The case of the shrinking groceries…

One year on from the horsemeat scandal and the ‘scrutiny of our food supply chain’ comes in at No.5 in Marketing Week’s trends for the year ahead (One of the 14 pieces of intelligence a marketer must know for 2014).  Ok… this sounds fair but my feeling is that we are happier scrutinising to criticise than to accurately inform ourselves. Don’t get me wrong, I am certainly not excusing including ingredients in products that aren’t on pack! But will the scrutiny help in our acceptance of other challenges our brands face?

We hear it everywhere, the case of the ‘shrinking groceries’ – a manufacturer’s conspiracy to rip us off!  Less drink in a carton for the same price, fewer biscuits or burgers in a pack for the same price, fewer dishwasher tabs in the pack for the same price or even a reduced size meal – you see where I’m going…  Incidentally is it just us in “Rip-off Britain” feeling this way or is this media theme just as popular in “Rip-off Spain” or “Rip-off Russia”? – Why should we feel as though we own ‘rip-off’ culture?  I’d be interested to know…

I digress.  No, this is not a new story, product size reduction has always been used to increase prices. Of course I, like you, want value for money. But the media message continues that we’re not getting value in a climate where our purse strings need to be tightened. The Independent reported “Major brands and retailers are “engaging” in underhand product shrinking to raise profits”.  Poor us, here we go again, feeling deprived and ripped off.

But what I struggle to understand is why the shrinking sizes are seen to be so underhand?  We’re all aware of the increasing cost of living in all other areas so why don’t we understand that the prices throughout the entire supply chain are increasing – resources cost.

At least with the media attention fmcg companies are receiving, when many of these ‘culprits’ are asked to comment, they now have the opportunity to explain the obvious, that they, like us, are challenged by the increasing cost of commodities, fuel etc.  We see organisations going out of business every day as they try to face their challenges while keeping their customers happy. There are people in jobs behind these brands, struggling not only to maintain current custom but to commercialise some excellent innovation.

We have first hand experience supporting our clients in facing such challenges which has been reflected in much of our work in product development in recent months. Through our complete product mix evaluation service, from co-creation and product development workshops through to full consumer testing and value modelling we see where consumers prioritise. With the focus on the trade-offs consumers are prepared to make we determine where compromises can be made. Are we prepared to pay more? Would we prefer less/fewer for the same price? Would we rather compromise on the quality of the ingredients? What can the product look like within the confines of budget? Will we just buy more when it’s on promotion? The list goes on… Our clients don’t want to launch products that are seen to be poor value for money – they wouldn’t sell!

What so riles us about shrinking groceries? We have constant trade-offs to make as our world changes. We know prices are increasing and I for one would rather maintain the cost of my groceries week-on-week in order to help pay for the increase in my energy bills. We may eat fewer biscuits, smaller portions, drink a smaller glass of juice, buy a lot more on promotion – yes it may be annoying but that’s our choice based on all that’s offered to us. Surely this will also help maintain those New Year resolutions.

I would therefore argue against the theory that we are being ripped off by this industry. No one will ever ‘like’ increasing prices (in whatever format) and it’s very hard to accept but it’s a given. Under such scrutiny the key will be more transparency so that we are not comparing apples and pears but will we react fairly to the knowledge? Let’s face it, we all now know that we could all have bigger burgers if they contained horse! Do we really want that?

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Sara Spinks
01962 842211
Article date - 27/01/2014
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