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

To: epicure who wrote (214882)	8/7/2007 1:28:30 PM
From: Brumar89	Read Replies (1) \| Respond to of 793996

I don't agree that: People are hapless victims of our society or economy or corporations or advertisers or something wrong in our system and that's why they do wrong things. If we could just fix our system the right way, people wouldn't do wrong things. --------------------------------- Healthy foods are plentiful and affordable in America. How much profit is made on them is immaterial - the profit is sufficient or they wouldn't be plentiful. 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. The less they pay the farmer, the better for the next link in the chain. Sure. But businesses make the most money on cheap foods? Well, not necessarily. It depends on the price they sell to the customer. Something high cost can be very profitable if the customers are willing to pay a high enough price for it. And something bought from growers at a very cheap price may not be hugely profitable if the demand won't support anything more than a low price. On foods with huge runs processing costs become negligible, and packaging may actually be the main cost of the product. Well, not negligible. Huge runs will minimize the processing costs but they're not going to go to zero or close to zero. Packaging may be a major cost. Doesn't matter - consider the packaging just part of the processing. And the packaging is an important part of the product the customer is ultimately going to buy. The packaging may add to the utility for the customer - making it convenient to store, cook, or eat. Nothing wrong with that. When hurricanes approach, people stock up on cherry poptarts and granola bars cause they won't go bad, are watertight, don't need cooking or refrigeration. I like stuff in easy open cans so I buy those when I see them so I can take a can to work, put it in the fridge and not need to carry a canopener with me. And so on and so on. 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 As previously mentioned, depends on demand and price customers are willing to pay. (sodas, chips, cereals), I don't know if these are low cost. Sure the cost of the potatoes and grain aren't a big part of the final product. Sugar may be - I don't know. I don't know enough about the cost of preparing these to know what the transportation, processing, packaging cost are. and can be sold for high prices, versus foods that have high costs, and that cannot be marked up that much (meat, fresh vegetables). How much something can be marked up or sold to the customer has nothing to do with the cost. It depends on the demand for the product. 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). Well thats true of everything. Baked goods go bad too. I recall it being general knowledge in my hometown (because we had a commercial bread bakery there) that the profit margin on plain old white sliced bread is very low. Less than 1 percent. The profits on whole wheat is actually much higher as customers are willing to pay more but the costs are pretty much identical. While it is true that people want junk food, part of the reason they want it is very very very heavy advertising. We all know that a lot of advertising today trys to sell products on the basis of health features. Other advertising features taste. Advertisers will push whatever moves the product. If carrots were advertised heavily I suspect more people would eat them. So on the Bill and Hillary video based on the Sopranos last show, Bill frowned when Hillary ordered him sliced carrots i/o onion rings because of the massive advertising that onion rings enjoy compared to carrots? He'd been programmed to want onion rings i/o carrots. Ha ha. Nah, Onion rings really taste better than sliced carrots. Thats the truth. Advertisers push the taste of products like cookies because they really taste good - better than carrots and broccoli, say. "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 There are plenty of healthy breakfast cereals on the shelves. I wouldn't necessarily use cereal as an example of bad food - it can be good or bad. Fruit, vegetables and meat, because of higher production costs have lower profit margins. Profit = price - costs. You can't say anything about profit based on costs alone. 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; Of course, basic economics. People buy more of everything when its cheaper. 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. What I think you're missing is that you have to consider both supply and demand. And demand depends on what people want, which is often driven by what tastes good to them. All the advertising in the world won't convince people sliced carrots taste as good as onion rings. If millions of people liked sundried or baked thinly sliced apple slices (trying to think of something healthy that is like a chip) better than fried potato or corn chips, the stores would be full of them instead of whats in the chip aisle now. 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. Well, in the Krogers I shop at (my wife goes to walmart), the produce area is about twice as big as the chip and snack area. The milk and cold juice aisle is as big as the soda aisle, as is the canned juice aisle.