July 7, 2025
MikeEdwards/Depositphotos.com
When Does Price Pack Architecture Become Shrinkflation?
PepsiCo is selling Lay’s potato chips in many different-sized bags ranging from 50 cents to about $5. The increased smaller-size packages promise to entice snack lovers seeking less-expensive options.
A Wall Street article noted that Campbell’s and Mondelez are also adding smaller snack packages to stress affordability. Costco now sells eight-packs of muffins for $6.99 versus its traditional 12-pack for $9.99 for similar reasons.
“Consumers are going into small pack sizes to optimize their absolute budget,” Mondelez CFO Luca Zaramella told the WSJ.
A side benefit is smaller-size offerings tend to support “higher profit margins,” according to the report.
One risk with shrinking package sizes is being accused of shrinkflation, or when businesses reduce the size or quantity of their products while charging the same, or an even higher, price.
Shrinkflation became a buzzword in 2022 as brands began shrinking the packages of everything from toilet paper to yogurt and corn chips as inflation spiked. Many consumers have become suspicious of retailers profiteering from packaging changes.
A survey of 1,200 US. consumers by Purdue University’s Center for Food Demand Analysis and Sustainability (CFDAS) from October 2024 found 82% think shrinkflation is a common practice used by food companies. A further 76% believe it is a result of trying to increase profits even when costs are not rising.
However, brands have been reducing packaging sizes for reasons beyond affordability over the last 15 years as part of “price pack architecture” strategies, as profiled in a 2024 episode of NPR’s “Planet Money” podcast. The practice refers to brands offering a portfolio of packages and prices to reach different consumers and buying occasions.
Reasons For Smaller Package Sizing Varies, But Will Consumers Blame Shrinkflation?
Packages may become smaller to meet the needs of consumers for on-the-go occasions, lunch snacking, or those working on portion control. The smaller can of soda or mini pack of snacks may offer a trial size or opening price point, or act as an impulse purchase at checkout.
At the other end of the spectrum, family-size packs can support more of a value offering. Walmart offers Coca-Cola in increments as small as a 7.5 fluid oz. cans in a 10-pack to as large as a 3-liter bottle.
“I absolutely think there’s a tremendous opportunity in the U.S. marketplace to leverage greater pack diversity,” said Coca-Cola CEO James Quincey, in late 2023, on an earnings call.
For retailers, one challenge is finding shelf space for the variety of packaging sizes and price points and avoiding SKU proliferation.
NPR’s co-host, Amanda Aronczyk, was uncertain of the consumer benefits of price pack architecture.
She said, “On one hand, this is a story about companies bending over backwards to give us what we want in exactly the right quantities in exactly the right packages, which sounds like a win for consumers. But on the other hand, price pack architecture has also been one of the main ways that companies over the last decade have been able to squeeze more and more profits out of us, just by putting the same old stuff in a different package.”
BrainTrust
Jamie Tenser
Retail Tech Marketing Strategist | B2B Expert Storytelling™ Guru | President, VSN Media LLC
Cathy Hotka
Principal, Cathy Hotka & Associates
Kenneth Leung
Retail and Customer Experience Expert
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Discussion Questions
Has price pack architecture been equally beneficial for brands, retailers and consumers?
Has the shrinkflation controversy tainted the practice?
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This isn’t really a new strategy. Chains like Dollar General have always sold smaller pack sizes to help push a value message and aid affordability. The problem is that unit pricing for smaller packs is worse than for larger packs so, actually, consumers are often not getting a great deal. Larger, family-sized packs are much better value, but some consumers cannot afford to buy in bulk due to budget constraints.
The other issue with too many pack sizes and configurations is that it creates assortment overload and adds to the complexity consumers have to sift through at the point of purchase.
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When? when the goal is deception. If the whole point of a new size is that it’s smaller, then that should be the emphasis; if the labeling (for that which is smaller) says only that it’s new or better or… whatever, then it’s shrinkflation.
Perception of any benefits in smaller pack sizes must ultimately be in the eye of the customer. If smaller pack sizes are more convenient, better for travel, aid in freshness, then CPG’s must tout these positives clearly. But creating smaller pack sizes to realize better margins or make up for previous years poor performance will always be discovered by consumers.
Protect your brand authenticity conveyed to customers, first and foremost.
“Price pack architecture” may seem like be a fancy word for “shrinkflation” but it is more than a scheme to deliver less product for the same price. It’s also about matching quantities to consumption, which is always a moving target.
Getting package sizes right for a variety of purchase occasions is a fundamental discipline for CPG marketers. The key is to strike a balance within the assortment.
