Same price, but smaller size
Manufacturers downsize products while keeping prices constant. Changes clearly stated on packaging, companies say
By Teh Jen Lee and Elaine Yeo
November 22, 2008
THE same question raised in the US recently is now pertinent in Singapore: Honey, who shrank my butter?
You may not have noticed, but you are getting less for what you pay.
Sure, the price and packaging of, for example, a cake of butter may remain and look the same, but you are getting less than before June.
Manufacturers admit giving less for the same price.
Reason: Rising manufacturing costs.
But, they add, the shrinkage is spelt out clearly on labels.
Did you notice? A quick street poll that we conducted (see report on page 4) indicate that most consumers remain in the dark.
Earlier this month, the Los Angeles Times exposed what it called the 'stealthy shrinking' of groceries.
Manufacturers are trimming packages, nipping a few grams off soap bars, and even narrowing the width of toilet paper.
American pricing consultant Frank Luby was quoted saying that the changes were often so subtle that they created 'the illusion that you are buying the same amount'.
If so, the 'illusion' appears to have worked: Out of 40 consumers we surveyed, only 12 (30 per cent) had noticed the changes.
And almost all - 90 per cent - felt manufacturers were not making the downsizing obvious enough.
Sales director Damien Tauvel, 40, said: 'They are very good at hiding. I have to use my own observation. I didn't notice (the changes on) any labels.'
A spokesman for Cold Storage Supermarkets said downsizing of packaging took place about six months ago.
'Manufacturers downsize to keep prices competitive. We were given ample notice. So far, there has been no feedback from customers,' she said.
Companies here told The New Paper that cutting quantity is a common way to avoid raising prices.
Nestle's corporate communications manager James Wong said there has been 'unprecedented and hefty cost increases' of raw materials such as milk, cocoa, coffee and palm oil in the last 18 months.
Business costs such as labour, distribution and even packaging costs have gone up.
'Despite continuous improvement in operational efficiencies and other cost-reduction initiatives, Nestle is unable to fully absorb the impact of the rising costs of raw materials.'
Cost increase last resort
Mr Wong said passing on the cost increase to consumers 'is and remains the last resort'.
'We have no choice but to make the necessary price adjustments,' he said, but no details were given on when the increase happened.
Even after the price hike, costs continued to remain relatively high and volatile. Mr Wong said: 'It does not make sense to continue raising prices. The other option was to keep prices stable and to reduce the quantity.
'Changes took place in June this year and Nestle has been very transparent with our packaging changes. In all instances where there was a change, we have clearly stated on the packaging label, 'New Pack Size'.'
Nestle's products include Milo, Nescafe, and Kit Kat. Packs of Milo Fuze or Nescafe 3-in-1 specify how many sachets are inside.
Mr Wong said: 'This was the most cost-efficient way to inform consumers about this change.'
Retailers have generally been understanding, he added.
In July, Coca-Cola, the world's largest soft-drinks maker, shrank the size of its canned drinks in Hong Kong.
For the same price, consumers got 330ml a can instead of 355ml, a 7-per-cent decrease. Retailers were told in May about the change but not the consumers.
Mr Kenth Kaerhoeg, Coca-Cola Pacific's group communications director, told The New Paper: 'We are introducing the new can for two reasons. Firstly, it is a response to increased raw material costs - particularly the aluminium used to produce the can.
'Secondly, the new can size will align with the industry standard already used in many other markets, including most of Europe. Decisions around Coca-Cola packaging sizes are made locally market by market.'
Coca-Cola cans in Singapore have always been 330ml, a spokesman for Coca-Cola Singapore said, adding that 'no change in size is being planned'.
As for food giant Unilever, a spokesman said pack-size changes for its products had started in the countries where the products are made. For example, Skippy is from US, and Knorr Fish and Vegetable Cubes are from Thailand, and consumers here would get the changed quantity as well.
'In general, the pack size is changed from time to time. This is part of our business practice as well as meeting the requirements of our consumers.
'All our packs are clearly marked so that consumers can make informed choices,' he said.
Unilever's spokesman cited an undated survey which found that many consumers thought about price when they shopped for particular products. And they would rather get less than pay more money.
Is this generally the sentiment among consumers?
Homemaker Jas Ng, 35, said packaging does not make a difference to her.
'I don't look at the weight. I just go for the brands that I like. The manufacturer is not deceiving you because you can compare the weight before buying.
'It's up to the consumer.'
--------------------------------------------------------------------------------
Other incredible shrinking items
MILO FUZE: 20 sachets to 18
NESCAFE 3-IN-1: 40 sachets to 35
MAIZENA CORNFLOUR: 225g to 200g, 450g to 400g
B&P CORNFLOUR: 450g to 400g
Manufacturers downsize products while keeping prices constant. Changes clearly stated on packaging, companies say
By Teh Jen Lee and Elaine Yeo
November 22, 2008
THE same question raised in the US recently is now pertinent in Singapore: Honey, who shrank my butter?
