
Why Fruits and Veggies Are So Cheap in Chinatown - yincrash
http://www.wsj.com/articles/why-fruits-and-veggies-are-so-crazy-cheap-in-chinatown-1466762400
======
throwaway_bob
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.

~~~
seanmcdirmid
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.

~~~
JabavuAdams
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.

~~~
khedoros
And "Gypsies", describing the Romani people, is sometimes considered
derogatory because of its negative connotations, and because it is reflective
of the mistaken belief that they were itinerant Egyptians.

~~~
MBCook
Interesting. I'd never heard the Egyptian part before.

------
jimmywanger
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.

~~~
driverdan
> 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
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.

~~~
akiselev
The two stores deal with very different tagret markets and have very different
economics. Whole Foods shoppers are willing to spend way more on produce,
which is usually very low margin, so they don't need to make up the profit on
their other items. Compare, for example Vons and Pavilions, which are owned by
the same company. In my town we have a Vons literally across the street from
Pavilions and while their prices for alcohol are the same, stuff like produce,
coffee, and cereal can have a huge price differences even from the same
vendor. Likewise, Trader Joes has the cheapest and best eggs, milk, and other
staples in my general area, despite being overall more expensive.

When it comes to produce or meat, I have never seen anything at Whole Foods
that would be more expensive at a low end grocery.

~~~
sukilot
Trade Joe's entire reason for existence is that most of their stuff, both
packages and produce. is cheaper than other area stores. There are a private
label store.

~~~
aj7
This is a common myth. I've concluded Trader Joe's exists to give a veneer of
guilt-free-ness to buying junk food. Avoid the cheese and meat at all costs.

~~~
laxatives
Trader Joe's is great for prepared meals, but they are absolutely the worst
grocer with regard to meat and produce. Often substantially worse than
discount grocers like Krogers or Smart and Final.

~~~
home_boi
in terms of quality or pricing?

~~~
laxatives
Mostly quality, but also pricing. IMO the meat is average price and the
produce is maybe a little cheaper, but the quality of both is generally very
poor, especially the meat. I've had meat that was a few days away from going
rancid from several different Trader Joe's locations.

------
tacostakohashi
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.

~~~
greeneggs
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.

~~~
tacostakohashi
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.

------
Alex3917
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.

~~~
sotojuan
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.

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

~~~
jpatokal
No, it doesn't? A Big Mac in China is ~40% cheaper than in the US.

[http://www.economist.com/content/big-mac-
index](http://www.economist.com/content/big-mac-index)

------
syphilis2
The USDA shares detailed data on food pricing.

[http://www.ers.usda.gov/topics/food-markets-prices/food-
pric...](http://www.ers.usda.gov/topics/food-markets-prices/food-
prices,-expenditures-costs.aspx)

Price Spreads from Farm to Consumer: [http://www.ers.usda.gov/data-
products/price-spreads-from-far...](http://www.ers.usda.gov/data-
products/price-spreads-from-farm-to-consumer/interactive-chart-price-spreads-
and-food-markets.aspx)

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.

~~~
mikekchar
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...](http://www.ers.usda.gov/data-products/price-spreads-from-farm-to-
consumer/interactive-chart-price-spreads-and-food-markets.aspx)

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.

------
JumpCrisscross
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?

~~~
venomsnake
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
> couple of bacteria won't kill you

That's naive.

Enjoy your chicken sashimi.

~~~
twblalock
Chicken and pork sashimi are not difficult to find in Japan.

~~~
jpatokal
Chicken, yes. Pork, no longer:

[http://www.japantimes.co.jp/news/2015/05/27/national/health-...](http://www.japantimes.co.jp/news/2015/05/27/national/health-
ministry-to-ban-restaurants-from-serving-raw-pork-2/)

------
whack
_" 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.

~~~
PakG1
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.

~~~
billc8
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](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.

~~~
akiselev
They appear to operate at scale but they dont, at least not when compared to
the major national chains. El Super has 40 stores in California and a few
hundred more in Latin America whereas Safeway and Kroger have about 2500
stores each, in a market that is more picky about the appearance of produce
and other factors not relevant to most other markets.

El Super, Superior, Superking, etc also source their products differently and
there can be huge variation between stores depending on the neighborhood
socioeconomics.l

------
stevewillows
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.

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

[http://luckypeach.com/pro-choys/](http://luckypeach.com/pro-choys/)

------
jakobegger
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.

------
fpoling
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.

------
hackuser
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
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.

------
fma
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.

------
smegel
Does everyone here subscribe to the WSJ or something?

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

The Google referrer gives you free access to that article.

------
perseusprime11
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.

~~~
fennecfoxen
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
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.

------
AznHisoka
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.

~~~
paradite
> 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.

------
jedberg
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.

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

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

------
latishsehgal
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.

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

------
eternalban
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.

------
tim333
>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.

------
billc8
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.

------
jlukanta
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"

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

~~~
jsprogrammer
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).

~~~
thomasfoster96
If loading a small text page is a hassle... I'm not sure what millennium your
connection is in.

~~~
jsprogrammer
That "small text page" weighs in around 2.1MB.

~~~
thomasfoster96
I thought you were referring to the HN page, which is what the comment seems
to suggest to me.

~~~
jsprogrammer
HN is probably small, but often suffers from bad latency.

~~~
thomasfoster96
Depends on where you are - HN uses cloudflare, so it can be incredibly quick
(even on 3G on a mobile) if you hit a cached page.

------
percept
Why? (paywall)

~~~
pietro
Click the "web" link below the title.

~~~
percept
Thanks!

------
hiou
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?

------
kelukelugames
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.

~~~
tnuc
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.

~~~
kuschku
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.

