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You're listening to Bloomberg BusinessWeek with krol Messer and Tim Stenebek on Bloomberg Radio.

You're listening to Bloomberg BusinessWeek with krol Messer and Tim Stenebek on Bloomberg Radio.

Well.

Well.

As I mentioned, it's one of the most read stories on the Bloomberg terminals. Today's big take, it's about the new retail tactic that's pushing Americans to buy more. The world's biggest packaged goods makers, including P and G, Unilever, and Edgewell, are using a tactic called upflation to clawback sales. In the US is more than one hundred billion dollar personal care and beauty market with more is Dina Shanker, Bloomberg News consumer reporter. She wrote the story along with Leslie Patten. She's here in our Bloomberg studio, Dina. We know about inflation, We know about disinflation. Jay Powell certainly does shrink flation. We know about that. What is upflation?

As I mentioned, it's one of the most read stories on the Bloomberg terminals. Today's big take, it's about the new retail tactic that's pushing Americans to buy more. The world's biggest packaged goods makers, including P and G, Unilever, and Edgewell, are using a tactic called upflation to clawback sales. In the US is more than one hundred billion dollar personal care and beauty market with more is Dina Shanker, Bloomberg News consumer reporter. She wrote the story along with Leslie Patten. She's here in our Bloomberg studio, Dina. We know about inflation, We know about disinflation. Jay Powell certainly does shrink flation. We know about that. What is upflation?

So upflation is something that we noticed happening where these major consumer goods companies saw sales falling in volume. People were just buying less. So they said, hey, we actually have a new version for you to buy. It's even better than the one that you don't want anymore, and it costs more too. So my favorite example is deodorant. The deodorant sales were falling. People just weren't buying as much deodorant as they used to. So a bunch of these companies came out with new products called all over body deodorant, so that if you're not just worried about the smell from your armpits, but maybe from the backs of your knees, or your feet or your chest, you can now buy a whole new, more expensive product and cover your body with it to stop the sweating.

So upflation is something that we noticed happening where these major consumer goods companies saw sales falling in volume. People were just buying less. So they said, hey, we actually have a new version for you to buy. It's even better than the one that you don't want anymore, and it costs more too. So my favorite example is deodorant. The deodorant sales were falling. People just weren't buying as much deodorant as they used to. So a bunch of these companies came out with new products called all over body deodorant, so that if you're not just worried about the smell from your armpits, but maybe from the backs of your knees, or your feet or your chest, you can now buy a whole new, more expensive product and cover your body with it to stop the sweating.

What an exciting opportunity. You have to say, I've never thought about the backs of my knees, So this is really interesting. I mean, is it working. How are consumers actually responding to this?

What an exciting opportunity. You have to say, I've never thought about the backs of my knees, So this is really interesting. I mean, is it working. How are consumers actually responding to this?

So the companies say that people are responding, well, they're buying them. Doctors have expressed a bit more reservation on the need for such products. We spoke to my colleague Leslie, spoke to someone who was thinking about using it for night sweats. But you know, I mean, who among us has not woken up warm in the middle of the night and just discovered that you can, you know, turn on a fan or the air conditioning or take off your blanket. There are a lot of solutions out there that you might already have in your home.

So the companies say that people are responding, well, they're buying them. Doctors have expressed a bit more reservation on the need for such products. We spoke to my colleague Leslie, spoke to someone who was thinking about using it for night sweats. But you know, I mean, who among us has not woken up warm in the middle of the night and just discovered that you can, you know, turn on a fan or the air conditioning or take off your blanket. There are a lot of solutions out there that you might already have in your home.

So what exactly is the scope of the problem here? Just how bad is it out there for the personal care market of these large consumer products companies, like what's going on? Give us some numbers here well.

So what exactly is the scope of the problem here? Just how bad is it out there for the personal care market of these large consumer products companies, like what's going on? Give us some numbers here well.

So basically what happened was was that in COVID, a lot of people discovered that, you know, like they don't need a shave as much, and they're not going anywhere.

So basically what happened was was that in COVID, a lot of people discovered that, you know, like they don't need a shave as much, and they're not going anywhere.

Right, I remember Jillette talking about this, right exactly.

Right, I remember Jillette talking about this, right exactly.

And so the volume sales have been falling each quarter, even though dollar sales are going up because they're raising prices because of inflation, volume sales are down. And we're seeing it in food as well. We're hearing packaged food makers talk about it quarter after quarter that volumes are falling. They don't know when they're going to stop falling, and so they're just trying to turn things around by basically offering you something they would think is very different, but we might not think is so different. I mean, is a specialized razor really worth double the price of the standard version?

And so the volume sales have been falling each quarter, even though dollar sales are going up because they're raising prices because of inflation, volume sales are down. And we're seeing it in food as well. We're hearing packaged food makers talk about it quarter after quarter that volumes are falling. They don't know when they're going to stop falling, and so they're just trying to turn things around by basically offering you something they would think is very different, but we might not think is so different. I mean, is a specialized razor really worth double the price of the standard version?

