One of the things you may have noticed is the incremental, but steady rise in the cost of consumer goods, without any corresponding increase in your paycheck (at least for most of us.). It’s a subtle, but necessary part of the times we live in.
Both PepsiCo and Coca Cola have come to a point where they have no choice but to raise prices, but they have the problem of how to do that without risking market parity. A 4 July, 2011 article from Adage.com says that PepsiCo “vowed to increase beverage prices from July 4 to offset higher commodity costs, with rival Coca-Cola also saying prices would increase 3% to 4% in the second half…” They accomplished that with little fanfare or outrage, with the prices I paid at my usual C-store stops rising from $1.29 per 20oz bottle (Coke, I don’t drink Pepsi, normally) to $1.38 per bottle, with Pepsi being sold at the same price.
So, now we come into the closing period of the fourth quarter of 2011 and we see yet another price increase in the making, but this one is more subtle. The price is rising not in the way you think, by simply changing the price tag, but by changing the size of the product available. I normally buy one six pack 16.9oz bottles of Coke for my home, which had normally cost $3.33 per pack, every week. This works out to .031 cents per ounce. A few weeks ago the six pack disappeared from the shelves, only to be replaced last week with a new price of $3.98 per six pack, making it now cost .039 cents per ounce. It’s not much of an increase when you look at it in this light, but what used to cost .56 cents a bottle is now .67 cents a bottle. Still not much of an increase, but it is still an increase.
Meanwhile, both PepsiCo and Coca Cola seem to be removing their 20oz bottles that now cost $1.38 each with a smaller sized 16.9 oz bottles at a projected cost of $1.25 per bottle. The change has not actually occurred yet, so I am going by unverified quotes from the distributor reps. That makes the new price work out to .074 cents per ounce as compared to .069 cents per ounce. It appears cheaper to the impulse buyer, suggesting that the product is now cheaper because the price per bottle went down from $1.38 to $1.25 per bottle, but the bottles are smaller and in the end actually cost the consumer more.
Soda is not a product high on the preppers list of needed survival items for long term food needs, so why is this price change such a big deal to me, and why should it be a big deal for you, as a fellow prepper?
The reason is the bottom line reasons for these price increases to have, or will, occur. Natalie Zmuda also writes in that same Adage.com article that; “In communicating with retail customers, both bottlers cited rising costs in ingredients, with Coke Consolidated saying that, in the last year, corn prices are up 110%, aluminum is up 24%, plastic is up 42% and crude oil is up 43%.” These are the same ingredients that go into much of our long-term food storage products, MRE’s and other products we tend to eyeball for our prepping needs.
There are several problems that culminate in determining a price for any given product. One of those problems is the sticker, or target price to be placed on an item. That is the cost we need to be concerned with, unless you are purchasing strictly from a real wholesaler.
By the way, when you look at businesses you should take a moment here and remember that many retailers claim to be selling their products at wholesale cost. These advertisements and claims are not really correct in the greater scheme of things. True wholesale cost is always lower than what you pay, not matter what the vendor claims you are paying. The vendor needs to make a profit to stay in business, and therefore has to charge you a higher price than he paid, and so the price the vendor paid to the manufacturer or distributor is his true wholesale cost. You may be paying a lower cost than you would at a conventional retail outlet, but you are still not paying true wholesale costs.
At any rate, no matter where you buy your supplies, the manufacturer or producer needs to include in his calculations all of the costs required to get that product into the retail environment. This includes many things, such as the cost of labor, production and facilities costs, acquisition of raw materials, commodities prices and taxes, et al. Herein lies the problem with our preparedness planning.
Over the last couple of years, the pricing of the commodities that go into producing food products as well as consumer packaging has been steadily increasing along with the steady decline in the value of the US dollar in the worlds markets. Simply put, it costs on average 10 to 15 percent more to make a can of dehydrated food today than it did a couple of years ago. Many of the producers of long-term food product have tried to keep costs low by absorbing much of these hidden costs of business, but we have seen that the bottom line retail costs have still increased. There was a huge across the board increase this past January (2011) and it appears as though we need to expect another one this coming January (2012). Beyond that, as we creep closer to the coming worldwide economic depression we can expect even greater costs, along with a decreasing availability of these products as producers and distributors crumble under the weight of the declining economy.
My suggestion to you today is that you do whatever it takes to fast track your acquisition of these long-term food supplies to avoid having to pay substantially more in the coming years. How much of an increase can we expect? If I had the answer to that question I could solve the problems facing our economy, and since I don’t have the answer, the best I can do is to guestimate what we can expect for pricing increases over the next few years.
Short term; expect an overall increase in all prepper category products combined of about 8 to 10 percent over the next 12 months. I believe we will see a food product increase of about 4-7 percent in January of 2012, and increases in other categories of between 3 to 8 percent, with the highest increases in products such as generators and solar power modules. Of course, these guestimates are dependent upon the fluctuations of the commodities markets, and therefore can change quickly from day to day.
Long term; expect an increase over the next decade of anywhere from 40 to 210 percent over today’s pricing of all prepper related products. This includes generator and solar power products, long-term storage foods, seeds, tools and gardening supplies, shelter products, camping supplies, and water and sanitation categories.
Probably the best way to maneuver around the issue of long term planning is to develop a preparedness planning binder, divided into different categories of needs and areas of concern. By doing so you can keep track of pricing and availability of products, thereby gearing your purchases to suite your needs, and not give into the temptation to buy based upon the fear of the moment instilled by many marketers of prepper geared supplies and products. A person never thinks best when under the strain of an immediate emergency, and if you have paid close attention to advertising as long as I have, you’ll find that there are many companies that urge you into a quick purchase based upon a current emergency
Remember the wheat scare of 2010, where Russia banned exports of their wheat crops to compensate for the droughts that caused the reduction of available domestic supplies of wheat in that country? Advertising said that wheat based products would increase in price exponentially and that we would soon see bread in the grocery stores at ten dollars a loaf or more? Didn’t happen, did it? I suggested at the time on Surviving the Times that you either buy your storage wheat the week of that post, or wait a few months until the speculative flurry of investments calms down and prices get back to serious levels.
You need to be aware of what is going on around you, not only locally, but globally as well. Remember to ADD to survive in the coming times. Analyze and Assess, Develop your plan, and then Deploy that plan for success.
Save 20% on Surviving the Times and A handy Guide to Disaster Preparedness until 9 Sept, 2011! Simply enter the code SEPTEMBER305 when asked for coupon at checkout! Both are also available as downloads for your e-reader by going to my bookstore here. The same discount applies to all products at this site.
|Surviving The TimesBy D.L. Soucy
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Surviving the Times takes you through the steps to make your own preparedness planning binder. You’ll learn how to guage the… More > level of various threats as they relate to your preparedness planning by using the three P’s of preparedness, the SaWaFo pyramid and more. We will look at some of the main issues such as gold and silver for survival, and the basic survival arsenal as well. < Less
|A Handy Disaster Preparedness GuideBy D.L. Soucy
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A compilation of tips and how to’s on developing an emergency preparedness plan, and how to get ready for natural and… More > man-made disasters. Also includes a comprehensive listing of state and federal agencies to contact for more help and assistance in dealing with emergency planning and dealing with the aftermath of a disaster. < Less