3/28/2007

Yellow vs. Red

Yesterday I bought a pack of Starbursts and as I opened them up I was disapointed to find only two reds and one pink in the whole package of twelve. This means that the remaining nine were orange and yellow. Now I consider myself somewhat of a candy expert, because I love candy and I eat a lot of candy. Finding only three good flavors in the package isn't unusual but it still is depressing. I tried my hand at Mambas today hoping for luck to be on my side. One package strawberry, one lemon and one orange; only one-third good flavors. I have always wondered if red coloring and flavoring was more expensive than orange and yellow, or if there was some sort of economically efficient profit maximizing reason for these candy companies to put in less of the good flavors. Now I understand that everyone has different tastes and there are probably people out there who prefer lemon or orange over strawberry or rasberry, but shouldn't that mean at least equal amounts of each color? According to the National Confectioners Association, red is the most popular color of gummi candy. When you go buy penny candies, or candy in a specialty candy store where you pick out exactly which ones you want and scoop them out yourself, which colors do you pick more of? I know I always pick out the reds, pinks, purples, blues and whites. I always skip past the yellows, oranges and sometimes greens. I wondered if anyone else had this same concern as me, and upon searching I found one opinion from a few years back asking, "does anyone like the green Gummi Bears"? The author of this article tried to contact the "Gummi Bear people" to find out why there were always more greens. The president of the company manufacturing Gummi Bears said that kids love green and that there are on average, equal amounts of each color produced. Thinking in terms of profit maximization, wouldn't it make more sense to put more of the good flavors in a pack of Starbursts? Wouldn't this encourage more repeat purchases if consumers knew they weren't going to be stuck with over half yellows? Why are there less reds? I am still unsure on the answer. For now though, I'll stick with chocolate because I know it will always be good.

10 comments:

joseph said...

Interesting question and I must say I would have neve3r thought about it myself. I think there might be a number of arguments. First of all: I like the green bears the best! I remember that I always would pick out the green candy over any other color. I also think that manufacturers are not only concerned with the flavors, but also with the color combination. Both kids and adults probably tend to grab the package that looks the most colorful.

Wouldn’t you agree?

TR said...

I think the answer to the post is in the first comment by Joseph. He was a person that obviously liked green ones. I think that candy companies do their research quite well and are pretty sure about what colors they should incorporate in their candies. Maybe people that like Gummy Bears like a certain color of Gummy Bear but prefer a different color of Mambas. Just because someone likes all different kinds of red candies doesn’t mean that other people like the same color of all candies as well. I personally like yellow Mentos the best, but not yellow Gummy Bears. I think a big part of the problem is people’s perception. To one person there are always a lot of green Gummy Bears left over, and to another there is always a lot of red Gummy Bears left over.

Kate said...

Imperfect bundling is a vile culprit to the perfect choice. The refined sugar, high fructose corn syrup candy industry is no exception. I agree with all that is above, it is hard not to. We all have our favorites, but the important point is that candy companies are choosing to bundle because it is favorable for them. It creates a demand that benefits their total revenues and total costs. Until the perfect choice benefits the candy industry we are stuck with candy bins in supermarkets as the alternative to a sanitary packaged perfect choice.

Jacob said...

I have never thought about this before in terms of economics. I think that you bring up some interest questions and concerns. I agree with TR that the candy companies have most likely done allot research to determine what is the most profitable. It seems to make sense however to put less of what people truly want in a package of, for example, gummy bears. Because, if there is less of what they truly want in each package then it seems likely, that people may buy more packages in an effort to get more of what they want and as a result, the candy companies’ profits are maximized. Sneaky, but it seems to be working.

Dr. Tufte said...

-1 on Jacob for a spelling error.

OK. I laughed really hard at this one. Patrick REALLY REALLY REALLY LIKE CANDY!!!

First off, I'm not sure color is what it is all about. I'm a sorter - as are many people. I like all the colors, but I usually eat all of one color in a row.

Kate has an interesting point: maybe this is all about offering us imperfect bundles (2nd degree price discrimination). I have trouble seeing that when the color doesn't affect the flavor though.

I'm no expert, but I'd guess that there isn't a lot of thought that goes into how manufacturers allocate colors to specific packages. I think randomness is part of the bundle they are offering: if there was an exploitable pattern there'd probably be some pretty weird purchasing behavior: say people who steal Starbursts, but to get the left end of the package.

A "bigger" question is why are there so few colors? Clearly people demand a variety of colors. It must be that the marginal utility derived from extra colors declines more quickly than the marginal productivity of the factories.

It is also possible that this is all "cheap talk". This is the technical term (believe it or not) for making small product differentiations not because they make for an addition to the bottom line, but because they don't cost much and don't hurt the bottom line. I'm leaning this way, because it is hard to explain why we would have multi-colored gummi bears sold alongside single color gummi products (isn't that what Swedish Fish are?).

Funny story: being a good Libertarian, to teach my kids about taxes and arbitrary government, I instituted a yellow tax in my house. If they have a handful of candy, they know that I will always tax them one yellow one. ;)>

FWIW: There's an interesting problem for ECON 6100 here in how you allocate colors to a package, with a constraint that there ought to be at least one of each type in there.

Matthew said...

Dr. Tufte made an excellent point when he mentioned second degree price discrimination and imperfect bundles. I think this is absolutely true. I am not talking about gummi bears, since they all have the same color, but about Starburts and even chocolates (I feel there are too many cream-filled and not enough caramel!). Each color is a clearly different flavor and you will have to buy more of the bad flavors to get to the good flavors. So if you want ten red Starbursts, you might have to actually buy forty of them in the package, thus increasing the producer's surplus.

Regarding gummi bears and colors, all of the comments have been great. Another reason for increased colors, I think, is because variety increases consumption. If all the gummi bears were the same color, I might eat two. However, with more colors, I want to try everything, so I'll take two of each color, definitely increasing my consumption.

William said...
This comment has been removed by the author.
William said...

Dr. Tufte,
You say, "I'm no expert, but I'd guess that there isn't a lot of thought that goes into how manufacturers allocate colors to specific packages. I think randomness is part of the bundle they are offering."

It seems to me though that there has to be some thought that is placed in making Starbursts. I for one eat a lot of candy too and in all my years of eating Starbursts I have never received more than three pinks which is the average. I have never been struck with the luck of having nine pink and reds. It seems that you always get stuck with more of the bad flavors then the good ones.

Maybe they do this to have the consumer want to buy more. Or maybe it is something for the consumer to look forward to getting. I was just thinking about this concept with Starbursts the other day. My solution to the problem was that they should offer starbursts with all red or all pink or a combination. I would definitely buy it!

As to another comment that you made, you said, "A "bigger" question is why are there so few colors? Clearly people demand a variety of colors." Starbursts actually does offer other flavors in other packs, they have the tropical version, baja california, sour fruit chews, retro fruit chews, and berries& creme. All of the packs though offer only four different flavors. So obviously it seems there must be some importance in not having a multitude of flavors in each pack.

Dr. Tufte said...

Interesting.

I'm still not sure what to make out of this, but it makes me think of the M&M store in Las Vegas. Is there a market for this with other products?

Anonymous said...

I am eating a bag of starburst as we type and I was upset to find mostly yellows. My curiosity brought me to this site. My favorites are the pinks, oranges, and reds. Luckily I have a boyfriend who loves the yellows so my bag of starburst will never go to waste.