Companies try to mask price increases by shrinking food packaging

food inflation

To trick consumers into paying more for less, food manufacturers have made an art form of shrinking packaging in unnoticeable ways. Image: CC pawpaw67/Flickr

During the economic downturn, food manufacturers have been quietly shrinking food packaging. As the rate of food inflation has been accelerating, so has the rate of food package shrinkage. As shoppers start to notice they are paying more for less, the spin from food manufacturers is that smaller food packaging is good for the environment and more convenient for consumers.

The incredible shrinking food package

Shrinking food packaging isn’t a recent phenomenon. When unemployment is high and wages are stagnant, companies can’t overtly raise prices to pad profits. In recessions over the last 20 years, food manufacturers have hidden price increases by subtly reducing the quantity of the product.  During the latest recession, food packaging began to noticeably shrink in the summer of 2008. As unemployment has remained high for years, food packaging continues to get smaller. The recent emergence of food inflation has led to higher prices, as well as smaller packages. Rising prices for energy and commodities such as corn, cotton and sugar are expected to continue, and consumers can expect to pay even more to get even less in the future.

The spin on shrinking food packaging

Food manufacturers figured out long ago that consumers notice rising prices more than shrinking quantities. Marketing departments have made an art form of shrinking food packaging in unnoticeable ways. The height and width of a box may stay the same, but the depth will be reduced so that the package looks unchanged on the shelf. Glass jars will have larger indentations in the bottom to reduce volume. Chips and other salted snacks will be filled with more air and less product. But as food packaging continues to shrink, companies are resorting to clever positioning as the reduction in quantity becomes impossible to hide. According to the New York Times, Procter & Gamble has branded smaller, more expensive products as “Future Friendly” because they use less energy, water and packaging. Tropicana reduced the size of its orange juice container with an “easy-pour lid”, which the company said retained the value of the product with added features.

Grocery budgets and unit cost

Food manufacturers bet most consumers don’t read labels in detail. According to the Times, a can of Chicken of the Sea albacore tuna now holds five ounces instead of six and costs more. Bags of Doritos, Tostitos and Fritos contain 20 percent less product than in 2009. The best way for consumers to protect themselves is to quit tossing things in the shopping cart without looking. They should pay close attention to the price panels on the shelf that list the unit cost, or price per ounce. Consumers can also accurately gauge how much they’re getting gouged by saving grocery receipts over several months. Most grocery receipts show the quantity of items along with the price. By comparing a receipt from March with one a month later, the true impact of shrinking food packaging on a grocery budget becomes crystal clear.

Sources

New York Times

USA Today

TIME

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