By Willy Staley  Updated on Fri Apr 6, 2012

Have Rising Commodity Prices Shrunk the Cadbury Creme Egg?

 
Have Rising Commodity Prices Shrunk the Cadbury Creme Egg?

Marco Perry/flickr source

Declinism, attractive as it is, is an easy stance to take. It can be defended with nothing more than paeans to the way things were, rooted more in sentiment than facts or data. Because of this, the back of a declinist’s head is populated, always, with the nagging suspicion that everyone feels this way about America after a certain age. Nowadays we long for the simplicity and relative equality of our parent’s generation, the postwar years. But baby boomers grew up wondering if and when the United States and the Soviet Union would destroy the entire planet with nuclear weapons, and they likely longed for the simplicity of their parent’s generation — who, for their part, had the privilege of participating in the bloodiest conflict ever in world history.

But it has been proven in a number of ways that things are worse today than they used to be. And whether they will continue that way is anyone’s guess. The best way, perhaps, to prove something is in decline is to isolate it from other variables — especially nostalgia. Rock beats scissors and data beats nostalgia. Whether one decade is better than another is nearly impossible to quantify, there are so many variables at work. But by taking one small case — Cadbury Creme Eggs, say — we can think about larger issues: the effects of corporate consolidation of industries, and how that hurts retailers and consumers; the declining purchasing power of the dollar in the face of rising global demand for goods.

And we can tell you with reasonable certainty that commodity prices have made your Easter less sugary, chocolatey, and “creme”-y than it used to be.

“You’ve just grown up!”

The Cadbury Creme Egg lives in the upper echelons of seasonally available Easter candies, along with Peeps and those delicious malted, speckled egg-shaped things. And also, like everything around us, it seems to be getting worse — specifically, by shrinking. But this, too, could simply be a product of getting older. Find your favorite stuffed animal from your childhood, if it’s still around. Don’t touch it, it’s likely disgusting and filthy. More pertinent: it’s likely much smaller than you remember, having grown a few shoe sizes since you’ve played with the thing. And in fact, Cadbury employed this very line of reasoning in defense of their shrinking Creme Egg. According to chocablog, on the confectioner’s FAQ page, a question used to read: “Why has the size of the egg changed?” and Cadbury’s official response was “It hasn’t — you’ve just grown up!”

The seasonal candy seller has a unique ability to lie to us about things like this. With a year of lag time between the candy’s season, can you really trust your memory? Cadbury exploited this, in a rather clever way.

What Cadbury couldn’t anticipate is that a C-list actor and comedian, B.J. Novak, is a big fan of Creme Eggs, and buys them in bulk, like a wine collector buys cases of his favorite bottles. Famously — to Creme Egg aficionados, anyway — B.J. Novak went on Late Night with Conan O’Brien in 2007 with two eggs in his pocket: a 2005 vintage egg and a 2007 one. He had some left over. The difference in size between the two candies is striking. He proved what we all suspected. Watch the video below.

Turns out, Cadbury shrank the egg in 2006, according to Wikipedia. By way of explanation, Cadbury issued this update to their FAQ: “As the world’s largest confectionary company, Cadbury Schweppes is committed to developing great-tasting products that you, the consumer loves. Since people’s preferences very from market to market, so do our products. This is reflected in the board variety of sizes and flavours of products that we offer our consumers worldwide.”

What’s the Britishism I’m looking for here? Bollocks? Poppycock?

A chocolatey culprit?

Could it be that American consumers wanted smaller Easter candies? Or is it possible that a massive global spike in the prices for cocoa, sugar and corn caused Cadbury to shrink a product packed to the gills with all three?

First, take a look at this graph: cocoa prices over the last 10 years.

Have Rising Commodity Prices Shrunk the Cadbury Creme Egg?

A brief spike there in 2003, but it’s been steady otherwise, until it spiked again and got all volatile in 2008 along with the rest of the commodities market. Nothing interesting here, unless you know about a certain piece of litigation that Cadbury settled recently. A class action lawsuit was filed against Cadbury, Mars and Hershey in 2010 alleging that the three confectioners were involved in a price-fixing conspiracy. They routinely, in lock-step, raised their prices on chocolate products between 2003 and 2008, according to the suit. The candy makers cited rising commodity prices, which clearly was not the case. Hence the class action lawsuit, which, it should be noted, Cadbury is the only party to have settled.

Apologies to anyone who thought the candy business was anything like the way that apologist Roald Dahl portrayed it — indeed Veruca Salt would fit in much better in the business than Wonka himself.

