Bad News Comes in Small Packages

Guest Post by Jeff Thomas

shrinkflation

There’s a change taking place in supermarkets – one that’s going largely unnoticed, in spite of the fact that it’s becoming a new norm.

Packaging for products, particularly foodstuffs, is getting downsized. Folger’s coffee, Chobani Yoghurt, Fritos, etc. – all are being offered in smaller packages than before.

The resizing is not dramatic; in fact, it’s so small – sometimes less than 10% – that it’s hard to imagine why they’re bothering to do it.

This is particularly true of items that come in plastic packaging. Gatorade, for example, has been reduced in size from 32 to 28 ounces, but the price is the same.

To the consumer, a change in the size of a plastic Gatorade bottle doesn’t raise an eyebrow, but for food producers, it’s a significant event. Each time a new bottle is designed, even if the change is very slight, new moulds must be designed and machined. And every machine in every factory across the country that produces the bottles must be fitted with new moulds. Then, the injection-moulding machine must be re-calibrated to insert a smaller amount of polyethylene into the mould, and the moulding time must be re-calibrated.

Injection moulding machines are notoriously temperamental, and it can take weeks or months to fine-tune them to perform consistently in continual production. Very costly.

While this information is boring for most of us, it’s of great importance to the producer of the product.

Resizing packaging is a last resort for any producer of goods. A simple downsizing is costly enough that he wouldn’t entertain the idea unless he’s backed into a corner and can’t do anything else. If an entire industry is downsizing products, it means something more concerning than just a few companies trying to remain competitive.

And, in fact, a writer for Consumer World commented recently that price increases and smaller packaging “comes in waves,” but that “We happen to be in a tidal wave at the moment.”

But, again, all this is small potatoes to the consumer – it’s not his problem. So why should we bother to think about the minutiae of food production when we have bigger issues to concern us?

Well, in actual fact, there’s no issue that’s of greater importance to us than the supply of food. Until recently, we’ve been able to be fairly complacent about food availability, as most of us have been accustomed to the shelves at the supermarket remaining full. But, recently, there have been a few scares. Some items have gone missing for several months. Certainly, the shortage of baby formula was important enough to have appeared on the evening news for several weeks.

But what if all food products were, without warning, in short supply? What if a percentage of the supermarkets began shutting their doors across the country?

Let’s back up a bit here.

In decades past, it was the norm for most major supermarkets to have their own warehouses, where backup stock could be stored. If, for any reason, shipments were delayed by, say, a snowstorm, the shelves could be restocked locally until the weather improved.

In addition, payment terms of 30 days net were not uncommon in the industry.

Markups, too, were substantial enough that items that were marked up 10%, 20%, or more could cover for those items that could not be marked up as much but were necessary as a draw to get customers through the door. A store owner might decide, “Put 5% on the milk, and we’ll get the shortfall back on the HäagenDazs.” 

But, over the last decade or more, the food industry has taken repeated economic hits. In each case, the industry has attempted to give the impression that there were no problems – that it has been business as usual. But, truth be told, the viability of the industry as a whole has degraded considerably.

The food industry has, for years, gotten by on a retail markup as low as 2% on most items. Also, suppliers are demanding three-day payment turnarounds in order to get by. In addition, the local warehouses that most supermarkets once maintained are largely gone. Supermarkets now rely on semi-weekly deliveries from wholesalers to keep the shelves full. There’s minimal backup supply.

What all this means is that the food industry, from the producers to the wholesalers, to the retailers, has no wiggle room left. At this point, the industry resembles a boxer who has given up and dropped his hands and is just waiting for the knockout punch.

It will come as no surprise to the reader that inflation is increasing due to dramatic government spending. In the last ten years, more currency has been created than in the previous 230 years put together. Dramatic inflation is unavoidable.

