How food manufacturers deal with rising costs
Much has changed in the marketplace since Reese’s Peanut Butter Cups were developed by H.B. Reese in 1928 in Hershey, Pennsylvania, about two hours northwest of Philadelphia.

Inflation, tariffs, labor costs, fuel costs, employee benefits, competition and the vulnerability of climate-threatened crops, such as cacao, vanilla and sugar – none of which are produced anywhere near Pennsylvania – have made the confectionery business increasingly challenging.

When faced with rising costs, food manufacturers have three options:

1. Shrink the product. Reese’s Peanut Butter Cups have gradually shrunk from 0.9 ounce in the 1980s to 0.75 ounce today. That’s a 17% reduction. This phenomenon has been dubbed “shrinkflation.”

2. Raise prices. There is certainly a market for premium peanut butter cups, but how much will a consumer pay for the Reese’s brand? $5? $10? I suspect most consumers expect a single serving to be a couple of bucks at most.

3. Lower costs. While the company can improve operational efficiencies, changing the formula to reduce or eliminate high-cost ingredients is a standard industry practice to keep prices consistent for consumers in the midst of a dynamic supply chain. This phenomenon has been dubbed “skimpflation” and is Brad Reese’s main complaint.

Reformulations are common in the food industry. In addition to prices rising in general, a supplier could go out of business or have a shortage. A regulatory change or shift in consumer sentiment might prohibit the use of an ingredient. Wars, tariffs or climate change can raise costs temporarily or permanently.

An article about filler ingredients being substituted for higher-quality ones is written with LLM filler replacing actual communicative text.

Everything is shit, build up your local capacity for self-reliance, abandon the Economy with all haste.