U.S. consumers have won a significant victory in their battle against shrinkflation.
Largest Producer of Salty Snacks
This happens as PepsiCo announces that popular snack brands like Doritos, Lay's, Ruffles, and Tostitos soon will contain 20% more product without a price increase. This move comes after years of frustration as customers noticed their snack bags shrinking while prices remained the same.
PepsiCo, the largest producer of salty snacks in the U.S., confirmed the change according to El Economista, attributing it to shifting consumer behavior. As snack portions shrank, many shoppers began opting for cheaper alternatives or private label brands from retailers like Walmart and Costco.
This trend had a noticeable impact on PepsiCo’s sales. In the third quarter of 2024, the company reported a 0.5% decline in snack sales compared to the same period in 2023, with snack volumes down by 1.1%, according to a report by Bank of America.
Everyone Notices It
The growing frustration over smaller portions for the same price was even acknowledged by President Joe Biden ahead of the 2024 Super Bowl.
He pointed out that many products, including snack bags and sports drink bottles, had become smaller, yet consumers were still paying the same amount.
"It’s something everyone notices, especially when shopping for big events like the Super Bowl," Biden remarked, drawing attention to the widespread issue of shrinkflation.
PepsiCo isn’t the only company feeling the effects. Competitors like General Mills and Mondelez have tried to lure back customers with promotions, but these efforts haven’t been very successful.
As Domino’s CFO Sandeep Reddy noted, “Consumers are tired of getting less for the same price.”
Now, the ball is in the consumers' court. With more product in each bag, will customers return to trusted brands like PepsiCo, or will they continue choosing private label options that have become popular during the shrinkflation era?
PepsiCo is betting that this move will help restore consumer loyalty and drive sales back up in the coming months.
