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DAVID KESTENBAUM, HOST:
So it's, like, 9:30 at night. I'm at the supermarket for this story but also, honestly, because I need milk. It's amazing how much milk two little kids drink.
Can you tell me where the milk is?
UNIDENTIFIED WOMAN: Last aisle at the end of the back of the store.
KESTENBAUM: Last aisle at the end of the back of the store?
UNIDENTIFIED WOMAN: Mm-hm.
KESTENBAUM: It's in the very back corner of the store. Milk - it's a funny thing - one of the most popular items, and they put it as far as humanly possible from the entrance. There's a kind of story about why this is. Maybe you've heard it. My mom told it to me when I was a kid. You know why milk is in the back of the store? - she said. So you have to walk through the store to get it, so you pass all this other stuff. It's to get you to buy more things.
I believed my mom. She's my mom. Over the years, I told this story to other people. You know why milk is in the back of the store? - so you have to walk through the store. Only recently have I wondered, is it actually true? Is that why milk is in the back? Can you really have a business model intentionally built around inconveniencing your customers?
It is a long walk. Here it is - one gallon whole milk.
Hello, and welcome to PLANET MONEY. I'm David Kestenbaum. Today on the show. Turns out there are two theories - big theories - to answer this very little question - why the milk is in the back of the store, two theories that reflect very different world views. We try to discover which is right.
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KESTENBAUM: We set up today's show as a kind of friendly debate between two people. I'm going to call them milk theorists. One is Michael Pollan, food writer, author of "The Omnivore's Dilemma" and many other books about food, most recently "Cooked: A Natural History Of Transformation." Michael gets his milk at a small grocery store in Berkeley, Calif.
MICHAEL POLLAN: I get a local milk called Saint Benoit, which is not homogenized but pasteurized and is whole.
KESTENBAUM: How far is it from the cash registers?
POLLAN: Forty feet, maybe - 50 feet.
KESTENBAUM: So you got to walk.
POLLAN: I mean, it's not a huge store. This is not - oh, it's - yeah, it's a hike.
KESTENBAUM: Also on the line, I called up a second milk theorist Russ Roberts, economist at the Hoover Institution and host of the "EconTalk" podcast. Russ shops at Costco and, for the record, is not a milk-drinker.
RUSS ROBERTS: I'm pretty lactose intolerant, so I don't drink much milk.
POLLAN: So you're disqualified from this conversation as being lactose intolerant (laughter).
ROBERTS: Well, as an academic, I think I'm more than qualified...
POLLAN: (Laughter) I see.
ROBERTS: ...But by the fact that I don't, you know, know much about it.
KESTENBAUM: First up, Michael Pollan arguing for the idea that milk is in the back to force us to walk through the store. He says stores do this kind of thing all the time. They're always trying to manipulate us into buying more. Grocery stores, he says, think very carefully about where they put everything, what you see first when you walk in. They put items with higher profit margins at eye level.
POLLAN: I've come to understand the landscape of a grocery store as a brilliantly designed landscape to get us to buy as much food and as much expensive food as possible. So my general impression is that the milk is in the back.
And it's - but - and it's not just that the milk is in the back. It's also usually very far from the bread. Both of them are very common items that everybody needs, and so it makes you cover a lot of ground if you want them.
KESTENBAUM: Michael, is there one thing that when you walk by in the store you have a hard time not buying?
POLLAN: I buy a lot of things I didn't come there to buy, and that's really typical. In one study, something like only a third of the items bought in the store were on the grocery list or planned for. So you'll see some cool new cracker, and you'll buy it. And you might not notice that it's six dollars for a little box.
KESTENBAUM: So that's Michael's view, the first theory. Russ has a very different view. The stores, he says, are not in the business of trying to manipulate us. They are trying to give us the best shopping experience possible. They have to because of this basic economic principle - competition.
The supermarket business is very competitive. Stores have to please us, he says, or we'll go to another store. Russ thinks the reason the milk is in the back is practical. It's easier to keep the milk cold if it's there. The delivery trucks come into the back of the store. Milk goes right into this refrigerated room that's often right behind the cooler where you grab your milk. No one has to lug the milk through the store to some cooler in the front.
ROBERTS: Milk spoils very easily. I was told that for every degree of temperature it rises, it loses a day of being available and being sellable. So the argument I'm making, which is kind of a radical argument, is that you and I want the milk in the back, even though it's a little less convenient. If it were in the front, it would be more expensive, and we're not willing to pay that extra price. So I think they're actually doing what we want, not what they want.
KESTENBAUM: Russ says it's probably cheaper to have the milk in the back. That keeps the cost down for the store and for you, the customer. Russ also points out that if hiding stuff people want in the back of your store is really a good business strategy, why don't other stores do it? Why don't bookstores put the best-sellers in the back? They don't.
ROBERTS: They're in the front. They don't make you go through the Elizabethan poetry, not that we wouldn't be better people for it - if we had to go through that section. But they tend to put it in the front to make it easy.
KESTENBAUM: All right, so Michael, what do you think of his argument that it's there to serve the customer?
