Category Archives: The Planet

Good News For Costco, Bad News For Consumers !

We must be getting old, here at Routing By Rumor world headquarters, because we’re not spotting deceptive consumer practices as quickly as we used to.  If you’re a regular visitor to these parts, you’ve heard us complaining about manufacturers who downsize their products, and about manufacturer’s practices we’ve termed “deception engineering“.

Case in point…  When last month’s “Costco Connection” advertising and propaganda publication  arrived (they call it a “lifestyle magazine” –  believe that, and we have an “infomercial” we want you to watch), we found great news on page 52  (View the April edition of Costco Connection here).  Costco announced, in a two-page article, that while other brands of tuna fish were shrinking their cans from six ounces to five ounces, Costco was increasing the size of their  “Kirkland Signature” house brand of tuna fish, from six ounces to seven ounces.  You don’t read good news like that every day.  Sounds like they’re making an already good value even better.  Break out the mayonnaise and strike up the band.  Happy days are here again!

Or are they?

It turns out that it’s good news for Costco, but bad news for Costco members (and, we suspect, for those cute little tuna fishies).  While it’s true that they have increased the size of their Kirkland Signature tuna fish by 16.6%, to seven ounces, consumers are not getting more tuna for their money.  The article in their Costco Connection magazine somehow forgot to mention the fact that the price per can actually increased even more than the size of the can!  Bottom line: You get more tuna per can, but the price per ounce has increased.

Silly us.  We thought we might be getting more tuna fish for the same price.  In actuality, while the size of the cans was increased a whopping 16.6%, the price per can has increased an even more whopping 20%.  Packs of eight 6-ounce cans  had sold for $9.99 in area Costco Wholesale warehouses.  Now that they have introduced packs of eight 7-ounce cans, Costco has raised the selling price to $11.99, a 20% increase.  By the way, didja ever notice how most grocery items at Costco seem to be sized so that the average price per package is around $10 or $12 ?  Throw 9 or ten items in your cart, and you just spent at least $100.  But we guess that’s the whole idea of shopping in a “warehouse” club.   And why does the price of everything have to end in “.99”, ie: $9.99, $11.99, $14.99 ?  We realize that Costco didn’t invent that pricing strategy, but if you’re shopping in a place like Costco, which says it caps  it’s margin** (see below) at 14%, it seems like a suspicious practice to cynical little us.  Like maybe if their normal markup dictates a selling price of $12.35, it gets rounded UP to $12.99, just because someone at Costco likes the number 99, and rounding it up to an even $13.00 might seem, well, excessive.  Yes, we know that 13 is not an even number, but you get the point.  Besides, 1300 IS an even number, which is sort of odd, when you stop and think about it.  Then again, maybe we’re paranoid, and when they have an item that should sell for $12.35, they decide to give their members a break, and round the price down to $11.99.  Yeah, right.  All we know is that if you look at your receipt the next time you shop at Costco, just about everything except random-weight packages of meat, poulty, fish, etc., will end in “.99”.  But even those random-weight items will have a unit price ending in “.99”, such as $5.99 per pound.

But then, there are a lot of odd things at Costco, like the fact that they will accept any credit card in your wallet, as long as it is from American Express.  And the fact that they don’t offer grocery bags, so you end up throwing 500 loose items into your car in the parking lot.  And the fact that they won’t accept any manufacturer’s cents-off  coupons, unless they are distributed by Costco themselves.  And the fact that they have pretty limited hours of operation, especially for the lowest-cost membership holders. And the fact (according to this New York Times article), that Costco refuses to accept food stamps (now issued as debit cards) for purchases.  And the fact that you’ll find horrifically environment-unfriendly packaging of many small items (especially electronic items) at Costco, which doesn’t seem to be getting Costco members too upset.  We’re talking huge plastic blister packs (which can’t be recycled, at least where we live), or combination plastic and cardboard blister packs, so that these small items are less likely to be stolen.  In our opinion,  some of the terribly excessive packaging at Costco and other warehouse-type retailers qualifies as a crime against the planet, even if it doesn’t happen to be illegal.

