Package Goods Get Bigger Again

Marketers That Shrank Products -- Though Not Prices -- Start to Upsize

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BATAVIA, Ohio ( -- The so-called grocery shrink ray -- which made thousands of products smaller in recent years without lowering their prices -- has started to reverse, as more marketers deal back savings on commodity costs in the form of bigger packages or bonus products at the same price.

SELLING POINT: 'Still the same amount of crackers.'
SELLING POINT: 'Still the same amount of crackers.'
The shift is sure to fuel some cynicism, as it gives the appearance marketers are simply adding back what they took away in the first place. But so far only one marketer -- Mission Foods -- has been publicly called out.

And it's unclear many have made or will make direct or permanent reversals -- tempting as it might be to return those 1.5-quart ice-cream tubs to the original half gallon and bill the addition as "33% more free!"

Marketers in household products are generally making packages temporarily bigger as part of limited-time promotions. And some products are simply responding to competition. Procter & Gamble Co.'s Pringles Super Stacks are clearly bigger than they've ever been, in a reaction to rival Frito-Lay offering "20% more free" across its lineup.

Newly upsized packages are particularly prevalent in snack foods and cleaning products, the latter movement led by Reckitt Benckiser, which adopted a "Big Brands, Big Savings" promotional platform this year across brands including Lysol disinfectants and Finish dishwashing detergent.

Holding the top line
Why increase package sizes or offer bonus products instead of just reducing the price? Marketers and retailers both want to rekindle volume hurt by the recession, but neither wants to take a hit to the top line by lowering prices, said Sanford C. Bernstein analyst Ali Dibadj. He's seen the trend toward promotional upsizing start in food and extend into household and personal care, largely following the pattern of price hikes being partially dealt back.

Rob De Groot, Reckitt exec VP-North America, Australia and New Zealand, said, "There's a reluctance to bring the prices back to where they were before on all sides."

The package-goods industry went many years without substantial price increases, he said, and reversing list prices now would hurt all sides. RB is focusing its bonus offers on premium products to help trade consumers up or prevent them from trading down, he said.

But upsizing isn't without risk when it simply gives consumers back what they had in the first place. Mission Foods cut the number of tortillas in its 10-count pack by two last year, then added them back this year, touting the move with a "Now with two extra tortillas!" blurb. The blog Consumerist called attention to the move after a consumer tip last month.

In a statement, Mission Foods said the "extra tortillas" package was temporarily introduced in June, and a new package without the claim was in full distribution by Aug. 1.

Walmart policy
Making all the upsizing easier is that Walmart, which earlier in the decade banned use of the word "free" in bonus offers as misleading, has relented -- though it may not be a change in policy so much as a change in personnel, with new merchandising execs unaware of the old policy.

"I have inquired with members of our merchandising group and have not found anyone yet who is aware we had such a policy," a spokeswoman said in an e-mail.

Suppliers said Walmart made the move in 2002, and Walgreens complicated things two years later by insisting on having the word "free" on bonus packs, requiring many marketers to have two sets of packs.

It's not clear the tide has entirely turned. Rich Palesh, president of research firm Promodata, said analysts are tracking an even split between upsizing and downsizing.

Somewhere in between, Campbell Soup Co.'s Pepperidge Farm Goldfish recently introduced a new club-size pack with a nod to a year or two of others downsizing: "Still the same amount of crackers."

Upsizing could be a mixed bag for marketers, said Thom Blischok, president-consulting and innovation for Information Resources Inc. On one hand, consumers stock up when they see deals. That's a change from earlier this year, when they were wary of buying extra even on sale. On the other hand, one theory behind bonus packs is that they expand consumption because people use more. But Mr. Blischok's research indicates consumers have gotten better at rationing.

"The new conservative shopper will consume in the long term 6% to 10% less," he said. "We're not seeing people return to indulgence. We're seeing them looking to get a better deal and extend their supply."

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