"Let them eat cereal" How "greedflation" fueled consumer ire against Kellogg

https://www.salon.com/2024/03/10/let-them-eat-cereal-how-accusations-of-greedflation-fueled-consumer-ire-against-kelloggs/

by DocFeind • 2 years ago

75 91 2 years ago

salon.com

mc322• 2 years ago

Marketing 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_Viscosity22• 2 years 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.

parpfish3• 2 years ago

But 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.

lowkey2• 2 years ago

I 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.

mc322• 2 years ago

We’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?

dclowd99014• 2 years ago

This 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• 2 years ago

The Guardian had a better headline: "Let them eat Flakes" (https://www.theguardian.com/us-news/2024/feb/27/kelloggs-ceo...)

HPsquared3• 2 years ago

Cadbury's version would be "Let them eat Flake"

dclowd99014• 2 years ago

Isn’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• 2 years ago

Last Time eat such, it was so sweet, I would Not even consider it good as a cookie.

Overtonwindow• 2 years ago

I 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.

tekla4• 2 years ago

canned foods

I would love to understand how food placed into a can and boiled to pasteurize it is highly processed

throwup2385• 2 years ago

You’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.

hackerlight• 2 years ago

We'd be better off as a species if Kelloggs and the rest gets deleted. There are wholegrain cereals that taste great and are healthy. There is no need for this dopamine hacking crap that try to trick people with their marketing schemes.

r0ckarong3• 2 years ago

You not a food scientist but definitely an expert in making assumptions. To make your own meals you need to know how to cook and be able to afford the stuff. If you don't have the fortunate upbringing to learn how to cook you need to find time and be prepared to spend what little money you have on potential straight to the garbage experiments. That's not going to happen for a lot of people just because you don't risk throwing away time AND money. Sure, well cooked budgeted meals are an amazing way to save money and eat well. It just isn't that simple to come by.

jprete2• 2 years ago

I agree, but I think you're overestimating the difficulty of producing something edible. Not good, but edible.

ericd2• 2 years ago

That’s a bit hyperbolic, its trivial to hard boil some eggs, and there are a number of similarly simple dishes that you’re not going to need to retry a bunch.

elhudy• 2 years ago

There is nothing inherently wrong with highly-processed food. For one, the term "highly-processed" is often loosely used and subjectively defined. This is apparent in the fact you think canned foods are unhealthy, whereas the commenter responding to you sees nothing wrong with pasteurizing food in cans.

For two, highly-processed foods can contain nutritional value, the two aren't mutually exclusive. If the battle is against foods with little nutritional value then then just say that. "Highly-processed" is such a red herring in the nutrition industry.

parpfish3• 2 years ago

If they had to label the ingredients on an apple, you wouldn’t understand all those words either.

HPsquared3• 2 years ago

Up 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.

lowkey2• 2 years ago

Respectfully 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.

HPsquared3• 2 years ago

Inflation 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_fro...

prepend• 2 years ago

It’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• 2 years ago

Compound 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• 2 years ago

All 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.

aNoob7000• 2 years ago

A 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• 2 years ago

I 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.

LegibleCrimson3• 2 years ago

It'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• 2 years ago

Depends on the cereal. kellogs is just junk food of course, but you can buy oats, crushed wheat etc in a raw form.

LegibleCrimson3• 2 years ago

Those 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.

interestica• 2 years ago

It'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.

Ironically, the most infuriating thing about Kellogg's is that they can get away with labelling one of their cereals (Vector) with a high protein value that comes largely from the milk you're expected to add to it. Prominently on the face of the box: 13g protein. Actual cereal content: 5.7g

https://www.wkkellogg.ca/en-ca/products/vector-meal-replacem...

They can get away with it because it's officially designated a "meal replacement" - so they're technically not breaking rules.

But the stuff is still stocked in the cereal aisle. And anyone would call it a cereal as the term is commonly used.

tmaly• 2 years ago

This 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• 2 years ago

greedflation 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.

7thaccount2• 2 years ago

When everything is an unregulated monopoly, those companies can set prices however they want.

cjbgkagh4• 2 years ago

Regulated 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.

Nux• 2 years ago

The Kelloggs products are rubbish, not nutrition.

They can make the package smaller and smaller and then take it off the shelves completely.

donatj3• 2 years ago

The 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...

acomjean• 2 years ago

It'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• 2 years ago

Show me one goddamn "dwindling profit margin".

donatj3• 2 years ago

https://companiesmarketcap.com/kellogg-company/revenue/

Kellogg, down 15% in the last year

bhickey• 2 years ago

There'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.

wredue2• 2 years ago

Greedflation is the term describing inflation way over and above what it should have been.

Profits are not dwindling, they are better than they’ve ever been across most sectors. In addition, corporate ability to hide profit has been growing.

donatj3• 2 years ago

I think you just misunderstand how bad inflation really is. Costs have risen by conservative estimates 18.7% since 2020. When your money is worth 18.7% less, anything less than an increase in "profit" of 18.7% dollar value is actually a loss because the value of the numbers has changed.

ck2• 2 years ago

I 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

ungreased06752• 2 years ago

I 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• 2 years ago

We can test this hypothesis by looking at the profits of publicly traded companies.

Scene_Cast2• 2 years ago

IIRC profit margins of grocery stores are around 4%.

whynotmaybe• 2 years ago

The 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.

cjbgkagh4• 2 years ago

It’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.

acdha4• 2 years ago

This 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...

ungreased06752• 2 years ago

What specifically doesn’t make sense? A bigger pool of money chasing the same amount of resources equals higher prices (and profits).

leereeves• 2 years ago

One thing is clear: whoever wrote the headline in your link cherry-picked a time period that overstates the effect of "greedflation".

Corporate profits drove 53% of inflation during the second and third quarters of 2023 and more than one-third since the start of the pandemic

IOW, even according to that report, roughly two-thirds of recent inflation was not due to greedflation.

ReptileMan• 2 years ago

Usually 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.

dclowd99014• 2 years ago

Used to be that way. I feel like a carton of eggs is exorbitant these days.

acdha4• 2 years ago

That’s the corporate profit-taking at work. If you buy from farmers or Costco prices have been stable.

karaterobot• 2 years 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.

jprete2• 2 years ago

It's also very possible that 99 cents is substantially below cost and the supermarket just wants a loss leader and/or to clear inventory.

cultofmetatron• 2 years ago

a hard boiled egg and a baked potato is going to be a better breakfast nutritionally anyway. cereal is junk food marketed as healthy.

"Let them eat cereal" How "greedflation" fueled consumer ire against Kellogg

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