Food at Home and Key Ways to Save Money on Groceries


Food at Home and Key Ways to Save Money on Groceries

Food at Home and Key Ways to Save Money on Groceries


Food—including Food at Home, Food Away from Home, as well as Alcohol & Tobacco

Food, alcohol, and tobacco together constitute more than 17% of the average American family expenses.  Food is the third largest expense after Housing and Transportation.  In this post we will focus on grocery (otherwise known as "Food at Home") expenditures and discuss some key ways to save money on it.


Table of Contents:

  • Grocery (aka Food at Home) Expenditures
  • Meats, poultry, fish, and eggs
  • Ways to save money on meats and poultry
  • Fruits and vegetables


Table 1:  American Family 2019 Annual Average Food, Alcohol & Tobacco Expenditure Breakdown

#

Food, Alcohol, and Tobacco Subcategories

U.S. Average ($)

% of TOTAL

1

Food at Home

4,305

  50.8%

2

Food Away from Home

3,326

39.2

3

Alcohol

538

  6.3

4

Tobacco

308

  3.6

 

TOTAL

8,477

  100.0%


Similar to the Housing category to better understand how to reduce the Food expense we need to break it down further into sub-categories and identify key drivers of each expenditure.  After understanding such key drivers of each expense we can determine which of the Top 14 Ways and Methods of Saving Money would work best to reduce family grocery expenses and help save money.


Grocery (aka Food at Home) Expenditures

Below, in Table 2, is the list of the average American family grocery (aka "Food at Home") expenses broken down by high level category.


Table 2:  U.S. Household Annual Average Food at Home Expenditure Breakdown

#

Food at Home Subcategories

U.S. Average ($)

% of TOTAL

1

Meats, poultry, fish, and eggs

  914

  21.2%

2

Fruits and vegetables

  823

19.1

3

Cereals and bakery products

  548

12.7

4

Dairy products

  429

10.3

5

Other food at home

1,591

 37.0

 

TOTAL

4,305

  100.0%


Meats, Poultry, Fish, and Eggs

Meats, poultry, fish, and eggs altogether account for more than 20% (or about $900) of the total annual Food at Home expenditures for an average American family.

  • Meats:  Meats (beef, pork, mutton etc.) are a commodity, that is very difficult to "brand" and thus the main cost drivers of meat are:
    • the price of whole animals (cows, pigs, sheep, etc.) at farms and at wholesale markets, 
    • part of the animal purchased (for example, loin chops versus spareribs for pork),
    • degree and type of processing and packaging, and
    • type and brand of retailer from which you are buying meats (for example, regularly priced meats at Walmart and Aldi will always be less expensive on a per pound basis than at Whole Foods, Publix, or Safeway).
  • Poultry:  Similar to meats, poultry is a commodity, and most attempts at "branding" fresh and frozen poultry by large corporations in the U.S. have failed.  Thus the main cost drivers of fresh and frozen poultry are:
    • the price of whole birds (chickens, ducks, and turkeys) at farms and wholesale markets,
    • part of the animal purchased (chicken breast versus drumsticks, etc.),
    • degree and type of processing and packaging, and
    • type and brand of retailer from which you are buying meats (similar to the example above, regularly priced poultry at Walmart and Aldi will always be less expensive on a per pound basis than at Publix or Safeway).
  • Fish:  Due to significant variety and highly varying difficulty of catching different types of fish, the prices per pound vary quite a bit. So, the type of fish you buy is one of the primary drivers of cost. And similar to meat and poultry, the degree and type of processing and packaging, and the type and brand of retailers where you shop, have a significant influence on the price you end up paying.
  • Eggs:  Eggs, like poultry, is a commodity and the main cost drivers are
    • size or grade of eggs,
    • whether or not the eggs you buy are claimed to be one of the multiple "organic" type eggs (see Figure 1 below), and of course
    • whether you do your grocery shopping at a premium supermarket, medium-priced one, of a discounter.


Figure 1:  A Guide to Egg Carton Labels


Ways to Save Money on Meats, Poultry, Fish, and Eggs

In this post we discuss the Top 14 Ways & Methods on How to Save Money.  Thirteen of these 14 savings methods can be applied to saving money on meats and poultry—all except for the Method #9 ("New vs. Used").  Let's briefly go through some of them in relation to saving money on meat and poultry.

