Brands of food you fondly favor could momentarily cease their strategic psychological manipulations.
When you start noticing a change in the flavor or portion size of your favorite food, it's not just a random occurrence.
Faced with increasing costs, numerous food companies have resorted to two shady tactics: shrinkflation and skimpflation.
Shrinkflation involves reducing the size or quantity of a product, keeping the price the same – or even increasing it, in some instances. On the other hand, skimpflation involves making subtle changes, such as replacing high-cost ingredients with cheaper alternatives, to save costs.
These tactics have sparked outrage among consumers who feel misled, and rightfully so. However, when companies pass on price hikes directly to consumers, there's also a wave of backlash if you ask McDonald's and others.
Once upon a time, companies would ignore customer complaints or release carefully crafted statements to smooth things over. Their messages would often convey sentiment like: We understand your anger, but hey, we're struggling too. By the way, the price increase isn't as much as people claim.
But recently, companies like McDonald's, Wendy's, and Burger King started experiencing revenue declines. In response, they introduced value menus, promotions, and pledged to be more mindful of price hikes.
Although complaints about shrinkflation and skimpflation persisted, it took years for companies to acknowledge them. But now, things are starting to change.
Followers of Whole Foods' famous Berry Chantilly Cake took to social media to voice their concerns about ingredient changes. Responding swiftly, Whole Foods announced that the cake would return to its original recipe.
But wait, there's more!
PepsiCo, the owner of Lay's, Doritos, Tostitos, and Ruffles chips, announced it would add more chips to certain lighter bags without increasing the price. The company explained that Tostitos and Ruffles "bonus" bags would contain 20% more chips for the same price in selected locations. Furthermore, PepsiCo added two additional small chip bags to its 18-bag variety pack.
The timing of PepsiCo's decision is curious, considering customers have been complaining about shrinkflation for years.
However, customers continuing to buy these goods despite complaining provides no incentive for companies to curtail shrinkflation. And it appears PepsiCo's customers have reached their breaking point, with snack sales and volume both decreasing in the last quarter, according to the company's latest earnings report.
So, how can they maintain the same price while adding more chips?
The reason lies in the snack's high profit margins. According to Chris Hydock, a marketing professor at Tulane University's Freeman School of Business, adding a few extra chips is a low cost for PepsiCo, especially with many of its own input costs having lowered since the pandemic. And while this move offers more value to the consumer, PepsiCo did not respond to CNN's request for comment.
While PepsiCo could have reduced prices to appease customers, doing so could set off an "If You Give a Mouse a Cookie" cycle, leading to more expectations for discounts and promotions.
This move by PepsiCo is likely to prompt other snack manufacturers to follow suit, suggesting the end of shrinkflation in the food industry. Still, food companies are unlikely to abandon mind games altogether.
"I would expect (food companies) to shift their strategy and find a new mind game to play that maybe people are not quite looking out for yet," Hydock said.
In light of customer backlash, numerous food companies have resorted to cost-cutting measures like shrinkflation and skimpflation to maintain profit margins. For instance, PepsiCo, the owner of Lay's, Doritos, and Tostitos, announced it would add more chips to certain lighter bags without increasing the price, offering more value to consumers.
