The items in our 1862 Grocer 33 are familiar. Macaroni, lard, sherry, cheese, Garibaldi biscuits. OK, the peas are frozen, the honey comes in a squeezy bottle, the Guinness is in cans and the cheese is pre-sliced. And of the brands, only Guinness, Cadbury, Croft and Billingtons existed at the time.
But the biggest change is the price. In real terms, this week’s Grocer 33 basket (average cost £93.95) is far cheaper than it would have been in 1862. At £1,254.17, it would have cost 13 times more.
The chief reason for the dramatic fall in prices is the rise in wages. These comparisons use the average earnings index compiled by Measuring Worth, in order to show how affordable the items would have been.
“In 150 years, living standards have probably gone up by a factor of 10,” says Stephen Broadberry, a professor at the London School of Economics. “Wages have risen much faster than prices.”
Using the retail price index to measure monetary inflation - which strips out the nation’s rising wealth, the basket would still have cost a hefty £153, however. It’s taken giant leaps in technology, transport and international trade to bring prices down this much.
The most dramatic price difference is the pineapple. An item that, in the depths of winter, now costs an average of £1.72, would have set a shopper back £149 in 1862. That’s a 8,553% reduction in today’s terms. “The only pineapples grown outside the tropics were in the greenhouses of the wealthiest lords and ladies,” explains Tim Lloyd, associate professor of economics at the University of Nottingham. “It would have taken months by sail boat and the cost partly reflects the transport costs. Today you can almost fly it in overnight. Improvements in fertilisers and agriculture have increased yield too.”
The building of Dole’s first pineapple cannery in 1901 set the fruit on its way from status symbol to the topping of a gammon steak at Wetherspoons - and “pineapple chunks” entered the dictionary after the term was first used in The Grocer in 1902.
The Gin Craze
While pineapples, melons and grapes - which cost the equivalent of £262.11 per kilo - were expensive because of difficulties in supply, gin was expensive because of tax.
The early 18th century is famed for the Gin Craze, when Londoners necked more than a pint a week because of the low cost. But the government, concerned by binge drinking and public disorder, brought in a series of tax hikes and eventually a requirement for gin-selling establishments to hold an expensive licence.
By 1862 C Kelly, a wine and spirits merchant in Clifton, was advertising a quart of gin for 8 shillings - equivalent to £234.40 for 700ml. The inflated price makes David Cameron’s reported consideration of minimum alcohol pricing look like tinkering on the side.
Tea was also heavily taxed - with duty at 1s 5d per pound, it accounted for nearly half the 3s retail price advertised by A. Monteath, a general grocer, tea and spirit merchant in Dunfermline.
But developments in production, trade and transport also played a part. Industrial espionage enabled the British to break the Chinese monopoly on tea by planting bushes down the coast of India in the 1830s and 40s, and later in Sri Lanka and Africa.
“From China being the sole source, three more centres were producing just as much,” says Manan Bhansali, operations director of The East India Company.
In the 1860s, it also took a minimum of four to five months to transport tea from China to Britain. “Companies like East India ran the risk of losing one ship in every three, so the costs to the consumer weren’t just tea costs,” he adds.
It was not until the construction of the Suez canal and the move to steam ships at the turn of the 19th century, that tea was delivered to England regularly. Piracy, a huge issue in the South China Sea, was also less problematic with the new tea growers and trade routes. “By that time Britain controlled the whole route,” adds Bhansali.
One of the more static items is ham, which costs roughly half what it cost 150 years ago. The fundamentals of preserving pig meat in salt have changed little, bar the lowering of salt content thanks to the invention of cold storage.
In 1862, British butter and cheese had been sourced no further than Belgium. But in 1881 the New Zealand government offered a £500 prize for the first 25 tonnes of butter and 50 tonnes of cheese to be exported and sold. The prize was claimed the next year when the Dunedin arrived in London following a 98-day trip. The butter it contained was sold for 11½ pence a pound - the equivalent of £11.27 for 250g - a third less than butter had cost 20 years before.
With the technology in place for chilled shipping, the market was ready for butter to be produced cheaply and in great quantities. In 1886, Harry Reynolds turned out the first 100lbs of factory-made New Zealand butter. He chose an anchor as the identifying symbol, inspired by a tattoo on an engineer’s arm, The brand is now worth £98.5m for Arla Foods [Nielsen 52w/e 1 October 2011].
The Dunedin also carried 4,331 mutton carcases, 598 lamb carcases and 22 pig carcases. In London, the mutton was sold at market for 7½ pence per pound. “The triumph over physical difficulties was almost incredible,” The Times wrote.
The shipment of frozen lamb quickly grew. In 1884, a single cargo of 25,000 frozen carcases arrived from New Zealand. “It shows what enormous proportions the frozen meat trade is likely to attain,” the St James’s Gazette commented.
Improvements in fertilisers have helped make land used for food production more effective. “In the 1860s, the only fertilisers would have been manure from farmyard animals,” says Lloyd. “Today they’re all oil based.”
The most pronounced jump in crop production was the so-called Green Revolution in the 1960s and 70s, when research agencies invested heavily to develop high yielding crop varieties, primarily rice. Asian rice output trebled over a decade. But the new varieties require a lot of water and fertiliser - making their price susceptible to drought and oil costs.
The present and the future
With commodity prices soaring since June 2007, food prices have risen 12% in real terms in the past four years, Defra noted in a report last year. But “food prices followed a steady decline between 1975 and 2007, with a real-terms fall of 32%. There is no evidence yet of a return to this long-term downward trend,” it added.
And Lloyd points out that the commodities spike of recent times is dwarfed by the mid-1970s spike, when bad weather shrunk world food production by 33 million tonnes and world cereal reserves reached a 22-year low.
“In the 1970s international trade was far less important so it only took a bad harvest in one or two areas in the world to send prices rocketing. Because the world market is much bigger now, that has a dampening effect on the spike.
“For most of the last 20-30 years, food prices have been at about the same price in real terms as they were in the great depression.”
Compared with The Grocer’s launch year, food is even cheaper. Up from the much-slated £2, the average chicken, at £4.57, is still affordable to most. Or a lot more affordable than £37.20.