13 ms·
"Let them eat cereal" How "greedflation" fueled consumer ire against Kellogg
- deleted 3y ago[deleted]
- mc32 3y agoMarketing has jumped the shark. This is very stupid -sure college kids eat cereal for their three meals because they’re in a bind (time, money, etc) but they have their health, for the most part. So this is silly. But so is the president when he complains about shrinkfkation using his exaggerated Jim Carey face from the grinch. The complicated policy led to this. Companies either raise prices or sell you less for the same price. This is transparent posturing.
- Eddy_Viscosity2 3y ago> Companies either raise prices or sell you less for the same price. Or they sell you the same amount for the same price. Much of these increases are not 'required' they cash grabs. F these guys.
- parpfish 3y agoBut isn’t the purpose of a business to be a cash grab? If consumers are willing to pay more, charge more. I don’t care if Kelloggs raises prices. It will make them more money up until the point people switch over to Post or the store brand (that’s 99% identical), and then they adjust prices. The problem is if there’s collusion and all manufacturers raise prices so they can’t compete on price.
- dclowd9901 3y agoThe problem is collusion. Not “the heads of the two companies call each other and cackle while they bathe in pools of money” collusion, but soft collusion where their pricing models aim for profit over sales numbers.
- parpfish 3y agoSo you’re saying that it’s a problem when multiple companies are trying to make a profit? I know that profit is a foreign concept to most VC backed tech companies, but it’s pretty fundamental to everybody else
- cjbgkagh 3y agoThat’s not collusion that’s just optimizing price for profit. You can have ‘collusion in effect’ with price matching on a market leader where multiple companies can price as if they were a single company monopoly without explicit coordination. There are many situations that are not considered true monopolies that I think should be, such a geographical monopolies that occur when there is a tacit agreement for companies not to enter each other’s areas of operations.
- Ekaros 3y agoThat is just the "free market" we operate in... There is little to do about that unless we want government to cap prices on everything, including wages. In the end solution is to break up these large conglomerates and stop them ever going over certain size by acquisitions. And exactly same should be done in tech. Big companies should not be allowed to buy start-ups for example.
- lowkey 3y agoI agree that greedflation is very much a thing. When many competitors do this, it makes it easier for others to do the same. However, I find it frustrating that so many articles, economists and the government consistently fail to mention the primary proximate cause for inflation. Namely, the simple fact that 80% of all the dollars ever created were created in the most recent 4 years. In my opinion inflation is a misnomer. It would be more accurate to call it dilution of the purchasing power of the dollar aka grand theft by central bankers.
- mc32 3y agoWe’ve had higher inflation over the last few years that’s affected prices and salaries. That’s not in question at all. That money printer has hardly cooled down. Do you want to provide the same labor at the same price so your company doesn’t have to raise prices?
- Eddy_Viscosity2 3y ago> Do you want to provide the same labor at the same price so your company doesn’t have to raise prices? In many cases, the company keeps salaries the same AND raises prices. Then they complain that 'no one wants to work any more'.
- dclowd9901 3y agoThis used to be true, but a lot of pricing is automated now, based on location, pricing of similar products, etc etc. it’s also still somewhat in its infancy. Remember way back when high frequency trading was first a thing, you’d hear stories about some HFT houses cranking up the prices of some little penny stock on the basis their algorithms saw the price go up and then jumped in, causing some kind of feedback loop? I think that’s exactly what’s going on now, only at a pace more in line with merchandise pricing (over weeks rather than milliseconds).
- bloak 3y agoThe Guardian had a better headline: "Let them eat Flakes" (https://www.theguardian.com/us-news/2024/feb/27/kelloggs-ceo-cereal-for-dinner https://www.theguardian.com/us-news/2024/feb/27/kelloggs-ceo...)
- HPsquared 3y agoCadbury's version would be "Let them eat Flake"
- dclowd9901 3y agoIsn’t the headline based on the name of the collective action? I’d blame the lack of cleverness on whoever coined the TikTok trend.
