Yaa is a Senior Behavioral Analyst at Canvas8. Growing up across three continents, they are always looking for the bigger picture and cross-cultural meaning-making. In their spare time, you can find them studying herbal medicine or by the ocean, possibly surfing if it's warm enough.

People are drawn to honesty and integrity in the post-truth era

Radical Transparency 

People are operating with a heightened perception of value

Critical Spenders

Ahead of the 2024 Super Bowl, US President Joe Biden released a video criticising snack-makers for 'ripping off' consumers by making products smaller while keeping prices the same. "Sports drinks bottles are smaller, a bag of chips has fewer chips, but they're still charging just as much," he said. "I've had enough of what they call 'shrinkflation'. It's a rip-off." 

President Biden | Twitter

It's a sentiment shared by many, with 46% of global survey respondents having noticed product sizes becoming smaller yet remaining at the same price point and 48% stating that they find this practice unacceptable. 

Ipsos

' is not a new phenomenon, but it's a growing concern for people as they navigate a tumultuous economic landscape. Indeed, 64% of US consumers say they're worried about it. 

CNBC

' – all of which are driving a sense among consumers that they're being treated unfairly by brands. Ioannis Evangelidis, an associate professor in marketing at Esade Ramon Llull University, has studied the consumer sentiment surrounding these practices. Canvas8 spoke to him about perceptions around shrinkflation and what brands can do to retain trust and loyalty.

Why is this topic important to understand?

Companies making products smaller isn't anything new. We know that instead of increasing the price of products, companies tend to make them snack-sized – think of Toblerone becoming smaller over the years as an example. I started noticing this when I bought products on the market myself. I used to buy feta that was 200 grams, and now it's 150, but they haven't updated the price. As a consumer, my response was: 'Is it really fair to decrease the product size? I don't believe this goes unnoticed, so it feels like deception'.

So, I wrote this paper because there isn't much work around shrinkflation. There are papers that show that if you actually increase the price, you'll lose fewer sales. However, some people argue that consumers prefer that you make a product smaller than increase the cost. So, I wanted to focus on not really what people choose but how they judge it once they become aware of this practice. Is it seen as fair, or is it not fair?

How did you go about conducting your study?

In this research, I gave people different scenarios of companies (chocolate manufacturers, an orange juice producer, or a toilet paper company) facing increasing costs, and I randomly assigned respondents to certain groups. One group got information that the company decided to increase the price of their products because their costs had increased. In another group, we told them the company chose to decrease the product size. After being presented with these scenarios, we asked them whether this was fair or unfair.

When we talk about fairness, we mean: is it permissible? Is it acceptable? Is it fine with you? Would a consumer see this and think the company is doing them wrong? It basically sets the rules or the boundaries of what companies can and cannot do, so you can imagine if most people think it's unfair, then specific actions should not be permissible, or companies will think twice before doing them. This could be for a variety of reasons too: perhaps it messes up your meal planning if you used to buy 500g of pasta for a family dinner, and now you're only getting 450 grams, so you need to purchase more than before.

It's a simple methodology, and the study was inspired by actual company product examples. I am quite active on Reddit, and there's a subreddit called #shrinkflation where consumers document pictures of products becoming smaller with before and after images. When I started doing the paper, this thread had a few thousand people, and now it has more than 100,000 – it's growing by the day, and some of my study scenarios were based on products that I saw there. I didn't name the brands, though.

The basic phenomenon of shrinkflation aversion is that people find decreasing the product size more unfair than increasing prices – even if they lead to exactly the same price per unit of product. More specifically, the study showed that many people think decreasing product size is deceptive and think companies do it because the consumers won’t notice. On the other hand, brands raising prices is seen as a more transparent action.

When we asked people to explain why they felt it was unfair, it wasn’t really because it messed up their planning. It’s because people think the company or brand is trying to be sneaky. I did another experiment around a firm explicitly telling consumers it had decreased the packaging size and asked participants how they felt about that. People were perfectly fine with it, even though it equally referred to a price increase. When communication becomes transparent and explicit, people believe shrinkflation is more fair.

