U.S. Consumers Prefer Economy Size To Downsized

U.S. Consumers Prefer Economy Size To Downsized

More than half of U.S. consumers (58%) are “very concerned” about rising food prices, according to a survey of more than 48,000 households conducted by Nielsen in October.

So are consumer packaged goods (CPG) manufacturers and retailers, who have struggled in recent months to balance consumer demand for low prices and high value with abnormally high raw materials and transportation costs.

Rather than raising prices, some food manufacturers have reduced the size of their products.  Such strategies may minimize sticker shock at the grocery store, but are unpopular with U.S. consumers.

Instead, according to Nielsen, nearly half (47%) of American consumers would prefer to buy large, economy-sized products with lower price points per serving.

In comparison, only 17% of consumers surveyed by Nielsen said they would prefer CPG manufacturers to introduce new, smaller pack sizes at lower prices.  Another 9% suggested that CPG manufacturers downsize or modestly reduce the packaging size of products, keeping the price of the product the same. 

“CPG manufacturers and retailers have few options to manage rising commodity costs beyond absorbing increased costs, passing on increases to consumers by raising prices, or covering increased costs by downsizing offerings,” Todd Hale, senior vice president, Consumer & Shopper Insights, Nielsen, noted.  “Downsizing, in particular, is not a new option — we’ve seen downsizing over the last few years in a number of categories, including ice cream, cereal, candy bars, salty snacks, and paper products.”

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