Don’t fight the food (trend)

In the investing world, a common bit of wisdom is: “Don’t fight the Fed.”

That means if the U.S. Federal Reserve Bank decides to do something deliberate to try to affect interest rates, don’t get in the way: accept that it’s likely to succeed and adapt, at least in the medium term.

Or you’re gonna get crushed.

In agriculture and food production, it seems to me like farmers and food companies are having to decide what consumer market trends to fight, which to accept and adapt to, and which to ignore. For some trends, farmers aren’t going to want to do the ag version of fighting the fed, but lots of present trends like those in the past will evaporate as fickle consumers move on to the next mania.

Right now it seems crazy out there in restaurants and grocery stores, with almost every product claiming some certain specialness: organic; gluten-free; preservative-free; green; natural; non-GMO; free-range; made-in-a-peanut-free-facility; high source of whatever; low-carb; trans fat free;

Here are some pix from my recent experiences in restaurants and grocery stores:

Ham

Gluten free

 

a and w

Today’s various food trends have created a bunch of micro-markets and given opportunities for many producers of specially-made crops, livestock and food products.

But some developing markets are hard to service, and their development can seem to undermine the stability of the existing, high-efficiency commodity industry. A and W’s “Better Beef” campaign seems to do that, with its need for high volumes of antibiotic-free, preservative free beef pushing it to buy some foreign rather than entirely Canadian beef. For the Canadian beef supply chain to be able to supply enough specially-made beef burgers to meet the Better Beef specs, it’d have to develop a much bigger secondary system of cow-calf, feedlot and packer capacity to provide it. That’d have a lot of costs and complications for questionable gain.

The same thing’s going on with stall-free pork: if demand for that gets to a sufficiently large size, the industry’s going to have to be running parallel systems to supply both, or lose one or the other. At what point do producers need to decide whether to adapt to the trend and convert or determine the trend will ebb and wane and can be ignored?

How about the GMO-free thing? While there’s no real scientific debate about the safety of GMO-produced crop varieties, there’s a growing trend of activist groups trying to force labelling and packaging. If lots of packaging and labelling laws get approved, will there be a bigger demand for non-GMO stuff, or will consumers just move onto something else and not care about GMO content? And how does a farmer deal with that?

The gluten-free issue is interesting. It’s a fundamental attack on a core Prairie farm product – wheat – but also creates a wonderful growing market for another core Prairie farm product – pulses. So does the ag industry and do farmers fight against the gluten-free mania, or do they just figure out how to deal with the trend? Do you fight the food trend, or promote your own alternative?

I’ve got guesses on all these, so here they are, for the record, just so the future can prove how wrong I am: 1) Antibio-free beef: a growing market for the stuff, both from a few food providers like A and W and from Europe will develop, giving some people an incentive to meet that market. But a lowest-cost beef system will continue for many years, especially since beef is already so expensive that few grocers will want to push prices even higher. (Once beef prices fall and we go into a long low price cycle, I’d expect North American grocers to start pushing hard for more antibiotic free meat); 2) Stall-free pork is going to completely dominate pork sales in a decade; 3) Gluten-free will fade away except for a niche market to meet people who actually have Celiac disease, but the low-carb trend will continue because it is well-founded. Smart places like Boston Pizza will offer gluten-free items to meet consumer needs, but will continue to offer a gluten-loaded menu; 4) We’ll never be free of suddenly-popular food trends that seem to suggest the public is stampeding in one direction, only to see most fade away. But a few will become permanent changes and we’ll need to learn to adapt to those.

 

 

 

Comments

  • These micro markets will become macro markets because people want and need healthy food.
    As more scientific studies reveal the side effects of eating GM foods and antibiotic,hormone pumped meat come to light, people realize how important it is to feed their families wholesome food.
    There is an significant increase in allergies, colitis, celiac and crohn’s disease, glutin intolerance, weight issues and cancer to name but a few.
    Many EU countries have banned GMOs. Mexico has banned GE corn.
    Some South American countries are now considering banning GE corn and soy, as the health of their people has declined since the introduction of GM corn and soy with all the pesticides and herbicides sprayed on them.
    Our farm animals deserve more respect, proper space to move around and very good care, after all they give up their lives to feed us.
    Change will come and it will be better for all of us: consumer, producer , livestock and our environment.
    This is not a fad. People are sick and tired of being sick and tired.

explore

Stories from our other publications