How come chocolates in stores have not significantly increased in price, while the prices of most other food products are rising at a dizzying pace? The answer is quite prosaic: chocolate manufacturers have long been at the forefront of the trend of reducing the packaging of their products. Once, the standard for a chocolate bar was 100 grams, and then it was reduced to 90 grams. This year, chocolate manufacturers have completely played around and discarded all standards when it comes to weight. Packaging of 68 or 75 grams is now no exception. Consumers find it much easier to adjust to a smaller package of their favorite product than to its visibly higher price.
After chocolate manufacturers, others have realized this too, and they have found a way to mitigate the growing gap between rising production and distribution costs and the decline in purchasing power due to inflation through reduced content. There are already numerous examples worldwide. Large companies are reducing the packaging of soaps, laundry detergents, ice creams, pastas, ready meals… Consumers will hardly notice that the content of a bottle of fabric softener is no longer 1000 ml, but 950 ml, but they will be pleased that the price of that bottle has remained approximately the same. The focus is on maintaining the volume of total sales, and reducing the content of packaging instead of an appropriate price increase is one way to achieve this.
Even in normal times, determining the selling price of a product, or pricing, is an equation with multiple unknowns, where any mistake by the manufacturer can lead to catastrophic results. However, in normal times, companies have historical experience that helps them to more or less accurately know at what price they will procure raw materials and supplies, what their energy costs in production will be, as well as transportation costs. In normal times, they can very well assess the market and competition and determine their margin accordingly and enter into contracts with customers. But these are certainly not normal times.
At this moment, there is probably no manufacturing company, especially among those whose products reach the end customer through retail, for which pricing is not an equation with too many unknowns. The price we will pay for energy this winter is one of the largest and is a double nightmare for every manufacturer: not only does no one know how much their energy costs will (again) increase production costs, but also how much the purchasing power of the population will decrease due to the transfer of disposable income into heating costs.
