I had to laugh when I read the OP. Our family is me, DH, DS8 and DS6. We have cut down our groceries to $600 a month (includes paper goods, hygiene, cleaning and DH beer) from a previous average of $800-900. We also lowered our eat-out budget from around $400 a month to $200. And I think we are doing great by paying off our debt an extra $400 a month! I don't know really how to cut it down anymore and we are eating better and healthier than ever.
I think you have a point here. I mean we could all survive on white noodles and rice for a very low budget but if you are buying fresh fruit, veggies, organic, etc. it will make your bill higher. For example light wheat rolls are $3.79 and white store brand rolls are $1.29. I think sometimes your budget also reflects what you buy so it depeneds so much on your personal choices.