Dwarkesh Patel: observation

Transcript context

…There are people who are trying. Niman Ranch, for instance, has done this with independent pork farmers. There was a big effort to do this by Cooks Venture with pasture-raised chicken. Unfortunately, they just went out of business. The reason they went out of business is because there is such huge mislabeling across the industry that it's very hard to separate out what's actually better. For instance, much factory-farmed chicken in the US is sold with the label "all-natural." We know from surveys that people think all-natural means the chickens were outside. It actually means nothing. But if you're trying to sell your product as pasture-raised next to a product that says all-natural, and people think it means the same thing and your product costs $2 more, you're not going to get very far. So long as we have this rampant mislabeling, it's very hard for the other players to get ahead. There's normal bananas and there's organic bananas. People are willing to pay quite a bit more for organic bananas. I feel like “pasture-raised” should be in a similar embedding space as organic. Organic is a huge industry even though it has dubious medical benefits, et cetera. Then the problem is not that if there were accurate labeling, you'd think there might be consumer demand to make this a viable, much larger industry. It's just that it's very hard for consumers to identify which is which. Yes. You actually see that in the egg sector in the US. Within eggs, there is clearer labeling. Cage-free actually means something, pasture-raised actually means something. You can't just put the all-natural label on. What we see is that the pasture-raised egg sector is growing rapidly. Even then, it is still handicapped by the fact that supermarkets use this as a price differentiation tool. They know that wealthier consumers prefer pasture-based eggs and are also less price-sensitive, so they mark them up heavily. The price you see is way inflated beyond the actual cost difference. Yet still, that is a rapidly growing sector.…

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