Food for thought
‘We are eating too much of everything’: Why shrinkflation isn’t cheating consumers
According to data released by the ONS, between September 2015 and June 2017 206 products used to calculate British inflation shrank in size, while only 79 increased.
Bread, cereals, meat and confectionery were the categories most likely to witness a reduction in the size of products, although these categories also saw some products increase in size.
It is worth noting here that the ONS looked at a total of 17,000 product sizes. Just 1-2.1% of food in its sample shrank in size.
Nevertheless, the ONS wrote: “This analysis suggests that when size changes occur, the prices charged for the products frequently remain the same, meaning that when products get smaller, consumers tend to end up getting less good value for their money – in other words, products undergo ‘shrinkflation’.”
Cue outraged headlines and indignant posts on social media about ‘rip off Britain’.
“We’ve seen a trend over recent years of popular products reducing in size while their prices stay the same. Taken together, these practices can have a real impact at a time when many households are already facing a squeeze on their finances,” Alex Neill, managing director of home products and services at consumer group Which?, noted.
Was Brexit to blame?
One point of contention was the idea that Brexit and the depreciation of the pound might have resulted in higher ingredient costs, prompting the food industry to cut portion sizes to preserve margins.
This is something the ONS itself seemed to rule out, stating there was no evidence Brexit was to blame for shrinkflation.
“There was no trend in the frequency of size changes over this period, which included the EU referendum,” the statistics agency concluded.
The Food and Drink Federation, which represents the UK food industry, disagrees with this assessment.
“In recent years, the industry has faced sharp increases in the cost of essential ingredients, packaging and other raw materials used to make food and drink. The falling strength of the pound since June 2016 has added to these massive cost pressures. This is in addition to the cost many manufacturers will already have incurred as they prepare for a potential ‘no-deal’ Brexit scenario,” Tim Rycroft, FDF Chief Operating Officer said.
These costs leave food makers with a difficult decision, Rycroft continued. “The majority of food and drink companies are taking a hit on already tight margins in the notoriously competitive UK grocery market. Some companies have reached a point where they must either reduce portions or make modest price increases to protect jobs.”
Fanning the flames of shrinkflation backlash with the emotive issue of Brexit was always sure to stir things up. But when we are talking about portion sizes, the debate should really be framed in the context of healthy eating.
Portion sizes and health
While rising costs may prompt some food makers to reduce the size of products, population health is also a consideration.
The statistics on UK obesity levels make for grim reading. In 2016, 26% of adults were classified as obese. One-in-five children are obese by the time they leave primary school.
And while the obesity rate has been relatively stable since 2010, the cost to the National Health Service is ballooning. The number of hospital admissions where obesity is a contributory factor increased by 18% year-on-year in 2017/18, NHS data reveals. The overall cost of obesity to wider society is currently estimated at £27 billion. The UK-wide NHS costs attributable to overweight and obesity are projected to reach £9.7 billion by 2050, with wider costs to society estimated to reach £49.9 billion per year.
This economic time bomb has prompted a shift in the way government and industry think about diet and health. Regulators are increasing pressure for food makers to reformulate, cutting sugar, salt and fat from products. Last March, Public Health England unveiled steps to reduce 20% of calories in popular foods by 2024. A calorie cap has been mooted.
“Health will also be a factor driving change in branded and own brand foods and drinks. Government is asking food companies to reduce both sugar and calories in a huge range of foods, including limiting portions, as well as soft drink manufacturers currently paying a substantial tax on some of their products,” the FDF’s Rycroft stressed.
‘The press have confused the issue’
According to Tam Fry, chairman of campaign group the National Obesity Forum, the press has “confused the issue” in its reporting of the shrinkflation trend by “suggesting you are being cheated by the industry”.
Fry is a frequent critic of the food industry for its failure to act more decisively to tackle obesity. However, this week’s reports make him “squirm” because the press is “warping the argument”.
“The basic problem is we are eating far too much of absolutely everything. The logic behind shrinking [portion sizes] is excellent. We have to worry about the content and the quantity,” Fry told FoodNavigator.
He continued: “Industry has a good argument. The reduction in size is negligible in terms of the total cost of a product and packaging. It would be quite defensible form the industry perspective to say we are not going to reduce the price.”
In particular, Fry highlighted, food makers are grappling with the costly and time-consuming issue of reformulation. “If industry, as I believe, is now starting to take health seriously… I think that is a justification for not moving on price.”
If anything, like many other health campaigners, Fry would like the government to take more decisive action to speed progress on both reformulation and portion sizing - particularly in out-of-home channels.
“The problem we have is all this is voluntary. We need to see greater determination on the part of government... The large manufacturers I believe have got the message. But the smaller manufacturers have their own difficulties and are not following the lead.
“We do need to tighten the screws a bit but already we are headed in the right direction. The press have to be responsible in how then report things and understand that 10% less Mars Bar is a good thing for health.”
