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March 2011

The Incredible Shrinking Package...
but Not the Price

Recently you might have noticed quite a bit of new packaging for food products at your local grocery store. I first thought product marketers were using new ways to attract consumers. However, upon a closer look, I realized the packing looks different in part because the sizes are smaller.

One recent example is what is happening to some orange juice containers. I often buy the 64-ounce carton of Florida’s Natural Orange Juice because I not only like the fresh taste of the juice, but also because the juice is produced by a Florida orange-growers cooperative. Florida Natural’s main competition is Tropicana, a company owned by PepsiCo, Inc. Something seemed different with the Tropicana containers and I looked more carefully and saw that while the company kept the price the same, it reduced the container size from 64 ounces to 59 ounces. This is not unusual. The same thing is happening with boxes of my favorite breakfast cereal where the boxes being placed at the “sale” end of aisles are increasingly smaller in size but have attractive prices like two 10-ounce boxes for $4.

Consumer Reports just took a look at this phenomena and determined we are getting less for our money for many food and consumer products and that there is good reason why certain products don’t seem to last as long as they used to. The Consumer Reports investigation looked at a number of food products and found that packages were reduced in size by as much as 20 percent. It cited some examples, including Ivory dish detergent (shrinking from its prior 30-ounce size to a new 24-ounce bottle) and shrinkage in Haagen Dazs’ “pint” of ice cream (from 16 ounces to 14 ounces).

Companies respond that they don’t want to cause consumers sticker shock so instead of raising prices, they just shrink the packaging size—exactly what I was seeing with Tropicana and Cheerios. Yes, the base price of many ingredients has increased dramatically over the past year and this is putting pricing pressure on food and consumer goods manufacturers.

What can you do? There are several strategies to make sure your family food budget doesn’t keep getting bigger. First, comparison shop between brands to determine which one is the better deal. As noted earlier, Florida’s Natural Orange Juice is still the same size and is usually favorably priced versus Tropicana. Second, look at the unit-price labels on the store shelf. You might be surprised to find that a smaller box has a lower price per ounce than a large box. Third, stock up on certain items such as cereal because the base price of oats, corn, and wheat continues to rise. The cereal seems to keep fine over several months. To make sure, I usually pull the box from the back of the shelf because my local grocery store usually puts the oldest product up front. Fourth, look for generic store brands on such items as milk because it is often bottled in the same dairy plant as the name-brand milk but is sold at a lower price. Finally, as recommended by Consumer Reports, you could call the company that downsized the packaging, and you might get coupons in return for your call. Happy shopping!

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