How to make money selling food

Here’s one of my biggest lessons from the past several years of helping to keep a small grocery store afloat: the best (maybe the only) way to make money selling food is…to sell something other than food.

Basically, there’s not much profit in food, not in an industrialized food system where per-unit costs have been driven down about as far as they can go. You have to find other things with a higher profit margin (pharmaceuticals, vitamins, snow melter, booze) and/or sell everything under one physical or digital roof (supermarkets, Amazon). Or you can do what Unilever and other behemoths are increasingly doing, and shed the food brands entirely.

As Christopher Doering reports on Food Dive this week, Unilever is off-loading its ice cream manufacturing–including of rascally Ben & Jerry’s, which it famously acquired in 2000–into a separate company, because <sad trombones> sales only rose 2.3% last year, to a measly $8.6 billion. Unilever is planning to focus more on the more profitable “HABA” sectors–health and beauty aids.

To be fair, fellow behemoth Kroger is selling its own specialty pharmacy as it tries to prove to the Federal Trade Commission that its planned merger with Albertson’s won’t result in even greater monopoly power. They’re doubling down on the grocery sector, and that’s the other way to make money selling food: be the only one doing it in a particular market. It’s all just shuffling the chairs around, without really doing anything to break up the consolidated capital that drives most of the system at this point.

4 months ago

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