Cheerio's Economics

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?

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0 Responses to Cheerio's Economics

  1. Hugo says:

    Sure enough, it’s a friggin’ multimedia Nuremburg rally in Slayjing. Impressing us with the sheer scale of their saluting and all but goose-stepping masses. Standing on the shoulders of Leni Riefenstahl, all the way. With President Stooge and First Lady acting as wowed as his father, who NBC failed to mention, works for “China”, meaning the military junta there. Suggestion: every time a corporation makes the mistake of running a commercial advertising itself as a “Proud Sponsor” of this Pro-Bowl, boycott that sponsor for the duration of the Games. Drink Pepsi products.

    And this, from a sportsman in Atlanta.

  2. blurdo says:

    They’ve been all over this for months at They call it the Grocery Shrink Ray.

  3. Hugo says:

    Oh Gawd, those tacky generals have done the Hello Kitty thing, with “It’s a Small World after All”, replete with jingles, while NBC, an organization literally fighting for its life over its ridiculous overbid for a Chicom olympics, is sending every familiar network face to put the love on the Chinese so bad it makes you think you’ve been slimed by a Barry White tribute band. Now they’re even doing a Bob Dylan rip-off! Taplin alert!

    As to groceries, they’ve been doing it for at least two decades. Don’t you remember your Andy Rooney?

    Please help to redouble the radio frequencies broadcasting from democracies into China.

    And while you’re at it, boycott their goods. I’ve been doing so for 19 years and I haven’t regretted for a day not being able to buy a certain Chinese Christmas ornament, nor the Chinese-Made G.I. Joe from the Winter Offensive on the Chosin Reservoir. (I kid not.)

  4. Hugo says:

    Omigod, Cheerios fans. The theme chosen by Glorious Chinese nation for Happy Joyous Slayjing Olympics is “One World, One Dream”.

    Didn’t Peter Gabriel already cover that Orwellian waterfront 20 years ago?

  5. Hugo says:

    If you guys want to ponder how panderers peddle poison to us, look to NBC and the Proud Sponsors and to Slayjing.

  6. Rick Turner says:

    I can hear the announcer now on the radio, “Get the latest, don’t be late! No big too small!”

  7. Kate says:

    on the other hand, maybe this will drive other food producers to start selling smaller portions at the same prices; halving the size of a big gulp could actually be positive for consumers.

    the frustrating thing is that consumers in general seem completely inactive in any of this. in answer to your question, no, i don’t think they’ll notice.

  8. Terry McCall says:

    They did this to Halloween candies and other mini chocolates recently. “Why would anyone wanna make Reese’s Minis even smaller” thought I.

    Now I know.

    They thought we wouldn’t notice…

  9. Kenneth says:

    We won’t.

  10. Captison says:

    Interestingly, when the cost of groceries started going up, I cut out cereal entirely from my diet and switched back to those tried-and-true recipes Grandma used to use: hot rice cereal, cornmeal mush, cheese toast, and drop biscuits. Tastes better than Cheerios and takes next to no time to prepare. I wonder if GM thought about the possibility that rising food prices would send people back to staples rather than into the arms of off-brands?

  11. Hugo says:

    Here they are, Gabriel’s concluding lyrics:

    we do what we’re told
    told to do

    one doubt
    one voice
    one war
    one truth
    one dream!

    Perhaps Mr. Gabriel should sue the Chinese junta for copyright infringement…

  12. P. Cross says:

    Hugo, “Perhaps Mr. Gabriel should sue the Chinese junta for copyright infringement”…It’s a long long line with no joy in the end.

  13. Hugo says:

    Hmmm. You’re right there, P. Cross. And come to think of it, my brother and a couple of frieds would be well ahead of the talented Mr. Gabriel in the queue — although my brother ever defers to any artist, so he certainly would off Mr. Gabriel that place in line. But then what would the Chinese make of it? They might disapprove of the “royal treatment”. On the other hand, we capitalists probably would see such a massive line, requiring queuers to brave the combined privations of nature for days on end, as a kind of pseudo-Darwinian thing, such that any “cuts” would violate the Rules of Nature, which (I think) were some of the things the Chinese Tinkerbelles were twirling ’round about the other night.

    Oh, it’s so confusing. Spin me around a few times and I can’t tell whether I’m afoot or unicornback. Silly…me…

  14. Hugo says:

    Well, I meant to spell “friends”, but “frieds” is a happy accident — I’m sure they’d agree.

  15. Hugo says:

    (The friends, I mean.)

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