Higher Food Prices and Shrinking Food Packages
http://thedianerehmshow.org/shows/2011-03-30/higher-food-prices-and-shrinking-food-packages
Pasta, sugar and paper towels are arriving on store shelves in smaller packages. As the price of raw materials increases, producers are saving money by shrinking sizes. Passing higher commodity costs on to consumers and other marketing trends.
Guests
Catherine Rampell
economics reporter, New York Times
Bob Young
chief economist at the American Farm Bureau Federation
Scott Faber
vice president, the Grocery Manufacturers Association
Ben Popken
managing editor of consumerist.com
Rebecca Hamilton
associate professor of marketing at the Robert H. Smith School of Business, University of Maryland
Comments
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I always liked the Paul Revere myth, so I guess I'll try it.
"A famine is coming! A famine is coming!"
Did you see how fast those Japanese stores cleared their shelves when the trucks quit running? Cool wasn't it?
When you next go in the supermarket check your cans and frozen packages in the small and obscure print to see where the food came from. Is it China, Costa Rica, Mexico, Thailand, even Canada? Oh Canada! Now you already knew your produce comes from overseas, didn't you? So what do we grow here? Mostly grain I'd say. China would be a starving place right now if not for USA, Brazilian and Argentinian soybeans. They import 80%. Right now we could feed everybody if they had the money to pay but the reserves are short and the margins are close. Groundwater is scarcer each day and topsoil is blowing away to form bigger deserts. Climate change adds to unsustainable practice with vanishing glacial runoff and extreme weather events. A good drought in the USA, or even Russia again, could mean starvation. It ain't no new thing. 30 million Chinese have died from not eating in one instance before.
So your corporate spokespeople and your government hate to tell you,"A famine is coming." Did you think all those people in North Africa and the Middle East were rioting because they wanted a new Volt, or wanted some stuffed shirt to vote for? No, man. They're hungry and don't have enough grocery money. Rice is way up, wheat up, corn up and colony collapse disorder not solved. Intelligence agencies still practice pathogen and pest warfare on crops too. Somethings gotta give.
Don't be surprised at tiny ice cream cartons with whipped cream inside. That's just the way it is here in the phattest country on Earth. You better be asking some questions about food security here at home. And you better be asking if it is our policy to "kill the hungry" overseas because the survivors are gonna be angry. I'd say put some good flour and some cans up in your cabinet. Horde you some rice and beans. It's gonna be a weight loss revolution when the famine hits home. Grow a victory garden beside your back steps and demand some answers about corporate capitalist agricultural policy. You'll be glad you did. See Lester Brown and "Plan B" at Earth Policy Institute. Lester knows his stuff.
(I've started saying grace again, and meaning it.)
Thanks for your indulgence Diane Rehm. I just wanted to add how food commodities are fungible and go to the highest bidder just like crude oil. And you can't drill, drill, drill for food.
Watched Gates and Hillary during Sunday Morning Shows.
They are both pulling things out of their buttocks to justify "the regime change".
Condi Rice and Rumsfeld all over again.
Hillary/Gates/AIPAC/Tel-Aviv .... their original decision was the Overthrow + Punish Ghadafi - he has said terrible things against Israel in the past ... just Google.
Why would Libyan soldiers kill their own people/civillians?
Why would USA support a bunch of tribal primitively armed fundementalis guys to overthrow a government that is stable and recognized by United Nations and is supported by 95% of the secular, western oriented and educated (by American Teachers)?
Look at the pictures of downtown Grosny in Chechnia when it was being bombed by Russian jets ... oh my God ... not a single apartment building without a hit ... what the hell United Nations done when Russian were killing their own Civillian People?
The armed rebels with machines guns on Toyota trucks getting close to Tripoli ... the Libyan military is torn to pieces with American Tax Payer paid Bombs .... will they not kill civilians?
Believe it or not they will supply weapons to the religious opposition; because Tel-Aviv favors Arabs killing Arabs, asap.
Please ask your guests to comment on pet foods, too. The 20 lb. package of dog food is now down to 15 or 16 pounds--but is still marketed to look the same as it did several years ago. I was suspicious when I no longer had to ask for assistance carrying several bags down the long Petco aisles.
This phenomenon is affecting restaurant portions as well. If the salmon size continues to shrink on the Nicoise salad at Nordstrom's, it will soon appear more like a crouton. I'm even getting suspicious about the "7 oz." steak at a local steak house.
I thought Frito-Lays' attempt to hide their shrinking packages was clever. They began to sell their regular size of chips as 20% more free. This allowed them to get the consumer to adjust to the smaller size and believe that they were getting a deal previously.
Why do you suggest that the consumer is always the victim of price volatility? My mom taught me to use the unit price listed on every product when I was very young. Is the real issue consumer awareness?
Charlie from NC
It's not just size of products. It's also the water content. Meats, dog foods etc have "Up to 10% solution" which is water. So 10% of the chicken you buy is water for 2.99 a pound or more.
Consumers are pretty savvy. We know how to calculate unit costs (oz, item, etc).
While I do think food manufacturers are being sneaky, I actually appreciate having more reasonable sizes for prepared foods. We have more single person households in the US than ever before, but when you go to the grocery, it is often impossible to find smaller packages of items. Which contributes to waste and lost $$s.
Food manufacturers could also consider what they put into their products. Corn is more expensive...so do we really need corn syrup in everything? We have started baking a lot of our own breads so that we can get real bread (whole wheat mostly) without the corn syrup. Just one example.
Our manufacturered food is so rife with sugar and salt....they could easily reduce these ingredients and we would all be the better for it.
