Friday, July 25, 2008

Local food, energy prices and the rise of American foodies

The food distribution business is in trouble. There has been a lot of press about how individuals can reduce their carbon footprint and energy costs by buying more locally grown food, which is a difficult change for the established distribution companies to adjust. It is also clear that the price of food is under upwards pressure because of poorly conceived energy subsidies biased towards staple foods such as corn. There is no question that many people are worse off due to the high cost of food and energy.

What has not been widely discussed in the press or academic circles (at least the transportation circles, with few exceptions) is how we got to this point where all foods are expected to be available year round. Who are the historical players to blame for our current mess? Just for fun, let's blame the foodies. Here's why. The amount of product differentiation and variety available now did not exists 20 or 30 years ago. It barely existed ten years ago. The beginning of sourcing individual unique products can be traced to the 1970s, where enterprising distribution companies started distributing strange and previously unavailable fruits and vegetables on the West Coast. This coincided nicely (and there is certainly circular causality here) with the rise in the first batch of genuine culinary stars in the US, such as Jeremiah Tower, Alice Waters and Wolfgang Puck. No longer was a fancy night out limited to prime rib, an iceberg salad and, if you were feeling really adventurous, an order of strawberries with shaved red onions and balsamic vinaigrette.

There was a technological innovation that allowed for the shift towards new foods. Distributors had perfected the cold chain, which maintained foods in a refrigerated state from field to plate. The cold chain was a major part of an improved food safety system. This was a big deal, and it opened up a new world in which chefs and distributors could compete. Because of the low energy prices, distributors traveled the globe to find anything that gave them an edge. The chefs followed, as unique menu items can make a name and restaurant. (Eventually items that were once unique becomes commonplace regardless of how worthy it actually is. There is no good reason that Arctic Char should be a featured fish in a self-respecting restaurant, but a lot of people put a lot into selling it 15 years ago when it was a cheap, oily fish from the frigid North Atlantic. It's still oily and gross, but expensive and a featured menu item.)

So the demand for new and unique foods by foodies helped increase product differentiation but also increased overall transportation costs for distribution. It's unclear what the effect of a weak dollar is on overall food expenditures, but the cumulative effect is the increased demand for locally grown food, which may just prove to be a reshuffling of the costs among producers, distributors and consumers rather than an actual reduction. In any event, what seems to be missing is from the discussion is stronger advocacy about eating seasonally above and beyond locally. That's where the foodies have caused the most trouble, by insisting on many tasty items year round that should really be only available for a short season. (Soft shell crabs are probably the worst offenders.) So we can thank the foodies for increased selection, but we can blame them in part for increasing our dependence on the distribution network. As the distribution costs rise, so so our overall food costs, and any solutions (such as more local farming) are long term (it takes a while to develop a farm and generate produce) or we have eliminated the best farm land for local growing through our appetite for land in our expanding metropolises (though we are in no danger of actually running out of farmland, only "exurban" farmland).

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