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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: Brumar89 who wrote (214874)	8/7/2007 8:49:18 AM
From: epicure	Read Replies (1) \| Respond to of 793994

"They buy junk cause they want it." It's a little more complicated than that. Businesses are set up to make the most money possible. Businesses make the most money on cheap foods with minimal food costs- so the less they pay the farmer, the better. On foods with huge runs processing costs become negligible, and packaging may actually be the main cost of the product. It makes sense that businesses will push those things with the least base costs- right? The greatest profit is to be had from foods that cost almost nothing (sodas, chips, cereals), and can be sold for high prices, versus foods that have high costs, and that cannot be marked up that much (meat, fresh vegetables). When you add in food handling and spoilage, the problems with fresh foods become even more apparent (and adds a large measure to their cost). While it is true that people want junk food, part of the reason they want it is very very very heavy advertising. If carrots were advertised heavily I suspect more people would eat them. "Breakfast cereals today remain what economic analysts call a "high margin-to-cost business". One of the biggest costs is the marketing, which is typically 20-25% of the sales value, according to analysts JP Morgan. Gross profit margins on processed cereals are 40-45%." guardian.co.uk Fruit, vegetables and meat, because of higher production costs have lower profit margins. And here's an interesting study that shows pricing does influence consumer choice when it comes to healthy foods. Pricing study- 50% reduction in price, fruit sales in the cafeteria quadrupled, and carrot sales doubled: sph.umn.edu So that's part of what I'm talking about. The pressures on processors is to find very cheap products that they can sell for high prices- like your potato chips. The pressure on grocers is to find the highest mark up products per unit of floor space, with the lowest spoilage or return rate- that's not going to be produce. The consumer is bombarded with clever advertising and product placement designed to make him buy the most profitable choices for the retailers. Does the consumer also "want" the profitable choice? Well yes, but it's much more complicated that a system where the consumer just wakes up one day and says to himself- "What I want is a highly processed non-nutritive heavily sugared cereal in a bright box that has very little actual cereal in it..."