Food prices: "the difference you won't see" exposed and denounced

Food prices: “the difference you won’t see” exposed and denounced

For no less than 50 years, Betty Henry, who lives in London, Ontario, has been buying ED Smith brand pumpkin pie filling to prepare her Thanksgiving desserts.

This year, upon opening the tin, Mrs. Henry immediately noticed that the garnish in question was no longer what it used to be.

And for good reason: Vegetable oil, previously the third most important ingredient on the can list, now ranks sixth.

In the new version of the filling, the third ingredient is water. It was more soup than anything.she comments.

Frustrated, the consumer decided not to buy this brand again. Water comes out of the tap, he says. Why would I pay for this?

The show Market from CBC found that the price of pumpkin filling has risen more than 50% since January 2021. At the time, it was selling for $3.99. Last October, it sold for $6.03 at Loblaws stores in Toronto. The amount remained unchanged at 540 ml.

That they get less for their money than before, consumers already suspected, becoming aware of the phenomenon of reduflation. This term is a translation from English ” inflation contraction », a contraction of « contraction – reduction in the size of products – and “inflation” – the increase in prices. This strategy consists, for manufacturers, in reducing the production cost of a product by subtly reducing its format or its weight, maintaining the sale price, or increasing it.

But as Betty Henry discovered, there are also times when manufacturers lower the quality of their products to maintain or increase their profit margin.

Ingredient substitution, that is, using ingredients from different and slightly less expensive sources, is a process that comes as no surprise to Jordan LeBel, a professor of marketing at Concordia University’s John Molson School of Management.

It’s about keeping profit margins, profit margins. »

a quote from Jordan LeBel, professor of marketing at Concordia University

And manufacturers resort to other subterfuges, LeBel continues. For example, a family size product will be re-marketed in a new family size…a little smaller. To increase the price, but also to reduce the amount they give youdescribes the professor at Concordia University.

This subtle difference…

Another ploy: the limited time offer. A pumpkin flavored product will have, for example, added nutmeg. Between the old and the new version, it is difficult for the consumer to compare price, quantity or ingredients to know if they find their account, or not.

It’s called “the difference you won’t see”, explains Jordan LeBel. The manufacturer changes the recipe a little, tweaks the label and can, if necessary, argue that we cannot compare the old with the new, since it is not the same product.

Thus the box of cereals goes from 500 g to 460 g, or 450 g… So that the consumer sees nothing but fire, [d’une différence] from 10%”,”text”:”we try to stay down [d’une différence] by 10%”}}”>we try to stay down [d’une différence] by 10%explains Mr. LeBel.

But if we were to go down to 400 grams or less, the consumer would see somethingunnaturalargues Mr. LeBel.g, and for which we will also have changed the recipe.”,”text”:”So we are running out of stock of this box, but at the same time, we are launching a new one that will be 400g, and because we will also have changed the recipe .”}}”>So we have just sold out of this box, but at the same time we are launching a new one that will weigh 400 grams, and for which we will also have changed the recipe.

Retailers, accomplices of manufacturers

Retailers are, in a way, complicit in these methods, says the professor, for whom this aspect is too little reported.

The retailer likes new things, because to register this new Stock maintenance unit (” Stock maintenance unit ” Where SKU), will impose a fee on the manufacturer. And the latter, in return, will demand more visibility from the retailer for its new product.: \”For a week or two, I would like to have the ends of the halls\”. That’s why you’ll also have to pay for it”,”text”:”It will say: \”For a week or two, I’d like to have the ends of the aisles\”. That’s why you’ll also have to pay”}}”>He will say: “For a week or two, I would like to have the ends of the corridors.” For that you will also have to paysays Jordan LeBel.

ready and promotion.”,”text”:”These changes are disguised as \”changing consumer preferences\”, under the pretext that \”we are responding to demand,\” denounces the professor from Concordia. I don’t mind, but we took the opportunity to drop a few grams while pocketing listing and promotional costs for the retailer.”}}”>These changes are passed off under the pretext of “changing consumer preferences”, under the pretext that “we are responding to the demand”, denounces the professor from Concordia. I don’t mind, but we take the opportunity to drop a few grams and at the same time, the retailer pockets the cost of ready and promotion.

pay more for less

Going back to the aforementioned pumpkin filling, Winland Foods (which recently acquired the ED Smith brand), responded to complaints from Betty Henry and other customers who felt they had been misled. Says CEO Eric Beringause: We are sorry that customers were disappointed with our products and I will take care of it personally.

But with the help of the firm BetterCartAnalytics, which watches the evolution of food prices in the supermarket, the team of Market has identified other products that have undergone a reduction cure.

Pearl Milling Company SyrupCMFor example: In September 2021, the 750 ml bottle was $1.97 at Walmart stores in Toronto. The size of the new version of the product, launched that month, has been reduced to 710 ml, but remains at the same price.

The bottle on the left, the new product from the Pearl Milling Company, is larger than the bottle on the right (the old product), but contains less syrup.

Photo: CBC/Jenny Cowley

Then in November the price skyrocketed to $2.54 and in December it hit $2.67. Eventually, in October 2022, Walmart was selling this product for $2.97.

Pearl Milling Company, owned by PepsiCo Canada, did not respond to CBC inquiries about this.

For Daniel Tsai, professor of management at Toronto Metropolitan University (formerly Ryerson), the shares of Pearl Milling CompanyCM look unjustifiable.

According to him, this substantial price increase, accompanied by a reduction in quantity, is disproportionate to the current inflation rate.

The year-over-year consumer price index (CPI) was unchanged at 6.9% in October in the country, according to Statistics Canada.

Tsai says that with consumers concerned about the rising cost of living, manufacturers and retailers need to be more transparent about the price increase and why it’s happening.

Another example cited by Market : Barilla brand pasta.

Two almost identical boxes of spaghetti: one shows a weight of 450g and the other 410g.

Consumers must use a keen sense of observation to notice that the manufacturer has reduced the weight of its product, while maintaining the same packaging format.

Photo: CBC/Jenny Cowley

The spaghetti, which was sold in a 16-ounce package and cost $1.97 at Walmart in September 2021, has been reduced in size to 16-ounces.

The price increased to $2.12 in July 2022, then $2.27 in October 2022, still for the 410-gram format.

Market He states that taking into account the reduction in size and the increase in price, the cost of this product has increased by more than 25%.

The diet of many families depends on rice and pasta because the prices of these products are supposed to be cheap, affordablesays Mr. Tsai.

In a statement issued last year, Barilla said it had slightly modified the format of its products and prices in response to the constantly rising costs of basic ingredients and logistics while allowing to serve four to five servings with a box at a good price.

Legal, but unethical

Companies that reduce in Canada are not required to inform consumers.

These practices, unethical, unmoralas Jordan LeBel describes them, they are legal.

But according to him, the fact of resorting to it aggravates the crisis of confidence of consumers towards the industry. Especially when people look at the profits, whether it’s the multinationals, or the big banners, which posted record profits during the pandemic.

The food industry, and that includes both manufacturers and retailers, is pretty opaque, not very transparent. I think that should be called change. »

a quote from Jordan LeBel, Associate Professor of Marketing at Concordia University’s John Molson School of Business

We put a lot on the shoulders of consumers who are told to reduce food waste and do everything they can to save the planet.laments Mr. LeBel, who points out that few people have two hours to compare prices and sizes in supermarket aisles.

For economist and author Armine Yalnizyan, it’s time for governments to step in. There is not much to look after the interests of consumers, although we live in a very consumerist societyshe points out.

It is time for governments to step in, he argues, to monitor prices in supermarkets.

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