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How Natural Food Chains Grow Profits

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Have you shopped at Whole Foods lately? Yesterday, there was lots of yummy looking food being prepared for lunch at lively stations set up throughout the store. Almost none of it was organic or pasture-raised. Beautiful roast beef sandwiches, grilled vegetables, shrimp curry . . . not organic. While two out of three of their freshly ground nut butters used to be organic, today there are none. Same price, lower quality. Although I didn’t have a tape measure handy, last week there were approximately four linear feet of organic red peppers, now $5.99 a pound instead of $4.99 pound, and 20 linear feet of “Whole Trade” peppers. Now what does “Whole Trade” mean?6vas4qqmfe-gwrnb8t2mba

If you look at the pattern of American spending on food and the trend in prices, you’ll understand why.  American spending on food has remained constant or declined for years. Data from the U.S. Bureau of Labor Statistics Consumer Expenditure Survey confirm the generally downward trend Gallup finds in weekly reported average inflation-adjusted spending on food since the late 1980s. The Gallup figures show Americans’ spending on food declining to $151 a week in 2012 from $234 a week in 1966 and 1967. The BLS figures show Americans’ spending on food declined to $124 a week in 2010, from a high of $148 in 1989.  At the same time, the USDA reports that the cost of food is expected to rise 4% a year; actual 2013 prices have risen 2.5% to 3.5%, with meat and sugar prices declining, and vegetable prices increasing as much as 5%. The arithmetic is simple. If American spending on food is declining and costs are going up, the quality of what they eat is also declining.

In fact, Americans spend less on their food than any other country, only 6%. The U.K. weighs in at 9%; France at 14%. Not surprisingly, the poor spend a higher percentage of their income on food than the wealthy.

Mother Jones has written an infgatesormative article tracing America’s low-cost diet to the Nixon administration when, in response to rising food costs and growing demand amongst the expanding middle class, Nixon’s secretary of agriculture, Earl Butz, turned the country’s agricultural subsidy program—originally instituted to help stabilize food supply and farmers’ incomes after the volatility of the Great Depression—into a support mechanism for the industrial production of corn and soy. Butz’s policy of “get big or get out”—made possible by advancements in industrial food production, including technological developments and an abundance of cheap fossil fuels used to make fertilizer and pesticides—encouraged the consolidation of small farmers’ plots into gigantic holdings and led to the rise of agribusiness in place of the family farm. The changes Butz wrought are visible in our food supply, too: The amount of corn produced each year in America has tripled since 1970, from 4 billion bushels then to more than 12 billion today. Faced with an abundance of cheap corn, the food industry figured out how to make it into cheap meat, milk, eggs, and sweets. Over time, the cost of things made from highly-subsidized crops like corn, wheat, and soy—things like cheeseburgers and soda—has declined drastically.  While some debate the merits of local, organic, and seasonal food, and question what it means to eat sustainably, the dominant food production policy in the US is oriented around just one metric: producing calories as cheaply as possible. And organic calories are more expensive than conventional ones. Hence . . . the labeling fraud.

Sixty percent or more of Whole Foods, Trader Joe’s and other natural food retailers are not USDA Organic“.  Many foods are “natural”. Does it matter? “Natural foods” and “all natural foods” are widely used terms in food labeling and marketing with a variety of definitions, most of which are vague. The term is assumed to imply foods that are minimally processed and do not contain manufactured ingredients, but the lack of standards in most jurisdictions means that the term assures nothing. In some places, the term “natural” is defined and enforced; in the United States it has no meaning.

An Organic Consumers Association article reports, and I quote, that polls and surveys indicate that the majority of America’s health- and environmentally-conscious consumers are confused about the qualitative difference between organic foods and items and so-called “natural” products. The majority of consumers believe, contrary to fact, that the cheaper foods, supplements, body care, clothing and other products bearing the “natural” label are “almost organic”. Many consumers actually believe that the “all natural” label means a product is better than organic. This is outrageous, given the fact that organic food and products, by law and by third-party certification, are produced without the use of synthetic pesticides and chemical fertilizers, animal drugs, genetically modified organisms (GMOs), irradiation, nanoparticles or sewage sludge. “Natural” products, on the other hand, are basically unregulated. Many consumers actually believe that the “all natural” label means a product is better than organic. This is outrageous, given the fact that organic food and products, by law and by third-party certification, are produced without the use of synthetic pesticides and chemical fertilizers, animal drugs, genetically modified organisms (GMOs), irradiation, nanoparticles or sewage sludge. “Natural” products, on the other hand, are basically unregulated.

According to OCA, Organic Consumer Association, natural food retail giants like Whole Foods or Trader Joe’s, and wholesalers like United Natural Foods Incorporated (UNFI), are maximizing their profits by selling so-called “natural” products at premium organic prices. Organic consumers are increasingly left without certified organic choices while organic farmers continue to lose market share to “natural” imposters. It’s no wonder that less than 1% of American farmland today is certified organic. Routine mislabeling and marketing fraud have confused millions of U.S. consumers, and enabled the so-called “natural” foods and products sector to grow into a $60-billion- a-year powerhouse, garnering twice as many sales in 2012 as certified organic products.

Joining the Santa Fe Food Coop is a good way to continue eating quality food without spending more. In fact, the Park Slope Food Coop, our model, estimates that shoppers save 20% to 40% on food, $2,400 to $4,800 a year for a family of four.

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2 thoughts on “How Natural Food Chains Grow Profits

  1. Reblogged this on Sustainable Santa Fe and commented:
    We need more alternatives to costly, large-scale natural food stores in Santa Fe. Let’s make a food coop happen!

  2. That so called “natural” designation makes no sense at all. And yes, we do need alternatives
    to TJ, WH and such. Here here!

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