Transcript: Sylvain Charlebois: Food Prices, Food Costs | Nov 02, 2015

Steve sits in the studio. He's slim, clean-shaven, in his fifties, with short curly brown hair. He's wearing a gray suit, white shirt, striped lilac tie, and a red flower on his lapel. Behind him, a wall screen reads “The Agenda, with Steve Paikin.”

Steve says RESTAURANTS AND FOOD
CHAINS ARE PROMISING CAGE-FREE
EGGS, NON-GENETICALLY MODIFIED
VEGETABLES AND ORGANIC DAIRY.
IT'S CLEAR SOMETHING IS GOING
ON.
AND JOINING US NOW TO GIVE US
SOME PERSPECTIVE, IN INNSBRUCK,
AUSTRIA VIA SKYPE:
SYLVAIN CHARLEBOIS, PROFESSOR AT
THE UNIVERSITY OF GUELPH'S FOOD
INSTITUTE, CURRENTLY A
VISITING
PROFESSOR IN FOOD POLICY AT THE
UNIVERSITY OF INNSBRUCK, AUSTRIA.

Sylvain appears on screen sitting in a room with white walls. He’s in his early forties, clean-shaven, with short dark hair. He’s wearing glasses, a blue shirt, and a black tie.

Steve continues WELCOME.
NICE TO HAVE YOU ON TVO TONIGHT,
PROFESSOR.
HOW ARE YOU DOING?

Sylvain says VERY WELL.
VERY WELL, STEVE.

Steve says EXCELLENT.
CAN YOU GIVE US SOME SENSE ABOUT
THE OVERALL CHANGE IN THE
CONSUMER MARKET INSOFAR AS
PEOPLE NOW SEEM TO BE AS MUCH OR
MORE INTERESTED IN HOW THEIR
FOOD WAS PRODUCED AS OPPOSED TO
JUST HOW IT TASTES OR, YOU KNOW,
HOW MUCH IT COSTS?
HOW IS THAT CHANGING RIGHT NOW?

A caption appears on screen. It reads "Sylvain Charlebois. The Food Institute of the University of Guelph. University of Innsbruck."
Then, it changes to “Food prices, food costs. Consumer’s choice.”

Sylvain says IT'S
CHANGING DRAMATICALLY, AND I
THINK IT'S SURPRISING A LOT OF
PEOPLE, STARTING WITH THE
INDUSTRY, AND IT SEEMS AS THOUGH
ANIMAL WELFARE AND OTHER ISSUES
ARE GAINING CURRENCY IN THE
MARKETPLACE ESSENTIALLY, AND
THAT'S WHY WE'RE SEEING A LOT OF
CHANGES ALL OF A SUDDEN WITH
PROCESSORS, WITH RESTAURANT
CHAINS, AND, FRANKLY, RIGHT NOW
YOU'RE SEEING AN ENTIRE
CONTINENT, NORTH AMERICA,
CATCHING UP TO SOME OF THE
POLICIES THAT WE ACTUALLY SEE
HERE IN EUROPE.

Steve says SO WHEN YOU SAY THAT
IT'S GAINING ADDED CURRENCY, ARE
YOU TALKING ABOUT ACROSS CANADA?
ACROSS THE UNITED STATES?
OR HOW SO?

Sylvain’s frame appears on a map of Austria that highlights the location of Innsbruck.

He says IT
REALLY DEPENDS WHERE YOU LOOK.
BUT WHAT I MEAN BY CURRENCY
ESSENTIALLY IS THAT CONSUMERS
ARE SHOWING SIGNS THAT THEY
ACTUALLY ARE WILLING TO PAY MORE
FOR FOOD, FOR A VARIETY OF
REASONS: SUSTAINABILITY, ANIMAL
WELFARE, FAIR TRADE.
I THINK THE REASON WHY THIS IS
HAPPENING, IT'S BECAUSE OF FOOD
INFLATION.
OVER THE LAST FOUR OR FIVE
YEARS, WE'VE SEEN A SIGNIFICANT
INCREASE IN PRICE POINTS IN
GROCERY STORES, AND THAT'S
PROBABLY WHY NOW CONSUMERS ARE
NOT ONLY SPENDING TO GET
CALORIES BUT THEY'RE INVESTING
IN THEIR NUTRITION, AND THAT'S
WHY THEY'RE VALUING THINGS THAT
THEY MAY NOT HAVE VALUED BEFORE.

