Market failures in perspective

Clearly, consumers just want sugared drinks more.

The thing that takes a while to realize about Carbondale is that the city’s small size isn’t its most impactful feature — it’s the disconnectedness. We’re 15 miles from the interstate to our east and 40 miles from the one to our north, and the state highway corridor we’re located on features only other towns that are smaller than Carbondale. It’s not cheap to ship stuff in here, and as a result our selection of consumer products, and groceries in particular, is terrible.

That makes some sense, but what astonishes me is the terrible way firms in this market respond to consumer behavior — given the cost of getting products into this market, I would expect firms to do everything they can operate at high efficiency (note: I’m not an economist, so maybe there’s a really good reason for them to operate inefficiently that I don’t know about). But every time I set foot in the pop* aisle at either of our local grocery stores, I’m more and more convinced that nobody cares what consumers here do. You can see this in the discrepancy in stocking and restocking of sugared and diet drinks.

I’m a huge fan of Vault Zero, the low-calorie version of Coca-Cola’s high-caffeine citrus soda. Now, regular Vault is not a particularly high-selling brand, and if the market is more interested in sugared than diet, you’d assume that Vault Zero would be even more of a niche product. What this doesn’t explain, I don’t think, is the tendency for both our stores (stocked by the same distributor, I’d assume, so we’re really talking about one point of entry for these products) to frequently sell out of Zero and sometimes go weeks at a time without restocking. But lest this come off as the screed of a lonely, atypical consumer, I note that many other diet brands go through the same cycle here — low stock, frequent short-term and occasional long-term sell-outs.

What prompted me to really think about this, though, was the sight pictured above, seen this morning in one of our stores. Regular Mountain Dew is given three times the shelf space of Diet Mountain Dew; the diet sells out, while the regular has sold one unit since restocking. And in general, it’s clear that strong consumer demand exists for diet drinks. If we’re concerned about the effects of high-fructose corn syrup intake through beverages, and if we’re going to just chalk American obesity up to freedom of choice, shouldn’t we be looking at how free those choices are, particularly in the commercially disconnected rural areas that are home to so much of that obesity?

* To my fellow Michiganders: I’m trying to fight the good fight, but ten years in Wisconsin has really given “soda” a lot of weight in my brain.

Share this post:

    Tags: , , ,

    • Candy

      Fraki’s in Calumet routinely ran out of orange juice. I could never understand that, since it was a product that wasn’t seasonal and likely had a highly static buying pattern. BTW, I still say pop, here in soda land, but it’s been pop for me much longer than for you.