Companies Change Product Sizes to Reduce Costs

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Photo by ninjapoodles

Consumer Alert:  Many of your favorite brands are drastically reducing product sizes without a corresponding drop in price.  In some cases, the price has even gone up while the quantities have gone down.  This has been going on for some time, but the latest reductions in product size has been more drastic, and come at a time when consumers are already feeling the pinch of rising food and gas prices.

Last week I received an email from someone who works in the food industry (they asked to remain anonymous).  In the email they cited several examples of brands that are reducing their quantity per package:

Obviously, this is not a exhaustive list, but I wanted to share the specific examples provided so you would be more aware during your next grocery shopping trip.

What Can We Do About Rising Prices and Falling Quantities?

Not much.  But, it is a good time to remind consumers to check out unit prices when comparing various product sizes.  Often times bulk packaging is more expensive per unit than smaller counterparts.  Marketing departments are banking on the popular misconception that bulk packaging is always cheaper.  Take along a calculator during your shopping trip, or use the calculator utility on your cell phone to compute the unit costs of the product your are interested in.  Here’s a real-life example from one of my past shopping trips for laundry supplies:

  • $10.99 for 120 loads – $.0916 per load
  • $6.84 for 90 loads – $0.076 per load

The 1.5 cent difference doesn’t sound like much, but if the larger container was offered in a 90-load size at the same unit price it would cost about $8.24 - a $1.40 premium over the smaller package.  If you go through a bottle a month that adds up to nearly $17 over the course of a year.  Multiply those savings by four or five similar products and you can easily see how checking unit prices can save you a couple hundred dollars a year.

Have you noticed any of your favorite brands reducing product sizes to reduce costs?

Comments

  1. Not too many people under the age of 50 (I’m 48) remember inflation, my only memory of inflation is my mother in law commenting about how she used to have to ask every year for more money for shopping since prices keep going up.

    On a more personal note you really really notice inflation when you leave the country. I’ve been gone from Canada for almost 10 years and every time we go home we go though sticker shock, everything is more expensive than I remember.

    It will be interesting to see if this is a short term or a return of inflation, I expect the latter.

  2. I thought it was interesting that when I went for school supplies, all of the teachers’ lists requested a 12 pack of pencils. In the pencil section of the store, pencils were almost exclusively bundled in 10 packs. I have noticed an endless array of shrinking items. It is certainly tougher to get the good values, but paying attention to unit price or price per ounce will definitely help you in your shopping.

  3. Yay shrink ray! I recently wrote about how Folgers lowered the package size but claimed to make more actual cups of coffee, that’s pretty ridiculous.

    For a while you could still find the older sizes around if you looked for them, but now the shrinking has been happening for while all the older stuff is gone. :(

  4. Wow, I really had no idea. I’ll need to make sure and read the unit prices more carefully. At the Albertsons where I live, they display the unit price on the shelf label which helps a lot. After reading this though, I’ll need to double-check their math and make sure they aren’t trying to pull a fast one.

    Unfortunately, with the food/gas prices going up it just means that “large and horrible fat-cat corporations” will rule the roost. (Note the quotes as I personally don’t say that statement but am amused at the many people do. I’m sure someone will here soon and they will mean it.) Places like Wal-Mart and associated companies (Sams, etc) will be getting more and more patronage as they are able to keep their prices quite a bit lower than the competition.

  5. Good observations and good advice. Bring a calculator and prove it to yourself which product spends your money better.

    A few related data points from my shopping experience:

    1. Similar products are unit priced differently – some by the pound, some by the ounce, and some by the unit – all associated with a very similar product like a jar of tomato sauce. Sam’s club is known for this.

    2. Albertson’s often switches between so much per pound and so much per item, especially on produce. There is a big difference between $2 each and $2 per pound (for a 2 pound item), so read carefully to see what your $2 is buying.

    3. The marketing department isn’t always counting on a general misconception of larger is more economical – they state that right on the package to help mislead us. Family Pack, Large Economy Size, Institutional Size, Value Pack, and Economy Pack are all written on the larger packaging, but it isn’t always the truth.

    (Oh, and don’t forget that those tiny candy bars have been called Fun Size for more than 30 years. So, it must work at some level.)

    4. Anyone shop at Costco Wholesale? It isn’t is it? It’s really only big box retailing, but the propaganda is right out there in the name for us to believe anytime we stop questioning what we are being told.

    The bottom line is that we always need to be aware when we shop. The retail environment is filled with words, music, animation, colors, shapes, scents and clever packaging – all used quite deliberately to appeal to us in an effort to get us to happily part with our money.

    We all have choices to make, and if we find that certain products are intentionally deceptive or otherwise objectionable, then we need to buy others or find an alternative that doesn’t involve purchasing the product. Only when an organization feels a pinch in their bottom line will things change.

    We have much greater influence over the marketplace than we give ourselves credit for, but we have to act (and speak up). As smart shoppers we need to be armed with information, shop deliberately, and exercise our freedom of choice.

  6. “Often times bulk packaging is more expensive per unit than smaller counterparts. Marketing departments are banking on the popular misconception that bulk packaging is always cheaper.”

    My husband and I just ran into this last night while shopping at Meijer. They had the regular size Miracle Whip container and then a bulk size and the bulk size was more expensive when you broke it down.

  7. The most blanant example of this that I have seen is in the dog food that we buy.

    For a 40 lb. bag of Canidae dry dog food, we saw the price increase by about $5 within the past couple of months. Sort of a bummer, when you are already paying $40 for the bag, but not a shocker since the cost of everything has been going up.

    Now I wish I would’ve stocked up on those 40 lb, $45 bags of dog food, because Canidae has now shrunk the size down to 35 lbs. Still for the higher price of $45.00.

    I’m afraid of what I will find NEXT time we need to buy dog food!

