Dairy Talk Consumers Wise Up

January 12, 2009 06:00 PM

Jim Dickrell
A funny thing happened on our collective ride to this nasty recession: Consumers are rethinking what they're willing to pay for food.

"The downturn in the economy has reversed the way consumers shop,” says Stephen Rannekleiv, vice president of Rabobank's Food and Agribusiness Research and Advisory team. "Five years ago, there was a growing trend of U.S. consumers willing to pay more for high-quality, luxury goods. Today, there has been a 180¢ª turn.”

All of a sudden, organic, free-range and BST-free aren't so trendy. In fact, retailers and manufacturers have been hit so hard they're not sure how much further they can ride the "all-natural” wave, says Dennis Erpelding,
manager of government relations, public affairs and communications for Elanco Animal Health. Elanco, since purchasing Posilac from Monsanto last August, has visited 75 to 80 organizations along the dairy food chain.

"Many of these companies have taken pause and are trying to understand the implications of their decisions regarding BST and other ‘natural' products,” Erpelding says.

Store brands, which typically are conventional food products without absence-labeling shenanigans—such as "no BST,” "no pesticides,” "no antibiotics”—are gaining market share as consumers stretch their wallets.

Once manufacturers and retailers understand that taking safe, approved technologies out of the mix raises their cost of goods without improving nutritional value and while increasing greenhouse gas emissions, they start to question what they're offering to the public.

The key, Erpelding says, is to engage companies along the food chain on these issues. BST was approved 15 years ago, and often there has been a complete turnover in personnel since then. "We've been the first to call on some of these companies in many, many years,” he says. "Yet we've been met with very open doors.”

This may be the silver lining to the crisis. The elitist snubbing of perfectly healthy, conventionally produced food might go the way of the Hummer. One can only hope.

Jim Dickrell, Editor

Bonus content:

Click here for New York Times article "Organic Food Sales Trends."

Click here for Wall Street Journal article "Will Shop For Food."

Click here for Wall Street Journal article "Wal Mart Flourishes As Economy Turns Sour."

Click here for Wall Street Journal article "Whole Foods Get Infusion, Post Steep Drop in Net."

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