In my experience, a 260 or 400 gram box of original, plain Cheerios costs the same as a 330 or 460 gram box of Honey Nut Cheerios, respectively. I can’t imagine how the Honey Nut variety costs less for General Mills to produce, unless they are vastly more popular?
My WAG is that honey and nuts are, per volume, heavier than the rest of the cereal, so you get a heavier box for the same amount of product.
Are the boxes the same size? So it’s a volume pricing, not weight. This way they can charge one price both ‘flavors’.
Also the Cheerios is the flagship brand and perhaps is not wise to price it under the other.
Whatever is driving this price difference in your area is apparently not universal - I checked the prices in my local shops (south of the UK) today and they’re the same, weight-for-weight for regular or honey nut Cheerios.
Checking online, regular is a little more expensive per ounce that Honey Nut around here (NE US). As a note, the cost of the ingredients may represent a minor portion of the total costs that include packaging, shipping, and marketing.
As the mom of a little one, I’m a bit convinced that it’s a type of price gouging aimed at the mommy market. Products marketed toward infants seem to carry a mark-up in price. 100% apple juice labeled Gerber costs twice as much per volume as just the regular brands on the juice aisle. “Nursery Water” is priced considerably higher than distilled water on the next grocery shelf. And everyone knows that Cheerios are a great finger food for toddlers, so why not price those higher, too? (Of course, I’m a bit of a cynic, plus not averse to buying generic brands. But I sincerely wonder whether my theory has some basis in fact.)
There’s no problem that can’t be explained by a conspiracy theory.
Along the kiddy line of thinking, my SO suspects that in general the honey nut ones would be significantly more addictive than regular. Budget concious mommies buy the slightly cheaper stuff and the kids get addicted ensuring more regular and more often purchases long run.
Why would it be a conspiracy theory? Business is about maximizing profits, and if the market will support higher prices on Cheerios, then why wouldn’t they? On the Q&A page of Cheerios.com there is even “How old do children have to be to eat original Cheerios® cereal?” Not “When can my kid eat cereal?” or even “When can my kid eat Cheerios?”, but specifically original Cheerios. So yes, at least at some levels, original Cheerios is being marketed at the parents of small children.
You’re right. Children become addicted and turn to criminal behavior if they are denied the sugar frosted crackios, and mothers are helpless to stop them. If only there were competing products in the cereal market we would be rid of this scourge.
Yes, but discussion of economic theory and pricing does not usually take the form of “it’s a type of price gouging aimed at the mommy market”. That’s where it went off the rails. Aside from the whole hullabaloo over “price gouging” (which I have long argued does not exist), the market is saturated with substitutes that are just as good. If you think you’re being ripped off, get the big generic bag with twice as much for a dollar more. “Price gouging”, as it were, can only occur when there is no competition, because the competition will eat their lunch if they raise prices to an unsustainable level.
It could be that with HNC you’re replacing some of the better (and maybe more expensive) ingredients with cheap sugar.
Honey Nut CheeriosTotal Carbs 22
Sugar 9
Fiber 2
Other Carbs 11
CheeriosTotal Carbs 20
Sugar 1
Fiber 3
Other Carbs 17
Exactly. I don’t care if widget A cost me $1 and widget B costs me $1.10 to produce. If the market demands maximize my profit at $2 for widget A and $1.50 for widget B, what do I care?
Next thing you know toddlers are holding up liquor stores to get their honey nut fix. Its not a pretty sight.
What something costs to produce has no bearing on what it is worth. (or what people will pay for it)
Honey Nut Cheerios weighs 33% more per unit volume than Cheerios. A 28 gram serving of Cheerios is one cup compared to a 28 gram serving of Honey Nut Cheerios which is 3/4 of a cup.
Almost nobody eats 28 grams of cereal. You buy it by the ounce, but use it by volume. Honey Nut Cheerios costs less per gram so it can cost the same amount per bowl.
Why is that? Because they charge what the market will bear, and the product’s utility to the final consumer is what determines what the market will bear.
Look at Coke. Coke has 40 grams of sugar in it, Diet Coke 70 mg of Sucralose, yet both cost the same in the store. Do you think the cost of each of those sweeteners is identical? Of course not, but their value to the user is the same, therefore the prices are the same.
Good point. I am sure it has much more to do with volume and market positioning than cost of production.
Much of the basic Cheerio is air. Honey and nuts do have more weight for th volume.
Much of the advertising is aimed not at the mothers, but at the children. Look at Fruit Loops.
This being GQ, let me make it very clear I am only offering this as a possible conspiracy theory. ‘‘The dentists are paying them to encourage selling more of the sugary stuff.’’
My theory offered above was a bit tongue in cheek, and I really didn’t intend to derail the thread with some conspiracy. That said, though, people will spend more on goods or services based on marketing and labels aimed at children, and I don’t fault General Mills for keying into that niche. I just think it’s stupid to pay for that special labeling. (Similarly, I’ve given up trying to convince my mom that Excedrin Migraine is the same product as regular Excedrin, just repackaged. Fine if she wants to spend more, but I get the same product with a store brand, at 1/4 the price.)
And labdude, I have to laugh at your point about Froot Loops: just last night, I saw an ad for a new pogo stick, and joked with my husband that the company, which also makes scooters, must be owned by an orthopedist. This came after a conversation at the dinner table about how he had single-handedly sent at least two or three of his orthopedic surgeon’s kids to good colleges.
This applies to my response as well.
^^^This. But realizing this people would have no reasonable argument for how things should be priced.
Very few companies price their products on a cost plus a margin model any more. Which is different than what amount of margin is necessary for a company to stay profitable and in business.
Regular cheerios must be in more demand than the Honey Nut variety.