The Hidden Economics of Food - Part 7: The Manipulation Market

The Invention of Baby Carrots

In 1986, California carrot farmer Mike Yurosek had a problem. Carrots are irregular. Grocers wanted perfect specimens. Ugly carrots—twisted, broken, misshapen—were thrown away or sold as animal feed.

Yurosek’s solution: cut the ugly carrots into small uniform pieces and sell them as “baby carrots.”

They weren’t baby carrots. They were regular carrots, reshaped. But the name stuck, and an industry was born.

Today, baby carrots are a $1 billion market. Americans eat twice as many carrots as they did before baby carrots existed.

This seems like a success story—innovation meeting consumer demand. But here’s the thing: the demand didn’t exist until the product was created.

The Myth of Given Preferences

Economic theory assumes consumers have preferences. These preferences are “given”—they exist before the consumer enters the market. The market’s job is to satisfy these pre-existing wants.

This is the foundation of consumer sovereignty: markets serve consumers because consumers know what they want, and competition forces producers to satisfy those wants.

But baby carrots reveal a different story:

• Before 1986, no one wanted baby carrots (they didn’t exist)

• After 1986, millions of people wanted baby carrots

• The product created its own demand

This isn’t unusual. It’s how markets actually work.

Preference Manufacturing

How did baby carrots become wanted?

Product Design

Yurosek didn’t just cut carrots. He designed an experience:

• Convenience: No peeling, washing, or cutting

• Snackability: Sized for eating from a bag

• Appearance: Uniform, smooth, visually appealing

• Positioning: Packaged like snack food, not vegetables

The product was engineered to create wants that regular carrots didn’t satisfy.

Marketing

The carrot industry promoted baby carrots as:

• A healthy snack (competing with chips and candy)

• Kid-friendly (small, sweet, fun)

• Convenient (ready to eat)

• Versatile (lunch boxes, parties, cooking)

Later campaigns even marketed baby carrots with junk-food aesthetics—the “Eat ‘Em Like Junk Food” campaign used vending machines and extreme-sports imagery.

The same product was repositioned multiple times to create different wants.

Distribution

Baby carrots appeared where snacks appear: convenience stores, vending machines, school cafeterias. Placement shaped perception.

If carrots appear next to chips, they’re snacks. If they appear next to broccoli, they’re vegetables. Placement isn’t neutral—it frames what the product is for.

The General Pattern

Baby carrots illustrate a general truth: preferences are constructed, not discovered.

Advertising Creates Wants

The advertising industry exists to shape preferences. This isn’t controversial—it’s the explicit purpose.

Companies spend $700 billion annually on advertising globally. They wouldn’t spend this if advertising merely informed consumers about products. They spend because advertising creates and shapes wants.

Consider:

• Diamonds weren’t associated with engagement until De Beers marketing created the association

• Breakfast cereal was invented and marketed as a convenience food, creating a meal category

• Mouthwash created the fear of “halitosis” to create demand for the solution

• Bottled water was marketed as premium when tap water is often equivalent or better

In each case, demand was manufactured, not met.

Product Innovation Creates Wants

New products don’t just satisfy existing wants—they create new ones.

Before the iPhone, people didn’t want smartphones (they didn’t know what smartphones could do). After the iPhone, people needed smartphones.

Before streaming services, people didn’t want on-demand video (they watched scheduled TV). After Netflix, scheduled TV felt intolerable.

Innovation is as much about creating wants as satisfying them.

Social Context Shapes Preferences

What we want depends on what others have:

• Fashion operates entirely on social signaling and conformity

• Status goods are wanted because others don’t have them

• “Keeping up with the Joneses” makes neighbors’ purchases create new wants

These wants are real—people genuinely desire status goods and fashionable items. But the wants are socially constructed, not natural.

Why This Matters

If preferences are manufactured rather than natural:

Consumer Sovereignty Is Limited

The argument for free markets rests partly on consumer sovereignty—markets give people what they want. But if wants are shaped by the same markets that claim to satisfy them, this is circular.

Producers don’t just respond to demand; they create it. The power to shape preferences is real power.

Welfare Calculations Are Questionable

Economics measures welfare as preference satisfaction. If I want something and get it, my welfare increased.

But if my want was manufactured, did I benefit? If advertising made me want something I wouldn’t otherwise want, and then I bought it, am I better off?

This isn’t a trivial question. Entire industries—tobacco, gambling, junk food—create wants that harm those who have them.

The Market Isn’t Neutral

Free-market ideology presents markets as neutral mechanisms that aggregate preferences. But markets:

• Favor well-funded marketing over consumer welfare

• Amplify manufactured desires

• Create artificial needs

• Exploit psychological vulnerabilities

Markets aren’t neutral—they’re arenas where power is exercised, including the power to shape what people want.

The Manipulation Spectrum

Preference-shaping exists on a spectrum:

Informing

At one end, producers inform consumers about products. This helps people satisfy existing preferences. It’s generally beneficial.

“Carrots are high in vitamin A” is informing.

Persuading

Persuasion goes further—it tries to change preferences, but through legitimate appeals to value.

“Baby carrots are convenient for busy parents” is persuasion.

Manipulating

Manipulation exploits psychological vulnerabilities to create or change preferences without the person’s genuine endorsement.

Marketing junk food to children, using addictive mechanics in games, or engineering social-media feeds for engagement are manipulation.

The Problem

The lines are fuzzy, and incentives push toward the manipulation end. More effective manipulation means more sales. Competition rewards companies that manipulate better.

Consumers can’t easily distinguish information from manipulation. (That’s what makes manipulation work.) And the companies doing the manipulating have every reason to deny it.

Baby Carrots: Good or Bad?

Baby carrots are, on balance, probably positive:

• People eat more vegetables

• Less carrot waste

• Convenient healthy snacking

But the mechanism—manufacturing demand—is the same mechanism used for harmful products. The technique is neutral; the application varies.

Tobacco marketing uses the same techniques as carrot marketing. Social-media platforms use more sophisticated versions of the same preference-shaping.

Understanding how baby carrots became wanted helps us understand how we come to want things generally—including things that harm us.

Implications

If preferences are made, not given:

• Advertising regulation is legitimate—it limits preference manipulation, not just information flows

• Paternalism isn’t automatically wrong—sometimes protecting people from manufactured wants is protection, not oppression

• Corporate power is more concerning—the power to shape preferences is real and significant

• “Just give people what they want” is inadequate—people want what they’ve been shaped to want

The baby carrot is innocent. But its success reveals something about markets that the simple “satisfying consumer demand” story obscures.

Demand is often created, not discovered. Consumer preferences are outputs of the economic system, not just inputs to it. And the power to shape what people want is among the most significant powers in a market economy.