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Spiralling Costs and Organics

Milk Churn The soaring price of food was often in the news in 2007, and we are not immune. We have been looking at our accounts, and it is impossible to miss the fact that many of our main ingredients, including milk, cream, and eggs, have risen as much as 30% within the last calender year.

While this is good news for farmers, who have seen generally declining prices up until recently, it is not good news for consumers. It is inevitable that we (like many other food companies) will be forced into a price increase to counter our rapidly shrinking margins.

What’s interesting is that the price disparity between organics and conventional foods, although still substantial, has shrunken somewhat. With a litre of local, regular milk now an amazing 1.24 in our local supermarket, we have discussed whether we should switch to organic milk for our coffee drinks. Organic milk costs more, of course, and we would have to pass that on.

Would such a move be a good idea? We all know that organics is a good thing, but how much extra would you be willing to pay for a cappuccino or latte made with organic milk?

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For an organic latte or cappuccino, I would pay an extra:
Total Votes: 107 Started: 24 January, 2008 Back to Vote Screen

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12 Responses to “Spiralling Costs and Organics”

  1. January 24th, 2008 at 1:48 pm

    An Fear Bolg says:

    I voted that I wouldn’t pay extra for organic milk. Having said that, my favourite milk is Glenisk, which is organic. In fact, I first saw this for sale in the Grianán in Dingle about 10 years ago, and am delighted to see Glenisk mature as a business, with a great range of products (including low fat milk). Most standard milk is pretty bland and tasteless, whereas Glenisk is a nice drink on its own.

    However, I believe this is due to the fact that it is a smaller company than the major milk producers. In some ways, I think “organic” is a con – genuinely organic products are better, in my view, as they are produced in smaller quantities, often in an artisan manner, by people who genuinely care about the product. If the same producers made the same products on the same scale, but using the pesticides etc. that are not allowed for organics, I don’t think we would know the difference.

    So I am organic sceptic – I buy many organic products but I don’t think their quality has anything to do with the fact that they are organic.

    I wouldn’t like to pay extra because, to be honest, I think your products are expensive enough as it is, particularly if an increase is already on the way. Your shops and products are excellent, but I fear you could reach a tipping point on price if you incorporate such extra costs.

  2. January 24th, 2008 at 5:12 pm

    Deborah says:

    I hate coffee, so bad question for me, but I wanted to ask if you use organic milk for your ice-cream? The taste difference between organic and regular milk always amazes me. If I plan on making anything involving a custard, including ice-cream, I always splurge and buy the organic milk or cream(Glenisk as mentioned above!) I really do think it’s a superior taste and would think it would be a better investment in your ice-cream than someone’s coffee! Obviously given the quantities involved it would mean more of a price hike, but I for one would much prefer to pay extra for organic ice-cream than a drop of milk in my tea! Not sure if you use it already, just thought I’d raise the point… doubt there’s much that could make your ice-creams better!

    The other thought though, is could it be an option instead of mandatory? A la Starbucks… regular, skim, organic, soy, etc with the price differentiating for each? Or would that be too much logistical hassle with pricing, training and turnover?

    In terms of coffee shops, my pet peeves here in Ireland are not having sweetener available (I’m sure many diabetics could relate too) and rarely being able to get low-fat or skim milk (which unlike sweetener is not easily carried in one’s purse!) Oh yes, those and jugs of milk sitting out on a table all day. *SHUDDER* I would much rather you add some money to the price of my beverage and give me the choice of a bit of sweetener and low-fat milk than fretting about organic! ;-)

  3. January 24th, 2008 at 9:15 pm

    tricia says:

    I’m all for organic.

    For me, when I go in for a coffee at a shop, I realize I’m going to be paying significantly more than I would at home. So, with that mindset I hardly ever pay attention to the price. Although I would notice if it was dollars higher than normal.

    I’m in Oregon, USA and I don’t think food prices have risen for us like they have for you. So take my comments with that knowledge, and the knowledge that we, in the Pacific NW, love our coffee. For me personally, when I buy coffee, I go to the place that makes the best cup. And I pay what they ask. I wouldn’t go to another store for cheaper, if they didn’t make it as good. I’m paying a huge margin for that cup (as opposed to making it at home) so I want it to be good. And I think organic makes it gooder (I love that non-word).

