Ideology and Iowa Food Prices
by Paul Deaton [Editor's Note: This is the second article in a Blog for Iowa series about food and food pricing in Iowa, centered around a comparison shopping trip to buy ingredients for a bowl of vegetarian chili. Read the first article by clicking here].
Price is not the dominant consideration when many Iowans buy food. While we like “low” prices and avoid “high” prices, people have other motivations for the way they shop for food. Retailers, if they are smart, work to determine those other motivations and leverage them to attract visitors to their store. If grocery shopping were solely about price, stores like John's Grocery and New Pioneer Food Coop would have faded into extinction long ago.
At a recent graduation party the conversation turned to the food purchased for the event. Many Iowans make their own food to serve at graduation parties. In cleaned up garages and rented backyard tents, a variety of items from pasta to finger sandwiches and snacks are served along with a container of iced tea and coolers full of canned beer, bottled water and soda. There is usually a sheet cake decorated with a graduation theme, purchased from a local grocery store. For Iowans, a High School graduation party may be one of the signature events for a family over the course of a lifetime.
At one party, the hosts mentioned that they were avoiding the purchase of “hamburger” because it was so expensive. They were pleased that they had found it on sale for $1.89 per pound and had purchased a large quantity to store in the freezer for the party. The high price came as no surprise, as news media have been reporting declining beef sales in the context of rising costs and high unemployment for some time. Regardless of cost, most families find ways to purchase the food they want for events and the dinner table. This is an American attitude.
In the BFIA shopping comparison, the lowest price for butter was at New Pioneer Food Coop. It was a surprise. At $2.79 per pound, it was 18% below the average price and 6.4% below Wal-Mart's store brand. The pound of butter at New Pioneer was priced low compared to the market. Butter users could be expected to pick up a pound or two at this price, assuming they were aware of the market average price of $3.41 per pound.
Retail butter pricing, like ground beef, illustrates a key point regarding attitudes toward food prices. People are likely to be aware of the market price of certain food items common in their diet and shop for those items based on price. At the same time, other motivations bring them into a store. The primary motivation for New Pioneer shoppers is unlikely to be the price of butter. There is what can be called an “ideology of food shopping.”
New Pioneer patrons are attracted to the store because of the large selection of organic produce, local dairy products and a host of specialty items geared towards organic, locally grown foods. The ideology is that there is value in seeking USDA certified organic foods or their equivalent and it is worth paying a higher price than “non-organic” foods.
During the time of increasing awareness about the health consequences of bovine growth hormones used in dairy cattle, sales of organic milk drew customers to New Pioneer Food Coop. These patrons were members of both the Republican and Democratic political parties, but reflected a common ideology related to the value of organic food. There have been debates over the ideology of organic food and those debates continue. People manifest the ideology in their food shopping behavior by shopping at New Pioneer Food Coop.
The conventional outlook is that getting people to come to a store should be a key marketing focus, more than pricing. When we consider the cost of the five items in the BFIA vegetarian chili recipe (onion, tomato paste, kidney beans, lime and vegetarian burger crumbles), New Pioneer priced at $9.79 or second highest in the survey, 7% above average and 38% higher than Wal-Mart. This example illustrates that while food prices may be rising, the ideology of food shopping is an important factor. ~Paul
Deaton is a native Iowan living in rural Johnson County and weekend
editor of Blog for Iowa. E-mail Paul