Food Doesn’t Cost Enough

A higher general inflation rate is expected to impact food prices in B.C. Most Canadian province food prices are expected to rise between 1% and 3% in 2018 according to the 8th edition of Canada’s Food Price Report. Vegetables and food purchased at restaurants will see the highest increases, at between 4% and 6%, while fruit prices are predicted to increase between 1% and 3%, and meat, seafood and dairy are expected to rise 0 to 2%. Increased competition from pop-up farmers markets and ready-to-eat alternatives has also had a significant impact on prices. One of the contributors toward higher food prices is weakness in the Canadian dollar, which makes goods imported from the United States more expensive.

Projections show that meals in the traditional sense are “slowly disappearing,” with convenience increasingly trumping price as a key consideration for consumers. Americans achieved a 50-50 balance between spending at restaurants and retail in 2016, with Canada poised to reach that benchmark by 2035. The report states that major food topics in 2018 will be ongoing consumer aversion to animal proteins and the first update to the Canada Food Guide since 2007.

One of the biggest issues that restaurants encounter are problems around food cost, there are many possible situations that can cause food cost to rise. External factors, like the general cost of buying ingredients is one, waste and spoilage is another. The combination of these factors will produce shrinking profits and most likely result in going out of business.

I would like to propose a simple idea that food prices maybe aren’t high enough.

I know, that seems like crazy talk, given the statistics noted above, but ‘hear’ me out. When you buy groceries and cook at home, you are supporting an industry that throws away 1/3 of all food produced. From the selection of produce, animals and animal products for sale by large suppliers, where those that do not make the cut, (blemished, wrong size, wrong amount of fat content) are often discarded.

  • Through the retail displays, or grocery stores, where huge volumes of foods are displayed, weeded through, and trimmed daily to remove any imperfect and unattractive items.
  • To your refrigerator where there are various items going stale, sour or slowly composting.

If appearance (colour, size and uniformity) of food was not so important to the retail end of the food supply (once again, because of Us, the consumer) and more people knew how to shop and cook at home, then we could start to change the pricing of food, making it more affordable.

Until that time, going out to eat, or buying pre-made meals and reheating them at home would lead to far less waste and more savings over all. I mean, how often do you not finish your meal at a restaurant?

We throw away a lot of food for no other reason than because it is unattractive.

To support this our food industry, starting with Us, the consumer (this is all driven by customer demand), right on up through the distributors and the retailers, creates a dynamic that will suppress the real cost of food, to maintain profitability while accounting for the waste. The way we market food, like a commodity, has led to a mentality that justifies artificially low prices so it appears affordable to throw out the scabby apples, the undersized bananas, and the product that no one bought because the display was so plentiful.

If you raise the cost of food, at the production level (what the purchasers pay the producers), by the time it comes down to the customer it would have a pretty profound effect. It would also help all the farmers, fishermen, and food producers, who are the ones paying the heaviest toll for cheap disposable foods.

Here is the rational: if stuff is more expensive you are less likely to throw it away.

You, and by “You” I mean Us, spend $100 a week on groceries alone, before eating out etc. We are not looking at that now.

Every month you spend $400 on food and $120 of that is disposed of (hopefully mostly compost) every month! That means that you will go right back out the next week and replace that spoiled food. When you dispose of food items you need to account for the opportunity cost. That is $120 you cannot spend on something else, so basically you threw away $120 and now you cannot spend it on something else, so you are also taking $120 out of some other aspect of your life, like going out – rough and not quite accurate but you get the idea.

Now raise food prices by 25%:

Assuming you keep your shopping, eating habits and income level your weekly bag of groceries now costs $125 but your budget is still $400. You start using all the food and throw none of it away, it costs 25% more, but you no longer throw out 30%. You come out 5% ahead, so $20. Now calculate the fact that you are no longer throwing out that $120, you are maximizing your income. Remember, before the price increase you were only consuming $280 worth of food, (which would be worth $350 now) Now you are consuming all $400 worth so you are eating more food, or realizing that $400 was too big a budget, and buying even less – opportunity benefit.

Trace that back up the chain through the grocery stores, the suppliers and producers – it’s huge!

On a related note, if you are worried about the effects of fossil fuel on the environment, ponder this…

If you think that 13% of fossil fuel burned can be traced back in some way to food production, (before you include transport and energy for refrigeration), would it not follow that if you throw away a third of the product you are also burning the comparable amount of fuel unnecessarily? How would that reduction in consumption affect global warming? If you maintained your production levels and fuel consumption but allowed all the products to market, rather than throwing them out, could you not take care of some of the famine in the world while lowering prices?

My two cents.

Executive Chef, Wade Rowland

Cheakamus Centre

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