Carol B Kenney, Ph.D.
The Science of Natural Health
www.Pathways4Health.org
Fall 2014: Choices? Myths? A Case for the Affordability of Fresh Fruits and Vegetables
We all care about food and nutrition and we probably feel well-versed in many issues that relate to good
health. One “truth” that we hear repeated again and again, so often in fact that we may take it for
granted, and without much thought, is that fresh fruits and vegetables are priced out of reach and too
expensive to be a mainstay in the diet of the typical American family.
As a former economist and someone familiar with government economic statistics, I have watched food
lose share of the consumer dollar year after year as we give a greater priority to other goods and
services, especially high-tech and recreation durables and health care services: In the early postwar
period, Americans spent 24% of every dollar on food; today, we spend less than 10% (Chart 1). In recent
decades, we seem to have traded food dollars for dollars spent on health care (Chart 2). [Charts and
Tables appear on the last pages of this piece.]
The apparent shift in our preferences away from food toward other goods and services got me thinking:
Questions…
What factors explain the dramatic decline in the food/disposable personal income (DPI) ratio in
Chart 1?
If we devote so little of our income to food relative to 50 years ago, isn’t there room in the
budget to give a little more emphasis to food in general and fresh fruits and vegetables in
particular? [We can use fresh fruits and vegetables, for which there is historic data, as proxies
for nutrient-dense, health-supportive foods.]
Does price explain the steep drop in the food/DPI ratio—the food industry presenting us with
cheaper food options and savings so we can spend more for other goods and services?
How much of the typical consumer dollar goes to fresh fruits and vegetables?
Have the prices of fresh fruits and vegetables gone up that much more than other foods, as well
as all other consumer goods and services, to render fresh produce unaffordable?
What else is the typical American family buying that makes fresh produce feel so unaffordable?
Overview and Conclusions…
The charts and tables that follow represent ideas and concepts derived from raw data available through
the Bureau of Economic Analysis, a division of the Department of Commerce.
Carol B Kenney, Ph.D.
The Science of Natural Health
www.Pathways4Health.org
The data suggest that some of the overarching influences on consumer spending have come not only
from the relative prosperity of the postwar years, but also specifically from the growth and influence of
the food and drug industries, the development of new high-tech products and medical technologies, and
the powerful role of low-cost imports. Imports, by complementing and competing with domestic
products, have had a major impact on consumer behavior and shopping habits, especially in recent
decades.
The story of postwar consumer spending, the expanding market basket of goods, and the role of imports
is a fascinating one and the conclusions below are perhaps more easily understood in this context. But
in the interest of brevity and not to be sidetracked by too much history and too many statistics, many of
which are captured in the tables and charts, let’s focus here on just a few summary thoughts and leave
this story to be told in the Appendix of this newsletter, if you would like more background on the topic.
While you may develop ideas from the charts and tables on your own, these are some specific
conclusions that I draw from them:
 Americans have dramatically cut back on their relative spending for goods across virtually every
expenditure category in order to purchase more services. Since the early 1950s, consumers
have diverted 26 cents of every dollar from goods to services; with half, some 13 cents
redeployed to health care services (Table 1, last column).
 As a nation, we spend about three times the amount for alcoholic beverages than for either
fresh fruits or fresh vegetables. We spend twice the amount for non-alcoholic beverages
(especially sugary soft drinks) and twice the amount for bakery products than for fresh fruits or
vegetables. And, we spend a roughly equivalent amount for sugary snacks and sweets
compared to fresh fruits and vegetables (Chart 3A).

From what we hear about the high cost of fresh fruits and vegetables, we might assume that
their prices have outpaced prices of such consumer favorites as beverages, bakery products,
and sugary snacks, but Chart 3A suggests that this is not the case. Prices have inched up in like
fashion for all of the food categories depicted in Chart 3A. The fact that consumers have
increased their spending on all these categories at essentially equivalent rates suggests that
taste and convenience, not nutrition and health, may be the key priorities when Americans
stroll the aisles of grocery and convenience stores (Chart 3A).
 Amounts spent for physician care and also for prescription drugs each account for 8-10 times
the dollars we spend on fresh fruits and vegetables (Chart 3B). Prescription drug sales have
grown at twice the rate of spending for fresh fruits and vegetables (10.2% vs. 5.2% and 4.9%,
respectively) and its share of PCE has increased by almost five-fold in the last 60 years to now
account for almost 3% of total consumer spending (vs. 0.3% for fresh fruits!). Americans also
spend more for non-prescription drugs than for fresh fruits or fresh vegetables (Chart 3B).
