Sunday, January 10, 2016

The paradox of "healthy food"

The "Lunch Talk" video I posted earlier today defies a popular misconception that healthy food is expensive. The healthy food confusion is a version of a common human perception that expensive things or experiences are inherently better than inexpensive ones. For example, in experiments with differently labeled wines people report "expensive" as being of a higher quality. In experiments with painkillers, people report that large, colorful, "expensive" pills work better than plain pills. The trade-off between quality and price seems to be fundamental to our understanding of how things work in the world.

Remarkably, there's nothing fundamental neither in nature, nor technology that determines good stuff should cost more than bad stuff. Moreover, major business breakthroughs happen when inventors deliver high quality products and services at dramatically lower prices. For example, Henry Ford created a technology revolution when he introduced Ford-T and the assembly line to manufacture the most reliable and most affordable automobile in history. Before him, people believed that reliable automobiles must be expensive. Similarly, Amazon introduced a business model where a company can inexpensively provide a great shopping experience with lots of choices, knowledgeable explanations, quality ratings and fast convenient delivery. Before Amazon, retailers believed that high quality shopper experience was only possible in high-end stores managed by highly compensated staff. They were proven wrong with dire consequences for their shareholders.

Today, businesses like Whole Foods and Sprouts are built on the assumption that healthy food must be expensive. Leanne Brown's book shows that this trade-off can be broken. As a result, we might see a revolution in many health-related areas, from retail food outlets to obesity prevention apps to government welfare services.

tags: health, trade-off, quality, innovation

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