In the fast-moving consumer goods (FMCG) marketing and packaging improvement sector, downsizing is a strategy that involves reducing the quantity of product offered in a standard package to conceal a potential price increase. This reduction in quantity allows the unit or visual price to remain similar to the previous one, despite an increase in the price per kilogram or liter of the product. Downsizing can be implemented by changing the packaging of a product for which consumers have long-established price references, or to introduce a new variety or flavor of an existing product.
In the first case, downsizing can be used when manufacturers need to raise prices due to increased raw material costs. In the second case, the reduction in the quantity sold applies to the new variety of the product, which is then marketed at a higher price than the previous version. For example, Nielsen noted that reducing the size of a Lustucru rice box from 1000g to 900g, without changing the price, resulted in a 3% decrease in sales, while an equivalent price increase for the 1kg box would have led to an 11% decrease.
To maintain similar prices despite increased costs, companies like Coca-Cola replaced 2-liter and 1.5-liter bottles with 1.75-liter and 1.25-liter formats. This decision was justified by citing an adaptation to “changing consumer expectations.” Some alcohol producers sometimes adopt a similar approach by reducing the alcohol content of their products, allowing them to lower production costs without reducing prices.
However, downsizing is not without risk, as it can lead to…
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