Endless Thread - Shrinkflation

Episode Date: June 25, 2020

From the supermarket to the housing market, products are getting smaller but prices are not. Why is this happening? And can it be stopped before the toilet paper roll disappears right before our very��� reaching hands?

Support for endless thread comes from Mathworks, creator of MATLAB and Simulink Software, to design and develop engineered systems, accelerating the pace of discovery in engineering and science. Learn more at Mathworks.com. Support for WBUR comes from Is Business Broken, a podcast from the Mayrotra Institute at Boston University that explores questions like, why is innovation in healthcare so hard? Is ESG just greenwashing? of course, is business broken? Listen, wherever you get your podcasts. Produced by the I-Lap at WBUR, Boston. Benjo. Am Siv. Oh, that has no ring to it whatsoever. So let me tell you about my friend, actually really about my friend's mom. My name is Melanie and I live in California. Melanie is the kind of lady who has a label maker and she knows how to use it. Sounds like my dad, who writes my name and phone number on all of my belongings, even as I approach the age of 40. It drives me insane.

He uses a permanent marker. Of course. Dad. Stop. It gets at this idea right that as a parent, you need to be super organized. Which includes shopping smart. Melanie's attention to detail is legit. And recently, she made a discovery in the bathroom.

Bathroom discoveries. It had to do with her favorite brand of toilet paper, Charmin Ultra Soft, which she usually gets at Costco, but when the pandemic hit, she couldn't find it. Tale is oldest time, or is old as this at least three months ago. But she was able to find some Charmin Ultra Soft at her local grocery store, and this Charmin Ultra Soft was different. Well, normally when I get down to the very end, I put a new roll on and leave the little, you know, the little bit that's still enough there. So when I took the new roll and put it on and I put the little bit that was left on the old roll, it was noticeably not as wide. Not as wide. Nope. And both the new TP and the old TP were Charmin Ultra Soft. Yep. So then, of course, I'm curious. So I took a shabby. So I took a shabby.

off of each one and matched them up together and discovered that side to side, it was half an inch shorter, and then the length of the sheet itself was a quarter inch shorter than the previous roll. So each square is a little bit smaller? Yep, which I grant you doesn't seem like a huge deal for the toilet paper user. As Melanie says, you might just have to fold the squares a little differently. change your technique. My daughter rolled her eyes when I told her that. I have to learn some new skills.

But when you multiply it by the millions or billions of rolls of toilet paper that Charmin is making of their ultra-soft line over time, Charmin might start seeing some ultra-savings. Melanie says she's seen this before. For example, already many years ago, I noticed I had some very old. cookbooks that had belonged to my grandmother. And some of the products in there call for sizes of things that don't exist anymore. For example, a one pound can of tomatoes. Well, the canned tomatoes now are 14 and a half or 15 ounces, depending on if you're buying sauce or diced or whatever. So there is no such thing as a one pound can anymore. Overall, what we're talking

about here. What's happening to these products is what happened to George on that episode of Seinfeld, the one where Jerry's girlfriend walks in on George naked. Well, I just got back from swimming in the pool and the water was cold. You mean shrinkage? Yes. Significant shrinkage. Significant shrinkage. Melanie's right. This is something that has been happening to products all over the place, but without most of us even noticing. From the the supermarket to the housing market, products are getting smaller. But prices are not. So why is this happening? Who is getting the savings? And can it be stopped before the toilet paper roll disappears

right before our very reaching hands? Turns out there's an economic term for this and a whole sordid history to go right along with it. Today's episode, shrinkflation. I'm Ben Brock Johnson. I'm Amory Siebertson. And this is endless thread. The show featuring stories found in the vast ecosystem of online communities called Reddit. We're coming to you from WBUR, Boston's NPR station. So we first learned about this phenomenon on Reddit. There's the post about how when you buy the big box of Snickers bars, which is sometimes marketed as a whole yard of Snickers bars, it's not actually a yard. There's the one comparing the size of the Big Mac hamburger over the years, which has definitely shrunk. And there's a whole shrinkflation subreddit, which just started back in January

and counterintuitively is growing. And very quickly, among these posts, we found a Redditor who has been looking at this for much longer than we have. Like, I knew this was a thing. I didn't know somebody had termed it already, though, so that was kind of cool. This guy goes by Renick Knows, and Renick Knows knows a lot about shrinking products because he has worked in just about every grocery store in Flagstaff, Arizona. Safeway, fries, Sprouts farmers market, Bevmo. Renick currently works at a Whole Foods doing pricing and ordering. And not too long ago, he realized that a name brand of orange juice he had ordered for the store hadn't come in for a few weeks. And it finally came back. And one of my coworkers and I looked at it and were like, wait,

this is like 53 ounces. Wasn't it 64 before? The packaging looks almost exactly the same, but it's slightly skinnier. So they cut off all of those ounces and put them into a package that kind of looks the same. But we didn't change any of the tags. And I went and checked as well. The first day we got the juice in,