  4. January 25th, 2008 at 7:13 am

    Tracey says:

    I agree with Deborah! The taste difference between organic and non organic milk is what converted my husband and I over to completely organic milk products! We pay more for organic milk but it tastes better….sooo…sort of feel like we’re getting more bang for our buck. That said, it’s just the two of us here with luckily (haha) no milk guzzling kids so we can afford the extra luxury of organic milk.
    We actually buy raw milk now for non cooking purposes because the taste difference between it and just regular pasteurized milk was even more astounding.
    We usually don’t mind paying a little more for a treat if it’s a really special treat and organic. Of course not being in Ireland and no plans as of yet to get over there I don’t suppose my opinion weighs anything. :) Will be interesting to hear what y’all decide.
    Once again I have to say how much I enjoy your blog, the inside scoop as it were on the ice cream biz. Thanks!

  5. January 25th, 2008 at 10:13 am

    mj says:

    I’m not impressed with the “organic” thing. My reasoning is scientific in that for something to be declared organic it has to have this quality x. And for something to be not organic it has to have quality y. When these qualities are just variations on chemical z in parts per million then I find the whole thing to be somewhat of a marketing exercise and not really a health exercise.

    The very fact that certification carries an annual fee and depends on your land being free from artificial fertilizers for N years (where N depends on the organisation offering the certification) makes it a mockery. Are these organic farms geographically isolated from roads, other farms, towns, the rain, the air, animals and other plants?

    Organic produce: a load of old tosh.

    But….yes, I think you should probably go organic. There’s enough of an organic fad for you to improve your margins and attack a new niche.

    The pictures of your ice cream make me want to visit Dingle (which is about as far away as you can get from here without leaving the island!). I am a confessed ice cream addict.

  6. January 25th, 2008 at 11:59 am

    Kieran says:

    Wow, guys! Thanks for your detailed thoughts. Much appreciated!

    An Fear: I agree with you that organic doesn’t necessarily mean it tastes better, but it often does, and I am talking about Glenisk milk in our coffees. And we’re also concerned about that “tipping point.” It’s a tough call though – if we’re really trying to be the best, how far do we go without sending too many people away with price shock?

    Deborah: We’re using milk from the endangered Kerry cow for the ice cream, delivered by a local farmer. It’s the best milk we have ever tasted. He’s starting the process of going organic, and I’d much rather support local farmers than bring organic ingredients in from far away. However, although we can pasteurise the Kerry milk for the ice cream, it wouldn’t be practical for the coffees. Finally, we always have the option of skim and non sugar sweetener in our shops. In the high season we have soy milk as well.

    Tricia: Yes! Better taste and better feel-good factor.

    Tracey: We’re all about treating yourself and luxury. That’s what we do! As for the raw milk, that’s why we use the milk from the Kerry cow.

    mj: Those are real issues. Still, for us, it all comes down to taste (and, as I said, feel-good factor)

  7. January 25th, 2008 at 1:14 pm

    lorraine@italianfoodies says:

    We were just talking about this, it’s shocking how much the price of ingredients has increased. Pizza cheese and oo flour has nearly doubled in price since last year so likewise we have to have a price increase too which I know is never well recieved but unfortunately it has to happen. Regarding organic milk I don’t think we could change over as I don’t think the majority would be prepared to pay the extra, I would but I think we are in the minority tbh!!! Interesting to see though, let us know what you decide and how it works out!!!

  8. January 25th, 2008 at 2:00 pm

    Kieran says:

    Doubled! My God. I guess we got off easy!

  9. January 25th, 2008 at 5:32 pm

    Sorina says:

    You have a very nice blog, good post…keep up the good job

  10. January 25th, 2008 at 11:36 pm

    An Fear Bolg says:

    I would say that your products are of such high quality that the addition of an “organic” tag won’t have much effect either way.

    Plus, supporting the Kerry cow and local producers is better and more important than supporting organic.

  11. January 25th, 2008 at 11:45 pm

    ConorB says:

    My dad who runs a dairy farm in West Cork is delighted with the price increase. Dairy farmers have had a tough few years with really low prices.

    Regarding organic milk – I voted no. Most milk in Ireland is produced off grass. That is why Irish Butter has that lovely golden colour. While it might not be certified organic, in my book it is fairly close to pure.

  12. January 24th, 2009 at 4:03 pm

    claire says:

    I am a long time organic convert, and after the many years of eating organic at home, and out whenever possible, I feel that I can honestly say that in the majority of cases organic food tastes better. And with the recent oil crisis etc, conventional food has got much more expensive, while organic prices have remained mainly the same. Often there is little difference in cost.

    Local food is important, but if that local food is sprayed with pesticides and grown on chemically fertilised soils, then that local farmer is putting chemicals into your waterways and your environment.

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Kieran Murphy is a director of Murphys Ice Cream living in Dingle, Co. Kerry, Ireland.

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Murphys Ice Cream

Murphys Ice Cream has shops in Dingle, Killarney and Dublin 2 (Wicklow Street).