POLLAN: Well, I think Russ is assuming a greater degree of rationality in the American consumer than the designers of supermarkets assume. I mean, they're trying to work on us at subliminal levels, even, like, the music, you know? The number of beats per minute or per second in the music played in supermarkets is designed to slow us down and get us not to rush through and enter that that interesting dreamlike state that comes over people in supermarkets.
They've studied our blink rate in supermarkets, and we blink less in the supermarket as we're gradually slowed and lulled into that state of, gee, maybe I should try this new cereal.
ROBERTS: You think there's something in the air that they're blowing in...
ROBERTS: ...To make us drowsy? Are you that worried?
POLLAN: (Laughter) I have no evidence of that.
KESTENBAUM: So you've got two very different world views. When Russ goes to the supermarket, he thinks competition is a wonderful thing. Look at how it forces the store to keep costs down. Look how well laid out the store is. I'm in charge here.
When Michael Pollan goes through a supermarket, he's suspicious. Why are there certain brands of beers and not others? Why does the granola always seem to be so hard to find? To him, the owners are in charge. And they're making decisions that aren't always in his best interest.
Russ thinks grocery stores profit by helping customers. Michael thinks they also profit by manipulating customers. Michael and Russ went back and forth, and then Michael Pollan said this.
POLLAN: Well, you could, instead of having two people, you know, speculating about it and bringing their theories of the world to bear on this question that we don't - it's clear we don't have a lot of empirical data on - you could ask somebody who might actually have the, you know - have the answer.
KESTENBAUM: I could be a reporter and actually go find the answer.
ROBERTS: Oh, that's so tedious.
POLLAN: (Laughter) So I'm just saying it's another way we could go at this.
KESTENBAUM: I decided to try to track down the answer. I got our intern here to look up the top 10 grocery chains. I called and sent emails, made more calls. I found industry consultants who advised on store layout. And I got six people willing to talk on tape, people in a position to know the answer, people who know about milk. I tried not to bias them - just asked, where's the milk in your store, and why? When I was done, I got Michael Pollan and Russ Roberts on the phone.
KESTENBAUM: I played them excerpts from each of the interviews so they could react and we could keep score. First up - BJ's Wholesale Club, a major competitor to Costco and Sam's Club, over 200 stores from Maine to Florida. I talked to Rob Olsen, dairy buyer.
Do you go through a lot of milk? Is that right?
ROB OLSEN: Yes, regular gallon milk - we sell millions of gallons a year.
KESTENBAUM: And if I walk into one of your stores, where is the milk?
OLSEN: The milk is in the dairy cooler, which is located in the back of all of our clubs.
KESTENBAUM: Is it right that milk is one of the most popular items at the store?
KESTENBAUM: Why - so why is it in the back?
OLSEN: Traditionally, I think - and this is just my own opinion - I believe we want members or customers to get to the back of the club and see the wide array of items that we carry.
KESTENBAUM: So the idea is it gets them into the store. It gets them to look at the other stuff and say, oh, maybe I need that, too.
OLSEN: Correct. We call it building the basket in the business.
KESTENBAUM: (Laughter) What do you guys think?
POLLAN: I love the phrase building the basket.
KESTENBAUM: (Laughter) Russ?
ROBERTS: Well, he clearly talked to the same guy Michael talked to (laughter). Michael said he'd always heard, and this guy heard the same thing from the same guy.
POLLAN: (Laughter) So you're saying it was second hand?
ROBERTS: Exactly. It's folklore.
POLLAN: Right, hearsay.
KESTENBAUM: I was tempted to give this one to Michael. The guy, after all, had a phrase for the idea - building the basket. But it turns out he had another phrase also - the cold chain. There's another reason we put milk in the back, he said, to preserve the cold chain.
The idea is that once the milk comes out of a cow, gets pasteurized and put in that gallon jug, you never want to take the milk out of a refrigerated environment. You want to keep it cold every step of the way.
OLSEN: Very, very important in perishables. It's brought into a cold room, and it's kept in this cold room. It goes from the cold room to the cold truck to the cold distribution center back to on a cold truck to the club or store. And it's constant. It's called the cold chain.
KESTENBAUM: After the call, the PR person for BJ's assured me this was the primary reason. I don't know. I gave Russ and Michael each a point. I also talked to Kroger - 2,400 stores in 34 states. The PR person there also mentioned both. So again, I gave Russ and Michael each a point. The next answer, though, was not ambiguous. Kevin Lang works for Wegmans. He's a store manager in King of Prussia, Pa.
KEVIN LANG: The reason for us, why we have milk in the back is because that's where milk comes in. So therefore, we don't have to worry about ever breaking the cold chain. I think it's a consumer misconception that, you know, retailers put milk in the back of a store to make you walk through the entire store. It's not true.
KESTENBAUM: So he really - I think I got to go point Russ on that one.
POLLAN: I do, too.
ROBERTS: And it's a fabulous grocery store. But on - to give Michael his due, it's kind of his incentive not to suggest that it's some sinister policy to get people to buy stuff.
ROBERTS: So we do...
ROBERTS: ...Have to keep that in mind.
