Why Fruits and Veggies Are So Cheap in Chinatown

http://www.wsj.com/articles/why-fruits-and-veggies-are-so-crazy-cheap-in-chinatown-1466762400

by yincrash • 10 years ago

230 207 10 years ago

wsj.com

percept2• 10 years ago

Why? (paywall)

pietro• 10 years ago

Click the "web" link below the title.

percept2• 10 years ago

Thanks!

jlukanta• 10 years ago

As always, you can copy and paste the title on Google and bypass the paywall or use the "web" link under the title.

For those who won't bother, this is the TLDR version:

"Chinatown’s 80-plus produce markets are cheap because they are connected to a web of small farms and wholesalers that operate independently of the network supplying most mainstream supermarkets ... Because the wholesalers are in Chinatown, they can deliver fresh produce several times a day, eliminating the need for retailers to maintain storage space or refrigeration"

jedberg5• 10 years ago

Of just click the "web" link below the title.

jsprogrammer4• 10 years ago

Would be nice if the Google link were on the front page instead of having to waste many seconds dealing with this bullshite (go to page, full text loads, split second later screen flashes and locks down, make it out to HN, look for Google link, almost flag post, wait for discussions to load, find Google/web link, wait,find correct link, reload same content, discover fluff).

kuschku7• 10 years ago

Use this link instead, it bypasses the paywall, globally, everywhere, regardless of referer:

http://www.wsj.com/article_email/why-fruits-and-veggies-are-...

JumpCrisscross• 10 years ago

Growing up, I remember Marina Foods in Cupertino being much fresher than the other grocers.

Chinatown’s green grocers, in contrast, buy their stock from a handful of small wholesalers operating from tiny warehouses right in the neighborhood

Chipotle tried hyper-localised procurement and processing. That backfired, since heterogeneity in sourcing and processing means heterogeneity in quality control. How do these markets avoid food poisoning their customers? Are the meat makers, distributors and retailers wholly separate? Do farmers of Asian vegetables avoid fertilising with manure?

jonknee• 10 years ago

How do these markets avoid food poisoning their customers? Are the meat makers, distributors and retailers wholly separate? Do farmers of Asian vegetables avoid fertilising with manure?

By not being a juicy target for a lawsuit. These are mom and pop shops that would just disappear into the ether if there was a big foodborne illness outbreak linked to their wares. They're also not selling prepared food--if you serve unsafe food that is because you did not prepare it correctly.

Havoc• 10 years ago

They're also not selling prepared food--if you serve unsafe food that is because you did not prepare it correctly.

Well a lot of fruit & veg is consumed raw so "prepare it correctly" is of limited use.

thaumasiotes• 10 years ago

Chipotle is itself a large chain. The incentives to avoid some bad food poisoning the market for one of your 2,000 stores are a little different from the incentives to avoid poisoning your only market.

Looked at another way, the fact that a Chinatown vendor's source would add heterogeneity to a national chain's supply chain doesn't mean the Chinatown guy uses heterogeneous sourcing. He is as localized as his source is.

throwaway049• 10 years ago

Chipotle sells fast food. Grocers sell stuff you have to wash and cook for yourself.

Stratoscope• 10 years ago

I had the good fortune to grow up when Have Gun Will Travel was first broadcast. One of my favorite episodes was Gun Shy, where Paladin travels to Montana and visits Ma Warren's boarding house.

Ma's house was famous for its food. Paladin lived in San Francisco and enjoyed the city's finest, and he was surprised and delighted with what Ma Warren prepared in this remote area. She was obviously a talented cook, but Paladin wondered how she got such a variety of quality ingredients. She explained.

Ma knew all the local farmers and ranchers, and they would bring her their best produce and meats to serve in her boarding house. In return, she cooked for them too!

Ma didn't have a reputation for poisoning her customers.

I wonder if Chipotle's problems had to do with being a big nationwide chain trying to be hyper-local, instead of just being someone who knew her neighbors and what they grew?

twoodfin• 10 years ago

I'm pretty sure that health incidents due to food-borne pathogens have declined dramatically in the past 150 years. Eating at Chipotle is probably an order of magnitude safer on average than eating at the real "Ma Warren's" of 1875.

dnautics• 10 years ago

There's also this effect that you hear when there's a chipotle incident anywhere in the country, but if there's a local grocery incident, it will either be local, or, not at all (because the victim count will be so low).

ceejayoz3• 10 years ago

How do these markets avoid food poisoning their customers?

If you buy veggies, it's on you to wash them.

If you buy prepared food that includes veggies, it's on the vendor to wash them.

akiselev11• 10 years ago

Bacteria can't be effectively washed off with water, which is why we use chemical abrasives and surfactants like toothpaste and soap when brushing our teeth or washing our hands. I don't know anyone who uses dish soap on their lettuce and grocery store outbreaks of food borne illness are a regular occurence, just not as sensationalized as the outbreaks at national fast food chains.

venomsnake2• 10 years ago

Lets start with the obvious - a modern food is disgustingly safe compared to what a human immune system is capable of handling. No matter what Madison Avenue has tried to convince the US public - a single or couple of bacteria won't kill you.

