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Tuesday, March 29, 2011

Food Companies (KFT) (PG) (GIS) (Dole) Offering Less for More

With rising costs pressuring earnings at food companies like Kraft (NYSE:KFT), Proctor & Gamble (NYSE:PG), General Mills (NYSE:GIS) and Dole (NYSE:DOLE), the companies have decided to offer less for more, as they shrink the size of their offerings while charging more.

This isn't anything new, as this has been the typical response of the food companies at times when consumer budgets are tight.

So when a consumer buys a bag of something, for example, now they'll find about 20 percent less than what it held before, but at the same price.

In tough times consumers are more aware of prices than they are on volume in the package, so companies can make these types of moves with a minimum of fuss.

Rising costs of inputs in the supply chain are the reasons for the companies changing their strategies.

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