Consumers are about to get more bang for their buck. During PepsiCo’s Q3 2024 earnings call, Ramon L. Laguarta, the company’s chairman and CEO, announced that they’re taking some air out of bags of Tostitos and Ruffles.
Going into the fall and winter seasons, where chips are frequently served at football and other gatherings, Laguarta said that the company will be “giving 20 percent more product” in bags of Tostitos and Ruffles. The move, Laguarta said, is because those brands “belong in those occasions.”
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Laguarta also noted that, in the past, PepsiCo found variety packs to be “a huge driver of business.” Now, however, that aspect of the business is “slowing down a little bit.” As such, the company has opted to add bonus packs to its variety offerings.
“This will be all additional value that I think will have a positive impact in the business in the coming months,” Laguarta said.
PepsiCo’s business decisions are also likely in response to a trend known as “shrinkflation.” As anyone who buys groceries knows, amid inflation, some companies decided to up the price of their products while putting the same amount or less of the product in the bag.
Robert Moskow, an analyst at TD Cowen, told CNN that the price per ounce of chips has increased 36 percent compared to 2020. Meanwhile, Edgar Dworsky, a consumer protection lawyer, discovered that some chip bags shrank by as much as two ounces in 2021, the outlet reported.
That price increase and product decrease have turned consumers away from name-brand products and towards lower-priced generic offerings. As such, Moskow believes that other snack brands will follow PepsiCo’s lead to attempt to win back consumers.
It’s not just PepsiCo that’s been accused of shrinkflation. Delish reported that Chipotle planned to re-emphasize the importance of “generous portions” to its workers amid public outcry. Additionally, on X, former Secretary of Labor Robert Reich called out several companies for participating in the practice.
“Pepsi replaced its 32oz Gatorade bottle with a 28oz for the same price. Nabisco shrank the family size box of Wheat Thins by 12%. General Mills shrank the family size box of Cocoa Puffs by 6%. Frito-Lay shrank the size of a bag of Doritos by 5%,” he wrote. “Shrinkflation is everywhere.”
