The insidious return of “Shrinkflation”

I hate to disappoint some of you, but the minuscule amount of macaroni meme is not what we mean by “shrinkflation”. It is good though, right? We made it ourselves.

Shrinkflation is different from inflation

Before jumping into what “shrinkflation” is, we must first understand what “inflation” means and how the two differ.

“Inflation” is what happens when you have “too many dollars chasing too few goods”. Inflation has shown up throughout history and it tends to hurt the poor and middle class the most by making everything, including everyday goods like groceries, more expensive to buy.

Because of this, inflation is and probably always will be, a common topic of conversation.

Despite debates regarding wars, gun violence, high gas prices, and social issues (like abortion and crime control) raging, a recent jointly published poll from the Associated Press and the University of Chicago Nonpartisan Opinion Research Center (NORC), the number one concern of Americans right now is inflation.

Economists are predicting inflation could remain stubbornly high for the next several years. While polling and public sentiment regarding particular issues, or even how to address particular issues, changes regularly—does anyone remember WIN economics?— the topic of inflation will continue on for quite some time.

According to a July report from the United States Food and Drug Administration, “In 2022, food at-home prices are predicted to increase between 10.0 and 11.0 percent, and food-away-from-home prices are predicted to increase between 6.5 and 7.5 percent.” Even with inflation appearing to fall recently, reportedly, the price of everyday food products like eggs have gone up 38% over the last year. Likewise, chicken has risen 16.6%, milk 15.6%, and potatoes 13.3%. These numbers far exceed the annualized inflation rate for the overall economy, which currently stands at 8.5%.

Skip Here for Shrinkflation

By this point, some 300+ words into this supposed article about shrinkflation, some of you are probably starting to compare me to a food blogger who won’t just jump to recipe.  Again, sorry to disappoint. But the best you’re going to get with me right now, is the heading of this section.

Some of you might also have started wondering why I’ve chosen to pepper this post with food references mixed in throughout. The reason is because shrinkflation tends to target the food industry.

According to Merriam-Webster, the term “Shrinkflation” is thought to be coined by a British economist named Pippa Malmgren. It describes the pernicious act of reducing the amount of product inside of a container without correspondingly lowering the listed price so that unwary consumers have no idea they’re effectively paying more for products they buy all the time. Cambridge Online Dictionary says this about shrinkflation: “[it] is a cunning way of raising prices without actually raising the price of the product you are buying.”

Sometimes the Law Provides a Remedy

There are at least two types of cases where the consumer protection laws of a state might provide a remedy:

• net weight cases
• non-functional slack fill cases

Net Weight Cases

Net Weight or “NET WT” as it appears on food labels, is a federal requirement that food products properly display how much of a product is inside of a container. “Tare weight” for those who are curious, is pretty much the rest, i.e., the “container, box, wrapper, or other packing material”. If a food manufacturer misrepresents how much of a product is inside a container, as proved through proper independent testing, then that manufacturer is probably going to have a host of problems on its hands, including potential putative class actions from upset consumers that we creative lawyers call, you guessed it, “net weight cases”.

Slack Fill Cases

The other type of case is a non-functional slack fill or “slack fill case”. These occur when a manufacturer makes a product package that is opaque (can’t be easily seen into without opening) but then leaves an unreasonable and “non-functional” amount of empty space or “slack fill”. These types of cases are very different from the net weight cases described above.

An example of functional slack fill might be a bag of potato chips, where the empty space is designed to allow the bag to be rolled up to preserve the products (the chips) inside. Other manufacturers have successfully argued that the empty space in their containers—the slack fill—was needed for transportation, so that the products can easily slide around inside of a package without being spoiled.

The Pepper Case

Several years ago, a modest company in Minnesota called Watkins, Inc. which was mostly known at the time for making popular branded soaps, also manufactured pepper products. As a result, Watkins came into direct competition against the largest spice company in the world, McCormick & Company, Inc.

When Watkins discovered that McCormick had reduced the amount of pepper in their iconic red and white tins by 25%, Watkins sued McCormick for unfair business practices under a federal statute called the Lanham Act.  Watkins alleged that while McCormick had properly reflected the net weight reduction on the product’s packaging, the company had nevertheless violated 21 CFR § 100.100, which prohibits non-functional slack fill, because there could not be a justifiable reason for reducing the amount of pepper in a can that had remained the same size.

Soon thereafter several firms from around the country sued McCormick (and others for doing the same thing) for violations of state consumer protection laws, such as California’s version of 21 CFR § 100.100, Cal. Business & Professions Code § 12606.2, which, for further reading, can be found here.

After years of hard fought and protracted litigation, the parties reached a class-wide settlement. One of the four certified class representatives—of the original 15 putative representatives—was Holly Marsh, whom I represented. I was recently able to catch up with Ms. March about the case and here is what she said.

“I was worried about trying to be a class representative in a class action. I had no idea what any of that meant. I was scared to death, but I wanted to do something about what I thought was going on at the time and in the end, I’m glad I did. The entire process was not scary and overly dramatic like in the movies. Thanks to you and your firm, even though other firms were in charge of managing the case, I always felt prepared for every stage because you were always there to answer any question I ever had.”

All Cases Are Different

The pepper case was unique and individual past results are not a guarantee for future results. Similarly, all consumer protection cases are unique and require time and attention from a qualified attorney licensed in your jurisdiction. The above is for informational purposes only and is not meant to form or imply the existence of an attorney client relationship. All links are current as of the writing of this article but we are not responsible for ensuring that the links remain active and up to date.

However, if you do feel that you are the victim of something we’ve written about, please contact the Firm to schedule a free consultation.