Secrets of Food Marketing, Part II

I guess I’m a little later on this than I expected, but if you watched the video I posted earlier this week, here’s the follow-up. As you might have guessed, the “food marketer” in the video was actually an actress, as Upworthy explains. Yet, the tactics she explains are real. I love this campaign, because it so adeptly shows the truth behind the food industry’s attempts to make us feel good about horrendous practices. Bravo to Compassion in World Farming for a job well done!

Another reason to avoid soda

“Over 79 billion gallons of water are required annually to dilute Coke syrup, and an additional eight trillion gallons are needed for other aspects of production, including the manufacturing of bottles. In 2012, Coke used more water than close to a quarter of the world’s population.

-Beth Macy, The New York Times Sunday Book Review, via Bartow Elmore’s book Citizen Coke

Citizen Coke

Food Company Monopolies

Back in December, the organization Food & Water Watch published a report entitled Grocery Goliaths: How Food Monopolies Impact Consumers. As this is an issue that’s near and dear to my heart, I immediately downloaded it for a little light weekend reading (ha, ha). Since you took the pop quiz already, you probably have some sense of how consolidation impacts the American food system. What I’ll do here is give you a few of the highlights of the F&WW report, so that you can get a better idea of why this should matter to you as a consumer.

Cost

More retro clipart at http://www.clipartof.com/

This is perhaps the most obvious – and enraging – issue for most consumers. Let’s take a look at some statistics and impacts. In 2012, Americans spent $603 billion on groceries. This is obviously a lucrative market for producers, and it has been getting more lucrative in recent years. Between 2010 and 2012, food prices rose twice as fast as wages and inflation. Why did this occur? When big companies buy up smaller competitors, they increase their market share and decrease competition. As a result, they have a big incentive to raise prices. The F&WW report states that the “link between grocery consolidation and retail grocery prices has been studied extensively, and the vast majority of studies have found that food prices rise when retail concentration increases.” A research economist with the USDA agrees.

Lower wages all the way down the food chain

The trouble with having one or two major suppliers for a given food item (such as, say, tortilla chips) is that less of the money filters down the chain. Consolidation means that farmers receive a shrinking percentage of consumers’ food dollars. Small suppliers, too, suffer. Retailers often charge companies a “slotting fee” for having prime shelf space at a supermarket. While large companies can afford to pay these considerable fees, the Federal Trade Commission has concluded that small suppliers are being “squeezed off the shelves.” In fact, larger producers pay the fees not just in an effort to promote their products, but to keep others’ out.

Predatory advertising

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Larger food companies have more money to spend on advertising. There is overwhelming evidence that food marketing to children has a huge influence on their food preferences (Questions? Ask me! I wrote my thesis about this). The other thing that large food companies do with their advertising is market specifically to low-income populations. The report states that food companies like Unilever, ConAgra, and Hormel track advertising (and sales) according to the “paycheck cycle.” One industry publication encouraged supermarkets to ensure that processed foods be “available and merchandised at the right time of the month” for food stamp (SNAP) recipients. If you feel like this doesn’t apply to you because you don’t fall into the low-income category, think again. You’re a taxpayer, and the health of the nation impacts your wallet.

Consumer choice

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Do you feel overwhelmed when you walk down the cereal aisle? Me too. But what, exactly, are you choosing between? Food & Water Watch reports that “many firms sell multiple brands of the same product, which leads consumers to believe that they are choosing among competitors when they are actually just choosing among products made by the same firm that may have been made at the same factory.” If you took yesterday’s quiz, you saw this in the yogurt question. Even many organic/health-food brands are purchased by large companies, but continue to be marketed separately and even have their own websites, making it difficult for the consumer to really know what the parent company is.

Did the food monopoly matter to you before? Does it matter to you now? I’d love to hear your thoughts!