And if you mean prepared Chinese food - have you seen the burners under the woks - they look, sound and consume fuel at comparable rate to a jet engine. It is very intense style of cooking using high heat for small amounts of time. The surfaces (where all the nasty stuff is) on everything that has went trough it are thoroughly sterilized.

Stuff like pickling, acids in the dressing also make the non heat treated stuff safe.

It is hard for people with normal immune system to get hurt by modern food.

xorcist• 10 years ago

couple of bacteria won't kill you

That's naive.

Enjoy your chicken sashimi.

kuschku7• 10 years ago

Modern food is so ridulously safe, in Germany a common dish is to put raw minced meat onto bread – Mettbrötchen – and it’s riskless.

jedberg5• 10 years ago

I live in the south bay, but whenever I have a business meeting in SF it's requested that I stop in Chinatown for veggies and meat, because it's so much cheaper and better than what we can get even here just 45 miles away.

gkop2• 10 years ago

Which Chinatown?

jedberg5• 10 years ago

HelloNurse• 10 years ago

"Just 45 miles away"? Why doesn't anybody sell good food where you live? It's California, not Greenland; everything should be plentiful.

jedberg5• 10 years ago

They do, we get plenty of good food here. It's just better in SF Chinatown.

billc82• 10 years ago

I recently went from shopping at Gelson's in Orange County to shopping at El Super's in the Valley. The price difference in everything was shocking but the fruits and vegetables are unbelievably cheap.

jimmywanger11• 10 years ago

Extraordinarily similar to an article in Lucky Peach, David Chang's (Momofuku) magazine.

http://luckypeach.com/pro-choys/

kelukelugames4• 10 years ago

This is the snob effect. People like the author believe produce is cheaper because of poor quality. Does Chinatown respond by lowering prices further because people won't buy poor quality produce?

If it weren't for prejudice then Chinatown groceries might price for more profit. The customers are missing out too. Marketing can fix this.

jimmywanger11• 10 years ago

That's incorrect. Cheaper produce is generally known to be the best produce.

For instance, it's summer in the northern hemisphere right now. You can't turn around without running into a ripe stonefruit (peach, plum, apricot).

Because the local trees are bearing right now, not only do you get high quality produce, but you get it for cheap because there's a glut of supply. But if you want an orange, you settle for an expensive, tasteless orange flown in from Chile, cause it's winter down there and that's when oranges become ripe.

If you tried increasing prices of produce in Chinatown, people would laugh in your face and move on down. The Chinese culture is very food aware and value conscious.

kelukelugames4• 10 years ago

"I figured the prices were cheap because the selection is all C-grade bok choy and yesterday’s bananas."

Literally from the start of the article. You and many others might not think like the author but there is a segment of the population who does.

whybroke• 10 years ago

Or their prices are lower because their customers, being aware of overseas prices, are more sophisticated about pricing than a typical US shoppers and so the vendors can't get any with absurdly inflated prices.

I say this because I spent a dozen years living in southern Europe where, not only are all food prices lower, (eg a loaf of bread is often 1/10 what it is in the states and American brand boxed cereal and California wine is cheaper then in their paces of origin.) but also there are product differences that reduce prices but not quality (eg eggs and milk that don't require refrigeration, vastly less packaging, few advertisements)

So yes marketing would raise prices but by bringing in more naive consumers and raising their expenses.

fennecfoxen2• 10 years ago

there are product differences that reduce prices but not quality (eg eggs and milk that don't require refrigeration, vastly less packaging, few advertisements)

Being aware of products on sale for cheaper does not help if they're on another continent. (Given that the EU is basically an agricultural-subsidy league, it's not surprising to see produce for cheaper, either, though it depends on local wages as well.)

But the real thing which drives down the prices isn't just savvy, it's that these customers care about the price and are wiling to go to additional efforts to pay less, whether by shopping at a less-traditional or inconvenient place, or by using coupons. Meanwhile the rich-white-single-programmer happily cruises down to a nearby Whole Foods because he really doesn't care about an extra few dollars on his grocery bill; he even buys the pre-sliced fresh fruit as a convenience.

With regards to milk, note that you can find boxed milk in the US (UHT milk, or even milk powder)... it's just not as common, and culturally is regarded as an inferior good. As for eggs, you'll have to blame the USDA for the mandate that they are washed before shipment (as opposed to by the customer).

tnuc• 10 years ago

The volume of retail produce passing through Chinatown (NYC) is by far the largest in the city. Profits are made by volume not by large mark ups.