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Carol B Kenney, Ph.D.
The Science of Natural Health
www.Pathways4Health.org
 Americans spend more on amusement parks, toys and games, air travel, and gambling and
lotteries than on fresh fruits or fresh vegetables...the latter by a wide margin. Spending for
gambling and lotteries (presumably a highly-discretionary expenditure and one that entices
most economic classes) has grown at twice the rate of fresh fruits and vegetables and absorbs
three times the dollars (Chart 3C).
 Compared to 60+ years ago, consumers are spending less of every dollar on food and more on
beverages of all types (Table 2). Of every dollar spent on food, consumers have shifted 13½
cents away from meat, poultry, milk and eggs, in order to spend 11½ cents more on cereals,
bakery products, and “other food” which includes convenience snacks and frozen and canned
prepared foods. Economizing efforts have aimed most at milk and eggs, where consumers have
cut back 8½ cents in order to spend 9 cents more of every dollar on snacks and frozen/prepared
foods.
Answers…
1. Prices for fresh fruits and vegetables have not run wild; instead, they have risen only moderately
faster (3.7% and 4.0%, respectively) compared to food overall (3.1%) and consumer goods and
services as a whole (3.3%);
2. Fresh fruits and vegetables account for such a negligible portion (0.3% and 0.4%, respectively) of
the consumer dollar that price increases should be relatively easy to absorb;
3. Fresh produce appears affordable in the context of the many dollars consumers spend on
discretionary items like alcoholic beverages and soft drinks, amusement parks, gambling and
lotteries.
We know that Americans as consumers are rational beings. From the data, we might conclude that
what many are short on is really not so much money, but time. With more women working outside the
home; with households having fewer hours to devote to planning, shopping, and cooking; and, with
screens, especially the internet soaking up more hours of our day, it is easy to be caught off guard,
needing a calorie lift and with no healthy food options in sight. It is then that consumers reach for quick
options like soft drinks and snack foods.
Without adequate time to shop, cook, and prepare healthy meals and with the satisfaction and
convenience provided us by the food industry’s array of sugary beverages and snacks, it is easy to see
why the myth that fruits and vegetables are unaffordable has gained in popularity and gone
unchallenged.
Copyright 2014, Pathways4Health.org
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Carol B Kenney, Ph.D.
The Science of Natural Health
www.Pathways4Health.org
Appendix
Overview of Consumer Spending in the Postwar: The Shift Away from Staple Goods, Toward
Discretionary Hard Goods and Services
A Discussion Shaped, in Part, by Data Outlined in Table 1
Relative peace and prosperity following World War II ushered in a period of unprecedented growth in
consumer spending, as well as major shifts within the consumer market basket itself. To the first point,
the modern “consumer economy” as we know it today initially grew out of strong pent-up demand
especially for durable goods following World War II. In these early postwar years as the war effort
cooled, strong consumer demand for goods came to the rescue to keep factories humming and workers
on the job, filling the void left by a government no longer purchasing armaments and war materials: In
the three years between 1943-44 and 1947, government spending dropped from 48% of GDP to 16%,
while the consumer share rose over the same three years from a wartime-depressed 48%-49% of GDP to
65%. [Federal spending soared, from $16 billion in 1940 to $109 billion in 1944, and then fell sharply,
from $109 billion to $43 billion in 1946 and $40 billion by 1947.]
To this day, the postwar consumer economy has continued to flourish, driven and nurtured by an
environment of general affluence, the absence of global wars, and the influence and ability of
advertising and the media to persuasively and effectively turn consumer “wants” into perceived
“needs.” Speaking to this marketing success is the fact that, after hovering at about two-thirds of GDP
throughout the postwar period, the consumer share of GDP is currently at an all-time high of some 68%.
Not only has the consumer market basket grown in the postwar years, but the mix has also changed.
Consumers can now purchase many more types of goods such as high-tech durables, as well as many
discretionary and health-related services. These goods and services have encroached upon traditional
consumer staples. Two dramatic changes in the way consumers allocate spending dollars are illustrated
in Charts 1 and 2 on the page that follows. Americans now spend less than 10% of disposable personal
income (DPI) on food, both “at home” and “away from home,” a steep decline from the 24% food/DPI
ratio of the early postwar years, with the entire shortfall explained by “food at home.” Simultaneously,
as food’s share of the consumer dollar has fallen, more spending has gone to health care (Chart 2).
