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Food Packaging Shrinks; Prices Stay Same
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Click2houston
June 19, 2008
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Some Products Come In Slightly Smaller Quantities

Some items customers have been buying for years may not be exactly the same as they were before, reported KPRC-TV in Houston.

Jack Bayless said he knew that one of his different-sized ice cream cartons did not measure up. One was round and the other was rectangular with rounded-off corners.

"I figured that this does not hold a half gallon," said Bayless of the rectangular carton.

He did his research by checking the contents.

"I was just interested because of the volume difference, I thought," he said.

As it turns out, there was no difference. Both contained a half-gallon. But experts said it's a good thing to question because of something called short-sizing -- changing the quantity of the content instead of raising the price.

Companies like Breyers and Dreyer's said they've had to shrink packaging to avoid raising their prices, reported television station KPTV in Portland, Ore.

The trend isn't limited to just ice cream. Shoppers will find 45-ounce butter containers, compared to 48-ounce containers they found on grocery store shelves in the past.

Last week, Kellogg Co. hiked its cereal prices for the second time in six months, reported Dow Jones Newswires. Spokeswoman Susanne Norwitz said the company reduced the sizes of "select" ready-to-eat cereal boxes, including Froot Loops, Cocoa Krispies and Apple Jacks. General Mills made a similar move earlier this year.

Companies said the food price increases are to blame. The price of milk has risen about 26 percent in the last year and the cost of eggs is up 40 percent. When dairy products cost more to produce, they cost more for shoppers.

Food companies are also dealing with the rising cost of fuel. Some manufacturers said they have a choice: shrink the product or increase the price. One estimate showed that about one-third of packaged goods have lost content over the last year.

"I think it's important for us to us to teach people how to make good decisions," said Dr. Paul Dholakia, an associate professor of management at Rice University in Houston.

Dholakia said manufacturers know customers will not notice quantity changes unless they change significantly.

"My advice to consumers is that you have got to be vigilant and not be driven by habitual decision making, but instead, pay attention to the actual quantity information," Dholakia said.

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