The Case Of The Shrinking Food Package
Recently my husband purchased a box of my favourite cereal. I normally buy the jumbo package and this one seemed a bit smaller, but he assured me that it had cost the same amount.
Not that I didn’t believe him, but I dug around our recycle bin for the old box and imagine my surprise to see it had contained over 1kg of cereal and the new box holds only 760grams. To further insult my intelligence the banner claimed to be a “new bigger size!”
Kellogg’s, you’ve got some ‘splainin’ to do.
Food Packaging Is Shrinking
It seems that manufacturers – especially of food products – have reduced their packaging in a marketing technique they call “downsizing”. This is a way of passing on a price increase without actually raising the price. They claim that this is what consumers want. But is it? Consumers seem to be the last to notice.
Cereal is a major culprit but the smaller packaging also applies to ice cream, coffee, juice, cheese, pasta sauce, and even paper products such as toilet paper and paper towels, to name a few. Sometimes they even keep the box the same – snack bars for example – and reduce the size of the bars inside.
Paying More For Less
If a package of, say, rice or noodles is the perfect size for my family meal, the new smaller size isn’t going to be enough. Now I have to buy two packages and figure out what to do with the remainder. Instead of paying an extra thirty or fifty cents I’m now paying double for an amount I don’t want or need. Or maybe they are trying to make us eat less to keep our weight down.
Grocery stores aren’t the only culprits. Fast food outlets such as Starbucks and Tim Horton’s have also reduced the sizes of both their coffee cups and cans of coffee.
Consumers have to start making their voices heard to stop this practice of gradual reductions before we end up paying for an empty box.
Have you noticed that we’re now paying more for less? What do you think of it?
This has been one of my pet peeves and a frequent blog topic for many months now. Ice cream went from 2.0 quarts to 1.75 quarts and now 1.5 quarts. All this in a 2-3 year period. It sucks.
Unfortunately, it’s been shown that people would rather pay the same amount and get less versus paying more for the same basket of groceries.
Plus, they count on customers not noticing the difference.
In the case of the cereal, I bet it was a bigger size than a ‘small’ or ‘medium’ container before.
I’ve been noticing this for years… It seems to me it started with Yogurt… the containers were getting smaller and smaller, yet the prices seem to still be going up !!!
Personally, I am insulted and those I have spoken to are insulted as well.
Another gaff from Big Corporations, in our opinion…
It’s called inflation. Big deal.
Also, in times of excessive obesity, smaller package size may actually be good for many.
No, not eating less. Just buying more containers and totally pissed off. It isn’t very green to reduce the siz of the pkg and buy two to make up for the reduced size. Inflation….no it’s a terrible marketing plan to fool your customers! Someday it will backfire on these jerks.
Ahh, insidious inflation! The funny thing is, on the back end, if the package size increases there will be no shortage of ads proclaiming the “New, Larger Size!”.
Food companies have been doing this forever. I should include candy companies too. It seems like a slick way of increasing prices.
I wouldn’t mind this as much if it was OUT IN THE OPEN. But, no… they have to hide what they are doing. It is disrespectful. Plain and simple.
I don’t agree with your rational. The costs of producing and transporting goods is going up, that has been proven. As such companies experience increased expenses and they need to adjust to the market, they can do it one of three ways: 1. Increase the price of the item. 2. Shrink the product and keep the price the same. 3. Combination of both. We have been seeing number 3 mostly because it is the most rational. People respond more more negatively to price increase than they do a package decrease and the #3 option allows them not to shrink the size too much or raise the price too much. Prices have and will continue to go up, this is called inflation. A business needs to maintain it’s supply and demand to, ya know, keep jobs, pay suppliers, make a profit, etc. Nearly every product has a competitor, so if they price themselves out of the market, they will see it in less demand as people will buy the other product. The solution is to be an informed consumer and know the product you are buying.
To say it is sneaky marketing is just not rational. I can see this bloggers point about the New Bigger Size on the box when it is not, but I question that the company reduced its product size and then put that banner on the top like the blogger says. Post your before and after pictures of the boxes and I would agree with the deception.
This is fundamental business economics and decisions businesses face every day.
Sorry, I should have cited my sources. Here you go:
http://www.nytimes.com/2011/03/29/business/29shrink.html?pagewanted=all
Key points:
“Each time, the marketing campaigns are coy; this time, the smaller versions are “greener” (packages good for the environment) or more “portable” (little carry bags for the takeout lifestyle) or “healthier” (fewer calories).”
… and:
“Once the economy rebounds, he said, a new “jumbo” size product typically emerges, at an even higher cost per ounce. Then the gradual shrinking process of all package sizes begins anew, he said.”
So it’s not just me who thinks these changes are “hidden” ?!?!?
——–
“It’s sneaky, because they figure people won’t know.”
“And companies try to do it in such a way that you don’t notice, maybe keeping the height and width the same, but changing the depth so the silhouette of the package on the shelf looks the same. Or sometimes they add more air to the chips bag or a scoop in the bottom of the peanut butter jar so it looks the same size.”