I was like, I'm going to do a price check to make sure we don't need to print new tags out. And they were still like $3.99 or whatever. And I was like, okay, that's weird. Have you ever been tempted to tell a customer that a product that they're looking at has shrunk? I'm very honest with all of my customers. is like maybe too honest.

So it's like, hey, Eric, how's your dog? By the way, the ice cream shrunk again. With customers like that, I will actually tell them, like certain things. Because I know what they're buying anyway because I see them so often. And it's like, ooh, I wouldn't get that. Renick noticed shrinking products because it was part of his regular job. But Edgar Dwarski has practically made it his job to notice shrinking products. And he takes his work home with him.

I have products that date back probably two or three decades. I mean, my garage has a can of Maxwell House coffee when you really got 16 ounces in the can. And that's what, maybe 30 years ago? Edgar is a former assistant attorney general in Massachusetts. He's also worked for several Consumer Affairs Secretaries. And Edgar's House is a former assistant attorney general in Massachusetts. basically full of products that have changed over the years. Let me show you some examples.

Coffee cans, bags of Keebler cookies. Notice it says in the corner, new look. Toilet paper rolls, boxes of Kleenex. The newer box is 210. You lost 30 tissues in the box. Cans of tuna. Originally tuna fish came in six and a half ounce cans. And the current one, this one, is five ounces.

Old tubs of Breyer's ice cream. Ice cream has been downsized for years. I think he eats those. Also boxes of cereal, rolls of bounty paper towels, and he's meticulously measured and categorized all of them. So, for example, some years ago, Skippy downsized peanut butter. Peanut butter traditionally was always comes in an 18-ounce jar. What they did, they lowered it to 16.3 ounces.

But the jar looked the same. And I said, well, how did they do that? They put a depression in the bottom of the jar. So it looked the same size, but it held less. Over the years, this is the kind of nerdery that gets you a reputation. And Edgar has one. He's been instrumental in changing consumer protection laws in Massachusetts. He has a website called Mouseprint,

which promises to expose the strings and catches buried in the fine print. tipsters send him information about products that they see shrinking. And since he has run out of reasonable space in his garage and does not want to be on an episode of hoarders, Edgar has a new process for logging that shrinkage. He tries to capture the shrinkage in real time when companies introduce a new product. So I quickly run out the stop and shop or star market and look to see, can I catch it right at the moment when both products are on the shelf. And then I'll take the old product on the left and the new product on the right and take a photograph of it.

When you show up to the supermarket, have you ever shown up at night to try to catch them? And you see like a bunch of Charmin bears in black suits and sunglasses, you know, trying to switch the products out or anything like that? Or to date myself a little bit, I see Mr. Whipple there, shooing people away and saying, please don't squeeze the Charmin. Ladies, you can't squeeze the Charmin. But this isn't Charmin, Mr. Whipple. This is new Charmin. Even more squeezably soft. The volume of the product changes, but the price tag doesn't.

That's how they get you. And Edgar says the key here is that as consumers, most of us are more sensitive to the price tag of a product than the volume we're getting, especially when it's a small change. He also prefers a different term for what's happening here. He calls it downsizing. The companies themselves do have a commonly stated reason for downsizing. Edgar got it a lot when he would call companies up to harang them about it.

The typical response is we've seen the price of raw materials go up. So we have to charge more or give the consumer less. Orange juice from Florida. A day without orange juice is like a day without sunshine. Orange juice concentrates tube shrink? A frost must have hit the harvest in Florida. But the $9 billion industry, synonymous with the Sunshine State, is in serious jeopardy. Chocolate candy looking a little more little?

