Sunday, July 12, 2009

Can a movement toward a new food system learn from the music industry?

In this entry, I started off on the similarities between a trend in the food industry toward smaller, alternative food & farm businesses and changes in the music industry that resulted in part from the growth of the internet.

I made a brief analogy between the effect of the internet on the music industry and the effect of new information and a shifting culture on the food industry and these comments drew the comparison out further.

I like this comparison. In both cases, there are some seriously established players ("new oligopoly" perhaps?): the major labels and and the major food corporations -- who currently control a large part of the market and have a stake in seeing that things as they are don't change. And in both cases, as a result of a new technology and new information and a changing ethos, consumers demand a new way of doing things.

In the case of the music industry, the game changed when internet technology made it possible to upload and download files. When industry decided to ignore this game-changing innovation and stick to business-as-usual, pirates moved in to fill the gap; eventually some legitimate businesses followed (Apple & iTunes). There were lawsuits, there was upheaval. I'm not sure if the major labels actually lost marketshare, though overall rate-of-growth in the industry supposedly slowed. But in general, it seems to me that consumers and small artists ended up much better off since we now we have all sorts of new and legitimate ways to find out about new music (LastFM, Pandora, cheap iTunes singles available for download) and they now have more avenues to get noticed.

In the food industry, there aren't really "pirates" yet, since generally food isn't considered intellectual property** but certainly the big players (and there really are only a few, just like worry that profits will be dispersed as modes of distribution become more varied and specialized, as consumers become more informed and their preferences change and the advantage of scale becomes less important.

In the case of music, large scale players might be frightened by the idea that the internet allows people to find out about an artist online rather than only in a record store. As Janis Ian argues in this article in 2002, music downloads may hurt huge artists and labels, but help almost everyone else, consumers who wouldn't be exposed to so many new artists and new and small artists, for whom exposure is everything.

In the case of food, large scale players might lose part of their advantage when individuals or policies calculate the true costs of food production (social, environmental) and impose penalties for negative externalities, when sustainable farming and food processing and distribution becomes more efficient with time**, and when society pays attention to other elements of value (taste, nutrition, uniqueness or variety, etc) and not just cost.

So what are some things we could learn?
  1. Big companies who are making a lot of money don't want that to change.
  2. Change that may hurt large companies may benefit individual consumers and smaller players, not necessarily financially (lower costs, increased profits), but also in other measures of value -- more access to a broader range of music, better access to healthier food that's better for the planet.
  3. Consumer knowledge and behavior can force a change to totally new types of business models.
  4. Anything else?
* Monsanto's patents on certain seeds are a notable exception!
** Some would argue that efficiency isn't important in the world of organic farming, but I think that's a romantic and backwards notion. Yes, efficiency isn't everything, and a quest to produce more, more cheaply can't completely sacrifice taste, nutritional quality, and the social good, but few would argue with the benefit of finding new appropriate technologies to help make healthy food affordable and accessible to more people.

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