You Get What You Pay For
Basic human psychology dictates that when it comes to buying consumer goods, which in our example will be food products, we naturally want the best items at the cheapest prices. Nobody likes to pay over the odds for anything on the market if they know full well that they can purchase the same equivalent item for far less in another brand or from a different retailer. Also, if the product that we have just purchased fails to deliver on the manufacturer’s or retailer’s promise to the buyer then we are also going to feel lied to or let down.
We want cheap. That is a given. We want reliable and high quality. That too is normal. However, what is not always understood is that you cannot have a premium product at an entry-level price. The very definition of cheap means that every corner has been snipped at in order to provide the very highest quantities of scale possible at the lowest standard that will be acceptable to the industry authorities and the general public. And this is fine, but it is something that consumers need to understand. If you are only willing to pay 99p for a beef burger then it is naive to think that you are going to receive anything other than an extremely cheap mass-produced product made with the cheapest legal ingredients and manufactured with clinical efficiency. Forget about any idealistic notions of mouth-watering goodness and nutritious enjoyment.
The employee balancing act
One of the highest costs in any business, particularly one such as a food manufacturing concern will be the labour costs. So, although every business wants, and indeed needs to keep labour costs to a sensible level, too many firms try to get away with making products using staff of inadequate numbers and levels of skill and experience. As consumers we really cannot complain when we spend next to nothing on certain food items that turn out to be damaged, badly packaged or even made haphazardly. It is what we have chosen to pay for.
The reasons that cheap and unskilled labour will never produce high-value products are easy to understand. You must consider the fact that skilled labour is not going to work at discounted rates out of the goodness of their hearts. If the market will pay a skilled labourer more for their efforts, then under normal circumstances the employee will gravitate towards where they will receive the greatest wages and benefits. So this leaves only unskilled labour left to choose from. You then need to consider human nature. Anyone that is knowingly working for a minimum wage in oppressive or unfavourable conditions will not stay motivated. This has been proven time and again to affect productivity and the quality of goods and services. Loyalty and therefore retention will also be at a low level. This all results in a firm that needs to continually hire and fire new employees, which lowers experience levels in the business. Which in turn leads to either shoddy workplace practices due to inexperienced, or unmotivated workers who couldn’t care less about quality control.
The only way to break this cycle is to encourage workers to stay for the long-term and become proactive employees who want to develop their existing skill set. This all requires increased levels of pay and investment in improving employee training and working conditions. The payoff over time would be a far more efficient and better-skilled workforce than your competitors, which in turn should allow you to charge more for a differentiated product or service. Unfortunately, this does require vision from business leaders who have faith in their own systems, strategies and product, something all too often lacking in the British workplace.
Cheap materials, cheap product
This is an obvious fact of manufacturing that the consumer should realise when they are comparing like-for-like products. Take a premium cola for example. Two litres of the two market leaders will come to around the same price, although if you look around you should be able to grab a bargain. Due to their size and the economy of scales achieved over decades of successful operating these prices will be reasonably cheap as well. However, if you wish to pay even less then you should be able to buy a competing cola at an even cheaper price still. However, the trade-off is that the budget cola will taste nothing like the two market leaders – and with good reason! They will not have the resources to match the quality of the market leaders products and will have to substitute premium ingredients and manufacturing processes with inferior ones that they can afford. This is fine, as that is what you are paying for. A cheap cola. And that is exactly how it will taste – cheap, flat and with a taste that is nothing like the market favourites. But if you want the better tasting cola then you need to pay what is asked. It is the same with cheap biscuits, chocolates and ice cream. You just cannot expect excellent quality if you are paying bargain basement prices. The cost of premium materials won’t allow it.
The Brexit effect
Every manufacturer in the UK is rightly extremely concerned about how Brexit will impact their business model. If the pound goes down then exports become cheaper and more competitive to sell in overseas markets. If the pound increases in value then imports become cheaper to buy. Currently, the pound has decreased significantly enough to notice and as such buying imports from overseas has become more expensive due to businesses getting less “bang for their buck”. This will have an impact on raw materials used during any food production if they are imported into Britain, with the end result for consumers being that prices may rise to offset the increase in costs. So a consumer needs to decide if they are willing to pay more for products that they like, or whether to accept a lower quality good at the correspondingly cheaper price. The Brexit effect could send up labour costs as well if foreign labour used in factories becomes more scarce. So if that does happen we should be prepared for that to push manufacturing labour costs up as well.
As you can see, it simply isn’t a feasible option for consumers to expect a product that is cheap and simultaneously of the highest quality in the market. We should realise that cheap food had to have been produced with cheap, unskilled labour & cheap ingredients, so that is what you will receive when you pay for it. It is possible for the product to be excellent value for money, but not to be a better quality than any rival and competing products. For that to be possible the best available raw materials, manufacturing processes and most skilled labour available must be utilised in making the product. And those factors come at a price. You must choose between cheap and cheerful or premium, better produced and packaged. If you want quality it needs to be paid for.