By DEE-ANN DURBIN
AP Business Writer
It’s the inflation you’re not supposed to see.
From toilet paper to yogurt and coffee to corn chips, manufacturers are quietly reducing package sizes without lowering prices. It’s called “shrinkflation,” and it’s accelerating around the world.
In the United States, a small box of Kleenex now contains 60 tissues; a few months ago there were 65. Chobani Flips yogurt has gone from 5.3 ounces to 4.5 ounces. In the UK, Nestlé has reduced its Nescafé Azera Americano coffee cans from 100 grams to 90 grams. In India, a bar of Vim dish soap has been reduced from 155 grams to 135 grams.
Shrinkflation is nothing new, experts say. But it proliferates in times of high inflation as businesses grapple with rising costs for ingredients, packaging, labor and transportation. Global consumer price inflation rose about 7% in May, a pace that will likely continue through September, according to S&P Global.
“It’s coming in waves. We happen to be in a tidal wave right now because of inflation,” said consumer advocate and former Massachusetts assistant attorney general Edgar Dworsky, who documented the contraction in the inflation on its Consumer World website for decades.
Dworsky started noticing smaller boxes in the cereal aisle last fall, and the contraction exploded from there. He can cite dozens of examples, from Cottonelle Ultra Clean Care toilet paper, which went from 340 sheets per roll to 312, to Folgers Coffee, which reduced its container from 51 ounces to 43.5 ounces but still says that it will make up to 400 cups. . (Folgers says it uses new technology that results in lighter grains.)
Dworsky said shrinkage attracts manufacturers because they know customers will notice price increases but won’t keep track of net weights or small details, like the number of sheets on a roll of toilet paper. Businesses can also use tricks to distract from downsizing, like branding small packages with new, bright labels that grab shoppers’ attention.
That’s what Fritos did. Bags of Fritos Scoops marked “Party Size” were once 18 ounces; some are still for sale in a chain of Texas grocery stores. But almost every other major chain now advertises 15.5-ounce “Party Size” Fritos Scoops — and more expensive.
PepsiCo did not respond when asked about Fritos. But he recognized the shrinking of the Gatorade bottles. The company recently began eliminating 32-ounce bottles in favor of 28-ounce ones, which are tapered down the middle to make them easier to hold. The change has been in the works for years and is unrelated to the current economic climate, PepsiCo said. But he didn’t answer when asked why the 28-ounce version was more expensive.
Similarly, Kimberly-Clark – which makes both Cottonelle and Kleenex – did not respond to requests for comment on the reduced pack sizes. Proctor & Gamble Co. didn’t respond when asked about Pantene Pro-V Curl Perfection Conditioner, which has gone from 12 fluid ounces to 10.4 fluid ounces but still costs $3.99.
Earth’s Best Organic Sunny Day snacks have been reduced from eight bars per box to seven, but the listed price at several stores remains $3.69. Hain Celestial Group, the brand’s owner, did not respond to an email seeking comment.
Some companies are upfront about the changes. In Japan, snack maker Calbee Inc. announced 10% weight reductions – and 10% price increases – for many of its products in May, including vegetable crisps and crispy edamame. The company blamed a sharp rise in the cost of raw materials.
Domino’s Pizza announced in January that it was reducing the size of its chicken wings from 10 pieces to eight pieces for the same $7.99 delivery price. Domino’s cited the rising price of chicken.
In India, “down-switching” – another term for shrinking – is mostly 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 raise prices.
“My company has been openly doing this for ages,” Anand said.
Some customers who have noticed the downsizing are sharing examples on social media. Others say shrink causes them to change their buying habits.
Alex Aspacher does much of the grocery shopping and meal planning for his family of four in Haskins, Ohio. He noticed that the one-pound package of sliced Swiss cheese he used to buy had dropped to 12 ounces, but kept its price of $9.99. Now he looks for deals or buys a block of cheese and slices it himself.
Aspacher said he knew prices would rise when he started reading about higher wages for grocers. But the speed of the change – and the decrease in packages – surprised him.
“I was prepared for it to some extent, but there has been no limit so far,” Aspacher said. “Hopefully we find that ceiling very soon.”
Sometimes the trend can reverse. As inflation declines, competition could force manufacturers to lower prices or reintroduce bulkier packages. But Dworsky says once a product has gotten smaller, it often stays that way.
“Migration is rather rare,” he said.
Hitendra Chaturvedi, professor of supply chain management at Arizona State University’s WP Carey School of Business, said he has no doubt that many companies are struggling with labor shortages and higher raw material costs.
But in some cases, business profits – or sales minus the cost of doing business – also increase exponentially, and Chaturvedi finds this troubling.
He cites Mondelez International, which took some heat this spring for downsizing its Cadbury Dairy Milk bar in the UK without lowering the price. The company’s operating profit rose 21% in 2021, but fell 15% in the first quarter due to increased cost pressures. By comparison, PepsiCo’s operating profit climbed 11% in 2021 and 128% in the first quarter.
“I’m not saying they’re taking advantage, but it smells good,” Chaturvedi said. “Are we using supply constraints as a weapon to make more money?
AP Writers Ashok Sharma in Delhi and Kelvin Chan in London contributed.