Shrinkflation Versus Portion Control in Foodservice – Product Reformulation, Redesign, Strategic Adjustments and Value Perceptions

Shrinkflation Versus Portion Control In Foodservice Trend Analysis Overview

Shrinkflation is a term used to describe when the size or quantity of a product is reduced, but the price remains the same or even increases. It can be a result of several factors, including rising production costs (such as raw materials, labor, or transportation), economic challenges, or a desire to maintain profit levels in a competitive market.

Leading food service brands have reduced portion sizes to cut costs. Shrinking portion sizes is essentially a solution to higher food service prices but the difficulty lies in ensuring consumers remain satisfied. Yelp has conducted a study based on consumer foodservice reviews, delving into inflation and shrinkflation. Certain cuisines are the most impacted by rising prices and reduced portions, which brands in these areas must acknowledge to ensure consumer sentiment remains positive during financial hardship. These reviews also highlight that shrinkflation is not always going unnoticed and consumers do often feel short-changed.

The shrinkflation versus portion control in foodservice report looks at product reformulation, product redesign, strategic adjustments, and value perceptions.

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Shrinkflation Versus Portion Control in the Foodservice – Product Reformulation

Shrinkflation can involve thinning ingredients and reducing portion sizes per meal. Reformulating products to smaller sizes is common in quick-service restaurants. They can reformulate and “shrink” menu items in a variety of ways, including thinning meat to offer a similar output at a lower unit cost but the same price for consumers. However, when financially conscious consumers wish to go out to eat, these consumers look for quality and value. With this in mind, food service brands need to offer consumers cost-effective meals with portion sizes reflecting the price point. If a brand reformulates to shrink or thin the menu item down, but the cost stays the same, consumers will not be satisfied and brand loyalty will be negatively impacted.

Global: When You Go Out to Have a Meal, What Influences Your Decision? 2022

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Shrinkflation Versus Portion Control in the Foodservice - Product Redesign

In a separate strategy for reformulation, food service brands can redesign dishes to account for shrinkflation and give off the illusion that the portion size has remained the same. The demand for certain packs and portion sizes in retail can be translated into food service; one-in-10 global consumers prefer large packs when purchasing prepared meals in retail, which poses a barrier for brands who are shrinking products as consumers might actively look for unit measures as part of their purchasing decision. Similarly, consumers associate large portion sizes with value for money in retail, highlighting that consumers will also be dissatisfied with a smaller portion that does not justify spending in a food service environment. This is particularly evident for younger consumers.

Global: What is Your Preferred Pack Size For Prepared Meals When Purchasing in a Retail Environment? 2023

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Shrinkflation Versus Portion Control in the Foodservice - Strategic Adjustments

Foodservice brands can make strategic readjustments for shrinkflation. While the per-dish price may remain constant, restaurants could adjust other elements of the meal, such as removing complementary items like bread to offset their costs. These strategic readjustments mean that the consumer gets less for their money in return, as the overall service output has “shrunk”. For instance, shrinkflation is causing some outlets to switch up their unlimited salad bars strategy and remove this offering to reduce costs and portion size.

Global: “How Influential is The Restaurant Experience/Ambience When Deciding Which Restaurants to Visit?”, 2022

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Shrinkflation Versus Portion Control in the Foodservice - Value Perceptions

Consumers are looking for low prices to equate to cost-effectiveness and value from QSRs. The QSR and food delivery market are attempting to navigate changing consumer demands and perceptions of value. Shrinkflation can cause consumers to feel short-changed in QSRs, especially if they are already opting for cheaper alternatives if they are getting a smaller portion than expected. Value, however, can be perceived through portion size and not price, with some consumers being willing to pay a higher price if they believe they are getting more food for their money. For instance, Papa John has acknowledged shrinkflation in its new campaign “Shaqflation”. It highlights a new promotion for an extra-large “sharing” pizza, which has a high price point but gives off the impression that consumers will be getting a large amount of food, despite it being split between consumers.

Global: “How Are You Coping with Rising Prices When Visiting QSR?”, 2023

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Scope

Industry Insight: Shrinkflation Versus Portion Control in Foodservice asks: is it a cost-of-living solution or will consumers feel shortchanged? The report looks at product reformulation, product redesign, strategic adjustments, and value perceptions.

Key Highlights

• The impact of shrinkflation is incremental and might not be noticeable immediately.
• Consumers are left with no choice but to accept shrinkflation or avoid food service outlets that are practicing this.
• Regulation is needed to ensure fairness – France has implemented legislation for shrinkflation transparency.
• Consumers will be budget-conscious regardless of portion size value perceptions
• Foodservice brands can offer tiered pricing models, subscription-based services, or bundled offerings to offset the effects of shrinkflation

Reasons to Buy

• Understand how food service outlets are trying to combat inflation through shrinking portion sizes and the impact that this has on the consumer.
• See how this relates to portion control in terms of consumer attitudes and behavior.