Friday, March 12, 2010

Juicing the Books

My greatest acknowledged vice, according to two of the women most dear to me, is that I drink too much fruit juice. Rather than dwell on this marital and maternal complaint over what is surely a most benign addiction (compare the problems of keeping a fridge full of orange, pineapple and mango juice to alcoholism, the perils of nicotine, drugs, sex, or say dodging bill collectors due to gambling debts with loan sharks and their ilk), I thought that acknowledging it upfront would help explain how I worked myself into a state of righteous indignation over the following article. Well partially at least.

Tropicana Orange Juice Raising Prices

PepsiCo said it was shrinking its most popular size by about 8 percent, while maintaining its price, and raising the price on another size starting in May.

The 64-ounce container of orange juice will drop to 59 ounces. The suggested retail price will remain at $3.59. [snip]

Food and beverage makers react to changing ingredient costs by raising prices, changing products sizes or both. It is a way to protect their profit margins, and in the case of shrinking packages, offer less to shoppers so they can still buy products without having to pay more money at once.

Now far be it for me to complain about my suppliers raising prices. It's not a case of hell hath no fury like a juice lover squeezed. I do understand, after all, that the Florida winter damaged crops this year and that there's supply and demand and all that. Like Bubbles in The Wire, I accept what a working man has to do to make a living. It's all in the game right? No, what got to me was the disingenousness of the thing. That last line in the article is a prima facie lie, an attempt to disguise a price increase with weasel words. Well I started feeling like Bodie: the game is rigged.

You may recall me discoursing on The New Formula - the propensity of companies to tweak processes and often worsen their products in furtherance of the bottom line, a pathological hallmark of latter-day capitalism. I even had a case study showing how spikes in the prices of soybeans directly led to me losing out on my trusty Oil of Olay body wash as, first, the oil maleation process was removed and then, when there was nothing to be tweaked in the manufacturing process, soybeans were removed and the product was relaunched and relabeled "new and improved". Such is life right? Make lemonade when life gives you lemons.

But that was tinkering with process, now they're even messing with my lemonade. With commodities like juice, one would think that there is only so much you can do to process to wring out efficiencies. You can only pay the illegal immigrant labour force so little to harvest, even they need basic food and shelter after all. The gains from fertilizer are diminishing and runoff issues are quite literal. Even the politics of it are confusing; banana republics are expensive these days. Ecuador's going mildly 'socialist' to the dismay of old fashioned Texas businessmen. In all seriousness, the economics of modern day agriculture are fairly well studied and there's precious little slack.


No. It's the package shrinking that gets me. The Tropicana deception, as I called it, this juicing of the books is only the latest in an interesting trend of manufacturers increasing prices but retaining the same size packaging. Bottles or containers are made more convex, given revamped designs to fill the same physical dimensions, the spouts are shaped to pour out more than previously. Throughout the sticker price remains constant in order to fool the indiscriminate consumer into thinking that they are receiving the same product.

This orange deception is the result of literal bean counting in the spirit of airline companies in the 1990s that literally started saving peanuts (reducing the number of peanuts per package distributed in flight - and these days you're lucky to even get any complimentary snacks). We're being nickeled and dimed to death. The sole concession to honesty is in the small print of the labels on supermarket shelves - the per unit price that generations of consumers had to fight for. Regulations that are often meaningless in the marketplace.

Consider liquid detergent in this vein. There is a fine interplay of fluid dynamics between the design of the spouts of modern liquid detergent bottles and the viscosity of the liquid they contain. And this is an engineering and marketing decision, when you pour, sometimes things come out faster than you expect. At other times, it is rather that you have to be quite lithe of hand to steady the bottle as you try to stop pouring - call the result excess runoff if you will to keep with the fertilizer analogue. It's a minor irritation to be sure but the net effect is to make you use more of the product than you expected, a cynical nod towards planned obsolescence. And I've experimented you know, I follow these things closely - for a couple of years I even kept a collection of old bottles of Ivory, Palmolive, Tide and the like. Results? Well each brand tweaked their bottle design and consumer convenience was never in mind.

But let's broaden the perspective here on this mania for manipulation, this drive to extract surplus value. We see this in strategies adopted in modern agriculture - or should I rather say agribusiness: piling on the fertilizer, force feeding animals substances that should alarm even the most jaded, corn everywhere, herding in crowded cages, top-ups with antibiotics when expedient and so forth. No wonder modern farms or say your local meat rendering plant are desolate places. But this imperative has broad applicability. Airline travel is now seen in its true light - convenient perhaps, but an exercise in stress and physical discomfort. The space in economy class of ye regular airline is now so circumscribed as to be cattle tested. The logic indeed is that we're only cattle. "Buy something you stupid consumer" as that poster goes.

But I can understand the perverse incentives. I know that there is a push at the end of each quarter to close deals and I've felt it wherever I've worked no matter how low up the totem pole I might rest. You don't need studies of companies manipulating earnings to consistently beat expectations to know what all this means. When we read about Lehman Brothers doing the Repo 105 dance, it is much the same attitude towards truth in advertising at work. The current encomiums to "do more with less" have their counterpart as we have seen, "sell less for more" is Pepsi's slogan. As someone who owns stock I can understand the profit imperative, as a consumer however, I know it will come back to bite me and in this case, it will bite me in the form of a 59 ounce juice container lovingly designed to fill much the same shelf space as its 64 ounce predecessor.

It's all a shell game and there are now so few scales left to fall from my eyes. I am now eagerly awaiting the new juice containers in May to add to my collection of deceptive latter day capitalist artifacts - an archive of products engineered for the express purpose of juicing the books.

Soundtrack For This Note

Anyone have any further examples of these newfangled "advances" in packaging?

Disclaimer: I should note that of late I've been mostly buying a brand of juice that is often sourced from South America (typically Brazil) rather than juice from Florida or California - I wonder if I'll return to Tropicana or Minute Maid after this fiasco - can't they have the nerve to simply increase the price? And while digressing, I should also again note that I've started to see pineapple juice from Ghana making it to the supermarket shelves in these California climes. I do applaud the wonders of distribution in this modern age. It's the packaging and advertising that gets me down. Deception innit?

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orchid lover said...

You drink too much juice.

John Powers said...

I make paper hats with tissue paper. And for the first time did a workshop on making paper hats yesterday. I discovered that the the previous size most available 20 in. x 26 in. has been replaced with 20 x 20. A drag because 26 inches is enough to go around a head.

Koranteng said...

That's a crying shame about the diminishing returns of tissue paper. And you can't even point a whimsical animating spirit as in the film Amelie that's gradually reshaping one's life. No, rather it's a fairly malevolent thing at work.

Incidentally, one wonders how closely the public relations flacks that manage the Tropicana brand will monitor the forthcoming backlash.

Bambalawe said...

So this Korateng guy is so thorough with life that he knows what processes at the soap factory they are tweaking to give him a 'new and improved' product. No shit I'm an animal !