You gotta love the ingenuity of the Big Food Businesses. According to the Wall Street Journal, in the wake of higher commodity costs, they don’t raise prices, they shrink the package.
Many food manufacturers are retooling assembly lines to produce smaller versions of everything from cereal boxes and ice-cream cartons to mayonnaise jars, margarine tubs and cheese packages. By giving consumers less for roughly the same price, food executives hope to keep consumers from moving to cheaper brands.
Consider General Mills Inc.’s Cheerios cereal. When the American Farm Bureau Federation sent members into supermarkets to conduct its second-quarter food-price survey, the 10-ounce box of Cheerios had vanished. So the volunteer shoppers turned to the box nearest in size, 8.9 ounces.
The smaller box cost $2.98 on average, up from $2.86 charged by the stores for the bigger box a year earlier. On a per-ounce basis, the retail price of Cheerios jumped 17% to 33.5 cents in the second quarter from 28.6 cents a year earlier.
Do they actually think no one will notice?