Shrinkflation at its peak: Price didn't go up? Check how much is left in the package

We know the product. We know what the cereal box looks like, we recognize the coffee jar from afar, and we can find the Bamba almost with our eyes closed. We also think we know roughly how much the product is supposed to cost. But do we really know how much is inside? This is a question that becomes more important as supermarket shelves fill up with packages of different sizes, sometimes in the same design, the same color, and the same brand.

Sometimes it's a shrinkage of an existing product. Sometimes it's an additional, smaller package. And sometimes it's a strategy that allows presenting a price that seems lower without the price of the product per 100 grams or 100 ml actually going down. The price looks good. The packaging is familiar. And the brain already fills in what's missing.

The packaging we remember is not necessarily the packaging we buy.

Kriyot cereal is a good example. For years we knew the large package weighing 750 grams. Later it changed to 686 grams. 64 grams may sound negligible, but it is more than 8% of the product. Alongside it, there is also a 375-gram package, in the same graphic language and with a familiar look.

The consumer passing by the shelf does not necessarily stop to calculate. He sees Kriyot, recognizes the box, and looks at the price. The eye might recognize that it is a smaller package, but does not always process that it contains almost half the amount of the large package we remember. This is not just a question of how many grams have disappeared. It is a question of consumer memory. We remember the packaging much better than we remember the weight.

Is the coffee cheaper, or is there just less coffee?

Elite Turkish coffee illustrates a different mechanism. 100 grams is the package most identified with the product. It is also a product that is very difficult for a retailer to play with in terms of price, because the public knows it and the chains compete for it aggressively. Alongside this package, one can also find 85 grams. From the manufacturer's point of view, it is a different product. From the retailer's point of view, an opportunity has been created to present a different price. And from the consumer's point of view, it is almost the same package of coffee.

If 100 grams are sold for 10 shekels and next to them 85 grams for 9 shekels, the eye sees a shekel less. But 85 grams for 9 shekels are actually about 10.59 shekels per 100 grams. On the sign, the price has gone down. In practice, the price per unit of measure has gone up by almost 6%. And here lies the whole story. You don't always have to raise the price to make a product more expensive. You can simply change the denominator.

In instant coffee, we also see the same phenomenon. Jars we are used to identifying with 200 grams sometimes appear in 190 grams. Nescafé Taster's Choice previously launched a Barista version of 180 grams instead of 200. In Jacobs coffee, one can find 190-gram packages that look very similar to the familiar jar. 10 grams here, 20 grams there. In percentages, it is really not negligible. 750 ml become 650, and in shampoo, sometimes a third of the bottle disappears.

Also in dishwashing liquids, one can find packages of 650 ml instead of 750 ml. 100 ml less is more than 13% of the product. The bottle still looks familiar, the color is the same, and the brand is the same. But if the price has hardly changed, the price per 100 ml has actually gone up.

In toiletries, the picture is even more confusing. The Israeli consumer has become accustomed to shampoo and conditioner bottles of 700 to 750 ml, but in various chains, one can also find packages of 400, 450, or 500 ml in similar designs. Between 700 and 450 ml, there is a gap of 250 ml. More than a third of the product amount. But when the two bottles are not standing right next to each other, most of us don't remember if it was 700, 500, or 450. We remember the bottle and the price.

Even the can is no longer the same can.

The classic can that the Israeli knows is 330 ml. But today one can also find 250 ml cans. They look very similar, but contain almost 24% less drink. The same principle also enters the bottles. Alongside the sizes we knew in the past, more products of a liter or 1.25 liters appear. Here too, there is no problem with the very existence of a small size. Sometimes the consumer even prefers it. The question is whether he understands that the price he is comparing refers to a different amount.

Eight snacks for 30, but how much snack did we get?

In salty snacks, the story is particularly prominent because of quantity promotions. Classic Bamba is known in an 80-gram package, but one can also find 60-gram packages. 25% less. In Bisli, one can find 55 grams instead of 70. More than 21% less.

Now stand in front of a sign that says: 8 snacks for 30 shekels. How many consumers will check if the Bamba is 80 grams or 60? Is the Bisli 70 or 55? Very few. From our point of view, we bought eight bags. But if each bag is smaller by tens of percent, the promotion can look exactly like the promotion we remember, while the amount of product we received is significantly lower.

"HaShahar" kilo spread? Check again.

