The incredible shrinking product!

Here we go again. Last week I was looking through a Sunday circular. On the front page, sugar was shown on sale for $2 a bag. After getting over my initial shock that this was a sale price, I knew that in the current climate, 40 cents a pound was a good deal. Then I looked at the ad more closely and noticed that the package weight was four pounds, not five! A full 20% of the package was removed.

Food companies are smart. They know that most people who pay attention are price conscious, but may pay little attention to the weight of the packaging. Coffee companies started this trend many years ago, moving from 1lb of coffee to smaller quantities, 12 or 14oz. Ice cream companies followed and now we get 1.5 quarts instead of a half gallon. Dammit, I want my half quart of ice cream back! You may have noticed when opening a box of cereal or a bag of chips that you might feel deceived, as if someone had gotten to the box or bag before you, had their fill and then resealed it. I hate opening a large box of cereal only to find that it is only 50 or 60% full. It’s a waste of packaging, shelf space and hauling resources.

I don’t know which annoys me more, the fact that the product companies think we are too stupid to notice or the fact that the majority of consumers don’t notice.

Take notice! I’ve been watching the commodities markets for at least a year now. These are the markets where raw materials are traded and they provide a very good indication of what we will be paying for goods in the future. Most commodities prices rose dramatically in 2010, but cotton was chief with a price increase of over 90% (click the chart included in the link to enlarge). I’m not sure how clothing manufacturers are going to deal with this sharp increase. They can’t make the product size smaller to save raw materials like the food makers can, so watch for steep increases in clothing prices this year. You are also going more smaller packages, probably sold to you as better for your health. The restaurants have done it in recent years (you think the smaller portions were really about your health?), and I think we may very well see the same in the grocery store.