FOOD CONSUMPTION AND EXPENDITURE PATTERNS

Consumer food expenditure are rising for three reasons

1. Increased population and quantities of food eaten.

2. Rising food prices.3.Consumers preferences for more expensive

foods and marketing services. In recent years rising retailed food prices

have accounted for most of the increase in consumers food bills.

The second most important reason for this rise has been the result of consumers substituting more expensive foods into their diet eating away from home more frequently.

Only a small portion of the rise has been due to increased quantities of food eaten.

Some interesting and important turning points in the American diet can be indentified.

In the nineteenth century and until 1950, pork was the most popular meat, but since 1950 Americans have consumed more beef than pork.

Consumption of fresh vegetables overtook fresh fruits in the mid- 1950s.

Poultry consumption first exceeded egg consumption in 1964 and poultry pushed past pork consumption in 1982.

The rising soft drinks consumption trend crossed the falling milk trend in 1967.

These trend indicate that no food has a guaranteed market.

Each must earn its place in the mind and stomach of consumers

These changing consumption patterns are of enormous importance to food producers and marketing firms.

Considerable money is spent monitoring these trends and attempting to influence them through new product development and promotional efforts.

THE DEMOGRAPHICS OF FOOD CONSUMPTION

Demography is the study of populationhow many people there are ,where they live and how they live. These trends influence food marketing by

affecting the number of mouths to feed, what people eat, where food is sold and how people buy their food.

Population TrendsThe food market expands in proportion to the

rate of population growth.

Immigration has increased food industry.

The mobility of the population also influences the food marketing machinery.

There are differences in food consumption patterns between one region of the country and another that cannot be explained on the basis of income or other factors.

Urbanization is another important demographic trend.

Migration have shaped the modern food distribution network.

The supermarket, for example is a suburban product.

The regional movement of population has

required new investments in food marketing facilities and provided opportunities for some food marketing firms to gain a competitive advantage over others.

The age and education of the population also influence food consumption.

Food marketing firms have developed special foods, packages and promotional messages for different target market age groups.

Household Food Consumption

The household is the basic unit of food consumption.

Household members typically pool their income, buy as unit and share somewhat similar food preferences.

Only one or two people of household trend have resulted in increased demand for smaller food packages and more prepared foods.

The average family size show that there are some economics of scale in consumption so that food spending per capita falls as the number of children increases.

Smaller families typically spend more per capita for food.

Other important household trends are the increasing number of female- headed household.

An increasing number of households headed by unmarried men.

Household appliances also influence food consumption.

Practically all families have some form of mechanical refrigeration and many have a separate food freezer, food processor and microwave oven.

Air conditioning has also changed food patterns.

The rising number of multi-car families, the exposure to television and other mass communications, and the popularity of outdoor grills and microwave ovens have also affected food purchases and preferences.

INCOME AND FOOD CONSUMPTION

Population and income growth have been the two major sources of growth in food consumption.

The number of people determines the total need for food, whereas their income determines their ability to pay for it.

Population growth has slowed but income growth is expected to continue to increase the demand for food.

Many low income countries and people have a great need for food but lack the income to make this an effective demand in the market place.

High income countries, such as the United States, are generally characterized by a strong effective demand for food.

The responsiveness of food consumption to an increase in income is called income elasticity.

If the quantity of a good rises along with income, the product is termed a normal good.

If quantity falls as income rises the food is termed an inferior good.

Livestock products generally are normal goods and have a higher income elasticity than crop products.

Rising consumer incomes affect food consumption patterns in several ways.

First, consumers do not buy many more pounds of foods as income rise.

Instead, they upgrade their diet by substituting more expensive foods, often meats, for staple items.

Second, rising consumer incomes is to reduce the consumers share of income spent for food.

Food expenditure do not normally increase as rapidly as income, so the ratio of food spending to income falls with rising income. This is Engel’s law.

Third, at low income levels, price and perhaps nutrition are paramount concerns.

As income rise, consumers add quality, variety, convenience and service to the desired product attribute bundle.

In high income societies and populations, the product bundle of attributes becomes more complex.

Rising incomes and educational levels intensity consumers concern with the quality of food markets and the social impact of the food industry.

PUBLIC FOOD PROGRAMS

A number of public and private programs feed the needy.

These are important in the study of food marketing because they increase the demand and spending for farm and food products.

Government take food assistance programs such as child nutrition programs (School breakfast), the special milk program.

In addition to assisting low income people and promoting better nutrition, one of the original objectives of these public food programs was to reduce agricultural surpluses by increasing the demand for food.