Why is the Mexican Nesquik cheaper?

January 14, 2009 9:09 AM

Why do items in my grocery store with similar items on the Mexican food aisle cost more at my grocery store? Why does Mexican Nesquik cost less?

I'm buying Nesquik at my local Fry's Food and Drug here in central Phoenix. I pick up the 10 ounce container, which is on sale (with my VIP card!) for 3.49. On the Mexican specialty food aisle where I'm picking up my roasted, salted pumpkin seeds (cause the David ones are WAY too salty) I see a 14 ounce container of Nesquik for 2.59.

Now, a serving of the Mexican variety is 3 tbs, and the gringo version is 2 tbs. But even taking the serving differences (I figure the amount of servings per container is roughly equivalent), how can you explain the price difference?

I've seen this in various foods. Another notable difference is the sardines, where the can on the Mexican food aisle contains almost twice as much as the Crown King can on the canned fish aisle, and costs a little less.

As an unrelated aside, the Mexican Nesquik has more sugar and has a richer semi-sweet chocolate flavor, when compared with the milk-chocolate flavor of the US version.

posted by Barry B. Palindromer to shopping (17 comments total)

Price discrimination
posted by grouse at 9:23 AM on January 14 [1 favorite]

As an unrelated aside, the Mexican Nesquik has more sugar and has a richer semi-sweet chocolate flavor, when compared with the milk-chocolate flavor of the US version.

This is not necessarily unrelated. They are different products, with different ingredients that cost different amounts.

That said, I tend to believe grouse's explanation more. I always buy my canned beans in the Mexican food aisle because they're way cheaper, too.
posted by vytae at 9:28 AM on January 14

Spices, as well.
posted by MrMoonPie at 9:32 AM on January 14

Similarly (though not exactly the same), I used to work for a drugstore chain that had different prices for exactly the same products in different locations. They originally had something crazy like six different price zones. It was all based on location: is there a grocery store next to the drugstore? What type of neighbourhood is it? etc.
posted by scribbler at 9:34 AM on January 14

My unsupported assumption has always been that the distributor charges less, so the retailer can sell it for less. And my extended assumption has been that the distributor charges less because (a) they can purchase the contents/ingredients for less in a different economy; (b) agricultural, packing, and shipping labor and costs are lower in the country of origin; (c) the labeling means the package can't be broadly marketed anywhere but as aimed at a niche market which doesn't command the prices of major, widely recognized national brands.

I've noticed this as well (what bargain shopper hasn't) and it does amaze me that even for products which are identical - beans, rice, olive oil, olives, crushed tomatoes - prices for Goya and related brands are so much lower than the major brands. On the other hand, even the other (non-Mexican) brands have a wide price variation - so you could as well ask why Pastene crushed tomatoes cost more or less than Del Monte or Contadina.
posted by Miko at 9:34 AM on January 14

...and you could also ask why, when you shop at an international grocery store like the Asian market nearby, on some foods you can find major American brands more cheaply than they're sold in the regular grocery store.
posted by Miko at 9:36 AM on January 14

No HFCS in the Mexican version?
posted by Thorzdad at 9:43 AM on January 14

Stuff that is seen as a basic to one market (beans) is seen as an exotic whole food to another, and (expectations of) price vary according to this.
posted by tallus at 9:59 AM on January 14

Buying your beans in the Mexican aisle is an example of arbitrage.
posted by Pants! at 10:13 AM on January 14

No HFCS in the Mexican version?
posted by Thorzdad at 1:43 AM on January 15 [+] [!]

High fructose corn syrup is a cheaper ingredient than regular sugar.
posted by bluejayk at 10:45 AM on January 14

Where are the Mexican-aisle products manufactured?

Bluejayk, HFCS is cheaper in the US because of corn subsidies and protective tariff on imported sugar. That said, I still don't quite get Thorzdad's point.
posted by Good Brain at 11:19 AM on January 14

AFAICT, Thorz was making a reference to the fact that Mexican Coke is made with sugar not HFCS.
posted by reptile at 11:30 AM on January 14

If you want to be blown away by this phenomena, go to your local Safeway or whatever and look at the price on a bottle of tumeric, cumin, curry powder, etc.

Then go to an indian market and look at the price on a costco-like vat of tumeric, cumin, curry powder, ...
posted by rr at 11:56 AM on January 14

High fructose corn syrup is a cheaper ingredient than regular sugar.

Only because sugar in the US has major price supports. I think it doesn't in Mexico, so if the stuff is produced there using sugar purchased at Mexican prices, the manufacturing price could be lower.
posted by Chocolate Pickle at 12:13 PM on January 14

Just to clarify that a bit more: it's true that in the US HFCS is cheaper per serving than sugar in processed foods. But the reason is that Archer Daniels Midland has lobbied aggressively to get restrictive sugar import quotas and sugar price supports in place to make sure that ADM's HFCS is cheaper than sugar.

The price of sugar in the US is maintained at an artificially high level by government interference in the market. Without that, sugar would be cheaper than HFCS, as it is in most of the world.
posted by Chocolate Pickle at 12:16 PM on January 14

If you want to be blown away by this phenomena, go to your local Safeway or whatever and look at the price on a bottle of tumeric, cumin, curry powder, etc.

Then go to an indian market and look at the price on a costco-like vat of tumeric, cumin, curry powder

Or just go to a grocery store that has a bulk foods section & do the same thing. I figured out once that it was cheaper to buy a really nice empty glass container and a baggie of bulk spice than to buy a plastic bottle full of the exact same spice. (Ginger IIRC.) Quite boggling.
posted by epersonae at 12:33 PM on January 14

Stuff that is seen as a basic to one market (beans) is seen as an exotic whole food to another, and (expectations of) price vary according to this.

Beans even relatively exotic? Really?
posted by thisjax at 1:23 PM on January 14