as being from intensive cage production, while brown eggs are perceived as being more “natural”. Everyone with knowledge of the industry knows that the color of the shell has nothing to do with the nutritional quality of the egg. The belief that the egg color indicates a difference persists, though.

Some blind tests carried out between “industrial” and free-range chicken meat carried out in the Netherlands in the 1980s showed interesting results. When consumers were not told which was which, they could not clearly taste a difference, while when they knew which meat was from which production system, they overwhelmingly gave the preference to the free-range chicken.

Here, in Vancouver, there is a strong trend towards organic foods produced locally. Farmers markets flourish and the environmentally conscious consumers choose to buy their “natural” food on these markets. Ironically, many of them drive in their gas-guzzling SUVs to go there. So much for caring for the environment.

Who, with a rational mind, would choose to eat junk? Yet, junk food is quite a popular item in North America, and it has been a growing trend in many European and emerging countries as well.

In the case of tobacco, not a food, but an agricultural product nonetheless, the warning on the package is quite clear. Yet, some people decide to smoke.

The list could continue and I am sure that everyone has more examples of irrational behavior. Consumer demand (both the rational kind as the irrational one) determines what farmers and food companies produce and sell. In this regard, consumers also share a responsibility in what is produced, how it is produced, where it is produced and how it is distributed to them. Blaming retail or the agribusiness alone for the kind food systems that are in place is unfair.

Of course, it would be interesting to imagine what people would eat if they were rational, and what impact on our food production this would have. A rational diet would follow proper nutritional recommendation, and to this extent would follow the same principles as those used in animal nutrition. However, this would not have to be as boring a diet as what animals are fed. A rational diet does not need to be a ration. After, the human genius that is cooking would help prepare delicious rational meals. It would be like having the best of both worlds. The emotional, social and hedonistic functions of food would remain. The key would be about balance and moderation. If people were eating rationally, there would not be any diet-related illnesses. There would not be obesity. There also would be a lot less food waste. This would improve the level of sustainability of agriculture.

Will consumers become more rational in the future? I do not think so, but I believe that they will become better informed and more critical over time. Especially with the rise of social media, information circulates much faster and trends can gather momentum faster than in the past. More programs for healthier eating are currently running and action is taking place at many levels. In particular, schools are a place where much can be achieved. One can wonder how long the “lunch money and self-service system” will last. Having schools placing vending machines selling items that are highly unbalanced foods and leaving the decision over to kids to decide what they want to eat was of course a disaster waiting to happen. I cannot believe that anyone would expect kids to consciously making the choice of spending their lunch money on broccoli and mineral water. Kids will choose what they like best, not what is best for their health. They need adults for guidance.

Attitude towards food is changing all over the world. Currently, I can see two major trends growing. One is taking place in North America and the other is happening in emerging countries.

In North America, consumers are waking up and starting to question the way their food is produced. This is a major change compared with their attitude until a few years ago. When I moved to this part of the world in 1999, I was amazed by how easy consumers, and retailers, were for the food industry. Consumers simply seemed to consume without trying to know about production methods. Hormones, antibiotics or GMOs (genetically modified organisms) seemed to be accepted. This was a sharp contrast with what I had known in Europe, where all of the above was meeting strong resistance from consumers and retailers. What I currently see happening currently in North America reminds me strongly of what I had seen happen in Europe 20 to 30 years ago. The similarities are almost disturbing. Consumers are losing trust in government agencies, and retailers seem to be the ones to champion food quality, traceability and production methods. This will have much more profound consequences in the way food is produced in the USA and in Canada than the agribusiness seem to realize, or is willing to admit. The population is aging, the generations are changing and the values about food are shifting. The current opposition is not a short-term fad. Consumers will make different choices. Some food producers see that and are already adapting, but many producers still seem to think that opposition will pass. I believe that they are in for a surprise. The expressed plan of Wal-Mart to buy more from small and mid-size farms, to reduce waste, and to develop sustainable sources of agricultural products is a very clear signal that business is changing!

In emerging countries, consumers are changing their eating habits, too, but for a different reason. They now have better wages and more disposable income. The previous “”subsistence” diet made of mostly grain, such as rice, wheat or corn, are now including more animal protein, as well as fruit and vegetables. In these countries, consumers are not overly critical of their food production and distribution systems, but issues that arose in developed countries affect the way food is produced, especially in the area of food safety. These consumers probably would like to experience the same level of food security and affordability of food as in the West over the past 5 decades, but the growing population, and the financial markets will temper this trend. Food prices will be firm at best and they are more likely to increase in the future on an ongoing basis.

There is no doubt in my mind that consumers and retailers are increasingly going to put the emphasis on sustainability, health, food safety and transparency. This may sometimes lead to conflicting objectives with the need to produce more food globally. This does not need to be a problem, but this is why the world needs strong leaders to show the way towards meeting both the objectives of better food and of more food.

Copyright 2010 – The Happy Future Group Consulting Ltd.

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