Steve says AND DO YOU SEE IT
HAPPENING IN THE PROVINCE OF
ONTARIO AS MUCH AS ELSEWHERE?

Sylvain says I WOULD
SAY IN ONTARIO IT'S A DIFFERENT
MARKET.
IF YOU COMPARE, SAY, ONTARIO
WITH B.C. OR Québec, WHERE
HOUSEHOLDS REALLY SPEND MUCH
MORE MONEY ON FOOD THAN IN
ONTARIO.
ONTARIO, REALLY, PRICE IS KING
STILL.
THE NUMBER ONE BANNER IN ONTARIO
REMAINS NO FRILLS, OWNED BY
LOBLAW, AND IF YOU GO INTO NO
FRILLS, IT'S BARE TO THE BONES,
VERY SIMPLE.
BUT WHEN YOU GO TO Québec, NEXT
DOOR, THE NUMBER ONE BANNER IS
METRO.
AND METRO'S OFFERING IS MUCH
MORE SOPHISTICATED, ELEGANT.
YOU HAVE A LABYRINTH OF SMELLS
AND COLOURS.
IT'S JUST A DIFFERENT EXPERIENCE
ALTOGETHER, WHICH REALLY
PROVIDES EVIDENCE THAT A Québec
CONSUMER IN GENERAL WOULD SPEND
MORE MONEY THAN IN ONTARIO.
BUT THINGS ARE SLOWLY CHANGING,
PARTICULARLY BECAUSE OF
ETHNICITY AND HEALTH.

Steve says LET ME ASK YOU ABOUT
McDONALD'S, WHICH OF COURSE,
YOU KNOW, THOUSANDS UPON
THOUSANDS OF RESTAURANTS ALL
OVER THE WORLD, AND RECENTLY
MADE I GATHER WHAT WAS A VERY
SIGNIFICANT DECISION THAT IT'S
GOING TO GO WITH CAGE-FREE EGGS,
ANTIBIOTIC-FREE CHICKEN, AND
THEY GOT A LOT OF ATTENTION FOR
MAKING THIS DECISION.
WHY DO YOU THINK THEY DID THIS?

Sylvain says I THINK
THEY DID IT BECAUSE IT WAS A
SOUND BUSINESS MOVE FOR THEM,
ESSENTIALLY.
THEY'RE GIVING THEMSELVES 10
YEARS, WHICH REALLY SHOWS HOW
DIFFICULT OUR SUPPLY MANAGEMENT
REGIME IS.
IF YOU WANT TO CHANGE THINGS IN
THE CODE OF PRACTICE, IF YOU
WANT TO CHANGE ANYTHING REALLY,
YOU NEED TIME.
WHAT REALLY McDONALD'S DID
RIGHT AS FAR AS I'M CONCERNED
WITH THEIR ANNOUNCEMENT WAS THAT
NOT ONLY DID THEY DECIDE TO GO
CAGE-FREE WITH THEIR EGGS -- AND
THEY DO BUY 120 MILLION EGGS A
YEAR.
SO THAT'S A LOT OF EGGS.
YOU NEED MILLIONS OF HENS,
LAYING HENS, TO SUPPORT
McDONALD'S.
THEY'VE DECIDED TO PARTNER WITH
FARMERS.
AND THAT'S REALLY WHAT IS
IMPORTANT HERE.
THEY'VE RECOGNIZED THAT IN ORDER
TO BASICALLY USE THEIR PULL
EFFECT TO RESPOND TO MARKET
NEEDS, WHAT CONSUMERS ARE
LOOKING FOR, THEY ACTUALLY
REALLY HAVE TO WORK WELL WITH
FARMERS, AND THAT'S WHAT THEY'RE
DOING, AND THAT'S WHAT THEY
INTEND TO DO OVER THE NEXT 10
YEARS, AND I SUSPECT WE'LL SEE
MORE AND MORE OF THESE THINGS
MOVING FORWARD.