POLLAN: Yeah, nobody wants - none of these retailers want to admit they're manipulating their consumers.
ROBERTS: Yeah. I'm amazed Michael got two votes already.
KESTENBAUM: That was a fair point, which is why I also called up consultants to ask them what the inside story was. Burt Flickinger has advised lots of supermarkets. He's managing director of a place called Strategic Resource Group.
BURT FLICKINGER: I tell the retailers to put the milk in the front of the store for the convenience of the customers, and the retailers typically ignore my advice and put the milk in the back of the store where they've been putting it for 70 to 80 years.
KESTENBAUM: Why do they say they want to put it in back?
FLICKINGER: The supermarkets say they want to put it in back because it's easier for delivery.
KESTENBAUM: It's easier to keep it cold.
FLICKINGER: It's easier for stocking.
KESTENBAUM: So they say it's for convenience sake - cheaper, less labor?
FLICKINGER: All of the above.
KESTENBAUM: They don't say it's so that people have to walk through our store and see other things they might want to buy.
FLICKINGER: And then they say, we want the people to walk through the stores and buy everything we sell.
POLLAN: (Laughter) Oh, that's another split vote there.
ROBERTS: Yeah, it's lovely.
KESTENBAUM: Point for each. I should mention that both Kroger and Wegmans, in a lot of their stores, do have small coolers in the front as Burt recommends so people in a hurry can just grab them. At this moment, Michael Pollan was behind in the count, but he was just down by one point. And the next person was someone he had selected - Brian Wansink, Cornell professor, expert in all the ways we get tricked when it comes to food.
But Wansink sided with Russ. He told me it's in the back just so they can keep the milk cold. Store managers, he says, are not playing Sigmund Freud. They're more worried about whether the cashiers are stealing from the register. And when it comes to milk, it's in the back because it's just much easier to have it there.
BRIAN WANSINK: You know, a lot of people really want to believe there's this big conspiracy that's going on at the grocery stores. But what they need to realize first, that what matter most to the bottom line (laughter) is saving the monies and the pennies to begin with. I think if we, as consumers, even designed our own grocery store, eventually, after the second or third iteration, it'd be in the back.
KESTENBAUM: (Laughter) If we designed them ourselves, we'd put them in the back eventually.
KESTENBAUM: All right.
ROBERTS: Michael, what were you thinking having him call that guy?
POLLAN: You know, there's this saying in journalism. You have to report against yourself.
ROBERTS: But there's a saying in the law that you got to know what your witnesses are going to say before you put them on a stand.
KESTENBAUM: I did my best, Michael.
POLLAN: It's not about winning, Russ. It's about getting to the truth.
ROBERTS: It puts you in a very small club, sir.
KESTENBAUM: Ah, the truth. I think we have this idea in economics - in a lot of things, really - that when there is a question, there is an answer. But sometimes, there just isn't. Stores themselves may not even have a clear idea of why they're doing what they're doing here. It's not like there's some binder at every supermarket's headquarters titled Optimal Milk Placement Analysis. I think the real question here, unfortunately, is a hypothetical. I put it to our last expert Jim Hertel, supermarket consultant, managing partner at a place called Willard Bishop.
If it were easy to put the milk up front, do you think stores would do it?
JIM HERTEL: Well, there's a dairy - there's somebody who's running the dairy department and a stock...
KESTENBAUM: No, no. I...
HERTEL: And to put all of it up front...
KESTENBAUM: I got you. I got you. But, I mean, just imagine there's a world where it is easy to put the milk up front. And they can just put it wherever they want. Do you think stores would do it?
HERTEL: No, I don't think they would.
KESTENBAUM: You don't think they would.
HERTEL: I - no. I think they like having people go to the back of the store.
HERTEL: For all the - for all the operational reasons why it's there, I think that the secondary or the side benefit of having people walk through the store is very comforting for them.
KESTENBAUM: (Laughter) Michael, I'm giving that one to you.
POLLAN: All right.
ROBERTS: Fair enough - I give that one to Michael.
KESTENBAUM: All right. So - I don't know, guys. It's like Russ has one, two, three, four, five. And Michael has one, two, three, four. Should we call this one a draw?
POLLAN: Yeah, sure.
ROBERTS: I'm happy to do that. Sure.
KESTENBAUM: Let me ask the obvious question. Did this change either of your thinking?
POLLAN: Well I think when I'm asked about this in the future, I will be more fulsome in my answer and make sure I pay sufficient attention to the idea of the cold chain.
ROBERTS: It reminds me of the importance of culture and history in some business decisions. But I think - which I think plays a role. But I do think a competitive force is pretty powerful. And I'm willing to concede that I may sometimes overestimate its power. In certain industries, it doesn't work so well, but I don't think it's this one.
KESTENBAUM: I think if someone asks you, is the milk in the back of the store because it's easier, or is it because it makes you walk through the store? - a safe answer is just to say yes.
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KESTENBAUM: Today's show was produced by Jess Jiang, a special thanks to our excellent intern Jason de Leon (ph). You can send us email - email@example.com. I'm David Kestenbaum. Thanks for listening.
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