Now, we’ll admit that we aren’t going to stop buying Costco tuna fish.  It’s actually excellent quality tuna.  It is quite possibly the best quality tuna we have ever found, at any price.  But those good folks in Seattle must think their customers are idiots.  To be sure, the price per ounce has increased only slightly, and it’s still a good value.  But shamelessly hyping the increased size of their cans of tuna fish, and not mentioning that it’s now more expensive and was actually a better value before they increased the size of the cans isn’t what we would consider good news or being straightforward with their customers .  In our opinion, it borders on deceptive advertising.  Of course, you can’t  expect that manufacturers will go out of their way to let you know when they raise prices, downsize a product, or substitute cheaper ingredients, either.  What we don’t like is the fact that, in our mind at least, Costco’s announcement paints a picture that it’s now a better value, when the opposite is actually true.

Since when is raising the price (per ounce, per pound, per gallon, etc.) of a product, while at the same time, forcing you to buy more of it at once, a good thing for consumers ?  What ever happened to the warehouse club concept that as package size increases, so does value ?

For us, the appeal of shopping at Costco isn’t so much about price, as it is about quality.  After all, shopping at Costco means an extra shopping trip,  an annual membership fee, not getting your groceries bagged, often waiting in long lines at the checkout, limited shopping hours and very limited product selection.  Indeed,we can buy many identical items for less at the local supermarket, especially when they’re on sale or if we use manufacturer’s coupons.  What we like most about Costco is that the quality of their private-labeled items, such as their tuna fish, is generally superior to not only the national brands, but any brand at any price.  Even Jimmy Kimmel shops at Costco.  Watch Jimmy shopping at Costco on youtube.  We never knew a trip to Costco could be so much fun.

An article entitled “Costco’s Artful Discounts” (Business Week, October 9, 2008), says this of Costco CEO James D. Sinegal… “he’s constantly pushing his buyers to find creative ways to lower prices and add value while getting his managers to crank up their efficiency efforts”.  It seems to us that Costco’s new 7-ounce cans of tuna have failed to deliver the lower prices or added value which Mr. Sinegal is so fond of.  What they do seem to have provided is a lot of hype for Costco’s marketing efforts, and very likely a higher profit margin because a product’s shipping and packaging costs (especially for canned items) decrease (on a percentage basis), as container size increases.  There is very little difference in the cost of manufacturing a 7-ounce tin can, compared to a 6-ounce tin can.  In fact, in the case of Costco tuna fish, the old and new cans use exactly the same size lid; but the walls of the can are slightly taller.  Costco is also very good at finding ways to minimize shipping costs, for instance, by having their vendors redesign packages so that more of them can fit onto a standard shipping pallet.  We wouldn’t be surprised if Costco’s next “improvement” to their Kirkland signature tuna will be to offer it in new and improved square cans.  Think of all the space that will save in the pantry, and the fact that you won’t have to worry about your can of tuna fish rolling away, should you drop it.  That’s always been a big problem for households that live in hilly areas.  Now, if the United States mint would only start issuing square pennies !

1919 Australian Kooka Square Penny

1919 Australian Kooka Square Penny

So, what have we learned today, class?  We’ve learned that you get less for your money when manufacturers shrink the size of their products,  and sometimes, you get less for your money when manufacturers increase the size of their products.  Heads, you lose.  Tails, you lose.

Dear Costco… May we please have our old 6-ounce cans of Kirkland Signature tuna fish back again?  They were a better value.

Then again, maybe we should just pay our money, eat our tuna fish (mercury content and torpedoes be damned), and keep our mouth shut.  Mother always said you shouldn’t speak with your mouth full, and now it’s 16.6% more full.

– Routing By Rumor

**  “Margin” is not the same as “markup”.  For instance, if you buy an item for $1.00, and sell it for $2.00,  your markup is 100%, but your margin (the percentage of the selling price that represents your profit) is only 50%.   We’ve always felt that putting things in terms of profit margin instead of markup, especially as markups become greater, has the effect of making a seller’s prices seem more reasonable.

