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The art of ‘downsizing’: how companies give less product for the same price | Economy

Doritos bags have become one of the symbols of a little-known commercial strategy used to hide the rising prices of products. Is named reduflation and it consists of putting less quantity than usual in a container without altering the sale price. In the case of Doritos, five less nachos in each package. This change usually goes unnoticed by the vast majority of consumers, who are not so aware of whether a package of cookies has 25 grams less, but they do tend to realize if they pay more for it when they go through the checkout. This is a legal tactic, as long as the companies reflect the new amount on the packaging, and is usually used in times of economic crisis or in inflationary times like the present.

The escalation of prices is being generalized – the CPI shot up to 9.8% in March in Spain, the highest record since 1985, and also rises in the euro zone and the United States – and companies are taking measures to try to maintain prices. margins without making products more expensive so as not to lose customers. One possible option to lower costs, which have been multiplied by energy, is to reformulate the product with cheaper ingredients. But in principle it is easier to reduce the amount, as in the case of Doritos, as the company admitted to the digital media Quartz. Unilever has also acknowledged that it is considering this type of strategy (Dove gel bottles have gone from 24 to 22 ounces in the United States) and the giant General Mills (Cheerios) adopts similar measures when it deems it necessary.

In Spain, the Organization of Consumers and Users (OCU) has detected several cases. 7% of the 238 products analyzed in October for the price controls carried out periodically have reduced their size. “The tactic has been used by Pescanova (in hake loins), Danone (five grams less in a yogurt), Gallo, Cola-Cao and Tulipán, and recently we have also seen a couple of cases in Revilla and Campofrío,” he explains. its spokesman Enrique Garcia. They are small differences in size, he says, like putting 10 grams less chorizo ​​in the container and continuing to sell it for one euro.

In the case of Pescanova, the OCU states in its study: “It might seem that the average price of a pack of hake loins has dropped by 7.1% compared to 2020. But if the reduction in weight is taken into account, which has been 10%, in reality it has risen 3.2%”. Sources from the fishing group affirm that the change in size has nothing to do with inflation, since the 360-gram product went on sale in September 2020, when the CPI was at low levels, and the product was no longer sold. 400 grams in supermarkets.

Change the size of the products (tactic in English called shrinkflation, a combination of the words reduce and inflation) is legal. Being part of their internal strategy, many companies reserve to give details about their pricing policy. Sometimes, these changes in packaging or quantities are argued by saying that sizes are reduced to eliminate calories, or that they respond to a commercial decision due to changes in consumption habits, in customer demand.

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The truth is that it is difficult, among the millions of brands on the market, to know to what extent these practices are used. “We believe that it is due to an environment of price increases, with the aim of making them less visible to the consumer, because in an inflationary moment like this, the user punishes what he appreciates that rises,” adds García.

Inertia and speed have an important weight when making a purchase: 70% of decisions are made in two seconds. And, although users are more sensitive to price variations, they are often not aware of the weight of the packaged products they buy. In the case of a liter of milk, or two liters of soft drink, the amount is clearer. But in other packaged products such as a bag of macaroons or a chocolate bar, keeping track of grams is not usually the case. “There are products in which it is more difficult to notice, for example, if I look at a 220-gram container of hummus, I really don’t know if a week ago it had 240, the same thing happens with a chocolate bar, if it is a little more shorter than before,” explains Juan Carlos Martínez Lázaro, Professor of Economics at IE University. “Reducing the amount can be a defensive strategy against rising costs,” adds the expert.

Could it be in any case a deceptive practice? Sources from the Ministry of Consumer Affairs indicate that surveillance to detect whether irregularities occur in the sector depends in Spain on the autonomous communities and that no complaint has been received in this regard. On the other hand, the effect on the calculation of the CPI does not have to be affected by this change in sizes, since the National Institute of Statistics takes into account the price per quantity to calculate the index.

big portions

Playing with quantities is not always to reduce them. “A few years ago we talked about the strategy of giving large amounts of product and now it’s the opposite,” recalls Martínez Lázaro. The objective then was to encourage the purchase of larger packages, even though they would later remain in the pantry for months.

The reduflation It is not new and sometimes it does not only refer to specific amounts of a container, but also to services provided or to the size of the portions. On many occasions, companies carry out this type of process in order to maintain their profit margin or, at least, not to reduce them. One of the best-known cases is from 1987, when American Airlines reduced the number of olives it served in its in-flight meals by one unit and managed to save $40,000.

Thirty years ago, only the most discerning consumers noticed, while today more information is shared on the internet. In the social network Reddit for example, the shrinkflation group It has 21,000 members, who post before-and-after photos of products that have dwindled.

Toblerone, before and after the change.
Toblerone, before and after the change.

Studies on the subject are scarce. One that stands out is one carried out by the National Statistics Office of the United Kingdom, between January 2012 and June 2017, in which they detected variations in sugar, jam, syrups, chocolates and processed confectionery.

Downsizing isn’t always easy either. It has to compensate the company, because it sometimes requires changes to the packaging or to adapt the machines. In addition, it can sometimes be more controversial to raise prices directly. It was the case of Toblerone. Its manufacturer, the Mondelez company, upset consumers by putting more space between the peaks of the popular chocolate bars to reduce their weight and production costs. In 2017 he faced a lawsuit and had to rectify and return to his previous form.

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