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Fat Chance

 The second article in a series examining the contributory factors to obesity in the UK.

So, over here I looked at costs associated with food, including average annual inflationary rates for food and fuel, and pressures on affordability, i.e real incomes, alongside a broad definition of what people were eating and who was eating what from a 'socioeconomic' perspective.

In this article I'm going to look at that last element in more detail, and perhaps find out what's driving those spending habits. I'm also going to look at look at contributory factors to cost - specifically, where is our food coming from?

Before we get started however, I suggest you click here and download the government's Food Pocketbook 2013. It's an invaluable guide, produced by the Department for Environment, Food and Rural Affairs, and one I have pilfered from extensively when looking at the above subjects.

But first I'm going to look at what we're not eating - but are buying. Whilst we are definitely moving towards buying a basket of goods with more preservatives added, as 2013's GVA chart on food manufacturing showed, we are still buying food that enables us to have a rounded diet. Price, and therefore affordability, have a correlative relationship with what ends up in the bin. Evidence from 2010's DEFRA report suggests that 15% of all household food and drink is 'wasted' . From this overall figure, the three items we throw away the most are:

1. Bread
2. Vegetables and potatoes
3. Fruit

The three items we're least likely to throw away are:

1. Alcoholic drinks
2. Soft drinks
3. Dairy and eggs

Best to bear in mind we are not throwing away items that are past their sell by date - there is merely a perception that the food is past it's best. That's an interesting nuance.

The most obvious difference between the two lists is the quality of nutrition in each one. There is next to no nutritional value in alcohol or soft drinks, but they are significantly more expensive than fruit and vegetables; therefore there appears to be a perception we can afford to throw away more. Our appetite seems to be tied to financial cost, and not physical health. This may be a major factor in declining health in many British adults.

It's also important to add there are stabilizers and preservatives in soft drinks and alcohol which don't exist in most fresh produce (although it probably isn't true that there are no preservatives sprayed onto fruit and vegetables - it's just that many regulatory bodies don't ask for it). As a result, we're also less likely to chuck it out because it's 'gone off'.

Not only are we wasting food here, we are wasting vast amounts of money. Although fruit and vegetables remain near the bottom of the cheapest goods on offer to shoppers, a more instructive number can be found when looking at price rises per food group between 2007-2013 - approximately the years when many Britons have seen incomes decrease in real terms.

Every food group has increase in price over the six years. Although some of that is to be expected in line with CPI, the numbers are still quite striking. Fruit has increased in price by 34%. Potatoes and vegetables are up by 31%. Meat has increased by 34%, which illustrates the crushing pressures many British retailers are experiencing in trying to remain competitive in consumer eyes (and also goes some way to explaining the horse meat controversy). Butter, margarine and cooking oil - traditionally staple bases of much of British cooking, particularly those on low incomes - increased the most, by 55%. 

It's tempting to say these figures are misleading when considering the basic price of an apple versus a steak, and relatively speaking, on a ratio of 1.1, there is no major loss in throwing away the apple. But do that hundreds, thousands of times, and it becomes easier to see why weight is becoming an issue.

So what are Britons eating, and how much of it are they eating? The 2013 Food Pocket Book lays out the 'eatwell' plate, with set percentages of foodstuffs to follow for a healthy diet. One third of your diet should, for example, include fruit and vegetables, and another 33% on bread, rice, potatoes, pasta and other starchy foods.

Just 8% of your diet should consist of fatty or sugary foods. But when looking at the diet makeup of the average British person in 2011, 22% of their diet consisted of those things, or almost three times the recommendation.

The most concerning result of all of this is that there appears to have been a long term decline in purchasing of what we'd call 'healthy' food amongst the poorest families - i.e. fruit, vegetables, carcase meat (i.e. not processed/reformed). Within that demographic there's also a long term move away from foodstuffs with short shelf life towards goods with preservatives and long life items - a strong indicator of downward pressures on wages.

Between 2007 and 2011 this group of people 20% more flour, 14% more non-carcase meats, 7% more cheese and 5% more confectionary. The obvious correlation between many of these items is price vs life - sweets and flour are long life, cheese is mid-life produce with a typical shelf life of 4 weeks, and non-carcase meat - i.e. processed meats - are consequently considerably cheaper than their carcase alternatives, and therefore can be 'wasted' more often.

So what are the main factors in cost? It's difficult to measure things like marketing budgets and import costs on food. So Defra have helpfully used something called the 'farm-gate' value - i.e. the net value of the item once those things have been subtracted from the gross value - to link a value to each foodstuff, and where it came from.

The first interesting thing to note is that as of 2012 Britain actually produced quite a lot of its own food. This might not be surprising regarding stuff like veg due to our fertile climate and significant farming communities, but it is surprising when once again looking at the horse meat issue. The rationale fr this occurrence was that food pricing in the UK is too high, and as consumer perception does not match real value of food. This drove most high street retailers abroad.

Except it didn't. As of 2012, 83% of all non-processed meat in the UK came from the UK. We actually produce more poultry now than we have ever done previously. The key indicator is our production of red meat - because of the beef export ban linked to things like CJD, there is less impetus for UK farmers to farm cattle.

Therefore the retail market goes into the EU and further to sate the customer demand, and this is where the supply chain breaks down - as people like Jay Rayner have pointed out previously, on multiple occasions, it's very likely supermarkets have painted themselves into a corner that's difficult to get out of when it comes to pricing. HMRC's import/export ratio on meat tells the story with clinical details. We export around £2 billion yet import just over £5 billion each year.

So, although there's a clear economic benefit to importing from within the Eurozone, there are also clear pitfalls to be found when basic foodstuffs increase in price - and the Eurozone doesn't guarantee fixed prices in a global market, as the two examples below show.

The table below is taken from the United Nations Food and Agriculture Organisation. As well as more domestic issues like those described above, you can see how, for example, the rapidly expanding Chinese middle class and slowly rebounding Japanese economy have both contributed to the sharp upward turn in meat prices, particularly beef.

This is taken from a World Bank article in 2013 as food costs started to level out. Here's what the global costs look like for customers in graph form since the turn of the century.

 

So global trade has dramatically altered the purchasing power for supermarkets and other grocers, and has unfortunately produced the sort of weird behaviours you'd expect to see with underperforming businesses who are experiencing long term capital and income problems, not behemoths such as Tesco and Aldi.

It's obvious then from all of the above that three key things have changed in diets in British people over the last 6-7 years. The first is that cost, not nutrition, is driving choices in supermarkets. The second, which is linked to the first, denotes a clear shift in attitudes towards 'value' when retaining food - i.e. we are increasingly less likely to eat fruit and veg due to perceptions about cost versus value.

The third is that, after a relatively stable few years in pricing (and coincidentally a relatively stable global financial market), the types of food bought are again following socioeconomic lines - i.e. the less well off you are, the less likely you are to invest your wages in fresh food, instead investing in longer term but less healthy produce. This last element is being driven by global rises in food types essential to a healthy lifestyle.

In the next and final part of these semi-regular articles I'm going to look at consumer attitudes. Specifically, what drives people to buy food that they know is bad for them?

 

Burger Business

for the disgusting picture>