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George Bush Fiddles While The Ice Caps Melt

Polar bears' extinction threatened by global warming ?
photo credit: Associated Press / Johnathan Hayward

Apparently, protecting our planet takes a back seat to protecting Big Oil’s profits, as far as George Bush is concerned. No big surprise there, as Bush was an oil man long before he was running the country and it’s economy into the ground. Perhaps Mr. Bush is not concerned about global warming because the White House is air conditioned.

On Friday, President Bush rejected imposing government regulations that would aim to control the United States’ production of greenhouse gases, which are blamed by scientists for global warming. He claims that doing so would hurt the economy and cause too many job losses.

Well, it’s kinda nice that he is concerned about the economy and about American workers, but what do you think that shipping nearly all of America’s manufacturing jobs to China has done? Perhaps you haven’t noticed, Mr. Bush, but the U.S. economy is in shambles. Barack Obama is smart enough to acknowledge that.

As far as protecting jobs, it’s great that Mr. Bush has finally gotten religion about the plight of the American worker, but if you want to protect Americans, preventing a global environmental catastrophe might produce a better return on investment. It will also protect American’s lives as well as their jobs and the economy.

Just how much damage are we doing to the environment from the burning of fossil fuels?

As of 2006, the world was consuming 86 million barrels of oil every day. With 42 gallons of oil in each “barrel”, that equals a mind-boggling 3.6 BILLION GALLONS of oil per day ! That’s more than 2.5 million gallons of oil every minute. We find it incredible that the world’s oil wells can pull that much crude oil out of the Earth. It’s truly hard to believe.

How much money is at stake for the nations, corporations and individuals that profit from oil ? Well, (pun intended) at the current price for crude oil, it’s more than $12 billion a day. That kind of money gives a lot of people a very strong incentive to maintain the status quo, ice caps and planet be damned.

At that rate of consumption, it seems unlikely that anything we try to do to reduce the production of greenhouse gases can have a significant effect, but we must do something.

If global warming is indeed occuring because of our consumption of fossil fuels (which includes oil), then it really does seem to be an intractable problem unless we can drastically reduce our consumption of fossil fuels. To put it in medical terms, if you have a hemorrhaging patient, all the blood in the world won’t save them unless you can stem their bleeding.

The world’s industrialized nations are so dependent on oil that there is no simple answer. Technologies such as solar, wind, or wave power are not currently capable of lessening the world’s dependence on oil to any great extent. Even if every gasoline and diesel powered vehicle on the planet could be replaced by electric vehicles, it wouldn’t eliminate most of the greenhouse gasses being produced. That’s because most of the electricity generated in the world is produced by burning oil, coal and natural gas.

Yet with the enormity of the problem clear to almost everyone, and more evidence of global warming becoming available every day, President Bush has chosen to do nothing.

Foreign leaders who attended the just-concluded G-8 summit in Tokyo must think there are two George Bushes (actually, there are, but that’s another story). At the G-8 summit, the United States joined other nations in supporting policies that will effect a 50 percent reduction in global greenhouse gases by 2050. If Mr. Bush is serious about reducing greenhouse emissions, you’d be hard pressed to find any proof of that.

We propose a summit of a different kind. How about putting President Bush on a melting iceberg, along with a group of eight polar bears (the G-8), where they could engage in a constructive dialog about what global warming means to them. In that environment, free of political pressure from Big Oil and forced to confront the issue, Mr. Bush might decide to act in a more immediate way to limit greenhouse gasses. Come to think of it, you might want to have that iceberg summit take place in Prince William Sound, Alaska, where the local wildlife has some firsthand experience with Big Oil, courtesy of the Exxon Valdez.

– Routing By Rumor

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Newspapers Are Now Obsolete. Introducing News Headlines Mad Libs !

With apologies to Andy Rooney

Ya ever notice how the same news keeps showing up in your newspaper day after day ?

…and how it always seems to get worse ?

Well, the newshounds at RoutingByRumor have figured out how to save you some money, and save some trees at the same time. Instead of buying a newspaper every day, why not try this update of the word game “Mad Libs” to get your latest news.

