Why does cereal cost so much?!
Andy Wing
> My grandmother-in-law, owner of a farm in Nebraska, blanches when she
> thinks of the $3-4 charged for boxes of cereal. Compared to the cost
> of wheat, etc this seems way out of line. Cereal seems like the most
> over-priced product in the grocery store. Why is it priced so high?
> Is this a fair representation of the cost of producing/marketing/
> distributing cereal, or is it just that high because people are willing
> to pay that much?
It's ye olde law of supply and demand. Read the ongoing flamewar
on rec.audio.* about the high prices for CDs for a clone discussion.
And while we're on the subject, subscribe to alt.coupons and give that
group a jump start :-)
--
Politics is not the art of persuasion, it's the science of selfishness.
"Any disclaimer issued by me is subject to change without notice"
Andy Wing Temple U. Computer Services agw...@astro.ocis.temple.edu
Michael Eder
The same size box of Special-K that costs $5.00 here costs about half
in the UK (England). I have also wondered why it is so expensive.
Maybe it is because they have so many dollar off coupons they think
everyone has one.
Maybe if the dollar keeps falling the prices will be the same.
Tim Foecke
> > > thinks of the $3-4 charged for boxes of cereal. Compared to the cost
> > > of wheat, etc this seems way out of line. Cereal seems like the most
> > > over-priced product in the grocery store. Why is it priced so high?
> > > Is this a fair representation of the cost of producing/marketing/
> > > distributing cereal, or is it just that high because people are willing
> > > to pay that much?
First, I have 2 grandmothers in Nebraska, and they cannot believe
what I pay for a mortgage in Maryland. You can rent a 4 br. house
in a small town in Nebr. for $400-500. Yes, cereal prices are high,
though.
BTW, the most expensive thing (and horribly overpriced) in most
grocery stores are many spices and herbs. Check out the per pound
price of parsley (roughly $100/lb) and dried chives ($400-500/lb)
At the warehouse store, the price is 1/10 to 1/20 of the grocery store.
Albert Silverman
Could it possibly be that the English are SMARTER than Americans?
Kevin McGuire
Two members of Congress (I believe one is Charles Schumer of NY) have
begun an investigation into whether the major manufacturers of cereal
were, in fact, price fixing. Apparently 85% of the cereal market is
controlled by four or so companies. NPR reported on this earlier this
week, so if the high prices burn you up, perhaps a letter to your
appropriate Representative might be in order.
Cheers,
--
Kevin S. McGuire | "The more I see of men, the better I like dogs."
Philadelphia, PA | -Mme Roland (1754-1793)
Adam Lasnik
I'd just like to add my agreement with some previous posters.
Having the gov't investigate possibilities of cereal price fixing is a
MASSIVE WASTE of resources and taxpayer money.
Yes, cereals are pathetically overpriced. Just like a great many
consumers are pathetically ignorant and/or weak-willed.
I'm more worried about airline price fixing, utility companies' rate
gouging, and a whole score of other stuff than I am about cereal prices.
Hell, belly button lint worries me more than cereal prices.
*** NO ONE has to have brand-name cereal to live, survive, thrive, travel,
communicate, stay warm, and so forth! ***
Please, people, quit encouraging grandstanding actions by incompetent
senators and congresscritters. And we wonder why we get such annoying shallow
politics in Washington. <sigh>
--ADAM
Christopher Scurlock
Adam Lasnik <ala...@nickel.ucs.indiana.edu> wrote:
>
>I'd just like to add my agreement with some previous posters.
>Having the gov't investigate possibilities of cereal price fixing is a
>MASSIVE WASTE of resources and taxpayer money.
>
>Yes, cereals are pathetically overpriced. Just like a great many
>consumers are pathetically ignorant and/or weak-willed.
>
>I'm more worried about airline price fixing, utility companies' rate
Here's an essential to life!
>gouging, and a whole score of other stuff than I am about cereal prices.
>Hell, belly button lint worries me more than cereal prices.
>
>*** NO ONE has to have brand-name cereal to live, survive, thrive, travel,
>communicate, stay warm, and so forth! ***
*** NO ONE has to travel by airline to live! ***
And in case you didn't know, food is fairly essential and I imagine that
most families start a day with breakfast cereal. As the name brands get
priced higher so do the off-name brands. And alot of families may be
getting pinched here unneccesarily.
It seems you live in a world with some atypical priorities.
>--ADAM
Adam Lasnik
[I had written]
>>I'm more worried about airline price fixing, utility companies' rate
>Here's an essential to life!