Free market has its advantages.

kuschku7• 10 years ago

Exactly. The Aldi-principle: Sell a lot, with a low amount of labour (often even putting the pallet directly from the truck into the store), and it’ll be cheap.

rakpol2• 10 years ago

Perhaps there's more to it than snobbery? Take, as an anecdote, this list of food safety incidents in China [1]. Whether or not that's comparable to the issues in the North American food supply chain, someone felt that there was enough concern surrounding the quality Chinese food to write an article about it. Food for thought.

[1] https://en.wikipedia.org/wiki/Food_safety_incidents_in_China

kelukelugames4• 10 years ago

Exactly. This is why I use the word prejudice. We can extrapolate this to Muslims. Though the conversation won't be as lighthearted.

I think snob effect is the main factor, as I listed it first. Assuming I jumped to xenophobia as the deciding factor is biased. Of course how we view Muslim immigrants and Chinese produce are orders of magnitude apart in impact.

schnable• 10 years ago

Not sure about NYC Chinatown, but in Philly Chinatown there are a lot of recent immigrants who work for minimum wage or lower, which keeps costs down.

jimmywanger11• 10 years ago

I think that one factor is that in the Chinese culture, you don't expect everything to be good and available during all seasons.

At a Whole Foods, you can reasonably be assured of asparagus in the winter time. In Chinatown, things are only available when they're in season, like a farmers' market.

Also, if you've ever ordered at a Chinese restaurant with a Chinese family, you'll see this phenomenon. Instead of ordering what you want, you'll consult with the waiter to see "what's good today".

For instance, the spinach might be not up to par, so he'll substitute some nice fresh bok choy. I've not seen that in a western restaurant.

mikeryan• 10 years ago

There's a lot of western restaurants (Admittedly usually on the higher end) who change their menus seasonally, if not daily to reflect whats available. Its part of what the whole farm-to-table phenomenon is about.

dogma1138• 10 years ago

It's not about farm to table, it's about economics and about what people prefer to eat especially in places where there is a big difference between winter and summer. Gazpacho isn't a dish you really want to have when the temperatures drop below 0, but on a hot summer day is perfection.

Pretty much most restaurants regardless of being high end or not, have fish of the day, soup of the day, dish of the day etc. that's just a normal reaction to the supply of the market during that day as it's often considerably cheaper to secure the daily catch or w/e your veggie guy has that morning than securing seasonal items daily.

jimmywanger11• 10 years ago

One thing is a lot of asian recipes tend to be more modular.

Also, the middle/lower range asian restaurants can't afford to print menus each day.

So for instance, if the shrimp don't look good that day, they'll gladly throw in the littleneck clams that just came in. Same with green leafy vegetables, where they're pretty much interchangeable.

"We have ong choy instead of a choy. Deal with it."

Whereas in a lot of western cuisines, if you need endive in a dish, it has to be endive. Especially in higher end restaurants. They care so much about the flavor that substitutions are not possible.

Maybe this green is slightly more bitter than this other green, and it throws off the whole flavor of the dish. Whereas, in a lower/middle end asian restaurant, nobody really cares.

jzwinck• 10 years ago

Is this an American Chinese thing? I live in Asia and when I ask what's good they usually say something generic like "The rice dishes are good."

jimmywanger11• 10 years ago

It helps if you speak the language. I'm not saying you don't speak the language, just for those following along at home.

You have to have some rough idea of what you want. If you want stir fried vegetables, you'll say something like "I want stir fried vegetables. What's good today?" Or "I want a seafood noodle soup. How do the mussels look? Any suggestions?"

Time location is important. Instead of just saying "What's good?" ask "I like rice plates. Anything good come in today?"

Finally, it's not always like this. I know I've squashed down at some street vendors and ordered a bowl of noodles without this conversation. This doesn't happen at every meal.

</soapbox>

driverdan• 10 years ago

At a Whole Foods...

I'm curious why did you compare to Whole Foods? They are far more expensive than a regular grocery store and their food is not better.

TaylorAlexander• 10 years ago

I hear people say that, but I keep seeing things that are cheaper at Whole Foods than they are at Safeway. Identical products, like Endangered Species brand 88% dark chocolate and Racer 5 IPA beer are cheaper at my local Whole Foods than they are at Safeway. $3.29 vs $3.99 and $4.99 vs $5.99, respectively. Their produce and meat may be more expensive, but appears to be of higher quality.

I'm not actually sure how much more expensive Whole Foods is compared to a place like Safeway.

akiselev11• 10 years ago

Have you shopped at Whole Foods or Bristol Farms for seasonal products? Compared to the major grocery store chains their produce is leaps and bounds better. I don't believe in the organic marketing crap but their food, especially when it comes to fruit, is amazing, unlike anything you can find at Kroger, Publix, or Safeway.

Cherries, strawberries, blueberries, raspberries, peaches, pears, apples, tomatoes, and countless of other produce taste much better than anything I can get at a normal grocery. Hell, I have very fond memories of eating fresh food from my grandparents dacha or picking wild berries in the forest behind my school and the high end grocers are the only place where they taste even remotely as good as what I had in Russia. Russia.

