This rather strange question has been central to a storm that has been brewing between various celebrity chefs, including Jamie Oliver and Hugh Fearnley-Whittingstall, and the supermarkets. Supermarkets say that consumers don’t want irregular shaped vegetables, such as carrots, parsnips and potatoes. ‘Nonsense’, say their critics.
At the centre of the storm are the farmers, who find a large proportion of their vegetables are rejected by the supermarkets. And these are vegetables which are not damaged or bad – simply not of the required shape. Although these rejected vegetables have been described as ‘wonky’, in fact many are not wonky at all, but simply a little too large or too small, or too short or too long. Most of these vegetables are simply wasted – ploughed back into the ground, or at best used for animal feed.
And it’s not just shape; it’s colour too. Many producers of apples find a large proportion being rejected because they are too red or not red enough.
But do consumers really want standardised fruit vegetables? Are the supermarkets correct? Are they responding to demand? Or are they attempting to manipulate demand?
Supermarkets claim that they are just responding to what consumers want. Their critics say that they are setting ludicrously rigid cosmetic standards which are of little concern to consumers. As Hugh Fearnley-Whittingstall states:
‘It’s only when you see the process of selection on the farm, how it has been honed and intensified, it just looks mad. There are many factory line systems where you have people looking for faults on the production line; in this system you’re looking for the good ones.
What we’re asking supermarkets to do is to relax their cosmetic standards for the vegetables that all get bagged up and sold together. It’s about slipping a few more of the not-so-perfect ones into the bag.’
In return, consumers must be prepared to let the supermarkets know that they are against these cosmetic standards and are perfectly happy to buy slightly more irregular fruit and vegetables. Indeed, this is beginning to happen through social media. 
The pressure group 38 degrees has already taken up the cause.
But perhaps consumers ‘voting with their feet’ is what will change supermarkets’ behaviour. With the rise of small independent greengrocers, many from Eastern Europe, there is now intense competition in the fruit and vegetables market in many towns and cities. Perhaps supermarkets will be forced to sell slightly less cosmetically ‘perfect’ produce at a lower price to meet this competition.
Videos
Hugh’s War on Waste Episode 1 BBC on YouTube, Hugh Fearnley-Whittingstall (2/11/15)
Hugh’s War on Waste Episode 2 BBC on YouTube, Hugh Fearnley-Whittingstall (9/11/15)
Articles
Hugh Fearnley-Whittingstall rejects Morrisons’ ‘pathetic’ wonky veg trial The Guardian, Adam Vaughan (9/11/15)
Jamie Oliver leads drive to buy misshapen fruit and vegetables The Guardian, Rebecca Smithers (1/1/15)
Hugh Fearnley-Whittingstall’s war over wonky parsnips The Telegraph, Patrick Foster (30/10/15)
Asda extends ‘wonky’ fruit and veg range Resource, Edward Perchard (4/11/15)
Wearne’s last farmer shares memories and laments loss of farming community in Langport area Western Gazette, WGD Mumby (8/11/15)
Viewpoint: The rejected vegetables that aren’t even wonky BBC News Magazine (28/10/15)
Viewpoint: The supermarkets’ guilty secret about unsold food BBC News Magazine (6/11/15)
Questions
- What market failures are there is the market for fresh fruit and vegetables?
- Supermarkets are oligopsonists in the wholesale market for fruit and vegetables. What is the implication of this for (a) farmers; (b) consumers?
- Is there anything that (a) consumers and (b) the government can do to stop the waste of fruit and vegetables grown for supermarkets?
- How might supermarkets estimate the demand for fresh fruit and vegetables and its price elasticity?
- What can supermarkets do with unsold food? What incentives are there for supermarkets not to throw it away but to make good use of it?
- Could appropriate marketing persuade people to be less concerned about the appearance of fruit and vegetables? What form might this marketing take?
Adverts are increasingly diverse, ranging from families using various products and promoting their qualities, to a gorilla drumming, a horse dancing and a monkey drinking tea! But, how important is advertising to a product’s brand. Does it have a positive effect on sales and profitability?
The key role of advertising is to sell more products and many firms spend a huge amount on advertising campaigns. Indeed, over £16bn was spent on advertising in 2012. Given that the economy is still vulnerable and many firms have seen their sales and profits decline, this is a huge amount. Procter & Gamble spent over £200 million, British Sky Broadcasting spent £145 million and Tesco spent £114 million in 2011.
Advertising increases consumer awareness of the product and its features, but also actively aims to persuade people to purchase the product. By differentiating the product through adverts a company aims to shift the demand curve to the right and also make it more inelastic, by persuading customers that there are no (or few) close substitutes.
Since the start of the economic downturn in 2008, advertising expenditure has fallen, as companies have seen a decline in their budgets. From a high of £18.61 billion in 2004, the Advertising Association found that it fell to £14.20 billion in 2009 at constant 2008 prices. In the last few years, advertising expenditure has remained at around £14.5 billion. But, is cutting back on advertising a sensible strategy during a recession? Of course budgets are tight for both firms and consumers, but many suggest that media-savvy firms would actually benefit from maintaining their advertising. By doing so firms could take advantage of weaker competitors by increasing their market share and establishing their brand image in the long run.
