Veylinx Study Reveals How Consumers Respond to Price Increases


How much of price increase are consumers willing to absorb?

With inflation soaring and brands facing pressure to respond, Veylinx decided to use its behavioral research methodology to understand the impact of price increases on demand for two popular U.S. cereal brands, Cheerios and Frosted Flakes. Unlike typical market research, Veylinx’s unique approach measures actual consumer purchase behavior instead of intent. Participants place a single sealed bid using their own real money on the products being tested. Next, they answer a series of follow-up questions about their preferences, perceptions, and purchase behavior. The results reveal consumers’ true willingness to pay instead of their hypothetical willingness to pay, providing an accurate and deep understanding of their demand.

According to the findings of our cereal study, 84% of consumers are worried about the impact of inflation on their lives — but in spite of these concerns, they tend to tolerate higher prices when it comes to breakfast cereal. The research revealed that relatively small price increases have minimal effect on demand for these pantry staples. For instance, when prices rise by 20 cents (from $3.29 to $3.49), demand for Frosted Flakes is almost unchanged, and demand for Cheerios falls by just 1.5%. Larger price increases do have a more significant effect on shopper behavior: a 50-cent price increase reduces demand for both brands by almost 13%.

Furthermore, the study found that frequent cereal-eaters — people who eat cereal three or more times a week — have a greater willingness to absorb price increases. Demand from this segment drops by only 15% when the price is raised from $3.29 to $3.99 (a 21% increase). At this level of price increase, demand falls by 26% for people who consume two or fewer bowls per week.

Although older consumers (55+) indicate the most worry about inflation — with 89% somewhat or very concerned — they are just as likely to absorb price increases as everyone else. Gen Z consumers are the least worried about inflation (only 71% are concerned), which is also reflected in their greater tolerance of rising cereal prices. Counterintuitively, lower-income consumers (<$25K annually) are the least worried about inflation (78%), while consumers with $100K+ in annual income report being most worried, with 88% somewhat or very concerned. In addition to inflation, more than 60% of consumers are concerned about supply chain disruptions affecting their lives.

Gen-z are least concerned about inflation and older consumers are most concerned about inflation in 2022

The Veylinx study also evaluated purchase interest for a variety of potential packaging innovations (sustainable packaging, single-serve pouches, resealable packages, and multipacks) to see if they provide opportunities for brands to raise prices without suppressing demand. The study found that most of these innovations did not, in fact, drive higher demand than the standard Cheerios and Frosted Flakes boxes — regardless of the price point. For Cheerios, sustainable packaging showed the most promise, performing the best at higher price points than the other innovations tested. For Frosted Flakes, single-serve pouches drove the greatest demand for those innovations.

Another insight enabled by Veylinx’s unique methodology revealed that consumers consistently overstate their interest and the amount they are willing to pay when participating in surveys versus real purchasing situations. For example, 76% of consumers said they would buy Frosted Flakes in a resealable bag when surveyed, but when faced with an actual purchase scenario, only 39% did.

For more comprehensive findings from our Inflation-Cereal research, visit to download the summary report. That report, in turn, contains a further glimpse into the overall results — but if you’re interested in even more data and insight into the breakfast cereal market or consumer inflation behavior, please contact We’re happy to walk you through the complete results or demonstrate how our methodology may be able to help you.

Post by Veylinx
January 14, 2022