- looofooo0 3y agoLast Time eat such, it was so sweet, I would Not even consider it good as a cookie.
- nemo44x 3y ago[flagged]
- Zigurd 3y agoThe above comment is most on target. It's not about keeping up with inflation. It's not about carbs being unhealthy. It's about greed and positioning an expensive, deceptively packaged, heavily promoted product that buys shelf placement to drive out competitors as somehow sympathetic to people who can't afford better food. That's just ghoulish. Is having a responsibility to shareholders an excuse for ghoulishness? I'll leave it at that.
- Overtonwindow 3y agoI think it goes beyond not eating cereal and doing our best to avoid eating highly processed foods in general. I think it’s as simple as reading the label, and if you don’t understand the label, you shouldn’t be eating it. Box foods, most canned foods, dare I say, most of the foods in a grocery store are highly processed, chemically engineered, with little nutrition value. I’m not a food scientist, but I think we can do better making our own meals, than depending on highly processed boxed/packaged foods from the grocery store.
- parpfish 3y agoIf they had to label the ingredients on an apple, you wouldn’t understand all those words either.
- tekla 3y ago> canned foods I would love to understand how food placed into a can and boiled to pasteurize it is highly processed
- throwup238 3y agoYou’re thinking of canned fruit and vegetables used to preserve them and not products like SPAM and Vienna sausages which are highly processed mystery meats. There are lots of highly processed canned foods you probably don’t even notice unless you know what you’re looking for.
- LegibleCrimson 3y agoI don't think of that as covering "most canned foods", though. Most canned foods are pretty ordinary canned foods, and aren't highly processed.
- throwup238 3y agoI think that depends entirely on your region, diet, culture, etc. here in California the distribution varries a lot between higher end stores like Trader Joes, lower end ones like Aldi or Grocery Outlet and culture specific ones like Ranch 99.
- aNoob7000 3y agoA simple solution is to stop eating cereal, especially Kellogg's. I think we've forgotten that we have a choice and can buy someone else's product or service.
- lotsofpulp 3y agoI don’t understand why you are downvoted. If anything, the price of boxed garbage nutrition cereal going up and up will result in much better societal outcomes for the US.
- HPsquared 3y agoUp 17.1% in a single, cherry-picked year. How does this stack up against inflation more broadly? It's a terrible trope in financial reporting to write a whole article about one data point, out of context.
- lowkey 3y agoRespectfully disagree. Inflation is cumulative in its effects. Up 17.1% in a single year outweighs 2% annual inflation over many years in its impact on the consumer. It is much more revealing than an average figure which can bury the total impact.
- HPsquared 3y agoInflation over the last, say, 5 years, has definitively not averaged 2% pa. Especially in basic supplies like food and fuel. Consumer goods often have "sticky" prices, for various reasons. Example: https://en.m.wikipedia.org/wiki/Fixed_price_of_Coca-Cola_from_1886_to_1959 https://en.m.wikipedia.org/wiki/Fixed_price_of_Coca-Cola_fro...
- prepend 3y agoIt’s not out of context. They point out how Kellogg’s is the highest of their competitors. And Kellogg’s was the one suggesting to use cereal to combat food inflation. It would have been nice to have more comparison and reference to how overall CPI was 3% for the same year, but it’s not the worst article.
- bluescrn 3y agoCompound Inflation, the less talked about sibling of Compound Interest. A few percent doesn't sound much, until you think about how those percentages accumulate over several/many years.
- rr808 3y agoAll the processed cereal aisle is so bad for your health. The problem isn't that Kelloggs raised its prices, the problem is that such big corporations sell junk food at such a low price in the first place.
