The Snack Food Wars

It won’t get you to Europe at half-fare, but the snack food industry is having it’s own version of airline price wars.

There’s a potato chip price war going on and the consumer is the one who benefits. The average price of chips has dropped by a dime a pound, with some companies lowering prices by as much as 30%. This price break is seen most often as one-time “specials” or cents-off coupons than as a change in the list price.

Industry giant Frito-Lay (maker of Lay’s, Ruffles, Funyuns, Fritos, Cheetos, Doritos, Tostitos and Munchos) has tried to fight off challenges from Borden (Wise, Guy’s, Clover Club, Laura Scudder’s and Red Seal), Keebler and upstart Eagle Brand (owned by Anheuser-Busch) by cutting prices. That forces everyone else to try and match them.

This has resulted in a solid increase in the amount of chips sold, but a relative decrease in the amount of money made from them. While dollar sales of potato chips increased by a slim 1.1% in 1991, the amount of chips sold went up by 3%. Things are so bad, in fact, that Keebler Co., one of the industry’s big three players, saw its profits for the first half of 1992 fall by more than half.

As a result Keebler announced on Friday that it was shutting down its Van Nuys factory, with a loss of 100 jobs. Earlier, Dallas-based Frito-Lay had laid off 1,800 workers.

* The long hot summer of 1992 is drawing to a close with not a bang, but a whimper.

You’d better have enjoyed the rock-bottom prices for fruits and vegetables that reigned for most of June, July and August, because you’re paying for it now. That can be taken literally. The same unseasonable heat that pushed early harvests and low prices has created growing gaps and market shortages that are now boosting prices.

Broccoli, tomatoes, grapefruit, cauliflower, strawberries and lettuce are all priced higher than normal for this time of year. If you’re looking for bargains, you can still find late-season peaches and plums and staple vegetables like potatoes and onions at reasonable prices.

If you’re looking for seasonal fruits, you can find Valencia oranges, Bartlett pears and red and yellow delicious and Granny Smith apples, which are just reaching their seasonal peaks.