You get what you are willing to pay for, especially when it costs two to three times the lower end.

jimmywanger11• 10 years ago

My main point is that most western groceries have an expectation of having any produce in any season, eg apples during the summer and peaches during the winter.

Whole Food is just an example of a national food chain most people are familiar with.

For example, outside of the west coast, nobody knows what an Albertson's is. And outside of the midwest, nobody knows what a HyVee is.

dekhn• 10 years ago

Nah, I shop at both Safeway and Whole Foods, and the comparable products are cheaper at Whole Foods (vegetables, fruits, and meat) on the whole, except for the very high end items.

dragonwriter• 10 years ago

Most grocery stores with a reputation for being expensive or upscale actually have list prices on comparable goods to "cheaper" stores, but carry a preponderance of more expensive products that the cheaper stores don't carry at all.

(This is for general chain grocery stores; independent and ethnic stores don't necessarily follow the danger pattern.)

peterbonney• 10 years ago

"I think that one factor is that in the Chinese culture, you don't expect everything to be good and available during all seasons."

I don't think that's a cultural thing, and certainly not an ethnic thing. I think it might have something to do with how many generations-removed one is from agrarian life (or close physical/logistical proximity to it)... Growing up in my (very white) hometown in New England, which still had plenty of farms at the time, it was well understood that the good produce was seasonal and not available in chain supermarkets.

jimmywanger11• 10 years ago

I don't think it's an ethnic thing. But I definitely think it's a cultural thing. I agree with you about how many generations-removed you are from food production. Rather, how many steps/middlemen you're used to.

For example: China is still a developing country with a generally low per capita income. You're intimately familiar with the seasons, and what's available when, and what it takes to get your food.

Few can afford to shop at Western style supermarkets regularly, so you have a better idea (and know) the people growing and selling your food. "Oh, that's the place that always has the good cabbage". That sort of thing.

Compare that to the states, where even produce comes shrink wrapped and you have no idea how it got in the store, you just know you need to pay money to bring it home. How many trucks/resellers/packagers has this produce gone through before I take it home?

honkhonkpants• 10 years ago

Asparagus is harvested in the winter!

maxerickson• 10 years ago

In Michigan it emerges in May or so, which is the middle of spring.

majewsky3• 10 years ago

In Germany, asparagus season is just over, lasting from April to June. Interestingly, asparagus is one of the few vegetables which Germans fully accept as being available only seasonally. And conversely, they go totally crazy during asparagus season for no apparent reason.

About the only other seasonal vegetable is kale, which Northern Germans will once a year cook to death and serve with disgustingly fat sausages whose name derives from an old word for "penis". You can't make this up. :)

e12e4• 10 years ago

For instance, the spinach might be not up to par, so he'll substitute some nice fresh bok choy. I've not seen that in a western restaurant.

All good chefs/restaurants do this. IMNHO fixed menu a la carte restaurants are rarely very good - but for some reason they seem to be common. Perhaps what's more interesting is how common it is to not do this in many restaurants. It usually just means that the kitchen doesn't care about the ingredients, or about the meals they prepare for that matter (eg: the line chefs/people actually working the kitchen day-to-day might have little freedom to influence the menu).

Alex3917• 10 years ago

The veggies in NYC's hispanic green markets are also really cheap. Same with the produce in the Korean markets, the Cambodian markets, etc.

While there might be something unique about the Chinese markets, I think in general stuff marketed to white people is just overpriced. Just look at how the cost of food at Smorgasburg compares with the cost of prepared food in Flushing, or at the price of housing between those two locations for that matter.

sotojuan2• 10 years ago

Definitely true. My roommate was a Chinese international and he thought everyone in my college was crazy to pay so much for X Chinese dish or Y food at a restaurant or market. I started to agree with him once I began to go to places that aren't Whole Foods.

sukilot2• 10 years ago

And McDonald's costs more in China than USA. Funny how that works, commodities and competition.

akiselev11• 10 years ago

This is my experience in Los Angeles as well. The Korean, Chinese, Armenian, and Mexican groceries are almost always cheaper than the national supermarket chains and often have better produce (with the exception of high end stores where you pay way more for quality) . NYC Chinatown may be a more extreme case due to density or something but American food marketing seems to have little to no effect on immigrant communities, which can easily support many low cost/high quality groceries in any metropolitan area.

amalag• 10 years ago

The local Lotte (a large Korean conglomerate) in northern VA has a huge variety of vegetables and far cheaper prices than the mainstream. Their target audience is asian/indian/hispanic and it shows. The place is totally packed and they also follow the Walmart model of renting out space inside the building for restaurants and shops (optical, barbershop, etc)

sampo• 10 years ago

Here in Central NJ (Princeton area), fruit and veg are also notable cheaper in the Asian supermarkets. Which we fortunately have two.

