Yet Another Stealth Price Hike: Baker’s Chocolate

Mole Sauce makers everywhere wept with the recent news that Baker's put through an enormous stealth price hike on their core baking chocolate products.

Yep, yet another consumer products company used a shrink-ray on their product, giving consumers the privilege of paying more for less.

And readers, this is one of the most blatant and ballsy stealth price hikes I've seen. Baker's cut their package size by half from 8 ounces to 4 ounces, while cutting their suggested retail price from $3.99 to $2.89.

I'm not very good at math, so I had to break out my calculator to figure out this next part: the per-unit price increased from 49c an ounce to 72c an ounce. In other words, Baker's raised prices by almost 50%.

We've made a practice here at Casual Kitchen of exposing stealth price hikes like these. Consumers get hit with them in practically every aisle of the grocery store: one-pound canned items are now 14.5 ounces, sugar now comes in four- rather than five-pound bags, and branded boxed cereal makers have been pulling this stunt for well over a decade--reducing the standard one-pound box to as little as 11 ounces. A few years ago Casual Kitchen even wrote about Davis Baking Powder's major stealth price hike, and we vainly tried to suppress our laughter at the company's hilariously implausible rationale: they claimed consumers wanted a smaller size.

Weirdly, this is exactly the same reason Baker's gave for their stealth hike. Hmmm.

Now, not only is this a cheesy and crappy way to treat consumers, it’s terrible for business in the long run. To see why, imagine the future size of a product if a company takes 10-20% of the weight out of a product every year or so--while maintaining price. Will consumers be willing to buy 3 ounce boxes of pasta in a decade? Will they pay a buck for a half a rotini in thirty years? At the rate Baker's is going, we will someday pay $2.89 for an individual morsel of chocolate. And they’ll probably claim we wanted it that way too. Clearly this isn't a sustainable business practice.

The bottom line is these price hikes are subversive, anti-consumer, and they are symptomatic of a company looking to maximize short-term profits at the expense of the long term. It’s bad for both shareholders and consumers.

Okay, enough handwringing. What solutions can we find?

First, here's what I tell all readers whenever a company makes a stealth price hike: Punish that brand by dropping it. Vote with your wallet and find a competing product that provides more value. They're out there--although candidly, the traditional grocery store isn't always the best place to find them. The market for baking chocolate, unfortunately, is singularly uncompetitive in most groceries, which is probably why Baker’s believed they could put through this stealth price hike without losing market share.

An empowered consumer, then, must go beyond the standard grocery store to find alternatives. For example, at Trader Joe’s, there’s an exceptional substitute: Trader Joe’s Pound Plus chocolate bars, available in milk, dark, bittersweet and 72% cacao varieties. At $4.99 for a 17.6-ounce bar, this unit price is just over one-third the unit cost of Baker’s pitiful four-ounce box. This is the first place I’ll go to meet my future baking chocolate needs.

Finally, one of my readers sent me a link to an intriguing low cost and less-processed homemade solution, using butter and standard unsweetened cocoa powder.

Readers, what's your take on this issue? What do you do when a brand pulls a stealth price hike over on you?

Related Posts:
Still Sixteen Ounces
Why Davis Baking Powder Put in a 23% Stealth Price Hike
Why Do Products Go On Sale?
Ten Thoughts On the True Value of Brands
The Mysteriously Shrinking Hershey's Bar
Prices, Zombies and the Advertising-Consumption Cycle
Divorce Yourself from the False Reality of Your Grocery Store


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