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BYLINE: Lauren Quinn
Newswise — URBANA, Ill. — In his State of the Union address last week, President Biden touched on a topic close to the hearts of U.S. consumers: food prices. In this election year, we can expect high food costs to come up repeatedly, with candidates from both parties invoking price gouging, shrinkflation, and corporate greed. But who do consumers blame? And how do political leanings shift those opinions? A University of Illinois Urbana-Champaign economist explains.
“Although economists are happy that inflation has cooled, consumers are still really frustrated with high food prices. We’re seeing increasing discussion of the issue in this election year, because it is so top of mind for consumers, and therefore for voters,” said Maria Kalaitzandonakes, assistant professor in the Department of Agricultural and Consumer Economics (ACE) in the College of Agricultural, Consumer and Environmental Sciences (ACES) at Illinois.
“Biden said in his State of the Union address that food companies are overcharging consumers, and that he’s going to address shrinkflation — the practice of charging the same price, or more, for less product,” she added. “We wondered, do consumers believe companies are to blame for high prices? How do they feel about firm size in the food system? We asked these questions in our regular Gardner Food and Agricultural Policy Survey, to try and understand how consumers feel about these issues.”
Kalaitzandonakes and coauthors Jonathan Coppess, a professor in ACE, and Brenna Ellison, Purdue University, utilized an online survey of 1,035 people recruited to match the U.S. population’s demographic characteristics to learn which players in the food system consumers feel are “too big,” which groups they blame for overcharging, and how consumers’ think about firm size in relation to measures of food quality, including sustainability, food safety, affordability, and more. They also asked for respondents’ political affiliations. The survey results are presented in a recent farmdoc article, “Sizing up the food system: US consumers’ perceptions of food system firm sizes and pricing.”
Overwhelmingly, survey respondents thought food manufacturers and grocery stores are too big, with too much control or share of the market. They also said food manufacturers, grocery stores, and restaurants overcharge consumers. Farmers earned little blame in either question.
Interestingly, political affiliation didn’t sway responses much.
“There aren’t many things that the U.S. public agrees on, but this seems to be an exception. Democrats, Republicans, and Independents all feel like they’re being overcharged. Biden’s won’t be the only campaign we’ll see addressing this, given that there’s high levels of agreement across the aisle,” Kalaitzandonakes said.
“Respondents from all three political affiliations also worry about firm size within the food system,” she added.
When the survey dove deeper into the issue of food company size, asking whether small or large companies are better (or equivalent) at ensuring food products are sustainable, safe, tasty, healthy, affordable, and accessible, the results were less clear. Although respondents felt food companies are too big and were overcharging them, they also indicated that large food companies are better positioned to offer affordability. They said smaller companies were better positioned to ensure things like the sustainability of food products.
“We didn’t seek to understand how consumers would react to different actions companies or the government could take to resolve the issue. But other researchers have recently found some support among voters for labels that indicate when a product has changed sizes or fines for companies that raise prices above inflation,” Kalaitzandonakes said. “There are a lot of open questions from this work.”
About farmdoc and the Gardner Food and Agricultural Policy Survey
Farmdoc’s team of specialists offers research-based information and analysis on agricultural finance, marketing, and management. The farmdoc project is hosted in the Department of Agricultural and Consumer Economics, part of the College of Agricultural, Consumer and Environmental Sciences (ACES) at the University of Illinois Urbana-Champaign.
The Gardner Food and Agricultural Policy Survey is conducted among approximately 1,000 U.S. consumers every quarter. The survey consists of a core set of questions designed to track changes in public opinion on significant food and agricultural issues over time. Additionally, it includes timely additional questions about emerging food and agricultural policy matters.
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