January 13, 2011
Looking at the rows and rows of products lining supermarket shelves, it's nice to see that at least some prices haven't risen -- er, well, actually, many have.
Look at the package that the product comes in, and it becomes clear that stickers aren't telling the whole story.
Major manufacturers of consumer goods are once again coping with rising commodity costs by cutting back on portion sizes, chipping away a few ounces here and taking out a few slices, thus making the customer pay more.
So, for millions of Americans, the net effect is just as costly.
Ivory dish detergent has dropped its 30-ounce bottle to 24 ounces, a 20 percent reduction. A can of Hills Brothers coffee that once held 34.5 ounces now contains just 27.8 - a 19.4 percent cut.
Manufacturers say such moves are their best option for coping with costs that are soaring, not only for the product, but also for the materials that go into the packaging. Those costs - from commodities to fuel - are expected to continue climbing through 2011.
"Your raw materials are going up. Something's gotta give," said JoAnn Hines, a Georgia-based packaging industry consultant.
Consumers respond much less negatively to a portion reduction than a price hike, companies contend. Consumer advocates counter that's because consumers are less likely to notice a stealthy downsizing - Scott paper towels, for example, have gradually been shrinking by just a few tenths of an inch, year after year.
Companies often attempt to "ease" a downsizing in - increasing the indent on the bottom of a container of ice cream; decreasing the thickness of plastic wrap.
If they simply raised their shelf prices, companies say, consumers would quickly jump to a cheaper brand.
Yet that mentality hasn't stopped some companies from increasing prices in recent months, especially when it comes to such breakfast staples as bacon, bread, eggs and milk, according to the American Farm Bureau.
In this month's assessment of 16 typical food items for the third quarter of 2010, the agency found that the total average price was up $4.07 - about 10 percent - compared with the third quarter of 2009. Bacon was up 44 percent, eggs 4 percent, whole milk 10 percent and sliced deli ham 11 percent.
Increasingly, though, consumers get most upset when they feel they are being hoodwinked by shifty package sizes, Hines said. Their ire is being amplified by the broad platform offered by the Internet and social networking sites.
"People love negative stories about packaging, so it starts to spread like wildfire," she said.
And while downsizing is nothing new, the latest round is coming as consumers are contending with once-in-a-lifetime financial worries. On the bright side, Americans spend less than 10 percent of their disposable income on food, according to the USDA - the lowest in the world.
Looking at the rows and rows of products lining supermarket shelves, it's nice to see that at least some prices haven't risen -- er, well, actually, many have.
Look at the package that the product comes in, and it becomes clear that stickers aren't telling the whole story.
Major manufacturers of consumer goods are once again coping with rising commodity costs by cutting back on portion sizes, chipping away a few ounces here and taking out a few slices, thus making the customer pay more.
So, for millions of Americans, the net effect is just as costly.
Ivory dish detergent has dropped its 30-ounce bottle to 24 ounces, a 20 percent reduction. A can of Hills Brothers coffee that once held 34.5 ounces now contains just 27.8 - a 19.4 percent cut.
Manufacturers say such moves are their best option for coping with costs that are soaring, not only for the product, but also for the materials that go into the packaging. Those costs - from commodities to fuel - are expected to continue climbing through 2011.
"Your raw materials are going up. Something's gotta give," said JoAnn Hines, a Georgia-based packaging industry consultant.
Consumers respond much less negatively to a portion reduction than a price hike, companies contend. Consumer advocates counter that's because consumers are less likely to notice a stealthy downsizing - Scott paper towels, for example, have gradually been shrinking by just a few tenths of an inch, year after year.
Companies often attempt to "ease" a downsizing in - increasing the indent on the bottom of a container of ice cream; decreasing the thickness of plastic wrap.
If they simply raised their shelf prices, companies say, consumers would quickly jump to a cheaper brand.
Yet that mentality hasn't stopped some companies from increasing prices in recent months, especially when it comes to such breakfast staples as bacon, bread, eggs and milk, according to the American Farm Bureau.
In this month's assessment of 16 typical food items for the third quarter of 2010, the agency found that the total average price was up $4.07 - about 10 percent - compared with the third quarter of 2009. Bacon was up 44 percent, eggs 4 percent, whole milk 10 percent and sliced deli ham 11 percent.
Increasingly, though, consumers get most upset when they feel they are being hoodwinked by shifty package sizes, Hines said. Their ire is being amplified by the broad platform offered by the Internet and social networking sites.
"People love negative stories about packaging, so it starts to spread like wildfire," she said.
And while downsizing is nothing new, the latest round is coming as consumers are contending with once-in-a-lifetime financial worries. On the bright side, Americans spend less than 10 percent of their disposable income on food, according to the USDA - the lowest in the world.
Closed November 2010
341 Meeting 12-16-2010 
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