• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Inflation Watch: The Incredible Shrinking Coke Can

Tyler Durden's picture




 

U.S. soft drink companies are increasingly shifting to "mini-cans" in an apparent strategy to help the poor obese people of the world manage caloric intake better. Mini-can sales are up 3% as the rest of the industry is in demise. All sounds great... However, as Reuters notes, the reality of the shift toward smaller cans "is almost the industry admitting that volume is not going to be growing very much." Simply put, it is one way that companies can drive higher prices and larger margins: Consumers may feel as though they’re buying a cheaper, smaller soda, but they are often paying more per fluid ounce. But do not fear, inflation is contained.

 

As Reuters reports, soft drink firms strategy is propaganda'd as helping manage health...

About a year ago, Texas rancher George Krueger worried about his weight, and decided it was time to downsize - his Coke cans, that is.

 

Like increasing numbers of U.S. consumers, Krueger bet that by switching from regular-sized soda cans to 7.5 ounce "mini"-sized ones, he could make a dent in his daily calorie intake.

 

“It’s kind of a happy medium,” said the 62-year-old, who generally drinks a can a day, but sometimes goes for an extra one for more caffeine. “I can have my sweet fix but not feel guilty for having so much.”

 

U.S. soft drink companies are betting that soda drinkers like Krueger and their willingness to buy smaller cans, even for a higher unit price, will be a potential antidote to weak sales as consumers shift away from sugary soft drinks.

 

The mini-can is the latest move by food and beverage companies to boost their product offerings of smaller portion sizes that supposedly help consumers limit their caloric intake - even if there are signs that some end up reaching for another package or can.

 

Mini can sales grew 3 percent in 2013 while the rest of the carbonated soft drink category dropped, according to market research firm Euromonitor International.

 

Pepsi’s mini can business in the United States has grown 24 percent year-to-date in 2014 and was up 34 percent last year. The company said that this year, it has also seen a significant increase in the number of in-store displays of mini cans.

But the reality is... it's about rising costs and managing margins...

The shift toward smaller cans “is almost the industry admitting that volume is not going to be growing very much,” said Ali Dibadj, a beverage analyst at Sanford C. Bernstein.

 

It is one way that companies can drive higher prices and larger margins: Consumers may feel as though they’re buying a cheaper, smaller soda, but they are often paying more per fluid ounce, analysts said.

 

Indeed, there is a price difference between mini cans and regular cans at retail. At a Fairway grocery store in Manhattan last week, 7.5-ounce cans of regular Coke and Pepsi were $4.49 for an eight-pack. Twelve-ounce cans, on the other hand were $4.89 for a 12-pack. That works out to roughly 7 cents per ounce versus 3 cents an ounce.

Of course, the reality is - consumers are drinking the same amount (more small cans) at a higher price...

“Studies show that people drink whatever package it comes in,” she said.

 

That’s not necessarily the case with all food products, such as 100-calorie snack packs. A 2008 study by Arizona State University researchers found that dieters actually consumed more of the food in smaller packages than they would if it was regular sized.

 

Krueger, the Texas rancher, hasn’t lost weight as a result of the mini cans but said they are likely keeping him from gaining more bulge.

 

“If I was really sensible, I wouldn’t drink them at all, but I just love the taste," he said.

*  *  *

"That works out to roughly 7 cents per ounce versus 3 cents an ounce." - Nope, no inflation here...

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Wed, 08/06/2014 - 22:22 | 5057108 LetThemEatRand
LetThemEatRand's picture

Meanwhile, an 8-ball on Wallstreet is cheaper than ever, and fully loaded.  Said one Wall Street insider, "If I was really sensible, I wouldn't snort it at all, but I just love the taste.  Fuck that 7-up guy and the un-Cola."

Wed, 08/06/2014 - 22:29 | 5057146 AldousHuxley
AldousHuxley's picture

Just drink water

Wed, 08/06/2014 - 22:35 | 5057167 hedgeless_horseman
hedgeless_horseman's picture

 

 

Our family milk cow is still giving us about 4 gallons of milk every day. She still eats the same amount of grass in the same pastures as always. No inflation here to report.