The Creme Egg, being a seasonal favorite, and typically placed right next to point-of-sale terminals as an impulse buy, is not a likely candidate for a price hike — make them too pricey and no one will eat one. But make them smaller, and they might not remember how big the thing was anyway.

Or is it sugar?

Still, this only scratches the surface, both literally and figuratively — the chocolate shell is just the candy’s exterior, and cocoa prices shouldn’t have led to this anyway. Indeed that’s important to consider, especially when considering the Creme Egg’s makeup: a chocolate shell filled with white and yellow fondant (sugar and water, basically). This is where a little high school geometry helps. Let’s call the egg a sphere for simplicity’s sake. A sphere’s surface area’s relationship to the radius is square (four times pi times radius squared, to be exact), while its volume has a cubic relationship with the radius (four-thirds pi radius cubed, to be exact).

Therefore, any changes in the egg’s shape will change the amount of sugar necessary to make a Creme Egg far more than it will change the amount of cocoa necessary. Furthermore, milk chocolate has plenty of sugar in addition to cocoa. To really understand the shrink, we must turn to sugar prices, below:

Have Rising Commodity Prices Shrunk the Cadbury Creme Egg?

See that spike in 2006? That spike followed Hurricane Katrina, which disrupted sugar trade and refinement in a year that was already tight for sugar production. Sugar prices nearly doubled. Between this one-time squeeze on sugar prices, and larger industry trend toward cutting back on, or charging more for, chocolate, it appears that Cadbury thought it best to hit the Creme Egg with the shrink-o-ray.

Now, it’s well known that large food producers hedge against price swings of this nature. It’s likely that Cadbury did so, but they were also (maybe) part of a price-fixing scandal, which sought to improve profit margins for the candy industry by blaming nonexistent global price increases. All we can say for sure here is that a) sugar prices increased and b) the Egg shrunk, simultaneously and with no explanation — in fact, flat-out denial — from Cadbury.

The bigger picture

Since 2008, commodities prices have skyrocketed, likely cementing the Creme Egg’s new, smaller size in place for good. Too bad for the B.J. Novaks of the world, but ultimately better for an increasingly obese and diabetic consumer base. The dark side of this story is what higher commodity prices mean for the third world, where commodity price volatility hits people in ways us in the developed world can hardly wrap our heads around.

And where did this spike in commodity prices come from? Many people blame speculators, specifically the massive commodities index funds created by big banks like Goldman Sachs. A controversial Harper’s feature by Fred Kaufman, in fact, blamed Goldman’s commodities index for driving up the price of hard red spring — a type of wheat — with causing the global food panics of 2008.

We may suffer smaller candies due to corporate greed, price collusion, and high commodities prices, but the third world suffers the brunt of it when bread gets too expensive. Keep that in mind this Easter weekend.

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Post a Comment

  • Rhondapalomarez

    i absoulutly love these things when easter comes i get a 100 dollars and buy them i make sure to use the whole 100 dollars and it not nearly enough im sad to see them go i wish they were available all year long

  • Carolekv

    Well, this is sort of funny – got one of these out of my son’s Easter basket yesterday, thinking I can’t eat one of these because as I recall, they have something like 300-400 calories.  I checked the package and quickly noticed that I CAN eat one – only about the same as a handful of jelly beans.  Yes, I did notice that they might be smaller, but didn’t care one bit about the fact that Cadbury might shrink their eggs yet charge the same.  I was just so happy that I could eat one now!  (Obviously, pulling another factor of the value to me as a consumer into this whole discussion.)  And then seeing this article this AM immediately peaked my interest.  So Cadbury wins but so do I.  Not sure this was their plan, but of value to the analysis of the outcome nonetheless.

  • http://mybanktracker.com Willy Staley

    That’s interesting. After all, Cadbury did say that they had shrunk the egg due to changes in consumer preference. I thought it was bunk, but maybe there’s more truth to it than I initially suspected.

  • Larry

    You are full of it. Don’t begin to compare the Cadbury eggs to Peeps or speckled eggs. That’s like pitting a prime rib against a sirloin. You guys have gotten greedy. You couldn’t even make the size difference a little less noticeable. It’s like comparing a hen egg to a Robin egg. 89 cents at that. You guys are going to lose out on that unwise decision.

  • Mr.Groppi

    I actually prefer the smaller size. I remember before they shrunk them I felt that they were a little to big and I’m a pretty big fan of chocolate and sugar. I had been fairly sure they were smaller for years now and I am glad to see my suspicions confirmed. I don’t even mind that they cost the same. i just wish that Cadbury wasn’t lying about their changes and would just fess up and admit what’s going on. For that I think I can probably do without those delicious gooey chocolate eggs.

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