In another case of shrinkflation, Cadbury has reduced the size of its Dairy Milk sharing bars by 10%, whilst keeping the price the same.
Parent company Mondelēz International blamed the move on a spike in costs associated with the production of its chocolate as it reduced the bars’ size from 200g to 180g. They are still typically being sold at £2 despite being downsized.
The firm stated that it was the first such move for that size of Dairy Milk bar in a decade. However, in 2020 the company was accused of shrinkflation when Cadbury chocolate bars sold in multipacks, including lines like Crunchies, Twirls and Wispas, were reduced in size to reduce their calorie count.
A Mondelēz spokesperson said yesterday: “We’re facing the same challenges that so many other food companies have already reported when it comes to significantly increased production costs – whether it’s ingredients, energy or packaging – and rising inflation. This means that our products are much more expensive to make.
“We understand that consumers are faced with rising costs too, which is why we look to absorb costs wherever we can, but, in this difficult environment, we’ve had to make the decision to slightly reduce the weight of our medium Cadbury Dairy Milk bars for the first time since 2012, so that we can keep them competitive and ensure the great taste and quality our fans enjoy.”
Commenting on the move Cloe Legrand, Consumer Analyst at GlobalData, said: “It was only a matter of time before fast-moving consumer goods (FMCG) producers looked at alternative ways to minimise costs given the recent challenges hitting the industry, with shrinkflation being a proven strategy in the past. However, Cadbury’s tactic of reducing pack sizes may not sit well with consumers.
“Currently, shoppers are more price-sensitive than they were pre-pandemic with GlobalData’s Q1 2022 global consumer survey revealing that 60% of people are concerned about their financial situation. This concern still rings true as consumers are facing rising inflation and higher energy bills. even after restrictions are lifting It could mean that the combination of higher prices with smaller sizes will alienate more price-sensitive consumers.
“People want value for money, particularly regarding confectionery with 16% of UK consumers believing large portions sizes equate to good value and younger consumers are more concerned about portion sizes. According to GlobalData, in the UK, 21% of Gen X and 19% of Gen Y consumers believe large portion sizes are good value for money, compared to Boomers with 10% and the Silent Generation with 0%.
“Shrinkflation might help to mitigate the rising costs that companies are facing right now as well as helping to sustain jobs in the long term. In the short term, value-conscious consumers will consider more affordable alternatives as price rises take their toll. As a result, brands should communicate these changes to consumers to be more transparent and explain if there is any improvement.”
NAM Implications:
- The key issue is how loyal consumers will/would respond to a price increase of 11%…
- …even in high inflation times.
