TikTok creators call companies ‘shrinkflation’

Hunter Jarratt was a frequent shopper of Quaker’s apple oat bars – until he realized that his favorite snack has gone down in size, even though the packaging is the same.

Hunter Jarratt

Hunter Jarratt was a frequent shopper of Quaker’s apple oat bars – until he realized his favorite snack was getting smaller in size, even though the packaging was the same.

In his TikTok video, he pointed out that an old bar weighs 26 grams and normally costs $1.90. But an oat bar now costs “well over $2,” at 24 grams, he claimed.

That means each gram in the 26-gram bar costs $0.073, while it costs slightly more — at least $0.083 per gram — for the smaller 24-gram bar, according to CNBC’s calculations.

“What he has is more air,” he said wryly.

That’s when Jarratt realized “shrinkflation” was at work – where some companies reduce the contents of their packaging without increasing the list price and, in doing so, charge consumers more.

PepsiCo — which owns Quaker and other household names, such as drinks like Gatorade and Lipton Tea, as well as Lays crisps — did not respond to CNBC’s request for comment.

Not only are consumers spending more on everyday goods, they’re also getting less than before – and young people like Jarratt aren’t happy.

Like Jarratt, many are now turning to TikTok to call out companies that have downsized products.

There were more than 261 million views of short videos related to “shrinkflation” on TikTok on Thursday, according to the social media platform.

It’s hard enough to keep up with the rising cost of living, and when companies start downsizing their items, it makes matters worse.

Claudia Valladares

Financial Advisor

In July, PepsiCo raised its revenue outlook for the year as inflation drove up prices and consumers paid more for its products.

Expecting costs to rise even further in the second half of the year, the global food and beverage giant said at the time that it planned to continue to downsize products and roll out other means of managing rising expenses.

What has been the impact of shrinkage on young people and are there ways to overcome it? CNBC Make It finds out.

Why does “shrinkflation” occur?

For Krishnan Kara, 23, it was Cadbury’s chocolate bars.

“They used to be 200g for £2 and are now 180g for £2. A 10% drop in size but the price is still the same,” said the London-based digital marketer.

“I was annoyed…Instead of blatantly raising the prices of goods with inflation, these big brands chose to reduce the quantity of product.”

In an email response to CNBC Make It, a spokesperson for Mondelez International said the “significant increase in production costs” has made it much more expensive to produce its products.

Mondelez International owns Cadbury and other snacks like Oreo, Ritz and Toblerone.

“We understand that consumers also face rising costs, which is why we seek to absorb costs wherever we can,” Mondelez International said, without giving further details.

Inflation and shrinkage really have a huge impact on groceries and almost everyone’s bottom line.

The spokesperson added that this is the first time since 2012 that Cadbury Dairy Milk medium bars have been reduced in size.

Drew Lee, 31, acknowledged that it is more important than ever for companies to “do whatever they need to do to maintain their profit levels”.

“As a consumer, I don’t like [shrinkflation]. But I understand why companies do it. Everyone has to make money,” said the industrial engineer.

Food ‘doesn’t last that long’

Even so, people CNBC Make It spoke to remain adamant that shrinkage will hurt consumers.

“Inflation and shrinkage really have a huge impact on groceries and almost everyone’s bottom line,” Lee said.

Lee added that he noticed the contraction was at work because he usually poured his private label Good & Gather packaged oatmeal from Target into a different storage container.

“I noticed it wasn’t filling the whole container like it normally would. If I hadn’t poured the oatmeal into another container, I definitely wouldn’t have noticed,” he said. -he declares.

CNBC Make It contacted Target for comment, and a spokesperson said the company hasn’t made any changes to its oatmeal packaging or product since its 2020 release.

“Shrinkage is an attempt to trick customers into thinking they are paying the same price for an item when in reality they are paying a higher unit cost for that item,” Lee, the engineer, insisted.

Financial adviser Claudia Valladares said shrinkage is a concern, especially for “people on a tight budget.”

“It’s hard enough to keep up with the rising cost of living, and when companies start downsizing their items, it makes things worse.”

Either I choose alternative products or unfortunately I have to spend more money on food…it just adds more debt in the long run.

Hunter Jarratt

@invasivespeciesguy

Jarratt agreed, saying the food “doesn’t last as long” now that inflation and contraction have become more intense.

“I’m a college student on student loans…I have an allocated amount of money for food,” the 22-year-old added.

“Either I choose alternative products or unfortunately I have to spend more money on food…it just adds more debt in the long run.”

Here’s what you can do

Jarratt’s personal experiences with the rising cost of living and shrinkage prompted him to create a TikTok video – although he admitted it wasn’t his “usual content” as an environmental educator.

“It’s hard to really be a conscientious shopper at the grocery store when most products are only owned by a handful of companies. But when you notice a change, it’s important to talk about it,” a- he declared.

“People are definitely starting to get it. A slight change in packaging won’t fool anyone.”

In addition to raising awareness, here is what some are doing to get by:

1. Pay special attention to prices and quantities

It’s more important than ever to pay attention to price and make comparisons between stores when grocery shopping, Lee said.

“You could throw a dollar here and there, which will have a huge impact over time.”

Kara added that he now pays more attention to the price per gram of food products.

“Something may seem cheaper, but the price per gram is higher than the same product which is more expensive,” he pointed out.

2. No shame in “nameless”

Another way to combat shrinkage could be to abandon your loyalty to particular brands.

Jarratt said when he noticed an item had shrunk, he would move on to another brand.

“For example, instead of buying Quaker’s oat bars, I’d rather buy General Mills’ Nature Valley bars, which at least still make me feel like I’ve eaten something,” he said. he declares.

“I can also buy a ‘no name’ brand granola bar which is cheaper than other brands, and still somewhat filling as a snack.

He observed that smaller, lesser-known companies may have raised prices, but product sizes appear to have stayed the same.

“I would buy from businesses like that and, where possible and affordable, from local businesses as well.”

3. Consider buying in bulk

Valladares, the financial adviser, said that buying in bulk would generally allow you “to get a discount on the overall purchase”.

“It’s because retailers know they will sell more of the product and are willing to give a price reduction,” she explained.

“It also allows you to take advantage of economies of scale – the unit cost of the product decreases as the quantity increases.”

It’s always a good idea to compare the unit price before making your purchase.

Claudia Valladares

Financial Advisor

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