If significant inflation were to occur in any given month, food industry profits would be eliminated for the month. This now happens periodically in the industry, but it’s recoverable the following month. (The next shipment is marked up enough to cover inflation, and while the profit for the month in question is never recovered, the industry survives.)

However, if a mere three consecutive months of significant inflation were to occur, we might expect to see the lights going off in supermarkets across the country. Those that are the most heavily in debt would go first. They’d be followed in the following months by others for as long as the inflation trend continued.

If any nation were to lose suppliers and retailers in, say, shoes or washing machines, shortages would occur, and we would simply adjust. Our old shoes would go to the cobbler rather than being thrown out. We’d call the washing machine repairman if we couldn’t go to the appliance store and buy a new one.

But food is different. It’s the one product that must be replaced immediately. We cannot simply postpone our need for food for a period of weeks or months.

A decade ago, when I wrote that food shortages would take place in the coming economic crisis, unsurprisingly, few people took the notion seriously, as the warning had been made so early. But those shortages have now begun. They’re not yet serious, but we’re now seeing the warning signs.

Back then, I additionally projected that the shortages would become severe enough that food riots would take place and, worse, that famine would occur for the first time in living memory in the First World.

If there’s a shortage of shoes or washing machines – let’s say 10% or even 20% – we’d simply adjust. But if there’s a 10% or 20% shortage of food, it means that some retailers have folded and that a given area no longer receives food.

If producers, wholesalers, and retailers shut their doors in greater numbers, there is famine. It will be selective – that is – it will be greater in some areas than others.

And, of course, that’s a hard concept for us to wrap our heads around in an economy that until now allowed us to simply pop around to Burger King if we got a bit peckish.

So, the downsizing of a Gatorade bottle doesn’t mean that tomorrow, we’ll be without food. This is a mere symptom of a greater problem. But it’s a warning sign that we should be paying closer attention to an industry that has run out of wiggle room and may soon become unsustainable.

If and when that happens, the outcome will be far more important than any of the other economic concerns that we presently focus on.

Editor’s Note: It’s clear the Fed’s money printing is about to go into overdrive. The next round of money printing is likely to bring the situation to a breaking point.

That means we’re on the cusp of a global economic crisis that could eclipse anything we’ve seen before. Most people won’t be prepared for what’s coming…

That’s precisely why bestselling author and legendary speculator Doug Casey and his team just released this urgent PDF report on how to survive and thrive in this chaotic environment. Click here to download it now.

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Anonymous
Anonymous

The kosher tax on most processed food goods is probably also paid per unit sold, making this even worse.

Eddie
Eddie

I have noticed that most packages are the same size, but contents are smaller by 10%.

So Supermarkets and the makers are gaining an additional 10% profit.

Glad I prepped…………….

(I watch 1 item, Swanson chicken in a can. Last year $2 to $2.50 per 12.5 oz can.

now $3.50 to $5.00 per can – Walmart $7.50 and Kroger charges $10 for 2 can bundle)

Llpoh
Llpoh

Eddie – that 10% profit increase is not likely correct. In drinks, the most expensive part of the product manufacturing can be the label/ printing. Yes, they are reducing cost, but sugar and water are not likely the most expensive part of the equation.

A cruel accountant
A cruel accountant

Come on man. It’s not for profit! It’s the easy grab model. So you can slam some liquid sugar down your throat!

Next is the version that comes with an IV!

musket
musket

Can of soup at Food Lion in NC is $2.26. Look in the box of crackers and the three sleeves are an inch from the top.

Anthony Aaron
Anthony Aaron

It’s the biggest ‘tax’ there is … but we’re not allowed to notice that … and, frankly, probably more than 90% of the folks have no idea just how much money that ‘kosher’ nonsense adds to our food — including in restaurants that threaten noncompliant ones with ‘trouble’ … I saw it happen with friends of mine in the business in Seattle …

lamont cranston
lamont cranston

Spoke w/ a Dollar General Store Manager 5 years ago. Everything is POS generated at the register. Suppliers get paid in 10 days (back then) after an item is sold. Supplier eats “shrinkage”.