It’s also important to consider another link between economic growth and advertising. Research suggests that advertising can be an important factor for economic growth. A three-year study undertaken by the Advertising Association and Deloitte, commencing in January 2013 suggests that for every £1 spent on advertising in the UK, £6 is generated for the wider economy. Based on these predictions, the estimated £16bn that was spent on ad campaigns in 2011 added over £100 billion to the UK’s GDP.
So, perhaps encouraging more advertising is the answer to the UK’s economic dilemma. This is certainly the opinion of Matt Barwell, the consumer marketing and innovation director of Diageo Western Europe, who said:
People fundamentally believe in advertising but a lot of the conversation focuses on negative elements. People rarely get the opportunity to talk about the positive role advertising plays in terms of wealth creation, exports and the social benefits that it provides. These are all things that many of us take for granted.
If private firms can therefore be encouraged to boost their marketing campaigns, jobs may be created, demand for products will rise and with the help of the multiplier, the economy may strengthen. Advertising has both pros and cons and opinions differ on what makes a good advert. But, whatever your opinion of the role of advertising, it is certainly an important aspect of any economy. The following articles take a view of advertising.
Articles
Could we advertise ourselves out of recession? Marketing Week, Lucy Tesseras (31/1/13)
Advertising in times of recession: A question of value The Open University, Tom Farrell (13/3/09)
Recession spending on advertising and R&D Penn State, Smeal College of Business
Nothing to shout about The Economist (30/7/09)
UK’s payday lenders face restrictions on advertising Reuters (6/3/13)
Value claims improve advertising effectiveness in recessionary times Com Score, Diane Wilson (17/9/13)
Advertising in a bad economy About Advertising, Apryl Duncan
Advertising worth £100bn to UK economy The Telegraph, Graham Ruddick (31/1/13)
Can advertising be the motor that gets the struggling UK economy out of first gear? More about advertising (26/2/13)
Adverts ‘worth £100bn to UK’ Independent, Giddeon Spanier (30/1/13)
Report
Advertising Pays – How advertising fuels the UK economy Advertising Association & Deloitte (30/1/13)
Advertising Pays – How advertising fuels the UK economy: Accompanying video presentation Advertising Association & Deloitte: on YouTube (30/1/13)
Questions
- What is the role of advertising?
- Using a demand and supply diagram, illustrate and explain the role of advertising.
- During a recession, why would you expect advertising expenditure to fall? What impact would you expect this to have in your diagram from question 1?
- How might firms that sustain their advertising expenditure during a downturn benefit?
- Explain the link between advertising and the economy.
- Why could a higher level of advertising boost economic growth?
- Are there any negative externalities from advertising?
Ahead of Lord Davies’s report on Boardroom equality, he will be somewhat alarmed by the survey results carried out by the Institute of Leadership and Management, which found that 73% of women felt that they still face barriers to top-level promotion. Quotas are a suggestion to break down this barrier. As Sheelagh Whittaker, a non-executive directive of Standard Life said:
‘I am a big supporter of quotas. I believe that we will only have true equality when we have as many incompetent women in positions of power as incompetent men.’
However, others say that quotas are not the answer, as they don’t actually change the fundamentals. Forcing compliance for equality in the workplace is not the same as equality in the workplace. There are a number of other reasons behind fewer women in top level positions, including less confidence and ambition, a more risk-averse attitude to promotion, as well as more women than men aspiring to run their own company, rather than seek promotion within a firm. So does discrimination still remain in the workplace or are there other explanations for the fact that only 12% of FTSE 100 directors are women?
Women still face a glass ceiling Guardian, Graham Dnowdwon (21/2/11)
Female managers say classing ceiling intact – survey BBC News (21/2/11)
The ‘glass ceiling’ is all in the mind: women lack confidence and ambition at work says new survey Daily Mail, Steve Doughty (21/2/11)
Women hit glass ceiling while report rejects boardroom quotas Independent, David Prosser (21/2/11)
Poll: Glass ceiling still a barrier The Press Association (21/2/11)
Men not to blame for the glass ceiling The Australian, Jack Grimston (21/2/11)
Questions
- How are equilibrium wages determined in perfect and imperfect markets?
- Is it efficient for a firm to pay men more than women or to hire/promote more men than women?
- Illustrate the concept of discrimination against women in the labour market. Think about the effect on the MRP curve and hence on equilibrium quantity and wage. How does this affect the MRP curve for men?
- What are the other causes of less women being FTSE 100 directors besides ‘the glass ceiling’?
- To what extent would a quota be effective in achieving gender equality in the workplace?
- Are there any other policies that could be used to tackle discrimination of any kind? What are the pros and cons of each?
This rather strange question has been central to a storm that has been brewing between various celebrity chefs, including Jamie Oliver and Hugh Fearnley-Whittingstall, and the supermarkets. Supermarkets say that consumers don’t want irregular shaped vegetables, such as carrots, parsnips and potatoes. ‘Nonsense’, say their critics.
The pressure group 38 degrees has already taken up the cause.