If you’re one of the few people on the planet who have never heard of Mad Libs, read this before you continue. And yes, the Web does indeed have everything, including the kitchen sink. There is even an official Mad Libs website.

And remember… “no news is good news”.

THE “MAD LIBS” U.S. NEWS HEADLINES

CONSUMER NEWS

The __________________ Corporation (fill in the name of a food or consumer goods company that has shipped all of it’s manufacturing to China) has announced the recall of ____________________ (fill in the name of a food product or child’s toy) due to possible __________________ contamination (fill in the name of a poison or carcinogen) or choking hazard. Consumers are advised to return the product to the store where they bought it.

ENVIRONMENTAL NEWS

Scientists monitoring the effects of global warming today observed the breakup of a ____________________ (fill in a really big number) square mile section of the Arctic ice pack. This is the largest loss of Arctic ice ever observed in a single day, and is further evidence of global warming.

HEALTH NEWS

The U.S. Department of Agriculture has announced the recall of ____________________ (fill in an agricultural product) which is suspected in a recent outbreak of ____________________ (fill in a food-borne illness). There have been ____________________ (fill in a number) suspected cases reported in ____________________ (fill in a number) states.

In an unrelated case, the ____________________ (fill in the name of a meat processor) corporation has announced the recall of ____________________ (fill in a very large number) pounds of ground beef, after tests have indicated possible contamination with e-coli bacteria.

ENERGY NEWS

Crude oil prices have hit another record high, closing yesterday at ____________________ (fill in a very large number) dollars a barrel. Regular grade gasoline is now an average of ____________________ (fill in a very large number) dollars a gallon nationally, and diesel fuel is now averaging ____________________ (fill in a very large number) dollars, across the nation.

FOOD PRICES

Food prices have taken another steep jump in the past month, with a seasonally-adjusted increase of ____________________ (fill in a number) percent. Spurred by steep increases in energy and commodity prices, this is the ____________________th (fill in a number) straight monthly increase in food prices. Recent ____________________ (fill in a weather-related disaster, such as flooding, drought, forest fires, locusts, hail, etc.) in key ____________________ (fill in a food commodity) producing areas has increased the likelihood of further price increases and tight supplies of ____________________ (fill in a commodity) for the foreseeable future.
EMPLOYMENT NEWS

The ____________________ (fill in a major corporation’s name) company today announced plans to lay off another ____________________ (fill in a large number) thousand employees in coming months. Blaming the decision on the sluggish economy and increased foreign competition, they said further workforce reductions might be necessary.

Also, the ____________________ (fill in a major retailer) corporation today announced plans to file for chapter 11 bankruptcy protection. In the latest quarter, they posted losses totaling ____________________ (fill in a really big number) dollars. They also announced plans to close ____________________ (fill in a big number) of their least profitable stores, and lay off ____________________ (fill in a big number) thousand employees.
MILITARY NEWS

The Pentagon has announced that another ____________________ (fill in a number) servicemen have died in fighting in ____________________ (fill in either “Iraq” or “Afgahnistan”). This brings the total death count to ____________________ (fill in a very large number) since the war began. The Pentagon has also announced that the tours of duty for ____________________ (fill in a branch of service) in ______________________ (fill in “Iraq” or “Afghanistan”) will be extended by ____________________ (fill in a number) months.

In a related story, suicide bombers have killed another ____________________ (fill in a number) people in the Iraqi city of ____________________ (fill in the name of a city in Iraq), after detonating ______________________ (fill in “a car bomb” or “explosives strapped to their body”) in a crowd of people gathered for ____________________ (fill in any reason people might gather in a group), and another ____________________ (fill in number) U.S. servicemen have been ____________________ (fill in “killed” or “wounded”) by a roadside bomb in ____________________ (fill in the name of an Iraqi city).

9/11 ATTACKS

The New York City Medical Examiner’s office announced today, that another victim of the September 11th attacks has been positively identified thru the use of DNA testing. Bone fragments belonging to ____________________ (fill in yet another victim’s name), which were recovered from ground zero in the weeks after the attacks, were re-tested using new technologies which were unavailable until now. This brings the confirmed number of victims of the 9/11 attacks to ____________________ (fill in a very large number that should wake up every American to the evil we are up against), making 9/11 the single deadliest enemy attack on U.S. soil in the nation’s history.

