Actualis



May 2010
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Honey, they shrunk the mayonnaise jar!

Remember when food prices really went up two years ago? The financial crisis soon distracted us from that. But it left a definite impact.

Something strange has happened recently in our refrigerators and pantries. See for yourself:

Typical Sizes of Common Grocery Items

Pretty striking trend, isn’t it? And these are not the only products affected. Cereal boxes have gotten smaller, too, and there are fewer potato chips in some bags.

What happened?

Inflation that didn’t look like inflation

This is not a new phenomenon. How many times have we heard our parents complain that Cherry Blossoms and Laura Secord eggs were bigger in their day? In 2008, inflationary pressure is what affected food products (see the Actualis article on the subject) and presented some packaged food manufacturers with a dilemma:

·         either increase prices to cover rising costs;

·         or keep prices steady but make packages smaller and put less in them.

With experience showing that consumers would rather not pay more, even if it means getting a little less product for their money, the second option was chosen. Ultimately, however, the result is the same: there was a tacit price increase, even if it didn’t show up on the grocery bill.

Supersize me no more

It would appear that the trend towards “supersizing”, which was explained a few years ago in the movie Supersize Me, can be reversed if circumstances call for it. Supersizing means taking advantage of the relatively low marginal cost of more packaging to give consumers ever-larger portions, which have higher profit margins. Consider, for example, the gigantic servings of popcorn and soft drinks sold at movie theatres. By contrast, what we’re seeing now is product downsizing: manufacturers are reducing package sizes to maintain profit margins and pass on inflation-related costs to the consumer.

There is an upside to this, however, since a smaller product generally means less packaging, and thus less of an impact on the environment. That may be small consolation, but at least it’s something!



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