I'm puzzled by your sarcastic response. Unless I'm really missing
something here, there are a zillion-and-one alternatives to brand-name
cereal. And unless you have evidence to the contrary, I do not buy (no
pun intended) your assertion that price hikes in name-brand cereal affect
other cereal costs.
And for goodness sake, who says you need only buy cereal?
Toast, oatmeal, waffles, pancakes, eggs, fruit and fruit salads,
pastries, light pastas, yogurts, cheeses... TONS of alternatives to plain
ol' cereal.
On the other hand, if I might be so bold, I'd like to reassert my
contrasting concerns about unfair pricing of utilities (water, gas,
electricity, etc) and airlines.
If you want electricity, you have no viable choice but to get it from your
local utility company. Period. Most of us depend on water for integral
aspects of our living.
And airlines, while a bit more of a stretch, provide similarly
irreplaceable services. I cannot reasonably drive or bus to and from my
college. Nor can I reasonably drive to get somewhere when there's a
family emergency or death.
Also, note that airlines have a high startup cost--competition isn't
something that can spring up easily and freely. In contrast, my Aunt
Bertha can make (and with a small budget, market) breakfast foods.
If you still want to argue that name-brand breakfast cereals are so
essential to our well-being that we need costly and liberty-threatening
gov't intervention in the free-market, feel free. But there's no way I'm
about to argue such a value judgment with you.
>It seems you live in a world with some atypical priorities.
It seems as though you might not have throught either of our arguments
through very carefully ;)
--ADAM
Brian Bringardner
March 9, 1995 Thursday SECOND EDITION
HEADLINE: EDITORIAL; Champions of breakfast
As if the nanny government weren't sticking her nose into enough
stuff, along come some congressmen (Democrats, natch) complaining
that the price of dry cereals is too high and demanding a Justice
Department anti-trust investigation of possible collusion among the
major manufacturers.
Price-fixing is always a possibility, though the last time this
was investigated, by the Federal Trade Commission a few years back,
the investigation collapsed.
There's a better remedy. If you think Corn Pops cost too much,
buy something else. It's not as though there weren't a zillion
other things to eat for breakfast. If you must have cereal, try a
hot cereal. No time to fix it, you say? Get up five minutes earlier
then. Can't do that? Throw some muffins in the toaster.
If enough people do that, the supermarkets will put Wheaties on
sale and the congressmen will have to shut up.
The Dayton Daily News
March 9, 1995, THURSDAY, CITY EDITION
HEADLINE: CEREAL INDUSTRY SHOULD BE IN DUCK SOUP
BYLINE: Ellen Belcher
I hate breakfast cereal, and I hate it even more that I give it
to my children.
That's why I love it that a couple members of Congress are
taking on cereal-makers, accusing them of gouging me and everybody
else in the country at the grocery store. (The heroes' names are
Reps. Charles Schumer, D-N.Y., and Sam Gejdenson, D-Conn.)
This could be a unifying issue for the country. Everybody buys
breakfast cereal - rich, poor, young, old, black, white - and
everybody hates paying $ 4 a pop for a box of sugar and grain.
Well, maybe, some people won't be excited. Remember George Bush
was surprised when he went to a grocery store and learned about
scanners. So maybe he doesn't eat Frosted Flakes or Wheaties for
breakfast. But all the people I know have a stake in finding out if
these magnates who make billions off something as disgusting as
mini-Pop Tarts are ripping off consumers.
The charge is that the cereal market is dominated by four
companies - Kellogg's, General Mills, Post/Nabisco and Quaker Oats
- and that together they're keeping prices artificially high. The
two Democrats who are ticked are asking whether the uniformly high
prices smell of anti-trust violations.
The cereal industry has a defense. It says it pays a lot to
advertise and that most people who buy cereal do so with coupons,
so really a box of Golden Grahams isn't that expensive.
I suppose Mary Lou Retton does charge a lot to allow her picture
to appear on a cereal box, and I suppose somebody has to pay for
the 50-cents-off coupon that comes in my Sunday newspaper.
But I'm still not swallowing it.
It just doesn't make sense that puffed up rice should cost more
than the fresh bananas that go on it. Think about how much effort
it takes to get bananas to Dayton from who-knows-where without
bruising them and before they turn black. Something is out of whack
here.
As far as advertisements go, that's a waste of money. Do the
cereal executives really think people are going to stop buying
their products if they cut back on the number of times they pitch
Sugar Crisp during Saturday morning cartoons? I don't think so.
Cereal is part of the American culture. It's how Americans feed
their children and keep their sanity in the morning when they're
rushing to let the dog out, find their children's sack lunches and
still get to work on time. Forgoing cereal at the check-out line
would be about as hard as living without a microwave. You can do
it, of course, but why would you? Why choose chaos when you can
have convenience?
