As food prices skyrocket, name brands are challenged to find ways to reinforce their relationships with consumers or risk losing them to more affordable competitors. Mondelēz International, for one, is using a tried-and-true method — giving shoppers free things.
In a conversation-changing move, the company announced Tuesday (May 24) that it is releasing a combination of Ritz Crackers and Oreo Cookies, offering consumers the chance to get a box of Ritz X Oreo cookie-crackers at noon EDT on Thursday (May 26) for the price of shipping and handling.
“Over the past few years, Ritz has been exploring innovative partnerships and experiences to spark excitement around our iconic, buttery cracker,” Alexis Yap, senior brand manager at Ritz, said in a statement. “We couldn’t resist the opportunity to collaborate with our friends at Oreo on a snack that’s part salty cracker, part chocolate cookie, and entirely delicious.”
The move comes as inflation sends consumers running away from national brands towards grocers’ private-label offerings. On an earnings call earlier this month, Brett Biggs, Walmart’s executive vice president and chief financial officer, told analysts that rising food prices are leading to “an increase in grocery private brand penetration.”
Related news: Walmart Sees Shift to Private-Label Groceries Amid Rapid Food Inflation
Similarly, on competitor Target’s earnings call the following day, the retailer’s executive vice president and chief financial officer Michael Fiddelke shared with analysts that the company has seen “strength of the own brands in food and beverage.”
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The Consumer Price Index for All Urban Consumers (CPI-U), reported by the U.S. Bureau of Labor Statistics (BLS) earlier this month, revealed that food at home (i.e., grocery) prices rose 1% month-over-month in April and 11% year-over-year.
Restaurants are facing comparable challenges with rising commodity costs and, in turn, rising menu prices for consumers. The CPI-U showed food away from home (i.e., restaurant) prices rose 0.6% month-over-month in April and 7.2% year-over-year. As such, many restaurants are similarly turning to buzz-generating products and giveaways to foment positive sentiment as price increases lead to widespread frustrations.
For instance, on Wednesday (May 25), East Coast restaurant chain Friendly’s announced a summer menu of lobster-filled items, and on Monday (May 23), Sonic announced a Slush Float made with Mondelēz’s Sour Patch Kids candies.
Additionally, after Taco Bell announced the return of its in-demand Mexican Pizza last month, the chain kicked off a promotion to offer a free one to rewards members. Last month, Buffalo Wild Wings announced a collaboration with PepsiCo’s Dorito to launch Doritos Flamin’ Hot Nacho Flavored Sauce.
Notably, for Mondelēz specifically, even as the company invests all the time and resources into winning over consumers with these flashy moves, executives are downplaying inflationary concerns.
“One of the things we’re seeing, for instance, is [with the] fact that everything is going up, not just food, consumers continue to prioritize grocery spending,” the company’s chairman and CEO Dirk Van de Put told analysts in April, in contradiction of the trends highlighted by retailers. “It’s more on personal items, floating, eating out, travel — those are the items where they’re trying to save.”
Read more: Mondelēz CEO: Amid Inflation, Consumers Spend on Groceries, Save on Restaurants
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