When Capitalism and the Internet Make Food Better

There has been a flurry of activity in recent days from food companies responding to consumer demands to improve the quality of their products. New York Times provides a summary:

Chick-fil-A said on Tuesday that within five years it would no longer sell products containing meat from chickens raised with antibiotics…

A growing number of restaurant chains, including Chipotle and Panera Bread, have made commitments to serve meat only from animals raised without antibiotics, and consumers have responded enthusiastically…

Subway announced last week that it would eliminate azodicarbonamide, a chemical that commercial bakers use to increase the strength and pliancy of dough, but, as noted by the consumer crusader Vani Hari, is also used for the same purposes in yoga mats and shoe soles.

And on Tuesday, Kraft said it was taking sorbic acid, an artificial preservative that had come under attack by consumers, out of some individually wrapped cheese slices…

These are pretty exciting times. It looks like the Internet is continuing to help spread information and ignite and amplify voices to demand change in the marketplace. This is exactly what I predicted two years ago when the Internet facilitated a revolution in “pink slime” meat:

Consumers have always been able to demand products that businesses had incentives to supply. But now technology lets us join together in large enough numbers to demand that businesses stop doing sketchy things that they then have the incentives to stop doing, even if the slow-moving, lobby-infested government never says they have to.

It’s not perfect, and sometimes I think this technology also allows the public to unfairly criticize businesses or go too far, but in general I think it’s pretty awesome. Individual consumers are becoming more empowered than ever before, and I’m excited to see what we do next.

The last two years appear to have empowered individuals even further. And this empowerment continues to prove that consumers can make companies respond faster than government can; the FDA has dithered for decades in regulating antibiotic use and only barely took some limited, voluntary steps last year after an alarming CDC report about growing antibiotic resistance. But it seems to be the consumers who have ultimately extracted such “regulation” from a growing number of companies.

It’s hard to overstate how beautiful are these examples of capitalism creating good out of an industry that has long been associated with its underside. I recently read Salt, Sugar, and Fat, which details the last hundred years of companies competing to churn out cheaper, tastier, more addicting – and more health-destroying – products. (Sure, people choose to buy them, and most regulation would probably have been worse, but even the most hardcore libertarian has to at least admit that the Nash equilibria have not been very optimal.) I also recently read Fast Food Nation, which details the last hundred years of companies exploiting information and power asymmetries to hurt agriculture industry employees, pushing me the farthest to the left in my sympathies for labor movements that I have ever been (not that that’s saying much).

But if the twentieth century was marked by food companies competing to win the most customers by lowering the health quality of their products, perhaps the twenty-first century will be marked by food companies competing to win the most customers by improving the health quality of their products. When the customer cared most about price, taste, and convenience, they each tried to outdo each other by piling on more sugar or salt or sourcing chickens raised in the cheapest (and dirtiest) available environment. But when the customer cares more about health, they now try to outdo each other in removing questionable items from their ingredients so that they don’t lose their customers to whoever’s doing more.

This won’t lead to utopia. The consumer is a contradictory, multi-headed beast. Plenty of consumers still want cheap, junk food and will only pay so much for improved health. Even individual consumers do not consistently know what they want in the ever-changing dynamics of food choices. But the recent activism and responses proves there are plenty of relatively painless ways companies can improve their options once the demand shifts the equilibria just enough to make it so. I suspect there is still plenty of low-hanging fruit on this tree.

And one of the key differences is the increase in technology. The Internet allows us to learn more about how companies are creating their foods and what might be problematic about those processes (reducing information asymmetry). The Internet also allows us to group together to amplify our voices loud enough to be heard on these matters, encouraging companies to respond to the slightest worry about a drop in quarterly profits before it even happens (reducing power asymmetry). And that is a beautiful thing.