In a related story, redevelopment of the former World Trade Center site in lower Manhattan has again suffered a setback, after ______________________ (fill in just about any reason imaginable ) has caused yet another delay in construction activity at the site. The reconstruction plans for ground zero have been mired in controversy, cost overruns, ____________________ (fill in another of the hundreds of reasons for the delays), and complaints from families of 9/11 victims, unhappy with plans for a memorial at the site.

NEWS FROM THE CAMPAIGN TRAIL

____________________ (fill in the name of a U.S. presidential candidate) has declared his intention to ____________________ (fill in either “end the war” or “win the war” or “increase the number of troops in Iraq and Afghanistan”) within ____________________ (fill in a number) days of being sworn in as President. Speaking from the campaign trail, he spoke to reporters about the growing dissatisfaction among Americans about how the war is going, and promised quick and decisive action to change the course of the war.

Also, in responding to reporter’s questions about ____________________ (fill in an embarrassing or troubling incident that has been dredged up from his past), he denied _____________________ (fill in “ever making the statement” or “ever meeting with the person” or “ever belonging to the group” or “ever voicing support for the group” or “ever practicing that religion” or “ever losing his temper”), blaming those rumors on ____________________ (fill in a political party) supporters trying to derail his campaign.
So there you have it… All the news that’s fit to print, and no need to buy a single newspaper.

– Routing By Rumor

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What’s Wrong With This Picture ?

credit: The New York Times / Sandy Huffaker

As just about everyone whose body temperature is above room temperature knows by now, gasoline prices have gone through the roof. You pretty much expect to see even higher prices each time you pass a gas station.

Most of us wonder who it is that is profiting from these spiraling prices. Many of us expect to see gas shortages, long gas lines, and gas rationing pretty soon. At the same time, station owners are crying poverty, claiming they make only pennies on each gallon of gas sold.

Then would someone please explain the prices in the above photo, from this New York Times article published May 24, 2008 ? We are hesitant to use the term “price gouging”, but there doesn’t seem to be any plausible explanation for the price differential between the “credit” and “full serve” pricing at this Union 76 station in La Jolla, California (The Union 76 brand is owned by ConocoPhillips). While not clear from the photo, we believe that the “credit price” implies self-service. In fact, why in the world would the credit card price be lower than paying cash, in the first place, self-service or not ? And why would gas at the full service pump be up to $1.20 a gallon more expensive ? Something stinks in La Jolla, and we don’t think it’s the MTBE in the gas. Do supermarkets that have self-service checkout lanes charge $1.00 more per item if you pay at a register with a real live honest-to-goodness cashier ?

Here in the Northeast U.S., gas stations generally set a single price for gasoline, regardless of whether you pay with cash or credit card. If a station differentiates between self-service and full-service (which is a misnomer anyway), it is generally a few cents a gallon.

While we’re on the subject of “full service”, when was the last time a gas station offered to check your tire pressure, oil level, coolant level, etc., or wash your windshield ? Full service my foot. We doubt most of the gas jockeys working at these stations would know how to open your hood, much less find your dipstick. Most of the time, you’re lucky if they can find where to insert the gas nozzle, and if they speak English. We wouldn’t pay one cent more for their supposed “full service”.

ExxonMobil just announced that they will be selling all of their company-owned gas stations to their distributors or to other buyers, because there’s no money in the retailing end of the business. Well, when you can make record-setting obscene profit by refining the product, we suppose you might loose interest in the lower profit parts of the business. (It’s sort of like why bank robbers never demand coins, preferring the paper money instead.) Maybe ExxonMobil should use the price model that Union 76 is using at the above station. If they could add up to $1.20 profit per gallon to their sales, we suspect that owning the stations suddenly becomes very profitable indeed !

