The Homa Files

Excerpted from the Minneapolis Star Tribune, “Freshly squeezed: The ever shrinking box and carton” by Chris Serres, December 2, 2008

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In the past year, thousands of small, almost imperceptible changes swept through the grocery aisles where American families shop each day.

The indented bottom of a Skippy peanut butter jar got more indented, turning an 18-ounce jar into a 16.3-ounce one. Ice cream containers shrank by one-quarter of a quart. And for breakfast, a jug of Tropicana orange juice got 7 ounces lighter while that box of Froot Loops lost more than 2 ounces.

Shoppers without a keen eye and a willingness to read the fine print on labels might have missed what has happened: Food manufacturers were downsizing packages, while keeping prices the same, as they passed on higher food costs to consumers.

According to a recent analysis by Nielsen Co., about 30 percent of all packaged goods have lost content over the past year. This at a time when U.S. grocery bills are rising — up 7.5 percent in October vs. the same month a year ago — at the fastest rate in 18 years.

What began as a response to rising fuel and ingredient costs has become institutionalized at many companies. At General Mills, for example, cost-cutting is so embedded that the company even has its own intimidating term for it: “Holistic Margin Management.”

It’s not always about shrinking packages, which can account for as much as 75 percent of a product’s cost. Even seemingly small changes in a package’s design can mean millions of dollars in annual savings — lessening pressure to raise prices to cover costs.

There is an entire science behind packaging reductions, enlightened by a long list of unsuccessful changes.

For instance, food manufacturers know consumers react more to changes in height than width, so cereal boxes often get thinner before they get shorter.

Once a product changes, buyers often forget the previous size, creating a new standard. Five years ago, ice cream tubs were a half-gallon, or 2 quarts; few noticed when it dwindled to 1.75 quarts and then, this past year, to 1.5 quarts.

When PepsiCo reduced the size of its Tropicana orange juice jug by 7 ounces, it touted the container’s “new ergonomic design” and easy-to-open snap cap. Yet consumer advocates argued the new features were really meant to distract from the reduced weight.

“This is the packaging equivalent of three-card monte,” said Ben Popken, editor of Consumerist.com, a website whose “Grocery Shrink Ray” tracks shrinking packages. “By changing several factors at the same time, food companies disguise the fact that you’re getting less for the same price.”  

Edit by NRV

Full article:
http://www.startribune.com/business/35343634.html 

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