Major Food Manufacturers’ Prices Up While the Cost of Ingredients Goes Down…
March 2, 2009
It’s interesting to note that while the price of grains and milk have gone down, the price of the final product has gone up, at least among the food products offered by major food manufacturers such as Kellogg, Nestle, Kraft, Unilever and others. One “major” manufacturer was cited by an executive for Southern CA based grocery chain Stater Bros as having sent out a letter outlining what price increases will occur over the next six quarters. The unnamed manufacturer has apparently set a four percent jump in price each quarter. Do the math — that’s a significant price increase over the year and a half period covered by those quarters.
Paying less for ingredients while passing the imaginary raise in price on to the consumer…
One company, Unilever, has reduced the size of their product, Skippy Peanut Butter, while also raising the price of that same jar of peanut butter, so that consumers are quite literally paying more for less. That’s always been a bit of a foul taste in my mouth when manufacturers do that. Hershey did that with their candy bars years and years ago, in addition to changes to some ingredients, such as changing from real vanilla to vanillin, which is made from pine needles. Mmmm…nothing yummier than a pine tree! Just ask Euell Gibbons.
Coca Cola changed their recipe to do away with cane sugar and move to high fructose corn syrup because it was cheaper. That change affected the flavor of Coke and people could suddenly chug-a-lug a can of Coke. Pre-HFCS, you couldn’t chug a can of Coke without burning the crap out of your throat.
There are still those of us who remember and miss that friendly burn.
If you’re of my generation, you’ll remember when you’d go to the store to buy a pound of ground coffee in a can. My folks drank Yuban. They’d buy it a pound at a time. There was nothing like the rich aroma of that fresh pot of coffee first thing in the morning.
Well, those one pound cans of coffee are awfully hard to find now. Coffee companies began shrinking them years and years ago.
Bulk coffee is always an option. At least you can buy it a pound at a time. It’s available either in whole bean form, or you can use their in-store grinder to grind it to your desired texture. While you’ll pay about $8.99 for a pound of bulk coffee beans from your local grocery, it’s nearly impossible to find a one pound can of ground coffee beans, much less buy one and it ends up being much costlier than that $8.99 a pound, too. ( I’ll note here that the store-brand bulk coffee that’s offered at the grocery is usually at least a dollar less a pound and is usually comparable in taste to the name brand being offered.)
What can we do to make them hear us?
Groceries are retaliating the best way they can, which is by offering more store-brand items instead of the big name products. Stater Bros, for example, has gone from an average of seventeen percent store branded items to twenty-one percent. It sounds as though they are considering offering more, which would be definitely be in our, the consumers’, best interests.
The best weapon we, as consumers, have always had, is the ability to vote with our checkbooks and our feet. This is another of those circumstances where action like this is not only advisable, but necessary, in the war on high prices. In most cases, these store brands are made with the same ingredients, if not by the same factories who produce the big-name stuff, so you’d likely not notice a negative difference in product quality.
I’ll be buying store-brand whenever possible from now on.
UPDATED 3-11-2009: Haagen Dazs has just announced that they are reducing the size of their “pint” of ice cream by two ounces in order to respond to the (mythological) increase in the cost of ingredients and manufacture. Riiiight, HD…you just keeping telling us that, and I’ll keep buying the store brand. And by the way…will you then continue to pretend that that’s a pint of ice cream you’re foisting off on the public?