Shrinkflation: What It Really Is And What It Means For You

Shrinkflation is a term to define companies downsizing products to keep purchase prices the same, but for the customer that translates to paying more for less. Guard against shrinkflation by shopping by unit price instead of the actual cost.

By Jennifer Hollohan | Updated

You can’t turn on the news without hearing the latest update about inflation. Additionally, you are confronted with the painful reality every time you shop. But the inflation story has another side you may not have heard about – shrinkflation. 

It sounds funny and has a goofy ring to it. However, it is very real and profoundly impacts every consumer. So, what exactly is shrinkflation, and why do we need to worry about it?

In this article, we will explore the technical side of shrinkflation. We will also explore what it means for your pocketbook and how it directly impacts you. Then, you can take your newfound knowledge and apply a critical eye to your future purchases.

What is Shrinkflation?

You will most often hear the term shrinkflation about the beverage or food industries. According to the Corporate Finance Institute, “In economics, shrinkflation is the practice of reducing the size or quantity of a product while the price of the product remains the same or slightly increases. In some cases, the term may indicate lowering the quality of a product or its ingredients while the price remains the same.”

Essentially, it is another form of inflation, albeit largely hidden. How often do you glance at the total unit ounces of your favorite cereal box or chip bag? If you are like most consumers, it is not very often.

That is how companies hide the changes. They count on consumers’ trust in their favorite products. Or their distraction while shopping. 

When companies face increased costs in production, ingredients, or transportation, that has to come from somewhere. So they are faced with a choice. They can raise prices and potentially lose customers or find savings by quietly reducing the package size while charging the same amount.

What Causes Shrinkflation?

American individuals and families are not the only ones feeling the pinch of cost increases across the board. Manufacturers have to deal with similar price jumps. Only, for them, it’s on a grander scale. 

A couple of specific behind-the-scene factors influence the degree of shrinkflation. Often it is because companies face stiff competition. But the most common reason is due to significant increases in production costs.

Historical Examples of Shrinkflation

Unfortunately, the practice of shrinkflation is not new. It has been going on for over a decade. But now, with consumers’ razor-sharp focus on inflation, more people are noticing the packaging issue.

According to the Corporate Finance Institute, a few historical examples include Tetley, who dropped from 100 tea bags per box to 88 in 2010. Also, in 2010, Toblerone cut 30 grams off the weight of its Toblerone bars. And in 2014, Coca-Cola joined in by slashing the volume of its large bottles – from 2 to 1.75 liters. Reese’s Puffs cereal is not even immune to shrinkflation.

Why Does it Matter Now?

Unfortunately, shrinkflation is far from over. And thanks to current inflation and lingering supply chain issues, we have likely only seen the beginning of a ramping up in shrinkflation. It directly impacts hurting consumers, many of whom are already struggling against the rising cost of everyday items.

Here’s a look at products and brands where some customers have noticed a marked difference recently. The list below is not exhaustive. It is simply meant to give you an idea of where shrinkflation can occur.

  • Cottonelle reduced the number of toilet paper sheets per roll to two lines. Ultra Comfort reduced to 268 from 284. And Ultra Clean dropped from 340 to 312.
  • Parents beware – Huggies cut the number of diapers in Little Snugglers boxes from 96 to 84.
  • Dove Body Wash shrunk to 22 ounces from 24 ounces.
  • During a rebranding, Pantene cut the size of its Curl Protection Conditioner to 10.4 ounces from 12 ounces.
  • Sun-Maid Raisins dropped from 22.58 ounces down to 20 ounces.
  • Chobani yogurt dropped 0.8 ounces in size.
  • Wheat Thins “Family Size” lost 2 ounces. 

How Can I Protect Against Shrinkflation?

There is no easy way to protect yourself from the impact of shrinkflation. But there are steps you can take to mitigate the effect it has on your budget and grocery bill in particular. The most important thing you can do is become a super-savvy shopper.

We are all conditioned to glance at the price tag before purchasing an item. And, often, we instinctively reach toward the cheaper option. However, that may end up costing you.

Not all packaging sizes are equal. So you can look at two sizes of mayonnaise, for example, and want to reach for the item that is $2 cheaper. But, next time you find yourself doing that, pause first.

Every price tag also lists the price per unit. It divides the package size by the total cost (saving you from having to do the math). Opt for the lower price per unit rather than the lowest total cost.