The Big Business of Guilty Pleasures

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Multinational beverage and snack companies spend billions each year enticing us to rip the tab off a can of sugary soda or lovingly peel away the foil from a milk chocolate candy bar. Could they actually be doing us a favor?

Coca-Cola (KO), for one, thinks it is. The beverage giant introduced its 7.5-ounce "Coke Mini" can in 2009, claiming that the diminutive refreshment represented a smart choice for those who wanted to enjoy the taste of Coke without overindulging.

Since then, the slighter can's popularity has burgeoned and it continues to reap rewards for Coca-Cola. The mini format grew by double digits in the second quarter of 2015, versus unit case volume growth of only 2 percent for Coke's total beverage portfolio.

Coke executives see this as a win for both the company and its customers. CEO Muhtar Kent described the phenomenon earlier this year: "[W]hen you compound double-digit growth in smaller packages over a number of years, this starts becoming really meaningful, meaningful in terms of both how you can impact calories, how you can entice a broader consumer group because essentially ... you're following a consumer -- and that really works."

Fellow beverage giant Starbucks (SBUX) also professed its desire to follow the consumer when it introduced its "Mini Frappuccino" at the beginning of this summer. The company said that it developed the drink after numerous customer requests for a smaller version of its popular Frappuccino beverages.

At just 10 ounces, the Mini Frappuccino has, according to Starbucks, one-third less sugar and one-third fewer calories than a 12-ounce "tall" serving. (Alas, these numbers are before the addition of any whipped cream or flavorings.)

Big Business Wants to Help You Watch Portions

The marketing around tinier servings is increasingly aligned with a practice known in dietary and nutrition circles as "portion control." This concept encourages us to carefully watch portions of healthy foods -- as well as foods which may represent guilty pleasures -- as a sensible way to balance what our bodies need with what they often crave.

A popular method for implementing portion control involves invoking images of common objects to gauge reasonable sizes of food servings. The Mayo Clinic, for example, suggests that to estimate a healthy portion of cooked skinless chicken (about 2.5 ounces), you should picture two-thirds of a standard deck of cards. WebMD says a healthy serving of chocolate is roughly the size of a box of dental floss.

Snack manufacturers must love the trend toward portion control, as they've become adept at creating ever smaller, often individually wrapped treats. In many instances, the consumer pays a steeper per-ounce price for a more compact indulgence, resulting in higher margins for the manufacturer.

For example, Lindt Chocolate's "Hello Chocolate Minis," individually wrapped miniature chocolate bars sold together in single packs, work well for the portion control-conscious consumer (as well as being highly shareable, I should add). It takes two minis to equal the dental floss-pack sizing guideline, so you get twice the pleasure from tearing open the little packets and devouring them.

But you'll pay a premium for the portioning. A 4.9-ounce bag of Minis in your local grocery store can range from 20 to nearly 70 percent higher in price on a per-ounce basis than say, a Lindt "Classic Recipe" Hazelnut Milk Chocolate Bar.

The Marketing Hook Is Persuasive, but Should Consumers Bite?

It may be difficult at first to see the point of making a guilty pleasure like chocolate or Coca-Cola less "guilty." Aren't manufacturers simply taking advantage of consumers in the most cynical fashion?

Maybe not. It's interesting to think about the personal economics underlying scaled-down, "mini" products. On one hand, you're getting less value for your dollar. Yet, odd though this may seem, you're also paying the manufacturer to ensure your moderation. And corporations can't be blamed for responding to market demand, as Starbucks did.

Moreover, the long-term economic benefit of curtailing consumption of sodas, candies and the like, and thus leading a healthier lifestyle, surely outweighs the premium you'll pay for a bit of portion policing.

Before you scoff at the argument, consider that many consumers, myself included, will pony up extra cash for foods and beverages marketed in positive terms, such as "sustainable," "local," "organic," "preservative-free," etc. We often willingly pay more for what we think will advance our well-being.

Big business, whether it truly cares about our well-being or not, certainly understands our cravings and ultimately knows how to push our buttons to induce a purchase. Take Haagen-Dazs, which has been hooking grocery store shoppers with a tiny, 3.6-ounce "cup" version of its ice cream in freezer sections for years. The company's marketing tagline brilliantly captures that mythical, promised win for both manufacturer and consumer:

"Haagen-Dazs single serve cups are perfectly portioned. Indulge. A little."

Motley Fool contributor Asit Sharma has no position in any stocks mentioned, but he's invested quite a bit recently in those "perfectly portioned" Haagen-Dazs cups. The Motley Fool owns and recommends Starbucks. The Motley Fool has the following options: long January 2016 $37 calls on Coca-Cola, short January 2016 $43 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. The Motley Fool recommends Coca-Cola. Try any of our Foolish newsletter services free for 30 days. Check out The Motley Fool's one great stock to buy for 2015 and beyond.
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