Readers of a New York newspaper in March 1910 were upset, but hardly surprised, to find an article concerning the vast difference in the cost of food between New York and London. Eggs cost them about twice the price, at 25 cents for 6 eggs in New York versus the same cost for 12 eggs in London. Apples cost 10 cents a pound in New York, but only 4 to 6 cents a pound at an English market. More maddening was that even American-raised beef was less expensive to London shoppers!
Government officials, economists, and even shoppers studied the cost of living issue, and each drew their own conclusions. Perhaps the supply of gold was driving costs up, they theorized, or as more people moved to cities, labor and land got more expensive on existing farms.
Wells Fargo, a national express shipping and financial services company at the time, was conducting research of its own. It found that the cost increases were a reflection of a distribution problem. Many independent farmers had limited experience or interest in marketing and logistics, and instead depended on middlemen and wholesalers. The result was expensive inefficiencies that led to 40 percent of American produce going to waste.
To provide a solution, Wells Fargo started a Food Products Department in August 1913. Wells Fargo had shipped food for customers since the 1850s, using its network of express offices to coordinate shipping by train, ship, and stagecoach.
The new Food Products Department differed from past express service by focusing on sales services as well as shipping. Company agents acted as marketers for local producers, advertising their produce and gathering orders from express customers. The result was a better sales price for farmers, reduced farm-to-table prices for city customers, and increased business for Wells Fargo at a time when it faced new competition after the U.S. Postal Service introduced parcel post service.
The story of an apple producer in New York demonstrates the usefulness of Wells Fargo’s new service. When asked by a Wells Fargo manager how he planned on getting his crop to market at the end of the season, the apple producer responded, “About the worst way possible … I am going to haul a hundred barrels of greenings (apples) into town in a few days and sell them at 25 cents a bushel to keep them from rotting on my hands.” He was convinced to try Wells Fargo’s Food Products Department instead. His apples were listed in a company bulletin to agents in other cities who found interested customers. They helped him sell his whole crop. At the end of the season, he made $1 a bushel, about 75 percent more than he made before. Despite a 35 cents shipping charge, his customers actually paid almost $2 less per bushel than the local market price.
‘A revolution in how Americans ate’
Wells Fargo’s Food Products Department did more than save consumers money and earn greater profits for farmers. It was part of a revolution in how Americans ate. Nationwide expansion of railroads and refrigerated railcars created regional hubs in food production. Midwestern farms became the dairy capital of the U.S, and the Southwest began to specialize in growing fruits and vegetables.
For the first time in history, people in Minnesota could eat fresh lettuce in winter, and people in Arizona could buy butter produced by cows thousands of miles away. Company records reflect the popularity of the business and its impact on getting foods to new places: 80,000 gift boxes of California produce for holiday shoppers on the East Coast; 32,000 pounds of butter shipped from Lima, Ohio, to New York City; 3,500 train cars filed with West Virginia peaches; and 6,000 boxes of cantaloupes moved from Illinois farms in a single day. The list goes on, but the numbers obscure the personal experiences of individuals who gained a new way to buy the foods they loved.
One woman living in New Jersey in 1915 began to grow homesick for salmon from the Pacific coast. She talked to her local Wells Fargo agent who helped connect her with the right people. Within a week, she had her fresh salmon and wrote a thank you note declaring, “I could scarcely believe it could come so quickly.” She got a taste of home, and a new business sending salmon directly to consumers helped fill demand for the regional delicacy for another 3,000 customers.