If you think you’re paying a lot for a cup of Starbucks coffee now – just wait until 2014.
There’s more discouraging news about the inflation of food prices.
The global fund provider Superfund Financial is predicting that coffee, sugar and cocoa prices will rise five to 10-fold over the next few years. In a recent article on BusinessWeek.com, Superfund’s managing director Aaron Smith says farmers won’t be able to keep up with demand because of the lack of farmland and rising costs. A record was set on the United Nation’s world food price index last month, and the cost of putting food on the table has contributed to unrest in the Middle East and Africa.
Maybe you haven’t recognized a huge jump in your grocery bill…but there could be a reason.
Start taking a closer look when you navigate your way through the aisles of your grocery store. But stop looking at prices and start looking at weight and size.
Lisa Stauber – who blogs at milehimama.com – noticed the food she buys for her family wasn’t stretching as far as it used to.
Stauber says a box of the whole wheat pasta she buys went from 16 ounces to 13.25 ounces. Then she noticed canned vegetables were getting smaller too. The frugal mom was shocked when she realized that several years ago she was buying a can of corn that was 16 ounces – now she sees cans that are just 11 ounces.
According to an article from The New York Times, this is something that food-producing companies have done during every economic downturn in recent history. A marketing professor from Harvard told the publication it’s a trick that usually works because we are more sensitive to price than size.
“Companies try to do it in such a way that you don’t notice, maybe keeping the height and width the same, but changing the depth so the silhouette of the package on the shelf looks the same. Or sometimes they add more air to the chips bag or a scoop in the bottom of the peanut butter jar so it looks the same size,” said Professor John Gourville.
Another marketing trick companies try to pull is telling you their new smaller packaging is environmentally friendly or “green.”
Kraft recently introduced what it calls “Fresh Stacks” of it’s standard Nabisco saltine crackers.
The company claims the smaller packaging is more portable and more sleeves of saltines means they stay fresher longer. But there are less crispy crackers for the same exact price!
What you won’t see is companies increasing the sizes of products and packaging when the economy is in good shape. Why would they? You’ve already grown accustomed to paying more for less.
There is Some Hope!
Truth be told – those companies don’t really like to raise prices. But those tricks will only last for so long before there’s some backlash. There is some hope that food prices won’t hit us in the wallet as hard as some are predicting.
American farmers are expected to boost the 2011 corn crop to ease global food inflation. Concerns about a shortage of corn – which is in darn near everything these days – caused prices to double since last summer from $3.50 to more than $7 a bushel.
The Associate Press said today that corn prices have already started to drop.
Now let’s get back to that cup of Starbucks coffee. Earlier this year, the chain said it would try to avoid passing on higher prices to consumers. Starbucks even warned that profits for 2011 could come in below expectations.
The question is – how long will they be able to hold off, and are you willing to pay $10 for a non-fat frappuccino?
Congratulations! You read the entire blog post. Now it’s Bonus Video Time! A special treat for coffee drinkers…check it out.
You can read our previous post Get a Grocery Shopping Strategy for some tips on saving at the store.
Image Credit: laurapadget and madmaclean
+Kasey Steinbrinck is the web content creator for online check printer Check Advantage. Visit the site to check out Cool Checks and Cute Checks at prices up to 75% off what your bank charges. Contact Kasey to get free original content for your blog or website.
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