Tuesday, April 23, 2013

What is REAL Cost? Part 2: The Food Business

The most important factor for businesses is often their bottom line. A monetary line drawn that says "this is where we win or lose." Considering REAL cost, where is the business' bottom line for environmental impacts? How would you calculate it?
I'm currently reading a book by Daniel Goleman, called Ecological Intelligence, where he details a business' lack of accountability to their ecological impact due to an inability to measure that impact. Economic impact is measured by ROI, or return on investment, which measures how much money you are getting back after taking into account the economic investment you put into your business so that it will continue to thrive.
ROI works similarly with our environmental impact. The more sustainable and eco-friendly we make our industries, and the better we improve upon our land's use and preservation (which is an investment), the better the health of our environment is going to be. Still, how do we make businesses we purchase our food from accountable for their environmental impact?
One of the most significant points Goleman makes is that businesses have to be honest and transparent to the consumer about their business practices and what effect they have on the environment. In the information age, consumers are already learning this kind of information from alternate sources anyway, so as a business, if you are upfront and honest to your customers, they may even be more generous later in supporting you, than if you had lied to them or tried to hide certain information about your practices originally.
The Dalai Lama said, "The lack of transparency results in distrust and a deep sense of insecurity." And he's right! Don't underestimate the shift in consumer spending from one product to the next if they find out you are hiding information from them. Be honest! It's the best way to retain customers for life.
Humans like to use math to validate their decisions, which is one reason statistics are so often used in arguments. Therefore, in order to measure those impacts, businesses need to look at the other costs of their products on the three different levels (yes, the same as those that consumers must pay attention to!):

  • The environmental impacts
  • The social and cultural impacts
  • The impacts on the health of humans and other species

Business can pay attention to how GoodGuide and the Environmental Working Group's Consumer Guides are rating their products, and strive to reduce those three above impacts. Find out where you can cut out negative inputs and outputs. Anything that the business pays for or uses to produce its product should be listed and evaluated, as well as any byproducts of production.
When you are a more accountable and transparent business, your customers will respect you more for the work that you do and the products you provide. I'm reminded of small farmers here, who at any time are usually happy to show you around their farm, how they produce the food they sell, and welcome questions about their business.
As a tie-in: Businesses need to understand the role they play in their customers' lives and the impact they have on the larger world, and consumers need to understand how their purchasing power affects business decisions, and the needs and wants they convey help change how business is run, and shows the impacts they support. The Food Industry can be sustainable, if businesses and consumers work together to ensure they are minimizing their impacts by understanding the REAL costs involved in producing and purchasing food and food products.
So, what is the best bottom line for a sustainable business? It is when the business, the consumer, and the environment are all winning.
If you own a food business or work in the food industry, what are some inputs and outputs you have minimized to lessen your impact on the environment? Leave your comments below! You can also check out Edible Knowledge's Facebook page to keep updated on the posts and other conversations about food and food culture!

Wednesday, April 10, 2013

What is the REAL Cost of Food?

America is a culture of consumers, rather than producers. We now buy food more than we grow it ourselves. Currently, about 1% of the American population are farmers. We surrender our self-sufficiency and food knowledge for food that is produced faster, grown or made by others, varied due to trade, and monetarily cheap.

We also allow advertisers to promote this culture and convince us that money is what we should focus on. On Taco Bell's dollar menu, they use the implicit question of "Why pay more!" to attract customers looking for the cheapest food. As America's working lifestyle has gotten busier and faster, our food lifestyle tries to keep up with those who cannot afford the time, energy, or dollars to feed their family by cooking at home, (one might note that wealthier people statistically eat out at restaurants more than the poor). Money is a major factor for a lot of people, as we are all directly affected by economics, and we use money daily to make our decisions on what to eat. And yet, is money the only cost to care about when we buy food? Absolutely not, it’s just the one factor of cost we give the most attention.

Why is it a major factor while other definitions of cost seem to fall into the background of unimportance? My only answer to this question: we are disconnected.

Our definition of cost often revolves around money, because the monetary price of food is in our faces every time we go to the grocery store, every time we pull up to the drive-thru, or look at a restaurant menu. It’s EVERYWHERE! We wait for sales on certain foods, look for restaurant coupons, all to cut back on the monetary price of food. However, there are other costs in our food system that are hidden from us, and what we aren't looking for and what isn't in our faces at these places are:
  • The environmental impacts
  • The social and cultural impacts
  • The impacts on the health of humans and other species

I recently made a visit to a grocery store, and have started to see some of this labeling crop up. There was a small description on farmed salmon, informing customers that the flesh of the fish has been dyed an orange color through the salmon’s feed (the hue of which is chosen from a SalmoFan, and the colorant added can account for a third of the feed cost!). The original color of farmed salmon is gray, and thinking that this is unattractive to customers, they feed the fish a synthetic feed that mimics the color they would get by eating a normal diet of krill in the wild to accommodate our society’s understanding of what a salmon should look like. Can you imagine being fed a synthetic substance that actually turns your flesh a different color? The label on salmon, and labels like this, help customers make decisions about the other three costs involved in our food system.

Now, there is some debate on this - Should labels be helping us make decisions? Are the labels we currently use insufficient in telling the story?

Imagine if instead of looking for the price, you paid attention to whether this food item harmed workers, or if the clothes you wear have toxic chemicals in them or if their production polluted groundwater runoff, or what antibiotics are being given to the animals you eat or if they spent their lives sitting in their own manure. What would happen if these impacts were clearly labeled?

I think labels can help us understand the impacts our food production has on the other three cost factors (impacts on environment, species, and culture), and should be used for the benefit of the consumer and to improve the impact on those three factors.

If a food, such as a GMO food, is in the development stage of its understanding of its impacts on humans, American consumers have a right to know which foods are genetically modified, and which foods are not. GMO food is a new experiment, and science experiments should either not be in circulation or should be labeled so that consumers can make educated choices about the food they are eating. If we do not yet have a conclusive understanding of the effect of a food on humans and other species or the environment, it should be labeled. (We’ll get more into GMO labeling later, but those are my current thoughts on the issue).

Other than labels, how can consumers learn about the impacts of their food and food products? The Internet is becoming a very influential source in our knowledge about those impacts, however information is expansive and a consumer’s time is limited. There are some databases to assist consumers in making better decisions about what they purchase, such as GoodGuide and the Environmental Working Group’s Consumer Guides. I encourage you to check out these sites to learn more about the REAL cost of your food choices, and to assist you in making more ethical and eco-friendly choices.

Let’s not forget, some of the responsibility should be given to the businesses who produce that food or food product to ensure they are accountable for the impacts of what they produce.

In my next post, we will continue this discussion on REAL food cost and what it means for businesses involved in food production and distribution, and how their relationship between their business and consumers is changing.