Do retailers respond to consumer concerns?

I often run across arguments and stories that seem to suggest that consumers have no choice (or very little choice).  Their "environment" is a function it seems, solely, of what food retailers choose to offer.  Representative of this sort of view is a tweet I noticed yesterday.

Does the food industry influence you and your kids?  Probably, to some extent.  I suspect they wouldn't spend millions on advertising if it didn't have some effect.

But, here is the question I want to ask: Do you influence the food industry?  The answer, is "yes"!  Food companies can't just offer anything they want.  Somebody has to buy it.  

Our choices are shaped by the environment in which we live and by the offerings of food companies. But, we have to realize that our food environment is also shaped by our cumulative choices. To stay in business, food companies must respond to our desires.

Just a few examples from stories I've seen in just the past couple weeks:

• Food companies stopped using dyes and lean-fine-textured beef in response to social media and buying patterns.
• A study shows that food and beverage retailers have voluntarily cut calories sold by more than 6.4 trillion calories  per year since 2007 (a reduction of 78/calorie/person/day) 
• Cheerios say they no longer will use GMO ingredient

Of course, this just scratches the surface.  How many more "gluten free" products do you see today than even one year ago?  How many milk jugs advertise to be "rBST free" today vs. 10 years ago?  

I'm not at all claiming that each of these represent a rational response by consumers to the actual objective level of risk (or, rather the actual lack of risk) present in such products.  

However, anyone who thinks food retailers aren't responding to consumer desires simply isn't paying attention.

Strange Claims on Meat Consumption

Alison Spiegel at Huffington Post recently ran a story with the lead title: 

Chicken More Popular Than Beef In U.S. For First Time In 100 Years

As best I can tell, however, claim isn't true.  It is true that per capita consumption of chicken is increasing, but it surpassed beef back in the early 1990s.

The claim comes from a graph, which was reproduced from a story by Priceonomics,who in turn took it from Angela Wong at NPR, who in turn cites the Earth Policy Institute.  Beyond that, I have no idea where the data come from.  

For context, here is the graph from Huffington Post:

But, according to USDA data, per capita chicken consumption passed beef in about 1992.  Here, for example, is a graph from the Livestock Marketing Information Center (which uses USDA data).

Oddly, the Earth Policy Institute has, on their web site, a graph showing something similar to the LMIC.  

There may be a rational explanation for the discrepancy (such as differences in data sources or differences in what is being counted in "total chicken") but without any details we only have to guess.

One final point.  Yes, per capita consumption of chicken is on on the rise and has been higher than beef for now over 20 years (according to USDA data).  But, that is largely because chicken has become much less expensive and, lately, beef more expensive.  

Thus, I don't know that we should say chicken is more "popular" than beef.  Indeed, people SPEND much more money on beef than chicken - about twice as much as the following graph shows.  If we judge by dollars spent, beef is much more popular than chicken.

How surveys can mislead

Beef Magazine recently ran a story about changing consumer attitudes.  The story discussed the results of a nationwide survey which asked the question: "How has your attitude about the following issues changed during the past few years?"  Here is a screenshot showing the results  

So, according to the survey, 29%+35%=64% of consumers are today more concerned about antibiotics than they were a few months ago.  In fact, the figure suggests that more than half of the respondents are more concerned today about antibiotics, hormones, GMOs, animal handling, and farmer values.   

I would submit that these findings are almost entirely a result of the way the question is asked.  Are you more concerned about issue X today?  Well, of course, any reasonable, caring person is today more concerned about X.  Indeed, why would you even be asking me about X unless I should be more concerned?

More generally, drawing inferences from such questions shows the danger of taking a "snapshot" as the truth.  To illustrate, let's compare how the above snapshot looks compared to the trends that come up in the Food Demand Survey (FooDS) I've been conducting for eight months.  

In that survey, I ask over 1,000 consumers each month a question, "How concerned are you that the following pose a health hazard in the food that you eat in the next two weeks?"  where the five-point response scale ranges from "very unconcerned" to "very concerned".  

I pulled out responses to the four issues that most closely match the survey above and plotted the change over time (I created an index where the responses in each month are relative to the response back in May which was set equal to 100).  If people are generally more concerned about these issues today compared to six months ago, it isn't obvious to me from the graph below.

So, a word of caution: you can't take every survey result at face value.  These sorts of comparisons show exactly why our Food Demand Survey is valuable: it replaces a snapshot with a trend. 

Distinguishing beliefs from preferences in food choice

That's the title of a paper I co-authored with Glynn Tonsor and Ted Schroeder, which is forthcoming in the European Review of Agricultural Economics.  The abstract:

In the past two decades, there has been an explosion of studies eliciting consumer willingness-to-pay for food attributes; however, this work has largely refrained from drawing a distinction between preferences for health, safety and quality on the one hand and consumers' subjective beliefs that the products studied possess these attributes, on the other. Using data from three experimental studies, along with structural economic models, we show that controlling for subjective beliefs can substantively alter the interpretation of results and the ultimate implications derived from a study. The results suggest the need to measure subjective beliefs in studies of consumer choice and to utilise the measures when making policy and marketing recommendations.

We show applications related to tenderness, added growth hormones in beef, and country of origin labeling.  Here are a couple excerpts:

The reason why the conventional ‘reduced form’ model yields a potentially misleading result is that it does not take into account the fact that most people believe that the generic steak is safe. The reason the premium for natural over generic was so low in the ‘reduced form’ model was not because people did not care about safety but rather because they, on average, believed the health risks from growth hormones and antibiotics in the generic steak were low.

and

the results reveal that, at the mean beliefs, consumers are WTP a premium of only about USD 1.68 . . . for a US origin steak relative to the ‘weighted average origin’ steak. The reason why the value is so low is that most people believe the unlabelled steak is highly likely to come from US origin.

The estimates allow us to make interesting calculations like:

of the total WTP premium for guaranteed tender steak, 46 per cent is due to perceived value of added tenderness; the remaining 54 per cent is due to other factors. A similar computation reveals that of the total WTP premium for natural steak over the generic steak, only 38 per cent is due to perceived added healthiness or no hormone use; the remaining 62 per cent is due to other factors.

and

The implication is that when a product has a mixed-origin label, people are
apparently pessimistic, believing the joint-labelled product to have a much
higher likelihood of coming from the less-preferred origin.

Food Conspiracies

This past weekend, I was a guest on a radio show that is broadcast through a network to about 100 stations across the US.  I was talking about my book, The Food Police.  Having done dozens of these kinds of shows over the past six or seven months since the book release, I figured that I've heard just about every question there was to ask.  I was wrong.  

After some standard back-and-forth questions with the host, the line was opened to callers.  Here are a few of the claims I heard - each from a different caller: 

• Adding fluoride to water doesn't prevent cavities and causes joint pain, teeth browning, cancer, and Alzheimers   
• Canola oil is an "unnatural" newly created synthetic product that causes cardiac problems and high blood pressure
• Organic farmers are small farmers; small farmers treat their soil better than large farmers
• With GMOs the genes they inject into DNA.  They are unnatural and become free floating in the soil; 70% of babies have the Bt toxin in their blood as a result of GMOs; the implication is that GMOs are very dangerous
• A new wave of cancer patients are successful fighting cancer by moving to a diet of organic produce 

Some of these are more grounded in reality than others but overall I think I lost a little bit of faith in my fellow man.  I don't mean that in a belittling way.  But it makes me wonder what it is in human nature or what incentives exist in media/internet that would take a little grain of truth and turn it into some of these beliefs that are so at odds with the evidence.