If the post-coronavirus economy means living without ketchup and spreading less Nutella on toast, what were the face masks and lockdowns all for anyway? From higher prices to product shortages, the latest consumer trends signal hard times for U.S. shoppers as future visits to the supermarket and restaurants will be different from before the COVID-19 public health crisis. In the end, millions of people survived the pandemic, and all they got for it was a lousy vaccine and no more oat milk. What is going on here?
Pass the Ketchup – or Catsup
The Ever Given giveth. The Ever Given taketh away. The next time you visit your favorite hamburger joint or hot dog stand, you may need to skip the ketchup. Or, if you do come across the classic condiment staple, you might want to hoard it as an investment. With the U.S. economy reopening, restaurants are getting back to business feeding hungry customers. But as these establishments satisfy your taste buds, they are all demanding the same thing: Ketchup. And this is having an effect on domestic inventories.
According to The Wall Street Journal, the U.S. is facing a nationwide ketchup shortage because the Suez Canal blockage has created a delay in the global supply chain. As a result, ketchup, especially packets, are being sold at a premium. This has forced managers to use generic versions, pour ketchup into individual packets, or visit the nearby Costco for alternatives.
It has gotten so bad that people are hitting up eBay to sell their ketchup packets to desperate diners. Forget GameStop stock – ketchup packets are going to the moon!
Let’s Roll into Higher Prices
Remember the good old days when shoppers would engage in hand-to-hand combat at the local Walmart over toilet paper? This was one of many fond memories the coronavirus pandemic gave the world. Fast forward a year, and it turns out that consumers will pay more each time they visit the bathroom or blow their nose.
Liberty Nation recently reported that Kimberly-Clark, the maker of Scott, has confirmed it will be raising prices on various consumer goods in North America this summer. The house of brands stated that its toilet paper, diapers, cereals, and other products would go up in high-single digits at the end of June to offset the spike in raw-material costs.
Whether it is the $1,400 government stimulus checks or the new job you found, this newfound money will be going straight down the toilet.
Oat My God
Who knew Americans would love their oat milk so much? Starbucks is learning that this non-dairy item has become incredibly popular at its stores. It has been in such high demand that the coffee juggernaut confirmed it is experiencing an oat-milk shortage. And this is only a month after introducing several oat-milk beverages nationwide.
The maker of the Trenti iced coffee, 12 pumps vanilla, 12 pumps hazelnut, 12 pumps (sugar-free) caramel, five pumps skinny mocha, and splash of soy had to issue a statement urging customers to try its other plant-based alternatives, such as soy milk or almond milk.
"Customers’ response to the national launch of oat milk at Starbucks has been positive. As more customers return to our stores, some customers may experience a temporary shortage of oat milk at their store. We apologize for any inconvenience to the customer experience and recommend trying soy milk, almond milk or coconut milk. Customers will have oat milk available in their store soon."
If customers need their caffeine fix, they can always have a cup of java black, much like Raymond Chandler's iconic Philip Marlowe: "Rich, strong, bitter, boiling hot, ruthless, depraved. The life blood of tired men." Consumers may not enjoy the black liquid euphemistically referred to as coffee either since the market is anticipating shortages of arabica beans.
Shrinkflation Nation
Paying more for less has become the norm in the food business – and it is usually the step before rampant inflation. So many of our favorite products have gotten smaller over time, but their price tag has stayed the same. Industry experts often defend the practice, arguing that research has shown customers would prefer to pay the same for a reduced amount instead of enduring sticker shock.
Love chocolate on toast? Be prepared to spread less hazelnut cocoa as tubs of Nutella are shrinking, but prices have stayed the same. While Ferrero has refrained from adjusting Nutella's formulation (55% sugar by weight), the chocolate and confectionery behemoth is trimming 50 grams off its 450- and 750-gram jars. The business cited rising production costs for the decision.
Nutella is not the first – and it will not be the last. Companies generally only have three options to choose from: price hikes, reduce the package size, and adjust the ingredients.
One of the more well-known examples is Coca-Cola, which started charging more for tiny soda cans and bottles. There was also outrage over Toblerone expanding the valleys between the chocolate peaks, forcing the business to add 50 more grams to the sweet treat and increase the price. Across the pond, the British Office for National Statistics (ONS) reported that more than 2,500 products, ranging from toilet paper to fruit juices to coffee, went through shrinkflation between 2012 and 2017.
The Global Economy
But why is all of this happening at once? There are several ingredients in this recipe of disappointment: central banks’ money printer go brrr campaign, lackluster harvests, export taxes, China buying everything, strengthening foreign demand, declining inventories, livestock diseases, and geopolitical developments. Post-coronavirus life will already be an eternal struggle. The consuming public takes pleasure in the little things, even if that means pouring oat milk in coffee or dunking green peas in ketchup. Shoppers cannot live if living is without Heinz (or French’s).
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Read more from Andrew Moran.
