Magically Opportunistic Pet Food Price Gouging!

One of the oldest tricks in CPG is changing the size of the consumer package and maintaining the same SRP (or even taking it up a few %age points). For those of you that have never paid attention to this trick, here is an example:

General Mills' Lucky Charms ($5.29) weighed in previously at 16oz ($0.331/oz) but now comes in at 14.9oz at $5.49 ($0.368/oz). A $0.20 increase per box doesn't seem like a lot so what's the issue? As with any good "magician", it is all about misdirection. I'm getting the LARGE SIZE...the cereal is "Magically Delicious" and I'm sure the increase is because of the ubiquitous "supply chain issues"! However, as a consumer, I'm now getting 6.9% LESS but paying 11.1% MORE on a cost/oz! Here is the segue back to pet food: I am now "buying me Lucky's" much more frequently. If one box at 16oz lasted me 7 days, the new sized box will last me 6.7 days. Again, doesn't seem like a lot but over the course of the year, I will end up buying 3 more boxes without even giving it a second thought.

Shifting gears into pet food, I came across the following "magic trick" at a company that has been in the news a LOT lately. They make a freeze-dried pet food that is 14oz in size. The price was $31.99/bag and they recently took a price increase to $33.98 (a 6.25% price increase per bag). Again, quick in-aisle math says you are paying $2.42/oz, up from $2.29/oz BEFORE the price increase. So $0.13/oz or $2/bag hardly seems worth mentioning so, of course, I had to dig in a little deeper.

The numbers above came from the company's website and I applied some basic math to get to the results (e.g. 45 kcal/nugget divided by 5.075 equals 8.8 grams/nugget). So these folks kept the size the same and tell the world that they only took a 6.25% price increase against SRP (all true) but the consumer is actually paying 54% MORE on a daily feeding basis for a 25lb dog!?!?!

Full disclosure, the company did change their ingredient deck; they added some probiotics, changed the order of other ingredients and may or may not have combined two ingredients into one for a name change and a higher "ranking" on the deck. Regardless, the changes made their nugget slightly more dense and LESSENED the kcal ME/kg by almost 13%. If, by some strange chance, consumers are using this food as an everyday option, they will have to buy 118 bags now (37 MORE bags than they did previously) in order to feed their 25lb dog based on the kcal ME/feeding requirements! Over the course of the year, those 37 extra bags will cost the consumer an additional $1,257.26 (and a total cost of $4,009.64 for the year)!

The industry constantly says that it is "recession proof" and that consumers are willing to "spend less on themselves" in order to maintain their pets diet but we (the industry, certainly not Guardian) have gone too far. When is enough, enough? When is too much, TOO MUCH? Asking for a friend...my best friend!

Additional articles on inflation and price gouging in the pet industry