PepsiCo is trying to win back customers turned off by “shrinkflation” with a special promotion offering more potato chips in bags from Lay's, Doritos, Tostitos and Raffles.
company told CNN Tostitos and Ruffles 'bonus' bags contain 20% more chips for the same price as a standard bag in some stores.
PepsiCo, the country's largest maker of salty snacks, has announced that it will add two more bags of potato chips to its 18-bag variety pack.
The move comes as cash-strapped consumers are cutting back on snack purchases due to persistently high levels of inflation.
PepsiCo CEO Ramon Laguarta told analysts on an earnings call last week that the company is looking to take advantage of the football season, when fans tend to consume more snacks.
“There are a lot of gatherings,” Laguarta said.
But Consumer World founder and editor Edgar Dworsky said shoppers shouldn't get their hopes up.
“PepsiCo's announcement sounds more like a temporary move than a permanent move ahead of the holiday season, when some products will be made larger,” said Dworsky, who has been closely monitoring the phenomenon of “shrinkflation.” he told the Post.
“By definition, a 'bonus pack' offers shoppers something special compared to a regular-sized product. The new permanent larger size is not called a bonus pack. ”
“Still, consumers should enjoy getting extra chips while the promotion lasts.”
According to a recent analysis from Bank of America, snack sales in the third quarter of 2024 were down 0.5% year over year, and retail snack volume was down 1.1%.
PepsiCo's snack sales decreased 1% last quarter, and snack volume decreased 1.5%.
In recent years, the price of snacks among food items has soared due to the progress of inflation.
The average price of a 16-ounce bag of potato chips last month was $6.46, up 28% from the average price of $5.02 in the same month four years ago, according to the Bureau of Labor Statistics.
Meanwhile, snack makers are holding prices the same or raising them while reducing the amount of product in their packages.
“Shrinkflation” is also affecting other sectors of the economy, such as healthcare and retail.
The price per ounce of salty snacks has increased 36% compared to 2020, according to TD Cowen analyst Robert Moscow.
This 36% increase is higher than the 21% increase in overall food prices over the same period.
Moscow Oblast told CNN that PepsiCo's move to increase the size of its snack packs will likely lead competitors such as General Mills and Mondelez to follow suit.
The Post has reached out to PepsiCo for comment.
