Saturday, August 9, 2008

REUTERS: Folgers says it decreased coffee canister weight

"NEW YORK, Aug 7 (Reuters) - Procter & Gamble (PG.N: Quote, Profile, Research, Stock Buzz) has decreased its Folgers canisters to 11.3 ounces from 13 ounces, reducing the company's green coffee purchases, a spokeswoman said on Thursday."

"Each can will still make 90 cups of coffee, as the weight reduction is the result of an enhanced roasting process that the company has been working on for more than 10 years. The new technique produces a richer taste, Becker said."

"The 11.3 ounce canisters have been on retail shelves since early August and there is no change to the price, she said."


THOUGHTS:
The problem with saying that the consumer will get the same 90 cups is...
People measure out the amount of coffee per serving. For each "cup" one table spoon of ground coffee is used. For people who measure coffee out this will actually result in fewer cups per container.

As for the price not changing...
a drop of 1.7oz from 13oz to 11.3oz is just a hidden price increase.

Walgreens is selling the 13oz for $4.99.
Price per ounce for the 13oz size is 38.38¢
Price per ounce for the 11.3oz size is 44.15¢
Change in price is 5.77¢
Increase in unit price is 15.03% [5.77/38.38 Change in price / original price]
A 15% increase in unit price seems very high. Wonder if consumers will notice and make different choices.

QUESTIONS:
  • What are your thoughts on this price increase tactic?
  • If you are a buyer of coffee, will this information change the way you shop the category?

2 comments:

ivanastaylor said...

Hi David - Enjoying your blog and hopping all around. I'm going to subscribe - you ask great questions. Check out www.pricingforprofit.com and submit your stuff there. Rafi Mohammed is great.

David Damore said...

Ivana,
Thanks for the comment. Checking www.pricingforprofit.com right now.
David