AznHisoka• 10 years ago

Not trying to be stereotypical but perhaps it's just because Chinese people simply value price more than other people?

one only needs to walk through Chinatown to see how much things are cheaper there. It's not just fruit and veggies but things like a haircut, repairing watches, bakeries and even pharmacies.

sotojuan2• 10 years ago

As much as it's stereotyped as dirty and loud, I'd love to move to Chinatown (maybe a quieter part of it!) just for the super low prices in everyday goods and foods.

I can get a filling, healthy lunch for $4-5 there!

paradite• 10 years ago

Not trying to be stereotypical but perhaps it's just because Chinese people simply value price more than other people?

That is a negative way of saying Chinese people are better at making stuff cheap.

Things are cheap because their raw costs are cheap to begin with. So it is not about "valuing price", but paying for the actual cost that is appropriate.

syphilis2• 10 years ago

The USDA shares detailed data on food pricing.

http://www.ers.usda.gov/topics/food-markets-prices/food-pric...

Price Spreads from Farm to Consumer: http://www.ers.usda.gov/data-products/price-spreads-from-far...

They also have good data on regional differences, in case you were wondering why the author was excited about $0.50/lb bananas and $1 pomegranates.

mikekchar2• 10 years ago

I've wanted a website for price spreads for ages. I keep ending up doing the math myself whenever one of these topics come up. Thanks!

In general, people have no idea that the retail price is 4-10 times the price for the underlying farm price. While shipping and processing take up some of the price, the limited data that I could find is that distributors are the ones taking all the profit. If you cut out a few distributors you can easily cut the price of certain goods in half. I'm guessing this is what most of these ethnic supermarkets are doing.

I'm really hoping that with the age of the internet farmers' groups will form groups that sell more or less directly to the customer and see some profit for themselves (which they can ultimately use to improve production practices).

For an example of how badly farmers are getting squeezed: http://www.ers.usda.gov/data-products/price-spreads-from-far...

You can see that the retail price has nearly doubled while the production price has only gone up by 30% since 1999. Some random inflation calculators on the internet tell me that since 1999 inflation has gone up 44% so the real price going to the farmers has dropped considerably.

Of all the economic issues I'm worried about, this ranks at the very top.

jakobegger• 10 years ago

I've had a similar experience with small turkish shops in Vienna. The vegetables are cheaper, fresher, and there's more varity than in the major supermarket chains.

I believe it comes down to centralisation. Major supermarkets only deal with large wholesalers than can deliver produce reliably to a large number of shops.

A small shop on the other hand is happy to buy a single crate of whatever salad just happens to be available cheaply.

hackuser• 10 years ago

I don't understand how this works out:

Because the wholesalers are in Chinatown, they can deliver fresh produce several times a day, eliminating the need for retailers to maintain storage space or refrigeration

Somebody has to store the inventory someplace, incurring those storage costs, whether it's the retailer, wholesaler, or someone further upstream. And regardless of who stores it, I'd expect those costs to have the same effect on the consumer's price.

Unless the farmers literally harvest multiple times per day, wash/clean/prep the merchandise, and deliver it to the wholesaler. That seems unlikely.

Also, what about the lost economy of scale of selling and delivering to a bunch of small wholesalers, and in a physically hard-to-access location (Chinatown in Manhattan)?

t3ra• 10 years ago

Doing daily harvesting isn't that unlikely also not everything is harvested at same hour of the day. And storing inventory is open for just few hours doesn't spoil the veggies.

whack• 10 years ago

"Chinatown is way cheaper... I figured the prices were cheap because the selection is all C-grade bok choy and yesterday’s bananas.

Wrong again! Chinatown’s 80-plus produce markets are cheap because they are connected to a web of small farms and wholesalers that operate independently of the network supplying most mainstream supermarkets."

So what's stopping the mainstream supermarkets from doing the same thing, undercutting their competition while simultaneously increasing their profit margins? Somehow, this sounds too good to be true.

vinceguidry2• 10 years ago

Demand. Chinatown can do it because it's ethnic residents don't just want a great selection of produce, they demand it. They want it bad enough to fuel an entire alternative supply chain. If the people buying Chinatown's produce were replaced by less-discerning customers, the produce markets would disappear overnight and the farmers would have to unload their current crops at cut-rate prices.

Normal customers don't want it that badly. So supermarkets can't rely on being able to continually turn a profit on such a risky endeavor.

A service doesn't just have to be ten times better than the alternatives to drive mainstream adoption. It also has to be something people want bad enough to pay to create an entire industry around delivering it.

grok2• 10 years ago

This still doesn't explain why it is cheap -- it's cheap likely because there are not too many steps between the consumer and the producer? And not too much money spent on infrastructure...

PakG1• 10 years ago

Supermarkets have to operate at scale, and their inventory has to be a relative mirror image across all locations, as well as match prices they plan and advertise in advance. To enable that standardization, there's a lot of central planning, and I imagine also a lot of centralized logistics.