- LegibleCrimson 3y agoIt's a stupid suggestion anyway. Most breakfast cereals are basically pure carbs, with nothing in the way of protein and very little fiber. You can get some protein in the milk, but that's not the cereal itself anyway, and also has a surprising amount of sugar. Two meals a day of breakfast cereal is not a nutritious diet. Once in a while as a treat, sure, given that they're basically crappy candies anyway, but you shouldn't be living on mostly breakfast cereals. The affordability argument dissolves when you're trying to actually get a reasonable nutritious balance from them, given that the average bowl of cereal gives you about a tenth your needed daily calories.
- kyriakos 3y agoDepends on the cereal. kellogs is just junk food of course, but you can buy oats, crushed wheat etc in a raw form.
- LegibleCrimson 3y agoThose are better, but still don't give a ton of calories or protein all said. You have to eat a lot of oats to live off them.
- ben_w 3y agoYou're not wrong, but this was my normal breakfast (and I skipped lunch) at university 20 years ago: https://www.wolframalpha.com/input?i=rolled+oats+200g+%2B+500ml+skimmed+milk https://www.wolframalpha.com/input?i=rolled+oats+200g+%2B+50... (Plus a bit of dried fruit, but I'm not sure how much, this far removed). That's just two full bowls. Dinner was usually just one pack of instant noodles from Lidl. At the time, this cost me about £0.50/day.
- legacynl 3y agoUnless you're stretching the definition of 'a bit of dried fruit' I call bullshit. There's no way you can live more than a month or two on cereal and instant noodles.
- tmaly 3y agoThis is not the first time they have shrunk their product. They did the same thing after the 2008 banking crisis. I would say let them do it if they want, it is their business to make those decisions. But I would like to have an independent group that looks into all the additives in processed foods. Far too many things allowed in food in the US is banned in Europe.
- nojvek 3y agogreedflation is real. It’s real because of competition drying up. Lina Khan is either incompetent or corrupt or both. The more consolidation we have at the top, the more power they have to raise their prices without consequences.
- 7thaccount 3y agoWhen everything is an unregulated monopoly, those companies can set prices however they want.
- cjbgkagh 3y agoRegulated monopolies are generally quite successful in lobbying their regulators to end up with regulatory capture. Then you end up with the worst of both worlds with no possibility of a competitor to displace them.
- 7thaccount 3y agoNot always, but yes sometimes. Not sure what the solution is, but I don't think it should be legal for a former regulator to get employed for a company they're regulating. It sets the standard to go easy and a cushy desk job will be waiting for you where you get paid a lot to do nothing. Properly done, regulators push back on cost increases unless we'll justified. A lot of utilities lose rate cases.
- cjbgkagh 3y agoYou're talking about the revolving door, that's easy to fix compared to the real problems. Politics is connected to people with money and those same people have investments in the companies being regulated. The regulators will be instructed by politicians to go-easy, and they will because why not, it's other people's money being wasted. The companies will hold their services hostage to the point that a politician/regulator must have the fortitude to be willing to let the regulated company fail, let the services fail, see large numbers of people laid off, have people's pensions take a hit, and endure constant attacks by news media. Or they can put up a noisy but ineffectual fight which they give in at the last minute and then be able to tell people that at least they tried.
- Nux 3y agoThe Kelloggs products are rubbish, not nutrition. They can make the package smaller and smaller and then take it off the shelves completely.
- donatj 3y agoThe term "Greedflation" is the stupidest thing to come out of the last couple years and is pure propaganda. It's a misunderstand of cause and effect. It's pushing blame for a problem the government created onto companies for not just eating the loss. It's absurd. The economy was mismanaged and we had a massive spike in inflation. Your costs went up, businesses costs went up. Everyone's did. To maintain their business they are forced to raise their prices or shrink their product. Blaming inflation on "greed" is literally scapegoating. The idea that businesses should keep their prices the same in spite of dwindling profit margins is just silly. https://www.economist.com/leaders/2023/07/06/greedflation-is-a-nonsense-idea https://www.economist.com/leaders/2023/07/06/greedflation-is...
- acomjean 3y agoIt's a slightly vague term. Greedflation is companies using existing inflation as cover to increase prices faster than costs thus increasing their profit margins.
