Welcome to the 94th edition of our Newsletter EdGenie's 📜 Sunday Scroll...

Every Sunday I send out actionable tips, tricks and real-world application insights from my 15 year experience coaching students to achieve As and A*s in their Economics A Levels via EdGenie.

Hey Genies, 👋

I hope you're doing well and taking some time to reflect on your recent end-of-year exams.

I want to know: how did they go? 🤔

(just hit 'reply' to this email and I'll respond personally)

Did it turn out as you expected, or did things not go to plan? 📉📈

If it didn’t go to plan, this could lead to two major issues:

• Your teachers' perception of your capabilities might be affected. 🧑‍🏫
• Your predicted grades could take a hit. 📉

So, guess what I'm going to say...

You need to make a change...NOW!!! 🚀

Not after the summer holidays. That’s too late.

NOW!!!

Trust me on this one!

Doing the same thing and expecting a different result does not work!

You must switch up your mainframe if you want to be great.

It's what you do from here that matters.

So, the first thing and the only thing right now is to acknowledge what went well and what went wrong. 🧐

Was it your Analysis, Evaluation, timing, exam technique, or did you simply not know the content well enough to answer the exam questions?

Was it a lack of exam practice? Were you unfamiliar with the structure? The type of questions asked? How to apply your knowledge and application to the questions? 📝

Did you not receive the proper guidance and help throughout Year 12, so you weren’t prepared for the exam you faced? 🎓

Just hit reply to this email and let me know how you did and what you think you did well and what went wrong. 📧

And I'll respond to you personally.

That’s all I’m asking you to do right now: develop that self-awareness. 🧠

Next week, after receiving your responses, I will give you my crucial tips on how to improve between now and September, so that after the summer holidays - you can provide that undeniable proof that you are an A or A* student

Best regards,

Emre

• 📉 Kraft Heinz’s Decline:​ Once hailed as a powerhouse after its 2015 merger, Kraft Heinz has lost around 60% of its market value and expects a 5–10% drop in operating profits. It is now considering a break-up.
• 🛠️ Mismanagement & Cost-Cutting​ : A decade of poor strategic decisions and aggressive cost-cutting have weakened the firm’s competitiveness and brand strength.
• 📉 Industry-Wide Trouble​:  Kraft Heinz’s woes mirror a broader downturn across major American packaged-food firms, with S&P 500 food companies down 9% on average in share value.
• 🏷️ Greedflation Fatigue​:  Post-2021 price hikes initially protected profit margins, but sustained inflation and a slowing job market have now curbed consumer spending on processed goods.
• 💊 Weight-Loss Disruption​:  The rising popularity of appetite-suppressing drugs is reducing demand for junk food, with about 4% of US adults reportedly using them—double the share from two years ago.
• 🆚 Rising Competition​:  Premium niche brands and cheaper private-label alternatives are chipping away at big firms’ market share, which has fallen from 42% in 2018 to under 40%.
• 📦 Retailer Pressure​:  Giants like Walmart and Target are squeezing suppliers over Trump-era tariffs, passing costs down the chain while protecting their own margins.
• ⚖️ Regulatory Squeeze​:  Robert F. Kennedy Jr. is pushing for stricter regulation on additives in ultra-processed foods. Reformulations may prove costly and unpopular with loyal consumers.
• 🔄 Strategic Break-Ups​:  Kraft Heinz may spin off parts of its business—much like Kellogg’s, which split into WK Kellogg and Kellanova, leading to 40% shareholder gains after acquisitions by Ferrero and Mars.
• 📈 Changing Industry Shape​:  The food sector may shrink in some places and expand in others as mergers, acquisitions, and shifting consumer trends reshape the market landscape.

Q. Explain two reasons why the demand for processed food products may be becoming more price elastic in the United States.
A. Firstly, rising living costs and the erosion of real incomes due to inflation have made consumers more price-sensitive, increasing the price elasticity of demand (PED) for non-essential goods like processed snacks. Secondly, the growing availability of substitutes—such as healthier private-label or premium alternatives—means consumers can more easily switch products in response to price changes, again raising PED. Over time, demand becomes more elastic as consumer preferences evolve, especially with rising awareness of health risks and regulatory warnings.

Q. Explain how increasing competition from smaller and private-label brands might impact the pricing strategies of large packaged-food firms.
A. The entry of smaller niche firms and retailer own-brands increases competitive pressure, forcing large incumbents to reconsider their pricing strategies. Firms like Kraft Heinz may be less able to act as price-makers, shifting toward more competitive pricing to retain market share. At the premium end, niche brands may attract health-conscious consumers, while budget labels undercut incumbents on price. This may also lead to increased non-price competition through branding or recipe reformulation, as traditional firms seek to differentiate and maintain consumer loyalty.

Q. Analyse how new regulations on food dyes and chemicals could affect both costs of production and consumer demand in the processed food industry.
A. Regulation requiring reformulation to remove artificial dyes introduces higher fixed costs due to R&D, compliance, and potential supply chain adjustments, raising the average cost curve for firms. These costs may be passed on to consumers as cost-push inflation. On the demand side, tighter regulations may reduce information asymmetry, shifting consumer preferences away from heavily processed goods, particularly if the changes impact taste or appearance. However, this could also increase demand among health-conscious buyers, depending on how reformulation is perceived.

Q. Analyse the potential impact of widespread use of weight-loss drugs on the market for processed foods.
A. The increased use of appetite-suppressing drugs reduces derived demand for calorie-dense processed food, leading to an inward shift of the demand curve. This decreases equilibrium price and quantity, particularly for goods seen as indulgent or unhealthy. Firms reliant on habitual consumption may face a long-term fall in revenue, especially if usage becomes widespread across high-income demographics. The impact may be more pronounced on goods with high income elasticity of demand, like branded snacks, and could force diversification or reformulation strategies.
​
​Q. Evaluate the impact of firm break-ups (like Kraft Heinz and Kellogg’s) on economic efficiency and consumer welfare.
A.Firm demergers can improve allocative and productive efficiency by allowing each segment to focus on core competencies. For example, Kraft Heinz’s proposed split could allow its spreads division to pursue higher margins, while shedding underperforming divisions. Break-ups may also promote X-efficiency, as management becomes more accountable. Consumer welfare may rise if innovation and product quality improve due to increased competition. However, loss of economies of scale and transition costs could offset these gains. The impact depends on post-break-up performance and whether firms face sufficient competitive pressures to innovate.

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