Meat&Poultry - November 2011 - 8

Commentary
BY L. JOSHUA SOSLAND
meatpoultry@sosland.com

Wall Street protest has food implications
At many levels, the nascent movement, “Occupy Wall Street,” seems as far removed from the food industry as could be imagined. After all, its ire principally has been directed toward the alleged faults of the financial-services industry – its handling of the housing market, its losses costing the public and its need for a federal bailout. A look at a list of the group’s stated grievances begins exactly with these issues: “They have taken our houses through an illegal foreclosure process, despite not having the original mortgage.” “They have taken bailouts from taxpayers with impunity, and continue to give executives exorbitant bonuses.” Nearer than one may think. Irene Rosenfeld, chairman and CEO of Kraft Foods Inc., noted that in the past year average unit sales of food were flat in the 19 largest categories. She said annual growth had averaged 5 percent. But scanner data for the past year were not the first signs consumers have been forced or have chosen to make cuts in food spending. And the pressure is not limited to the poorest Americans. A 2009 study by the Economic Research Service of the US Dept. of Agriculture made the point bluntly in the title, “Food Spending Declined and Food Insecurity Increased for MiddleIncome and Low-Income Households From 2000 to 2007.” Looking at spending patterns during this period, Mark Nord, a sociologist at the ERS, found that food spending between 2000 and 2007 declined 5.7 percent for the population with the lowest income, 15.3 percent for the fourth quintile and 9 percent for the third (middle) quintile. As a result, groups accounting for 60 percent of the American public cut spending on food during this period (data for higher income individuals were not included in the study). During this same period, one that hardly has been a “golden age” for food companies, spending on housing rose 10 percent and on health care jumped 19.5 percent. For the lowest income households, the period since 2000 has been one of rising food insecurity, which the ERS defines as lack of “consistent access by all people to adequate food for active, healthy living.” For medium-low and middle-income house-holds, Nord said the reduction in spending on food meant families “either reduced the quantity of food they purchased or that they purchased, on average, lower-cost foods.” Neither choice is a positive one for the food industry. ■
L. Joshua Sosland is the editor of Food Business News, a sister publication of Meat & Poultry.

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When pressure on American households reaches a point that consumers struggle to put food on the table, the food industry needs to take note.
Still, one significant thread running through the protests, related to the disparity of wealth in the US, is something that bears watching by food manufacturers. When pressure on American households reaches a point that consumers struggle to put food on the table, the food industry needs to take note. And the premise of the group is not simply that the poor are suffering. To the “Occupy Wall Street” movement, the financial sector along with compliant government are to blame, causing “the other 99 percent to struggle economically.” Leaving blame aside, is it true that 99 percent of the population is struggling economically to the point that food expenditures are being adversely affected? Could we be near such a point in a nation where consumers already have been spending a smaller proportion of their pay on food than any other country?

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