6 ms·

Not necessarily, since there’s not much overlap between processors for commercial clients like restaurants and consumer clients like grocery stores. The market

Not necessarily, since there’s not much overlap between processors for commercial clients like restaurants and consumer clients like grocery stores. The market for commercial food products has apparently cratered while demand for consumer food products remains high.

gruez 6y ago
But if commercial (eg. restaurants) food consumption is down, shouldn't it be replaced 1:1 by consumer food consumption?
- Jtsummers 6y ago
  Not necessarily, people don't cook the same things they purchase at restaurants. Additionally, a fair number of people don't seem to be competent at cooking much past a scrambled egg, so a lot of people choose packaged/prepared foods versus raw ingredients.
- nyokodo 6y ago
  Restaurants can't put leftovers in the fridge, so there's a huge amount of waste in the restaurant system.
  - 0xffff2 6y ago
    Where did you get this idea? It depends on the item, but most things do get rolled over from one day to the next.
- save_ferris 6y ago
  Sure, but the type of food people consume at home typically differs greatly from the food they eat out. Keep in mind that in this situation, the goal is to ensure that already-grown food isn’t wasted and is able to be processed, not necessarily meeting the perfect market demand that you’d see in normal economic conditions.
- deleted 6y ago
  [deleted]
- xsmasher 6y ago
  Not necessarily for the same products - people cooking at home aren't deep-frying everything. "What I cook for myself at home" and "what I order in restaurants" are two pretty disjoint sets. I'm not even sure the total number of calories will come out 1:1; are people eating less because they're not commuting or working? Eating better because they are cooking? Eating worse because they are depressed? I can't even guess.
- cwhiz 6y ago
  According to the article about 1/3 of food is thrown away. I would guess that consumers are throwing away less food and producers who typically sell to restaurants are throwing away more.
- oasisbob 6y ago
  Consumers eat differently at home. Think fancy cheeses. Some dairy cows make excellent milk for cheese. The input into this market is raw milk. When that market disappears due to restaurants closing, it's a serious problem.
- acmdas 6y ago
  Packaging and labeling are different for bulk commercial and small-package grocery-store logistics.
- giantrobot 6y ago
  While overall consumption remains the same (or similar, people need to eat) there's different supply chains involved in commercial and consumer consumption. Say you've got a bottling plant that sells exclusively to commercial suppliers. The cost to retool to produce consumer packaged products is non-zero. Your shipping is all geared to commercial suppliers as well. If you decide to reorient to produce consumer packaged goods this takes some amount of time. The farmers that supply you have a batch of milk right now they're storing and a batch coming up next week. If you can't take delivery, you don't have infinite cold storage for milk after all, they need to dump their milk because they've for another batch on the way they'll need to store. You may also have milk stored in your refrigerated tanks waiting for you to be able to reorient for consumer packaging. If your tanks are full you're not going to get new supplies. There's a lot of supply chains that have a lot of momentum and they've been optimized for throughput because that's what gives everyone involved the best margins. When demand drops it takes time and money to slow down or adjust the supply chain because of the momentum. Things like milk can be more difficult because they need not just storage but refrigerated storage and shipping. You might have milk and I might want milk but we're far apart and if you can't get it to me (safely) I'm not going to buy it. That's not to say it's good farmers are dumping otherwise good food. Dealing with perishable things is not the same as dry goods. You can't just add more trucks or warehouses and problem solved.
wtvanhest 6y ago
Anyone have any insight in to why people shifting to eat at home would lead to less overall food demand though? Presumably, if you have X food being produced by farms across the country, and people eating it, but split between restaurants (Y) and home (Z)... I would expect X to roughly equal Y + Z. I would also expect Y + Z = total food eaten and not see any change in the value of Y + Z regardless of how food shifts between the two. So how can you take away Y, but not increase Z at the same proportion? Guesses: 1) Restaurants use a lot more ingredients? Seems unlikely since margins are so low. 2) Consumers reduce waste because they are not balancing getting food from two sources and are more likely to eat everything in their fridge? (My wife, son and I experienced this after we found out our son has food allergies to more than nuts and we basically only eat home cooked food), but I don't know if that is big enough. 3) Something else? My gut tells me we are seeing a reduction in food waste which is due to less supplies, people being more careful. IDK.
- TeMPOraL 6y ago
  I'd say there's some slack in the system due to how incredibly wasteful the HoReCa sector is, in particular hotels and event catering. But to the extent people shifted from eating out to eating in, that amount of extra demand isn't met by the consumer-oriented sector, and must be eventually reflected somewhere. I'm honestly surprised the food prices haven't gone up just yet, given the stories I hear saying that processing plants supplying HoReCa have a problem adjusting to providing to grocery stores.
  - wtvanhest 6y ago
    Stores are locked in on pricing due to emergency order. I expect new stores to pop up with the ability to set new prices and pay more from suppliers.
- save_ferris 6y ago
  > Anyone have any insight in to why people shifting to eat at home would lead to less overall food demand though? If you're calculating demand based on ability to pay (which is how markets work), it might be helpful to take a look at the pictures of food bank lines across America[0]. Tens of millions of people have filed for unemployment in the last several weeks, and demand at the food banks have skyrocketed. But since food banks don't operate as typical market, we don't pay attention to them. With so many millions at risk of starvation, we need to rethink how we understand demand in the context of food consumption, because millions of people waiting for several hours in order to get a bag of food tells me that the demand is there. 0: https://www.motherjones.com/food/2020/04/these-photos-show-the-staggering-food-bank-lines-across-america/ https://www.motherjones.com/food/2020/04/these-photos-show-t...
zamadatix 6y ago
Something has to fill the increased consumer food demand though which is what I think the parent comment was getting at originally - what will do that? One could argue reduction in waste but I'm not sure that'd be enough.
- save_ferris 6y ago
  Have you seen the images of food bank lines in the last two months[0]? The problem with quantifying demand is that’s typically based on ability to pay, and we’re currently looking at what, 20% unemployment? Millions upon millions of Americans are at risk of starvation, and a central goal of an initiative like this is to make food as available as possible so that people don’t starve. 0: https://www.npr.org/2020/04/17/837141457/thousands-of-cars-line-up-at-one-texas-food-bank-as-job-losses-hit-hard https://www.npr.org/2020/04/17/837141457/thousands-of-cars-l...
  - zamadatix 6y ago
    Sure but that only goes to say demand is even higher not answer the question about how we're supposed to be able to source food for that demand if commercial food production isn't efficiently convertible to consumer food production. I.e. the question isn't "do people still need to eat" it's "will the shift in food demand type from commercial to consumer good create shortages".

