Jaffa Cakes

Shrinkflation is Meaning that Pack Sizes are Shrinking

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Jaffa Cakes packets are reducing in size from 12 to 10, but McVitie’s are opting to reduce the price to reflect the smaller number of cakes in the packet. However, hundreds of other items including toilet rolls, biscuits and chocolate have seen prices remain the same as packet sizes are shrinking.

This has been given the name ‘shrinkflation’. This is where brands are maintaining the prices of their products despite reducing the pack size. As reported by the Independent in March, Mars admitted to shrinking the packet size of Maltesers, M&M’s and Minstrels by up to 15% and had no intention of reducing the price of the products. While they were caught out for the shrinkage, it appears that the company reduced the pack size without any announcement.

Of course, this is understandable if you are looking at it from a financial perspective as companies want to protect their profit margins, but the fact is that some products have seen their packet size reduce twice in a year while the price has not been reduced.

It seems that it is being done mainly within the chocolate industry and that the reasoning for the shrinkage is that the cost of producing these products is rising. Another reason may be because of the increase in cost and the way consumers are turning against sugar, and this is brands attempting to cut down the size in order to cut down the amount of sugar present within their product.

Additionally, with ‘sugar taxes’ increasing, companies are forced to either shrink their product to reduce the amount of sugar or take the hit of the tax. A spokesman for Mars said:

“We have been absorbing rising raw material and operational costs for some time, but the growing pressures mean that we can’t keep things as they are. Reducing the size of our products is not a decision that we take easily, but we’re confident that our chocolate brands still offer our customers and consumers the best possible value for money without compromising on quality or taste.”

Back in December 2016, Euromonitor International Head of Packaging, Rosemarie Downey, said that the key trend for 2017 would be flexibility in terms of pack sizing:

“Smaller pack sizes will answer consumer’s health concerns both in portioning confectionery and snacks alongside specific sugar concerns in soft drinks.

“Smaller packs will enable simple consumer affordability in populous growing emerging markets with India set to lead global growth for packaging in 2017.”

With this being said, there are ways to cut packaging costs. By investing in shrink wrapping machinery, businesses can save money and be a more cost-effective packaging solution. If you require any advice regarding your packaging options, please do not hesitate to contact us.

Image credit: Asim18 under Creative Commons


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