logic
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well as i used to live in the uk i still keep an eye on whats going on, saw this shocking tv show the other day.
Dispatches: The True Cost Of Cheap Food
Not long ago I sat down with the multi-Michelin-starred chef Heston Blumenthal to taste-test products from the supermarkets' value ranges, the very cheapest of the cheap, the lowest of the low. It was a truly humbling experience. As we studied the prices, all of them measured in pence rather than pounds, we swiftly concluded that whatever aesthetic considerations we might want to bring to bear - did this stuff taste nice? Was it well made? - were irrelevant. Nobody bought these products because they liked them; they bought them because economic circumstance forced them to do so.
Never was that more true than now. Anyone looking for a marker of recession could do worse than go loiter in the value-range aisles of their local supermarket. Hell, you might even be shopping there - and you won't be alone, because supermarket shopping habits are changing. In the past year sales of own-label premium ranges have dropped by more than 6%. Sales of organic products have dropped nearly 15%. Value-range sales, on the other hand, have leapt by 46%.
So what exactly is it they are buying? I happen to know. For the past few months I have been investigating the realities of cheap supermarket food for an edition of Dispatches, to be screened on Channel 4 this week - and it really ain't pretty. What would you say to a beef pie that was only 18% beef, and a few more percentage points "beef connective tissue" - or gristle, collagen and fat, as it's more commonly known? How about a pork sausage that's just 40% pork, with a slab of pig skin chucked in for bulk? Or an apple pie with so little apple - a mere 14% - that you can't help but wonder whether it really deserves the name? I suspect, like me, you would say, "No thanks."
Then again, I have a choice. I don't have to buy cheese slices with half the levels of calcium of the more expensive variety or chicken breasts that have been bulked up with 40% water to give you the impression you are getting more for less. The people who are buying these products generally don't have that choice. They have to take what the supermarkets deign to give them. Which raises the question: is what the supermarkets give them good enough?
Only the most callous could argue that it is. This is not born of some conviction that all supermarkets are Evil as the foodie Taliban like to claim. Sure, they aren't perfect. The economies of scale that help them to keep prices low mean they can sometimes exert undue pressure on producers. Their impact on small local shops can be devastating. But they provide a level of convenience that serves hard-pressed families - in which time is short because both parents have to work to make ends meet - very well. They have opened up the range of ingredients available to us and helped to foster a debate on where our food comes from.
In return we have rewarded them with an exceptionally light regulatory regime that has enabled the likes of Tesco, Sainsbury's, Asda and Morrisons and the new breed of discounters - Aldi, Lidl and Netto - to be amazingly successful. Their share of this country's £120bn retail food market has risen from less than 20% in the 1980s to more than 70% now. But with that unfettered access to the market must come responsibilities - and surely that should include improving the quality of the food sold to the very poorest in society.
We can fight long and hard about what the word "quality" means. The supermarkets argue that their value ranges aren't in any way harmful and point out - rightly - that in recent years great efforts have been made to reduce the levels of things such as salt and sugar in very cheap bread. The age of rickets is over. But that still leaves them selling products that contain animal products the vast majority of us would actually throw away rather than cook with. Pig skin is apparently quite high in protein, but would you really choose to have it minced up and put in your sausages simply because it's cheap?
Furthermore, is it outrageous to suggest that the supermarkets should absorb the costs of making these improvements? They make huge profits. Morrisons, for example, made £583m this year. Sainsbury's is behind but has a still sizable £239m. And Tesco, the market leader, has just posted more than £1.8bn worth, despite the tough economic climate. Indeed, their ability to make money has proved remarkably consistent. New research commissioned by Dispatches and carried out by John Thanassoulis, lecturer in economics at Oxford University, has found that the profit margins of the big supermarkets have remained surprisingly steady for decades at around 5%, not just in the good times but during recessions of the sort we're experiencing now as well. Thanassoulis even found evidence that margins actually go up during economic downturns.
In short, they can afford to take the hit - because it really wouldn't cost much at all. I asked a food technologist, David Harrison, who has huge experience of the mass-market food business, to re-engineer some standard value-range products. I didn't want him to make a gourmet beef pie. That would be easy. Just throw money and some quality sirloin at the problem. I wanted to make a better pie, keeping within reasonable financial parameters. He started by analysing all the cheapest pies on the market and found that, on average, they had just 18% beef plus a few more percentage points of that connective tissue. (It can go much lower. I came across a minced beef and onion pie that declared a beef content on the label of just 7%.)
Harrison upgraded our generic recipe to produce one that had no connective tissue and 25% beef. The extra cost, to increase the meat content by 38%? A penny a pie. To remove the pig skin from a budget pork sausage and lift the meat content from 40% to 54% cost 0.7p per sausage. To increase the amount of apple in an apple pie by more than 40% cost 0.8p. As the cost of raw ingredients is only a quarter of the finished product's retail price, these really are tiny amounts. All of these improvements, even represented as double-digit percentages, may look marginal but the differences in the finished product are discernible. In a series of blind taste tests that I conducted, the overwhelming majority of people identified our new improved products and preferred them. And if that sounds like banal advertising patter, so be it.
