A note to food marketers: Consumers who say they want healthy options are unlikely to actually order off the healthy menu.
Many restaurants are bending over backwards to offer lower-calorie options including KFC, which launched a grilled-chicken platform this spring, according to an article in today’s Advertising Age byEmily Bryson York, but apparently price and taste trump all.
“There’s definitely a dichotomy between what people say they want and what they actually do when it comes to healthy restaurant eating,” Maria Caranfa, a registered dietitian and director at Mintel Menu Insights, said in a statement. “Over eight in 10 adults told us it’s very or somewhat important to them to eat healthy, but when it comes to dining out, most people are really looking for taste, texture and experience.”
According to Mintel, price was also a deterrent in selecting better-for-you meals. As cash-strapped consumers tighten their belts, they’re choosing cheap and tasty comfort food.
Mintel found that only one in five consumers rank a food’s health attributes as an important factor when choosing dinner. But 77% of them thought about “taste,” and 44% considered “hunger satisfaction.” And a particular problem for restaurants: While roughly 75% of those surveyed said they would like to see more healthy options, only 51% order from those selections.
No matter what your opinion of the Food Inc. documentary might be, my opinion of the latest social media tool – Twitter – took a huge leap to the positive side today. Twitter was atwitter today with one of the liveliest discussions on the Food. Inc. movie or agriculture in general that I have seen in a long time.
Some of the online comments were rude, many were funny or insightful, some were hopelessly naive, and all made you think at some level. And interestingly enough many from the agriculture community from the crop and livestock side were in the thick of the discussion….slow phone line speed and all. You are to be commended. It you aren’t on Twitter, get their quick…. www.twitter.com
Robert Kenner, Food Inc. Director, was featured and online to answer questions. (Long after Mr. Kenner left the discussion tweets continued…for 4 hours before I stopped keeping track) He may have created a questionable documentary and as one participant in the Twitter chat said today…”food and politics should never be served on the same plate,” but he deserves credit for putting himself out there in such a public forum. And at least this forum, unlike Good Morning America or the upcoming Nightline segment on his project, allowed both sides to be heard. For a movie reviewer’s perspective go to: http://bit.ly/14IocQ
If you don’t have time here it is in a nutshell:
“The side effect of a well-executed horror film is lack of sleep. The side effect of a well-executed documentary on corruption of our food supply is lack of appetite. Personally? I left “Food, Inc.,” went straight to lunch and had a big ole’ fried-chicken salad. Unfortunately for this film, one of the most valuable elements of education is learning to separate fact from bias and to seek proof in the form of evidence. “Food, Inc.” seems to cloud the presentation with a whole lot of bias and little proof.”
Now on to some jewels from today’s Twitter discussion:
I loved Variety’s review of Food Inc…it did for supermarkets what Jaws did for the beach.
How do you answer the need to feed a doubling or global population without utilizing any technology? Seems selfish to not look beyond the U.S.
Farmers are growing what they are paid for. We need to create a system where they can make money growing healthier foods.
Going back to how cattle used to be raised would require an added 16.5 million acres of land.
Gotta point this out moviemakers, Roundup soybeans are not insect resistant but herbicide tolerant.
I think we need diversity is Ag which means men and women, big and small, modern and old school. Room for all in Ag
Ag employs 21 million or 15% of the total U.S. workforce. The only entity employing more is government.
Food companies that rely on cheap corn are running around like chickens with their heads cut off and crying foul again with so-called “studies” submitted to the EPA that “prove” food prices will increase if the blend rate for ethanol in gasoline is increased to 15 percent.
But wait just a minute. The latest Consumer Price Index shows consumers are paying less for groceries today than they were just six months ago. The May index for meats, poultry, fish, and eggs was down almost a full percentage point from April and eggs index declined 6.5 percent. The index for dairy and related products fell 0.5 percent in May and has declined 5.6 percent over the past year.
What’s up here, Chicken Little? Because, despite the fact that a number of ethanol plants have closed over the past year, ethanol production is still increasing. The most recent figures from the Energy Information Administration (EIA) were for March and they showed that American ethanol facilities produced 640,000 barrels per day in March 2009 - up 79,000 barrels, or 12 percent from a year ago! Assuming that continues, the ethanol industry will once again produce a record amount of ethanol and distillers grains in 2009.
