More on the economy

I had a chance to visit with Roberta Cook today and she provided me some interesting insight on the recession of 1989-1992, particularly relating to what happened to per capita utilization of fruits and vegetables during that period. I'll bring some of that together soon.

She had some great observations about the effects of a potential recession on foodservice demand and some thoughts about private label produce retail. Dr. Cook points out that Tesco is using several private label brands, signaling different price points and consumer expectations. The use of private label produce is likely to pick up momentum for a number of reasons, not the least of which that it offers profit opportunity for retailers.

Meanwhile, Dr. Cook just forwarded me this new USDA report titled "Are Lower Income Households Willing and Able To Budget for Fruits and Vegetables?" The question seems especially timely with the increasing chatter about a possible recession.

Here is an excerpt:

In 2003, households earning below 130 percent of the poverty line spent less than higher income households on six out of seven food types examined. However, a small increase in income will not likely induce them to spend more on fruits and vegetables. Beef expenditures and spending on frozen prepared foods do increase. Focus group analyses suggest that beef and frozen prepared foods may be priorities over fruits and vegetables for reasons of taste and convenience. However, it appears that a household’s income does not need to rise much higher than 130 percent of the poverty line—a cutoff for the Food Stamp Program—before the average household allocates additional resources to fruits and vegetables, given a small increase in income. A positive income effect is found among households earning between 130 and 185 percent of the poverty line. Among such households, a 10-percent increase in income prompts a 1.15-percent and 1.93-percent increase in fruit and vegetable expenditures, respectively.