Getting back to our original question of “What’s wrong with this picture?” we think there are many things wrong on many levels. Why is gasoline $4.00 or $5.00 a gallon, and climbing? Why hasn’t the United States done more to lessen our dependence on foreign oil? Why is this country in love with gas-guzzling vehicles? (although that is starting to change). Why are the big oil companies allowed to rake in record profits, while much of America is hurting from the spiraling cost of energy? Why aren’t we seeing more government mandates or inducements to effect energy conservation, such as carpooling, discounts on mass transit fares, tax breaks to employers who encourage telecommuting, restrictions on the use of non-essential lighting, etc? (When there’s a water shortage, restrictions are put in place on non-essential water use. We think the same should be done regarding non-essential energy use, especially by commercial users.) How about giving free bicycles or scooters (or tax breaks) to city-dwellers (or anyone) who pledge to go car-free at least one day a week?

Oh, and does anybody actually opt for the “full serve” pumps at this, or any other Union 76 station ?

– Routing By Rumor

P.S. – Another suspicious thing about the prices displayed in the above photo is that all the prices are in the form $ xx9.9 ! While it is customary for gas retailers to always tack on that 9/10 of a cent, it looks like some retailers, this station included, have adopted the practice of tacking on 9.9 cents to everything. We guess the next logical step is to go to the $ x99.9 pricing model, where all grades of gas will sell for $4.99, $5.99, $6.99 a gallon, etc. Why bother raising the price by 10 cents or 20 cents every couple of days. Just start raising it in one-dollar-a-gallon increments.

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The Price Of Oil Is Increasing 150% A Year ! Is The $200 Barrel Of Oil Too Far Away ?

It was just over three months ago that we noted that the price of crude oil had passed $100 a barrel for the first time ever. Now, in less than four months, it has increased another 40%, and is closing in on $140 / barrel. Almost every day sees a new record high for the price of crude, and Friday was no exception. That equates to an annual increase in the price of oil somewhere around 150%. Based on the past few months, we think oil might hit $200 a barrel before the end of the year. If you think the U.S. economy is in trouble now, imagine what that will do to it.

Gasoline is at or above $4.00 a gallon in much of the U.S., with predictions of $5.00 to $6.00 a gallon by the end of the summer. It seems that those economic stimulus checks that Uncle Sam and his nephew George W. were kind enough to send y’all are little more than a gift to the oil companies and market speculators. Being able to afford to fill their gas tanks is the number one concern for most Americans now.  You would think that sky high gasoline prices would make a big enough dent in demand that there will be no gasoline shortages.  The truth is that the underlying cause of high prices is a tight supply and global demand for oil.  Because of this, we believe the next gasoline crisis is not too far down the road.

Look what fuel prices have done to the market for larger vehicles. Truck and SUV sales have dried up to the point that the market resembles the real estate market. Car dealers and real estate salespeople have joined the exclusive club once reserved for the Maytag repairman.

If you think increasing food prices and inflation in general are bad now (don’t believe the fairy tale statistics that Washington tries to feed you), just watch what happens over the next few months. Inflation, the cost of energy, and the economy (yes, Virginia, we ARE in a deep economic recession) are such problems that they have succeeded in replacing Iraq on the front page of your newspaper for the past few months.

These concerns have prompted the economic gurus at RoutingByRumor to come up with our top ten list of concerns that Americans are faced with…

  • Skyrocketing gasoline prices (try filling your tank)
  • Skyrocketing food prices (try keeping food on the table)
  • Energy prices (try heating/cooling your home)
  • Inflation (try to keep up)
  • Skyrocketing healthcare costs (try getting sick)
  • The real estate slump (try selling your home)
  • The foreclosure crisis (try holding onto your home)
  • The deteriorating job market (try finding a decent paying job, or any job at all)
  • Stagnant or decreasing wages, benefits and income (especially investment income)
  • The lack of leadership in Washington (try to find a real President)

Gee whiz… terrorism, illegal immigration and global warming didn’t even make the top ten. That’s how bad things are.