These farmer market-style operations are much more fluid and flexible.

billc82• 10 years ago

How does El Super do it because they appear to operate at scale. A friend said it could be cheaper labor cost and I just saw this- http://elsupermarkets.com/supply-chain-act

They reference slavery and human trafficking, and say they investigate reports of it but don't audit their suppliers.

I don't have specifics but I think you could buy apples for 80 cents a pound, and everything else is just unbelievably cheap.

I'd buy a shopping cart full of vegetables and fruits for $30 which at Gelson's would easily cost 3-4 times as much.

venomsnake2• 10 years ago

So what's stopping the mainstream supermarkets from doing the same thing, undercutting their competition while simultaneously increasing their profit margins?

you need to provide carrots/bananas/apples whole year while each is exactly the same as the other.

mikekchar2• 10 years ago

I've looked into this a bit and it seems to be a problem of distributors. Essentially there are very few distributors in North America. In some cases there is only one distributor. If you need volume, you must buy from those distributors.

The retail price for unprocessed vegetables is somewhere around 4 or 5 times the price paid to the farmer. The big exception is milk where in most countries there are laws on the retail price. Milk is about twice the farm price. This gives you an understanding of how much the distributors are shaving off.

If you are running a small shop and you have connections to non-traditional distributors, you can probably cut the price in half. Which is what the article is claiming. But they will never be able to scale it because they just don't have access to most of the food.

home_boi3• 10 years ago

It's not worth the time/effort of negotiating low volume deals. Whereas local, small businesses try to maximize return on income (ROI) on low volume, bigger businesses try to maximize overall profit.

latishsehgal• 10 years ago

I live in Dallas and have noticed significantly lower prices in the local Indian grocery stores as well. Would anybody here know if the same concept applies there as well.

throwaway_bob• 10 years ago

I lived on henry street for a while, and I can't say that I know anything about the back end of the distribution network, but I can say this article is missing a lot of things about the front end. The produce is cheaper than a standard western store, but the quality is much more varied. Moreover, the market (in the economic sense) seems really efficient. If you see something cheap in Manhattan chinatown in every store, it might be a really good deal, and just that thing is in season or a lot of it was just delivered. But if something is cheap in just one store, it is probably in bad shape. Stores are willing to sell produce that simply wouldn't be sold in ordinary western stores; and do things I think wouldn't be allowed elsewhere. For example, I have seen one place where if they have baskets of strawberries, and some of the strawberries are getting moldy, they will by hand separate out the non moldy ones, toss the moldy ones, and repackage the baskets. Moreover, the stores don't bother to keep clean at all, you can smell them from a block away. If you like food shopping, and you pay attention, its great, but if you want to just get your food, it is a lot of work. I think most americans do not want this kind of tradeoff.

seanmcdirmid4• 10 years ago

And this describes grocery shopping in China, not just Chinatown. I look forward to the day I can just go to a western supermarket and not have to worry about getting jipped on veggies...save so much work even if they cost a lot more money.

zaroth• 10 years ago

You won't have to worry, you can rest assured you are absolutely getting jipped!

JabavuAdams• 10 years ago

FYI "jipped" is actually spelled "gypped", which is a slur against Gypsies. I only raise this because I used to say it a lot, and was unaware of its etymology and connotations.

optforfon• 10 years ago

The fruit in China, at least in the big cities, is pristine. Apples are individually wrapped, everything is generally impeccable. You can get cheaper beat-up fruit in some food stalls at a cheaper price if you want.

mc32• 10 years ago

They definitely missed the point about ugly fruit and vegetables. From speaking to some of the vendors of cheaper fruits and veggies at farmer's markets, some of them (but not all) buy the second dibs (what the supermarkets and their other obligations don't buy) as well as more irregular fruit and produce.

Now, of course there is a growing ugly fruit and vegetable movement[1]. It's becoming more mainstream and even Whole Foods is buying in[2]. There is an effort in Boston to provide good affordable ugly fruit and vegetables to underserved communities.

[1]http://www.eatingwell.com/food_news_origins/love_ugly_fruits...

[2]http://www.eater.com/2016/3/8/11178270/whole-foods-ugly-prod...

DanBC• 10 years ago

Here are two such schemes, and a BBC radio programme (available as MP3 download):

http://www.frutafeia.pt/en

http://www.uglyfruits.eu/

http://www.bbc.co.uk/programmes/b05mpx0k

Scoundreller2• 10 years ago

some of them (but not all) buy the second dibs (what the supermarkets and their other obligations don't buy) as well as more irregular fruit and produce.

On top of that, the wholesalers know that these buyers will never pay a premium price, so they may get better deals on 1st tier items than mainstream supermarkets when the wholesaler really wants to sell.

NicoJuicy• 10 years ago

In france it's already since 2014 ( the ugly fruit bowl) http://www.dailymail.co.uk/femail/food/article-2693000/Forge...

amelius• 10 years ago

Can't restaurants just use the ugly food?

rinze• 10 years ago

For example, I have seen one place where if they have baskets of strawberries, and some of the strawberries are getting moldy, they will by hand separate out the non moldy ones, toss the moldy ones, and repackage the baskets.

