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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Package size is primarily an issue for prepared and processed foods.
Fresh fruits and vegetables remain unchanged! You can still buy a dozen apples and you do get 12.
Wake up America, cutback on prepared and processed foods.
This situation with food packages is nothing new. I've known since I was a kid that the only way to maintain profits when costs go up is to raise prices or shrink packaging. Shrinking the packaging has been going on for decades. It's a less obvious way to maintain profitability, but I don't know that I would call it "deceptive". It's just the way it is.
Please make laundry soap measure marks more readable! It is very hard to discern laundry load sizes on the lines imprinted on concentrated laundry soap container caps.
Recipes are NOT geared to the lessor amounts now contained in canned tomatoes or other vegetables - very very frustrating & inconvenient. Recipes are proportioned for 4 or 6 people - perfect for my family. Now I have to buy 2 cans & then store & freeze the unused can. There are NO options on the shelf among can sizes to use 1 can in conventional recipes without spending much MORE money for 2 cans.
Amen Tom! :>)
I'm interested in the relative cost of packaging to cost of content. As package shrink, am I paying more for the package relative to the content? I feel that food is overpackaged in this economy. Does buying the supersize of x actually save on cost (assuming the content don't spoil easily)? Especially is the cost of glass a bigger or smaller consideration in buying relative to can, to plastic, to bags?
Your guest Scott has carefully avoided and no seems to have brought up the fact that it is the investors that need to be fed. Much of the rising costs in food as with other things are simply due to speculation. At the same time, executives aren't paid to simply manage costs. They are paid to fuel investors. An interesting circular circumstance.
As a two person household we actually appreciate smaller size packaging. We use a freezer when it makes sense but many packages are just too large. We are also big private label fans to cut costs and the products are generally just as good.
Please! We all know the manipulation of food costs/quantity is all about the sacredness of THE PROFIT MARGIN. Corporations will not take a hit to their income...so the people must. Further, if the corporates "would lose their jobs" if they didn't find a way to maintain the sacredness of profits,
then they should form a union.
These companies have limited ways to maintain their businesses, one of which is cut labor, which is never popular. Another is to make the packaging smaller and fix the price. There is absolutely nothing deceptive about this. They put how much is in the box on the box. Are we now advocating putting how much the box used to contain next to how much it contains? As a grocery shopper, I am conscious of this happening, but understand that its the way it works, either the price goes up, or the size goes down.
Those fat-cat executives don't have to worry about their compensation [like we have to worry about feeding our families] since their financial compensation had already been set in stone. They'll do fine. It's the next generation [or two] who'll have to consider the consequences of their actions [or lack of].
Why would this not be considered manipulating the rate of inflation?
If it is then could it have much wider consequences to workers whose pay rate is often based on the rate of inflation.
Also, to a consumer, the very fact that there is a consortium of Grocery Manufacturers and American Farm Bureau Federation, this hints as a deceptive form of price fixing. What do your guests think about this?
There's a bigger picture that we're not talking about, the Consumer Price Index. Each year the "food basket" method is used to determine inflation. The amount of food in each item is not calculated, no adjustment for quantity. Hidden inflation, no wonder American's don't understand how the gov't can say inflation is not a problem.
Social Security, employment pay raises and many other programs and plans are pegged to the CPI, its time for a change ...
I think it would be naiive to think that costs would not increase over time. However, I think it is cynical that wholesalers want to maintain the same level of profit or even grow their profits and not absorb some of that increase themselves.
Where can I find a historical price spreadsheet of various products?
For instance, where can I find the price/size, and thus the price per unit, for dog food, orange juice, etc?
I can find no such listing.
Oh my goodness. What a dumb show. Stop whining. Take some personal responsibility and figure out what the cost you're paying is.
I kind of like cost controls through packaging. Means if use my head I can get a better deal. What is wrong with passing higher costs to lazier people?
Seriously? Somebody call a WAAAmbulance! "Ice cream containers are getting perilously close to a quart!" Really? Who dies when ice cream containers reach a quart? Dianne I pray this show topic was NOT your choice. When packaging companies start marking tuna cans as 14 oz when they are actually 12 oz start talking about deception. If folks are too lazy to read their recipes before they go shopping and read the labels when they shop, they can learn their lesson on the first meal where they eat an appropriately sized portion. Honesty is not the issue hear. It is simply another opportunity to pout and whine about a difficult economy created by our own greed.
Sincerely,
Ron Johns, Jr.
