If you ask most people, we are still in a recession—regardless of the call a few months ago by the National Bureau of Economic Research. Unemployment remains around 9%—not counting discouraged workers, part-timers who would rather be working full-time, and the millions of people who are invisible to government statisticians. Wages for those who are still working are stuck at 2007 levels , although the cost of living has gone up about 6% since ’07.
Naturally, most of us consumers are watching our pennies. And we’re very resistant to price increases, especially for those “discretionary” purchases.
So what’s a poor multimilliondollar beverage corporation to do? Companies, whether publicly traded or privately owned, have a game plan. The name of the game is ever-increasing profit margins. But these days the buying public won’t put up with price increases—which is the way big businesses have traditionally squeezed more money out of the consumer.
Well, apparently E&J Gallo has solved this dilemma by reducing the size of their Hornsby’s Hard Apple Cider bottles from 12 oz. to 11.2 oz.—and keeping the price the same! And hoping nobody would notice.
But cider drinkers did notice, and they aren’t happy. Check out Hornsby’s Facebook page (parental discretion advised due to language). (Also, in the interests of full disclosure…your correspondent is a big fan of Hornsby’s Crisp Apple.)
You have to ask yourself: What were they thinking? Everybody knows that the cost of ingredients is the least expensive part of the process—far below the cost of facilites, equipment, labor, distribution, marketing, etc. What do the ingredients in a can of Coke cost? Two cents? Seems like the cost of retooling the bottling equipment and the loss of customer loyalty would more than offset the financial gain from 0.8 oz less of cider in a bottle.
It will be interesting to see whether Gallo has the courage of its avarice. Will they have the chutzpah to market their vino in 700 ml bottles instead of the international standard 750′s?