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““Inflation was killing my grocery budget before I found this. I’m way too busy to cook every night.””
That was the beginning of an online video ad circulating from Factor75, a food delivery company that specializes in bringing fully prepared, dietary-friendly meals to consumers.
Factor75 is using inflation anxiety in its latest advertising campaign in an effort to steer consumers away from grocery stores, and to their meal subscription service. The company insinuates that grocery stores are being hit hard by inflation in the U.S., something that is actually true when looking at the latest inflation data. But it’s not entirely clear that pre-made services are free from the supply-chain issues, pandemic eat-at-home demand and other factors that are sending food bills higher.
Consumer prices rose 0.5% in December, pushing the cost of living last year to a near 40-year high of 7%. One particular area of price increases over the past year is in fact at the grocery store — Americans are paying 15.2% more for beef, 20.7% more for eggs and 5.9% more for milk, for example.
The most popular subscription option from Factor75 includes eight meals per week for $12.38 per meal, per person, still likely higher than an individual would spend per meal buying groceries.
But is using fear of inflation as a tactic in your advertising effective? Is it ethical?
See also: Why your favorite grocery store products are suffering from ‘shrinkflation’
“There is a long history of companies using ‘inflation’ in their advertising,” Doron Gerstel, CEO of Perion, a global advertising company that executes ads on multiple platforms, including digital and TV, told MarketWatch in an email. “It just has not happened recently, because we have been in such a low-inflation environment.”
“However, back in the 70s and 80s, we would see advertising that promised ‘inflation-busting prices’ all the time. It is ethical if the offers are legitimate, and it can be effective for a while. Once everyone starts making the same statement it becomes wallpaper,” Gerstel continued.
Representatives from Factor75 did not respond to MarketWatch’s request for comment on this story.
Factor75 is similar to food delivery companies HelloFresh and Blue Apron
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but delivers fully prepared meals instead of make-it-yourself meal kits. At times during the COVID-19 pandemic, meal delivery companies such as Blue Apron saw an increase in demand as people limited travel outside their homes.
In 2020, the U.S. subsidiary of German-owned Hello Fresh purchased Factor75 Inc. for a part-stock deal worth up to $277 million.
The news comes as one academic who predicted Dow 20,000
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is saying inflation in the U.S. is mainly being caused by “too much money chasing too few goods.”