Right? Is there anything specialized about it? I mean, that's a great example because for years companies have been trying to make razors different and differentiate them in the marketplace. And like, if you look at the product lines from some companies, there's like a dozen different options and they all do the same thing.

Right? Is there anything specialized about it? I mean, that's a great example because for years companies have been trying to make razors different and differentiate them in the marketplace. And like, if you look at the product lines from some companies, there's like a dozen different options and they all do the same thing.

Yeah, they all do the same thing. That's right. I mean you might find some people who say that this particular razor did a particularly good job, and certainly the companies say that they're solving real problem and that these are you know, different areas of the body call for different products. But you know, I've been I use a razormant for a man's face and it works just fine.

Yeah, they all do the same thing. That's right. I mean you might find some people who say that this particular razor did a particularly good job, and certainly the companies say that they're solving real problem and that these are you know, different areas of the body call for different products. But you know, I've been I use a razormant for a man's face and it works just fine.

Well, you touched on what I was wondering is and that's basically the company's defense. I mean, when you went to them and reporting this story and said, hey, it kind of looks like you're just charging more for something that's essentially the same as a very similar product that you have right now, I mean, how did they justify that.

Well, you touched on what I was wondering is and that's basically the company's defense. I mean, when you went to them and reporting this story and said, hey, it kind of looks like you're just charging more for something that's essentially the same as a very similar product that you have right now, I mean, how did they justify that.

They see what they're doing as really based in the consumer. These companies have done a lot of market research and a lot of consumer surveys where they that's how they found out people are worried about the smell of their feet and all of these other issues, and in some ways this isn't so different from what companies have always done. Innovation is sort of the lifeline of any consumer goods company. But what I at least saw on the food side was what felt like an increased sense of desperation among the food companies to really turn things around. I mean, these are companies with really thin margins to begin with, even in good times, and so when they're seeing volumes fall one percent two percent quarter after quarter, they are really trying to figure out new messaging, new ways. I mean, one of my favorites was Doritos and Tostitos as side dishes and ingredients, and I was like, oh, that's that.

They see what they're doing as really based in the consumer. These companies have done a lot of market research and a lot of consumer surveys where they that's how they found out people are worried about the smell of their feet and all of these other issues, and in some ways this isn't so different from what companies have always done. Innovation is sort of the lifeline of any consumer goods company. But what I at least saw on the food side was what felt like an increased sense of desperation among the food companies to really turn things around. I mean, these are companies with really thin margins to begin with, even in good times, and so when they're seeing volumes fall one percent two percent quarter after quarter, they are really trying to figure out new messaging, new ways. I mean, one of my favorites was Doritos and Tostitos as side dishes and ingredients, and I was like, oh, that's that.

I see in an omelet, you know, crush off some Doritos, put them in with your eggs.

I see in an omelet, you know, crush off some Doritos, put them in with your eggs.

Everything, right, Yeah, pretty much?

Everything, right, Yeah, pretty much?

Yeah. Well, they were actually talking about Cheeto's dust, which they call cheetle, as a coating for chicken.

Yeah. Well, they were actually talking about Cheeto's dust, which they call cheetle, as a coating for chicken.

I could see that. Yeah. I mean, well, I respond to marketing haspin.

I could see that. Yeah. I mean, well, I respond to marketing haspin.

I feel like everything, everything that has been proposed in this article to you sounds like a great idea.

I feel like everything, everything that has been proposed in this article to you sounds like a great idea.

Katie would buy that.

Katie would buy that.

Katie would buy that.

Katie would buy that.

Wow, that sounds like a really fancy razor.

Wow, that sounds like a really fancy razor.

That's terrible?

That's terrible?

Is this solely a US phenomenon? Are we seeing other companies and other countries adopt similar tactics?

Is this solely a US phenomenon? Are we seeing other companies and other countries adopt similar tactics?

So what we're seeing is that consumers in other countries are doing something similar to what a lot of US consumers are doing, which is cutting back. But the way that they are now marketing these solutions does seem to be very American.

So what we're seeing is that consumers in other countries are doing something similar to what a lot of US consumers are doing, which is cutting back. But the way that they are now marketing these solutions does seem to be very American.

Is there something different about this moment? Because you know, you've been covering the food side of things for years and these packaged food companies have always tried to innovate when it comes to new product lines, and sometimes it works, sometimes it doesn't, and there are a lot of famous examples of times when it hasn't. Personal care companies have come out for years with with new time types of products. But are we at a point where there's kind of just like, I know, this is like an uncreative way for me to ask this question, but are we just done innovating in this space? Are the are these like is this like last dick? Does it seem like a last ditch effort to you?

Is there something different about this moment? Because you know, you've been covering the food side of things for years and these packaged food companies have always tried to innovate when it comes to new product lines, and sometimes it works, sometimes it doesn't, and there are a lot of famous examples of times when it hasn't. Personal care companies have come out for years with with new time types of products. But are we at a point where there's kind of just like, I know, this is like an uncreative way for me to ask this question, but are we just done innovating in this space? Are the are these like is this like last dick? Does it seem like a last ditch effort to you?

