Sunday, October 17, 2010

What We Eat and How We Feel

I remember when the Internet first started, people were speculating that things like trade shows would go away completely.  Who needs to be in one place physically when you could do it virtually?  I do think that the role of trade shows is different these days, but I learn things there that I would never have known otherwise.  Here’s a smattering of what I learned at the Natural Products Expo this week.

Teraswhey is going to be featured in an upcoming book written by a psychiatrist who is using nutrition as part of how he treats his mentally ill patients.  When you think about it, that he anticipates that his book will be controversial in the psychiatric community says a lot about the dysfunction of our medical system.  Imagine someone who is bipolar who doesn’t work on regulating his or her blood sugar, for example.  He likes our whey specifically because it has the clean functionality he is looking for.  He uses it in a protein diet he recommends as part of a treatment regimen for treating depression.

An epidemiologist working with an HIV positive patient population told me that the side effects of the drugs and secondary illnesses experienced by his patients cause their absorption of protein to be severely limited.  It may take a patient consuming 120g of protein a day for their bodies to absorb half of that.  Since they are also likely to have stomach problems, the only way they can get enough protein is by supplementing with highly bio-available whey protein.  He likes teraswhey for his population because we have a range of flavors and our products aren’t chalky and taste great.

This is the year of the gluten-free cracker.  Lots of new brands and products were there.  I think it’s interesting that so many people are finding that they can’t digest gluten these days.  I also think it is interesting that people ask me whether my whey is gluten free.  I suppose its possible that people might add wheat gluten to a whey protein powder, but this is really more an issue that people have no idea where whey comes from.  I gather the average consumer doesn’t know that hamburger doesn’t come from anything other than a supermarket either so maybe this isn’t so odd.

All of this makes it clear to me that even the scientific world is starting to embrace the notion that what we eat really does impact how we feel.  That is a huge step forward.

Monday, October 4, 2010

The Future of Food isn't What it Seems

Another wrinkle in the global intrigue of potash.  It turns out that a single marketing organization called Canpotex markets 100% of the potash produced in Saskatchewan.  It’s made up of 3 of the largest producers of potash  - the Potash corp., Mosaic (i.e. Cargill), and Agrium.  That makes Canpotex the OPEC of Potash.  When food prices rose in 2007 and 2008, prompting mass protests in the developing world and a recurrence of talk of a Malthusian dilemma, Canpotex resisted production increases and allowed the world price of potash to go from $200 per ton to $1000/ton.  In 2009, farmers across the world cut back on their use of potash to save money, depleting their soil in the process.  The price of Potash fell to $350/ton.  This year it is rising again as farmers cannot continue to mine their soil indefinitely.

Free markets can be volatile, but they clear quickly and don’t produce huge boom and bust cycles.  However, where market consolidation creates pricing power in the hands of a few players, it magnifies volatility.  This has happened in all our global food commodity markets.   Worse in the case of Potash, market consolidation and power led to the mining of one of humanity’s most valuable long term assets: soil. 

In most cartels, there is an incentive for a member of a cartel like Canpotex to cheat.  When prices get high enough, one of the players can sell for a little less and lure customers away from the other members.  Or, one can increase production and sell more than their quota.  It turns out that one of the companies bidding to buy the Potash Corp, BHP, has already indicated its intention to leave the cartel. China’s Sinochem Corp. is also working on acquiring sufficient ownership to block a change in ownership if it means it will go to BHP Billiton, an Anglo-Australian mining company. This has prompted the Canadian government to indicate that it could block the transaction, saying that the cartel has provided beneficial royalties and jobs for Canadians. 

So here we have a situation where government, the one stakeholder that is usually viewed as intervening in cases of extraordinary market power, is actively supporting it.  All of which means that it may actually be the case that farmers and people around the world would be better off if The Potash Group was purchased by an Australian Company or a Chinese company instead of being a public Canadian company.

How many times these days are we faced with choices that are nothing more than the lesser of two evils?  This is what happens when we view the world within the box of how it currently exists.  The only way we can extract ourselves from this prisoner’s dilemma approach to economic activity in general and our food system in particular is innovation, disruptive innovation that creates meaningful and viable alternatives to a status quo that’s locked up by a few enormously powerful stakeholders.

Seaweed.  The solution to the potash dilemma is actually not more potash, or changing who owns the companies or how it is marketed, it’s seaweed.