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Winnipeg Free Press - PRINT EDITION

Research finds food packages are getting smaller

By: Geoff Kirbyson

Posted: 02/12/2011 1:00 AM | Comments: 0 (including replies)

IF you've noticed a little extra room in your trunk after your weekly trip to the grocery store, you're not hallucinating.

The package size of many products, such as margarine, yogurt, orange juice, ice cream, granola bars and soap has shrunk in recent years while prices have largely remained the same, according to new research coming out of the University of Guelph.

"Cadbury Easter eggs have shrunk 12.8 per cent in the last four years," said Sylvain Charlebois, a professor of food distribution and policies at the U of G.

He said there's nothing legally preventing processors and distributors from changing their packaging sizes. He described the practice as "deceiving" but said it's understandable because of the mountain of evidence that suggests price is the No. 1 driver for consumers.

"They're afraid to scare consumers off," he said.

Charlebois said food retailers set their price points based on research that tells them how much consumers are willing to pay. Even though demand for food is inelastic, producers fear that consumers will respond to higher prices of their favourite goods by buying less expensive -- and less profitable -- alternatives.

The practice of shrinking package sizes has been going on for a couple of years, according to Nancy Bagworth, Toronto-based vice-president of communications at Food and Consumer Products of Canada.

"As commodity prices have started to increase, some companies have reduced the size of their products in order to maintain the costs (at a certain level) so they don't have to pass that on to the retailer and the consumer," she said.

Robert Warren, a marketing professor at the University of Manitoba, said the practice has been going on for even longer -- remember how big chocolate bars were back in the 1970s? -- but it has really picked up in the last couple of years.

"When the economy softened in 2008, companies felt they couldn't raise their prices so they swallowed the input cost increases themselves, but they made the product smaller. For the last 20 years, they've been making things smaller as a way to boost profit margins," he said.

"You're getting less for the same money. Your value has decreased."

In addition to rising input costs, such as sugar, Bagworth said food producers are also having to pay more for transportation because of higher gasoline prices, which is also factoring into the smaller packages.

She said the process is completely transparent as when a container is reduced, its exact size is still printed on the package.

Charlebois said smaller packages aren't necessarily a bad thing. In fact, he said 38 per cent of all food bought at grocery stores, specialty shops or in restaurants in Canada gets thrown out.

"In a nutshell, we are buying too much food," he said.

Sobeys, Loblaw and Canada Safeway declined to be interviewed for this story as they said they don't determine the packaging size of goods from food manufacturers and suppliers.

Charlebois said his research also shows that consumers are willing to spend more time buying food than they did previously. For example, revenue at specialty stores was up 10 per cent in 2010 while receipts at convenience stores were down four per cent.

geoff.kirbyson@freepress.mb.ca

Republished from the Winnipeg Free Press print edition February 12, 2011 B4

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