I see it less as we're as companies are done innovating, and more like consumers are getting smarter. Consumers are pinched by inflation. Our budgets are tighter. We don't want to throw away food. We don't want to buy a nude stick of deodorant when the old one hasn't run out yet. I think people are just less willing right now to just light money on fire.

I see it less as we're as companies are done innovating, and more like consumers are getting smarter. Consumers are pinched by inflation. Our budgets are tighter. We don't want to throw away food. We don't want to buy a nude stick of deodorant when the old one hasn't run out yet. I think people are just less willing right now to just light money on fire.

Yeah, that's exactly what I was going to say. Is the difference in this period of time is that for the last couple of years, consumers who had never experienced an inflationary environment in their lifetimes were experiencing one. So maybe this time is different in that sense.

Yeah, that's exactly what I was going to say. Is the difference in this period of time is that for the last couple of years, consumers who had never experienced an inflationary environment in their lifetimes were experiencing one. So maybe this time is different in that sense.

Yeah. I mean, if we think about sort of the kind of tales that our grandparents told us that they wouldn't paper, they would just make their grocery lists on the back of, you know, their phone bill. Now it's like, well, yeah, why would I buy paper when I can take you know, Bloomberg offices have paper everywhere.

Yeah. I mean, if we think about sort of the kind of tales that our grandparents told us that they wouldn't paper, they would just make their grocery lists on the back of, you know, their phone bill. Now it's like, well, yeah, why would I buy paper when I can take you know, Bloomberg offices have paper everywhere.

I thought you were going to say, you just write it down on your phone.

I thought you were going to say, you just write it down on your phone.

You're going I never take office supplies from from the black class and bring them home.

You're going I never take office supplies from from the black class and bring them home.

It's good you said that on mic in front of the cameras, so we have it for the record. I am curious that. I mean, we're talking about staples here. I mean maybe in the pandemic you could get away with not shaving or maybe not using a lot of deodorant, But uh, I mean does this sort of how do I how do consumers deal with this? Basically we've been talking about a trade down across industries as well. It seems like companies are trying to uh sort of trick consumers out of that trade down here. But how I mean, how do you see this going when you think about the state of inflation right now and just how stretched people are feeling.

It's good you said that on mic in front of the cameras, so we have it for the record. I am curious that. I mean, we're talking about staples here. I mean maybe in the pandemic you could get away with not shaving or maybe not using a lot of deodorant, But uh, I mean does this sort of how do I how do consumers deal with this? Basically we've been talking about a trade down across industries as well. It seems like companies are trying to uh sort of trick consumers out of that trade down here. But how I mean, how do you see this going when you think about the state of inflation right now and just how stretched people are feeling.

So this was actually what really brought me and Leslie together on this was seeing that people weren't just cutting back on things like eating out at restaurants, which is always an extra treat. People were cutting back on things that we think of as essential. And there's something like just really it really changes the way you think of that word what is essential? Well, is it essential if half of it is going to end up in the garbage? No, it's not. So I will rethink what is essential food for my family. I used to think we had to have a consumer might say, I used to think we had to have fresh fruit in the house at all times, but now I realize that some of that fruit ends up in the garbage. I could just buy frozen fruit and then we have fruit, but it doesn't end up in the garbage. Now the fresh side of it is no longer essential. So I think we are seeing a big shift in how people take care of themselves and take care of their families. And there are, I mean entire movements that are about just like existing on less stuff.

So this was actually what really brought me and Leslie together on this was seeing that people weren't just cutting back on things like eating out at restaurants, which is always an extra treat. People were cutting back on things that we think of as essential. And there's something like just really it really changes the way you think of that word what is essential? Well, is it essential if half of it is going to end up in the garbage? No, it's not. So I will rethink what is essential food for my family. I used to think we had to have a consumer might say, I used to think we had to have fresh fruit in the house at all times, but now I realize that some of that fruit ends up in the garbage. I could just buy frozen fruit and then we have fruit, but it doesn't end up in the garbage. Now the fresh side of it is no longer essential. So I think we are seeing a big shift in how people take care of themselves and take care of their families. And there are, I mean entire movements that are about just like existing on less stuff.

I just want to remind you there's also fruit available at the Bloomberg office.

I just want to remind you there's also fruit available at the Bloomberg office.

Oh yeah, I mean I've just and uh like oreos and other things that I've heard that my kids asked for.

Oh yeah, I mean I've just and uh like oreos and other things that I've heard that my kids asked for.

So I so I've heard what is the cheetahs desk.

So I so I've heard what is the cheetahs desk.

Called cheatle Okay, gross?

Called cheatle Okay, gross?

Yeah, A big thank you to Dina Shanker, Bloomberg News Consumer reporter. Check out her story along with Leslie Patton on the Bloomberg Terminal

Yeah, A big thank you to Dina Shanker, Bloomberg News Consumer reporter. Check out her story along with Leslie Patton on the Bloomberg Terminal