Why is Organic Food So *#@! Expensive? By Ali Partovi (Transcript)

Full transcript of serial entrepreneur and angel investor Ali Partovi’s talk: Why is Organic Food So *#@! Expensive? @ TEDxManhattan conference. To learn more about the speaker, read the bio here.

 

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Ali Partovi – Serial Entrepreneur & Angel Investor

I’ve invested a lot of my own money into organic and sustainable farming, into converting American farmland to organic. And I’m here to dispel some misperceptions about organic food.

There’s this prevailing notion that organic farming is more expensive and less efficient, right, and that we need industrial agriculture and factory farms to feed the world.

Well, I’m here to dissect some of the assumptions behind that logic and to share some information that leads to a very different conclusion.

We all know that organic food is expensive. This is a fact, and it’s logical to therefore assume that it’s for the 1%, the foodie elites, the rich people, not for ordinary people. Well, that’s actually not correct logic and I’ll show why in a second.

It also leads us to assume that if organic food is expensive, organic farming must be more expensive, which then leads to wonder surely it can’t feed the world and back to concluding that it’s only for the 1%. Well those assumptions actually are wrong as well.

The idea that organic food is only for the rich, only for the 1% is a powerful one, with huge implications on both business and policy. And we need both business innovation and policy change in this country to support organic.

Think about it. If you’re a business person or a politician, the way to be successful is to come up with products or policies that cater not to the 1% but to ordinary Americans. And so we need businessmen and policymakers to recognize that organic food is not just for the 1%; it’s for everybody. It’s for ordinary Americans. And the first step in that change is to change that perception.

So who is buying this expensive organic food? Who in America is buying it?

Well, according to Nielsen and NMI Research, three out of every four Americans have consciously chosen to buy organic food in the past year. Now some of them might have only bought a single organic product but there is a subsets that are so-called devoted organic shoppers, that represent the vast majority of all organic food consumption in this country. These so-called foodies are not 1%; they’re 25%, one out of every four Americans.

Now let’s look at these elite foodies. What does the elite foodie look like? Two out of five of them have an annual household income of less than $50,000. One out of five has an annual household income of less than $30,000. These elite people are about 20% people of color and another 15% Hispanic. Six out of ten of them shop at Walmart.

How does that profile compare to the general United States population? It’s exactly the same. The general US population is about two out of five, income less than $50,000, one out of five income less than $30,000, about 20% people of color, 15% Hispanic, and about six out of ten shop at Walmart.

In every respect the foodie elite who are buying organic are the average ordinary American. And it’s one out of four Americans and they’re doing — they’re already buying organic in spite of how expensive it is. Just imagine how many more Americans would be buying organic food if it wasn’t so damn expensive.

Well, we actually know some of the answer to that. Walmart asked its consumers and found that 91% of them would be buying organic.

So why is organic food so darn expensive?

It must be because organic farming is more expensive, right? Not true. Organic farming actually saves a ton of money on a lot of very expensive inputs. Fossil fuel is expensive; fertilizers are incredibly expensive. The chemicals or the antibiotics that are used by factory farms — these things are very expensive, not just their externalized costs but their actual dollar costs are very high.

Well, so maybe organic farming saves money but perhaps it produces less food. That’s not necessarily true either. Now this is not a blanket statement; it varies by crop and region. But there are a lot of ways in which when done right organic sustainable farming can produce more food.

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