Wed, 08/06/2014 - 22:36 | 5057181 philipat
philipat's picture

Inflation? Nah, open the can, it's just noise......

Wed, 08/06/2014 - 22:43 | 5057217 Richard Chesler
Wed, 08/06/2014 - 23:38 | 5057391 Save_America1st
Save_America1st's picture

use a ProPure filtration system that purifies water and gets rid of pretty much all fluoride, glyphosates (pesticides like RoundUp, etc.), heavy metals, dirt, bugs, creepy crawlies, etc. etc. etc.  You can dump river, stream, puddle or lake water into it will totally purify the water.  And if you don't trust that, then after you filter it...boil that shit and you're good to go!

And also just stock up on some killer moonshine and any other booze of choice, bitchez.  Those bottle of booze will also be good for barter in the days ahead.  Buy a few cases of those little airplane bottle size boozes of all different flavors, vodka, whiskey, rum, etc...they'll be just like currency and will help you save your silver for later on down the line. ;-)

Either way...no normal person should give a rats ass about any soda, soft drink, fluoridated toxic beverage of any kind, and any other garbage that's being trimmed down while costing more.  Give all that shit up!

Just like giving up cable/sat TV...total rip off and a waste of time, energy, money that could be used for reading, prepping and stacking phyzz.

 

Thu, 08/07/2014 - 00:00 | 5057455 Elvis the Pelvis
Elvis the Pelvis's picture

Inflation my ass.  This is just another bubble.  It'll pop, and everything will drop.  Bitchez.

Thu, 08/07/2014 - 00:05 | 5057468 Save_America1st
Save_America1st's picture

WATCH and LISTEN then PASS IT ON.  Excellent interview with Marine Colonel Pete Martino:  I See Something!

This is the TRUTH, "Folks"!!!

https://www.youtube.com/watch?v=OUTXnnVTInA

Thu, 08/07/2014 - 00:14 | 5057499 0b1knob
0b1knob's picture

I worked in soft drinks years ago and they tried the same thing with 8 oz. cans.    NO ONE BOUGHT THEM.   People aren't as stupid as Coke would like them to be.

Actually the cost of the aluminum cans is a major determining factor in the price of canned soft drinks.   That and the price of the distribution.   The actual cost of the ingredients is minimal.   The real profit is in fountain operations at McDonalds and other fast food places.  Most fast food joints just sell the food at cost and make all their money on soft drinks.  Why do you think they let you have free refills?   

Like somebody else said, drink water.    You can get a chicken sandwich and small fries at MickeyDees for less than $3 if you skip the soda.   I see lots of people doing it.

Thu, 08/07/2014 - 18:50 | 5061302 Againstthelie
Againstthelie's picture

We have a reverse osmosis system which filters out over 90% (over 650 TDS down to 20-30 TDS). For example Nitrate from over 100-150 mg/l down to 10-12 mg/l.

According to the homepage ProPure works without electricity and is not working with reverse osmosis?

Thu, 08/07/2014 - 09:23 | 5058350 zerozulu
zerozulu's picture

Apparently Putin is friend of American people and is thinking about our inflation. Banned food imports from US, will help contain inflation here.

Thu, 08/07/2014 - 19:47 | 5061963 Idaho potato head
Idaho potato head's picture

And keep the Russians healthier.

Wed, 08/06/2014 - 22:48 | 5057234 Slave
Slave's picture

3 facist government employees despise your independence.

Wed, 08/06/2014 - 23:07 | 5057311 Cruel Aid
Cruel Aid's picture

if she eats grass, that is a very healthy drink, as the fat is not what clogs up arteries, turns out. Its the sugar in sodas and omega 6's.

I never drink sodas, but I do own the company, weird right?

Thu, 08/07/2014 - 12:30 | 5059390 TalkToLind
TalkToLind's picture

Raw milk?  TERRORIST!!!