gruez 6y ago

But if commercial (eg. restaurants) food consumption is down, shouldn't it be replaced 1:1 by consumer food consumption?

Jtsummers 6y ago
Not necessarily, people don't cook the same things they purchase at restaurants. Additionally, a fair number of people don't seem to be competent at cooking much past a scrambled egg, so a lot of people choose packaged/prepared foods versus raw ingredients.
nyokodo 6y ago
Restaurants can't put leftovers in the fridge, so there's a huge amount of waste in the restaurant system.
- 0xffff2 6y ago
  Where did you get this idea? It depends on the item, but most things do get rolled over from one day to the next.
save_ferris 6y ago
Sure, but the type of food people consume at home typically differs greatly from the food they eat out. Keep in mind that in this situation, the goal is to ensure that already-grown food isn’t wasted and is able to be processed, not necessarily meeting the perfect market demand that you’d see in normal economic conditions.
deleted 6y ago
[deleted]
xsmasher 6y ago
Not necessarily for the same products - people cooking at home aren't deep-frying everything. "What I cook for myself at home" and "what I order in restaurants" are two pretty disjoint sets. I'm not even sure the total number of calories will come out 1:1; are people eating less because they're not commuting or working? Eating better because they are cooking? Eating worse because they are depressed? I can't even guess.
cwhiz 6y ago
According to the article about 1/3 of food is thrown away. I would guess that consumers are throwing away less food and producers who typically sell to restaurants are throwing away more.
oasisbob 6y ago
Consumers eat differently at home. Think fancy cheeses. Some dairy cows make excellent milk for cheese. The input into this market is raw milk. When that market disappears due to restaurants closing, it's a serious problem.
acmdas 6y ago
Packaging and labeling are different for bulk commercial and small-package grocery-store logistics.
giantrobot 6y ago
While overall consumption remains the same (or similar, people need to eat) there's different supply chains involved in commercial and consumer consumption. Say you've got a bottling plant that sells exclusively to commercial suppliers. The cost to retool to produce consumer packaged products is non-zero. Your shipping is all geared to commercial suppliers as well. If you decide to reorient to produce consumer packaged goods this takes some amount of time. The farmers that supply you have a batch of milk right now they're storing and a batch coming up next week. If you can't take delivery, you don't have infinite cold storage for milk after all, they need to dump their milk because they've for another batch on the way they'll need to store. You may also have milk stored in your refrigerated tanks waiting for you to be able to reorient for consumer packaging. If your tanks are full you're not going to get new supplies. There's a lot of supply chains that have a lot of momentum and they've been optimized for throughput because that's what gives everyone involved the best margins. When demand drops it takes time and money to slow down or adjust the supply chain because of the momentum. Things like milk can be more difficult because they need not just storage but refrigerated storage and shipping. You might have milk and I might want milk but we're far apart and if you can't get it to me (safely) I'm not going to buy it. That's not to say it's good farmers are dumping otherwise good food. Dealing with perishable things is not the same as dry goods. You can't just add more trucks or warehouses and problem solved.

