consumption

Less, but expensive: how did the public protest affect brand prices?

From the pasta protest to the tuna protest: the public, nervous about price increases, punishes the expensive manufacturer or importer and turns to alternative brands.

A comparative test we conducted on the prices of leading brands versus substitutes, reveals that the latter have become more expensive compared to the "sensitive" brand.

Even so, some of them are still much cheaper

Dr. Hezi Gur Mizrahi

07/27/2022

Wednesday, July 27, 2022, 2:21 p.m. Updated: 2:41 p.m.

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On video: The pasta test of the show "Seven Nine" with Golan Yochpaz and Anat Davidov on 103FM (still photography, Reuven Castro, photography and video: 103FM)

In January 2022, the consumer public's awareness of the cost of living problem, which had been somewhat pushed out of consciousness since the events of the summer of 2011, began to increase - and with it the "pasta protest" started after Osem and other manufacturers/importers announced the price increase.

Although Essm finally gave in and agreed to the demand of the Ministers of Finance and Economy not to raise prices, but since then many companies have managed to raise the prices of their brands, sometimes even more than once.

This is the place to repeat what has already been written here many times: there are ways to raise prices without touching the price tag on the product, by canceling quantity discounts, promotions and more.

With the increase in awareness, we revealed the alternatives that consumers have in order to keep their pockets and deal with the cost of living: make a smart purchase and examine where it is worth paying huge premiums for our favorite brand and where we can give up and purchase an equivalent-substitute product, which will be significantly cheaper.

But it turns out that not everything is black and white and in order to balance the profit line, both the retailers and the manufacturers know how to raise prices precisely in places where the spotlight does not shine.

Yes, they learned that the consumer does not always know how to calculate the price increase in percentages, but mainly refers to the price change: a product can become more expensive by only 40 cents (for example), but what if those 40 cents are 20% of the product's price?

Barilla pasta.

It became much more expensive than that of Asam, which absorbed the fire (Photo: Yehats)

Pasta, couscous and flakes

What did the pasta protest do?

We examined what happened to the prices of pasta under the leading brands versus those substitute brands that gained value in public awareness.

In the sample we conducted in the leading marketing chains, we examined Asam's pastas, noodles and flakes in the months of January versus July according to average prices and found a 7.20% increase in consumer prices.

And that's another good part, since the increase in the price of the Barila brand from Shestowitz is more significant and stands at a ratio of 12.20%

. For example: Asam noodles 400 grams jumped at the Mega chain in the city from a price of NIS 5.21 to a price of NIS 7.00, a difference of 34.40%.

Asem's pasta products in the Rami Levy, Yohannoff and Beitan Wines chains became more expensive by only about 4%, mainly due to the public sensitivity that arose regarding the product.

The substitute he received in what is the pasta of the Taman company.

It still remains cheap, but pay attention to what happened to its price: the increase in price is 3 times higher than in Asam products: Taman pasta was sold at the same time in the Rami Levy network at an average price of NIS 2.87 per package, while the average price today is NIS 3.27 - a price difference of 14.40 % (compared to 4% in the barn).

And from pasta to couscous: in the Shufersal chain, the brand Couscous Sogat was sold in January at an average price of NIS 4.03, while today it is sold at an average price of NIS 4.90.

Meaning a gap of 21.58%.

On the other hand, Asam couscous was sold in January at a price of NIS 7.69 and today it will cost NIS 7.90, that is - a 2.74% increase in price.

Also in the Rami Levy chain, the alternative brand Couscous Soget became more expensive by 15%.

Sogat's replacement flakes, which received tremendous exposure with the protest against Assem, jumped by 17.80% compared to January compared to Assem's flakes, which became more expensive by less than 4%.

A package of Esem soup almonds was sold in January 2022 at an average price of NIS 10.70 and it is currently sold at an average price of NIS 11.10, a 3.70% increase in price.

This is compared to the replacement product of Master Chef from Shastowitz, which gave a cheaper solution and jumped by 23%.

Gaps were also identified in the area of ​​bread crumbs.

Compared to Asem's leading brand "Firorit" the replacement product is under the Soget brand.

In the test we conducted we found that it became more expensive by a ratio of 19% compared to Asem's brand - whose average price was even reduced by 4%.

Here, too, we recognize that if a cheaper product became more expensive from a price of 3.20 to a price of 3.80, this is a significant percentage, despite this, it still fails to turn on warning lights for the consumer, as long as it is sold below the price of the leading brand in the category.

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Cream cheese.

Napoleon also became more expensive, but Philadelphia became more expensive at a much sharper rate (Photo: ShutterStock)

Cream cheese

Most of the dairy products in Israel are produced by local producers, with the milk market divided between Strauss, Tnuva and Tara.