In choosing not to give our children real breakfasts, the kids
definitely lose something. I have a 9-year-old who thinks oats are
powdery and strawberry-flavored, and, who, when presented with the
real thing, wanted to know what was wrong with his hot cereal.
(Fortunately, I've always made French toast for him and his sister
from scratch, so they are not so confused that they think that that
delicacy comes from the frozen food case and is cooked in a
toaster.)
This kind of embarrassing attention has been focused on
product-makers before, and, after the complaints die down, prices,
in some cases, have come down. Although drug prices are still high,
some pharmaceutical companies, for instance, have cut prices
because some politicians say they're charging too much. So it's
possible that the cereal industry will be forced to change its
pricing strategies.
Meanwhile, it can't hurt if everybody who depends on cereal
chimes in with this message: Serving your family fast-food in the
morning shouldn't be as expensive as ordering take-out.
The San Francisco Chronicle
MARCH 9, 1995, THURSDAY, FINAL EDITION
HEADLINE: Cheerios or Caviar?
SHOPPERS WHO find themselves contemplating bankruptcy while
strolling the supermarket cereal aisle should appreciate the work
of two congressmen demanding to know how breakfast manufacturers
set those incredible prices.
The $ 4 tab for a box of their favorite grains or grits has
prompted Democratic Representatives Charles Schumer of New York and
Sam Gejdenson of Connecticut to seek a Justice Department
anti-trust investigation of cereal makers.
"Every once in a while there is an issue that just gets your
goat -- a pet peeve that you wish you could do something about,"
said Schumer, who says the cost of Rice Krispies, Sugar Pops and
other cereals has gone up 90 percent in 10 years, twice the rate
for other foods. "We're paying caviar prices for corn flakes
quality."
Cereal manufacturers say that at 25-to-30 cents a bowl, cereal
is still a bargain whose price has not even kept pace with
inflation, if coupon discounts are considered.
No matter who is right, there is an answer to ensuring that the
morning meal maintain its reputation for cheap eats: don't forget
that ever-faithful standby, oatmeal.
Ray Dawson
>
>Food is essential. Cereal is not essential. Cereal is a high-priced
>convenience food. If you want to pay less for breakfast, eat oatmeal
>or toast or eggs & bacon or etc. Also, if the store brand cereals
Personally, when I am in an anti-cereal industry mood (usually
strikes after going to the store and seeing the prices), I'll
eat a banana for breakfast for a few days. They are ultra-cheap
and quite nutritional. Maybe more so than your average bowl of
cereal in some ways. Cereal is fun, but there are good alternatives
when the prices start to outrage you. How long you suppose it will
be before we see cereal prices in the range of $8-10/box?
--- Ray ...
Brian Bringardner
March 14, 1995 Tuesday, STATEWIDE
Correction Appended
HEADLINE: GEJDENSON TELLS BUYERS TO SEND CEREAL MESSAGE
BYLINE: CHRIS SHERIDAN, DREW WEAVER and ANTHONY GIORGIANNI; Courant
Staff Writers
If spending three to four bucks on a box of cereal seems like an
investment rather than buying something for breakfast, you may want
to look at lower-cost store brands.
That was the advice U.S. Rep. Sam Gejdenson, D-2nd District,
gave Monday as he continued his campaign against high-cost brand-
name cereals.
Gejdenson, who last week asked the U.S. Justice Department to
investigate price increases by cereal manufacturers, called on
consumers to buy store brands, also known as private labels, in the
meantime.
"If we can get consumers to flex their muscles . . .," Gejdenson
said, "they'll save money [and] it will send a message to other
manufacturers."
Besides, Gejdenson said, his cheeks bulging with a store-brand
cereal, he notices no difference in taste.
"Very tasty," the congressman said as he crunched the contents
of a box of store-brand raisin bran, in the parking lot at Stop &
Shop on East Main Street in Middletown. Later, he added, "It looks
like this has more raisins."
Whether they like store brands or not, there was no question
that many shoppers are fed up with cereal prices.
"You buy a couple of boxes of cereal and you are making an
investment," said Mary F. Fleming of Wethersfield.
Although she doesn't favor private-label cereals, Fleming tossed
a box of America's Choice corn flakes into her cart, with the idea
of trying it out on her husband. If all goes well, she stands to
save 90 cents a box off the Kellogg's brand, priced at $1.99 for 12
ounces.
Last week, Gejdenson and U.S. Rep. Charles E. Schumer, D-N.Y.,
said the Justice Department should investigate Kellogg's, General
Mills, Post and Quaker Oats, which the lawmakers said control more
than 85 percent of the cereal market.
