24, 2003: In recent decades, the business of farming
has focused on producing bulk undifferentiated products -
cheaply. Measured as output per person, productivity in agriculture
has leaped forward. In step, farm gate prices for primary
foodstuffs have steadily declined. Farming adopted a cheap
food policy. Many applaud this triumph of technology and entrepreneurship
as success. I'm not so sure. The other players in the food
chain have not followed suit.
Consider McDonald's. How has it replaced Coca-Cola as the
world's most recognized brand? Is it because they make the
best or lowest priced fast food? No, those low-cost primary
ingredients from our farms have become Happy Meals and Meal
Deals. The burgers, fries and shakes are a predictable and
consistent -- value for money. Let me emphasize that: McDonald's
delivers value for money, not cheap food. As a matter of fact,
food is just a slice of the value they deliver. McDonald's
owns more private playgrounds than any other organization.
"Treat of the Week" has made them the world's largest
distributor of toys. Most important, McDonald's has not oversold
its food -- a happy customer is one whose expectations are
The food business is not about cheap food. Leading edge food
firms are "not selling food."
Some time ago the Canadian Council of Grocery Distributors
made a presentation to a gathering of Provincial, Territorial
and Federal Ministers of Agriculture. They described the trend
to "not selling food."
One, grocery distributors are not selling food; they are
selling time. Half a century ago cooking time in a typical
household was an hour. Today we have compressed this to 10
minutes. We buy co-packed products like cheese and crackers
or carrots and dip or stir-fry veggies altogether. Salads
are available in a Ziploc -- just add your favorite topping.
Two, supermarkets are not selling food; they are selling
health and nutrition. The growing interest in optimal health
means disease prevention and eating right. Low fat, low cholesterol,
omega three labels are everywhere on supermarket shelves.
Packaging now offers nutrition facts and recipes for health.
Three, food stores are not selling food; they are selling
emotional well-being. The presenters listed free range poultry,
brands from the past, food of the world, ethical treatment
of animals and environmentally friendly as desirable characteristics
for tomorrow's marketplace.
Many farmers have let others add the value for which consumers
are willing to pay: health, nutrition, emotional well-being
and time - but not all. There are signs that farmers have
had it with the cheap food program. Identity preservation,
organic agriculture, omega three production and second-generation
cooperatives are just a few examples. "Not selling food"
is also an option for farmers.
The Canadian Council of Grocery Distributors' presentation
overheads to the Federal, Provincial, Territorial Ministers
and Deputy Ministers of Agriculture, June 26, 2002 can be
found at www.ccgd.ca/en/Presentjeanneen.pdf.
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