Naturally - and as we have already learned from the previous examples, it is more difficult for a local manufacturer to raise prices, since he is subject to both public criticism and implicit threats from the regulator that may make his life difficult if he raises prices (as was hinted at by some manufacturers).

Among the products that have imported substitutes, we tested Philadelphia cream cheese against the Israeli Napoleon cheese.

The international brand jumped by a ratio of 14.50% and in contrast the Napoleon brand became more expensive by a ratio of 1.75%.

In the Rami Levy chain, for example, Philadelphia cream cheese was sold in January for NIS 10, compared to today it is sold at a price of NIS 11.90, a difference of 19%.

Starkist To Go.

As soon as the well-known brand became a target of public criticism, almost all retailers sharply cut its price.

To teach us that they can afford it (Photo: Tona Starkist)

Tuna and sardines

In the sample of the products that we carried out compared to the period, all the tuna and sardine products showed a price increase of 5.10%.

The leading brand in the segment is "Starkist" the replacement brand is made by "Vilipod".

The Taman brand that grew in consumer awareness does not show availability on the shelves of the various marketing chains - and there is a reason for this: the top brand in the category is Shastovitz's "Rio Mera" brand and other brands are "Filatona", a leading local manufacturer that also caters to the private brands in the chains and the brands of Net Poseidon companies, Williger and Robert.

Despite all the commotion surrounding the announcement of the price increase of Diplomat with the Starkist brand, it turns out that it is not the brand that has become more expensive for us in this period in the high ratio compared to the replacement brands.

The prices soared under our eyes, but as long as there was no official document, we did not comment.

Therefore, it turns out that a broader product examination must be carried out, because when the consumer examines only the sensitive product,

Starkist tuna quartet 140/160*4 in vegetable/canola oil or water is the leading product in the segment.

Its average price to the consumer was NIS 25.80 per quart in January - and did not change throughout the period (with the exception of one-off promotions).

Then something interesting happened: until the price increase was revealed, the average price was the same.

But as soon as the tuna protest was published, the marketing chains began to present promotions on the product in order to enjoy the image of a cheap chain and perhaps to enjoy the positive exposure.

Thus we found that the Victory chain reduced the product to a price of NIS 19.90, Rami Levy to NIS 20, Shufersel and Yohannoff to a price of NIS 21.95!

And what happens with the replacement brands?

The substitute products Tuna and Willipod remained at an almost identical average price, with a difference of 1.1% compared to January - and they still provide a relatively cheap solution for consumers.

This is while the Filtona brand became more expensive by 7% and the expensive brand "Rio Mera" became more expensive by 6% - and this is a product whose price is significantly more expensive than even the leading brand Starkist.

The price of a single unit weighing 112 grams costs the consumer about 14 shekels, so if we consider the ratio to the Vilipod product which costs about 5 shekels, it is a difference of 180%, but here it is already a luxury.

The Taman brand in question is found mainly in the marketing chains that cater to the ultra-Orthodox sector.

In Osher until Vermi Levy chains, today's price is NIS 16.90 per consumer and in the Ma'ayan 2000 chain we will find the product for NIS 15.

In various chains in the sector such as Barchel, we will find the product for NIS 19.90 per consumer.

We clearly recognize the penetration of the product to shelves where it was not previously displayed, apparently following its positive exposure won due to the relatively low price.

What's more, from the pasta protest we've already learned that when the storm subsides, the alternative and cheaper brands disappear from the supermarket shelves - which are once again taken over by the big and powerful manufacturers.

And while we are busy with canned tuna, the prices of sardines soared in the very same segment... the Vilipod brand, which provided a good alternative solution in the field of canned tuna, jumped by an average of 32% in the price of sardines.

For example, in the Rami Levy network the price was NIS 3.38 in January - and today the average price is NIS 4.83, a difference of 43%.

There is also an increase in the price of the "Robert Sardine" brand, but it is more moderate, "only" 11.50% and in the Yohannoff chain, for example, the product was sold in January at a price of NIS 6 and now stands at NIS 6.83, a jump of 14%.

The public is stupid and therefore the public pays?

It can definitely be a neighbor (Photo: ShutterStock, Doron Shiner)

Not working for anyone

So what did we learn?

Maybe it's just that manufacturers, importers and retailers are business people.

None of them work for us and none of them work to lower the cost of living.

When a product, brand or an entire segment catches the eye of the media and the public, its price is frozen and sometimes even discounted, but other products around it become more expensive.

When the public interest moves to the next "Facebook boycott", the manufacturer, the importer and sometimes even the retailer himself, raises the price without us noticing.

We also learned that the exposure that the cheap replacement brands gained, led to an increase in their prices, but a large part of them, despite a significant jump in price, still remained cheaper than the price of the expensive brand and the leader in the category.

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Tags

• barn

• diplomat

• Willipod

• barilla

• Rami Levi

• Shufersal

• Yohannoff

• Cost of living