Thursday, October 11, 2007

Shrinking boxes, growing profits

As previously reported, cereal companies have been shrinking cereal boxes in an effort to increase profits.

The strategy appears to be working, at least for now. General Mills latest financial results reveals that this strategy has increased profits during the last quarter. (See article at the StarTribune.com)

Corporations that short-sightedly look for short-term profits at the expense of long-term sustainability are playing a dangerous game. What will they do next time profits fall flat? You can only shrink the boxes so far. Eventually consumers will balk at the price of cereal, especially if there is not perceived value. Innovation could turn that around, but it doesn't appear that the big cereal companies are catching on to that.

Technorati Tags: , , ,

1 comment:

Fellow cereal aficionado said...

Hi,

I think your blog about cereals is very interesting. I didn't know there were people out there who love cereals as much as I do. I think you love them even more. :) I do hope cereal boxes stop shrinking! I miss those big boxes of cereals and the days when cereals were considered cheap.

Keep up the good work! :)