BBC Watchdog: Big names, small(er) products

Tony

What Consumer Founder
Apr 7, 2008
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Bolton
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Ever get the feeling you're paying the same but getting less? With some of the UK's biggest food companies that might be right.

Rebecca Wilcox discovered that Gu's 'Cheeky Pots' of chocolate desserts now have fewer spoonfuls of chocolate inside. The net weight on the packaging shows each pot is now 45g, compared with a previous weight of 50g, but the recommended retail price has stayed the same.

That's not the only product where the contents inside have reduced while the packaging and recommended retail price have stayed the same...

Haribo have reduced the weight of some of their products while keeping their bags the same size. For example, Haribo's 'Liquorice Favourites' have reduced from 175g to 160g. That's an 8.5% weight reduction.

A number of Gourmet Garden herb products have reduced in weight from 120g to 115g - a 4% change - whereas the tube has stayed the same size.

Pots of Muller Rice have reduced in weight from 200g to 190g, which is a 5% difference. Yet again, the size of the pot has remained the same.

Daniel King, from supermarket comparison website mysupermarket, says that several companies are downsizing their products because food manufacturers are facing higher costs:

"Oil prices have gone up, manufacturing costs have gone up, we're coming off the back of a pretty sharp recession. They don't necessarily want to increase the cost to the end consumer," explained Daniel, "but something has to give."

Net weights are printed on the side of packaging, but it's often difficult to know whether these weights are the same as they were six months ago.

Rebecca put the products Watchdog identified through an x-ray machine so she could see exactly what was inside. While doing so, she spotted all the extra air inside each packet now the contents have reduced in size.

We asked maths professor Shahn Majid from Queen Mary University of London to work out exactly how much extra air that might be. He calculated that if one person bought each of the products we identified once a week for a year, they would be paying for 2.6 litres of extra air every year. That's almost enough air to fill a small party balloon.

He then calculated how much air that would be if everyone in the UK bought each product once a week for a year. That came out at 158 million litres of extra air - the equivalent to the amount needed to fill 56 hot air balloons.

Company responses:

Gu

"The weight of Gu's Cheeky Pots of Chocolate Ganache changed from 3 x 50g to
3 x 45g in March 2010. In line with Gu's commitment to transparency, all retailer shelf-edge labels and packaging declarations were amended accordingly to reflect the new weights of the products so consumers can see the changes at a glance.

The size and dimensions of the packaging remain unchanged, as the fill level change was too small to require new packaging to be sourced and used.

The recipe has remained unchanged and includes the same percentage of cocoa chocolate.

The RSP of Gu Cheeky Pots of Chocolate Ganache has remained at £1.99 since
2007 and has not increased or changed since then despite rising commodity prices.

Our tracking shows that the average price per unit of this product has reduced by 14.2% since March 2007 (*Source = AC Nielsen scantrack, 52wks MAT to 20.03.10, avg selling price through the till which takes into account promotional activity.)

Over the same 3 year period, commodity prices of chocolate and cream (accounting for 95% of the ingredients in the Cheeky Pots of Chocolate Ganache) have seen dramatic increases. The price of cocoa, for example, has increased by over 130% in the last three years and cream has increased by over 60% (*Source = Financial Times for Cocoa, Dairy Datum Report for Cream).

Gu is a small business; we try very hard to provide the best quality products we can for our customers and pride ourselves on the honesty and integrity of our ingredients and manufacturing process."

Gourmet Garden

"Gourmet Garden have not changed the size of the packaging, but the content has changed from 120g to 115g on Basil and Ginger. This has been part of a standardisation process across the ranges, which commenced just over a year ago. As part of this process Gourmet Garden increased the size of its Chilli product from 110g to 115g."

Haribo

Despite the change in pack weight, which is printed clearly on each bag, HARIBO has not changed the size of its packaging. This decision was made as a result of a number of considerations.

As mentioned, the strong increase in relation to the cost of raw materials and packaging, as well as the weak position of the pound in comparison to the Euro, meant that HARIBO had to take action in order to retain a consistently low price point across all products.

Faced with two options; to reduce the pack weight or raise the cost price to the consumer, HARIBO chose to reduce pack weight in order to maintain its position as a trusted supplier of affordable treats.

In addition the brand introduced a £1 price marked promotional pack of 250g hanging bags of Liquorice Favourites, offering consumers even greater value for money.

Also in order to change the size of the packaging across HARIBO products, the company would have to change the design of the bags, outer cases, logistics and packaging machines, resulting in increased costs that would have to be passed on to the consumer.

Again, preferring not to do this, HARIBO chose to keep the packaging sizes the same and the costs of products consistent.

Priding itself on its position as a family favourite, HARIBO is committed to offering a variety of affordable treats.

