Consumers are getting savvy to, and vocally critical of, manufacturers downsizing products. Meanwhile, overpackaging creates industrial waste and consumer headaches.

Somewhere between shrinking boxes and cartons and overpackaged products lies the most suitable package size.

Less Product, Same Price
“Across the supermarket, manufacturers are trimming packages, nipping half an ounce off that bar of soap, narrowing the width of toilet paper and shrinking the size of ice cream containers,” one Los Angeles Times report states. “Often the changes are so subtle that they create ‘the illusion that you are buying the same amount,’” a pricing consultant explained to the L.A. Times. The Consumerist blog calls it the Grocery Shrink Ray, wherein a product is sold in a smaller size at the usual price.

For example, a roll of toilet paper contains the same number of sheets as always but the length of each sheet has been cut from 4 to 3.7 inches and sold at the usual price. Or a 16.3 oz. jar of peanut butter that used to be offered in 18 oz. might be sold at the 18 oz. price; it’s the hidden, inward “dimple” on the bottom that decreases the amount the jar holds.

Recent analysis by The Nielson Company points to about 30 percent of all packaged goods having lost content over the past year. (Source: Minneapolis Star Tribune)

The occurrence takes place most frequently during times of financial distress — say, during a recession. Downsizing products is a way for manufacturers to trim costs; when asked about the shrinkage, most companies point to higher costs for ingredients, manufacturing and fuel. “With price increases at such staggering levels, more manufacturers have been offering smaller packs as a better approach than passing on double-digit price increases to consumers,” notes The Nielsen Company’s Consumer Insights Magazine.

Of course, products have been shrinking for years. Yet, as the (Minneapolis) Star Tribune says, “What began as a response to rising fuel and ingredient costs has become institutionalized at many companies.”

In fact, the act of companies reducing quantity over raising prices has become a major issue for not only consumers, but also for the businesses themselves. Earlier this year, retail specialist The New England Consulting Group created a “Recession Price/Profit Management Consulting Practice,” a group to advise companies on when and how to downsize products or boost prices. (Source: USA Today)

It is also a strategy increasingly more consumers find deceptive, resulting in those who notice the shrinkage feeling cheated. Those consumers savvy to the shrinkage are also vocal. When they spot a product that’s downsized, they let the company (or anyone else) know they are outraged.

In a nationwide survey of 1,743 shoppers earlier this year, Consumer Reports National Research Center determined that 75 percent of buyers said they noticed packages are shrinking and 71 percent said the main reason for downsizing was to hide price hikes from consumers. Yet half said they’d prefer that manufacturers keep the old package and raise the price.

Likewise a recent Nielsen Panel Views study in the U.S., which revealed that “when given a choice, consumers would prefer that manufacturers offer larger sizes with lower price per serving rather than downsize or reduce the frequency/amount of price breaks (sales) to offset costs.”

That leaves companies with a crucial packaging question, with either answer having serious implications and potentially dire consequences: Quietly downsize packaging or obviously raise prices?

Small Things Come in Big Packages
On the other end of the package-size debate is overpackaging, which Packaging Digest has called “a real danger.”

For one, there’s the waste issue. The largest category of plastics is found in containers and packaging. In this category, in 2007 alone, the United States generated almost 14 million tons of plastics in municipal solid waste, according to the United States Environmental Protection Agency (EPA).

In fact, one-third of all consumer trash in the U.S. comes from packaging. For manufacturers, overpackaging wastes time and money, which few can afford to do today. As materials and transport costs remain high, it makes little financial sense for a company to continue this practice. Reducing packaging means fewer raw materials are needed, less energy is required and less fuel is used to manufacture and transport the packaged product.

According to the Environmental Defense Fund Paper Calculator, cutting the use of corrugated (unbleached) cardboard from 100 tons to 90 tons saves 19,329 pounds of solid waste, 108,932 gallons of wastewater and 55,487 pounds of CO₂ equivalent.

Companies like Staples and Lands’ End, among others, have said they recycle thousands of tons of cardboard per year. And Wal-Mart’s sustainability goals include reducing the amount of packaging in its stores by 5 percent by 2013. Its Sam’s Club outlets halved the amount of packaging for digital media in 2006. To help meet a goal of becoming packaging neutral by 2025, Wal-Mart’s packaging scorecard measures suppliers’ sustainability.

In addition to making packages easier to open, a major goal of Amazon.com’s newly announced Frustration-Free Packaging initiative is to be “more environmentally friendly by using less packaging material,” the company said in a statement.

But when it comes down to it, says Packaging Digest, “the battle against overpackaging isn’t about environmental stuff. This is about keeping people from going totally insane.”

Resources

Groceries Literally Shrink in New Economy
by Jerry Hirsch
Los Angeles Times, Nov. 10, 2008

Freshly Squeezed: The Ever-shrinking Box and Carton
by Chris Serres
The (Minneapolis) Star Tribune, Dec. 2, 2008

Food Amounts Shrink Over Years, But Containers Are Same Size
WTAE / ThePittsburghChannel.com

Shoppers Beware: Products Shrink But Prices Stay the Same
by Bruce Horovitz
USA Today, June 13, 2008

The Lowdown on Downsized Products
Consumer Reports Magazine, October 2008; ConsumerReports.org, September 2008

U.S. Consumers Tighten Belts & Spending
by James Russo, The Nielsen Company
Consumer Insight Magazine, July 2008

Should the Shape of Your Package Tip off the Purpose of the Product?
by Lynn Dornblaser
Packaging Design Magazine, October 2008

Resource Conservation – Common Wastes & Materials: Plastics
U.S. Environmental Protection Agency, Nov. 6, 2008 (last updated)

Staples’ Environmental Commitment Fact Sheet

Land’s End Corporate Social Responsibility Fast Sheet

Wal-Mart Sustainability Fact Sheet

Amazon Announces Beginning of Multi-Year Frustration-Free Packaging Initiative
Amazon.com, Nov. 3, 2008

The Real Truth About Overpackaging – Version 3.4
by David Bellm
Eye On Packaging blog (Packaging Digest), Nov. 6, 2008

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