Obviously companies need to make money, or they wouldn't be able to invest in their business, which in turn means they wouldn't be able to serve their customers. But if absorbing the expense to make these improvements meant Tesco's profits went from that £1.8bn to, say, £1.77bn, if Morrison's made not £583m but £570m, who exactly would weep? Not me.
Unsurprisingly, the supermarket business doesn't quite see it this way. As far as it is concerned, it has never stopped striving to improve the quality and value of its products. "Supermarkets are constantly looking at their ranges, both in terms of the quality and the price that they can offer it at to customers," Andrew Opie of the British Retail Consortium told me. "It's what they do and it's what they do well. So all of the supermarkets will be undergoing reviews of their ranges on a regular basis to examine what's the best-quality products they can get on the shelves at the right price. This is nothing new to the supermarkets."
Let's be clear. A 25% meat pie is still not a fabulous item. Nor would Blumenthal and I have swooned over a 54% pork sausage. Likewise, we can lecture those in dire straits on the need to eat more fresh fruit and vegetables - where the value ranges happen to score well - though patronising people who are struggling to make ends meet has always left me with a nasty taste in the mouth. The fact is that the items I have looked at are invariably going to be a part of the diet, and that leads to simple questions of respect; of the supermarkets, which do so well out of us in good times, not forcing the very poorest to eat dross when the bad times come.
Not that concepts like this are entirely alien to Britain's big companies. It's called corporate social responsibility and every serious public company, including the supermarkets, has a department entirely dedicated to it. They know their business and environmental practices have to comply with certain standards. They know that their dominance of the market means they are scrutinised in detail. And they also aren't averse to taking a hit on their bottom line. They already sell certain cheap products at below cost as loss leaders. Isn't it time that they extended that principle so that the quality of their very cheapest food, sold to the most vulnerable of their customers, should also become a part of their corporate social responsibility code, too?
The rise of cheap food
• Sales at Aldi, the low-cost supermarket, rose 24.5% in the last 12 weeks of 2008.
• Almost half of organic shoppers say they will reduce or give up buying organic food in the next year.
• The organic food and drink market in Britain is worth £1.6bn a year.
• During the summer of 2008, sales of Tesco's Value range of products overtook the sales of its Finest goods for the first time since their launch.
• In December 2008, food sales in the UK declined for the first time since 1986.
• In 2006, 26 countries accounted for 90% of the UK's imported food supply. Just over half of what we ate was supplied from within the UK.
• An average of £22.55 per week per person was spent on food and non-alcoholic drink in Britain in 2006.
• Morrisons' value range and cut-price deals increased by 8.1% in December 2008.
Dispatches: The True Cost Of Cheap Food
Not long ago I sat down with the multi-Michelin-starred chef Heston Blumenthal to taste-test products from the supermarkets' value ranges, the very cheapest of the cheap, the lowest of the low. It was a truly humbling experience. As we studied the prices, all of them measured in pence rather than pounds, we swiftly concluded that whatever aesthetic considerations we might want to bring to bear - did this stuff taste nice? Was it well made? - were irrelevant. Nobody bought these products because they liked them; they bought them because economic circumstance forced them to do so.
Never was that more true than now. Anyone looking for a marker of recession could do worse than go loiter in the value-range aisles of their local supermarket. Hell, you might even be shopping there - and you won't be alone, because supermarket shopping habits are changing. In the past year sales of own-label premium ranges have dropped by more than 6%. Sales of organic products have dropped nearly 15%. Value-range sales, on the other hand, have leapt by 46%.
So what exactly is it they are buying? I happen to know. For the past few months I have been investigating the realities of cheap supermarket food for an edition of Dispatches, to be screened on Channel 4 this week - and it really ain't pretty. What would you say to a beef pie that was only 18% beef, and a few more percentage points "beef connective tissue" - or gristle, collagen and fat, as it's more commonly known? How about a pork sausage that's just 40% pork, with a slab of pig skin chucked in for bulk? Or an apple pie with so little apple - a mere 14% - that you can't help but wonder whether it really deserves the name? I suspect, like me, you would say, "No thanks."
Then again, I have a choice. I don't have to buy cheese slices with half the levels of calcium of the more expensive variety or chicken breasts that have been bulked up with 40% water to give you the impression you are getting more for less. The people who are buying these products generally don't have that choice. They have to take what the supermarkets deign to give them. Which raises the question: is what the supermarkets give them good enough?
Only the most callous could argue that it is. This is not born of some conviction that all supermarkets are Evil as the foodie Taliban like to claim. Sure, they aren't perfect. The economies of scale that help them to keep prices low mean they can sometimes exert undue pressure on producers. Their impact on small local shops can be devastating. But they provide a level of convenience that serves hard-pressed families - in which time is short because both parents have to work to make ends meet - very well. They have opened up the range of ingredients available to us and helped to foster a debate on where our food comes from.
In return we have rewarded them with an exceptionally light regulatory regime that has enabled the likes of Tesco, Sainsbury's, Asda and Morrisons and the new breed of discounters - Aldi, Lidl and Netto - to be amazingly successful. Their share of this country's £120bn retail food market has risen from less than 20% in the 1980s to more than 70% now. But with that unfettered access to the market must come responsibilities - and surely that should include improving the quality of the food sold to the very poorest in society.