Individual portion-sized packs of snacks may belong in convenience settings or check-out lanes, but not on supermarket gondolas, for example. But multi-packs of the same units may be well-suited for the grocery aisle. Meanwhile on the cereal aisle, we see a few size options for major brands, but the old-style single-serve variety multi-packs are less common (at least where I shop).
For brands and retailers, there can be downsides to offering too many package size options. Supply chain complexity, merchandising labor in-stores, and damage to shopper perceptions are all part of the risk. Too-frequent changes in pack sizes may undermine shopper trust and draw attention to price-per-ounce thinking.
Customers absolutely know that brands are doing this — it’s hard not to notice that the chip bag will last a few days, not a week. Brands can do this if they want, but consumers won’t buy the “we’re doing you a favor” attitude.
Companies are operating in a trust economy. While price pack architecture is a legitimate business strategy, we need to recognize that brands are increasingly dealing with consumer skepticism about corporate motives. The challenge is whether brands can maintain consumer trust while optimizing margins through portfolio complexity. Successful brands will communicate the value of their products transparently, helping consumers understand the reasons behind the different sizes, rather than relying on the hope that consumers won’t notice the differences.
This isn’t just about package size; it’s about whether brands believe their customers are partners or targets. Companies still playing the ‘stealth optimization’ game are competing with 2019 consumer expectations in an increasingly transparent 2025 world.
I don’t see this as soley an expansion of shrinkflation…it could be a way to address the growing ozempic market where consumers are looking for smaller portions. Many restaurants are creating mini adult meals (think kids menu) with small plates at lower prices. With one in eight US adults having used GLP-1 medications, this is not only a margin play, it is a marketshare play as well.
The strategy has merit, but QSRs still don’t make it easy or cost-effective to do the right thing for my health or wallet. The first thing I cut when going on my diabetes regimen was soda pop – which means I have to buy unbundled. Yet a sandwich and small fries a la carte at McD’s is still about $10. So my overall visits to fast food over the past couple years have cratered (and I’ve lost almost 20 pounds).
Inflation by any other name (or tactic) is still inflation. Consumers are getting less for their money. And any brand or retailer (or politician) that thinks consumers (voters) aren’t noticing this, they are quite mistaken.
value shoppers has always check price / serving/weight. Smaller packages generally has less value, the issue is communication and planning. Telling consumer the smaller package is more convenient is one thing, tell them it is better without improving the product or value simply invites issues especially in this social media driven age
Package engineering for end-use efficiency and affordability makes sense. But lower, or even identicle pricing, doesn’t necessarily mean better efficiency and ‘affordability’. I recently reached for a “smokehouse” flavor of mozzarell cheese sticks thinking I would try them for a change. The $5.79 price was right next to the regular flavor $5.79 price. I just happened to notice the protein content was lower on the smokehouse version. Now why would that be? Simple. Smaller portions in the smokehouse version. The price points were identicle, but the cost per ounce of the smokehouse version was 20% more. Same price and almost identicle packaging except for the smokehouse call out, but hardly the same value. Not cool. I usually pay pretty close attention to the “cost per” pricing. This is exactly why.
Could smaller sizes actually increase consumption? “Oh, it is just a small package.” Does the buyer eat the whole thing? And then later does it again?
Beverage companies learned the value of smaller sizes years ago. A 20oz soda is often more than a 2 liter. Convenience for the shopper; at a price. Profits for the brand and retailer.
As noted in other comments, there are also channel differences that demand different pack sizes.
One channel that’s not been well-served by size differentiation is online grocery. Online shoppers typically buy larger sizes and multi-packs. But online orders are fulfilled in store where larger sizes and multi-packs are less frequently purchased.
For certain categories, grocers would be better served to have online sizes not available in store rather than dilute store assortments with infrequently store-purchased packs and sizes just to be picked for an online order.
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This isn’t really a new strategy. Chains like Dollar General have always sold smaller pack sizes to help push a value message and aid affordability. The problem is that unit pricing for smaller packs is worse than for larger packs so, actually, consumers are often not getting a great deal. Larger, family-sized packs are much better value, but some consumers cannot afford to buy in bulk due to budget constraints.
The other issue with too many pack sizes and configurations is that it creates assortment overload and adds to the complexity consumers have to sift through at the point of purchase.
Google is now paying $300 to $500 per hour for doing work online work from home. Last paycheck of me said that $20537 from this easy and simple job. Its amazing and earns are awesome. No boss, full time freedom and earnings are in front of you. This job is just awesome. Every person can makes income online with google easily….
.
