Daniel Quinn unpacks the underhand motivations behind shrinkflation and predicts an uprising against downsizing if FMCG brands don’t change their ways
FMGC brands are acting abusively towards consumers, and it can’t go on.
Many brands have been indulging in shrinkflation – reducing the weight or volume of a product while retaining the price – and ‘skimpflation’ – reducing the quality of ingredients. At an inquiry into fairness in the food supply chain, MP Cat Smith said that 77% of consumers had experienced shrinkflation and “felt like it is a con”. The consumer watchdog, Which?, has recently documented some of the worst cases from brands including Yeo Valley, Listerine and Lurpak. And last year’s CMA report highlighted that branded grocery suppliers “pushed up prices more than cost increases” and giants such as Kraft and Unilever faced uncomfortable questions from MPs on the Environment, Food and Rural Affairs Committee who suggested that what they indulged in was “greedflation”.
These tactics are sneaky and designed to mislead consumers. But what is worse is that many brands fail to take responsibility when challenged, and instead distance themselves from the practice or give disingenuous answers. A representative of Kraft Heinz even claimed that reducing the proportion of beans in a tin was “to make it taste better” and “to improve the quality of our product”. But the media are wise to it, consumers are wise to it and now the regulator is getting involved.
Brands need to stop this practice right now as it is damaging consumer trust and loyalty, both of which will be hard to win back.
What should brands do instead?
Everyone knows there is a cost-of-living crisis and that manufacturing costs have risen. Consumers understand that something has to give. But there are much better ways of offering value to consumers while maintaining margins than by just shrinking product sizes and hoping that nobody will notice.
First, brands could take the radical step of being open and transparent with their consumers. Go ahead and shrink the product if you need to, but make it clear on the packaging. You might just find that acting with integrity will be better for the brand in the long term.
Alternatively, offer different options. Rather than just, say, reducing the olive oil in your spread from 21% to 10% and pretending that the product tastes the same, how about creating a new, cheaper version and letting people who love the original make the choice to pay a little more for it.
Price is not the only ‘P’ in the marketing mix. There are so many other creative ways that brands can deliver a good deal for consumers whilst also covering increasing costs. Brands that can create elevated experiences across the 4Ps will enjoy greater margins and less dissatisfaction.
And cost isn’t the only way that consumers determine value. Brands need to explore how consumers perceive that price relates to size and volume, but also to other values such as quality, convenience, usefulness, taste, enjoyment, context and experience. Consumers are happy to pay more for products when there is a compelling benefit to them.
What this comes down to is that brands should invest more in consumer insight and analysis to create future consumer value. Consumers aren’t stupid; brands need to stop treating us as if we are.
Daniel Quinn is Head of Innovation at The Forge
Daniel has spent 25 years advising some of the world’s leading organisations on insight-fuelled growth strategy. His quest for commercial impact has seen him develop category-shifting profitable innovations in sectors as diverse as beer, premium spirits and consumer electronics through to charities, mining and fuels retail.