Method #1 Price Comparison:  This method is pretty self-explanatorywhen buying meat, poultry, or any other groceries for that matter, compare prices between:

  • different retailersALDI, Costco, and Walmart are likely to be a lot less expensive than Whole Foods or Publix, and
  • different butcher cuts (see Figure 1 below)


Figure 2:  American Butchers' Cuts for Beef, Pork, and Poultry

Different butcher cuts have significantly differing prices per pound caused by different parts' consumption value and popularity, their relative weight in the overall weight of a live animal, as well as the ratio of meat versus bone in each butcher cut.

Method #2 Price Discount & Coupons:  As this article discusses in detail, listing Top 19 options for finding and taking advantage of Discounts and Coupons.  Many, if not most of these 19 options can be used to save money on meat, poultry, and other groceries.

Method #3 Cherry-picking:  In retail there are two key approaches to shopping:

  1. One-stop-shopping, and
  2. Cherry-picking

One-stop shopping is offered by large supercenters and malls where a you can buy pretty much anything you want or need without having to go somewhere else.  Walmart, Sam's Club, Costco, increasingly so Target, and some other retailers aim to offer the one-stop shopping convenience to people.  Convenience does not mean you'd save money though, as some things at some of these retailers could have the best price in the market, while many other items could be priced a lot higher than elsewhere.

That's when cherry-picking comes in.  With some legwork and time and effort you can figure out where certain products "usually" or just "this week" are priced lower and shop around to get the best prices on everything you need.  No doubt this is a lot less convenient and requires more time shopping around, going from one store to another (or from one website to another)but at the end of the day you'll save money.

Here is an example of the price of pork chops at Walmart, Sam's Club, Safeway, Kroger, Albertsons, and Sprouts Farmers Market.


Table 3:  Example of Meat Price Comparison across Various Retailers

Retailer

Pork Chop Product

Price ($/Lb)*

% Difference

Sam's Club

Member’s Mark Pork Bone-in Assorted Chops, Tray

$ 1.97

BEST PRICE!

Kroger

Pork Bone-In Assorted Chops (About 8 Chops per Pack)

$2.99

+$ 1.02 (34%)

Albertsons

Pork Loin Chops Assorted Value Pack - 4.00 Lbs

$ 3.29

+$ 1.32 (40%)

Walmart

Pork Assorted Loin Chops Thin Bone-In, 2.0 - 3.8 lb

$ 3.73

+$ 1.76 (47%)

Safeway

Pork Loin Chops Assorted Value Pack - 4.00 Lbs

$ 3.99

+$ 2.02 (51%)

Sprouts

Bone-In Center Cut Pork Chops No Antibiotics Ever

$ 5.99

+$ 4.02 (67%)

*NOTE:  all prices as of June 16, 2021.

Cherry-picking assumes you'd be willing to drive to a few stores to get the best price on pork chops here, on fruit over there, and maybe canned beans in a third place, if that's where the best prices are.  As you can see from the above example, price differences on pretty much exactly the same product could be as high as 3 times.

Method #4 Retail vs. Wholesale:  As many people may know there are two types of sellers retailers and wholesalers.  Retailers are more than happy to sell you 1 can, 1 candy bar, and 1 pound of meat.  Wholesalers usually sell in bulk, requiring a minimum order quantity.  For example, instead of selling you 1 candy bar, they may require the smallest purchase to be a box or even a case of candy bars.  In exchange, their prices per item or per pound are lower than prices that retailers charge.

In this article we discuss in more detail a number of options that you might consider to get a lower "wholesale" (or "bulk") price when buying meats, poultry, or any other groceries instead of paying "retail" price:

  1. Direct buys from Wholesalers, Producers, or Farmers
  2. Wholesale Clubs
  3. Bulk Buying Clubs

In all these cases meat prices will be lower than what you'd pay at Publix, Winn-Dixie, or even Walmart, but you might need some extra freezer room to store the extra volume or, in the case of Bulk Buying Clubs, share the volume with friends and neighbors.

Method #5 Cash Back:  The best way to save money using cash back on meat is to use a credit card that offers the best cash back on this type of product.