Wed, 08/06/2014 - 22:34 | 5057176 Fish Gone Bad
Fish Gone Bad's picture

Sugar makes people fat.

Wed, 08/06/2014 - 22:38 | 5057185 LetThemEatRand
LetThemEatRand's picture

And Cola makes people thin.  

Thu, 08/07/2014 - 00:20 | 5057507 Harbanger
Harbanger's picture

That was before they took cocaine out of the ingredients.

Wed, 08/06/2014 - 22:42 | 5057211 Motorhead
Motorhead's picture

Sugar or high fructose corn syrup?

(Three cheers for the corn lobby!)

Wed, 08/06/2014 - 23:23 | 5057354 Rootin' for Putin
Rootin' for Putin's picture

Actally, the corn lobby was the US gov trying to protect the domestic cane and beet production.  The US pays about twice what the rest of the world does for sugar.  The unfortunate result of this is the cheaper man made concoction of hfcs.
Outside the US, you dont see hfcs anything like as much.

Thu, 08/07/2014 - 07:11 | 5057929 IronForge
IronForge's picture

They're both deliciously diabetic!!!

 

Wed, 08/06/2014 - 22:37 | 5057180 defender1be
defender1be's picture

Cheap and fully loaded?  The content has dropped to 10-15% a few months ago and sometimes even nothing. Only chemical chit that mimics the real stuf but is deathly on the long run and with very nasty side effects. So hé, no real inflation in illegal substance ether.

Wed, 08/06/2014 - 23:05 | 5057301 Buck Johnson
Buck Johnson's picture

Inflation sorry hyperinflation is on the rise and it's going to hurt us badly.

Wed, 08/06/2014 - 22:21 | 5057111 john39
john39's picture

How much would a can cost if they had to use real sugar instead of gmo mercury laced corn sugar?

Wed, 08/06/2014 - 22:26 | 5057132 edifice
edifice's picture

Kroger stores sell Mexican Coke, which uses real sugar as the sweetener. They are 99¢ a bottle.

Wed, 08/06/2014 - 22:34 | 5057173 edifice
edifice's picture

Mexican Coke. I see what I did there...

Wed, 08/06/2014 - 22:44 | 5057215 Motorhead
Motorhead's picture

Bet it tastes a whole lot better, too.

Wed, 08/06/2014 - 22:48 | 5057233 Freddie
Freddie's picture

I heard Costco sells it too.  So little illegal Mexican kids do not get even fatter.

Hopefully, KO major shareholder Buffett gets the eBola so he can bleed from his anus and eyes.

Wed, 08/06/2014 - 22:30 | 5057156 nink
nink's picture

If they keep buying down the cost of PM it will be cheaper to put coke in cans made of sterling silver than the cost if the coke that goes in it.

Wed, 08/06/2014 - 22:24 | 5057118 Grande Tetons
Grande Tetons's picture

Just maybe...the mini-condoms I have been using will become in vogue. They cover the tip and not the shaft. 

Wed, 08/06/2014 - 22:28 | 5057131 db51
db51's picture

I've been using minis, and they pretty much cover the whole thing.   Having to put it on and then roll the excess up like a pair of cuffs on jeans was a PITA on the standard Size.

Wed, 08/06/2014 - 22:24 | 5057122 TideFighter
TideFighter's picture

The worst shit you can put in your mouth, evah!

Wed, 08/06/2014 - 22:29 | 5057150 fonzannoon
fonzannoon's picture

awww the mouth breathers will have to ingest smaller quantities of diabetes water....awwwww.

Wed, 08/06/2014 - 22:35 | 5057169 Cognitive Dissonance
Cognitive Dissonance's picture

Anything that removes corrosion from car battery terminals or stains from your toilet bowl does not belong in your stomach. Just sayin'

<This public service message brought to you by a ex Pepsi addict. I have been clean and sober for 15 years now.....one day at a time.> :)

Wed, 08/06/2014 - 22:36 | 5057182 fonzannoon
fonzannoon's picture

maybe a few months of this and we can make snaller scooters.

