Impact: The Three Dollar Avocado
| posted by Marianne BellottiA new organic/natural food store just opened up in town. If you've ever been inside one of these massive chemical free superstores you can appreciate the experience. These are not your corner health food stores with rows of vitamins and a few displays of protein bars. They resemble in many ways old fashioned department stores: instead of cheap metal racks and shelving, products are displayed on aisles of neat blond pine; instead of piles of prepackaged meats, specialty kiosks dot the back walls with impeccably dressed butchers, bakers, and sushi chefs.
I like such stores not for their appearance or even the convenience of ordering a delicious black-out cake made with real sugar instead of over-processed chemical substitutes, but to indulge the economics geek in me. I like Kashi brand breakfast cereal and Paul Newman cookies. The first I have no trouble finding at normal supermarkets, the latter is almost impossible to procure outside in the Double-Stuffed Oreos world. But when I walk into a Trader Joe's or a Whole Foods I usually find that my Kashi breakfast cereal is a whole dollar more expensive than it is at the Stop and Shop down the road.
It's classic price targeting: I'll come into the store anyway to get my hard to find products and who wants to run around to six different stores to get the best price for each grocery item separately anyway? The store knows I don't want to get in my car and drive off to a new store and wait on another line just to buy cereal, and maybe they figure I'll be so impressed by the store itself that I'll write off the mark-up like I'm supporting a good cause. For many shoppers at these organic-megastores I'm sure this is true, but it doesn't stop with a buck more for good cereal.
Take, for example, the existence of the organic avocado. Now I've never grown avocados, but from what I understand they don't have much in the way of pest problems in the first place. Their thick alligator like skin is peeled off and thrown away before you consume the fruit, meaning any pesticides or chemicals never touch the stuff you eat. At the normal supermarket avocados are two for a dollar, at the organic grocery they are $2.98 per fruit.
One could argue that since pesticides and industrial fertilizers can have such nasty potential environmental effects, the justification for organic avocados is not so much that they are healthier products but that they are more responsible. But are they a whole 400% more responsible? Really?
As responsible business practices become more and more economically viable, dry and straight-forward capitalism is getting unfairly shafted. Classic for-profit business models, so often ridiculed by Corporate Social Responsibility proponents, have a simple elegance to them that should be respected and even admired. They have effortlessly accomplished what so many responsible businesses are still struggling with: studying and maximizing the impact of their actions. Of course, the traditional for-profit company only looks at the bottom line, which gives them a dirty little advantage, but still they have identified ways to efficiently measure how changes to their business practices impact their mission. The fact that the mission is money is beside the point.
Too many “responsible businesses” operate under the assumption that ideas that are good in theory will produce desirable impacts and that's that. Research to support and scale these theories are left to the skeptics who may not have the industry's best interests at heart. A traditional for-profit company doesn't hand over the responsibility of determining the best way to succeed at its money-making mission to its critics, why do so many social initiatives?
While I was browsing through the new organic supermarket I noticed something funny: the lights in the freezers kept going on and off seemingly at random. At first, I confess, I was actually kind of alarmed at the idea that the freezers were losing power, but then I realized what was happening. The freezers were on a cycle, each unit going on and off for a few minutes, in order to save electricity.
I've always thought the expression “saving electricity” was a funny. Electricity is not like canned food; short of using batteries you can't produce it, preserve it and use it later. When you turn your lights off at night the electricity is still being spent, still flowing into your house, regardless of whether you're using it or not. The theory behind “saving electricity” is that if you use less electricity, demand goes down and power plants produce less, thereby consuming less fossil fuels. But this theory only has an impact in the right scale: if every household in America or even your hometown starting using energy efficient light bulbs then yes. A single market rotating freezer power? Not so much. Outputs of power plants are not determined by single users, but general patterns. So if you're the only person in your neighborhood not blasting your air conditioner 24/7 this summer the only thing you're doing is saving money on your electric bill.
The issue is not whether responsible businesses are doing enough. The issue is whether such businesses have even the slightest idea of how much they are actually doing, how much of an impact they're really making. Our main flaw in wanting social responsibility is assuming that something is better than nothing. Okay, maybe something is better than nothing, but if businesses don't study and project the effects of their practices then potential innovations that may further the mission never get noticed. We end up doing “something” but not getting the impact that we actually want. Conserving energy by running freezers on cycles, in my opinion, has a negligible impact on fuel consumption, but if the money saved on the electricity bill is used to buy and retire a few fossil fuel credits the resulting impact is all the more efficient. Such solutions are easy to identify once we have a clear picture of the real impact of “responsible” actions. Just because an initiative doesn't live up to our expectations, doesn't mean it can't contribute if it's used as part of an overall strategy.
The sad thing is that so few of our responsible businesses have a strategy. In this way they are simply traditional for-profit companies with extras tacked on. Their responsibility comes down to basic economics: price discrimination because people shopping for responsible products will pay more, taking up energy efficient technology because it cuts costs, going green and organic to increase market share. There's nothing wrong with this (in fact if it breaks the technology out of the CSR niche so that traditional for-profits take it up to cut costs and increase profits I think it's a wonderful thing) but it leaves the industry as a whole vulnerable to backlash when we claim righteous goals yet have no plan to achieve those goals or data about the impact we're making. Is a $3 avocado really more responsible than a .50 one? Or are we ignoring the reality of the $3 avocado and merely pretending to make an impact?
Consumers may spent the $2.98 for the organic avocado and the extra buck for the cereal now, but at some point they're going to read an article that casts doubt on whether these extra costs are necessary or benefiting anything other than profit margins. If the Socially Responsibility movement doesn't have answers for them we will produce nothing but cynics that throw the baby out with the bathwater. Then this whole exciting new frontier of business will be lost.
