Shrinkflation: ‘I don’t know how it hasn’t caused French-style rioting’

Pricewatch has the dubious honour of being the first page in The Irish Times on which the world shrinkflation ever appeared. It was back in the heady days of 2015 when prices were falling and interest rates were low and all we had to worry about was the amount of biscuity crumbs on a Brunch.

We did not come up with the portmanteau – the credit for that is given to author and economist Pippa Malmgren, who first tweeted about the notion in January 2015, three months before we got wind of it – she was giving out about our shrinking soft drink cans, as it happens.

Neither Pricewatch nor Malmgreen can claim credit for the concept, which is many centuries old. Going right back as far as Roman times there were unscrupulous bakers artificially inflating the size of their loaves so they could charge a higher price for a smaller product.

But shrinkflation as we might recognise it probably has its roots in more recent times, in the vending machines that started appearing in United States in the early part of the last century. The makers of the sweets and chocolate bars commonly found in such machines struggled to work out how to reconfigure the newfangled things to facilitate price hikes. If they wanted to bump up the price of a product from a nickel to six cents, the machines simply said no. So instead of increasing the prices, they reduced the size of the products in the machine.

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Since those early days, products have been shifting in size and – more often than not getting smaller.

The shrinkage has become more pronounced over the last decade or so. A report published by the UK’s office of national statistics (ONS) just over five years ago suggested that more than 2,500 products commonly found on supermarket shelves in the UK – and in this country too – had shrunk between 2012 and 2017, with everything from chocolates to juices to toilet rolls impacted.

Cadbury Creme Eggs are smaller than they used to be, as are Maltesers, M&Ms and Minstrels. McVitie’s cut the number of Jaffa Cakes in a packet from 12 to 10, while Innocent smoothies that were a litre are now 900ml. Toblerones have also been hit.

The ONS research suggested that toilet rolls, nappies, tissues and washing-up liquid were the products where the greatest size changes had occurred, while foods with the highest numbers of product size changes included bread and cereals, meat, sugar, jam, syrups and chocolates.

Since the start of the cost of living crisis last year the problem has worsened as retailers and producers have sought to offset higher input costs by making products smaller. The shrinkflation comes on top of price increases faced by consumers which have seen the cost of groceries climb by more than 15 per cent in the last 12 months, according to figures from retail analysts Kantar.

In an era when retailers and producers are under pressure they have four options on the table. They can take the hit and accept smaller profit margins. They can increase their prices. They can make their products smaller or reduce the costs by changing the ingredients.

Profit margins tend to be fiercely protected. Changing the ingredients can be a dangerous move and see consumers turn away from a product, while shifting prices can see people moving to cheaper own-brand options. That leads to many makers going for the Honey, I Shrank the Shopping option.

But while shrinkflation may be seen as the least worst option by manufacturers and retailers, it is ultimately shoppers who pay the price and are being increasingly confused at best and misled at worst and it is becoming harder and harder to make informed decisions about where to best spend your money.

Earlier this month, it was digestives that took the biscuit as news emerged that the McVities people had shrunk the size of their packets from 400g to 360g, taking three biscuits off the table in the process.

Last week it was Buttons.

More specifically it was the sharing packet of Cadbury’s Buttons, which were getting smaller, with the bags going from 240g to 185g, a reduction of 23 per cent with no commensurate fall in price.

Mondalez, which makes Buttons, and Pladis, which owns the McVitie’s brand digestives, were singing from the same hymn sheet as they blamed the cost of living crisis and higher input costs for their decision to shrink their products.

Then there were the Magnums. Last Tuesday it emerged that the fancy ice creams had fallen victim to shrinkflation for the second time in as many years with the makers Unilever confirming that it had reduced the number of ice creams found in the multipacks from four to three. Last year, Unilever decreased the size of the ice cream from 110ml to 100ml.

They are not the only products that have found themselves caught in the shrinkflation trap in recent times. “My local supermarket has reduced the number of beetroot in a packet from four to three. Beet that for shrinkflation,” said one Irish Times reader in a letter he sent to the editor last week.

There have been other reports. “I love an open fire (bad for climate and all that, I know) and used to buy a box of 10 fire logs in Dunnes Stores for €10,” another reader who contacted Pricewatch said. “When I went to get them the other day the box has shrunk to six logs for €8.50. If you didn’t look carefully you’d think you were buying the same box.”

Keen students of maths will have worked out that such a shift in size has seen the price of the fire logs in Dunnes climb in price from €1 each to €1.41 each.

We contacted Dunnes to see what it had to say but at the time of writing it had not responded to our query.

Another reader highlighted a popular brand of custard creams that used to have 12 in each packet had two of the biscuits removed by the makers with no change to the price. “I don’t know how this hasn’t caused French-style rioting,” he said.

