Steve Tarpin can bake a graham cracker crust in his sleep, but explaining why the price for his Key lime pies went from $20 to $25 required mastering a thornier topic: global economics.
He recently wrote a letter to his customers and posted it near the cash register listing the factors — dairy prices driven higher by conglomerates buying up milk supplies, heat waves in Europe and California, demand from emerging markets and the weak dollar.
The owner of Steve’s Authentic Key Lime Pies in Brooklyn said he didn’t want customers thinking he was “jacking up prices because I have a unique product.”
“I have to justify it,” he said.
The U.S. is wrestling with the worst food inflation in 17 years, and analysts expect new data due on Wednesday to show it’s getting worse. That’s putting the squeeze on poor families and forcing bakeries, bagel shops and delis to explain price increases to their customers.
They’re raising prices in other ways, too, and now it’s almost panic mode.
Shrinking package and portion sizes is part of it. Supermarket chains are experimenting with bottled water bottle sizes and shapes, for example. The new “gallon jug” of water is now (or soon will be) 3.1 quarts. With at least one bottle much larger in =appearance= than the old one-gallon ones. But if you turn the new bottle upside down, you will see a large hollowed out area underneath — a trick borrowed from wine makers. The local chain here also switched the water source from a spring in nearby mountains (most “delicious” water I’ve ever had — and we’ve used it for years) to ones in urban areas not nearly as good tasting but undoubtedly more profitable to the marketeers.
Competition? It’s a race to the bottom, and the customer be d-mned. The “pound” can of coffee often has shrunk to 11 or 12 ounces. Ice cream manufacturers long ago shrank the “half-gallon” to 1.75 quarts or less, and it’s bound to get smaller.
And it’s all but impossible to keep up with the size of cereal boxes. Several weeks ago at Target, I saw that the 15 oz box of Rice Krispies at $3.39 was replaced with a 10 oz box, but the shelf price had remained the same. I called one of the managers over to ask what was going on; the smaller box had earlier sold for about $2.25. We did an inspection and found that manufacturer Kellog had changed the barcode on the smaller box, using the same one that previously had been used for the 15-ounce boxes (and was posted on the shelf label). It was a 33 percent reduction in product content (or a one-third increase in price, to look at it another way). One that apparently caught retailers and their computer-barcode jockeys by surprise. At least, that’s what the management guy told me. A couple of weeks later, the shelf price had been changed, Target’s computer data edited, and those 10-ounce boxes were now going for $2.50. (Keep an eye on the ingredients, too. Some cereals that once were made entirely of U.S. farm whole grains now may be made of “wheat meal” or other “meal” — which MAY have a foreign origin! Egads, they’re taking lessons from the big pharmaceutical companies.)
In their race to the bottom, the people who now run our corporations seem to have no regard for the quality and customer approval that were responsible for company and brand success in the first place. (I will not buy another container of Tropicana “not from concentrate” orange juice until they switch back to 100 percent juice from Florida. They recently started importing its premium-brand juice for the first time from Brazil — cheaper and lower quality, less desirable taste. And absent USDA regulation, who knows whether a lot of that Brazilian juice got its start as concentrate.)
It’s a global problem. High prices have led to food riots in some cities and countries. Rice and corn are staples now beyond the reach of many poor populations. What a sad mess. Maybe it will drive us to our knees….
w.w.
Hey, last time I checked…you can still get a Double Cheeseburger for a buck. America! What a country!
When the bottled water companies start going under…that’s when we are really in trouble. Have any cable companies or satellite TV companies gone under yet? No? I guess people can still afford the essentials of life, then.
Don’t get me wrong. I know that Life isn’t all fricassied frog and eel pie. A good dose of recession could sober a fellow up. I know I have been paying off my credit card debt at an amazing pace and should be done by the end of May [thanks for the tax rebate]. We did cancel our satellite TV…but that was last October and it was because it was mostly mind numbing and soul squelching trash being spewed into our living room.
Ok, I admit it. I DID have a bottled water this morning. I was at a remote radar site that had no running water. I was thirsty. I saved the bottle to re-use with tap water from home. Maybe, just mabye, I kept the economy going…one more day. I had a generic bottled water, and I’m proud.
Can we imagine what the world will say when we have converted all the planet’s corn to produce less than 1% of our own fuel needs? Do you think we have a bad name now?? What a joke. The terrorists are here at home and they are colored green.
In England we have the same problem- then Tescos (a leading supermarket) announces profits of several billions. First they starved the competition and now the prices escalate. Hmmm makes you wonder….
Adding to what blog #1 said,
In our local supermarkets many cereal brands have been removed from the cereal section because they contained the simonella infection. Whom do we blame for this? I wonder where some of these “store” brands came from? If you have the time take a trip through your local stores and look hard at the labels of all the goods that give the country of manufacture. You may be extremely surprised at what came from where.
The recalled cereals were from a suburb of Minneapolis.
#5 Harvey,
You would be surprised at what you DON’T see on the labels. Food manufacturers import much food product from foreign sources without the need to say so on the label. Congress and the FDA don’t require “country of origin” labeling for “ingredients” the manufacturers use (thanks to intense lobbying by the food industry and mandates of the World Trade Organization).
The recent spate of melanine poisonings in pet food “manufactured” in the U.S. involved wheat gluten and rice protein concentrate from China (elsewhere, contaminated corn gluten was used). The U.S. “manufacturers” (little more than marketers and packagers, really) were under no requirement to list country of origin for these principal ingredients. If they had been, I bet many U.S. pet owners would have had a second thought before proceeding to the checkout register.
Well, pet food aside, it strikes even closer to home. Cargo ships of various flags often leave U.S. ports loaded with wheat and corn, which then is processed abroad (often in factories dismantled in the U.S. and reassembled there or built outright by American manufacturers), free from the regulated health standards in manufacturing that we are accustomed to here. Then the stuff is shipped back as ingredients for OUR food products — with the country of origin a closely held secret by the U.S. manufacturers.
The food industry is violently opposed to requiring origin ID (as is the pharmaceutical and other industries — my pharmacist has no idea where the stuff in my pills come from). They say it will be too expensive and difficult to manage. (Why, they might find it then would be less expensive to build factories on American soil and hire American workers to make the products.)
Okay, let’s spare them the pain of printing new labels. At minimum, they could identify product and ingredient origins on their website, with lot number history, dates, and the like. Consumers who WANT to be informed could be. I also would like to see included the names of the contract manufacturers for the brand name marketer, and the names of the companies and the countries they receive their ingredients/products from.
The result just might spark a race to the top — for high achievement, quality, and value. Let the bottom feeders expire.
But for now, this is the kind of pressure and spin we are up against:
http://www.gmabrands.com/publicpolicy/docs/Comment.cfm?DocID=842&
[blockquote]
Mandating country of origin labeling across the board or expanding it to include ingredients would be burdensome, impractical, and provide no additional benefit to the consumer. Country of origin labeling has no relation to public health or food safety, and conveys no useful information to the consumer on health or safety.
[/blockquote]
Yeah, right….
w.w.