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Food Producers Cater To New Consumer Tastes

PRESIDENT Bush may not eat it, but broccoli posted the largest consumption gain of any food in the United States - 231 percent - from 1978 to 1988, according to the US Department of Agriculture. Low-calorie sweeteners, rice, and yogurt also gained by close to 100 percent or more, but consumption of whole milk, beef, and coffee dropped.Eaters are looking not only for more nutritional value, but also for convenience and variety, and these demands are changing the way the industry is organized, says Alan Barkema, an economist at the Federal Reserve Bank of Kansas City, Mo. "The US food market is changing from a mass market to many niche, or specialty, markets," Mr. Barkema and colleagues wrote recently in the bank's economic review. Food companies are turning increasingly from an "open production" system of generic commodity markets to contractual agreements and vertical integration - or mergers - with farmers. The goal is to gain more control over the quality, quantity, and price of food products such as beef, grains, and oil seeds. Barkema calls this the "broilerization" of US agriculture, referring to chickens, which have long been produced by vertically integrated companies or under production contracts.

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