It’s been evident that this re-packaging scheme has gone on for years. 16 oz. cans of veggies are now 14 oz. I noted the Gatorade scam two years ago. Bagged chips too, Sweetie likes Lay’s – there now 7.75 oz./bag, down from 10 oz. a year or so ago.

Once silver goes to $100+/oz., most all of the Mexicans will go home, as Mexico has the largest minable silver reserves in the world. Mucho dinero to mine-o.

TN Patriot
TN Patriot

Ice cream and frozen veggies were what I first noticed with shrinkflation and those changes occurred more than a decade ago. Ice cream went from a 1/2 gal container to a 3 pint container and veggies from 16 oz to 12 oz. They also changed the serving size so the 3/4 # veggie bag still had 4 servings in it. This means the cost per serving did not increase, therefore no inflation.

Anonymous
Anonymous

Decades ago, cans of coffee became smaller, but started saying that they’d make the same amount of drinkable brew as if there were the former, larger amount. Straight outa Orwell. Pure psyop: not to convince us, but to break our resistance to seemingly intractable corruption.

Euddolen ap Afallach
Euddolen ap Afallach

Decades ago, cans of coffee became smaller,

Yep.

They may have shrinkage on coffee, but I shrewdly bought up an entire warehouse of canned dehydrated water right before they started making the much smaller cans of the so called “New, Concentrated Dehydrated Water”
They claim it uses less water, but I can’t see the difference.

You gotta keep your eye out for these deals!
They’re out there!
____________
Heck I even remember when a dollar used to cost a nickle.

dragonfly.purple
dragonfly.purple

In addition, to the products you mentioned, sugar was downsized from 5 lbs to 4 lbs.

Anonymous
Anonymous

I love your optimism on silver 100 would be great.

KhaanTEXt
KhaanTEXt

Let’s see now . . .50 year ago when I was enrolled at John Ireland Elementary in Dallas, a bag of Fritos or Lay’s weighed 1 pound (16oz.), Gatorade came in 1/2 gallon glass bottles with a metal cap, shrinkflation is not a new phenomenon.

boron
boron

A lot of people have been complaining that their weekly food bill has been going up as fast as the stock market’s been coming down and more and more of the retired elderly on fixed incomes have been finding it difficult to maintain a sufficient, tasty caloric intake.
The brilliant solution by the food producers (whose facilities are under attack, BTW) is to make the packages smaller.
Great!
And if you think that’s a joke, just wait ’til they add more water to the “juices” and more cheap non-nutricious filler to other products like cereals or breads. Even better, they’ll be soaking the meats you buy; just watch how much they’ll shrink when you put them under the broiler.
There are more ways to defraud you than by downsizing the packages.

Eddie
Eddie

You ain’t seen nothing yet……………….

next additive – bugs, seriously!

Anonymous
Anonymous

And mRNA vaxes added to foodstuffs.

lamont cranston
lamont cranston

I think it was an Auburn prof that analyzed the amount of “meat” in fast foods. Taco Bell’s meat was 38% meat, the rest was cellulose and other fillers.

BabbleOn
BabbleOn

Subway Chicken only 40% protein, 0% tuna in the tuna. Everything is fake already.

august
august

At least Subway Tuna still contains some fish, plus nutritious vegetable protein, stabilizers and food coloring, with only traces of peanuts and ammonia.

Balbinus

Your hamburger is always clean now as it takes a bath in hot water at the start of cooking. I cooked 4 western style ribs last week. They lost 1/2 their size in 70 minutes in the oven!

Anonymous
Anonymous

“Food”

It’s amazing what morons have money for.

And time for. Christ, ya fcukin threetards, try learning a little bit every week on this amazing new device and improve your lot over a few years.

Iggy
Iggy

I’m going to have to shoplift 10 percent more.

boron
boron

The way things are going in downtown Portland these days, y’ better quick about it.