Fort Worth, TX
Della Basmati Brown Rice switched to a smaller package a month or two ago, which was obvious because their distribution process was disrupted and their product was off my local grocery store's shelves for 2 weeks during the switch-over. When the product returned, the design change and size were obvious to me. They went from 2.5 lbs to 2 lbs, and the packaging, which has a somewhat different design, now has a banner on it that says, "New Look! Same Great Taste!" What about a packaging banner that says "New Size! Less For Your Money!"
Not aware of the excess air in Ice Cream? Why do you think it melts so fast?
I do believe that the major corporate producers continue to assume we won't notice; that we are naive or oblivious.
Which amazes me because of a very simple Coal Tunnel Canary: Vegetables.
You can't mask the condition, size or price of a green pepper or head of broccoli.
When the general cost of food rises (because of weather, transportation, demand) consumers see it in fresh produce — plain as day!
Why do the corporations think we would assume they have some magical bottomless supply of raw ingredients?
The first time I picked up a smaller box of cereal, I realized that the company was trying to provide the same quality that I was used to, but due to increased costs I would get what I paid for. My sons are adults and have moved on to their own homes. I welcome the smaller size so that it stays fresh until my husband and I use it up. The larger items are no longer needed, but I had not adjusted to smaller packaging until the companys made it available. I read labels and know what I need. If I need a larger size, I purchase the store brand. If I need smaller amounts, i purchase the name brand that I have always used. Sincerely, Polly Lovell
Another important point on smaller packaging, is that this increases the waste stream, smaller packages means more packages.
I wish I could purchase my favorite coffee in a 1# can.
Is this another case where laissez-faire regulation has come back to bite us?
ed
Happily my local supermarket is one of the top five in the nation. A favorite house brand product, unsweetened chunky applesauce, has changed in size (from 24oz down to 22.5 oz while keeping the same price) and has changed from glass to plastic, probably cheaper to package and cheaper to ship.
I accept the rise in price but object to the change of container. A liquid product stored for long time in a plastic continer is an automatic reject for this shopper. I am willing to pay higher prices to retain the glass packaging.
One of the guests just stated that the manufacturers are trying hard to find ways not to raise prices for the consumer. This is patently wrong. They are, in fact, working hard to hide the fact from the consumer that the prices have gone up by reducing the product delivered for the price paid.
I am a careful consumer; I have to be as I have food sensitivities. One of the things that distresses me is when tried and true brands change their formulation or quality. Chewing gum now is hard to find with plain sugar; it all has a touch of aspartame or other artificial sweetener to enchance sweetness. A brand of popsicles that had sugar and was being used by a corn allergic person, suddenly switched to corn syrup. For people with food sensitivities these cost saving measures could cause health problems.
During the last gas spike several years ago the price of bread went up by a dollar. When gas went down the bread didn't. It never did. Costs for making food may go up, but I think most food producers think of it as an opportunity to gouge.
Also I've noticed that the unit pricing can be deceptive ie; cost per 100 sheets-how big are the sheets? Liguid detergent with UPC's by the gallon in one case and by the pound in another.
Two points:
1) It is a great shame that we do not include home economics and personal financial management in our educational system to educate our consumer base in making the better choices.
2)I perform the great majority of grocery and consumable purchases for our household and the greatest lesson I can pass along after 50+ years of doing so is, "Read the label and compare unit cost/price of the represented brands." If you are unhappy later because you arrived home with smaller quantities per container at the same or higher costs than previous purchase, then learn from it and shop smarter next time. We, as consumers, have the greatest power - we choose where and how to spend our money. Use it, vote with your wallet.
Grumbling about a price increase isn't enough to make me change brands but deceptive packaging is. I'm not stupid, I know the price of food is going up everywhere so I can come to terms with a higher price but this sort of breach of consumer trust is despicable.
I don't know why these companies think no one is going to notice and I'm not sure how they think they can avoid losing customers by employing these practices.
Thanks for talking about this topic. Every time I go to the grocery store I am infuriated, not by the increase in product costs, but by the universal decision by food manufacturers to try to fool people. I anticipating that we will next again see the old 1/2 gallon size of ice cream, newly branded as "value packaging" "new larger size" but at a hefty price. It's all a game. I solve the problem by just eating less, using less detergent, using cloth washrags rather than paper towels...
Manufactures spends a large amount of their profits in packaging to make their products more appealing to the consumers and maximum profit. The product that is inside the packaging is inferior to real foods that you can make yourself.
I know that the consumer would be better off not buying packaged food! Buy whole foods, or foods in bulk with little or no packaging. Go the the farmers market! Let the consumer control the quanity and quality of the food they eat not manufactures.