Opening Insight: How Food Fads Expose Market Psychology
Updated Aug 22M, 2025
That impossible-to-book restaurant you can’t stop thinking about? The same instincts pulling you toward that table are quietly steering your portfolio. The rise of keto menus, plant-based burgers, and the gluten-free boom hasn’t just reshaped grocery aisles—it’s a mirror held up to the herd behavior that drives financial markets. In both worlds, collective momentum often overwhelms individual judgment, spawning booms and busts from cauliflower rice to cryptocurrency. The psychology isn’t merely similar—it’s effectively the same playbook.
The Psychological Connection
Fear of missing out—FOMO—powers bubbles. When colleagues rave about intermittent fasting or the latest superfood, something primal switches on. It isn’t fear of danger; it’s fear of exclusion from what the group deems “smart.” The same circuitry lights up when investors chase parabolic stocks or trending tokens. Behavioral research shows that FOMO can temporarily sideline deliberative thinking, nudging people to pay up for stories rather than substance. Consumers shell out triple for “activated” products with thin evidence, just as investors bid up narrative-driven equities. In both cases, the brain’s threat-detection hardware, anchored in the amygdala, reacts to social cues more than underlying value.
Narrative Over Numbers
Food trends rarely explode on nutrition science alone; they break out when wrapped in a story. Bone broth didn’t change—its framing did. What was once a kitchen staple morphed into a “healing elixir” via evocative tales of ancestral wisdom and recovery. The narrative elevated the product.
Markets rhyme. Investors routinely privilege compelling company stories over ledger lines. Tesla’s ascent was propelled less by current profits than by a sweeping narrative about remaking transportation and energy—an audacious future many were willing to underwrite. As Nobel laureate Robert Shiller argues in “narrative economics,” contagious stories drive both consumer and investor behavior far more than tidy models admit. We act on what feels true, not just on what the data can prove.
Cyclical Contrarianism and Status Signalling
Food trends follow predictable cycles: what begins as contrarian (like natural wine or keto) eventually becomes mainstream, prompting true contrarians to find the next differentiating choice. This same pattern plays out in investing, where strategies that initially generate alpha (outperformance) lose their edge once widely adopted.
Both food choices and investment decisions also function as powerful status signals. The exclusive restaurant reservation or knowledge of an underground food pop-up serves the same psychological purpose as owning a particular investment before it gains popularity. Both signal insider knowledge and cultural capital.
Practical Applications
Recognise Pattern Triggers in Your Decision-Making
When you feel sudden urgency about a food trend or investment opportunity, pause to identify what’s driving it. Is it genuine value or social contagion? Try this exercise: Before your next major purchase or investment, write down three reasons for your decision that don’t include what others think. This simple reflection can break the herd mentality in both domains.
Use Contrarian Thinking in Both Areas
Develop the habit of questioning mainstream narratives in both food and finance. When everyone is obsessed with a new restaurant or food trend, ask: “What evidence supports the claimed benefits?” Apply this same scepticism to “can’t-miss” investments everyone is discussing. The psychological muscle you develop by questioning food fads will strengthen your investing discipline.
Create Decision Frameworks That Transcend Emotions
Just as meal planning helps avoid impulsive unhealthy food choices, investment policy statements prevent emotional market decisions. Develop clear criteria for both food choices and investments before emotions hijack your thinking. For example:
- What problem does this solve for me?
- What evidence (not testimonials) supports the claimed benefits?
- What are the opportunity costs of this choice?
- Would I have made this choice if nobody else had known about it?
The Taste of Crowd Psychology
Consider how quickly oat milk transformed from obscurity to ubiquity in coffee shops nationwide. Early adopters enjoyed genuine benefits—plant-based, creamy texture, environmental advantages—but the explosive growth reflected classic market psychology. As consumer attention amplified, investment capital followed, with Oatly’s IPO valuation reaching an astonishing $10 billion despite modest revenues.
This pattern repeats across both domains: initial discovery by contrarians, growing adoption by the early majority, massive influx during peak popularity, and eventual normalisation or decline. The striking similarity is not coincidental—it’s the predictable rhythm of human collective behaviour.
Conclusion: The Investor’s Menu
Next time you notice yourself gravitating toward a food trend, use it as a mirror for your investing psychology. The same cognitive biases that have you considering an expensive juice cleanse may be silently orchestrating your portfolio decisions. Consider the directional forces at play:
The Contagion Vector: Food trends spread through social networks at accelerating speeds—keto didn’t gradually gain followers; it exploded exponentially once it hit critical mass. This viral coefficient applies to investment themes, where adoption curves follow identical mathematical patterns. The smart money recognizes that by the time something reaches your social feed repeatedly, you’re likely in the late majority phase—where gains have diminished but risks remain elevated.
The Contrarian Trajectory: The most profitable food entrepreneurs don’t chase established trends—they position ahead of consumer sentiment shifts. Similarly, legendary investors like Warren Buffett and Howard Marks built fortunes by developing psychological immunity to crowd enthusiasm. The parallel skill identifies inflexion points where mass psychology is about to reverse, not simply avoiding the crowd.
The Authority Multiplier: Notice how both food trends and investment narratives gain legitimacy through association with perceived experts. The pattern is predictable: anecdotal success → influencer adoption → mainstream media coverage → expert endorsement → peak popularity → diminishing returns → eventual skepticism. Tracking any trend in this cycle provides an edge in both domains.
The Value-Narrative Gap: The wider the disconnect between fundamental value and narrative intensity, the greater the eventual correction. This principle applies equally to $15 activated charcoal lattes and sky-high tech valuations. The disciplined consumer-investor develops concrete metrics to quantify this gap, creating stable decision frameworks when emotions run hot.
The truly sophisticated approach isn’t avoiding trends altogether—it’s developing the metacognitive ability to recognise when your decisions are being shaped by mass psychology rather than rational analysis. In both nutrition and investing, the most profitable position is often found not by fighting the crowd entirely, but by understanding its psychology deeply enough to anticipate its next move before it happens.
When you master this cross-domain pattern recognition, food trends become more than dietary choices—they become real-time laboratories for understanding the market movements that may affect your financial future months or years later. The crowd is often wrong precisely when its confidence is highest, but those who can read these psychological currents gain an edge that compounds across every decision they make.
