business news in context, analysis with attitude

The Minneapolis Star Tribune reports that manufacturers are “downsizing packages, while keeping prices the same, as they passed on higher food costs to consumers.

“According to a recent analysis by Nielsen Co., about 30 percent of all packaged goods have lost content over the past year. This at a time when U.S. grocery bills are rising -- up 7.5 percent in October vs. the same month a year ago -- at the fastest rate in 18 years … What began as a response to rising fuel and ingredient costs has become institutionalized at many companies. At General Mills, for example, cost-cutting is so embedded that the company even has its own intimidating term for it: ‘Holistic Margin Management’.”

KC's View:
I think that the majority of consumers understand that manufacturers need to cut back on packaging to save money, and a lot will applaud when manufacturers changing packaging for environmental reasons. They even understand when prices have to go up because of rising energy and raw material costs.

I just think that they have a right to expect transparency.

(Not sure that they’re going to buy the whole rising energy costs argument, however, since gas prices have dropped precipitously in recent months. But that’s a different issue…)