The Mysterious Case of Food Costs and Short-sizing.

originalWe’re not economists. We’re not grocery store executives. We don’t transport food. And we definitely don’t grow it and sell it. Our role in the food production machine: consumers. We’re at the end of the line.

We shop, we cook, and we eat. Which I assume makes us a lot like everyone else. We’re not really sure why the cost of produce goes up or down. We have little insight into why raw ingredients like corn, soy and wheat are more expensive than ever. And with the cost of fuel dropping to levels that make us sigh with relief, we wonder, why haven’t food costs come down?

There are a number of factors that determine why particular food items cost what they do, some of which we know of, others we’re still learning about. But there is one thing we know for sure: we need healthy, affordable food.

An article was published today in the Chicago Tribune explaining why it will be a while until consumers feel some relief at the supermarket, even though commodity prices have fallen dramatically since summer. Essentially, it will take months for those cuts in cost to work their way through the intestines of the American food machine. While companies have already enjoyed the benefits of a cheaper meal, most of us are still eating crap, and paying through the teeth for it.

In the meantime, if you’re looking for another way to save at the store, search for the cost per ounce on items like coffee, sugar, condiments, cereal, etc.

In speaking with Kerri’s grandfather over the holiday, who spent his career in the corporate side of grocery retail, he said that someone should do an expose on the shrinking size of products. While this may not be news for many of you, companies have continued to charge the same amount for things like mayonnaise, even though they’ve shrunk the size of the jar. The volume has changed, but the cost is the same.

I did some searching, and it turns out he’s right. From yogurt and cereal, to coffee and peanut butter, short-sizing (as it’s called in the industry), is an all too common way to pass off cost increases to customers. And they’re doing it all over the store. In fact, some news organizations did cover it, including Consumer Reports. The New York Times published an article about it back in September; it is quite an enlightening read.

I leave you today with a question: What can we do about it?

(This is not a rhetorical question.)

– Christopher

15 Comments

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15 responses to “The Mysterious Case of Food Costs and Short-sizing.

  1. Pingback: The Mysterious Case of Food Costs and Short-sizing. « One Dollar … · TV SeRiES

  2. They actually ran a story about it here in Houston on the local news. The product was peanut butter and they showed how the maker was adding an indention to the bottom of the jar. The jar looked the same as before on the shelf, but held less peanut butter.

  3. I think the best way to combat this practice is easy… stop buying it. Foods like this fall into one of 2 categories; 1. processed junk we shouldn’t be eating or 2. can make a (better) version of it at home at a better price anyway. We don’t “need” to buy ice cream or yogurt that has been short-sized. We can buy the ingredients (which most have not been adjusted) and make a better tasting and more healthy version at home.

    I think a compromise can be made, for example buying only a generic version of it if you “must” have it but don’t want to support short-sizing in general. If the generic has also been short-sized at least you’re not supporting the more expensive version.

  4. Betty Ann

    …..it is also bad for the environment.. when items shrinks….. because of the surface volume of packing an item. A large item of let say 50lbs has less encasing of it; than say 10 (5 lbs) items. ..

    So coffee used to be 1 POUND and now 12 ozs (or 13)… and so people will run out faster of the product at home and pick up another can (it is more wrapping of an item). I hope I’m saying this right..

    But picture a 50 pound object ..the wrapping is just around the outside. then picture it divided lets say in 10 (5 lb) items.. making up the same amount of space. (stack near the 50 pound item).. but the paper to wrap each is not just one big piece now it is all horizontal and vertical extra pieces.

    Got it?

    and i’m pleding to donate 25.00 to feed others each month thanks to you guys.. (I donate 25 to your paypal a couple of weeks ago); and I realized that I have to do it each month.. now .. to some place (i’m in nyc; and 8 million people here; I’m finding places here… 25.00 is better than nothing as a single mom to donate………

  5. Santammy

    Let me just say, we spent the week in Maine at a ski resort and brought our own food. But one day my husband ran to store and got a few items. I wanted to die when I saw he paid $4.74 for a half gallon of Orange Juice!!!!