If the grocery stores posted "per unit" pricing on every product, people could easily see the true price....or carry a calculator and do the math.
(Sounds like an app for iPhone, no?)
From a cooking standpoint, I find this new trend of shrinking goods frustrating. Many recipes call for standard package amounts, be it can or box. When the contents decrease, the ingredient balance in a recipe is off kilter. You either have to adjust everything else, or spend more to get the missing ounces! I honestly would rather pay a bit more and have the ease of cooking with my usual recipes. Just thought I would share a different perspective!
Cheers!
Nikki Tsunemori
I am a bit confused about the point of the show today.
It seems there is a very strong oppositional tone to the food industry on the fact that they are downsizing the size of many packages of food.
But, at the same time, the issue of obesity, poor nutrition and over eating in the US has been a frequent subject on the show.
While I agree there is a somewhat deceptive aspect to the fact that people are paying the same for less, isn't the fact that people are literally being forced to eat less during this area of food obesity and other food related issues a good thing?
Please take some time to address how much of the manufactures efforts are a response to public policy pressure or perceived public requests.
Thank you
To add, the famous Taco Bell real beef advertisement seems to point to the extreme of the vendor.
The ONLY reason to shrink packages is to deceive consumers.
This practice has the added cost of more packaging per unit of product.
Michael, so true! Less water in many products would reduce size and shipping costs (good for energy conservation)...and make it easier to take home as well as storing the product. Thanks for raising this issue.
I understand the annoyance with the 'bait and switch' tactics of the product manufacturers, but when it comes to food I don't think the shrinking is necessarily a bad thing. Americans are too fat as a society. We also pay too little for food. Getting away from gigantic boxes of food (with questionable nutritional value) is a good thing.
If we are really concerned about making sure that lower income families get as much nutrition for their dollar we would teach them how to cook meals from scratch.
About three years ago my husband and I were visiting friends in Canada, and the subject of rising prices on common items came up. My comment was that also the size of items are decreasing, as noted by the brand of toilet paper I buy. We live in and old house with a recessed fixture for toilet paper. When we moved into this house about 10 years ago, the roll would not fit. Here we are, 10 years later, and not only does the roll fit with room to spare, the price has gone up about 50 cents!
-Diane Margosian
Lakewood, OH
What are the chances that this may be a blessing in disguise? Will we be healthier with smaller portions? Will food scientists perhaps develop a less expensive & HEALTHIER substitute for all the awful high fructose corn syrup & other highly processed corn products that are ubiquitous in everything today?
Since we are in a depressed economy but, paradoxically, there is an epidemic of obesity, decreasing the size of packages (at least of food) but keeping the price the same is not only a good financial strategy, but is a good public health move as well.
Diane - it's not just food manufacturers doing this. Method, a company that makes environmentally friendly cleaners cut the amount of their dishwashing soap drastically by using "new packaging" that allows "better aim" of their dishsoap, at least that's what they said when I contacted them (you can't make this stuff up).
Diane, I'd never had a problem hitting my sink until now, however their "improved packaging" not only gives me less product, but spurts dishsoap everywhere BUT the sink, making what little I get now less effective.
Consumers need to vote with their pocketbooks, I now use a different dishsoap. Fooled once, shame on you, fooled twice, shame on me!
With unit pricing in plain sight at the grocery store isn't it up to the consumer to decide whether they want to purchase a specific item or not?
When item prices rise, stores often stick a "sale price" over the new, higher price--the "sale price" is the old price--a bit of a sneaky way to transition buyers.
Let's see. How long ago did Beyers go from half gallon to 1.75 quart to 1.5 quart. and how many years ago did Tuna go to 5 oz from 6 oz. Just love it when they put: "New Smaller Size....20% Less for the Same Price".
This isn't something "new". Walmart has been doing this for years. That's how they've always fooled people that everything they have is "less" than the competition. Smaller packaging.
I am no fan of corporate america, food manufacturers or otherwise, but I don't see the crime here. Unless the manufacturers are putting misleading labels on packages or otherwise breaking the law, accusing them of being deceptive seems unfair.
BTW, I do not see a thread for this segment on Facebook. Am I missing something?
For families on WIC, you get your food items based on the size of the packages (i.e. 2 64 oz grape juices per month) so changing package sizes completely screw us at the market because the WIC allocations are not updated according to the changing package sizes.
Diane: You are a national treasure and we all love you. But how can we tell you that commodities never get more expensive, it’s the fiat dollar that is getting cheaper and cheaper, and because people’s salaries are paid in old, unadjusted amounts, it is necessary to reduce sizes of commodities packages in order to preserve the illusion they can still afford them.
When will you have a program about effects of printing fiat money? Sincerely, jn.tlaga@hotmail.com
Coffee --why is a "pound" of coffee in the market no longer 16 oz, but 12 oz? Back in the day, the market sold a 16 oz pound...no longer, AND the price is unchanged. This has nothing to do with reduced packaging for environmental purposes.
I used to work in the food industry, snake foods. Making a smaller package, but keeping the price the same was a great way to sneak a price hike in without telling the consumer. It wasn't about helping the consumer eat less. It was about profit.
Thanks for your show today. About 35 years ago I took an economics course at West Virginia University. One of the things I remember vivdly is the difference between explicit price rationing (changing price) and implicit price rationing (changing the size). Funny how noone complains when the warehouse clubs go the reverse implicit route by applying gargantuan sizes to food and commodities. They figured out how to get the ticket up and encourage consumption. A guy with suspect will power like me will benefit from the smaller sizes on all the things I shouldn't eat.
Stan Davisson