Cocoa supply chain disruptions. Companies that make products rely on a lot of materials that change price. Even things like the price of gasoline can have an impact. And when they get called out for it, the company line is usually, look, we try to keep the price down, but sometimes we can't. Of course, that doesn't mean the consumer feels. anything other than nickel and dined. And if you want to call it that, Edgar says companies have been nickel and diming us for decades. Well, the lore is that many moons ago, and this might be 90 or 100 years ago, when candy bars were a nickel, you had vending machine operators that, you know,

had chocolate bars and various types of candy in their machines for a nickel. But then the price of chocolate went up, which, problem, because the machines only took a nickel. Extra, extra, read all about it. Newfangled vending machines become immediately obsolete. Solution? Chocolate manufacturers decide to shrink the bars. Price, still a nickel.

Saving the vending machine makers and the chocolate makers a whole lot of pennies. We'll be rich beyond our wildest dreams. So, downsizing has been around for decades and decades. It's not some newfangled thing called shrinkflation. Whatever you call it. It's true that candy makers in particular are one of the most famous or infamous industries of corporate shrinkage. One recent example, a video posted on Reddit with the title, B.J. Novak highlighting how shrinkflation is real by showing how Cadbury shrunk their Cadbury eggs over the years.

B.J. Novak is the actor who plays Ryan on the show The Office. In this video, he's being interviewed by Conan O'Brien on late night back in 2007, when B.J. Novak was apparently on some kind of Easter candy crucible. involving known Easter candy phenomenon the Cadbury Cream Egg. I bite my Cadbury eggs this year. They are, they feel smaller than they used to be. And I ask my friends, okay, a couple people noticed that, right? Yeah.

I asked my friends, have they got smaller? My friend saying, no, you've just gotten bigger. B.J. Novak pulls out an egg from 2007 and then an older egg. Yes. This is the egg. Judge for yourself, America. The older egg is significantly bigger than. and the new egg.

It is. There has been significant shrinkage. Mondalais International, the company that owns Cadbury outside of the U.S. is kind of a snacking behemoth. They own Tate's cookies, Triscuit, Belveda,

Ritz, the list goes on, and Edgar Dwarski has a story about another of the company's products, and it starts with one of his favorite pastimes. I tend to go to grand openings of supermarkets, and I want to... Excuse me!

Some people go to the movies, you know, on debut night. I go to supermarkets when they open. No judgment. No judgment. We're coming with you. Yeah, yeah. Let us know.

We'll be there. So I went to the grand opening of Wegmans, and this was, I think it may have even been the first one in the state, you know, some years ago. And Nabisco had just downsized Oreos. And they happened to be a Nabisco salesperson or something like that. in the cookie aisle. And I was complaining to him, look at this. You know, you've downsized the Oreos.

Why did you do that? And they said, well, look at the bright side. You know, each one's a little bit smaller. You're saving calories. It's true that companies have come up with a ton of ways to sell you on the idea of keeping a price the same while reducing product. They promise extra quilting in their paper towels or a more convenient dispenser for your toothpaste, which, by the way, might get you to use more.

of the product more quickly. It might be easy to ask why it's worth complaining about your Oreos or whatever. But we're putting out this episode in the middle of a global pandemic, an economic downturn that looks to be rivaling the Great Depression. People are really focused on saving money right now. The national household saving rate back in February, before the pandemic really hit, 8.2%. By April, when the pandemic was in full swing, 33%. Unpressure. people are saving way more money right now, which means spending less. And when they do spend money, they are much more price sensitive. So it's connected to this bigger thing. It's not all the size

of your Cadbury cream egg. It's about this feeling that we're all getting a little less than we ought to for our cash. The retirement age keeps going up. The services government offers go down and down. And this is another form of shrinkflation. Like you're getting less for being a citizen. And all of that leads to one simple question. If we can't make ends meet, why are you in charge? Coming up, politics, baby, shrinkflation politics. At Radio Lab, we love nothing more than nerding out about science, neuroscience, chemistry. But we do also like to get into other kinds of stories, Stories about policing or politics, country music, hockey, sex, of bugs. Regardless of whether we're looking at science or not science, we bring a rigorous curiosity to get you the answers.

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Recruit new talent, reach new audiences, whatever your goal we can help. Discover how the magic is made at WBUR.org slash creative studio. So you might have noticed how our grocery store grand opening attendee Edgar Dwarsky didn't love the term shrinkflation, but shrink. Shrinflation is so sexy. It's hip. I'll give you that it's hip. Okay, fair enough, fair enough.