Pointing to a study by the University of Connecticut's Food
Marketing and Policy Center, they said cereal prices have increased
by 90 percent since 1983, about twice as much as other foods.
The major cereal manufacturers and their trade association, the
Grocery Manufacturers of America, say the analysis is wrong.
"It's bad work. The numbers aren't right," said Jeffrey
Nedelman, a spokesman for the grocery association.
Gina Talamona, a Justice Department spokeswoman, said the agency
"will be happy to take a look at" the report. She said examining
such a request for an investigation is not unusual.
At a press conference Monday, Gejdenson released a survey of
brand-name vs. private-label cereals at three Connecticut
supermarkets. The survey, he said, showed that consumers can save
an average of $1.30 a box when purchasing store-brand cereal over
the brand- name equivalent. A similar survey by The Courant on
Monday found savings of as much as $1.70.
At the Heartland supermarket in Wethersfield, a 15-ounce box of
General Mills' Cheerios was priced at $2.70. That was $1.12, or 71
percent, more than the store's private- label brand, Total Value
Toasted Oats, priced at $1.58.
But cereal manufacturers point out that those savings often are
reduced by the coupons they offer for their products. They also
questioned whether private-label products have the same quality as
the name brands.
"One of our constant goals is to have superior quality, and we
work very hard to maintain that superiority," said Craig Shulstad,
a spokesman for General Mills.
Today, supermarket sales of private-label cold cereals are about
$491 million, or less than 6 percent of an $8.4 billion market,
said Peter Berlinski, chief editor of the New Jersey-based Private
Label magazine.
He said the continual development of new varieties of brand-
name cereals makes it difficult for private-label producers to keep
up. The four companies cited by Gejdenson and Schumer produce
about 200 varieties of cereals. Still, Berlinski said, the quality
of the limited number of private-label cereals is very high.
"The standard with private-label cereal today is top quality,"
he said. "It doesn't make sense to spend an extra $2 to get a name
on the box when the same stuff is inside."
Although shoppers Monday said brand-name cereals are priced too
high, many couldn't find a store brand they liked.
Edna Ege of Haddam has experimented with private-label cereals,
but finds no generic alternative that appeals to her as much as
Mueslix. Still, at $4.29 a box, Ege wonders how long she'll be
able to keep loyal to the Kellogg's offering.
"It's awful," she said as she pointed to the box in her cart at
Stop & Shop in Middletown. "I swear, that's up since the last time
I bought it."
Also at Stop & Shop, Luanne Paley of Portland said the comfort
she feels when she buys food from familiar companies is worth the
added expense.
"I don't buy generic," Paley said. "I don't know who's making
the other things."
But at Heartland, Valerie Chaniewski of Rocky Hill said brand-
name cereals are just too expensive.
"The only time I can buy them is with a coupon," she said. "We
go through two or three boxes a week. You can't afford spending
$12 a week on cereal."
She said many private-label cereals are "just as good" as their
brand-name counterparts.
John Garvey
I fail to see what relevence the rent comment has to do with the
previous post. As far as the cost of spices and herbs, while not
defending them, I think the high cost is probably due to the high
labor intensive effort required to grow and package them. Whereas
wheat growing is mostly automated, I don't think this holds true for
herbs and spices, but I am far from an expert in this area. If you
compare the cost of a pound of other goods produced from wheat, such
as bread, crackers, etc. the cost of cereal is clearly out of line.
Andy Wing
>
>Food is essential. Cereal is not essential. Cereal is a high-priced
>convenience food. If you want to pay less for breakfast, eat oatmeal
>or toast or eggs & bacon or etc. Also, if the store brand cereals
>wrong store. I can always get a plastic bagful of the generic cheerios
>for like 99 cents.
Most people don't want to spend the time cooking hot cereal, let
alone bacon/eggs/toast, they want to eat and run.
I tried the 'bag cheerios' you mention and they taste cardboardy
imho. The Ralston Tasteeos sold by Acme here in the Philadelphia area
are much better, even than real Cheerios.
Polar
agw...@astro.ocis.temple.edu (Andy Wing) writes:
>
>In article <wbbD5B...@netcom.com>, w...@netcom.com (Will Bell)
wrote:
>>> I tried the 'bag cheerios' you mention and they taste
cardboardy
Have you tried Puffed Wheat and Puffed Rice? By now they probzbly have
Puffed Millet, etc.etc.
These (at 99 cents in markets, perhaps a little more in organic food
stores where they're made from organic flour) are by far the best buy
AFAIK. They taste delicious, can be dressed up w/fruit, etc. and can be
eaten with milk or yoghurt.
I put mine in a ziploc so they stay fresh.
Good eatin!
Polar