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Shrinking Packages

by Elaine Schwartz    •    Feb 17, 2011

Have you noticed that the 64-ounce Tropicana Orange Juice container now holds 59 ounces of juice? Or, that Scott Toilet Tissue is 104.8 sq. ft. instead of 115.2 sq. ft.?

Other shrinking packages include…

The 24-slice package of Kraft American Cheese has 22 slices.

The 16 oz. Haagen-Dazs ice cream container has 14 oz.

At 24 oz., Ivory Dish Detergent is now 6 oz. smaller.

The 12 oz. package of Hebrew National Franks has become 11 oz.

According to Consumer Reports, many everyday goods are getting smaller. When cotton, wheat, oil, sugar, oilseeds (e.g. soybeans and sesame seeds) and other commodities become more expensive, then suppliers have decisions. Absorb higher production costs? Increase prices? Shrink product size? Many have chosen to preserve profit margins by downsizing.

The Economic Lesson

According to the Bureau of Economic Analysis (BEA), the Consumer Price Index (CPI) recalibrates when package size changes. They explain it here. However, I do wonder whether the CPI adequately reflects the inflationary implications of smaller packages.

The December-to-December, 2009-2010 inflation rate is 1.5%.

 

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