Method #6 Trade Brand for Private Label:  There were multiple attempts to brand fresh meat and poultry in the United States.  But most of them failedconsumers don't see a big difference between a Tyson chicken versus Walmart's Great Value chicken.  In fresh poultry the chicken is the chicken is the chicken.  So, if you are like most other consumers, buying Retailers' brands (such as Member's Mark at Sam's Club, Kirkland at Costco, Great Value at Walmart, etc.) rather than Purdue or Tyson should save you some money.

Method #8 Substitution:  Substitution of one product, which is unaffordable or simply quite expensive for another, which satisfies the same need and offers similar attributes and benefits is a pretty effective way to save money.  For example switching from beef chuck roast (retailing for $7-10 per pound) to pork chops (retailing for $2-5 per pound) will still satisfy the need for the "center of plate" protein, but at a significantly lower price.

Method #10 DIY vs. DIFM:  First, let's recall that DIY means Do-It-Yourself and DIFM means Do-It-For-Me.  In meats and poultry some examples of DIY vs. DIFM could be:

  • Buying whole animal and chopping it up into specific "butcher cuts" yourself (DIY) vs. buying those cuts from retailers who already have done it for you and charge extra for the service (DIFM)
  • Mincing meat or poultry yourself (DIY) vs. buying minced and, potentially, packaged minced meat from a retailer (DIFM)
  • Something of an extreme would be growing your own chickens, hogs, or cows (DIY) versus buying meat from farmers, wholesalers, or retailers (DIFM).


Fruits and Vegetables

Fruits:  Did you know that the average price difference between the least expensive and the most expensive fruit in America is more than 20 times?  According to the USDA data last dated as of 2016 the U.S. average price of the least expensive fruit—watermelonwas $0.32 per pound whereas the average price of the most expensive fruit—raspberrywas $6.88 per pound, or almost 22 times more expensive than watermelon.  The gross price provided by the USDA is the average of all retailers: discounters, like ALDI and Walmart, regular priced retailers, like Winn-Dixie and Giant, as well as premium ones such as Whole Foods, Sprouts, or the Fresh Market.

Everyone likes fruit.  Some people like kiwis, some navel oranges, while others like different types of berries (blueberries, strawberries, raspberries, etc.).  However, if you are trying to make sure your family gets enough fruit (and all nutritional elements that come with it) without breaking the bank, when planning your next grocery shopping trip you might want to keep in mind significant differences in:

  1. price per pound for various fruits,
  2. the amount of waste that different fruits have (such as uneatable peels, core, etc.), and 
  3. the resulting net eatable fruit price per pound, which ultimately is what your family will consume and enjoy.

Let's take a look at the table below to compare the Gross Retail Prices as well as the Net Prices (after accounting for the preparation yield) of different fruits, something that will hopefully help you make better choices the next time you are shopping for groceries.


Table 4:  U.S. Average Fruit Retail Prices, Preparation Yields, and Net Prices as of 2016

Fruit

Gross $/lb

Prep Yield*

Net $/lb

Watermelon

$      0.32

52%

$      0.62

Cantaloupe

$      0.52

51%

$      1.02

Bananas

$      0.55

64%

$      0.86

Pineapple

$      0.65

51%

$      1.27

Honeydew melon

$      0.83

46%

$      1.80

Grapefruit

$      1.01

49%

$      2.06

Oranges

$      1.10

68%

$      1.62

Papaya

$      1.29

62%

$      2.08

Mangoes

$      1.32

71%

$      1.86

Tangerines

$      1.48

74%

$      2.00

Pears

$      1.52

90%

$      1.69

Apples

$      1.62

90%

$      1.80

Peaches

$      1.68

96%

$      1.75

Nectarines

$      1.88

91%

$      2.07

Plums

$      1.99

94%

$      2.12

Kiwi

$      2.18

76%

$      2.87

Grapes

$      2.24

96%

$      2.33

Strawberries

$      2.51

94%

$      2.67

Apricots

$      3.09

93%

$      3.32

Cherries

$      3.21

92%

$      3.49

Blueberries

$      4.39

95%

$      4.62

Cranberries

$      4.69

100%

$      4.69

Dates

$      5.51

100%

$      5.51

Blackberries

$      5.66

96%

$      5.90

Figs

$      6.13

96%

$      6.39

Raspberries

$      6.88

96%

$      7.17

*NOTE:  Preparation/cooking Yield factor is the percentage of fruit that ultimately is eatable once cooked or prepared for consumption (calculated as gross fruit weight less non-eatable parts, such as peels, nuts, as well as an increase/ decrease in weight as a result of cooking).


