What will our food system look like in the 21st century?

It's time to rethink our view of agriculture. "Agriculture today is part of an entire food and fiber system that encompasses farms, agribusinesses, processors, distributors, wholesale and retail vendors, restaurants, and food service operations," says agricultural economist James Beierlein. "These sectors are interrelated parts of a large network, and each depends on the proper functioning of the others. Farmers rely on agricultural supply companies for products and services. Processors, food manufacturers, and ultimately distributors and retailers depend on farmers for raw commodities to process and deliver to consumers. Consumers depend on food providers for meals, yet they drive these businesses with their food choices." Many people also depend on the food system for income. In Pennsylvania alone, farms, processing plants, retail food stores, and restaurants provide about 600,000 jobs.

When most Pennsylvanians lived on farms, food was grown mainly at home or nearby. Today, even farm families buy most of their food. This transformation began in the mid-1800s, as canals and railroads made products from distant states accessible to Pennsylvania markets. Soon, industrial canning turned fruits and vegetables from seasonal luxuries into year-round staples, and iceboxes revolutionized markets for fresh meat, eggs, milk, and produce. After the Civil War, land-grant colleges, including Penn State, improved agricultural practices and helped farmers adopt them. Rapid technological change made farms more efficient, reducing the need for farm workers. The population shifted to cities, spurring the growth of commercial food processing. By the 1900s, processed foods were readily available, and supermarkets opened up in the 1920s and 1930s. Now consumers can buy almost any food at their local grocery store.

Today, much of our food dollar pays for processing, packaging, transportation, and services. A bag of pretzels, for instance, begins as soft winter wheat seed that a farmer purchases from a supplier. The farmer plants and harvests the crop, then sells the wheat to a mill, where it is ground into flour. The flour is then sold to a manufacturer, made into dough, and baked into pretzels. The pretzels are bagged and put in cartons, then transported to the supermarket, where individual bags are placed on the shelves. The costs of these off-farm activities, commonly referred to as the marketing bill, represent about 78 percent of each dollar spent on food. "That percentage varies by how much off-farm handling and preparation is required," Beierlein explains. "For eggs and meat, the marketing bill might be as low as 40 percent. But for some items, such as snacks and bakery products, it can be as high as 85 percent."

Foods prepared in the home from scratch make up an increasingly smaller proportion of what most of us eat. Experts project that by the year 2000, more than half of our food will be consumed away from home. To adjust to this change, supermarkets are reinventing themselves, blurring the lines between grocery stores and food service operations by offering more prepared foods. Wegmans, a trend-setting New York supermarket chain, offers prepared foods that can be eaten in the store's restaurants or taken home and reheated. In Pennsylvania, supermarkets owned by Giant Eagle, Giant, and other chains offer similar options.

Food businesses also are poised to meet the needs of people who are too busy to shop. According to Business Week, an online grocery-shopping service named Peapod already serves more than 10,000 households in Chicago and San Francisco. Peapod provides customers with daily price updates on some 18,000 items via computer. Online shoppers can peruse categories, the electronic equivalent of pushing a cart down the aisle, or they can simply send a shopping list. Peapod's own shoppers fill the grocery orders, and drivers deliver them.

As food businesses adjust to changing consumer expectations and demands, new services and products become available. In some cities, it is even possible to shop via computer and modem. For a fee, services such as Peapod will take the customer's order on-line, then purchase and deliver the groceries.

Meanwhile, automatic scanners at the checkout counters of nearly all supermarkets are collecting mountains of data on what people are buying. "However, this information is still vastly underused," says agricultural economist James Dunn. "With the right analysis, these figures could provide valuable statistics for anyone with a stake in the food system. Most supermarkets only use scanner data to control inventory and manage shelf space, but the data also could be analyzed in ways that might help processors and even producers. It could be used to monitor changes in demand, to track how well specials and promotions are working, and to assess the effectiveness of new marketing techniques in different regions and among different groups of consumers."

As American consumers–and their food choices–become more diverse, all food-related businesses are making adjustments. "The increase in one-person households, for instance, does not bode well for certain categories of food consumption," says agricultural economist Robert Herrmann, who studies consumer behavior with rural sociologist Rex Warland. "A few years ago, we looked at fresh vegetable consumption in the Philadelphia area and found that many people thought that preparing fresh vegetables was too much trouble for just one person. This attitude reflects a reluctance to devote time and energy to meal preparation. Because people have less time to spend in the kitchen, they are demanding foods that are more convenient. That demand will continue to rise. People also are concerned about food safety, nutrition, and health. They want, and will pay for, convenient foods that do not skimp on nutrition, such as pre-peeled vegetables or ready-to-eat salads. Food safety concerns usually are latent, but appear quickly when stirred up by the media. The American public has high expectations for the food system, and when they feel it has let them down, they react strongly, even to the point of avoiding suspect products."