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Nutella the Latest to Join Shrinkflation Nation

The Ferrero-produced product will soon reduce the size of its 400g jars in the UK and Belgium without altering the product price, in what is becoming a common move to cut costs.

Nutella to reduce 400g size due to production costs.
Nutella to reduce 400g size due to production costs.

According to recent reports, Nutella has confirmed that it will reduce its 400g jars to 350g due to rising production costs.

What is Shrinkflation?

Shrinkflation is not new to the marketplace. It is the process of reducing product size, quantity, or quality (via reformulation), while the price of said product remains the same or even increases.

New Coke: 'One of the Most Memorable Marketing Blunders Ever'New Coke: "One of the Most Memorable Marketing Blunders Ever"Reformulating products does not usually go over well with the consumer. (Think 1985’s “New Coke,” attempt at reformulation that even Coca-Cola refers to as “The Story of One of the Most Memorable Marketing Blunders Ever.” It’s worth noting that taste-tests prior to the change showed a preference for New Coke over Original, but consumer sentiment ruled.) Also, in today's age of social media, consumer discontent travels fast.

Cost vs. Weight

Furthermore, most companies do not want to raise prices in order to meet rising production costs because consumers are more likely to make a decision based on price than changes in weight, so downsizing the product is the remaining viable option. Product information is clearly marked on the packaging, so Shrinkflation is not overtly misleading the consumer, but comes down to if the consumer notices the change or not.

An article by Sylvain Charlebois, Professor of Food Distribution and Policy at Dalhousie University in Halifax, said that in the US an estimated 15% to 20% of all packaged food products have been downsized in the last five years.

Multipacks of Cadbury chocolate bars will also shrink by the end of 2021, in what Mondelez attributes to a calorie reduction move, although consumers are skeptical of the reasoning since according to a BBC article, the single-serve bars will retain their current size, "offering consumers different portion sizes for different occasions." Mondelez also changed the size of Toblerone bars from 200g to 150g in 2016 but ended up going back to the 200g size in 2018.

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