Most companies reduce products quietly, hoping consumers are not reading labels too closely.
Or marketers design a new shape and size altogether, complicating any effort to comparison shop.
But even while companies blame the recession for smaller packages, they rarely increase sizes in good times
@NotSoFast: I don’t have to post any pictures to prove a point. I had both boxes in hand and there was almost a 300gram difference in amount and the price was the same at $9.99.
As mentioned, my reason for preferring to pay an extra few cents (yes, I know all about inflation) to getting a smaller package has to do with portioning and I don’t need a food company to decide for me how much I should eat at one time.
It’s really not more rational because the packaging often has to be redesigned, and new machinery purchased. I would also rather see a more honest and up front increase in prices. As someone else has said, it makes for more garbage and either more trips to the store or more items purchased.
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Well, that’s your opinion. Thanks. Have you chatted with anyone as you walk around the supermarket? I have. I stand in front of the mini-yogurts or the chip bags and start chatting. People like to be respected, not to be treated like fools. This is the overwhelming response I get when discussing the amazing shrinking packaging. The Corporations want to hide the fact that they are raising prices. If they want to be above board… raise the price. Then the consumer can make an educated choice. Changing packaging size introduces a complicated calculation for the consumer, that is if he/she can remember the previous package size. Is the cost per unit the same? More? By how much? Then a decision can be made. No… this is all about deceiving and confusing the consumer… Sorry…
“… this is called inflation…”
Sorry… meant to add… I know what Inflation is… this is a financial blog… please… and I know it is unavoidable… this is not my argument…
But..But, it can’t be inflation cause the guvment tolds me so. Inflation is at hysterical lows in Ameruca.
In all seriousness, what I find to be amazing about the American consumer is that those of us aware enough to notice complain about things like “downsizing” due to inflation, the “actual” kind but then we turn right around and elect politicians who will lie right to our face and tell us that inflation doesn’t exist. I suppose inflation doesn’t exist for billionaire politicians that probably have never set foot in a supermarket unless it was for a campaign event; but you get my meaning.
The only conclusion that I can draw from all of this is that the American consumer likes to be lied to and scammed about as much as kids like to be bullied in school. And like the bullied kid in school we may grumble but ultimately we are all just going to sit there and take it like good little sheeple.
Inflation is a pretty generally understood concept amongs government officials and I haven’t heard any of them saying it doesn’t exist. It is pretty much agreed that inflation is a problem and it has been acknowledged quite a bit. http://www.usinflationcalculator.com/inflation/current-inflation-rates/
The point they disagree with is how to control it.
And exactly how many Social Security Cost of Living increases have you not received because inflation is at historically low levels? You are correct however, government officials are ignorant sociopaths but they are not so stupid to attest that inflation doesn’t exist.
My point was that using any government figure as a basis for making a decision or an argument is sort of like listening to a very famous Washington DC Mayor who dismissed the notion that his fair city was violent and dangerous by stating matter of factly that Washington DC is a very safe city when you factor out all the murders, rapes, and violent carjackings. Governments are smart to deceive their slaves on things like inflation and unemployment because if they don’t said government might end up like Egypt, or Libya. If you’ll recall, the event that kicked off “Arab Spring” was a spike in commodity prices rather than the long simmering resentment towards their governments.
Bottom line is that government and big business are going to do everything in their power to hide the reality of the situation from you for as long as possible. Complaining about it is not going to change their behavior and they already assume that you are either not smart enough or not motivated enough to stop playing along with their charade by buying generic or just cutting back.
Do you honestly think they are intentially deceiving and confusing the consumer? That they strategize on how to create false advertising and blatantly lie to you? From an economical point of view, they are making the right choice. You just don’t like it. Hell, neither do I but I can rationalize as to why. People are more and more buying smaller sizes of everything because that is what the consumer wants given the option of a higher price or smaller size.
No, I don’t chat with people in the super market while I am buying mini-yogurts or chip bags. Most people do not understand economics and it is easy to be an armchair expert in the dairy section of Safeway and cry “FOUL FOUL, prices rising smaller packaging, they are stealing from us with deceptive marketing!” Their opinion does not trump fundamental economics. People talk with what is in their wallets. There are dozens of yogurt and cereal brands, buy another one. Companies are very good at understanding purchasing patterns, there is a reason Nielson is in business.
This is a blog on finance tips and frugality. Ezra Klein, Planet Money, and Paul Kedrosky are finance blogs.
@NotSoFast – I understand what you are saying about companies spending millions of dollars researching consumer behaviour patterns, and that has led to them reducing the package size rather than increasing the price of the existing package.
I don’t agree that they are just giving customers what they want. They’re in business to make money, and research has probably suggested that people will buy 2 smaller units even though the jumbo version has a lower cost per unit.
Whether you think it’s deceptive or not, shrinking the regular size package that consumers are used to will most likely cause consumers to purchase an additional package, now buying more than they need.
“Do you honestly think they are intentionally deceiving and confusing the consumer?”
