Lesson 5 · snacks

The $5 bag of Cheetos

Corn, cheese dust, a shiny bag, a truck and a store shelf. You pay $5. The person who grew the corn gets about a dime. Why?

Who makes it

A snack from a giant

Cheetos are made by Frito-Lay, which is part of PepsiCo, one of the biggest food and drink companies in the world. PepsiCo also makes Doritos, Lay's and Gatorade. It buys corn from farmers, turns it into puffs, adds the orange cheese seasoning, bags it, and trucks it to stores.

Guess first

Split the $5. Where does it go?

The split is an illustration of how a snack's price is usually shared, not PepsiCo's real numbers. The pattern is real: the ingredients are a small part of a snack's price.

Play: the shrinking bag

Same price. Smaller bag?

When costs go up, a company can raise the price, or keep the price and quietly put less in the bag. People call that shrinkflation. Slide the bag size and watch what a "$5 bag" really costs.

Price per ounce at $5

Bag sizes here are examples. Real bags come in many sizes; check the weight printed on the bag.

The twist

You're paying for the name

Corn is cheap. What costs money is everything that makes you want this bag: the famous name, the cheetah mascot, the ads, the bright bag, and the spot at eye level on the shelf. Stores often charge snack companies for the best shelf spots. A store-brand cheese puff can taste similar and cost less, because nobody is paying for the famous name.

Guess before you check

Quick quiz

Rules to remember

What this means for you

  1. The ingredients are rarely the expensive part.Brand, packaging, trucks and shelves cost more than the corn.
  2. Check the size, not just the price.Price per ounce tells the truth when bags shrink.
  3. Famous names cost extra.Sometimes it's worth it. Try the store brand once and decide for yourself.
  4. Where it sits on the shelf is paid for.The snacks at your eye level are often there because someone paid.

Next time we're in the snack aisle, find the price per ounce on the shelf tag and compare a famous brand with the store brand. Then decide which one is worth it to you.

Being a smart buyer isn't about never treating yourself. It's knowing what you're paying for.

— Mom