Shortcuts to Ruin

You want fresh authentic chocolate covered strawberries.
Then why would you expect that when you are shopping by price?

Here is an example of what that causes:
Company “A” buys company “B”, it cost them a lot of money that they want back, so sales have to increase.

  • To increase sales they have to lower the price & advertise more.
  • Lower costs
  • Increase production
  • Cheaper delivery
  • Increase the number of customers

Lowering costs:
Of course company “A” is not going to start with the number of board members, they rarely think of themselves as cost, and management rairly bases their compensation solely on performance.

They cut costs in materials, first by trying to get a better deal on supplies, then by lowering the standards those supplies need to meet.

In the food industry those supplies are called ingredients. Sometimes (when there is just a minor price difference) to sources would be equivalent, but when there is a major price drop something is really different. With chocolate that difference is “cocoa butter” and to lower the costs the cocoa butter (really expensive stuff) is replaced with something less expensive. The less expensive coating can not legally be called chocolate, but they have advertised it as such for so long they coast along and people still think it’s chocolate.

So the coating is the first place they are going to cut corners, even if the replacement is later flagged by the government as unsafe (it happened), but where else can they cut corners? Obviously the other ingredients (like the strawberries themselves), older, damaged, and less quality control in general are all going to lower the costs.

Increased production:
When production increases you either have to get more space, run things faster, automate, or put on more shifts. Getting more space is expensive, new sites, new equipment more costs at every level. Running this faster means possibly less time spent on quality control, after all if no one is inspecting the ingredients or the final product then less gets rejected and they just handle the failures after the fact (outsourced to a third world country). Automation can be done if you change the product, in this case the leaves are stripped off when they are picked, they are dumped into vats of the fake coating and the part of the process that requires people is significantly reduced. Of course leafless berries that are being shown in the ads, that’s handled in the fine print. Putting on more shifts is an easy one, especially if you’ve increased automation and are pre-dipping and shipping from pre-made inventory. Shipping from inventory means the product is not as fresh, but if things really go wrong that is what they have liability insurance for.

Cheaper Delivery:
The carriers raise their rates 3 – 4 % every year, they never deliver nationwide packages for free. When you are shipping nationwide, overnight is expensive & some customers do not want to pay to pay a realistic shipping rate because they have been ordering shoes online that ship for free. Think about that for a second, they are comparing the shipping for a non-perishable product, one that can sit in a regional warehouse for a year and not change, to the overnight shipping required to keep a strawberry fresh. So where do they cut corners? Instead of shipping with overnight they use “express”, so they have changed from one day in transit to 2 or 3 days in the back of a truck. Add that 2 or 3 days to the fact they are pre-dipped and sitting in inventory, just how old are those strawberries? You can bet no one else would call them fresh. Because they are not as fresh they are leaking a lot of juice, so they modified the packaging, put holes in the bottom of the tray and the equivalent of a meat blood pack underneath, from an engineering standpoint it hides a lot that is going on.

Increase customers:

Basically at any price, they have reduced quality, freshness, have said the product was chocolate when it was not.. and have a huge amount of debt they need to pay off from buying the company.

So how?
Ads lots of ads, you may have noticed the big radio show hosts pushing them, do they get the same quality product that a normal customer would? Don’t bet on it, the images online of what the hosts got and what customers got do not match up at all. You have to remember that the hosts make money based on the advertising sold on their show and some just want the money (even if they do know that the product is not really as good as they claim).

False ads: did you know one year they got caught running ads that said competitors were sold out?

Letting affiliates run false ads. Affiliates are 3rd party marketers that get paid if a product sells from a link the affiliate provides. But there really is not any control of when an affiliate lies or bends the truth. You may see an ad that says “free shipping”, “gourmet white chocolate” or “30% off coupon” and while the keywords are on the affiliates web site, the deal, product or offer does not exist. Affiliates are notorious for posting offers without the needed context (good only on one product, expires date..), but they got you to the site so they get money.

Fake “free shipping” offers, they actually did this twice. Their customers said that they were signed up, without their consent, up for a service that billed them monthly under the guise of “free shipping”. No free shipping actually existed. The customers sued and it was settled out of court. The liability insurance company really didn’t like that the company had pulled the same stunt again and tried to seperate themselves from the liability of the case (paying off the customers claims). Think about that one, the company screwed up or lied the first time and because someone else was paying for it they did it again, basically running an ad with someone else’s money. Why fix the problem when someone else if paying for it?

Summery:
This company has been bought and sold a number of times, each time did the debt load grow? Did a new group of bean counters cut corners to try to pay off the debt with each new acquisition?

People who search for the lowest possible price without doing the research on the company have really hurt a lot of the ethical competitors.



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