wtvanhest 6y ago

Anyone have any insight in to why people shifting to eat at home would lead to less overall food demand though? Presumably, if you have X food being produced by farms across the country, and people eating it, but split between restaurants (Y) and home (Z)... I would expect X to roughly equal Y + Z. I would also expect Y + Z = total food eaten and not see any change in the value of Y + Z regardless of how food shifts between the two. So how can you take away Y, but not increase Z at the same proportion? Guesses: 1) Restaurants use a lot more ingredients? Seems unlikely since margins are so low. 2) Consumers reduce waste because they are not balancing getting food from two sources and are more likely to eat everything in their fridge? (My wife, son and I experienced this after we found out our son has food allergies to more than nuts and we basically only eat home cooked food), but I don't know if that is big enough. 3) Something else? My gut tells me we are seeing a reduction in food waste which is due to less supplies, people being more careful. IDK.

TeMPOraL 6y ago
I'd say there's some slack in the system due to how incredibly wasteful the HoReCa sector is, in particular hotels and event catering. But to the extent people shifted from eating out to eating in, that amount of extra demand isn't met by the consumer-oriented sector, and must be eventually reflected somewhere. I'm honestly surprised the food prices haven't gone up just yet, given the stories I hear saying that processing plants supplying HoReCa have a problem adjusting to providing to grocery stores.
- wtvanhest 6y ago
  Stores are locked in on pricing due to emergency order. I expect new stores to pop up with the ability to set new prices and pay more from suppliers.
save_ferris 6y ago
> Anyone have any insight in to why people shifting to eat at home would lead to less overall food demand though? If you're calculating demand based on ability to pay (which is how markets work), it might be helpful to take a look at the pictures of food bank lines across America[0]. Tens of millions of people have filed for unemployment in the last several weeks, and demand at the food banks have skyrocketed. But since food banks don't operate as typical market, we don't pay attention to them. With so many millions at risk of starvation, we need to rethink how we understand demand in the context of food consumption, because millions of people waiting for several hours in order to get a bag of food tells me that the demand is there. 0: https://www.motherjones.com/food/2020/04/these-photos-show-the-staggering-food-bank-lines-across-america/ https://www.motherjones.com/food/2020/04/these-photos-show-t...

zamadatix 6y ago

Something has to fill the increased consumer food demand though which is what I think the parent comment was getting at originally - what will do that? One could argue reduction in waste but I'm not sure that'd be enough.

save_ferris 6y ago
Have you seen the images of food bank lines in the last two months[0]? The problem with quantifying demand is that’s typically based on ability to pay, and we’re currently looking at what, 20% unemployment? Millions upon millions of Americans are at risk of starvation, and a central goal of an initiative like this is to make food as available as possible so that people don’t starve. 0: https://www.npr.org/2020/04/17/837141457/thousands-of-cars-line-up-at-one-texas-food-bank-as-job-losses-hit-hard https://www.npr.org/2020/04/17/837141457/thousands-of-cars-l...
- zamadatix 6y ago
  Sure but that only goes to say demand is even higher not answer the question about how we're supposed to be able to source food for that demand if commercial food production isn't efficiently convertible to consumer food production. I.e. the question isn't "do people still need to eat" it's "will the shift in food demand type from commercial to consumer good create shortages".