Food is Big Business by Dianne Schenk
(Previously published in The Homepage February 2013)
We all know that Warren Buffett bought the Heinz Food Company for billions of dollars last week. We noticed because Heinz has been one of the most successful businesses in Pittsburgh since its beginning over a century ago. Even though most of the company operations moved to other parts of the country and even the world years ago, company headquarters and company pride have always been an important part of Pittsburgh.
But why would Warren Buffett, a man worth many more billions than those he paid for Heinz, be interested in a food company? What’s so important about food and why is it worth so much? Let’s look at a community like Hazelwood to see if we can understand it. According to the 2010 US Census, Hazelwood and Glen Hazel combined are home to 5,033 people across all ages, genders and income levels. My daughter works in Colombia, S. America, for a non-profit company similar to the Peace Corps. As part of her salary, she is given $7.00 per day to pay for all her food needs. Let’s use this daily allowance as an example of what food can cost per person, per year.
If you are a single person, paying $7 for food each day means you spend $49 on food every week. Let’s round that up to $50 just to make things easier. At $50 per week for food, a single person can be expected to spend about $200 on food every month. That might sound like a lot, but if you count snacks and eating out now and then and all the food expenditures you make over a month, it’s a reasonable amount of money per person to spend on food. Now let’s calculate how much the entire population of Hazelwood and Glen Hazel would spend on food in a year at these rates. 5,033 x 50 = $251,650 per week. Multiply that by 52 weeks in a year and you have $13,085,800 in your neighborhood food economy.
The interesting thing about spending money on food is that we have to eat every day. All of us know that when we overeat on Fat Tuesday in preparation for Lent, we still get hungry sometime on Ash Wednesday and need to eat again. Some people can fast for a day, or sometimes a week, and I’ve even heard of people who take the challenge and fast for 40 days like Jesus did in the wilderness, but most of us need to eat about 2000 calories of some kind of food each day in order to survive. If you eat much more than that and aren’t a champion athlete, you will have health problems, but if you eat less than that, you will also have health and nutrition problems and eventually you won’t be able to survive.
This constant food economy is one of the biggest industries in the world, and helps explain why a man like Warren Buffett, who knows more about making money than most people, is interested in putting a big chunk of his investment into a strong food company like Heinz. He knows that Heinz will never go out of business so long as there are people in the world needing to be fed. Even in a neighborhood like Hazelwood, this money gets spent every day. Right now almost all of this money gets spent outside the neighborhood, in grocery stores and restaurants in neighboring communities like Homestead and Greenfield. Almost none of it is getting recycled through the community to support jobs and small businesses or healthy food options right here on Second Avenue. It’s not possible to compete with WalMart prices and selection, but I’d like to see more some small food businesses like D’Andrea’s in town offering quality, healthy food and keeping some of that money here in the community.