The Incredible Shrink Pack

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Has anyone noticed this recently? Your favorite brands are getting smaller and smaller, but the price stays the same.

Consumers are really starting to pay attention to “product reduction”. I first noticed it in my yogurt cup, but thought it was less calorie anyway, but lately I see a lot of different products going down, but the prices stay the same and in some case, the content of the products decreases, combined with an increase in prices.

This is not the first time this has happened. If any of you have old cookbooks, you will notice that the recommended amount of some products has changed. Especially when you are cooking and need a and a piece of something to complete the recipe. A cup of something is still a cup, however, so standard weights and measures still apply.

We saw the shrinkage of the detergent bottle (Ultra detergents) some time ago, as well as the alleged claim to save the environment with less packaging. The detergent is concentrated, requiring less packaging material to make the bottle and less shipping costs. The real truth, however, is that it was a win for the CPG companies and packaging manufacturers, not the consumer. You’re actually paying more per wash with the newer detergents rather than less. Looks good for the environmental packaging spin.

But enough sour grapes on something that has become commonplace, the wrappers are now shrinking to meet the cost of inflation. The price of raw materials is skyrocketing and companies are looking for ways to offset the rising costs. One of the easiest ways is to cut down on the amount of product inside while keeping the price the same and hoping consumers won’t notice.

Sorry, but now we have a savvy customer reading labels and taking notes. Not only read them, but they compare similar products. Branded merchandise was already losing ground to private label products, even more so with the economic downturn. If your product is shrinking and the consumer is not satisfied, they will look for an alternative, especially if it is cheaper.

There are other cost saving options when it comes to packaging, however. Some companies do what is called “lightness”. This reduces the amount of packaging material used. I’m sure you’ve seen how the thickness of your water bottles has decreased or how you can now squeeze your beer or soda can with one hand. This is because manufacturers have found a way to remove the packaging materials while maintaining the structural integrity of the packaging. Packaging technology has new and improved materials that make this possible. It’s important to note, however, that there is a fine line between reducing material costs and packaging failure. If it does not reach the consumer in good condition, it is a disaster.

Another way to reduce packaging costs is to reconfigure the packaging to be more cost effective. That is, designing a product in such a way that it takes up less space on the store shelf or maximizes palletizing and shipping or transportation by being a better shipping unit. A good example is the square milk bottle introduced by Wal-Mart where not only can a square bottle get more on the shelf compared to a round bottle, but it is also more cost effective shipping. This redesign of the bottle is a victory for Wal-Mart considering the enormous amount of money saved by making this change. A note of caution when thinking about a radical overhaul of an item of commonplace, the jury is up on consumer acceptance of the square milk bottle. Have you ever tried to pour one?

Given consumer awareness of the incredible shrinkage of packaging, a smart marketer would look for ways to deliver more value, not less. Redesigning, lightening or just keeping the same amount of product are all options to win the hearts and minds of today’s consumers in brand loyalty, that’s not what it used to be and once it is. ‘they’re gone, they might never come back.

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