Why We Should Worry About Our Oreos

Among the world’s most important numbers we have…

-Pi (3.141592…): the ratio between a circle’s circumference to its diameter:

-the Golden Ratio (!.6180…) an aesthetic proportion that defines beauty:

and …

-the Oreo cookie-to-creme ratio:

Oreo Cookies

Cookie-To-Creme Ratio

The Oreo cookie-to-creme ratio is supposed to be 71 percent to 29 percent. However, a slew of Oreo lovers report that Mondelez is cutting back on the creme. While they have not been able to  prove their concern quantitatively, they do have examples. Most convincing, they claim that Double Stuf is now just a regular Oreo. Meanwhile, in a Reddit forum, one cookie eater said, the regular Oreo has “…barely even a sneeze of filling on the cookies.”

Shrinkflation

In addition, during May 2023, the Shrinkflation website, Mouseprint, documented a smaller Oreo package. The smaller package has four fewer cookies:

Our Bottom Line: Production Cost

When we look at the determinants of supply, production costs top the list. For Oreos, production costs take us straight to the chocolate. And that takes us to the cocoa bean. Up 47 percent, higher prices reflect less cocoa supply. The reasons relate to bad weather, crop disease, and several West African countries’ state guaranteed higher prices, In addition, farmers are coping with pesticide and fertilizer shortages.

Below, you can see the recent surge:

Citing higher costs for cocoa (and sugar and transportation), Mondelez said it would raise prices. As economists, we can see why. Reflecting elevated production costs, we just need to shift our supply curve to the left. As a result, equilibrium price rises:

But not necessarily. Instead, the cookie-to-creme ratio could change.

My sources and more: Thanks to WSJ for inspiring today’s post. From there, for my Oreo research, I discovered this website and this one for ratios. Then, even more crucially, based on Reuters and Japan Times articles, the ascending price of cocoa beans entered our calculations.