Changing Consumer Desires

As the adage goes, the customer is always right — changing customer desires can profoundly change the lives and livelihoods of farmers. What people around the world choose to eat directly affects what farmers grow. After the Depression and World War II, pent up consumer demands first produced an explosion in the food business. But then lifestyle changes and expanded research into the health benefits of certain food groups began to shift consumer demand from one market segment to another.

In 1953, Fortune magazine hailed what it saw as a “Fabulous Market for Food” rising in post-war America. They said that consumers with more money in their pockets than at any time since the Depression were spending proportionately more of that income on better and more convenient food.

“Better” food often meant beef, and in particular, steaks. Many consumers in the U.S. at this time wanted the biggest, best-marbled, juiciest steak they could find. Throughout the 1950s and 60s, per capita consumption of beef rose until it reached over 100 pounds of beef per person per year in 1976-80. They were also gradually increasing their demand for chickens and turkeys, fish, dairy products, sugars, fats and oils and processed fruits.

At the same time, people were eating less wheat and other grains in the form of baked goods. Wheat consumption dropped from an all-time high of 225 pounds per person per year in 1880 to around 110 pounds in 1970. Eggs, potatoes and sweet potatoes, and fresh fruits and vegetables — as opposed to processed fruits and vegetables — were also less popular.

Many of these same patterns were repeated around the world. After the war, consumers in countries who got American aid discovered American food. Beef consumption took off in countries that had never really had a taste or domestic market for red meat. Intake of staples, like rice, were sometimes curtailed. So America’s humanitarian impulses also had the affect of supporting a burgeoning export market for agricultural products.

But what goes up can also come down. In the 1950s, food consumption patterns began to be affected by research into how dietary patterns can affect diseases. In 1921, heart disease became the leading cause of death in the U.S. according to the Census. But no one knew exactly what caused it.

In the 1920s, scientists were just discovering and naming various vitamins, and demonstrating how the lack of particular vitamins could cause particular diseases. It wasn’t until 1941 that the first “daily nutrition guide” was published, but it was advocated a well-rounded diet to avoid any deficiencies.

In 1950, an American doctor, John Gofman, suggested that blood cholesterol was to blame for a rise in heart disease. It was supported by an unusual study that came about because of the Korean War. Pathologists were sent to Korea to learn about war wounds by dissecting the bodies of soldiers who died. They found alarming evidence of fatty deposits in the arteries in 35 percent of these young men. A further 41 percent had fully formed lesions, and three percent of the soldiers had blockage in one coronary artery. In total, 75 percent showed evidence of serious coronary heart disease, and they were barely out of their teens. Cholesterol in the diet was suspected.

In 1948, the Framingham Heart Study began. The idea was to track a large population over a long period of time to see if there were diet and lifestyle factors that would increase the risk of heart attacks. Over 5,000 men and women from Framingham, Massachusetts, signed up and were interviewed and tracked every two years.

The first result of the study that got public attention was in 1960 when researchers announced that cigarette smoking increased the risk of heart disease. A year later, the study reported that cholesterol levels and blood pressure also increased the risk of heart attacks. Other researchers showed a link between cholesterol and high fat foods like red meats.

This was really the first time that the public began to consider that the choice of what to eat could help prevent certain killer diseases. And gradually, a series of individual diet choices began to move the market shares of various agricultural products.

One food winner was wheat because new nutrition guides from the government emphasized grain consumption over red meats.

The beef industry began to respond. Tom Hoffman saw the change in consumer desires firsthand. He worked in the Omaha Stock Yards and became a buyer for various packing houses. He says that before the health studies came out, “Folks wanted the heavily fatted calf… Now, if you have more than a mist of fat on an animal, folks don’t want it.”

Beef lost out to other forms of meat, as well. The consumption of beef peaked in the mid-70s and has been steadily dropping since, while consumption of chicken overtook beef. Analysts have argued that one factor is that beef is more expensive and the poultry producers have been able to reduce costs over the last 50 years.

But another major factor is that the poultry industry paid close attention to the changes in consumer demand and found ways of giving the consumers the products they wanted. As early as the 1960s, marketing research helped large chicken companies figure out that U.S. consumers favor white breast meat over all other cuts and that the modern family didn’t have the time anymore to cut up and cook a whole “broiler.” They also found the conflicting facts that consumers want low fat meat, yet have a strong preference for juicy cuts. Fat is most often associated with juiciness. That presented a problem.

Chicken producers have a couple of advantages over beef producers. Chickens are a lot smaller and have a much shorter life span. So the producers got to work and developed new genetic lines that produced birds with more breast meat. Also, about this same time, large producers like Tyson and Perdue were integrating their production cycle. They controlled everything. They hatched their own chicks, delivered a set number of chicks along with specified amounts of feed from their own mills. Also, production moved to containment buildings where feeding schedules, temperature and humidity conditions were tightly controlled. The companies also controlled the slaughter and preparation of the birds.

Then the producers figured out how to provide the best cuts of meat in prepackaged lots and sell of the surplus, less desirable cuts to dog food manufacturers. They figured out how to provide fast food outlets with prepackaged cuts ready for preparation. They also sold marinated breasts ready for microwave preparation to put back some of the juiciness that the consumer wanted.

Listening to the consumers and reacting quickly with new hybrid birds, cost-cutting production, and new processing and preparation methods allowed poultry producers to increase their market share dramatically.

The poultry industry was so successful that pork producers mimicked the vertical integration in the largest companies, the processing and preparation innovations, and even their advertising. The slogan, “Pork, the other white meat,” is credited with increasing sales.

John Turnbull InterviewTom Hoffman (right) has seen the change as a cattle buyer. When he started working at the Omaha Stockyards in the mid-50s, consumers wanted “a covering of fat on the outside that could be 1½, 2-inches thick, for flavor,” he says. “Now, if you have more than a mist of fat on an animal, folks don’t want it. Different times, different life.”

Tom Hoffman InterviewJohn Turnbull (left) works with farmers as the head of the local resource district around York, Nebraska. He says farmers should take a cue from the manufacturing sector. “If the consumer wants a pair of white jeans that’s what they make,” he says. “If they want blue jeans they make blue jeans. What ag has done for years is produce corn whether the consumer wants it or not. And we’ve got to change that attitude.”

Written by Bill Ganzel, the Ganzel Group. First published in 2007. A partial bibliography of sources is here.

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