The role of imports. Imports have grown steadily throughout the postwar period. In dollar volume
imports are the equivalent of 16% of GDP, up from a 4% average in the 1950s. The stunning growth of
imports means that the American consumer can select as never before across an even broader spectrum
of products—from big-ticket items like automobiles to bargain-priced electronics, clothing and shoes.
Beyond greater choice, imports provide economies, due to their generally lower cost and also the
competition they exert on domestic producers. As a result, Americans spend fewer dollars per unit on
such items as TVs, other electronics, and soft goods. In the case of hard goods like TVs and computers,
we are able to buy more units per household using relatively fewer dollars; or, in the case of goods like
clothing, we can buy a like number of units for less money, leaving more dollars for other purchases.
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Carol B Kenney, Ph.D.
The Science of Natural Health
www.Pathways4Health.org
Over the postwar period, the impact of imports—due to price and competition—has been a factor
allowing consumers to shift more and more spending dollars from goods to services, especially health
care and financial services. Currently, the typical American spends 66 cents of every dollar on services
and only 34 cents on goods, a relationship that has nearly flip-flopped over the last 4 decades (Table 1).
Services, which are generally a product of domestic labor and little influenced by lower foreign wage
rates, continue to take a bigger and bigger piece of the consumer dollar. This is not only due to higher
inflation in services relative to goods (4% annually compared to 2.4% for goods, Table 1), but also
because services become relatively more important once demand for goods begins to “top out.”
We can also see from Table 1 several ways that consumers are savvy and sensitive to price: We buy
relatively more recreational vehicles, electronics (in “other durables”), and clothing in response to the
low and/or falling prices of these goods. Meanwhile, in the face of rising gasoline and fuel prices, we
economize on energy consumption, through smaller and more fuel efficient cars, fewer trips, more
public transportation, and better home insulation. In fact, while energy prices have risen 40% faster
than all consumer goods and services as a whole (4.7% compared to 3.3%), the American consumer has
so successfully economized on energy usage that spending for energy actually takes a smaller share of
the consumer dollar today than in the early postwar years (3.7% versus 4.6% in 1950-52, Table 1).
Food benefits little from the savings offered by low cost imports and foreign competition. Like services
and in contrast to most durables and soft goods, food is less affected by imports and fresh produce
imports are negligible. From our calculations in Table 1, we can see that “food at home” (technically
termed by BEA, food and beverages sold commercially for off-premises consumption) has increased at
an average rate of 3.1%, which is only slightly less than the 3.3% average annual inflation rate for the
total market basket of consumer goods and services as a whole. Food is less influenced by imports
because domestic agriculture, much of which is government-subsidized, is competitive globally and
because food is subject to spoilage, so it travels and keeps less well than hard goods and non-food
nondurables. Table 1 also indicates that, even though the price of food has outpaced the prices of
durables and most nondurables, consumer spending for food, due to slower unit growth, has risen at a
slower 4.9% rate than all other major categories of goods and services (except clothing and footwear).
The biggest price increases affecting consumers are in three major areas...services (4.0%), food (3.1%),
and energy (4.7%)…compared to 2.4% for total consumer expenditures (PCE). In contrast to food and
energy, where consumers have slowed their rate of spending, individuals seem less price-sensitive to
services, which have grown at an average real rate of 3.5%. Health care services (essential) have grown
at a 4.1% real rate, but so too have recreational services (a discretionary purchase). Perhaps the rather
inelastic demand for essential as well as discretionary services reflects demographics, general postwar
affluence, the greater availability and types of services, and the time crunch experienced in working
households. Meanwhile, while rising prices have encouraged consumers to cut back on food and
energy, bargain pricing has lured individuals to stock up on durables and apparel.
Copyright 2014, Pathways4Health.org
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Carol B Kenney, Ph.D.
The Science of Natural Health
www.Pathways4Health.org
6
Carol B Kenney, Ph.D.
The Science of Natural Health
www.Pathways4Health.org
7
Carol B Kenney, Ph.D.
The Science of Natural Health
www.Pathways4Health.org
8
Carol B Kenney, Ph.D.
The Science of Natural Health
www.Pathways4Health.org
9
Carol B Kenney, Ph.D.
The Science of Natural Health
www.Pathways4Health.org
10
Carol B Kenney, Ph.D.
The Science of Natural Health
www.Pathways4Health.org
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