By Ben Harman

Yes, it’s an age-old truth that everybody has to eat. But, we also know that there’s no such thing as a free lunch. However, if we could spend 20% less on the first four lunches, the fifth one may as well be free…

Some of us may qualify for food programs, and some of us may be rich enough not to have to think twice about it, but for most of us in the middle it makes sense to tweak some of our habits to make sure our hard-earned dollars are bringing home as much bacon as they can. This can be especially true when we factor in considerations for those of us pursuing a sustainability-based, organic, or special-diet lifestyle.

The most important step in optimizing our budgets is the difficult task of actually analyzing where we are spending our money. We may be surprised by just how much further our dollars can go once we rearrange our spending patterns and priorities. Of course, if we are paying with credit, driving long distances, or paying for various “conveniences” we could be stacking up additional costs as well. For now, let’s just focus on the retail cost of groceries.

The percentage of American household income spent of food, according to the Bureau of Labor Statistics (https://www.bls.gov/cex/tables.htm), is typically second only to housing. This is true for all income levels, though the actual dollar amount increases with income bracket. Regardless, we could probably all find a good use for every 1% of our income we are able to regain through more judicious use.

A typical Wal-Mart supercenter will offer approximately 100,000 SKUs (Stock Keeping Units) to choose from, while a hard-discounter like ALDI (or their health-conscious cousin, Trader Joe’s) will pare that down to a much streamlined 1,000 to 1,500 SKUs (Harvard Business Review, DEC 2009).  By streamlining their supply chains, offering majority private label products, and paying for little to no “extras” such as cart pickup, they are essentially able to sell the same products for lower prices. This is a win for the budget because we are able to buy more actual groceries when we avoid the expensive brand markups that cover their more aggressive selling strategies, and the higher costs of retailers that offer more services and product presentation.

Many stores will also offer the choice to buy in bulk to save on some packaging costs. It’s also possible to split wholesale or bulk items among participating families. This can be especially helpful for items like rice that can be shipped in huge quantities and don’t spoil.

When you look at what is driving the cost of food, a significant contributor turns out to be plain old waste. Food waste in the US is now approximately 1 Lb/day per capita (http://www.fao.org/save-food/resources/keyfindings/en/). A significant amount of that is food that we’ve allowed to spoil or be thrown away at the consumer level. Why would we spend full sticker price for something we’re going to throw in the trash and haul to the landfill? There are 3 big things we can probably do to save on this end:

  • Use leftovers / don’t overproduce
  • Plan meals around ingredients we already own / don’t buy things we aren’t going to use
  • Understand the “sell by” dates for different products (they may still be perfectly safe)

Of course though, the best way to get the exact foods you want is to produce them your own darn self. See (http://www.powellacres.com/) for more homesteading tips, or refer to the meme I created below to summarize this point…

Steenkamp, J. (2009). Don’t Be Undersold. Harvard Business Review, December Issue