By Will Novosedlik

This story was originally published in the Fall 24 issue of strategy magazine.

Shrinkflation – as you likely know by now – is the practice of reducing a product’s volume-per-pack while leaving the price the same. It’s usually done in response to cost increases for manufacturers. And while the last couple years have seen an uptick in package downsizing, consumers are taking notice, prompting some brands to respond and even make amends.

In October, PepsiCo in the U.S. started putting more chips in some of the bags for snack brands Lay’s, Doritos, Tostitos and Ruffles. The CPG co. is calling them “bonus bags” and they will contain 20% more chips for the same price as standard bags, but only in select locations. Meanwhile, Domino’s Pizza, in an effort to show that it doesn’t participate in shrinkflation, launched the “Moreflation Deal,” a 30-day promotion which allows online customers to upgrade a pizza to a large – for free – when they order two or more medium pies.

Whenever shrinkflation happens, consumers tend to hold retailers accountable. And who can blame them? Statistics Canada reports show that retailer profit margins have increased by 75% since 2020. The reputation of retailers is on the line, which is why French-based Carrefour this year placed signage around food brands – specifically PepsiCo – warning consumers of the practice and openly attempting to shift the blame to manufacturers.

Shrinkflation is a deceptive tactic that has been used by companies as a way to keep food prices low for years. But it’s also a practice that’s gone relatively unnoticed until now. According to 2023 data from Caddle, 44% of consumers reported “shrinkflation” among baked goods, compared with 39% in 2022.

“Nobody really talked about shrinkflation before…the rise of smartphone usage and social media,” Dr. Sylvain Charlebois, senior director, Agri-Food Analytics Lab at Dalhousie University points out. “We’ve now created this archive of online data that allows us to share and compare. Consumers are now wise to what used to go unnoticed.”