Was there anything that really surprised you from this research?

One finding that didn't make it into the paper was a scenario where a company did a poll and asked consumers, 'Would you rather we increase the price or make the product smaller?' That kind of worked – meaning people liked that the company asked them, but at the same time, they're like, 'Why are you asking me?' Another thing I did was look at whether people would find shrinkflation more fair if every company was doing it – would it become more acceptable? Unsurprisingly, people still hated it, but maybe, in the long term, they would get used to it.

There's another term – skimplation – where companies reduce the quality of a product. I saw an example recently with a coffee brand that used to be 100% Colombian coffee, but it's not anymore. It's using a blend of inferior coffee, and they've taken the '100% Colombian coffee' off the packets. That's something else that's happening that's not transparent practice.

Looking ahead, this research suggests there needs to be some kind of regulation. Some European countries, such as France and Germany, are looking to take action on this kind of inflation and at least enforce some control over it. We need more platforms that document it and build awareness, so I'm quite fascinated to see if there will be some protection for consumers, because they want it.

. As a result, one in six Britons have switched where they do their weekly shopping from big mainstream supermarkets to discounters, while half of Americans are now proud to call themselves a bargain-hunter, and 67% say that getting a good deal makes them feel better about spending money. 

YouGov

Good News Network

 To cater to more sensitive budgets and perhaps counter the disdain towards practices like shrinkflation, brands are pioneering new forms of consumer care. Superdrug hired 

 for over 150 of its own-brand items to make everyday shopping more affordable.

Consumer-centric value narratives are key

As the research highlights, communication transparency is important when mitigating the negative effects of shrinkflation aversion. There's an appetite for this type of transparency to extend into supply chains, with two out of five shoppers (43%) across the US, UK, France, China, and Japan saying that supply chain transparency is important to them when buying clothing. 

Avery Dennison

For brands, this could present an opportunity for greater candour when talking about the pressures their manufacturing might be under (e.g. increased cost of raw materials, production price hikes) but, importantly, ensuring that the purpose of this communication includes a benefit or value for the end consumer. That is likely to become even more critical as some brands (especially CPG brands) step up to take advantage of upholding commitments to consumer-centric values. Scott & Jon's, for example, announced that its shrimp rice bowls would have 20% more product in each package in an explicit bid to fight shrinkflation. 

PR Newswire

With some brands appearing – from the consumer perspective – to 'take advantage' of the economic situation to maximise profits, there's an opportunity for both public and private actors to advocate for consumers' best interests. While there are 

proposals for mandatory transparent labelling

 within the EU, some retailers are taking it to the next level. 

Bloomberg

 Take French multinational retailer Carrefour. It is utilising 

 to warn customers when a product has downsized and has even gone as far as 

 due to dramatic price hikes. For brands, this kind of action is crucial to retaining loyalty at a time when 

 shoppers believe brands participate in 'greedflation' – or actively using inflation as an excuse to hike prices. 

Food Dive

 of US adults say they're worried about shrinkflation

 Britons have switched where they do their weekly shopping from big mainstream supermarkets to discounters

of global survey respondents have noticed product sizes becoming smaller yet remaining at the same price, and 

 state they find this practice unacceptable

Shrinkflation aversion describes how consumers respond negatively to brands who downsize products for the same cost

The cost of living crisis is eroding brand loyalty, as people instead look out for bargains and value-maximising purchases

Leading with empathy and championing transparency can help brands rebuild trust with audiences, speaking to the need for support during the cost of living crisis

Ioannis Evangelidis is an associate professor in marketing at Esade Business School, Ramon Llull University. He studies consumers' decision-making, and his work has been published in leading marketing, management, and psychology journals. As an expert, his insights have been featured in popular media outlets, including 

Global

Behavioural Sciences

Ever noticed your favourite products get smaller but stay the same price? ‘Shrinkflation’ is having a moment. Canvas8 spoke to marketing professor Ioannis Evangelidis to understand how people are responding to it and what brands can do to communicate these changes fairly.

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