I went to the lake last week. Before heading out, I went to the grocery store to buy some soda, an infrequent purchase in my household, and was stunned to find a 12 pack for $9.99. That was at least double the price I expected. Trying to understand where this pricing anomaly came from, I started checking out historical commodity prices. A bushel of corn for today versus 2011 - almost unchanged. Aluminum for today versus 2011 - almost unchanged. Transportation costs? West Texas Intermediate crude for today versus 2011 - almost unchanged. It’s either the caramel coloring or the water…
Or the lack of competition.
After I left the store, I did check their ad, and found a 12 pack of a lower tier soda for $3.50
Someone is making 60 points of margin on the $10 12 pack. That seems extreme for what is effectively corn syrup and water in an aluminum can.
There has been a weird thing going on with soda. Like cosmotic says in the sibling comment, they're often on sale.
But, like, really often and for a different deal each time. One week they may be at the full price, then the next it's "3 for $10.99 (Must buy multiples of 3)", then it'll be "$3.00 off when you buy two", then back to the crazy price.
It's annoying as hell, and all I can guess is that they're segmenting the market across time. The bargain hunters will wait for the sale and stock up (me), the normies will just put it in their cart each week without looking at the price.
But it's been this way for many years. Only in the last couple have I seen the craziness that is $10 for a 12-pack. It used to be ungodly expensive when I saw a 12-pack for $6.99.
So they've been doing this game for a while, and upped the limit when inflation provided cover.
This seems to effectively muddy the waters such that they can steadily raise the price without a ground truth for comparison. We learn to ignore the MSRP but each promotion becomes apples to oranges, and over time they're nudging things up.
If it's a certain formerly-cocaine-infused soft drink, the simple answer is that the vendor continually tests how much the market is willing to pay, and found that it will pay more.
I tried repeatedly to quit that particular product. I've tried grocery store generics. I bought a home soda maker and tried various craft soda syrups online. Nothing tastes the same, or even "close enough" for my palette.
I have managed to drink less of the stuff. I only buy the mini cans now (unless I'm treating myself to a bottle at a convenience store), and try not to have one at all on some days. But the sad fact is, as much as competition is supposed to solve this problem, there is really no alternative for people that are tuned into the taste of that particular brand, so they continue to pay out the ass for it when the vendor jacks up the price year after year.
>I have managed to drink less of the stuff. I only buy the mini cans now
If you're trying to save money, that's counterproductive. At least in my experience the mini cans are actually more expensive than the regular cans, even on a per can basis. This seems to be corroborated by others[1].
That's true, but I'm weighing overall consumption with the cost of saving money. The fact is, if I buy 12oz cans of Soda, I'm going to drink 12oz of soda. They're not resealable like plastic bottles--I'm either gonna drink it in one sitting, or it's gonna go flat and get dumped out. So yes, buying the 7.5oz cans costs comparatively more money, but I'm drinking less of the stuff overall, and arguably decreasing my dependency on Soda Vendor.
I absolutely can't quit soda, so what I've done instead is go entirely on the sugar-free variants of all my favorites. I know it's still not good for me of course and I moderate my intake, but I legit cannot handle the mainline variants anymore, any time I have to get a full sugared Coke, holy fuck I feel like I'm just eating a bowl of raw sugar, I can't even taste the damn soda.
And yeah, we do the stock-ups when it goes on sale because I flat refuse to pay $10+ for fuckin soda.
For several years, beverage companies have been complaining about CO2 supply being low. During the pandemic, I switched to a SodaStream, converted it to use a 10 pound CO2 tank and started buying the syrup for my preferred soft drink. It allowed me to increase the CO2 level of my drink while, over time, cutting the amount of syrup used by 80% (and greatly decreasing my sugar intake per day). It's pretty much lightly flavored sparkling water now.
> It’s either the caramel coloring or the water… Or the lack of competition.
There could be a lot of other factors involved.
Governments and unions can add a tremendous amount of artificial cost/overhead to goods and services, too.
A minimum wage increase or new collective bargaining agreements, for example, can increase costs throughout a supply chain, from manufacturing, to transportation, to retail.
A new or increased vehicle fuel tax, or a more general "carbon" tax, are examples of government policies that can also repeatedly distort pricing throughout a supply chain.
Also, keep in mind that the pricing of the lower-tier grocery products might not reflect the actual cost to the retailer. Such products are often sold as loss leaders. The actual cost may be much closer to the cost of the higher-tier products, but this isn't apparent to the customer thanks to the retailer subsidizing the product.
Cheaper grocery products can sometimes use inferior ingredients or lower-cost alternative ingredients, too. Comparisons with more expensive products may not be realistic because they're fundamentally different products, even if they may seem similar to the consumer.
> Cheaper grocery products can sometimes use inferior ingredients or lower-cost alternative ingredients, too. Comparisons with more expensive products may not be realistic because they're fundamentally different products, even if they may seem similar to the consumer.
The total cost of materials for a can of soda is negligible.
After I left the store, I did check their ad, and found a 12 pack of a lower tier soda for $3.50
Someone is making 60 points of margin on the $10 12 pack. That seems extreme for what is effectively corn syrup and water in an aluminum can.