The financial crisis, explained with strawberries.

patio11• 10 years ago

Well, to approximate a synthetic CDO squared, you'd first put all the moldy strawberries in a new basket, label it "Strawberries", send it to the rating agency where it would be rated AAA American strawberries, and then sell firms their choice of the least, middling, or most risky slices of the basket of "AAA American strawberries."

praptak• 10 years ago

That would be gathering the moldy ones instead of tossing them. And perhaps putting them into an opaque "high risk, great price" strawberry basket.

steveax3• 10 years ago

For example, I have seen one place where if they have baskets of strawberries, and some of the strawberries are getting moldy, they will by hand separate out the non moldy ones, toss the moldy ones, and repackage the baskets.

Having worked produce in both regular chain markets, and in "gourmet natural foods" markets, I can assure you that this is a common practice.

ams6110• 10 years ago

Makes sense to me. I get moldy strawberries so often at the local supermarket that I absolutely open the container and rumage around before I buy. If they bothered to remove the moldy ones for me, I'd appreciate it.

What's the alternative? Should they be throwing away the entire container?

home_boi3• 10 years ago

Is this common place for frozen berries or are they generally packaged before any mold can occur?

gnu8• 10 years ago

They all have mold on them. It's only the ones that have mold colonies large enough to be spotted by eye that are sorted out. Does that correspond to how much mold is dangerous? Who can say?

gbog• 10 years ago

Picking the good strawberries and repackaging not only should be allowed, it should be mandatory. How are we gone so far away from (agricultural) reality that such a simple and necessary task is /forbidden/ ?

hkmurakami• 10 years ago

This definitely happens outside of Chinatown as well. In fact there's a place at the border of Los Altos and Cupertino (right next to a Trader Joe's in fact) that deals with produce that is very close to expiration that was clearly sent over from other supermarkets. They also sell green that aren't "baby greens" -- i.e. they're grown a bit too mature and are now bitter and tougher than what the typical grocery store patron would like.

Obviously the nutritional value is the same, so the place makes for a great source for smoothie ingredients and frozen fruits to be consumed at a later date.

_0w8t• 10 years ago

In Denmark in supetmarkets 25% of the price goes to advertising. I suspect in US this is similar if not worse. So I guess that a part of the reason for cheap vegetables is that in Chinatown they do not need to advertise.

stevewillows• 10 years ago

Beyond the price, I've been doing almost all of my produce shopping at smaller markets for years as a way to avoid excess packaging.

I browsed a Whole Foods last weekend and nearly everything had some form of label wrapped around the stem, was stored in a plastic mesh sack, etc.

Whole Foods promotes environmental awareness as part of its package, but a full shop there would create a significant amount of waste / recycling compared to shopping at a local farm with a basket.

perseusprime11• 10 years ago

On the flip side, whenever I go to local farms, I find the prices to be high. I am not sure why this happens. For example, a pound of tomatoes just the other day at a local farm was $5.99 and my local Whole Foods was selling organic tomatoes for $2.99. I also can never seem to find organic produce from local farms.

fennecfoxen2• 10 years ago

At a guess, your local farm is engaging in price discrimination. If you care enough about "buy local" to drive out to the farm to buy the vegetables, chances are they can charge you more.

curiousGambler• 10 years ago

That and economies of scale forcing the small farm's prices higher.

I do wonder how often small farms hide price discrimination behind "economies of scale" though.

tacostakohashi2• 10 years ago

I can't help but think that this article, and other comments, gloss over some major, obvious factors:

1) More than anything else - high volumes, low margins, and intense competition. People travel to Chinatown from all over NYC to buy at those prices. When they do, they're often making a long trip (in many cases, over an hour), and so they buy in much higher quantities than they would at a local grocer or supermarket. Conversely, people who just get their groceries at a local shop aren't fools, they're saving considerable time by not having to go to Chinatown.

2) Low labor costs. Most retailers are, small-scale immigrant businesses. In many cases, it would be a family operation, where children feel obligated to help their parents, or the workers are immigrants that speak little or no English (beyond that required for selling produce), are possibly undocumented, possibly are paid cash-in-hand without being taxed, and for one reason or don't have many employment opportunities outside of Chinatown. Compared with an outfit like D'Agostino, Gristedes (both of which use unionized staff), or Whole Foods, they're going to be paying a lot less for their staff in Chinatown.

greeneggs2• 10 years ago

But what you are missing is that it is not primarily about the costs. The prices elsewhere are higher because those grocers want the prices to be high. They make more money from it, and there is insufficient competition to force them to lower prices.

Where I am, for example, the base price at Safeway/Vons/Pavilions for any of the cheaper produce items is $1.99/pound. It goes up from $1.99: $2.99, $3.99, etc. Nothing has a base price of $x.49/pound. This pricing scheme has little to do with costs!

