New and Improved

Another case of the new formula, another case of a company juicing the books: the diaper wipes that we had settled on for The Daughter got the New and Improved! treatment last week (the exclamation mark is the usual signifier of duplicity). It's the now customary scenario: a company decides to wring out surplus value by squeezing every ounce out of its means of production, typical latter day capitalism at work.

Working in an industry that is perpetually focused on the new and shiny, I probably shouldn't begrudge innovation in a mature market, and what is more fundamental than diaper wipes after all. Furthermore The Wife suggested I should censor this particular rant - perhaps wanting me to elevate the discourse and not fall into a parental blogging rut. I had even planned initially to use the title of this piece to dissect exactly why the recent redesign of Delicious left me in literal despair, but, well, my muckraking instincts for economic malarkey would not be denied. I'm knee deep in it, so diaper wipes toli it is...

I note:

1. The number of wipes per box is reduced, 64 rather than 70
2. The formulation is changed - the material is different and the liquid the wipes are soaked in is different. Presumably cheaper ingredients are being used all around.
3. The price per box remains the same.
4. Profit!

Counteracting this, my investigations reveal that the size of each individual wipe is slightly increased now a 17.7 by 17.7 cm square as opposed to a 17.7 by 17.2 rectangle. Thus an individual wipe might feel slightly more substantial in your hand. Such are the fringe benefits.

I won't repeat my usual analysis of the costs of all the raw materials (although I was intrigued by some of the substituted chemicals) - I'll give them the benefit of the doubt that the research and development costs of this process tweak is neutral in that regard.

Doing the math however, even if the same raw material for the tissue was being used, they have managed to get a 6 percent decrease in their costs. This combined with a 8.5 percent decrease in the units per box (their revenues are assuredly tied to the total number of units moved) is the icing on the cake, or should I say, the fruit at the bottom.

And the only thing they had to do was change the packaging. The New Formula is marketed as "New and Improved"!, ostensibly "thicker, more absorbent" and the new box has been given a makeover - green graphics evoking the forest plundered in the manufacturing process, marketing copy about how it is good for the environment, bio-degradable, hypo-allergenic etc.

Impressionable Youth

Most egregious is that the new diaper wipes have a stenciled design of what looks like little Winnie the Poohs to make it more exciting for both the adult wipers and the toddler wipees. The owners of A.A. Milne's copyright (or is it Disney) must be smiling at both the licensing opportunity and inspired product placement, eyeballs are everything and the younger and more impressionable the better.

Some surfer of the conventional wisdom says you have to do something 10,000 times (or is 10,000 hours) before you become a pro. Diapers are in most cases a 2 to 4 year part of a parent's life thus one might approach that virtuosity. Incidentally the diaper companies quite ludicrously say that you should expect to change 10 diapers a day (it is obviously in their interest to encourage inflation in diaper changing rates). Crunching numbers as is my wont, in addition to the economic bonanza gained by the process tweak, there are all those ad impressions that can be monetized, marketed to the highest bidder.

The brand is called Seventh Generation, they must be in Seventh Heaven at this turn of events. Really, think about the impressions here. The best minds of my generation are trying to figure out how to get users to click on ads and here we have literal evidence of bottom power. Various science fiction novels and films have emphasized the permanent advertising that is in our near future. The tissues given to economy passengers on some airlines have advertisements on them; much has been made about catering to captive audiences in toilet stalls and the like. The future has long intruded in the most routine encounters, intimacy and privacy be damned.

I expect that my love for Winnie the Pooh, Peter Rabbit and Kwaku Ananse will remain undiminished, but surely one might wonder about a potential backlash. I expect however such things have been taken into account, brand managers are watching social media for signs of reaction to the rebranding. Indeed my company even markets software for this purpose.

Maker's Mark was pilloried recently for planning to dilute the alcohol content of its bourbon and other products; the company reacted by reversing its decision. Fiddling with the formula is a fine art and perilous especially with food and drink (New Coke and horse meat notwithstanding). They should really have just gone with strategy of smaller containers like the orange juice producers. For other types of product the sky seems to be the limit in this respect. Inertia being what it is, most people won't change their practice even if they notice the difference.

We are all jaded customers, used to being nickled and dimed and singing the inflation calypso - this is par for the course in this Great Recession. Anyway, I noticed and wrote it up for what its worth.

A New and Improved Playlist

A soundtrack for this note as is my custom

• George Howard - Brand New (And All Made Over)
  Jazz-Funk grooves at the beginning of his career.
• Brand New Heavies - Put The Funk Back In It
  Alternatively try Shakedown from the same album
• Gil Scott-Heron - Ain't no New Thing
• Kanye West - Devil in a New Dress
• Allan Family - New Creation
• Morgan Heritage - New Time, New Sign
• Luciano - Tell Me Why
• Brand New Heavies - Get Used To It
• Dwele - What Profit
  What profit a man indeed?

File under: economics, deception, marketing, pricing, design, observation, perception, packaging, snake oil, Hard Sell, sales, New Formula, backlash, commodities, strategy, capitalism, irritation, rant, USA, whimsy, toli

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

• Richard "Dimples" Fields - She's Got Papers On Me (featuring Betty Wright)
  A cautionary tale this one, it's all downhill from here.
• Oran "Juice" Jones - The Rain
  A juice soundtrack should always feature the one and only Oran "Juice" Jones whose oeuvre I've discussed previously. The Rain is about betrayal:

  That's right, now close your mouth 'cause you cold busted. Now sit down here, I'm so upset with you I don't know what to do.

  Hear that Tropicana?
• Eric B. & Rakim - Know The Ledge
  It's all about the inflation calypso isn't it? Well, knowledge is king. Alternatively try Naughty By Nature's Uptown Anthem from the same Juice soundtrack.
• Superchunk - Package Thief Tropicana's theme, punks.
• Masi Asare - Orange Soda
  I'm going to have to go in for soda instead of juice what with all these pricing shenanigans.
• The Juice Crew - The Symphony
  Pound for pound the heavyweight champion of posse cuts.
• Orange Glow by Amel Larrieux
• Atmosphere - Shoulda Known
  From their 2008 album rightly titled When Life Gives You Lemons, You Paint That Shit Gold

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?

File under: economics, deception, pricing, design, strategy, policy, juice, packaging, irritation, rant, USA, capitalism, marketing, observation, perception, commodities, backlash, snake oil, New Formula, toli