Anthony Aaron
Anthony Aaron

Hey … there are lots of stores in PDX besides Walmart … true, looting and fires and such have caused a lot of them to be boarded up and out of business — but if you’re motivated you can always go out to the ‘burbs … 

Anthony Aaron
Anthony Aaron

Depending on your demographic allegiances it’s not even considered theft anymore … unless it’s into the 4-digit range …

Anonymous
Anonymous

Been doing that for a long time. Used to be you would get a full box of cereal – now the bag inside is half full.

Anonymous
Anonymous

That’s different – the weight is the same. Of course, anyone still eating such crap is a total fool.

Anonymous
Anonymous

Toilet paper–the roll is the same diameter but the cardboard tube in the middle is wider so you actually get less product. Scoops corn chips- are the same size bag but now the chips themselves are so thin you cannot scoop up a bit of salsa without the chip breaking.

Anonymous
Anonymous

The paper became much narrower years ago, too – not the total roll length, but the other dimension: say, the height of the roll if stood on its flat end. Ivory bars went to 4 oz. from 4.5 many years ago.

One thing that became huge many years ago – which you have to be retarded to buy – is obesity-producing and cirrhosis-producing HFCS-containing soda/tonic/pop, whichever regionalism you use for it. It costs producers nothing, except for freight weight and space and water supply, and helps fatten and weaken and stink up Americans.

KhaanTEXt
KhaanTEXt

And for some unknown reason toilet paper must be the most awful color of all, WHITE!!!

MrLiberty

If only the government came in smaller and smaller sizes as inflation rose. Instead, it’s just the opposite.

Anthony Aaron
Anthony Aaron

Hershey’s has been a classic example of variable sizing for decades … to keep the prices stable at retail, hoping that no one notices that a 2.6 oz. bar 3 years ago became 2.75 ozs. last year, but is 2.5 ozs. this year …

n
n

And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?

Fraizer
Fraizer

Slouches towards Bethlehem?

More likely checking ibn to the Jerusalem Hilton.

Anonymous
Anonymous

Downsizing is nothing new. A half gallon of ice cream is now 1.5 qts and has been for a long time. You can only raise prices so much before people quit buying or find and alternative. Smaller size keeps people buying as it doesn’t bust the budget. It is a marketing trick.

Euddolen ap Afallach
Euddolen ap Afallach

Downsizing is nothing new. A half gallon of ice cream is now 1.5 qts and has been for a long time. You can only raise prices so much before people quit buying or find and alternative. Smaller size keeps people buying as it doesn’t bust the budget. It is a marketing trick.

Could this be considered another component of currency debasement?

keann
keann

Anyone that hasn’t noticed the shrinkage of packaged goods does not shop or cook on a regular basis. Covid not only shrunk businesses and freedom it shrunk packaging. Recipes from the olden days (pre-covid) will tell you to add a 15 oz can of something, most are now 14.5 oz. Bought a box of cereal lately? Even cans of sugar loaded soda have down-sized, for your health of course, although the price is still the same if inflation hadn’t added to the cost.

Random63
Random63

Ummm….this was going on during the obama years. The author is a bit behind in his observations.

Stucky

“That’s precisely why bestselling author and legendary speculator Doug Casey and his team just released this urgent PDF report”

Doug Casey sucks DDD. So, shove his special report as far up YOUR ass as you can.

Second, every supermarket, mini market, convenience store, etc. is OVERFLOWING with food. In fact, eggs at Aldi’s yesterday were back down to $2.10 a dozen. But, you want me to be A-F-R-A-I-D (!!!) that some day, in some place, in some store, there won’t be any food. Riiiiight. May I suggest you take your Fear Porn shove it as far up YOUR ass as you can.

august
august

I will never buy Chobani yoghurt, just because of the way they screwed up Twin Falls, Idaho.
Residents of south central Idaho…. change my mind.

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