Steve says HOW SIGNIFICANT DO
YOU THINK THAT MOVE IS FOR THE
EGG INDUSTRY ITSELF?

Sylvain says I THINK
IT'S SIGNIFICANT.
BECAUSE IT IS McDONALD'S,
THEY'RE PULL POWER IS VERY
SIGNIFICANT.
IF WE WERE TALKING ABOUT ANOTHER
CHAIN OR ANOTHER COMPANY, I MAY
DIFFER, BUT IN McDONALD'S
CASE, THEY'RE POWERFUL ENOUGH TO
REALLY TRIGGER SOME MAJOR
CHANGES OVER THE NEXT DECADE OR
SO.
HOWEVER, I MUST SAY THAT -- I
MEAN, THEY'VE MOVED FORWARD ON
THE FACT THAT THEY HAVE
RECOGNIZED THAT ANIMAL WELFARE
HAS CURRENCY, BUT I'M REALLY
LOOKING FORWARD TO SEEING HOW
THE MARKET WILL REACT TO HIGHER
PRICES BECAUSE INEVITABLY EGGS
WILL BE MORE EXPENSIVE IN
CANADA.

Steve says WELL, THAT'S WHAT MY
NEXT QUESTION WAS GOING TO BE.
IF YOU WANT TO TREAT ANIMALS
BETTER, MORE ETHICALLY, IT DOES
COST MORE.
PRESUMABLY THE FOOD THEREFORE
THEN COSTS MORE.
McDONALD'S IS, OF COURSE,
EXTREMELY WELL-KNOWN FOR THE
FACT THAT THEIR MEALS ARE SO
INEXPENSIVE.
SO DO YOU HAVE ANY THEORIES ON
HOW THE MARKET WILL REACT?

The caption changes to "Pricey challenge."

Sylvain says I WISH.
IF I MAY, STEVE, I CAN COMPARE
EUROPE.
EUROPE HAS BEEN CAGE-FREE FOR
YEARS NOW.
AS OF JANUARY 1ST, 2012, THERE
ARE NO CAGES, BATTERY CAGES,
ALLOWED IN EUROPE.
BUT WHEN YOU GO OUT, WHETHER
IT'S IN INNSBRUCK OR FRANKFURT
OR PARIS, GENERALLY SPEAKING YOU
WILL PAY MORE FOR EGGS.
I'LL GIVE YOU AN EXAMPLE.
RIGHT NOW IF YOU GO OUT AND BUY
TEN EGGS, THEY DON'T HAVE DOZENS
HERE, IT'S TEN EGGS, IT'S THREE
EUROS.
SO ABOUT 4 dollars 50.
WHICH IS MUCH MORE EXPENSIVE
THAN EGGS RIGHT NOW IN CANADA.
BUT THE OTHER THING THAT WE NEED
TO KEEP IN MIND ARE SUPPLIES.
EASTER LONG WEEKENDS, OFTEN YOU
END UP NOT SEEING ANY EGGS AT
ALL.
SUPPLIES DO VARY.
AS SOON AS YOU PUT MORE PRESSURE
ON PRODUCTION, ON GOING
CAGE-FREE, FOR EXAMPLE, SUPPLY
MAY VARY.
IT'S GOING TO BE INTERESTING TO
WATCH HOW CANADIANS REACT TO
THAT.
SO THEY DO WANT CAGE-FREE EGGS,
BUT ARE THEY ACTUALLY WILLING TO
PAY MORE AND ARE THEY WILLING TO
ACCEPT THAT SOMETIMES THEY MAY
NOT HAVE ACCESS TO EGGS AT ALL.

Steve says WELL, YOU SAY IT'S
MORE EXPENSIVE, AND I GUESS IT
IS ON A PERCENTAGE BASIS MORE
EXPENSIVE TO BUY 10 EGGS IN
EUROPE FOR THE EQUIVALENT OF
FOUR AND A HALF CANADIAN
DOLLARS, BUT IN THE GRAND SCHEME
OF THINGS, IT'S NOT THAT MUCH
MORE EXPENSIVE, IS IT, REALLY,
TO DO THINGS ETHICALLY AND IN A
MORE APPROPRIATE WAY?
AT THE END OF THE DAY, WE'RE
TALKING, WHAT, IS IT A DOLLAR OR
TWO MORE FOR A DOZEN EGGS HERE
IN CANADA?
IT'S NOT SIGNIFICANTLY MORE.