"HaShahar" spread also illustrates how much memory works faster than calculation. We are used to packages of 500 grams and a kilogram. But in Osher Ad, there is also a dedicated package of 900 grams. 100 grams less, 10%. The consumer sees a large jar, recognizes the product, sees an attractive price, and the brain completes: "Kilo of 'HaShahar' at a good price". Only it's not a kilo. And the same phenomenon is also found in Yad Mordechai honey with a 900-gram jar compared to a kilo.

Also in Heinz ketchup, there are different sizes between chains. 700 ml, 900 ml, and other formats can look like part of the same product family, but the difference in quantity is significant. The same thing in milk. We are used to thinking "a carton of milk equals a liter", but coffee milk from Tnuva comes in an 800 ml package and sits next to other dairy products. 20% less than a liter. Everything is written on the package. The question is how many of us actually read.

The world is actually moving to smaller packages.

The fascinating thing is that the phenomenon is not just a way to deal with costs. Food manufacturers themselves identify a change in buyer behavior. Mondelez, the manufacturer of Oreo, Cadbury, and other brands, reported in July that it is adapting its product basket to a growing demand for smaller package sizes. In the background is a consumer who is also looking for value, but finds it harder to meet the total expenditure of products and large packages.

Other large food and beverage companies, including PepsiCo, have also recently expanded their reference to smaller packages and more accessible prices, against the backdrop of pressure on household budgets.

There is a paradox here. A small package can help a family spend less money on the current purchase. If I don't have 25 shekels, a product for 15 shekels is more accessible to me. But sometimes the same consumer will pay more for every 100 grams. That is, someone who tries to spend less might end up paying more for the same cumulative amount.

And in India, they decided that the consumer should not have to solve problems in front of the shelf.

In India, they decided this year to deal with part of the problem in an interesting way. In June, the government ordered manufacturers and importers of edible oils to switch to standard package sizes, with the aim of making it easier for the public to compare prices between brands. Instead of a wide variety of non-uniform volumes, nine standard sizes were defined, from 200 ml to 20 liters. The rules apply to both local production and imported oils. The government explicitly explained that unusual sizes make it difficult for the buyer to understand which brand really offers the better value.

This is an interesting move because it changes the point of view. Instead of telling the consumer "look better", they tell the manufacturer: allow the consumer to compare easily. It is not certain that Israel needs to copy the Indian model and dictate sizes for every food category. But the question is definitely relevant for us too. How many different sizes are really necessary? And when does variety become a tool that makes price comparison difficult?

The manufacturer profits, the retailer gets another tool.

There is also a clear commercial logic here. When a manufacturer reduces content by 15% or 20% and lowers the purchase price for the retailer by a smaller rate, he can improve the product's economics without noticeably raising the price on the shelf. But the retailer is not innocent in the equation either. A product of a new size is a product that is harder to compare one-to-one with a competitor. If everyone knows how much 100 grams of coffee should cost, the competition is clear. When one chain has 85 grams and the other 100, the prices on the sign are no longer immediately comparable.

Thus, a situation is created where the manufacturer gets greater flexibility, the retailer can present a more attractive price, and the consumer sees a lower number. Everyone wins. Except for those who don't notice that the amount has changed.

But everything is marked, so what's the problem?

On paper, there is a solution. The weight is written, the volume is written, and in relevant cases, there is also a price per 100 grams or 100 ml. But here regulation meets human behavior. We don't enter the supermarket like analysts. We are in a hurry, holding a list, answering the phone, looking for a promotion, and making dozens of decisions in a short period of time. Don't expect the buyer to calculate if 85 grams at 8.90 are more worthwhile than 100 grams at 9.90. It simply won't happen for most of the public.

Also, marking "new package" or "new content" might be legal and clear, but after a few purchases, we get used to it. 60 grams become the new Bamba. 650 ml become the new dishwashing liquid. 190 grams become the coffee jar we know, and the old memory is erased. This is perhaps the most significant point in the whole story.

Maybe we need to redefine what transparency is.

Transparency is not just the fact that the number appears somewhere. True transparency is that the consumer is able to understand it at the time he makes a decision. If you have to bend down to the shelf, read a small number, remember how much the product contained in the past, and open a calculator, the information might exist, but the comparison is not really simple. Therefore, next time you ask "how much does the product cost?", it is worth adding one more question: how much product am I getting? Because sometimes the price has really gone down, and sometimes nothing has been discounted - they just changed the denominator for us.