Point being, at the same time ethanol production is increasing, food prices are heading back downward (finally!). In other words - no correlation. The sky is not falling.
The New York Times had an editorial over the weekend under what they call their “Running Commentary” featuring thoughts from five different economists on why wholesale prices for food were up 1.5 percent in April, the biggest monthly increase since January 2008. The title is “Food Prices: Myths vs. Reality.”
Here’s a summary of the five responses from the economists:
1. Bill Lapp, former chief economist with ConAgra Foods, blames it on reduced availability of corn, increased demand for ethanol, and lower livestock numbers.
2. Arizona State University business professor Tim James pointed out that the increase is wholesale prices, not retail, which is a more volatile index. The consumer price index actually shows a 0.2% decline in food prices.
3. UC Davis extension marketing economist Roberta Cook says there are many factors that influence food prices and one of them is tomatoes …. no, wait - it’s consumers’ willingness to pay more for better tomatoes.
4. Michael J. Roberts, assistant professor of agricultural and resource economics at North Carolina State University, noted that food prices declined in four of the five previous months, commodity prices dropped 70 percent between July 2008 and March 2009 and prices are now some 55 percent off last summer’s highs.
5. Finally, Washington State University ag economist Karina Gallardo basically said there are too many factors affecting too many different types of food to say with any certainty why prices went up.
So what did we learn from this, class? If this were multiple choice test, which answer would you pick if you were asked why wholesale food prices were up in April?
A. Ethanol
B. Don’t worry about it
C. Eat better tomatoes
D. Prices are actually lower
E. None of the above
Frito-Lay has announced a new packaging initiative that’s a chip off the old chip.
Starting next year, all Frito-Lay multigrain SunChips (which are made with whole corn) will come packaged in the first fully compostable snack chip bag made from plant-based materials - that is, corn-based. According to the company, “the change is designed to significantly improve the environmental impact of its packaging.”
This month, the SunChips brand is taking the first step towards this transformational packaging. The outer layer of packaging on 10 ½ oz size SunChips snacks bags will be made with a compostable, plant-based renewable material, polylactic acid (PLA). By Earth Day 2010, PepsiCo’s Frito-Lay North America division plans to rollout a package for its SunChips snacks where all layers are made from PLA material so the package is 100% compostable. They even have a video on their website of the bag decomposing.
In addition, at a time when other food companies are keeping higher prices from last year intact, Frito-Lay recently began to add 20 percent more product into its take-home sized Doritos, Tostitos, Cheetos and Fritos products, without increasing the price.
But wait - there’s more! On Earth Day this week, PepsiCo’s Frito-Lay and National Geographic announced the launch of the Green Effect, a national initiative that encourages consumers to take their own small steps toward helping the planet. Consumers can submit their ideas on how to make their communities greener, for the chance to win one of five $20,000 grants that will help turn their green ideas into reality.
According to news release, the Green Effect initiative is the second collaboration between Frito-Lay, a division of PepsiCo, and National Geographic. “Earlier this year, Frito-Lay and National Geographic teamed up to create a unique editorial supplement entitled, “Solutions for A Better World: A Lighter Footprint.” The supplement, which was polybagged with National Geographic magazine, detailed the world’s current dependency on fossil fuels and delves into the realities of alternative solutions including; solar energy, wind power, biofuels, recycling and water conservation.”
So munch a bunch of Frito’s SunChips today and feel good about it!
Several agricultural organizations are calling on Congress to hold hearings on food price increases that food companies claimed were due to ethanol production.
The groups held a press conference on Thursday to discuss the recent report from the Congressional Budget Office regarding ethanol’s impact on food prices. The CBO reported that higher corn prices due to expanded production of ethanol actually only accounted for only 10 to 15 percent of the overall increase in food prices last year.
Leadership from the American Farm Bureau Federation, National Farmers Union, National Corn Growers Association and Growth Energy joined together for the conference call. AFBF president Bob Stallman began by saying, “The results come as no surprise to us. We have called for hearings to determine why food prices have increased. It’s disingenuous to only look at corn when determining why food prices are increasing.”