We can confirm that the RRP's on all products across the HARIBO range have remained unchanged.

It is however important and relevant to highlight that in order to maintain its position as an affordable supplier, the brand has introduced a number of promotional price marked hanging bags, which are widely available in both independent retailers and multiples nationwide.

The price marked bags retail at £1 for 250g and this range include the brands recent addition Football Mix, Liquorice Favourites and the top three selling lines; Starmix, Tangfastics and Kiddies Supermix.

As such, HARIBO is still offering consumers superior value for money in relation to price per bag and price per 100g.

Muller

"Muller made a small change of 10g to the weight of some products due to the rising cost of raw materials over the last 12 months and the increase in fuel/energy costs.

In the current economic climate, Müller felt it more appropriate to make a small change of 10g to the weight of some products rather than increasing the wholesale price to retailers.

Whilst the retail price is individually determined by retailers our view is that our high quality products still represent excellent value for money at the prices at which they are generally available.

In this case the existing pots mould was used so there was no change to the physical packaging/pot size, although, of course, the new weight was clearly labelled on the pack ensuring consumers could make an informed choice, balancing our obligation to our consumers with our environmental responsibilities. As an environmentally responsible operator mindful of the Packaging (essential requirements) Regulations our policy is to re-use existing pot moulds wherever possible.

Our view is that our high quality products still represent excellent value for money at the prices at which they are generally available within retailers.

We have reduced the pack size of the product to avoid increasing our cost price to our retailer customers and accordingly we have not changed our recommended retail price (RRP) of the product."

Beacon Confectionary

"Over the last 12 months, there have been significant cost increases to the raw ingredients and distribution processes used in the confectionary manufacturing industry. Unfortunately, this has meant that we have had to reduce the size of some of our eggs in order to keep them cost effective for the consumer and to enable us to maintain competitive prices. We have reduced the size of our packaging to reflect this. We feel our Hot Wheels Easter Egg remains great value for money with two fantastic die cast cars included in the pack."

Pot Noodle - Unilever

"In May 2009 Unilever standardised the content weight of all Pot Noodle pots to 90g from a previous range of weights between 92g and 96g.

The content weight was reduced by a very small amount in order to standardise the range, taking us in line with the rest of the instant snack market and back to the size we had been two years previously. As this was a minor change the pots remained the same size and the RRP did not change. This change took place nearly a year ago and to date we have had no consumer complaints."

Pringles and Pampers - Procter & Gamble

"Delivering value for the consumer is critical to our business. Our products are purchased every 1-3 weeks, thus we are acutely aware of the pressure on consumer buying power. Our goal has, and always will be, to provide consumers with trusted products that provide both superior value and quality.

It is important to note that the final consumer price is solely at the discretion of the retailer. We can only share our perspective on list price.

As with any brand, the RRP is reflective of the R&D investment, raw materials, processing and manufacturing, transportation and distribution, packaging and marketing, and can fluctuate depending on economic conditions. Increased commodity costs represented a significant consideration in our pricing strategies over the past few months. Innovation also played a significant part and we have brought many innovations to both of these brands.

Specifically in relation to Pampers, on Baby Dry Midi Jumbo Pack, the nappy count decreased from 104 to 96, with RRP remaining the same (July 09). However, over a 12 month period (Feb '09 - Feb '10), over 80% of Baby Dry nappies were bought on promotion and, across the same period, the absolute cost to mum per Baby Dry nappy remained more or less the same (14.7p Feb09 : 14.4p Feb10). In July 09, we also increased the nappies per pack across our Pampers Easy Ups range with no change to RRP (a similar value offering to what we implemented across our Active Fit range the year before), which in a recessionary period represented great value for Pampers mums and their babies. Product innovation is the key driver of our Pampers brand and we are continuously learning from babies and parents to deliver superior products. We recognise that in difficult economic times, mums want more choice. In response to this, we also introduced Pampers Simply Dry - a basic nappy with the trusted dryness of Pampers, offering great value.

In relation to Pringles, last year we increased the pack weight from 155g to 165g with an associated increase in RRP from £1.55 to £1.99. Again, innovation has played a significant role in this brand's development over the past couple of years, including the launch of the award-winning Pringles Select and, most recently in 2010, Pringles Xtreme as well as a variety of additional flavours, thereby providing consumers with greater choice.

We'll continue to monitor pricing and the relative consumer value of our brands, making appropriate interventions where applicable to remain competitive and to deliver value."

Nestle's Aero Peppermint

"It's a very small change in order to maintain the same good value price in response to extremely high cocoa prices."

Tesco Light Choice Lasagne

"We reviewed the size of some of our Light Choice ready meals earlier this year, to bring us into line with our competitors. We increased and improved the ingredients to give customers a tastier ready meal."



Big names, small(er) products