Yes I do ! I think it is naïve to think otherwise.
At any rate, I have to say that I do not agree with your opinion, but I will fight for your right to express it.
One thing I do know very well is that when marketing a product a company wants to do what it takes to sell the product. You said, yourself, “People respond more more negatively to price increase”. This is why the Corps have taken the “shrink the packaging, they won’t notice or at least it will confuse them” route. Solely raising the price would give the consumer the advantage and allow them to make an educated decision. (Some of us can add and subtract).
Financial Tips Blog… I stand corrected… but I reiterate my point.
It is naïve to think every manufacturer is intentionally deceiving and lying to the customer. Of course people react negatively to raising the price, because they would rather have a smaller version of the product. That is my entire point. These companies understand the average consumer significantly better than we do. Consumers know exactly what is going on, we talk with our wallets. There has been billions of dollars invested in understanding consumer purchasing patterns (http://www.nielsen.com/us/en/practices.html) and if the results revealed differently, they would increase prices in lieu of smaller sizes. Consumers drive the decision. Call it deceptive, call it false marketing, call it whatever you want. The fact is this happens in nearly every sector of every industry and has trended this way for decades. We can complain about it and debate the reasons why they do it or we can look at ways to change our individual purchases to better benefit our own personal financial situation. Buy in bulk, get rid of processed junk (because majority of the time it is on these products), stick with the basics: meat, eggs, veggies, oats, etc, spend more time in the store and eat more naturally.
If you think solely raising the price would give the consumer the advantage because adding and subtracting is the qualifier for making an educated decision, I don’t know what to say. I can only explain it to you, but I can’t understand it for you.
Amazing !
A shocking number of people flat out don’t understand. Hard to believe, but I had a heck of a time explaining to an otherwise intelligent friend the concept of price per weight or volume printed in little numbers next to the item price. He would buy the cheaper item even though it cost more per ounce even when it was something he’d easily use all of and then have to go out and buy more.
These tricks are just that, tricks, based on careful studies of how people respond. You can bet they wouldn’t even print the weight or volume of the product if they weren’t required by law to do it.
I have a friend who works in marketing. The whole field is absolutely about intentionally deceiving the consumer. Not by lying outright, but playing with things like the size, shape and color of the packaging. They do study after study to gauge people’s reactions to all manner of things. Marketing is all about making the product you are representing look bigger or better than competing products and there are all sorts of tricks involved that rely on a certain percentage of people not noticing. Companies pay marketing consultants large amounts of money to try to maximize sales of their product.
I have to laugh when I see what food manufacturers are doing. Chip bags are the worst. I believe consumers should stick to their guns; know your budget and stick to it and don’t buy into products that are taking advantage of you and your money. It’s people vs. price and with effort we can keep these money guzzling companies in check or else they’ll be out of business.
That would be great but what do you do when everybody is doing it? We can’t just not eat. At least Costco doesn’t tend to do this as much.
I love that you wrote “splainin to do”! I would probably be a “granola” to a lot of people, I try not to eat cereal and in stead opt for oatmeal or bake my own bread (part of being gluten free)… it makes sense why they would do it…as I myself probably wouldn’t realize the size different either. (this doesn’t make it right!) Whenever I feel like that I just stop buying there cereal and opt for another company…might not make a huge difference today but at least you are not supporting it. carehanna.blogspot.com
I’ve been noticing this pattern for a while now. The first time I noticed it was when I was using a recipe that called for an “8-oz. can of tuna”. I’d been using this recipe for years and never thought twice about it, until I realized that the can of tuna I’d bought was only a 6-oz. can. That’s because the makers of this brand don’t make the 8-oz. cans anymore, charge .25 cents more per can, and never thought anyone would be the wiser. I’m sure I can still make the same meal with 2-oz. less tuna, but should I really have to???
Great post!
This packaging change is a relatively recent phenomena. I was thinking of the exact same thing, with regards to recipes. There are years and years of recipes that have been created expecting “standard package size” for the ingredients. Products always came in a certain size and recipes counted on this. Pick up an older copy of Fanny Farmer’s Cookbook and have a look!
@Kevin: Thank you. A smaller bag of chips is one thing but when you need a certain size for meal prep or a recipe you may end up having to buy two packs (at double the price) and have more than you need. I find it hard to believe that is what most consumers want.
I first noticed this in highschool where I paid $1 for a bag of chips. As I became older, the bag of chips became smaller and I was still paying $1. Pretty unfair when you’re a kid.lol
This drives me nuts! I really noticed it this year when I went to buy Halloween candy. The bags were the same size and about the same price but I picked one up and it felt almost empty, what a joke! This bait-and-switch crap is an insult to my intelligence and puts me off buying it far more than a higher price would. I understand the need to increase prices, but don’t try to cheat me by hiding the increase.
For you people that state well its just inflation. The division between the rich and poor is dividing even more and corporations have increased their profits.
Paul Polman CO of Unilever makes around 9 million dollars a year makes Red Rose Tea