NCGA CEO Rick Tolman wants an apology from the Grocery Manufacturers Association. “I think that grocery manufacturers and others owe farmers a huge apology for the damage they’ve done to the reputation among consumers,” Tolman says.
The Congressional Budget Office report on ethanol and food prices released last week spun both ways for ethanol, depending on the media outlet and which side of the food versus fuel debate your corn is buttered.
For example, the San Francisco Chronicle headline proclaimed “Energy Blamed More than Ethanol For Food Prices.” Others with a similar spin included Midwestern papers like the Des Moines Register and the Grand Island Independent.
Headlines from the Associated Press and Reuters, however, led with a more negative spin. AP headlined “Report: Ethanol Raises Cost of Nutrition Programs.” Unfortunately the report only quantified the effect of higher corn prices on last year’s food price increases, even though it specifically notes that “certain other factors—for example, higher energy costs—had a greater effect on food prices than did the use of ethanol as a motor fuel.” It would be nice to know how much higher gasoline and electricity prices helped to raise the cost of nutrition programs, but CBO was only charged with finding out how much ethanol was to blame.
The report made some important points about the inability to predict ethanol’s future impact on food prices because the forces determining that impact move in opposite directions.” Federal mandates now in place require additional use of ethanol in the future, which would continue to put upward pressure on prices. In contrast, increases in the supply of corn from cultivating more cropland, increasing crop yields, or improving the technology for making ethanol from corn or other feedstocks (raw materials) would tend to lower food prices.
What was interesting about the report was that there was something in it for everyone, with both sides of the food versus fuel debate claiming that it supported them. I guess the government just wanted to be fair to everybody.
The food price bus is being driven by the same factors that were driving it last year, according to an update of the Farm Foundation report on “What’s Driving Food Prices?” issued this week.
“In July 2008, crude oil prices were at record levels, as were most agricultural commodity prices. Low supplies generated fears of food shortages. The rhetoric of the food-versus-fuel debate rose along with food prices. Today, despite remarkable course changes, the key drivers of food prices and their complex interactions remain the same,” according to the new report.
The new report updates the analysis Purdue University economists Phil Abbott, Chris Hurt and Wally Tyner did just nine months ago for Farm Foundation. That report, released in July 2008, identified three major forces driving food prices: World agricultural commodity consumption exceeding production growth, leading to very low commodity inventories; the decline in value of the U.S. dollar; and the new linkage between energy and agricultural markets.
In the second half of 2008, each of these driving forces completely reversed direction, but they continued to be the key factors for commodity prices.
In an interview, Tyner told me that the report is only about commodity prices, not retail food prices, which have not come down from last year. “The rate of increase for food prices has come down,” said Tyner. “Poultry products and dairy tend to move through quickly, but for beef it can take up to a year before all of the price impact goes through. So we may not have seen all of the pass through yet for beef.”
Tyner says the lower grain prices may not necessarily mean immediate improvement for the ethanol industry, since there is almost two billion gallons of ethanol capacity shut down. “There’s a delicate balance between three prices - gasoline, ethanol and corn. If the price of corn falls relative to ethanol, those plants can come back on very quickly. If the price of corn goes up relative to ethanol, they can shut down fairly quickly. So we’re going to see a pretty tight balance between corn, ethanol and gasoline in the months ahead and it’s going to remain a tight wire.”
The occasion was marked as part of the Missouri Corn Growers Association (MCGA) annual meeting Tuesday in Jefferson City. CEO Gary Marshall, who has led the organization for over 23 years, was pleased at the turnout for the event. “We had a number of legislators that came in, I think we had over 50 that were registered, and we had a lot of growers there as well, so it was a great time to celebrate 25 years,” Marshall said.
MCGA honored 17 members of the Missouri state legislature with Friend of Corn Growers awards, including Representative Brian Munzlinger who served as chairman of the MCMC in 1993-94. That was the year that Missouri really took the lead in promoting ethanol by expanding use to over 16 percent of the state’s fuel, funding two feasibility studies for ethanol plants and introducing an E85 van at the Indianapolis 500.
