This is going to sound a bit random (and it surely is) but I had a weird dream last night in which I was having a debate / argument in a supermarket and my sole point was that flour has a much bigger market share than chocolate, and everyone else in the dream was laughing at me as it was “clearly obvious” that chocolate was a much bigger seller globally.
Leaving aside what this dream may say about my state of mind ( ), is there any way to quantify the overall value in the global market of a particular commodity AND the products it is used and sold in? With my choice of (milled) flour, we’d have the initial commodity cost itself, then all the individual sales of breads, tortillas, cakes and all other available flour based products. With chocolate, we’d have the cocoa beans, then all the individual bars of chocolate and (I realise there may be some overlap with certain cakes etc… but if both products are used then it’s a wash for that particular item).
I doubt that actual bottom line figures would be available, but would something approximating a comparison be doable, such as saying that the largest market would be 1: oil; 2: coffee; 3: tobacco (for example) so that a ratio value of all flour based products vs all chocolate based products could be found and a ‘winner’ crowned?
I’ve been googling it a bit but can’t seem to find anything particularly illuminating, and possibly won’t be able to, but thought I’d ask anyhow, see if anyone can provide an insight.
Since commodities like you speak of are typically not stored for long periods of time, I would say a rough estimate would be the amount of the commodity produced in a year. So if the world produced 5 million metric buttloads of flour, then we could probably say that approximately 5 million mBl of flour was used in all products. Similarly if there was only 472 thousand courics of chocolate produced, clearly less chocolate was used than flour.
What would be the point of comparing the overall value chain of flour to chocolate? They don’t compete with each other, they’re not substitutable products.
You wouldn’t necessarily define the flour market as base flour and all downstream products (that would be the value chain), as you would be double counting tons of flour as it is consumed in multiple downstream value added products.
Typically a market is the amount of demand for a particular product. The downstream products would be sources of demand for the base commodity, but they don’t multiply the market. Those downstream products have their own market.
[QUOTE=Saint Cad]
Since commodities like you speak of are typically not stored for long periods of time, I would say a rough estimate would be the amount of the commodity produced in a year.
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I imagine the complication would be the ‘added value’ of items, such as premium chocolate products, that use the same basic ingredients but charge a lot more for them, raising the overall value of that market (for example).
I’ve heard lots of chat in various fields mentioning ‘this is a multi-buillon dollar industry’ when discussing any number of different things, so there must* be a general overview or ballpark figures somewhere for comparing market values.
I really can’t suggest that there is a point to it, other than it would help answer a query raised in my dream…
Ultimately, I believe any of these market estimates is wild guessing at best unless it is a very specific product in a specific field with generally only one purpose. Then the answer is: ‘total sales of all companies making that product in a year’.
In writing proposals, particularly for technology research grants, the sponsors always want to hear a story about how the thing being developed has a large market opportunity, both for their applications and many others. This is where the bullshit flies hot and heavy.
I always scour LexisNexis in the hopes some person somewhere has already provided an estimate I can quote in a study, trade journal, newspaper article, etc. Often, research organizations like Frost & Sullivan or the Gartner Group will produce expensive industry reports they sell, and as part of the press, they will state huge numbers: “The market for X technology is $353 billion worldwide, and will reach $1.35 trillion by 2020 - read all about it in our X technology industry report for only $950!”. Then you can do derivative math. If the market for milled flour is reported as being $1 billion in the U.S. by Frost & Sullivan (hypothetically), and another report says that milled flour is used in 10 different markets of which baking makes up 35%, now I’m down to $350 million. Now another story says that cupcakes are 5% of the baking market, so I’m down to $17.5 million. I generally try to subdivide the market until I get non-roundish sounding numbers like that because it sounds like you know what you’re talking about.
When I truly have no clue how big something is, I take a wild ass guess. My own general rule of thumb is:
Try to figure out who the main producer of product X is and one or two competitors
Try to calculate what their annual sales are for that product (assuming it is only a portion of what they make) - This is often pretty easy to do looking at annual reports for public companies, which provide those details.
Add those values together
Add a bullshit multiplier based on how much of the market you think these companies control. This will generally be somewhere between 2-5. This accounts for all the private companies and overseas companies you’ve never heard of making product X and their sales, which are almost always more combined than even the biggest producer. As such if they are huge in the market, multiple by 2. If they are still relatively small and it is an emerging market with lots of people making it, 5 may be the better multiplier.
There was an interesting article about the true global cost of cybercrime:
They essentially pull it out of their ass.
As far as energy commodities, the IEA has a lot of stats on production and consumption and you can estimate the annual value pretty readily: http://iea.org/stats/index.asp
I also think that comparing the global value of chocolate vs. that of, say, soy (fatties vs. health nuts) would be interesting if not wholly useful.
Oh… I think I’m understanding the question better now. It’s just flour vs. chocolate.
To answer this particular chocolate vs flour example, the approach I’d take would be to borrow statistics from one of the larger grocery chains or food wholesalers. Generate one list of products that contain flour and one list of products that contain chocolate. Now you can calculate the difference in sales. Assuming you used a large enough chain, you should be able to extrapolate this number to the general market. (i.e. if your chain is 10% of the grocery biz, then you can multiply by 10 to estimate the whole market).
The challenge, of course, is getting access to the product lists and sales figures. That data exists, but it’s not going to be free.
), is there any way to quantify the overall value in the global market of a particular commodity AND the products it is used and sold in? With my choice of (milled) flour, we’d have the initial commodity cost itself, then all the individual sales of breads, tortillas, cakes and all other available flour based products. With chocolate, we’d have the cocoa beans, then all the individual bars of chocolate and (I realise there may be some overlap with certain cakes etc… but if both products are used then it’s a wash for that particular item).