President Biden Urges Snack Companies to End Shrinkflation in Video Address
In a video message posted on social media platform X, President Joe Biden called on snack companies to cease the practice of shrinkflation, which involves reducing product sizes while keeping prices the same. The President referred to this practice as “a rip-off” and urged businesses to “do the right thing” and put an end to it. Although Biden did not provide specific solutions or policies to tackle this issue, he highlighted the frustration of the American public, who feel deceived by companies shrinking products incrementally in the hopes that consumers won’t notice.
The video featured various brands, including Gatorade, Doritos, Breyers, and Tostitos, but did not specifically name any companies engaging in shrinkflation. This call to action from the President follows a report released by Senator Bob Casey, who chairs the Senate Health, Education, Labor, and Pensions Subcommittee on Children & Families. The report detailed the impact of smaller product sizes on consumer goods such as toilet paper and snacks like Oreos and Doritos. It revealed that household paper products had seen a 34.9% increase in price per unit since January 2019, with 10.3% of the hike attributed to the shrinking sizes of rolls and packages. Snacks experienced a 26.4% price increase during the same period, with shrinking portions accounting for 9.8% of the rise.
Consumer concerns about the economy and inflation have remained high, with 22% of respondents in a recent Reuters/Ipsos poll citing it as their top concern. Despite a slowdown in inflation, the aftermath of the COVID-19 pandemic continues to impact Americans. Since taking office, President Biden has prioritized addressing rising supermarket prices, pushing for lower insulin costs, and attempting to diversify the meat-packing industry to alleviate the surge in beef prices. Senator Casey’s office has reached out to trade associations representing household consumer products and food and beverage corporations, seeking answers regarding pricing strategies, packaging practices, and the impact of shrinkflation on customers. It remains unclear if the trade associations have responded to the inquiry.
Analyst comment
Neutral news.
As an analyst, snack companies may face pressure to address shrinkflation due to public frustration and President Biden’s call to action. However, without specific policies or solutions provided, the market impact may be limited. Consumer concerns about inflation remain high, which could incentivize companies to address the issue.