More Details For Us→→→→ https://tinyurl.com/mr8pnsb6
When? when the goal is deception. If the whole point of a new size is that it’s smaller, then that should be the emphasis; if the labeling (for that which is smaller) says only that it’s new or better or… whatever, then it’s shrinkflation.
Perception of any benefits in smaller pack sizes must ultimately be in the eye of the customer. If smaller pack sizes are more convenient, better for travel, aid in freshness, then CPG’s must tout these positives clearly. But creating smaller pack sizes to realize better margins or make up for previous years poor performance will always be discovered by consumers.
Protect your brand authenticity conveyed to customers, first and foremost.
“Price pack architecture” may seem like be a fancy word for “shrinkflation” but it is more than a scheme to deliver less product for the same price. It’s also about matching quantities to consumption, which is always a moving target.
Getting package sizes right for a variety of purchase occasions is a fundamental discipline for CPG marketers. The key is to strike a balance within the assortment.
Individual portion-sized packs of snacks may belong in convenience settings or check-out lanes, but not on supermarket gondolas, for example. But multi-packs of the same units may be well-suited for the grocery aisle. Meanwhile on the cereal aisle, we see a few size options for major brands, but the old-style single-serve variety multi-packs are less common (at least where I shop).
For brands and retailers, there can be downsides to offering too many package size options. Supply chain complexity, merchandising labor in-stores, and damage to shopper perceptions are all part of the risk. Too-frequent changes in pack sizes may undermine shopper trust and draw attention to price-per-ounce thinking.
Customers absolutely know that brands are doing this — it’s hard not to notice that the chip bag will last a few days, not a week. Brands can do this if they want, but consumers won’t buy the “we’re doing you a favor” attitude.
Companies are operating in a trust economy. While price pack architecture is a legitimate business strategy, we need to recognize that brands are increasingly dealing with consumer skepticism about corporate motives. The challenge is whether brands can maintain consumer trust while optimizing margins through portfolio complexity. Successful brands will communicate the value of their products transparently, helping consumers understand the reasons behind the different sizes, rather than relying on the hope that consumers won’t notice the differences.
This isn’t just about package size; it’s about whether brands believe their customers are partners or targets. Companies still playing the ‘stealth optimization’ game are competing with 2019 consumer expectations in an increasingly transparent 2025 world.
I don’t see this as soley an expansion of shrinkflation…it could be a way to address the growing ozempic market where consumers are looking for smaller portions. Many restaurants are creating mini adult meals (think kids menu) with small plates at lower prices. With one in eight US adults having used GLP-1 medications, this is not only a margin play, it is a marketshare play as well.
The strategy has merit, but QSRs still don’t make it easy or cost-effective to do the right thing for my health or wallet. The first thing I cut when going on my diabetes regimen was soda pop – which means I have to buy unbundled. Yet a sandwich and small fries a la carte at McD’s is still about $10. So my overall visits to fast food over the past couple years have cratered (and I’ve lost almost 20 pounds).
Inflation by any other name (or tactic) is still inflation. Consumers are getting less for their money. And any brand or retailer (or politician) that thinks consumers (voters) aren’t noticing this, they are quite mistaken.
value shoppers has always check price / serving/weight. Smaller packages generally has less value, the issue is communication and planning. Telling consumer the smaller package is more convenient is one thing, tell them it is better without improving the product or value simply invites issues especially in this social media driven age
Package engineering for end-use efficiency and affordability makes sense. But lower, or even identicle pricing, doesn’t necessarily mean better efficiency and ‘affordability’. I recently reached for a “smokehouse” flavor of mozzarell cheese sticks thinking I would try them for a change. The $5.79 price was right next to the regular flavor $5.79 price. I just happened to notice the protein content was lower on the smokehouse version. Now why would that be? Simple. Smaller portions in the smokehouse version. The price points were identicle, but the cost per ounce of the smokehouse version was 20% more. Same price and almost identicle packaging except for the smokehouse call out, but hardly the same value. Not cool. I usually pay pretty close attention to the “cost per” pricing. This is exactly why.
Could smaller sizes actually increase consumption? “Oh, it is just a small package.” Does the buyer eat the whole thing? And then later does it again?
Beverage companies learned the value of smaller sizes years ago. A 20oz soda is often more than a 2 liter. Convenience for the shopper; at a price. Profits for the brand and retailer.
As noted in other comments, there are also channel differences that demand different pack sizes.
One channel that’s not been well-served by size differentiation is online grocery. Online shoppers typically buy larger sizes and multi-packs. But online orders are fulfilled in store where larger sizes and multi-packs are less frequently purchased.
For certain categories, grocers would be better served to have online sizes not available in store rather than dilute store assortments with infrequently store-purchased packs and sizes just to be picked for an online order.