August, 2000

From the Editor

What's The Rush

My grandfather used to tell me that in business ignorance was bad but survivable; what really killed you, he used to say, were the things you knew that weren’t so.

So I would recommend being cautious the next time you hear the words of a speaker at a conference along the lines of “everyone’s got more money than time these days” because, though it is truism, it is not true.

There is a great new book out: The Fourth Great Awakening and the Future of Egalitarianism, written by Nobel Prize winner professor Robert W. Fogel of the University of Chicago.

The book deals with distribution of income, and demonstrates that the increasing inequality in America purported by some economic statistics is really a function of changing lifestyles and increasing options for individuals. The book demonstrates that almost everyone is getting richer.

For a full century, gains of the lower economic classes have been far greater than those of the population as a whole. This is true whether you measure real income, homelessness, life expectancy or even height. And this was achieved even though the standard of living for the generational population was also advancing.

There are items of great significance for the food business within this book. It is especially important for those in the deli business looking at Home Meal Replacement, both to see why it didn’t work and to see what might yet work.

Some of the numbers are astounding. In 1880 a typical household’s food bill for a year ran 1,405 hours of labor, or the equivalent at the time of roughly a half-year’s wages. Of course that investment didn’t include any unpaid time that had to be put in to transform that food into meals.

Today, a full year’s worth of food costs the typical family only 260 hours of labor and included in that price, is everything from restaurant meals to convenience foods.

Of course, having fewer expenses on basics is a plus, but what good does it do if you don’t have time to spend it?

But in fact we do have more time. To start with, everyone is living much longer. Just since 1950, for example, the life span is up by 10 years. And the biggest gains are now coming as people over 65 live longer. Most people have more years of active retirement than previous generations could realistically dream of.

But the real insight of the book is that differences in income between people are often related to the fact that affluence in society has given people more flexibility. Two people in the same profession can approach it very differently: one might work day and night with the singular goal of retiring early. Another might follow a more temperate pace and work an additional 10 years.

The brilliance of professor Fogel’s book is to look at things like leisure, income and expenditures over a whole lifetime. This contrasts sharply with most research techniques that tend to be snapshots of a single moment.

Here is a shocker: as of 1999, 80 percent of the people in the bottom 10 percent of income distribution were spending more than they earned. This group was spending roughly twice what they were earning!

How is this possible? There are a variety of explanations but in many cases, people are using savings to fund a kind of sabbatical between careers, to go back to school or to pursue early retirement.

What this means, of course, is that all those overlays built around reported incomes aren’t going to be all that useful in planning a merchandising strategy.

And the fact that the same customer may be very high income and time stressed at one moment, then on a break from work the next, means that targeting customers is quite the challenge.

The comeuppance of this book is that people have more discretionary time than ever in history and will have even more in the future. Based on a 365 day year, in 1880, the average male head of the household worked 8.5 hours a day. By 1995 that number was down by 4.7 hours a day (remember this is based on a 365 day year), and by the year 2040, professor Fogel projects that work will consume only an average of 3.8 hours a day. With less time for being sick and less commuting time, the time available for leisure will go from only 1.8 hours a day in 1880 to the 5.8 hours a day we saw in 1995 and by 2040 leisure time will reach 7.2 hours a day for an average male head of a household.

So the notion that we are all desperately short on time isn’t correct. Though our world is fast-paced, the long years spent in school and long years in retirement change the calculation significantly.

The amount of time spent on meals and personal hygiene remain around two hours a day, unchanged from 1880. Professor Fogel says that this number will be basically unchanged in 2040. But perhaps the human condition is changing. Most human beings will be confronted with the kinds of questions about how to live a life that, in earlier times when subsistence was the rule, were confronted only by the wealthy. Leisure brings choices and the need to make decisions.

Perhaps the wiser task for our industry is to find the way to persuade people that they are more completely human if they take the leisure to enjoy a bountiful meal in the company of interesting people.

Encouraging people to enjoy a beautiful deli-prepared repast, in the company of friends and the comfort of one’s own home, may wind up being more plausible than pushing the grab-and-go section.  DB