Missouri corn growers headed to the state capitol after the meeting to present their legislators with breakfast for the next couple of months - four boxes of corn flakes containing a total of 12 cents worth of corn. MCMC Chairman Keith Witt says the idea was to show them the disparity between the corn prices and products containing corn. “The box of corn flakes costs $2.18, so we’re just putting a little visual to that,” said Witt. “It costs more for the transportation of the box of corn flakes than the actual corn.”
Janet Atkison of KMZU Radio in Carrollton was one of several farm broadcasters who attended the event, which also included a live broadcast of AgriTalk.
Listen to Janet’s report that she filed back to her station while the event was still on-going.
It is hard enough to forecast the next year, much less the next ten years, but that is what USDA’s Economic Research Service has attempted to do with its latest Long Term Agricultural Projections report released last week. Not surprisingly, they expect prospects for the agricultural sector in the near term to reflect adjustments to the global economic slowdown and the U.S. recession.
Among the projections for the next decade in corn, the report says “a gradual shift to corn away from other crops reflects the high levels of domestic corn-based ethanol production and gains in exports that keep corn demand and producer returns strong. Following a decline in 2008, corn acreage increases to 90 million acres by 2011 and remains at or above that level over the remainder of the projection period.”
ERS expects net farm income to initially decline from the highs of 2007 and 2008, yet still remain historically strong, rebounding to near-record levels in the latter part of the projections. Retail food prices are expected to continue to increase more than general inflation through 2011 (particularly meats in 2010 and 2011), but then food prices return to the longer term relationship of rising less than the general inflation rate over the remainder of the projection period.
But wait just a minute. The latest 
Here’s a summary of the five responses from the economists:
Starting next year, all Frito-Lay multigrain 
In addition, at a time when other food companies are keeping higher prices from last year intact, Frito-Lay recently began to add 20 percent more product into its take-home sized Doritos, Tostitos, Cheetos and Fritos products, without increasing the price. 
The groups held a press conference on Thursday to discuss the recent report from the Congressional Budget Office regarding ethanol’s impact on food prices. The CBO reported that higher corn prices due to expanded production of ethanol actually only accounted for only 10 to 15 percent of the overall increase in food prices last year.
For example, the 
“In July 2008, crude oil prices were at record levels, as were most agricultural commodity prices. Low supplies generated fears of food shortages. The rhetoric of the food-versus-fuel debate rose along with food prices. Today, despite remarkable course changes, the key drivers of food prices and their complex interactions remain the same,” according to
The new report updates the analysis Purdue University economists Phil Abbott, Chris Hurt and Wally Tyner did just nine months ago for Farm Foundation. That report, released in July 2008, identified three major forces driving food prices: World agricultural commodity consumption exceeding production growth, leading to very low commodity inventories; the decline in value of the U.S. dollar; and the new linkage between energy and agricultural markets.
The 
The occasion was marked as part of the Missouri Corn Growers Association (MCGA) annual meeting Tuesday in Jefferson City. CEO Gary Marshall, who has led the organization for over 23 years, was pleased at the turnout for the event. “We had a number of legislators that came in, I think we had over 50 that were registered, and we had a lot of growers there as well, so it was a great time to celebrate 25 years,” Marshall said. 
MCGA honored 17 members of the Missouri state legislature with Friend of Corn Growers awards, including Representative Brian Munzlinger who served as chairman of the MCMC in 1993-94. That was the year that Missouri really took the lead in promoting ethanol by expanding use to over 16 percent of the state’s fuel, funding two feasibility studies for ethanol plants and introducing an E85 van at the Indianapolis 500. 
Missouri corn growers headed to the state capitol after the meeting to present their legislators with breakfast for the next couple of months - four boxes of corn flakes containing a total of 12 cents worth of corn. MCMC Chairman Keith Witt says the idea was to show them the disparity between the corn prices and products containing corn. “The box of corn flakes costs $2.18, so we’re just putting a little visual to that,” said Witt. “It costs more for the transportation of the box of corn flakes than the actual corn.”
Janet Atkison of 
Among the projections for the next decade in corn, the report says “a gradual shift to corn away from other crops reflects the high levels of domestic corn-based ethanol production and gains in exports that keep corn demand and producer returns strong. Following a decline in 2008, corn acreage increases to 90 million acres by 2011 and remains at or above that level over the remainder of the projection period.”