Sylvain says NO,
IT'S NOT.
BUT FOR FAMILIES WITH LESS
MEANS, IT COULD BE SIGNIFICANT.
BUT I WOULD SAY THAT RIGHT NOW
WE'RE SEEING AN INDUSTRY
RECOGNIZING THAT THE MARKETPLACE
IS ACTUALLY WILLING TO PAY FOR
THE ACTUAL COST OF FOOD.
THERE IS THIS SHIFT.
AND THAT SHIFT REALLY PROBABLY
STARTED IN 2007-2008 WITH RIOTS
AROUND THE WORLD WHEN COMMODITY
PRICES WENT UP, JUMPED 70, 90,
100 PERCENT.
THAT WAS A BIT OF A WAKE-UP
CALL.
AND OF COURSE IN CANADA, WITH
FOOD PRICES, FOOD INFLATION, I
THINK PEOPLE ARE REALLY
RE-QUESTIONING HOW THEY EAT.
WE JUST DID A SURVEY AT THE
UNIVERSITY OF GUELPH ON BEEF
CONSUMPTION, AND BECAUSE BEEF
PRICES HAVE GONE UP 30 percent OVER OF
THE LAST TWO YEARS, CONSUMERS
HAVE STARTED TO THINK ABOUT THE
ETHICAL TREATMENT OF ANIMALS.
THEY'RE STARTING TO THINK ABOUT
THE -- IS IT SUSTAINABLE TO
PRODUCE BEEF AT ALL?
AND OF COURSE IN LIGHT OF WHAT
HAPPENED WITH THE W.H.O. LAST
WEEK ANNOUNCING THAT PERHAPS
BACON AND PROCESSED MEATS COULD
CAUSE CANCER, MORE AND MORE
CONSUMERS WILL START -- THEY'LL
THINK, THEY'LL REVISIT THEIR
CONSUMER HABITS, AND SO WHEN
THEY WALK INTO THEIR GROCERY
STORES, THEIR PERCEPTION OF FOOD
WILL BE VERY, VERY DIFFERENT
THAN A FEW YEARS AGO.

Steve says SO, SYLVAIN, IN OUR
LAST HALF-MINUTE OR SO HERE,
WHEN SOMETHING LIKE THIS
HAPPENS, THERE'S ALWAYS THE JUMP
TO A CONCLUSION: THIS IS A BRAND
NEW TREND.
IT'S GOING TO HERALD IN CHANGES
FOR THE NEXT 10 YEARS.
OR IT MAY BE A PASSING FANCY.
YOU NEVER KNOW.
WHICH DO YOU THINK IT IS?

Sylvain says IT'S A SHIFT.
WE'RE ACTUALLY -- WE'RE GOING
THROUGH A TRANSITION PERIOD
TOWARDS A MORE TRANSPARENT, MORE
ACCOUNTABLE INDUSTRY.
THE INDUSTRY IS BECOMING MORE
AND MORE ACCOUNTABLE TO ITSELF,
FRANKLY, AND TO CONSUMERS
LOOKING FOR DIFFERENT THINGS.
I THINK WE'RE GOING BEYOND
POLICIES THAT CAN BECOME
ROADBLOCKS AT TIMES AND THEY
LOOK AT THE BUSINESS CASE OF
TREATING ANIMALS ETHICALLY,
TREATING THE ENVIRONMENT FAIRLY
AS WELL.
ALL OF THESE THINGS COME AT A
PRICE, BUT MORE AND MORE,
CONSUMERS ARE SHOWING THAT
THEY'RE WILLING TO PAY FOR IT.

The caption changes to "Produced by Hilary Clark, @hilarygclark"

Steve says UNDERSTOOD.
SYLVAIN, THANK YOU VERY MUCH.

Sylvain says GOOD-BYE.

Watch: Sylvain Charlebois: Food Prices, Food Costs