It’s the inflation that you are not supposed to see.
Manufacturers are slowly shrinking the size of their products without decreasing prices, from yogurt to yogurt to coffee to corn chips. This is called “shrinkflation” and it is accelerating around the world.
A small Kleenex box in the U.S. now contains 60 tissues, while it used to have 65 a few months back. Chobani Flips yogurts are now 4.5 ounces instead of 5.3 ounces. Nestle reduced the size of its Nescafe Azera Americano coffee canisters in the U.K. from 100 to 90 grams. A bar of Vim dish soap in India has shrunk to 135g from 155g.
Experts say shrinkflation is not new. It is a phenomenon that can be seen in high inflation periods, when companies are faced with rising prices for ingredients, packaging and labor. According to S&P Global, global consumer price inflation rose by 7% in May. This pace will likely continue into September.
It comes in waves. “Inflation is causing us to be in a tidal surge at the moment,” stated Edgar Dworsky, a Massachusetts consumer advocate who was previously assistant attorney general. He has documented shrinkflation through his Consumer World website for many decades.
Dworsky noticed smaller boxes in the cereal aisle last autumn, and shrinkflation has ballooned since then. Dworsky can name dozens of examples. He can point to Cottonelle Ultra Clean Care toilet tissue, which shrank from 340 sheets per rolling to 312, and Folgers coffee which, while its 51-ounce container was reduced to 43.5 ounces, still claims it will make 400 cups. Folgers claims it is using a new technology to produce lighter-weight beans.
Dworsky stated that shrinkflation is attractive to manufacturers because they know their customers will notice price increases, but they won’t keep track net weights or other details such as the number of sheets in a roll. To draw attention to downsizing, companies can use tricks such as marking smaller packages with bright labels that catch shoppers’ eye.
This is what Fritos did. Fritos Scoops bags marked “Party Size” were once 18 ounces. Some are still available at a Texas grocery chain. Nearly every major chain now sells “Party Size” Fritos Scoops, which are 15.5 ounces aEUR and more.
PepsiCo did not respond to questions about Fritos. However, it acknowledged the shrinking of Gatorade bottles. Recently, the company began to phase out 32-ounce bottles and replace them with 28-ounce bottles. These are tapered in their middles to make them easier to hold. PepsiCo stated that the changeover was planned for many years and wasn’t due to current economic conditions. When asked why the 28-ounce size is more expensive, PepsiCo didn’t answer.
Kimberly-Clark aEUR”, which produces both Cottonelle aEUR”, didn’t respond when asked about the smaller package sizes. When asked about Pantene ProV Curl Perfection conditioner (which was reduced from 12 fluid ounces down to 10.4 fluid ounces, but still costs $3.99), Procter & Gamble Co. did not respond.
The price of Earth’s Best Organic Sunny Day Snack Bars has gone down from 8 to 7 bars per box, but it remains at $3.69. Hain Celestial Group was not available for comment.
Some companies are open about the changes. Calbee Inc., a Japanese snack manufacturer, announced a 10% weight loss and 10% price increase for its products in Japan. The sharp rise in raw material costs was the reason, according to Calbee Inc.
Domino’s Pizza announced that its 10-piece chicken wings would be reduced to just eight pieces in January for the same $7.99 carryout. Domino’s pointed out the increasing cost of chicken.
According to Byas Anand (head of corporate communications at Dabur India), India’s consumer care business, “down-switching” or shrinkflation is a term used for India. Companies simply raise prices in cities.
Anand stated, “My company has been doing this openly for years.”
Customers who are seeing the downsizing are posting examples on social media. Others claim shrinkflation has caused them to alter their shopping habits.
Alex Aspacher helps his four-member family in Haskins, Ohio with their grocery shopping and meal planning. He was shocked to see that the original one-pound package of Swiss cheese he had purchased shrank to 12 ounces, but retained its $9.99 price. He now hunts for bargains or buys a block and cuts it himself.
Aspacher stated that he knew prices would rise after he began reading about higher wages for grocery workers. He was surprised by the rapidity of the price change and shrinking packaging.
Aspacher stated, “I was ready for it to some degree, but there hasn’t been a limit so far.” “I’m hopeful that we will find the ceiling soon.”
Sometimes, the trend can reverse. Inflation may ease, and manufacturers might be forced to lower prices or introduce larger packages. Dworsky claims that once a product becomes smaller, it will often stay that way.
He said, “Upsizing can be quite rare.”
Hitendra Chaturvedi is a professor at Arizona State University’s W.P. Carey School of Business said that he believes many companies are facing labor shortages and high raw material prices.
Chaturvedi is concerned that in some cases companies’ profits aEUR”, or sales minus the cost to do business aEUR”, are increasing exponentially.
He cites Mondelez International as an example. This company was criticized for shrinking its Cadbury Dairy Milk Bar in the U.K., but not for lowering the price. As cost pressures increased, the company’s operating income rose 21% in 2021 but dropped 15% in the first quarter. PepsiCo’s operating profits grew 11% and 128% respectively in 2021.
Chaturvedi stated that while they aren’t saying they’re profiteering but it does smell like it. “Are they using supply constraints to make more money?”
