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lite.cnn.com - on gopher - inofficial
ARTICLE VIEW:
America revolted against Tostitos and Ruffles. Now they’re making big
changes
By Nathaniel Meyersohn, CNN
Updated:
8:08 AM EDT, Wed October 16, 2024
Source: CNN
PepsiCo is unshrinking shrinkflation.
The owner of Lay’s, Doritos, Tostitos and Ruffles chips will put more
chips in some bags to claw back customers tired of higher prices with
skimpier bags. Shoppers have balked at downsized chips, cookies, paper
towels and other products, widely known as , and turned to cheaper
options or stopped buying altogether.
A PepsiCo spokesperson told CNN that Tostitos and Ruffles “bonus”
bags will contain 20% more chips for the same price as standard bags
in select locations. PepsiCo is also adding two additional small chip
bags to its variety-pack option with 18 bags, the spokesperson said.
“It’s the football season. There’s a lot of
gatherings,” PepsiCo CEO Ramon Laguarta said on an earnings call last
week.
It’s a reversal of years of shrinking bags of Tostitos, Ruffles and
other chip brands.
In 2021, , a consumer protection lawyer and founder of the website
Consumer World, who meticulously tracks shrinkflation, that Tostitos’
“Hint of Guacamole” version shrank by one ounce from 12 to 11
ounces, while its “Hint of Lime” version dropped from 13 ounces to
11. Dworsky also found that Ruffles shaved off a half-ounce to a
“Sour Cream & Onion” bag in 2013.
“It’s about time,” Dworsky said of PepsiCo’s move. “Chip
lovers have suffered through years of downsizings.”
PepsiCo is the largest manufacturer of salty snacks in the United
States, and its competitors are likely to follow its lead with
increased sizes of their own, Robert Moskow, an analyst at TD Cowen,
told CNN.
Higher prices, lower sales
PepsiCo is making these changes because consumers, strained by a run-up
in inflation, have been buying fewer snacks. When they do, they often
switch from pricier big brands like Tostitos to Walmart, Costco and
other retailers’ private-label brands.
During the third quarter of 2024, snack sales declined 0.5% from the
same period a year ago, and retail snack volumes declined by 1.1%,
according to research by Bank of America analysts.
PepsiCo’s snack sales dropped 1% last quarter and its snack volumes
dropped 1.5%.
Snack prices have gone up more rapidly than other store items.
The price per ounce of salty snacks has increased 36% compared to
2020, outpacing a 21% increase in overall grocery store prices, Moskow
said.
The average price of 16-ounce potato chips in September was $6.46. In
September 2020, the average price was $5.02,
Consumers and lawmakers in recent years have also protested companies
downsizing products while simultaneously raising prices. Everyone from
to the has complained about shrinkflation.
PepsiCo, General Mills, Mondelez and other snack giants have ramped up
promotions to try to win back customers, but the promotions have been
ineffective, according to Bank of America.
Other companies are also trying to respond to consumers’ frustration
with shrinkflation.
Domino’s last month offered a limited-time deal called ” Online
customers who ordered two or more medium two-topping pizzas could
upgrade one of their pizzas to a large for free.
“Consumers are getting fed up of actually seeing a smaller portion
for the same price,” Domino’s finance chief Sandeep Reddy said on
an earnings call last month.
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