Shrinkflation Versus Portion Control in Foodservice - Product Reformulation, Redesign, Strategic Adjustments and Value Perceptions

Abstract

Industry Insight: Shrinkflation Versus Portion Control in Foodservice asks: is it a cost-of-living solution or will consumers feel shortchanged? The report looks at product reformulation, product redesign, strategic adjustments and value perceptions.

Shrinkflation is a term used to describe when the size or quantity of a product is reduced, but the price remains the same or even increases. Shrinkflation can be a result of several factors, including rising production costs (such as raw materials, labor, or transportation), economic challenges, or a desire to maintain profit levels in a competitive market. However, it can be seen as deceptive or misleading to consumers who may not notice the reduction in product size immediately, leading them to effectively pay more for less. Shrinking portion sizes is essentially a solution to higher foodservice prices2 but the difficulty lies in ensuring consumers remain satisfied. Yelp conducted a study based on consumer foodservice reviews which delved into inflation and shrinkflation. It is evident that certain cuisines are the most impacted by rising prices and reduced portions, which brands in these areas must acknowledge to ensure consumer sentiment remains positive during financial hardship.

Scope

• The impact of shrinkflation is incremental and might not be noticeable immediately.
• Consumers are left with no choice but to accept shrinkflation or avoid foodservice outlets that are practicing this.
• Regulation is needed to ensure fairness - France has implemented a legislation for shrinkflation transparency.
• Consumers will be budget conscious regardless of portion size value perceptions
• Foodservice brands can offer tiered pricing models, subscription-based services or bundled offerings to offset the effects of shrinkflation

Reasons to Buy

• Understand how foodservice outlets are trying to combat inflation through shrinking portion sizes and the impact that this has on the consumer.
• See how this relates to portion control in terms of consumer attitudes and behavior.