We can fight long and hard about what the word "quality" means. The supermarkets argue that their value ranges aren't in any way harmful and point out - rightly - that in recent years great efforts have been made to reduce the levels of things such as salt and sugar in very cheap bread. The age of rickets is over. But that still leaves them selling products that contain animal products the vast majority of us would actually throw away rather than cook with. Pig skin is apparently quite high in protein, but would you really choose to have it minced up and put in your sausages simply because it's cheap?
Furthermore, is it outrageous to suggest that the supermarkets should absorb the costs of making these improvements? They make huge profits. Morrisons, for example, made £583m this year. Sainsbury's is behind but has a still sizable £239m. And Tesco, the market leader, has just posted more than £1.8bn worth, despite the tough economic climate. Indeed, their ability to make money has proved remarkably consistent. New research commissioned by Dispatches and carried out by John Thanassoulis, lecturer in economics at Oxford University, has found that the profit margins of the big supermarkets have remained surprisingly steady for decades at around 5%, not just in the good times but during recessions of the sort we're experiencing now as well. Thanassoulis even found evidence that margins actually go up during economic downturns.
In short, they can afford to take the hit - because it really wouldn't cost much at all. I asked a food technologist, David Harrison, who has huge experience of the mass-market food business, to re-engineer some standard value-range products. I didn't want him to make a gourmet beef pie. That would be easy. Just throw money and some quality sirloin at the problem. I wanted to make a better pie, keeping within reasonable financial parameters. He started by analysing all the cheapest pies on the market and found that, on average, they had just 18% beef plus a few more percentage points of that connective tissue. (It can go much lower. I came across a minced beef and onion pie that declared a beef content on the label of just 7%.)
Harrison upgraded our generic recipe to produce one that had no connective tissue and 25% beef. The extra cost, to increase the meat content by 38%? A penny a pie. To remove the pig skin from a budget pork sausage and lift the meat content from 40% to 54% cost 0.7p per sausage. To increase the amount of apple in an apple pie by more than 40% cost 0.8p. As the cost of raw ingredients is only a quarter of the finished product's retail price, these really are tiny amounts. All of these improvements, even represented as double-digit percentages, may look marginal but the differences in the finished product are discernible. In a series of blind taste tests that I conducted, the overwhelming majority of people identified our new improved products and preferred them. And if that sounds like banal advertising patter, so be it.
Obviously companies need to make money, or they wouldn't be able to invest in their business, which in turn means they wouldn't be able to serve their customers. But if absorbing the expense to make these improvements meant Tesco's profits went from that £1.8bn to, say, £1.77bn, if Morrison's made not £583m but £570m, who exactly would weep? Not me.
Unsurprisingly, the supermarket business doesn't quite see it this way. As far as it is concerned, it has never stopped striving to improve the quality and value of its products. "Supermarkets are constantly looking at their ranges, both in terms of the quality and the price that they can offer it at to customers," Andrew Opie of the British Retail Consortium told me. "It's what they do and it's what they do well. So all of the supermarkets will be undergoing reviews of their ranges on a regular basis to examine what's the best-quality products they can get on the shelves at the right price. This is nothing new to the supermarkets."
Let's be clear. A 25% meat pie is still not a fabulous item. Nor would Blumenthal and I have swooned over a 54% pork sausage. Likewise, we can lecture those in dire straits on the need to eat more fresh fruit and vegetables - where the value ranges happen to score well - though patronising people who are struggling to make ends meet has always left me with a nasty taste in the mouth. The fact is that the items I have looked at are invariably going to be a part of the diet, and that leads to simple questions of respect; of the supermarkets, which do so well out of us in good times, not forcing the very poorest to eat dross when the bad times come.
Not that concepts like this are entirely alien to Britain's big companies. It's called corporate social responsibility and every serious public company, including the supermarkets, has a department entirely dedicated to it. They know their business and environmental practices have to comply with certain standards. They know that their dominance of the market means they are scrutinised in detail. And they also aren't averse to taking a hit on their bottom line. They already sell certain cheap products at below cost as loss leaders. Isn't it time that they extended that principle so that the quality of their very cheapest food, sold to the most vulnerable of their customers, should also become a part of their corporate social responsibility code, too?
The rise of cheap food
• Sales at Aldi, the low-cost supermarket, rose 24.5% in the last 12 weeks of 2008.
• Almost half of organic shoppers say they will reduce or give up buying organic food in the next year.
• The organic food and drink market in Britain is worth £1.6bn a year.
• During the summer of 2008, sales of Tesco's Value range of products overtook the sales of its Finest goods for the first time since their launch.
• In December 2008, food sales in the UK declined for the first time since 1986.
• In 2006, 26 countries accounted for 90% of the UK's imported food supply. Just over half of what we ate was supplied from within the UK.
• An average of £22.55 per week per person was spent on food and non-alcoholic drink in Britain in 2006.
• Morrisons' value range and cut-price deals increased by 8.1% in December 2008.
