Europe & EU

That shrinking feeling

That shrinking feeling

Here’s the good news. There’s no need to plan your January diet this year.

The food brands are doing it for you. They’re selling you a slimmed down version of their product for the same price.

So while the checkout till rings up the same total as usual, your shopping bag may well be considerably lighter because manufacturers are shaving costs by giving us slightly less chocolate, or fish or ice cream, in what looks like the usual packet.

It’s known as “shrinkflation”. If the portion size is getting stingier – shrinking – but the price stays the same, then you’re effectively paying more – inflation.

For instance, as you’ll no doubt have heard, the Toblerone is being redesigned for the UK market; its Alpine peaks are being eroded to compensate for the rising cost of ingredients, and a lighter bar is being sold for the same price.

The 400g bar is now a 360g bar and instead of 15 peaks it boasts only 11. This has caused much gnashing of teeth (and not in a good way).

But – and here’s the bad news – there could be more of it to come.

According to the consumer organisation Which? several brands were guilty of this “sneaky way of increasing prices” last year. Tropicana reduced the size of its Orange and Raspberry juice by 15%, packets of McVitie’s Digestive dark chocolate biscuits lost around 10% in weight, and Princes is putting less mackerel in each of its tins.

But thanks to the pound’s recent weakness and higher costs of ingredients, manufacturers may be tempted to go further.

“I think it’s going to happen even more,” says Ratula Chakraborty, retail specialist at the University of East Anglia.

“Manufacturers want to keep their prices low, and inflation is happening, commodity prices are changing, so who is going to pay for it? It will be you and I who pay for it.”

She thinks we should keep an eye on products across the board in coming months.

“I would say we should be watching out everywhere, food products, fresh produce, household products, grocery products.”

Blame Brexit?

Toblerone’s owner Mondelez says it is cost pressures that are behind the change.

Cocoa in particular has risen sharply in price over the last decade. And the weaker pound since the UK’s vote to leave the EU means it’s even more expensive to pay for those kinds of raw ingredients on the world market.

But Jack Skelly, senior analyst at the market intelligence company Euromonitor thinks shrinkflation would be happening with or without the referendum vote.

“Brexit is not the main issue here,” he says. “It’ll be mostly cocoa that’s driving it.”

That means, says Mr Skelly, we should watch the size and price of chocolate ice cream, chocolate biscuits and other cocoa content products in the coming months. The cost of palm oil – also found in many chocolate bars, cakes and biscuits, though not in Toblerones – has also risen.

Mondelez says it is not sterling weakness or the Brexit vote that’s behind the change, but they are only introducing the new design in the UK.

Sticky prices

As the more optimistic chocoholic might hasten to point out, the price of cocoa has fallen slightly in recent months, giving rise to the hope that portions could become more generous again soon.

Jack Skelly thinks not. “I think cocoa prices will go down next year but there’s no way [chocolate] prices will be reduced.”

That’s just the way it works, prices don’t immediately rise every time cocoa gets dearer, but once higher they’re likely to “stick” around the new level.

Honey, I shrunk the treats

Which guilty indulgences are weighing less?

  • In 2012 Nestle reduced the size of its 1kg tin of Quality Street to 820g
  • Cadbury’s Dairy Milk bars took on a new curvier, but lighter, shape in 2012
  • Cadbury’s Creme Eggs went from half a dozen in a box to just five
  • The Mars Bar shrank from 58g to 51g and the Snickers from 58g to 48g in 2013

Source: Confectionery News

There is of course an alternative to shrinking pack sizes. Walkers and Birds Eye have both announced they’ll be raising prices thanks to the weaker pound. But higher price tags usually go down even less well with shoppers.

“We notice price changes, but we don’t notice unless it is pointed out to us that something has happened in terms of quantity,” says Ms Chakraborty.

In this instance Mondelez did point out on their Facebook page the changes they were making to Toblerones. Once customers began unwrapping the new items, outcry grew across social media.

But shoppers will get over it. Over time we do tend to get used to the new sizes and move on says Oliver Nieburg, editor of Confectionery News. However angry consumers seem now, he thinks it’s unlikely to do lasting damage.

“These are things that are largely forgiven and forgotten after a few months. There’s an outcry on social media and then it goes away.”

At least Mondelez were transparent about what they were doing. More often these changes happen surreptitiously, he says.

“There may be some initial backlash and a drop in sales, but consumers are likely to adjust to the new reality.”

“I wouldn’t imagine it would be a lasting problem. “

Source: BBC News Europe