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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Jenna said...

What do I do? Pretty basic - in almost every case of the shrink ray hitting, unless it was some truly vital product (for example, a gallon of milk ever drops below a gallon, and I'm likely gonna have to just swallow the hit, along with a great deal of bile and more than a few muttered curses as just my husband and I alone drink 3 gallons a week, plus more for cooking and cereal) I've stopped buying the product cold. I'll write a letter or email right away, then maybe again in a few months and then... it's off the list pretty much forever. Some companies end up fixing their shrunken products, not many, but a few - but I'll be honest. There are so many ~other~ options for almost everything, once a company loses my money & attention, they rarely get it back. Not just from irritation at being jerked around - but simple time available. Due to allergies and celiac, I have to be hyper-vigilant in my label reading at the best of times and grocery runs already can take me all day. I just don't have TIME to keep going back to a product to see if they have fixed the issue. When the weeks shop involves 4 places as a matter of routine, then another half dozen as alternating through the month or on the 3/6 month restock shop, my money and loyalty goes fast when a company jerks me around.

Frustrating in the extreme about the unsweetened chocolate - I hadn't bought any in a few months, having stocked up for the holiday baking craze I have just been working through my stash. I'm almost out and have been putting recipes aside for Valentine's gifts that had me about to restock. Thanks for the Trader Joe tip, and I suppose after I look there and at the local bulk food shop I'll start looking online. I do enough cooking and baking to make it worth my while to buy in bulk lots thankfully.

What is so crazy making is how hard this makes grocery planning/shopping AND cooking for family and friends. I do a bit of shopping for my extended family because, as I work from home and a near savant level of Grocery Ninja skills and dozens of constantly updated price lists to work with gives me the ability to help them out, so this will be nothing more then mildly annoying for me and mine - but I know most of my friends will just end up, yet again, having to swallow the cost, so it's just yet another wallet smack. I'm blessed in a way most just aren't anymore... I have the time available to shop around and get the best prices for things, work out substitutes, and/or buy large enough amounts to almost always get the best price. But that is a MASSIVE luxury most folks just don't have.

Who know though, Baker's just lost my business, my families business, and I'll most likely email this post to a large chunk of my friends with an offer to see who would want me to grab enough for them as well when I do my next bulk stock up, with a large enough buy letting the price savings be shared out. Maybe enough people all over will do the same and make the company rethink this 'favor' they decided to do us all!

Jen Blacker said...

This is such a shame, I use Baker's for several of my recipes.

I did find an alternative though just this weekend by accident. One of my recipes called for unsweetened chocolate but I only had one square left of the Bakers. I used dark chocolate instead in the recipe. It worked out fine. It wasn't too sweet at all, didn't notice any difference.

So try using a good dark chocolate in place of Baker's for now. It should work for you too. If it turns out a little too sweet I'd just subtract some sugar from the recipe.

Barb | Creative Culinary said...

I hate this practice on so many levels. First I think it presumes the consumer won't notice and I'm never happy with someone assuming I/We are stupid. Beyond that it shows enormous greed. It seems like corporate America is back to it's old tricks of squeezing the consumer; I'm not sure about where YOU live but I know that the cost of living in Denver has not seen my income rise by 50% yet increases lately seem destined to make up for some years of slowdown with little regard to our paychecks being able to compete.

Truth be told I don't use Baker's much and it might be cheaper than some of the brands I do use for my baking but at least I'm paying a higher price for a higher quality...find something different stat!

BonnieBanters said...

This is a great article Daniel...thanks for exposing the price hike and providing alternatives!

Melissa French - The More With Less Mom said...

I absolutely can't stand when they change package sizes. They're messing with my recipes and it makes me bonkers. And less likely to use recipes that have packages in them.

Little Les said...