Tuesday, June 16, 2009

The incredible shrinking ice cream container...

This isn't news to anyone that's been shopping recently, but there seems to have been a meeting of the minds in the ice cream industry and practically every brand has moved to the new 1.5 quart size as the industry standard.

At first blush it might be hard to notice the change for two reasons: 1) most of the cartons have been redesigned to include a larger lid that creates an optical illusion of a larger package and 2) the change has been so universal across the ice cream aisle that there are no outliers - every carton is 1.5 quarts so the small containers don't seem out of place.
What are we missing in our ice cream containers? Well, the old 1/2 gallon container held 64 ounces of ice cream whereas the new 1.5 quart containers hold 48 ounces. That 16 ounces of ice cream has just vanished. A 25% decline in the amount of ice cream in your freezer. Did prices fall by 25%?
According to a Turkey Hill spokesman "“It’s the rising cost of all the ingredients. Rather than change our quality ingredients or raise our prices, we decided to go with smaller packages.”
Hmmm, that sounds good, but let's look at some data.......

Corn sweetener demand has fallen steadily now for about six years. Declining demand should lead to lower corn sweetener prices (although the corn ethanol hiccup last year might have artificially affected pricing).

What about that other main ingredient in ice cream, milk? We must be paying top dollar for that, right? Not even close. A gallon of milk at retail is barely above $2.

So if the two main ingredients, milk and corn sweetener, are falling in price the argument that ice cream manufacturers had to cut their container size by 25% in order to offset rising costs doesn't hold any water.

The reality is that no one in the US needs to eat any more ice cream. If a firm wants to increase prices they should feel free to do so in a free market, but don't try to fool the consumer with smoke and mirrors.


1 comment:

Anonymous said...

Amen! I'm sick to death of these scams, and you are right they are getting together and doing these things as a industry, not as individual business decisions. The same thing happened recently in laundry soap as well - just suddenly, every manufacturer simultaneously comes out with smaller containers claiming they are more "concentrated." Yeah, right, why couldn't they have been more "concentrated" all along? They too did it as an industry, not as individual business decisions. The collusion to essentially rape the consumer en masse and remove the competitive element is akin to price fixing in my book. So, I'm fighting back - we make our own homemade ice cream now as well as our own homemade laundry soap. So there big colluding creeps, we just cut you out of the profit picture entirely!