Wednesday, March 30, 2011

Food Inflation Kept Hidden in Tinier Bags

Last Friday I wrote about the rising cost of food and related it to the gasoline price increases. Of course that was only one factor. Corn sweeteners, used in a large number of products in the supermarket, have been rising in cost ever since the environmentalists managed to convince Congress to mandate the injection of ethanol into every gallon of gas sold. Whenever government interferes in the American economy, calamity cannot be far behind.

Many of your food products come in plastic containers. Plastics are made from oil, the same oil that Obama and his EPA has stated must be priced out of existence to preserve our environment.

With costs rising, in order to survive, manufacturers are electing to reduce the content of their packages. Maybe now is the right time to go on that New Year's resolution diet you have been putting off for so long.

Chips are disappearing from bags, candy from boxes and vegetables from cans.

As an expected increase in the cost of raw materials looms for late summer, consumers are beginning to encounter shrinking food packages.

With unemployment still high, companies in recent months have tried to camouflage price increases by selling their products in tiny and tinier packages. So far, the changes are most visible at the grocery store, where shoppers are paying the same amount, but getting less.

Most companies reduce products quietly, hoping consumers are not reading labels too closely.

But the downsizing keeps occurring. A can of Chicken of the Sea albacore tuna is now packed at 5 ounces, instead of the 6-ounce version still on some shelves, and in some cases, the 5-ounce can costs more than the larger one. Bags of Doritos, Tostitos and Fritos now hold 20 percent fewer chips than in 2009, though a spokesman said those extra chips were just a “limited time” offer.

Trying to keep customers from feeling cheated, some companies are introducing new containers that, they say, have terrific advantages — and just happen to contain less product.

Kraft is introducing “Fresh Stacks” packages for its Nabisco Premium saltines and Honey Maid graham crackers. Each has about 15 percent fewer crackers than the standard boxes, but the price has not changed. Kraft says that because the Fresh Stacks include more sleeves of crackers, they are more portable and “the packaging format offers the benefit of added freshness,” said Basil T. Maglaris, a Kraft spokesman, in an e-mail.

With prices for energy and for raw materials like corn, cotton and sugar creeping up and expected to surge later this year, companies are barely bothering to cover up the shrinking packs.

“For indulgences like ice cream, chocolate and potato chips, consumers may say ‘I don’t mind getting a little bit less because I shouldn’t be consuming so much anyway,’ ” said Professor Gourville. “That’s a harder argument to make with something like diapers or orange juice.”

Read full NYT article here.

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