  6. rich

    The increase in the cost of food is being caused by inflation courtesy of the Federal Reserve’s “printing money”. You have ever increasing dollars competing for the same goods thereby causing prices to go up.

    The following is an excellent article on the subject:
    http://mises.org/books/inflationcrisis.pdf

  7. WA teach

    Same story ran here in Seattle. Food marketing experts claim that the practice has to do with the psychology around the price of a product. According to the interview on the radio, we have set prices for items in our minds, usually based on past experiences. Manufacturers have found that even a slight increase in the price of a product will bring a purchase to screeching halt. Making the product smaller, “fooling” the consumer, is much better for the bottom line.

  8. alyson

    listening to you guys on npr right now!
    reading the comments in this thread made me think of Consumerist. their editor has done a string of articles about the “grocery shrink ray”.

    http://consumerist.com/tag/grocery-shrink-ray/

  9. Sheila Smith

    I am finding more and more items have “Shrunk.” I am not stupid enough to think I’m getting a deal when it is the same price for a smaller food volume. I don’t respond positively to the little “Psych” game they are playing. It has messed with a few of my recipes and that is the bigger aggravation. EX: I need 2- 8 oz yogurts and now have to buy 3- 6 oz and have 2oz of left overs. Yes, it can still be eaten, but we’re talking more wasted packaging as already stated. It makes me lose confidence in the producers of the products as I feel they are trying to scam us.

  10. Dave

    What I’ve noticed in my local Brooklyn supermarket is incoherent shelf labeling. One product will be price per ounce, sitting next to the same product by a different company, showing price per pound. Comparing liquids, one is price per pint, another is price per pound (?). Price per weight compared to price per unit. My wife and I feel this store gives the best value of our limited available choices. I really don’t know if this is lazy management, or a deliberate attempt to make us give up and buy whatever has the big yellow “Sale” label that week.

  11. Deborah

    Typically, we purchase no prepared foods. We buy ingredients in bulk, and, lately, by reducing the amount of animal proteins that we use by more than half, we have decreased our food bill by about 1/3 each week. We find our meals satisfying and have little or no waste. Fast food is not interesting to us or our teenage children and we rarely eat out. We still spend far more than I’d like on groceries, but, considering the increase in the cost of food over the last 3 years, I am relieved that we have found ways to eat well, eat whole, and eat for less. Now I’m giving the family lessons in growing sprouts, baking bread, and planning meals that they are willing to eat. We’re a looooong way from $1 per day per mouth but we’re also a long way from being beaten into submission by the food machine. Getting the whole family involved in food choices has given them the chance to be more open-minded about the foods they are willing to try.

  12. Jim

    I relate. It annoyed me when cans of solid tuna silently shrunk from 6oz. to 5oz, and it really ticked me off when I bought a 3-pack of Dial soap only to find a deep (1/2oz) scoop out of the back of each – they stack the same but weigh significantly less. What to do? Two things: (1) I stock up on sales, and (2) I buy clearance foods at the OddJob/BigLots places – where I can finds cereals and other foods at sizeable discounts. That compensates for the shrinking containers.

    As for the packaging, paper or cardboard can probably go into the compost pile, steel cans can be recycled, but plastic … {sigh}.

  13. rich

    I think many here are missing the primary reason for prices going up. Our govt is essentially bankrupt, they finance a large portion of govt spending by “printing money”. This causes the money already in people’s hands to be worth less.

    When money becomes worth less, prices go up. It’s not greedy manufacturers who are to blame, it is the U.S. govts spending beyond its means that is to blame.

    If you think prices are high now, later this year or next you will be absolutely shocked. Our govt is now printing money at an alarming rate to pay for bailouts and stimulus packages. The result will be much higher prices.

  14. I just bought Girl Scout cookies today (I know, crappy food but I always buy one box a year) and noticed that the weight is now an ounce less than last year. Of course the price is still $4 a box. Yep, it’s the Incredible Grocery Shrink Ray in action.

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