Well, we got in touch with the person who's credited with inventing the word shrinkflation. So I'm Pippa Malmgren, and I'm a former advisor, economic advisor to President George W. Bush. And I'm an author. I write books about what's going on in the world economy. Economic advisor to President George W. Bush, which requires a very special kind of skill. Can you give us like the dummy, super dummy definition of inflation? We haven't really had any since the 1970s. So people don't know what it is.

And it's not that they forgot. It's that they've never experienced it in their lifetime. So basically it's an environment where prices on average are relatively rising. Deflation, it's opposite is when prices on average relatively falling. Pippa says that in general, general. We've seen prices go down a lot in recent years. Consumer technology, for instance, is a place where you're actually getting things a lot cheaper than you used to. The device you carry in your pocket has more computing power than the thing that first got us to the moon. And even

though it is stupid expensive, your new smartphone is still a lot cheaper than any of the Apollo missions. Things rise and fall in price all the time. That's normal. And if you're lucky enough to get a cost of living raise on a regular basis, that is also normal. Economists just like a little bit of inflation generally, because it means the economy and hopefully people's salaries along with it are growing. But when everything goes down in price or up in price at a fast rate, the larger economy is having problems. Shrinkflation, which Pippa came up with in 2015, is of course a combination of shrink and inflation. And it's actually a sneaky form of inflation. And it's actually a sneaky form of in that price tags are remaining the same, but we're getting less product for the price,

which means the price per unit is going up. You just literally open your eyes and you start looking at the size of things. And if things are starting to get smaller, like you go to open your breakfast cereal, and there's like less cereal inside all the time, that is a signal that costs are going up and the manufacturers are trying to protect their profitability. and there has to be a name for that. So I thought about it and I thought shrinkflation. And here is where shrinkflation gets interesting.

Because it can happen in a particular industry or a particular company here and there. But when it happens with a lot of companies at the same time, shrinkflation might be a kind of canary in a coal mine for more problematic inflation in the larger economy, a signal that something is wrong before we all know it is wrong. Pippa says there are examples outside of the grocery store too, air travel, even real estate.

In the last decade, there's been a big push with what they call micro apartments. So an apartment that was so small that 10 years ago, no one have considered it reasonable to live in there, has suddenly become like a cool thing in places like New York and L.A. And it's actually more expensive per square foot. It's just less square. feet. Pippa says that when you put all the shrinkflation together, you get a population that feels on the whole like we're basically getting, well, screwed. And when people hit a certain point of being sick of getting screwed, they start to ask some very pointed questions. Basically, when there's not enough money to go around, because there's so much debt, and the government says,

I know I promise to pay for a bunch of things like retirement at age 65, but you know, we're broke now, so retirement is going to be like 93. And this is another form of shrinkflation. Like you're getting less for being a citizen. And this feeling makes you start to question, wait a minute, who are these people in charge? Do I want them? Or is there somebody who could do this better or differently or more my way? And this question is exactly what led to the populism that manifested itself as Brexit in the UK.

but it's exactly the same thing that manifested itself as President Trump in the United States. There are many people who give many key reasons for populism in America and elsewhere. It's definitely not just economic anxiety. It can be racism, xenophobia. But Pippa's argument is that the economic anxiety of looking around at your candy bars and toilet paper and airline tickets and seeing that you're getting, not as the marketers promised, more for less money, but less for the same money, is part of the issue here. You feel like a frog in a pot

coming to a slow boil. Also, if you want to figure out whether shrinkflation is happening on a larger scale, you don't have to believe Pippa Malmgren and Edgar Dwarski and Renick Knows, you don't have to believe

B.J. Novak on Conan O'Brien. You can believe the United Kingdom's Office for National Statistics, which released in 2019, a report on this shrinkage. The report looked at data from 2015 to 2017 on hundreds of products. And it found that more than double the number of products that had increased had

indeed shrunk. So what do we do about it? Could we appeal to companies better angels in a language they can understand? Is there an economic argument to be made, a business argument to be made against downsizing? I honestly can't think of it. Oh, that's not good. So it seems unlikely that companies are going to go out of their way to tell us when they're shrinking their products. Because the whole point is that we don't notice. They're not technically lying to us. It's all legal. But some would argue it's misleading.

So might the government step in on behalf of consumers? Well, we checked on that. Got in touch with the Food and Drug Administration. And they said, in so many words, we are focused on labeling accuracy, but let us transfer you over to the Federal Trade Commission. please hold. This actually happened over email.

