doodledee

Sometime in the last week or two, Bylery's switched to the new "improved" gallon milk jugs. Overnight, their price for a gallon of milk went up 60 cents. Seems fair. Oh no wait it totally doesn't.

On the way out, I pulled the store manager aside and talked to him about how disappointed I was in the switch. (I stayed remarkably cool.) I told him about how I was happy with the old jug. I explained to him how, before the change, Bylery's was killing every other grocery store in town on milk prices because they hadn't bumped their price because they hadn't 'upgraded' their jugs. He nodded and listened politely - though he did raise his eyebrows when I used the word 'extortion' - and he said that I was the first to say anything about it either way.

Then he started talking about the change and why it happened. In the end it all comes down to economics and, I hate to admit, it makes a lot of sense. See, the dairy industry needs to continue to innovate in order to create the new jugs and containers that the American public demands from them. And let me tell you, innovation ain't cheap. It can cost millions, sometimes billions, of research and development dollars just to create a single new milk carton design. Spendy, eh? But that's just the beginning of the story.

Once it's created, the new container has to be approved by the Food and Drug Administration through a complicated and expensive process that, even when it ends, still does not guarantee the ease of use, kid acceptance, or general marketability of the new container. Thousands of new cartons and jugs start the process every year, but only a small handful actually make the grade. That's understandable when you consider that the dairy consuming public expects our government to rigorously safeguard them against stupid packaging, but it doesn't change the fact that it's a financial burden on the innovator.

Now here's the real kicker. After all that money is spent on research and on government approval and on focus groups and on cows, the container innovator is only given market exclusivity for their product for a short period of time. (3-5 years is typical.) And when the container's market exclusivity ends, the door is opened for generic versions of the carton to flood the market. And that can only mean one thing: cheaper prices. And if the prices go down, the profits go down. And if the profits go down, the money available for innovation goes down. And if the money available for innovation goes down, the odds that we'll continue to see groundbreaking new jugs and containers brought to market goes down. It's a cycle of stagnation.

So, the manager dude concluded, we *have* to pay more for the same milk in different jugs. The very future of our milk buying experience is at stake. It's just not something you mess around with.

He was a wise man.