The Homa Files

TakeAway: From PepsiCo to Kraft Foods to Campbell Soup Co., makers of some of America’s most well-known products are trimming the calories and content when it comes to package sizes. 

ConsumerReports.org listed examples of household and grocery products that have decreased in size, thanks to packaging shrinks, in part due to rising commodity and energy costs.

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Excerpted from Forbes CMO Network, “What? America’s Favorite Brands Are Slimming Down, Too?” By Elaine Wong, January 4, 2011

Häagen-Dazs’s ice cream container went from 16 to 14 ounces, a reduction of 12.5 percent. ConAgra Foods’ Hebrew National franks are now 11—not 12—ounces. Even household products are not immune: anti-chafing gel Lanacane is now 99 and not 113 grams (12.4% difference).  Kraft sliced the weight of its 2% Milk Singles and Fat Free Singles from 16 to 14.7 ounces last May.

Package shrink is not a new tactic to either the consumer or manufacturer (including private label companies).  Indeed, it has been going on for a while, most frequently during times when ingredient costs are soaring high. And calorie-conscious consumers, newly refreshed from their 2011 vows, might actually have something small to cheer about. After all, smaller amounts of product might, hopefully, lead to smaller waistlines. But in this day and age of social and digital media, when today’s cost-conscious consumer is much more smartly trained to detect such downsizes, even if unannounced, can such maneuvers actually hurt advertisers?

Robert Passikoff, CEO and founder of Brand Keys, a New York-based consultancy that specializes in brand engagement and loyalty, says most definitely yes. Social media’s prevalence and transparency aside, consumers, over the last two decades, have just become smarter shoppers, and such changes, even if subtle, aren’t likely to go unnoticed.  Consumers, especially in today’s tough economy, are more likely to balk if such increases get passed along in the form of price hikes.

Though most instances of package shrink happen stealthily, some marketers, such as PepsiCo, make it up by publicly announcing the changes to make sure consumers weren’t surprised. Such was the case when the company’s Tropicana brand announced that it was reducing the packaging on one of its most popular orange juice cartons by about 8 percent, in addition to raising the price, to cope with a severe citrus crop loss in March.

Regardless, some consumers are bound to complain as Consumer Reports found that some instances of package shrink were as high as 20 percent. Procter & Gamble’s Ivory dish detergent, which went from 30 to 20 ounces, was one.

Edit by AMW

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This entry was posted on January 14, 2011 at 5:50 am and is filed under Mktg - Packaging, Mktg - Pricing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.