It’s the inflation you shouldn’t see.
From toilet paper to yogurt and coffee to corn chips, manufacturers are quietly shrinking packaging without cutting prices. It’s called ‘shrink inflation’ and it’s accelerating globally.
In the US, a small box of Kleenex now contains 60 tissues; a few months ago, there were 65. Chobani Flips yogurts have shrunk by more than 10 percent.
In the UK, Nestle has downsized its Nescafe Azera Americano coffee cans from 100 grams to 90 grams. In India, a piece of Vim dishwashing liquid has shrunk from 155 grams to 135 grams.
Shrinkage is not new, experts say. But it rages on in times of high inflation as companies grapple with rising costs for ingredients, packaging, labor and transportation. Global consumer price inflation rose by an estimated 7 percent in May, a pace S&P Global says is likely to continue through September.
“It comes in waves. We’re in a tidal wave right now because of inflation,” said Edgar Dworsky, a consumer advocate and former assistant attorney general in Massachusetts, who has documented shrinkage on his Consumer World website for decades.
Dworsky started noticing smaller boxes in the grain aisle last year, and the shrinkage has exploded from there.
He can cite dozens of examples, from Cottonelle Ultra Clean Care toilet paper, which has shrunk from 340 sheets per roll to 312, to Folgers coffee, which reduced the 51-ounce container to 43.5 ounces but still says it’s up to will make 400 cups. (Folgers says it uses a new technology that results in lighter beans.)
Dworsky said shrink-flation appeals to manufacturers because they know customers will notice price increases, but fail to keep up with net weight or small details, such as the number of sheets on a roll of toilet paper. Companies can also use tricks to divert attention from downsizing, such as highlighting smaller packages with bright new labels that grab shoppers’ attention.
That’s what Fritos did. Bags of Fritos Scoops marked “Party Size” used to be 18 ounces; some are still for sale at a Texas grocery store chain. But almost every other major chain now advertises “Party Size” Fritos Scoops that are 15.5 ounces — and more expensive.
PepsiCo did not respond when asked about Fritos. But it did acknowledge the shrinkage of Gatorade bottles. The company recently started phasing out 32-ounce bottles in favor of 28-ounce bottles, which taper in the middle to make them easier to hold. The switch has been years in the making and has nothing to do with the current economic climate, PepsiCo said. But it didn’t respond to the question of why the 28-ounce version is more expensive.
Similarly, Kimberly-Clark — which makes both Cottonelle and Kleenex — did not respond to requests for comment on the reduced pack sizes.
Some companies are clear about the changes. In Japan, snack maker Calbee Inc. in May announced 10 percent weight reductions — and 10 percent price increases — for many of its products, including veggie chips and crispy edamame. The company blames the sharp rise in raw material costs.
Domino’s Pizza announced in January that it would reduce the size of its 10-piece chicken wings to eight pieces for the same takeout price of $7.99. Domino’s mentioned the rising cost of chicken.
In India, “down-switching” — another term for shrink inflation — is usually done in rural areas, where people are poorer and more price-sensitive, said Byas Anand, head of corporate communications for Dabur India, a consumer care and food company. In cities, companies simply drive up prices.
“My company has been doing it openly for centuries,” Anand says.
Some customers who have noticed the downsizing are sharing examples on social media. Others say shrink inflation is causing them to change their shopping habits.
Alex Aspacher does much of the grocery shopping and meal planning for his family of four in Haskins, Ohio. He noted when the one-pound package of sliced Swiss cheese he used to buy shrank to 12 ounces, but kept the $9.99 price tag. Now he hunts for deals or buys a block of cheese and cuts it himself.
Aspacher said he knew prices would rise when he started reading about higher grocery wages. But the speed of change — and shrinking packaging — took him by surprise.
“I was prepared for it to a certain extent, but no limit has been set so far,” Aspacher said. “I hope we find that ceiling pretty soon.”
Sometimes the trend can reverse. As inflation subsides, competition may force manufacturers to lower prices or re-market larger packages. But Dworsky says that once a product has shrunk, it often stays that way.
“Upsizing is a bit rare,” he said.
Hitendra Chaturvedi, a professor of supply chain management at Arizona State University’s WP Carey School of Business, said he has no doubts that many companies are struggling with labor shortages and higher raw material costs.
But in some cases, corporate profits — or revenue minus the cost of doing business — also increase exponentially, which Chaturvedi finds troubling.
He points to Mondelez International, which got some heat this spring by reducing the size of its Cadbury Dairy Milk bar in the UK without cutting the price.
The company’s operating income rose 21 percent in 2021, but fell 15 percent in the first quarter as cost pressures mounted. By comparison, PepsiCo’s operating profit rose 11 percent in 2021 and 128 percent in the first quarter.
“I’m not saying they make a profit, but it smells like it,” Chaturvedi said. “Are we using supply constraints as a weapon to make more money?”
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