    Maybe we should downsize our dogs to a more fuel-efficient model, like a couple of chihuahuas!! (Just kidding – we love our labs!!) ;-)

  8. @Pet Food: As a fellow lab owner, I can relate to the pet food costs! And like you, I wouldn’t trade her in for anything.

    @Amy: Often times the smaller quantity packaging is cheaper, but you have to buy two of them to get enough product. If it is a staple you are going to use anyway, it usually makes sense to just stock up.

    @Claire: Great points–thanks for sharing. And you are right about marketing departments, perhaps I let them off too easy!

    @David: Perhaps Walmart should change their smiley-face ads to show falling prices AND falling quantities. I’m not part of the anti-Walmart crowd, I shop where I can get the best deals, but do value customer service and will pay a small premium if I have to avoid certain stores.

    @Jim: I remember reading your coffee article, and should have linked to it originally. I went back and included a link because it was a great read, and on point with this post.

    @Susan: School supplies have been an area where changes are very noticeable. I’ve heard reports of glue and glue sticks being smaller than last year’s inventory, and as you mentioned the pencil packs have apparently shrunk as well!

    @Make Art Every Day: I have to wonder about the cost to manufacturers of changing the packaging materials to accomodate less quantities. With things like cereal they can just fill less product in the inner bag, but as you mention, ice cream and similar products have to have an entirely new package developed and produced.

  9. I don’t have a problem with charging more for the same thing when costs to manufacture go up. I do have a problem in making the package look the same and giving less for the same or slightly higher price. It is merely deceptive.

    Be honest with consumers and explain that prices are going up.

    Our favorite ice cream here is Texas, Blue Bell, now prints on their cartons, “Still a half-gallon.” I love that, because they are try to stick to those that are deceptively giving less product.

    It reminds me of when my wife went to fill up her car at Texaco about a month ago. Price was $3.86 on the top, $3.86 in the middle, $3.93 on the bottom. One would think, instinctively, that this means regular, mid-grade and premium. Not here. Cash, Texaco Card and credit/debit card. My wife was furious when she saw she was paying $3.93. Even though it cost her only about $1.00 extra, we will never again fill up at Texaco. You can fool us once, but not again. They lost a customer over $1.00. Simple greed.

  10. I noticed the same thing when I went to the store before, particularly peanut butter:
    http://spillingbuckets.blogspot.com/2008/08/is-coupon-clipping-worth-it-when-you.html

    I just went to the grocery store yesterday and there were notes up all around: “Due to the huge increased demand for StoreBrand products some items might be out of stock. Our suppliers are working hard to keep up, please be patient, and thank you for your patronage” – so it seems a lot of people are getting fed up with the increased costs.

  11. We just noticed this last weekend when we bought a new container of Skippy Natural Peanut Butter! It was, sure enough, thinner in the middle (top and bottom were the same) and less ounces when we read the small print. We couldn’t believe it! I didn’t know this was a trend right now- thanks for the head’s up!

  12. great observation. and it’s really kind of sad they are doing this because it’s quite deceptive…trying to keep the customers buying their favorite products while ripping them off in the interim.

  13. Sunmaid Raisins :( In the big red box.

    Because the grandkids love them, and we bake with them, I like to buy the big one pound box of raisins. Imagine my surprise when I opened it up and didn’t see any raisins…. Waaaaaayyyyy down in the bottom of the box was a small cellophane bag about 2 inches high. (The box is about 6 inches high…) So the box is about 1/3 full only. Talk about feeling gypped!

    But then I read the label on the front of the big red box – and sure enough, the size had changed… it now says 12 oz. Why oh why do they think they need to keep that huge box when their product only filled 1/3 of it? Bummer! I’m going back to the generic plastic bags that you can see all the way thru. Tougher to store properly once opened, but at least what I am seeing is what I am buying!

    Actually, I’m growing red currents, black currents, blueberries, and will be making my own ‘raisins’ from them !

  14. This is a little off topic, and I apologize if you’ve already covered this, but even restaurants are scaling down portions while keeping the price the same or even raising the price. Maybe they are feeling the pinch at the grocery store just like you and I.

  15. Marci:

    Good for you. Growing your own is a solution that I endorse. You either stay part of the marketplace or create an alternative.

    If enough of us create alternatives, then the marketplace will shift. We have seen this with fresh tomatoes on the vine and organic produce.

    The marketplace is more sensitive to consumer demand than any of us can imagine. Their profit depends on our continued patronage, so they have to pay attention or they don’t survive.

  16. The Breyers Ice Cream thing got me too! I was so made that I didn’t catch the size got smaller from last year. I didn’t even pick up on it at the store and then noticed the package looked funny at home.

  17. I also love it when retailers say something like 50% less fat, which is true since they are giving you half as much as they did before. Like those 100 calorie packs. They are great and useful for portion control, but duh people, you can do the same thing yourself and not have to pay for premium packaging.

  18. While shopping this weekend I had a coupon for 2 boxes of Kellogg’s Smart Start cereal. I noticed they had introduced several new flavors, one of which looked interesting(maybe it was the advertised “New Look!” that attracted me). So, I picked it up and threw it in the basket with the regular box. But then I noticed the “New Look” box was two ounces smaller than the old box. But the same price. Upon closer inspection I found that all of the “New Look” boxes had shrunk.
    Sneaky, very sneaky!
    Needless to say, I went with the regular box and the extra two ounces. I can add dried fruit to my own cereal, than you very much.

  19. This happened with my favorite Columbo yogurt and I was so upset about it. I ended up switching brands!

  20. I just noticed my Nabisco saltine sleeves are 1/4 empty…. looks like they reduced each sleveve by about 8 crackers…that 32 less crackers per box…but I’m sure the price hasn’t gone down.

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