For those of you visual people, here is the same data shown as a chart.


Figure 3:  Fruits Gross and Net Retail Price per Pound in the United States as of 2016


Vegetables:  Unlike fruits, the average price disparity between the least expensive and the most expensive vegetable in America is "only" 8 times! According to the USDA data last updated in 2016 the U.S. average price of the least expensive vegetablepotatoeswas $0.60 per pound whereas the average price of the most expensive vegetableoliveswas $5.09 per pound, or more than 8 times more expensive than potatoes.  The gross price provided by the USDA is the average of all retailers: discounters, like ALDI and Walmart, regular priced ones, like Winn-Dixie and Giant, as well as premium supermarkets such as Whole Foods, Sprouts, or the Fresh Market.

Vegetables are not only a staple of the Americans' food consumption, they are also an important source of nutrition that is important to ensure a family's health and well-being.  Given the significant price differences between Gross (and especially Net) Prices, use the above data (and also see Table 5 below) to maximize the amount of vegetables your family gets for every $1 spent while still maintaining sufficient variety and diversity of consumption.

Let's take a look at the table below to compare the Gross Retail Prices as well as the Net Prices (after accounting for the preparation yield) of different vegetables, something that will hopefully help you make more informed choices during the next grocery shopping trip.


Table 5:  U.S. Average Vegetable Retail Prices, Preparation Yields, and Net Prices as of 2016

Vegetable

Gross $/lb

Prep Yield*

Net $/lb

Potatoes

$      0.60

81%

$      0.74

Cabbage

$      0.62

78%

$      0.80

Carrots

$      0.77

89%

$      0.87

Pinto beans

$      0.80

65%

$      1.23

Kidney beans

$      0.86

65%

$      1.32

Black-eye peas

$      0.93

65%

$      1.43

Beets

$      0.94

65%

$      1.45

Black beans

$      0.95

65%

$      1.46

Navy beans

$      0.95

65%

$      1.46

Green peas

$      0.99

65%

$      1.52

Onions

$      1.05

90%

$      1.17

Sweet potatoes

$      1.05

81%

$      1.29

Celery

$      1.09

73%

$      1.49

Iceberg lettuce

$      1.09

95%

$      1.15

Acorn squash

$      1.12

46%

$      2.44

Cucumbers

$      1.26

97%

$      1.30

Butternut squash

$      1.29

71%

$      1.81

Tomatoes

$      1.29

91%

$      1.42

Lima beans

$      1.33

65%

$      2.05

Pumpkin

$      1.38

100%

$      1.38

Cauliflower

$      1.42

89%

$      1.59

Radish

$      1.46

90%

$      1.62

Romaine lettuce

$      1.48

94%

$      1.57

Green peppers

$      1.49

82%

$      1.82

Lentils

$      1.56

272%

$      0.57

Summer squash

$      1.64

77%

$      2.13

Broccoli

$      1.92

78%

$      2.46

Green beans

$      2.13

85%

$      2.51

Avocados

$      2.23

74%

$      3.01

Red peppers

$      2.32

82%

$      2.83

Artichoke

$      2.36

38%

$      6.29

Turnip greens

$      2.51

75%

$      3.35

Kale

$      2.88

105%

$      2.74

Brussels sprouts

$      2.96

106%

$      2.79

Asparagus

$      3.08

49%

$      6.23

Sweet corn

$      3.26

54%

$      6.04

Mushrooms

$      3.55

97%

$      3.66

Okra

$      3.82

77%

$      4.97

Spinach

$      3.83

100%

$      3.83

Olives

$      5.09

100%

$      5.09

*NOTE:  Preparation/cooking Yield factor is the percentage of vegetable that ultimately is eatable once cooked or prepared for consumption (calculated as gross vegetable weight less non-eatable parts, such as peels, seeds, as well as an increase/ decrease in weight as a result of cooking).

...and now the same data in the visual form.


Figure 4:  Vegetable Gross and Net Retail Price per Pound in the United States as of 2016




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