HONEY, I SHRUNK THE SNACKS

It all began with a packet of chips. The joke goes — you buy a packet of chips and receive 50% extra air. Consumers have long been complaining about packets of chips — half empty or half full depending on your outlook — importantly, not filled to the top as one would hope. It’s always a little disheartening but aside from a grumble on social media, consumers often swallow it right up.

After consumers spent 2016 up in arms over smaller Toblerone bars as the Mondelez-owned company spaced out its signature triangles so that there was less chocolate in each bar — they began to notice a trend. It wasn’t just Toblerone that had shrunk its packaging.

The phenomenon is called shrinkflation — bottles of Coca-cola, Cadbury’s chocolate bars and Toblerone bars all get smaller but the price stays the same. It’s a subtle form of inflation because you are paying more for each bite.

Stanlib chief economist Kevin Lings says: “It effectively acts in the same way as inflation by reducing purchasing power. It is a more subtle way of clawing back margin and companies are under constant pressure to maintain operating margins.”

It’s fairly obvious, says Lings, as salaries and the cost base rise above inflation, companies search for ways to keep their cost base less than the rising inflation rate.

“A fairly weak economic environment is difficult to pass on to the consumer. Shrinkflation faces less of a backlash than rising prices. Consumers will grumble and get over it,” he says.

“In the past five years at least, companies have struggled. Through smaller packaging, the price essentially goes up and you have an inflation effect but you keep it reasonably muted and benign,” he explains.

But there’s a caveat — social media and media awareness make it more difficult to get away with. With a blast of tweets, Coca-cola recently came under fire for its smaller bottles. A 300 ml bottle replaced the 330 ml one; and a 440 ml bottle replaced the 500 ml.

A spokesman for Coke told the Financial Mail: “Coca-cola are rethinking many of our drinks and package sizes around the world to reduce calories and sugar and reflect the changing tastes and dietary preferences of our consumers.

“We are also committed to providing a greater range of beverage choices for those wishing to moderate their sugar intake.”

Despite the spiel, consumers caught on to the fact that their sugar-free ranges like Coke Zero and Coke Life were also smaller. But Coke quickly covered their backs by releasing a statement. After all, an apology in the form of a fizzy drink assuages fears a little.

“We apologise that we were not as clear as we should have been about the changes. We could have communicated more extensively to our consumers at point of sale and through the media. Our company remains committed to serving South Africans with the choice of beverages they enjoy,” said Roger Gauntlett, the GM of Coca-cola Africa’s SA franchise.

Coke may have narrowly got away with it this time, as Lings explains, but there is only so much that companies can get away with.

“There is ultimately some limit before you get consumer resistance. There is a combination of factors that isn’t extremely noticeable to the consumer so where they can, companies trim back on other costs.”

Despite outrage on Facebook and Twitter and scintillating conversation to get your blood pressure up over dinner, consumers often roll their eyes and give in.

Independent analyst Chris Gilmour says: “All you’re doing is giving people less for the same price. People moan and buy it anyway. It’s a psychological thing which is why consumers don’t interrogate it more.

“It’s illogical but consumers find higher prices harder to swallow.”

And with producers under no obligation to inform consumers of changes or any barriers to shrinking their products for the same price, it’s an easy way to beat the system.

As Gilmour puts it: “I hate these poxy cans of Coke. I feel hard done by, but I still buy them.”

So yes, before you think you’ve stumbled with Alice into Wonderland, you haven’t suddenly grown a size bigger and you aren’t imagining that your favourite chocolate or cool drink is shrinking — it’s just a clever trick that a slab of chocolate, even 20 g smaller, may fix.

What it means: As the cost base goes up above inflation, companies search for ways to keep their cost base less than the rising inflation rate