Saturday, July 29, 2017

Does The Law of Demand Explain The Increase In Fresh Produce Consumption?

See Eating Fresh Fruits and Veggies Is Easy When They’re Relatively Cheap by Sarah Chaney of The WSJ. If the price of a substitute rises (or rises more), the demand will increase for a good. This might be what is going on with fresh produce. But also, tastes may have changed based on the information given about younger consumers liking fresh produce more. Of course, younger people might have lower incomes, so they might be more price conscious. Excerpts:
"In the fresh versus processed food wars, fresh fruits and vegetables are winning, thanks in part to their relatively cheap price tags.

Since November 2008, the consumption of fresh fruits has grown 16.2%, while consumption of fresh vegetables is up 20.6%. Consumption of processed fruits and vegetables increased only 9.9% during the same time period, notes Eugenio J. Alemán, Wells Fargo senior economist, in a new report.
“Consumers have rationally reacted to much higher prices on the processed side in relation to the fresh side,” Mr. Alemán said in an interview. “In relative terms, fresh fruits and fresh vegetables are cheaper today than processed fruits and vegetables are.”

Processed fruits and veggies are in the “freezer aisle,” while fresh are not frozen, according to the Bureau of Economic Analysis.

Prices of fresh fruits and fresh vegetables were on an upward trajectory leading up to the 2008 recession, but have remained relatively stable since. The processed version of these goods carry higher prices today than they did at any time before the recession."

"Younger consumers, in particular, have largely shifted to fresh-food consumption. Those under age 40 increased their consumption of fresh vegetables by 52% over the last decade."

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