Size matters when it comes to food and money—and sometimes smaller is better. But sometimes…it just isn’t. Especially when it comes to food package size.
Coca-Cola and PepsiCo have reported higher than expected profits and one reason has been that for both companies, the smaller mini can has been a part of their revenue-boosting strategies. That came at a time when the sales of carbonated soft drinks were beginning to fizzle out.
Head to your nearest grocery store and you’ll find the beverage aisle filled with these miniaturized offerings. Consumers have spotted a similar trend elsewhere, too. Bacon packages have gotten smaller and many are now just 12 oz. and not a pound. Toilet paper sheets are now noticeably smaller. And even some major restaurant chains are featuring bite-sized, budget-friendly menu items and desserts. The new “big” is actually “small”!
The Reason for Scaling Back?
When it comes to soda, there is some indication that parents are trying to scale back on pop consumption among their kids, like with these mini cans of Coke and Pepsi. It does sound like a really good idea, and when it comes to certain resized products like Coke and Pepsi’s mini cans, a smaller size can be a great way to appeal to health-conscious consumers.
Meats, vegetables, chocolate, coffee—all sorts of products have been sold in smaller packages in recent years. While it is true that for certain products the smaller sizing stems from a “health consciousness”, there are also the higher costs within the food industry and that is a big reason for this activity.
Changing Quantities Instead of Prices
Consumers are very sensitive to price fluctuation. We know it, and that is also the finding in studies published looking at package downsizing in things like major ice cream brands.
A few years ago, food suppliers and manufacturers began to reduce the size of a half-gallon container of ice cream from its historical 64 oz. package to just 56 oz. They did it without reducing the price and barely anyone even noticed it! With retail pricing being kept at the same level, it didn’t seem like much of a hardship for anyone to have to pay for a “lesser amount” of ice cream, and manufacturers saw this as an opportunity to fight their cost overruns and maintain or even increase their profit margins.
This small minor change in the ice cream packaging size actually produced an additional 12.5% profit (and an additional expense for you and your family). The prices of some brands and packages have continued to climb since then and many are now selling their “half-gallons” as 48 or even 45 oz. packages. That’s another loss for consumers of 11-14% from even the 56 oz. shrinkage in packaging!
BONUS TIP! When you stop to look at branded ice cream, make sure you compare it to the store’s own brand (also known as private label). They still may have shrunken package sizes or even increased the retail prices, but they still represent a much better value than national brands. Most supermarkets now feature premium flavors of ice cream which are on par with any national brand!
Food Package Size
The studies show that consumers were four times more sensitive to price than to package size. You need more time to check both price and package size of a product and most consumers probably don’t even check if it’s a product they buy every week the study noted.
I just can’t help but think and recall that old sci-fi film from back when I was a kid, “The Incredible Shrinking Man” (1957) when Scott Carey, the main character, is affected by radiation and insecticide, and medical science is powerless to help him. With all these changes happening, can you see how it may just apply to our food choices?
It’s Now So Common, It’s Even got a Name: “Shrinkflation”
It may have started out under the guise of being a “healthier” way to market your food choices—but let’s get real. It may be better for your waistline, but it’s not better for your pocketbook if manufacturers and supermarkets don’t pass on the cost saving to consumers when they reduce the content size you buy—and they don’t.
“Shrinking” products are simply an underhanded way of raising prices when the pack sizes shrink, but the prices don’t. Consumers should be very angry that they are being short-changed by some of their favorite brands. That’s if and when they even realize that it is happening to them. Sometimes its actually hard to see it unless you read all the fine print on a bottle or package these days. All in all, its been a super clever way for manufacturers to try to stop people from comparing products to find the cheapest items.
It’s fiendishly difficult to compare prices properly nowadays because of what is known as “special offers” and that means they they change the items and packages frequently. The shrinking ploy is becoming more and more common these days as they simply reduce the size so they don’t have raise the prices.
“Ping-pong” pricing (as it is called) is now a daily occurance and is very confusing to you, the customer. In almost every case, the shopper doesn’t connect to a size difference as long as the retail price seems to be consistent and so the items can sneak on by without the customer ever realizing it. Most of us shop and buy based on on price and that’s exactly how the companies are getting away with it!
Your only real defense is comparing unit prices, the price per oz. or other unit of measurement, every time you shop. Unit prices should be readily visible on the pricing tag.
Some of Your Other Favorites Have Done It
Cadbury’s including their Mars Bars, Kit Kat, and Chunky brands all have been reduced in size over the past several years. Sometimes, changes are obvious, such as Cadbury altering the shape of its chocolate.
But reductions are not always obvious. Casdbury also decreased the number of Creme Eggs in a box from half-a-dozen to five in their Easter packages and barely anyone actually noticed. Ka-ching! That move increases gross profits on every box by 16.7%!
Remember when a can of tuna was 6 oz. and not the current 5 oz.? It wasn’t that long ago. But, on other occasions, the clues are even more subtle than just removing an ounce of tuna. A jar of pasta sauce that now takes you less time to warm up to serve suggests that you are getting less of it in the jar, as an example. Take a good look at the bottom of that jar. You may see that the bottom is not flat and has been “hollowed” out slightly removing an ounce or more from it.
That Rationale Doesn’t Fly With Me
If these companies like Cadbury told us: “Look, we’re really sorry, but we have no choice but to shrink sizes to avoid price increases because cocoa is now in short supply,” then I think I’d be much more understanding about all of this. But, instead we are being made to feel duped when we realize what the companies are actually up to.
And here’s the real kicker in all of this: In many cases, the prices of the raw materials involved when the manufactures “shrink” items has actually stabilized or even gone down! But, that has not stopped the shrinkage train from heading your way one iota!
The “Fat” Is Not the Fact
Many companies have argued that a reduction in the size of their bars, boxes, and cans is not all about rising production costs, but it is also an attempt to support the drive to help people lose weight in the face of the obesity epidemic.
The truth about that is pretty obvious and disputes that faulty reasoning. Think about it. When you’re munching on some candy and these items have gotten smaller, the truth is as the bars get smaller, people just buy and eat more. I know I do and I am betting if you are being honest, you do the same thing.
Shrinkflation has taken off because suppliers are under pressure to maintain profit margins to keep shareholders happy and believe consumers prefer smaller products to bigger price increases.
Food and drink pricing always reflects the economic climate of the day and businesses seek to offset these costs wherever possible through improvements in efficiency and productivity. But these actions can only go so far, and in some cases companies then resort to tactics like reducing pack size, weight of product, or even the ounces in a can of soda rather than increasing the price for consumers.
But, it’s the underhanded way in which these product changes appear and are introduced that leaves a bad taste in my mouth and the mouths of so many others.
Are you consious of how much you are really paying for those same old things? Do you notice the “shrinkflation” and does it matter to you? If you are being budget conscious, shrinkflation may do you in unless you carefully look for it and be an even more conscientious shopper. Are you?