(Bananas are the only exception for $x.99---depending on the location, they can be $0.69 or $0.79/pound---and there are a few items below the general $1.99 base price: like carrots or jicama, available for $0.99/pound.)

Furthermore, they do mark items down at a times. So a fruit that is normally $1.99/pound will drop to $0.99/pound for 3-7 days. This is partly because of seasonality, but mostly for marketing. It is only one item at a time, for example. Under no circumstances will they mark multiple items down to $0.99/pound simultaneously, even if the items are both in season (which is easy to judge by looking at produce markets, farmers' markets, and more sensible grocery stores). It can be frustrating to know that it is high season for peaches, but the powers-that-be have determined that this week they're marking grapes down from $3.99 to $1.99/pound, so peaches can't be discounted.

kuschku7• 10 years ago

Do you have an ALDI or Trader Joes near you? Can you compare price and quality of their products?

I’d be interested.

tacostakohashi2• 10 years ago

I don't think I missed that at all - I said it's mainly about high volumes, low margins, and intense competition (for example, I'd imagine the rents are actually pretty high).

I'm sure the vendors in Chinatown want the prices to be high too. It's just that, unlike Safeway/Vons/Pavilions, they have dozens of competitors within walking distance.

koalaman• 10 years ago

they're also a community that is notorious for tax avoidance.

mistermann• 10 years ago

https://en.wikipedia.org/wiki/Uniform_Invoice_lottery

If I lived in a region with a generous social safety net and high immigration I'd be a bit worried.

dforrestwilson• 10 years ago

Yeah the tax thing is notable too. You see this quite a bit in NYC. Cash-only stores and restaurants can more easily misreport their income. Less paper trail to follow....

rbcgerard• 10 years ago

The other piece you are not paying for is the store, both the square footage in perhaps a more expensive location, code compliance, air conditioning/refrigeration etc.

[Edit] also, farm conditions, and supplier audit trail probably do not stack up well in realtive terms vs. mainstream grocery store

smegel• 10 years ago

Does everyone here subscribe to the WSJ or something?

Swannie• 10 years ago

Nope. Click on the Web link to access via Google.

The Google referrer gives you free access to that article.

eternalban• 10 years ago

This is not unique to CT. For example, you could -- last checked a few years ago -- get quite good and inexpensive fruits and vegetables around Lefferts Garden (below SE end of the Park) in Brooklyn. My personal speculation back then was that it was either a case of jacked up prices in Manhattan or a form of subsidy for that demographic.

fma• 10 years ago

This is not just in NYC...but also Atlanta. I only buy from western grocery stories if I absolutely need something. Maybe some western vegetables like lettuce I will get from Publix. But fruits, vegetables and meat are cheaper at the Korean, Chinese and Mexican grocery stores. I'm not talking about the small mom and pop stores, but giant chains.

Not only are they cheaper but they have more variety. If you go to an American grocery store...the fresh fruits and vegetable and meat selection is utterly pathetic. The price can be double. And people wonder why Americans don't eat enough fruits and vegetables

In Atlanta there are major streets like Buford highway, Pleasant Hill that have several large grocery stores (size of Walmart) within a few blocks of each other ,and no western grocery stores nearby because they can't compete. You may find an Aldi, or Walmart...but not Publix or Kroger. The sale prices at American grocery stores don't even touch the regular daily prices of the ethnic markets.

You walk into an American grocery store and you have a whole aisle dedicated to cereal, a whole aisle for potato chips, a whole aisle of soda...the fresh fruits, vegetables and meat are barely 10% of the square footage. While the ethnic grocery stories it's more like 25%...and those stores are larger. Meats of any cut, filets of fish, whole fish, fish head, live fish, live crab and lobster, pigs feet, ox tail...fish of many types...American stores, you'll have your salmon filet and shrimp.

It's true the quality can be hit or miss. I never frequent the Korean stores (hmart, assi mart) anymore unless I know I will eat it within two days. I go there once every few months. I frequent the Chinese and Mexican ones. Too many bad experiences at the Korean ones. When I shop at the Korean ones I open up their meats in the store and smell it...there's been a few times when I get home and open the package, the meat is rotten.

This is not to say I don't have bad experiences at the American markets. I have...milk that expires the next day (I wasn't attentive to the date, just picked the one that was furthest out...which happened to be tomrrow), the good ol rotten strawberry in the middle...but it happens less.

American grocery stores don't offer the same price or quantity because Americans don't demand it. They would rather want their aisle of frozen dinners and breakfast cereals.

hiou• 10 years ago

And if you figure in the 10-25% of business they do laundering money you find where the rest of the margins are made up.

How is something this naive in WSJ?

tim333• 10 years ago

Rather than contracting with large, industrial farms, it turns out, Chinatown’s wholesalers often buy from small, family farms

I miss that in the UK and the US. In Italy for example a lot of the stuff comes from local farms and tastes way better.

Why Fruits and Veggies Are So Cheap in Chinatown

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