Expensive rice pudding: How manufacturers increase prices without showing it

Expensive rice pudding: How manufacturers increase prices without showing it

According to a report by www.infranken.de,
Food manufacturers have many options to increase the prices of their products. One of these ways is “shrinkflation,” where packaging is reduced in size while the price stays the same or increases. In the case of the manufacturer Euryza GmbH, both the price of rice pudding was increased and the packaging size was reduced, resulting in a price increase of 63.2 percent. The Hamburg consumer advice center has criticized the company's pricing policy because the rice pudding is offered in smaller packs and at a significantly higher price.

The manufacturer's reaction to the consumer advice center's criticism was that raw material costs had risen by 95 percent and that the company was bearing part of this increase itself instead of passing it on to consumers. In addition, the company announced that it expects to offer the 500g and 1kg rice pudding sizes again in the third quarter of 2024 if the raw material situation improves. These changes and justifications from the company could have serious implications for the market and consumers.

The announced reintroduction of larger packaging sizes could have a positive impact on consumers as they get more product for their money. On the other hand, consumers may remain skeptical about whether the manufacturer will raise prices again in the future if raw material costs rise again. This behavior can have a long-term impact on consumer trust in the brand and on the rice pudding market as a whole.

The situation shows how price increases and product downsizing by manufacturers can have a domino effect on the market. Consumers could change their shopping habits and look for alternative products. Euryza's competitors could also benefit from the events by convincing consumers to switch to their products.

It will be interesting to see how Euryza's announced changes will impact the market and how consumers react to them. The company's transparency and communication with consumers will also be crucial to how market dynamics develop in the future.