- titzer 3y agoShow me one goddamn "dwindling profit margin".
- bhickey 3y agoThere's a shortage of competition. This in turn gives companies more power to set prices. Previously they wouldn't have had the same latitude to pass rising costs onto consumers. Instead this would've eaten into their margins. You can gripe about the term, but it's descriptive of a real phenomenon.
- ck2 3y agoI wish there had been a price tracker for walmart like there is for amazon (camelcamelcamel) Because all the food as essentially doubled in price over the past three years, some only 150% but still, that's crazy. It was a slow creep. And it feels like it was engineered by AI, not market demand. generic, plain Corn Flakes used to be $1 for a 18 ounce box, they are now $2.25 and corn is one of the most heavily government subsidized industries in the USA
- ungreased0675 3y agoI suspect all the “greedy companies jacking up prices” stories lately are in service of this year’s election cycle. Trillions extra in government spending without a corresponding increase in production created high inflation. Now, like a frosting-smeared toddler standing next to an empty cake pan, they’re pointing the finger at the family dog. Greedy corporations, pay their fair share, we’ve seen this tired trope before.
- eightysixfour 3y agoWe can test this hypothesis by looking at the profits of publicly traded companies.
- Scene_Cast2 3y agoIIRC profit margins of grocery stores are around 4%.
- nerdponx 3y agoThe grocery stores generally aren't the ones increasing prices.
- whynotmaybe 3y agoThe opposite could be true like in Canada where a Loblaws lobbyist is the campaign manager for the Conservative party and Loblaws keeps jacking up prices on everything.
- cjbgkagh 3y agoIt’s safe to assume that companies are always greedy, it’s in their nature. That’s why we need competition between companies. The alternative is regulation but companies tend to love regulation as regulatory capture is easier than real competition. I think systems that presuppose non-greedy companies are just as fanciful as those that presuppose non corrupt governments.
- acdha 3y agoThis doesn’t make any sense – the government spent money in no small part due to enormous demand from businesses for assistance, company profit margins are public data, and your vague “they” is conflating the government, academics, and journalists as a single group coordinating for political reasons despite obvious differences between and within those groups. Study after study has found that profit taking is a considerable cost driver: https://finance.yahoo.com/news/greedflation-caused-more-half-last-100000899.html https://finance.yahoo.com/news/greedflation-caused-more-half...
- ReptileMan 3y agoUsually raw food is cheaper per calorie and macronutrients than any processed food. To me it seems that a box of kellogs costs like almost twice per gram of legumes. And they have the benefit of actually being tasty if properly prepared.
- dclowd9901 3y agoUsed to be that way. I feel like a carton of eggs is exorbitant these days.
- acdha 3y agoThat’s the corporate profit-taking at work. If you buy from farmers or Costco prices have been stable.
- karaterobot 3y ago> There are reports that the calls for the boycott of the brand are already starting to have some effect... some shoppers have already started to see Kellogg’s cereals for prices as low as 99 cents on supermarket shelves. I'm confident that's isolated to a few stores with a nice discount going on rather than an across the board change coming down from Kellogg. They aren't going to knock the price down to less than a third of what it cost last week because of a boycott, they'd set the price to whatever it was right before people started complaining. If they moved it from $3.27 to $.99 because of pressure, they wouldn't be able to raise the price back to what it was again for years. And this boycott isn't nearly big enough for them to be doing something like that. I think that's what you'd do if a mob was actively straining against the locked doors of your corporate headquarters, rather than another angry group complaining on the internet. Not that Kellogg aren't bastards, I'm just saying let's be real about the effectiveness of internet boycotts.
- jprete 3y agoIt's also very possible that 99 cents is substantially below cost and the supermarket just wants a loss leader and/or to clear inventory.
- deleted 3y ago[deleted]
- cultofmetatron 3y agoa hard boiled egg and a baked potato is going to be a better breakfast nutritionally anyway. cereal is junk food marketed as healthy.