You may not have noticed, but you are getting less for what you pay.
Sure, the price and packaging of, for example, a cake of butter may remain and look the same, but you are getting less than before June.
Manufacturers admit giving less for the same price.
Reason: Rising manufacturing costs.
But, they add, the shrinkage is spelt out clearly on labels.
Did you notice? A quick street poll that we conducted (see report on page 4) indicate that most consumers remain in the dark.
Earlier this month, the Los Angeles Times exposed what it called the 'stealthy shrinking' of groceries.
Manufacturers are trimming packages, nipping a few grams off soap bars, and even narrowing the width of toilet paper.
American pricing consultant Frank Luby was quoted saying that the changes were often so subtle that they created 'the illusion that you are buying the same amount'.
If so, the 'illusion' appears to have worked: Out of 40 consumers we surveyed, only 12 (30 per cent) had noticed the changes.
And almost all - 90 per cent - felt manufacturers were not making the downsizing obvious enough.
Sales director Damien Tauvel, 40, said: 'They are very good at hiding. I have to use my own observation. I didn't notice (the changes on) any labels.'
A spokesman for Cold Storage Supermarkets said downsizing of packaging took place about six months ago.
'Manufacturers downsize to keep prices competitive. We were given ample notice. So far, there has been no feedback from customers,' she said.
Companies here told The New Paper that cutting quantity is a common way to avoid raising prices.
Nestle's corporate communications manager James Wong said there has been 'unprecedented and hefty cost increases' of raw materials such as milk, cocoa, coffee and palm oil in the last 18 months.
Business costs such as labour, distribution and even packaging costs have gone up.
'Despite continuous improvement in operational efficiencies and other cost-reduction initiatives, Nestle is unable to fully absorb the impact of the rising costs of raw materials.'
Cost increase last resort
Mr Wong said passing on the cost increase to consumers 'is and remains the last resort'.
'We have no choice but to make the necessary price adjustments,' he said, but no details were given on when the increase happened.
Even after the price hike, costs continued to remain relatively high and volatile. Mr Wong said: 'It does not make sense to continue raising prices. The other option was to keep prices stable and to reduce the quantity.
'Changes took place in June this year and Nestle has been very transparent with our packaging changes. In all instances where there was a change, we have clearly stated on the packaging label, 'New Pack Size'.'
Nestle's products include Milo, Nescafe, and Kit Kat. Packs of Milo Fuze or Nescafe 3-in-1 specify how many sachets are inside.
Mr Wong said: 'This was the most cost-efficient way to inform consumers about this change.'
Retailers have generally been understanding, he added.
In July, Coca-Cola, the world's largest soft-drinks maker, shrank the size of its canned drinks in Hong Kong.
For the same price, consumers got 330ml a can instead of 355ml, a 7-per-cent decrease. Retailers were told in May about the change but not the consumers.
Mr Kenth Kaerhoeg, Coca-Cola Pacific's group communications director, told The New Paper: 'We are introducing the new can for two reasons. Firstly, it is a response to increased raw material costs - particularly the aluminium used to produce the can.
'Secondly, the new can size will align with the industry standard already used in many other markets, including most of Europe. Decisions around Coca-Cola packaging sizes are made locally market by market.'
Coca-Cola cans in Singapore have always been 330ml, a spokesman for Coca-Cola Singapore said, adding that 'no change in size is being planned'.
As for food giant Unilever, a spokesman said pack-size changes for its products had started in the countries where the products are made. For example, Skippy is from US, and Knorr Fish and Vegetable Cubes are from Thailand, and consumers here would get the changed quantity as well.
'In general, the pack size is changed from time to time. This is part of our business practice as well as meeting the requirements of our consumers.
'All our packs are clearly marked so that consumers can make informed choices,' he said.
Unilever's spokesman cited an undated survey which found that many consumers thought about price when they shopped for particular products. And they would rather get less than pay more money.
Is this generally the sentiment among consumers?
Homemaker Jas Ng, 35, said packaging does not make a difference to her.
'I don't look at the weight. I just go for the brands that I like. The manufacturer is not deceiving you because you can compare the weight before buying.
'It's up to the consumer.'
--------------------------------------------------------------------------------
Other incredible shrinking items
MILO FUZE: 20 sachets to 18
NESCAFE 3-IN-1: 40 sachets to 35
MAIZENA CORNFLOUR: 225g to 200g, 450g to 400g
B&P CORNFLOUR: 450g to 400g