Wed, 08/06/2014 - 22:44 | 5057218 NoDebt
NoDebt's picture

It's possible to be a big fat fuck and still starving to death for lack of real nutrition.  Just ask McDonalds or Yum Brands.

Wed, 08/06/2014 - 22:46 | 5057224 fonzannoon
fonzannoon's picture

now they can be fat fucks instead of big fat fucks. things are lookin up.

Wed, 08/06/2014 - 22:53 | 5057253 NoDebt
NoDebt's picture

Nah, these big fat fucks could find calories in the middle of the Gobi Desert.  I swear they can suck the calories out of a Big Mac from across the room.  It's like osmosis.  One minute they're over here, next minute, they're in their bodies.  No chewing required.

 

Thu, 08/07/2014 - 00:06 | 5057470 BLOTTO
BLOTTO's picture

You guys are drinking it wrong...

.

You gotta drink it like the teens...mix the c-cola with Red Bull and a splash of Monster on top

Wed, 08/06/2014 - 22:38 | 5057187 Fish Gone Bad
Fish Gone Bad's picture

A battery cleaner you can drink!  Now that is a marketing gimmick.

Wed, 08/06/2014 - 22:47 | 5057230 Baby Eating Dingo22
Baby Eating Dingo22's picture

I just heard a Pepsi ad for a new product that is made with REAL SUGAR

What tooth rotting, diabetic obesity creating substance have they been using prior?

Wed, 08/06/2014 - 22:51 | 5057247 Cognitive Dissonance
Cognitive Dissonance's picture

High fructose GMO corn syrup. You know.....the good shit.

Wed, 08/06/2014 - 22:58 | 5057273 Almost Solvent
Almost Solvent's picture

And that's only until they can find a cheaper 'sweetner' to further cut costs 

Thu, 08/07/2014 - 14:11 | 5060163 TheRedScourge
TheRedScourge's picture

Actually, the sugar cartel is mostly to blame for them using HFCS.

Thu, 08/07/2014 - 00:21 | 5057509 Freddie
Freddie's picture

Coke is really bad and Pepsico uses even worse GMO corn syrup.  Pepsi's stuff can cause gastroenteristis (runs) for many people.

Wed, 08/06/2014 - 23:07 | 5057309 Hulk
Hulk's picture

coke cleans pennies up bright and shiny like too !!!

Thu, 08/07/2014 - 02:38 | 5057692 RafterManFMJ
RafterManFMJ's picture

I do a couple table spoons of Apple Cider Vinegar everyday.

"In a 2009 study published in Bioscience, Biotechnology, and Biochemistry, it was found that subjects that consumed acetic acid for 12 weeks experienced significant declines in body weight, abdominal fat, waist circumference and triglycerides. Triglycerides contribute to the bad cholesterol that we want to avoid."

Supposed to have many health benifits. Definitely freaks people out when you do a shot of it.

Try Bragg Apple Cider,vinegar, Unfiltered, Raw, Organic; it's an excellent sippin' vinegar.

Wed, 08/06/2014 - 22:25 | 5057127 edifice
edifice's picture

I remember they used to sell lids for soft drink cans. Older folks like my grandparents (b. 1913, 1921, respectively) would only drink half the can, then save the rest for the next day. Myself and many people I know no longer drink soda. Maybe soft drink makers are trying to rekindle lost business with smaller servings? "A little won't hurt ya"?

Wed, 08/06/2014 - 22:34 | 5057175 yogibear
yogibear's picture

"Myself and many people I know no longer drink soda."

It's a good thing. Coke can stuff their carmel colored sugar water. They keep raising their prices and we stop drinking it. 

Wed, 08/06/2014 - 22:40 | 5057199 Fish Gone Bad
Fish Gone Bad's picture

Coca Cola sales aren't so hot.  People finally figured out they can do without it.

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