Lecture 1-Consumers Food Dollar Flashcards
Why is the term “food industry” a misnomer?
What is called the “food industry” is actually a misnomer because the path of food from farm or factory to plate relies on and involves a collection of other industries, with many different actors. This includes: inputs, producers, processors/transformers, distributors, wholesalers, retailers, food service operators. Given its complexity, simply using the word “food industry” would not be sufficient for such a large industry. By having multiple industries the food system is able to ensure the highest quality of food and able to meet the ever changing standards of consumers.
What do we mean by “farm bill” and “marketing bill”?
The farm bill refers to the portion of the food dollar that goes directly to farmers, the rest of this consists of the portion of the dollar that goes directly to marketing. Marketing bill consists of anything that happens once the food leaves the farm gate. This includes marketing, transportation, labour, packaging, labelling.
Describe and discuss the importance of the agri-food system to the Canadian economy.
Canada’s agri-food system is a thriving sector which accounts for a $50 billion dollar contribution to GDP. Over time it has grown intensely and will continue to do so over time. Agricultural sales and farm incomes are currently at record highs and Canada continues to be one of the world’s largest exporters for agricultural commodities. The change in market conditions and growing consumer demand have led to more variety in the farm types, technological advancement, crop mix, livestock her size. Adoption of innovation by the sector has contributed to increases in output and productivity. Canada’s farming sector employs 270,000 workers (many temporary workers) and contributes to about 3% of the GDP.
- What does FAFH stand for? Why is it of concern to food manufacturers? What recent changes have taken place in FAFH?
FAFH stands for food-away-from- home. This is a concern to food manufacturers because when a consumer purchases from Mcdonalds for say, the farmer receives significantly less than if the food was purchased from a grocery store given it is usually highly processed. The changes that have taken place in food away from home include, healthy spins, premiumization/gourmatizations, convenience (delivery/uber eats/vending machines/meal kits), automation, robotization, affordability/value options, experience, entering supermarkets with restaurant brands.
- The frontier between food-at-home and food-away-from home is getting blurred. Explain. What are some of the consequences of this?
When obtaining food-at-home, the supermarket is the place common to consumers where you purchase the ingredients you need to cook your meal.The restaurant is the place where the consumer would go to purchase food away from home. However, in an attempt to gain more share of the consumer stomach the supermarkets have created the “grocerant”. The grocerant offers fully prepared meals and even sections of the grocery where you can sit to eat which has therefore blurred the lines. An example of channel blurring would be IKEA (typically a place for building your own furniture) which also sells food in a cafeteria style setting. In order to keep up with the following, FAFH has tried pushd back with a healthy spin, premuization, convenience, automation, affordability, experience and entering supermarkets. The consequences of channel blurring is that when you are buying food away from home this tends to have an impact on the farmers wallet. Food away from home no matter where it is ingested, gives the farmer significantly less money in their pocket compared to food at home. Additionally, food-away-from-home tends to have an impact on the waistline of consumers given these usually contain higher levels of cholesterol and sodium.
According to the most recent calculations by the USDA, the “marketing bill” portion of food purchased by consumers represents about ___ % of the price of a food item.
85%
According to the most recent calculations by the USDA, the “marketing bill” portion of food purchased by consumers represents about 85% of the price of a food item. What are some implications of this? For farmers? For food marketers? For consumers?
The marketing bill portion of food purchased by consumers represents about 85 percent of the price of a food item. This means that farmers are left with about 15% of every dollar. The farmers receiving this 15% of the food dollar have begun protests and have put in the effort to increase their share of the food dollar. If farmers are receiving less money, this means less spending on tools they need such as- labour wages, fuel, fertilizers etc. Crop shortages caused by this then translate into higher prices.
