Shrinkflation: Drawbacks for the Environment, Consumer Trust

In times of inflation, consider whether shrinking a product for a short-term
win could cause long-term brand damage — first, determine if it’s the best option and include a robust assessment of the environmental impacts.

In an era of intense inflation, the practice of
shrinkflation raises important
questions about its environmental impact — particularly regarding packaging
waste.

One might thin less product means less packaging and less waste in our landfills
and oceans. But, like most things in life and business, it’s not that simple.
Does shrinkflation really lead to increased packaging waste, or does it reduce
it?

To better understand this, it’s essential to delve into the mechanics of
packaging and consumer behavior.

Environmental impacts

A key issue with shrinkflation from a consumer perspective is the perception of
value for money; but the environmental impact is rarely explored, despite these
concerns having much larger ramifications environmentally. One would assume that
with a reduction in product size, packaging size would also decrease — yet this
isn’t always the case. In many instances, manufacturers keep the size unchanged
to maintain shelf presence or because of technical constraints in packaging
design. This mismatch leads to an increase in packaging material per unit of
product, contributing to more packaging waste.

Additionally, when faced with smaller product sizes, consumers may either
consciously or unconsciously adjust their purchasing habits. Whether they
purchase more at a time or more often, it can drive an increase in the total
packaging entering the waste stream. This behavior is particularly noticeable in
products that are consumed regularly and in large quantities — such as food
items and household essentials — but doesn’t stop there.

The production and distribution of smaller-sized products may lead to increased
energy consumption and carbon emissions. Consumers and suppliers may take more
trips to get the same quantity of product. These factors, coupled with extra
packaging requirements, amplify the environmental footprint of shrinkflated
products even when the unit size diminishes.

Shrinkflation in action

Image credit: Carlos Dominguez

One can glean a deeper understanding of shrinkflation’s impact on packaging
waste from examining examples across various industries:

Beverage industry: In beverages, shrinkflation often manifests through
reduced bottle sizes. While the reduction in plastic used per bottle is a
positive outcome, the increase in the number of bottles purchased to achieve
the same consumption level may negate these benefits.
Food industry: Perhaps the most visible sector for shrinkflation — a
classic example is the shrinking of a chocolate bar, cereal box or number of
chips per bag. If the packaging size remains unchanged, the ratio of product
to packaging diminishes — leading to more packaging per gram of the product.
Household and personal care products: Cleaning products, toilet paper
and other household items aren’t immune to shrinkflation. These products,
which often come in plastic or paper packaging, can contribute to packaging
waste if consumers end up purchasing them more frequently. Take the case of
“dollar-store sizing” paper towels — where regular cardboard rolls would
carry 500 sheets, the same-sized roll at the dollar store might only carry
200. Not only is this resource inefficient, since the standard cardboard
roll holds fewer paper towels; but it also means the customer will use more
rolls and make more trips to the store. This in turn would drive a higher
rate of stock turnover and more frequent resupply.

The environmental implications of shrinkflation-induced packaging waste are
complex. As a rule, more packaging requires more raw materials, an increase in
energy usage and water, and may decrease the likelihood for someone to know how
to properly recycle — and as such, more waste ends up in landfills or
incinerators. This increases the impacts associated with end-of-life treatments
— for example, more emissions and energy used and greater risk of plastic
leakage.

Additionally, using extra packaging without increasing the quantity of product
increases transportation impact — for instance, an increased number of trips for
delivering packaging to manufacturing sites, as well as for consumers purchasing
the same quantity of products.

The solution

Today’s consumers are savvy when it comes to shrinkflation and the environment,
which are key factors in brand trust. Consider whether shrinking your product
for a short-term win could cause long-term brand damage. Rather than default to
another incremental product shrink, first determine if it’s the best option and
include a robust assessment of the environmental impacts.

If shrinking products is necessary, consider offsetting the impact by improving
the packaging design — an opportunity for a product makeover that the customer
can feel good about. The first step of a successful eco-design approach though
should always be to remove any unnecessary packaging and reduce packaging weight
without compromising product quality. Then, manufacturers can explore innovative
packaging designs that are proportionate to the product size, use fewer
resources, are easy to recycle and have the lowest environmental impacts (on
carbon, land, water and plastic pollution). Packaging designers should also
explore innovative business models, such as reuse or refill
systems.
This model may be even better than the traditional single-use system, as it can
house the same quantity of product many times over.

Shrinkflation is just one of many examples demonstrating that even the most
common business decisions can have far-reaching consequences on consumers and
the planet. In this age of sustainable transformation, savvy leaders will need
to look before they leap and keep in mind the good of people, planet and their
bottom line.

Published Mar 22, 2024 2pm EDT / 11am PDT / 6pm GMT / 7pm CET