Which, thank God. But yes, really, it is the FTC that is supposed to protect consumers from being misled and misinformed by companies here in the U.S. At least in this case. And they said, quote, we don't believe that the commission has brought any cases involving this practice, meaning shrinkflation. They also don't have guidelines requiring a certain amount of transparency between the manufacturer and the consumer whenever a product.

is downsized, so they couldn't say much more about it. You know who did have more to say about it, though? Charmin. We emailed them a picture of Melanie's sheet-to-sheet comparison of her Charmin ultra-soft toilet paper, and they agreed to talk. Hi, Lauren, this is Amory, calling from WBUR. How are you? Hi, Amory, I'm great.

Lauren Danroy is the Associate Communications Manager for Charmin, and she told us that a change in the size of their products usually has to do with innovation, things like new fibers and textures and ply structures. All of that plays into how the paper itself comes out, I guess, and then is put on the role. So sometimes to allow for more room for those innovations to take place, we do downcount our sheet size. However, that's keeping in mind that we're allowing consumers to do a lot more with less paper. So it's almost like you're getting more with less, essentially. so it's a little bit more bang-through-your-buck in that sense.

Lauren said this a couple of times, by the way, that Charmin wants you to be able to do more with less paper. So if your squares seem smaller than before, according to Charmin, they're probably more absorbent or stronger or softer. So for example, we just recently upgraded our ultra-soft product line this year to add more premium softness fibers and increase or introduce a new design to the paper itself, like the clouds and everything else you see on the surface,

which helped to improve our absorbency, deliver greater sheet thickness, and create a more softer feel to the paper. Why didn't my high school guidance counselor say you could be a toilet paper upgrade innovation expert? Whether the consumer notices these differences, that's another story. Melanie didn't. She just noticed her squares were smaller, and the packaging didn't tell her she was getting, quote, more premium softness fibers in lieu of square centimeters of toilet paper.

Lauren admits that on the shelf, this stuff can be hard to parse for the consumer. The double roll, which is now out, mega roll, jumbo roll, double mega, it is definitely confusing. So why not make it less confusing? So the consumer has an easier time knowing what they're getting? You know, I'm not sure about that, and that's a good question, but if someone is a known mega roll ultra soft user. That's when I'd encourage them if they're trying to make a comparison to continue looking to other

Mega Roll Ultra Soft products from the exact same retailer. Lauren says she will get back to us on some of our questions. But in the meantime, pay attention, she says. Pay Mega Jumbo Ultra Attention. Renick, Pippa, and Edgar agree. Just pay attention. So you have to read labels much more carefully. Begin to become net weight conscious.

And if you catch a manufacturer downsizing. And if you see that a product is actually getting smaller. Right to them, complain to them. The thing the public can do is they can complain. And then take a look at an alternative. Stop buying it. And the good news was social media, if they start to complain. Maybe if people do that enough, brands will stop actually shrinking stuff.

I don't know how long that would take or how many people it would take. But usually the manufacturers have been pretty quick to back away and to stop shrinking the product. So that's how a consumer can fight back. Speak up, consumers. Be net weight conscious. Read the label. Check the volume. Get your parental attention to detail on. And one more thing. Please be nice to your grocery store employees. It's not our fault. Endless thread is a production of WBUR. Austin's NPR station in partnership with Reddit. Josh Swartz is our producer, and he thinks that deciphering net weights and grocery stores is basically the opposite of food porn.

Iris Adler is our executive producer who doesn't like when companies secretly shrink their packaging because, well... That's insane. Mix and sound design by Paul Vicus, and he isn't so concerned about food products. He's more concerned with the serving vessels. We want plates. Michael Pope is our advisor at Reddit, and he just wants to go back. to The Way We Were. Editing help from managing producer Kat Brewer,

additional music by Paul Vicus, and huge shout out to Frank Hernandez, who came up with the idea for this episode. Frank, nailed it. On Reddit, we are endless underscore thread. If you want to contribute art for an upcoming episode or give us a story tip so we can tell it like we did today, hit us up there.

You can also go to our official subreddit, endless thread.red.com, or you can email us at endless thread at wbUR.org. My co-host and producer is Amory Seabriton. My co-host and senior producer is Ben Brock Johnson. We'll let ourselves out.