[ Shrinkflation bites: Biscuits to disappear from packs of Penguins and Digestives ]

[ Why 'shrinkflation' means you are paying the same for less ]

“I think it’s getting worse,” says consumer advocate Dermott Jewell. “And the reason it’s getting worse is that businesses are doing anything to not announce a price increase and draw attention to themselves. I am not saying they’re unjustified, but shrinkflation facilitates a lack of transparency around pricing and the problems have been escalating.”

He says many consumers would have had a “niggling sense for months that their money is not going as far as it used to and they have been doing everything they can to shop around and switch products and they’re still noticing that not only are prices increasing and they are paying more but they also have to visit the shops more often. They don’t necessarily understand how this is happening, despite their best efforts.”

He says it might be better, on balance, if prices increase and products stayed the same size. At least then it is there for everyone to see and it will be seen immediately. It wouldn’t be through a back door. I think it is an unfair way of doing it.”

He says that he accepts retailers and producers are under pressure. “I won’t say for a moment that I don’t understand it and it is always pointed out that humans don’t like price increases and they prefer this but there needs to be a clear conversation with a customer. If you’re loyal to them and you want them to be loyal to you. You’ve got to tell them what you’re doing. And that has not been happening.”

He says it is one thing to shrink the size of so-called treats but that the practice is much more egregious when it comes to essential items that people have to buy. “I would focus very, very much on anything that parents have to buy for young babies or young children.”

Shrinkflation bites

Edgar Morgenroth is an economics professor at Dublin City University has a benign and a not-so-benign interpretation of shrinkflation and how food is being handled by our producers and retailers.

First the benign. “With things like chocolates and sweets there may be people who say ‘the kids want a packet of biscuits’ [and] we know, that’s not actually a good thing for them so with a smaller packet size, we actually give them less and so they might think that shrinkflation is actually not such a big deal,” he says.

Prof Morgenroth also points to the many people out there who have been hit hard by the cost of living crisis and may benefit from a slightly smaller product size rather than a price hike that puts something out of reach in terms of affordability.

“In an inflationary period, where real incomes are falling, people are more price sensitive and may be more willing to take it from that perspective. There’s a fixed amount of money in your pocket for your shop and you are still getting a packet of biscuits, or whatever it is, rather than if it was more expensive and not getting them. You still get something for the fixed amount of money that you have in your pocket.”

You know salt is cheaper than pork and water is cheaper than pork so you throw a load of salt on stuff and then inject it with water and you have people effectively paying for water at the price of pork

—  Prof Edgar Morgenroth

But he also has a less benign perspective. “I suspect retailers and more likely manufacturers, have kind of figured out how the human brain works and they seem to be able to get away with it so when one company does it and seems to get away with it, the others probably look at it and think: ‘Well, maybe we should try something like that.’”

He says that another – less discussed and harder to detect – approach adopted by manufacturers is the swapping out of more expensive ingredients for cheaper ones.

“I remember a time when certain products had proper chocolate on them but now they have a load of stuff, stuff that looks like chocolate and might even taste sort of like chocolate, but isn’t chocolate because it’s got a lot of palm oil and whatever else in it. It’s cheaper to manufacture and they can get away with it through manufacturing tricks. That is another way of increasing margins and ultimately pulling more money out of people’s pockets.”

He says that when he was growing up in Germany “there was no palm oil [but] now pick up almost any sweet product, a lot of confectionery and it’s everywhere.”

He points to the practice among some meat producers of artificially inflating the size of their products by adding more salt and water. “You know salt is cheaper than pork and water is cheaper than pork so you throw a load of salt on stuff and then inject it with water and you have people effectively paying for water at the price of pork. I think manufacturers have spent a lot of time figuring out how they can make their products cheaper to make and that is what they would call that innovation.”

Back to shrinkflation, he says that it is “very tricky” for consumers to protect themselves from the practice. “The weights and volumes on packaging and on labelling are there to protect the consumer but in reality, often enough, the packaging is such that you need a microscope to read it and then you need a degree in chemistry to actually figure out what the hell all these things are.”

He also notes that, often, even if people notice the changes and are not happy with them they have little or no choice. “Often there aren’t alternatives or if the alternatives exist they’re just a lot more expensive. You can get organic pork that’s not filled up with water and won’t shrivel up in a pan but it is hard to get and can be very expensive.”

He has a simple solution to the problem of shrinkflation but says the key is the packaging, however.

[ The Irish Times view on shrinkflation: consumers short-changed ]

He notes that often you might see a lot of empty space in boxes and in bags. “There might be a product where the box hasn’t changed in size but there’s only half the content in it. Well, it’s actually very wasteful from a packaging perspective and very misleading. So if you had a rule or law that minimised the void within packaging, the manufacturers would have to respond with smaller packaging. And now it becomes much more obvious that you’re getting less. That’s often enough. It would be much harder to hoodwink people if the packaging was smaller.”

He also points out that it would mean that making products smaller would come at a much higher cost to manufacturers as they would have to completely change the packaging and the branding of a product every time they wanted to make it smaller.