One of the great things about living in the United States is the ubiquity and affordability of high-quality orange juice. A few weeks ago, while going through the aisles at Target to buy a carton of Tropicana, I couldn’t find any. It looked like Target had replaced them with cheap generic knock-offs. On closer inspection, it turned out Pepsi redesigned the packaging. To say the new design is ugly is an understatement. Many comments on the redesign compare it to generics in its amateurism.

Pepsi’s marketers are not legends in the field like those of Procter & Gamble, but still, I find it hard to believe no one there perceived how bad the new cartons look, and how off-putting they are. This led me to think if this wasn’t intentional.

In this economy, sales of Spam are exploding even though the ersatz canned meat is actually more expensive than more nutritive fresh meat and a much worse value. One explanation is that spam is what economists call an inferior good, a good for which demand increases as incomes decrease because people can’t afford the better stuff. One extreme type of an inferior good is a Giffen good, a product for which demand increases even as its price increases. Economists still debate whether Giffen goods even exist. One often-quoted (and just as often disputed) example are potatoes during the Great Irish famine of 1847. As the price of potatoes rose, the poor were locked in a vicious circle of not being to afford anything else and being more dependent on potatoes, which only accelerated the price explosion.

Perhaps the Tropicana marketers have figured that in a severely down economy, people are settling for inferior goods, and making Tropicana look downmarket may increase its sales…

Update (2009-02-23):

So much for my theory. Although you could make the case this is more like the New Coke fiasco (that many conspiracy theorists still think was deliberate).