What's the product? Locavore edition

I've wondered how much locavore, or GMO-free, or other strong expressed ethical-preference consumers' demand is real as compared to notional. Do people really want the product they're buying to satisfy all the constraints, or do they just want the warm glow that comes from thinking that it might and that they're good people for affiliating with that kind of product?

We can think about what the two different worlds would look like and reason from there. Suppose there really were very strong effective demand for locavore products. A restaurant, or boutique grocer, catering to locavores would do a lot to demonstrate to their customers that their products meet the constraints. They'd make verifiable claims about their supply chains. If a product couldn't be sourced locally, there'd be explanations about how that product weren't local and why - like that bananas just don't grow here. And if a store or restaurant were found to have cheated, customers just wouldn't trust it any more and it would go under.

In a world where people cared about the feeling more than about the practice, stores would make unverifiable claims about supply chains. It would be ambiguous which products really were sourced locally and which had to come from elsewhere because of cost or other factors. And deception wouldn't be punished so long as the image could be maintained - customers would look for rationales for whatever had happened, and just continue eating there.

Via Thomas Lumley, here's a rather extensive story on scam-versions of buy-local in America. Most claims turn out to be wrong. Shops and restaurants that want to provide locavore alternatives find that customers are simply not willing to pay prices that are multiples of the prices that would otherwise obtain, so they fudge things. And when they're caught, and there's media coverage:

INSIDE EDITION CORRESPONDENT Lisa Guerrero wore a fitted black blazer and stilettos when she busted with her camera crew into Get Hooked, a casual seafood restaurant in Hudson that on occasion hosts micro-championship little people wrestling.

Taking co-owner John Hill by surprise, she confronted him about his “Delicious Lobster Sensation,” part of a Feb. 8 segment about the frequent fraudulence of lobster dishes.

Although the restaurant has its own fishing boats, and Hill likes to say, “Our refrigerator is the Gulf of Mexico,” its lobster roll-like sandwich is made with a commercial product that contains cheaper fish such as whiting and pollock.

After the show aired, I followed up to see how the revelation had affected the restaurant.

“We’re selling more lobster rolls now than ever, and we’re serving the same product,” co-owner Michelle Bittaker said. “What the show forgot to tell you is that the sandwich is $9.95, with french fries and coleslaw. Nobody in America could serve a real Maine lobster roll for $9.95.”

They also offer a real Maine lobster roll on their specials board, she said, 6 ounces for what she calls a more realistic $24.95.

I don't like fraud, and there's a lot of fraud in the story. But I wonder how many of the customers would really prefer knowing. Here, at least, I'd expect the Consumer Guarantees Act could have something to say. There, if customers really wanted to know, they'd make sure to buy from restaurants and shops certified externally as meeting some verified supply chain regime.

I also take it as cautionary tale about NZ agricultural imports into the US.

New Zealand has a great product story to tell: Canterbury lambs have happy lives, and even Peter Singer said it's ok to eat them so long as they're net happier existing than not and so long as their being eaten is what allows them to exist. But as for any real willingness to pay real substantial price premiums for things that are guaranteed GMO-free, or organic, or whatever else... if the restaurant next door has something with a similar label that costs half as much, well, good luck.

Rebecca Krassnoski of Nature Delivered has sold her naturally raised pork to restaurants like The Refinery and Pearl in the Grove. Here’s a little bit of her math:

Her cost to raise a pig to slaughter weight is $240 to $300, plus $50 to slaughter it and $50 to transport it. So, let’s say her total cost is $400. That whole pig, minus entrails and hair, will weigh 192 pounds. If she sells it at $3 per pound, that’s a sale price of $576.

“I make $200 if everything goes well,” she said. “That’s on a perfect day. On average, I’m lucky if I make $100 on a pig and maybe I raise 100 pigs in a year.”

Ten thousand dollars a year is not a living, she said, but “nobody wants to pay $6 per pound for pork.” Most restaurants can’t, or won’t, pay her what she needs to live.

“I can’t think of a time when my chops have been served at a restaurant on a daily basis,” she said. “I think a lot of times farmers with a good story are used as a billboard.”

Americans balk at paying $6 per pound for local natural pork. In NZ terms, that's about $20/kg plus GST.

There'll always be small niches where there are customers willing to pay a premium and who care about the authenticity of claims made. My sister's market in Winnipeg serves some of them, and she has rightly earned their trust. And I think it's great when NZ growers find ways of tapping into those kinds of North American markets.

But setting NZ policy in the expectation that there are $20 notes sitting on American sidewalks waiting to be scooped up if New Zealand could better capitalise on clean green stuff... I'm a sceptic.