– Routing By Rumor

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The Coming Gasoline Crisis… Get Ready For Gas Lines And Rationing !

credit: Florida Sun-Sentinel / americanphotojournalist.com

photographer: Melissa Lyttle

The first gas crisis in the United States in recent (post WW II) times was during the winter of 1972-73. The second gas shortage was during the summer of 1979. It was during that crisis that gas prices broke (at least in the Northeast U.S.) $1.00 a gallon for the first time. Those were the good old days. Fast forward to 2008, when, for many parts of the United States, gasoline is now topping $4.00 a gallon, and rising daily.

Despite the fact that we are almost 30 years down the road since the last energy crisis, we are still almost totally dependent on petroleum-based fuel. Electric, natural gas, solar, hydrogen and to a lesser extent ethanol, have failed to make a significant dent in our demand for petroleum-derived gasoline and diesel fuel.

There are still virtually no all-electric, natural gas or hydrogen vehicles on the road, with a fairly insignificant number of these alternative-fuel vehicles in some fleets, such as utility company, transit authority and delivery company vehicles. Have you ever seen an electric, hydrogen or natural gas refueling station ? Even today, for all practical purposes, gasoline and diesel are the only fuel options available. What percentage of the privately owned passenger vehicles in the U.S. are all-electric or gas-electric hybrids ?

Despite more energy-efficient homes and appliances, we continue to set energy consumption records. Electric utilities generally set new winter and summer peak output records each year. It seems that no matter how efficient our homes or cars become, no matter how hard we try to conserve energy, we will never see lower demand for energy. All we can hope to achieve is to slow the increase in energy consumption.

While the increase in total energy consumption varies by geographic region and market sector, consumption generally increases between 1 and 3% annually (see US Department of Energy report).

Now couple our ever-increasing appetite for energy with the fact that developing nations, most notably China, are significantly increasing their energy use. It portends continuing increases in the price of energy from all sources, not just oil. It also means tighter supplies and future energy shortages (see this April, 2008 AP article in the NY Times about tight oil inventories). With the summer approaching, shrinking gasoline supplies (despite higher prices), and increasing seasonal demand, it’s a recipe for trouble. They are even attributing a decrease in U.S. oil supplies to fog in the port of Huston. What’s next… blaming it on which way the wind is blowing ?

Recent world events related to shortages of food staples such as rice, wheat and corn are already being felt in the United States. While there does not appear to be a true shortage yet, the prices of all these commodity items has risen sharply in recent months. And yes, much of this increase can be tied to the price of oil.

We are seeing more and more instability, in terms of price and availability of food items. In just the past few weeks, rationing (or more accurately, purchase limits) have begun to pop up at retailers around the United States, on rice and flour. While panic buying is likely to blame to a great extent, a tight supply is no doubt at the root of these actions, as well as the sharply higher prices.

credit: freeenterpriser.com

Gasoline is subject to exactly the same market behaviors as food. To some extent, it is even more vulnerable. You can’t plant more oil seeds next Spring in anticipation of higher demand. The crude oil supply is more or less constant, at least for now. It’s a non-renewable resource, so once it’s gone, it’s gone forever.

It would not take much to touch off panic buying of gasoline. A steep short-term increase in the price of crude, a new political crisis in the Middle-East, a weather-related emergency, or some unforeseen event that influences energy markets, are all capable of creating a crisis overnight.

We think that the recent run-up in gasoline prices has significantly increased the likelihood that we will see another gas crisis in the near future. This is regardless of whether there is a true shortage, or if it’s just panic buying that takes hold. Don’t be surprised to see gasoline rationing being put in place as soon as this occurs, whether it is imposed by the retailers, or by the government. Don’t be surprised to see long lines at the pumps, a la 1972.

– Routing By Rumor

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What’s The Real Secret In Lipton “Recipe Secrets” Soup Mix?

I’ll give you a hint… The secret is not inside the box.

I think the secret might be what they left out. Shhhhhh !!!

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Another Shrinking Product:

Lipton “Recipe Secrets” Soup & Dip Mix

At RoutingByRumor, we love to use Lipton’s “Recipe Secrets” mix in recipes, rather than preparing soup with it. We’re not too pleased that the packages might have shrunk.

We pretty sure that Unilever has shrunk the size of their Lipton Vegetable “Recipe Soup & Dip Mix”. We don’t buy it very often, but if memory serves us correctly, it used to contain two one-ounce packets in a two-packet, 2.0 ounce box. When we bought a box recently, it was nearly impossible to read the weight printed in the box. Take a look at the box above. Do you think Unilever, the owner of the Lipton brand is trying to camouflage something here, or is that just a printing problem? Don’t you think it’s just a bit suspicious that the net weight statement happens to be printed where it partially blends in with the varigated background of the bowl of soup, instead of printing it over a solid background, where it could be easily read?

Notice the solid color, high contrast background behind the easy-to-read statement that claims “Also Great for Slow Cookers!”. As other websites have pointed out, a common ploy when shrinking the contents of a product is to place some eye-catching graphics or announcement on the package, to draw your attention away from the shrinking content statement, whether it is a lower weight, item count, square footage, etc.

If they have indeed shrunk the size of their Recipe Secrets dry soup mix, then it seems to us at RoutingByRumor that their Deception Engineering department could have done a much better job on the packaging. It’s so hard to read the package weight that it’s pretty obvious they might be trying to hide something here.

We don’t have an older package to compare this to, so if any readers of this blog have an older 2.0 ounce package of Lipton Recipe Secrets soup mix to compare this with, we would appreciate your comments, and if possible, a scanned image of the front of the box. We will post your box here for comparison.

If indeed Unilever has shrunk the size of their Lipton Recipe Secrets soup mix from 2.0 ounces to 1.8 ounces, that is a full 10% reduction in what you’re getting for your money, assuming that the package price has not gone up. To add insult to injury, the 0.9 ounce packets (two per box) of soup mix are now very thin, flimsy, metalized plastic, instead of the much more sturdy paper and foil envelopes that the mix used to come in. Perhaps Unilever will tell you they improved the packaging, but for my money, I’d rather have foil laminated paper envelopes instead of plastic. Paper is a renewable resource, unlike plastic, which is made from petroleum, and probably takes a zillion years to decompose in a landfill. If your trash is incinerated, do you want to be breathing in the waste products produced by burning plastic? I’m sure the switch to plastic has lowered Unilever’s packaging costs. Wouldn’t it have been nice if they passed on the savings to consumers, or used the lower cost of materials to INCREASE the size of their soup mix instead if shrinking it?

Are the ingredients in Lipton’s Vegetable Soup & Dip Mix so costly that they were forced to shrink the size of the package? They aggregate the (dehydrated) vegetable ingredients as the first item on the ingredient list (carrots, cabbage, onions, leeks, peas, green bell peppers, red bell peppers and tomatoes). The second most prevalent ingredient is salt, which as you probably know, is nearly as costly as gold and platinum. Give me a break.

Lipton’s nutrition panel lists over 3100 mg of sodium per box (>5 servings with 610 mg sodium per serving). Considering the fact that sodium is only part of the weight of table salt (NaCl contains Sodium and Chlorine atoms), my guess is that if they did not aggregate the vegetables on the ingredient list, that sodium would be the first ingredient listed (in descending order of predominance, by weight). Bear in mind that, atomically speaking, table salt is almost exactly 40% sodium and 60% chlorine by weight. That means that the 3,100 mg of sodium per box (as per the nutrition label) equates to approximately 7,800 mg of table salt per box. So, when you think of it, getting less soup mix, besides meaning less soup mix, also means less sodium, which means less hypertension (ie: lower blood pressure) for Lipton’s consumers. Thanks, Unilever !!! We’re feeling healthier already.

If our hunch is correct, it shouldn’t surprise anybody that other Unilever brands are shrinking also. See our previous post about the incredible shrinking bottles of Hellmann’s Mayonnaise (known as Best Foods Mayonnaise, West of The Rockies), another brand brought to you by Unilever.

As is our policy at RoutingByRumor, if Unilever wishes to comment, we will be happy to post their statement here, unedited, and correct any factual mistakes in this article.

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