Nudge Podcast Episode Summary: "I Shrunk Britain’s #1 Bread. Did Anyone Notice?"

Released on November 11, 2024

Host: Phil Agnew
Podcast: Nudge
Episode Title: I Shrunk Britain’s #1 Bread. Did Anyone Notice?

Introduction: The Experiment in Bolton

Phil Agnew sets the stage on a bustling high street in Bolton, a town renowned not only for its rich history and heritage but also as the proud home of Warburton, Britain's most beloved bread brand. Established 148 years ago, Warburton has grown to become the second best-selling food and drink brand in the UK, trailing only behind Coca-Cola. With nearly half of Lancashire residents purchasing Warburtons compared to just 15% in London, Bolton serves as the perfect locale for Phil's intriguing experiment: **shrinking Warburton’s favorite bread to test if consumers notice the phenomenon known as shrinkflation.

"I will shrink Bolton's favourite bread and see if anyone notices. I want to find out if Shrinkflation works." [00:01]

Understanding Shrinkflation

Before diving into the experiment, Phil seeks to understand the concept of shrinkflation—a strategy where companies reduce the size or quantity of a product while maintaining or even increasing its price, thereby boosting profits without overtly raising prices.

Grace Farrell, a consumer expert from WITCH (Consumers' Association), explains:

"Shrinkflation is one of the many ways a company can increase its profit. It involves shrinking the size of the product while keeping the price the same, or sometimes even increasing it." [02:50]

Grace highlights numerous examples, including:

• Listerine Fresh Burst mouthwash: Reduced from 600ml to 500ml with a 52p price increase, leading to a 21% higher cost for 17% less product.
• PG Tips Pyramid Tea bags: Decreased from 180 to 140 bags per pack across multiple supermarkets.
• Bisto Best Chicken Gravy Granules: Dropped from 250g to 230g at major retailers.

"We've seen it with chocolate chip bars, coffee, toothpaste, butter, and even laundry detergent." [03:54]

The Psychology Behind Shrinkflation

Despite widespread application, why do companies persist with shrinkflation despite evident consumer dislike? Grace delves into the psychological phenomenon of change blindness, the inability to detect changes when they are subtle or occur gradually.

"Change blindness is the inability to detect changes, especially when those changes are small and unexpected. Gradual changes often go unnoticed." [06:07]

Referencing the Just Noticeable Difference (JND) concept introduced by researcher Ono in 1967, Grace illustrates how incremental modifications can remain invisible to consumers. The classic, albeit inaccurate, example of a frog in boiling water metaphorically underscores how gradual change can lead to significant, unnoticed outcomes.

Grace further cites the Simons and Levine (1998) study, where 50% of participants failed to notice a person being replaced behind a large painting during a conversation. This emphasizes that without side-by-side comparisons, consumers may remain oblivious to shrinkflation.

Field Experiment: Shrinking Warburton’s Bread in Bolton

Armed with this psychological insight, Phil teams up with Grace to conduct a hands-on experiment on Bolton’s high street. Phil meticulously reduces the size of a Warburton loaf by 5.5%, a typical shrinkflation percentage, and approaches local residents to assess their awareness of the change.

"Over the course of an hour, I spoke to 12 folks from Bolton." [14:10]

Key Observations:

• Recognition of Product: All but one participant recognized Warburton’s bread, underscoring brand loyalty and recognition.
• Perception of Design: Most participants commented on the bread’s packaging and appearance, noting subtle changes but failing to link them to size reduction.
• Awareness of Shrinkage: When directly questioned, only 2 out of 12 participants noticed the bread had been reduced in size. Surprisingly, one individual even perceived the shrunken loaf as larger than the standard version.

"Only two noticed the bread had been shrunk." [17:51]

This experiment corroborated the psychological theories discussed earlier, demonstrating that subtle, gradual reductions in product size often escape consumer detection, allowing companies to maintain or increase profits without alarming their customer base.

Implications and Consumer Empowerment

Despite 77% of shoppers in WITCH’s survey acknowledging awareness of shrinkflation, a significant portion remains indifferent, continuing to purchase shrunken products. Grace suggests that without transparent information, consumers are at a disadvantage, inadvertently supporting shrinkflation.

Grace highlights an innovative approach by Carrefour in France, where the supermarket chain proactively labels products that have undergone shrinkflation. By identifying 26 products from major brands like Nestlé and Unilever, Carrefour makes consumers aware of size reductions without restricting their purchasing choices.

"Carrefour's approach is smart because it provides the information consumers need to make informed choices." [18:38]

Proposed Solution:
Grace advocates for legislation mandating grocery stores to label items that have significantly shrunk without corresponding price reductions. This transparency would empower consumers to make educated decisions, potentially curbing the widespread practice of shrinkflation.

Conclusion: The Invisible Changes We Accept

Phil concludes by reiterating the subtlety and effectiveness of shrinkflation, linking it to everyday behaviors and broader societal changes. He playfully demonstrates change blindness within the episode by altering his vocal tone subtly—a change he bets most listeners did not notice.

"Did you notice the subtle changes I made throughout this episode? My guess is you didn't." [19:25]

The episode serves as a compelling reminder of how incremental changes, whether in product sizes or corporate policies, can have profound impacts while remaining largely unnoticed by the public.

Notable Quotes

• "Shrinkflation is one of the many ways a company can increase its profit." — Grace Farrell [02:50]
• "Change blindness is the inability to detect changes, especially when those changes are small and unexpected." — Grace Farrell [06:07]
• "Only two noticed the bread had been shrunk." — Grace Farrell [17:51]
• "Carrefour's approach is smart because it provides the information consumers need to make informed choices." — Grace Farrell [18:38]
• "Did you notice the subtle changes I made throughout this episode? My guess is you didn't." — Phil Agnew [19:25]

Key Takeaways

1. Shrinkflation is Pervasive: Companies across various sectors employ shrinkflation to boost profits without overt price hikes.
2. Psychological Barriers: Change blindness and the Just Noticeable Difference make it challenging for consumers to detect gradual size reductions.
3. Consumer Awareness is High but Ineffective: While many consumers recognize shrinkflation, most do not alter their purchasing behavior accordingly.
4. Need for Transparency: Initiatives like Carrefour’s labeling could empower consumers to resist shrinkflation by making changes more apparent.
5. Regulatory Intervention: Legislation mandating clear labeling of shrinkflation could be pivotal in safeguarding consumer interests.

Final Thought:
Shrinkflation exemplifies how subtle, incremental changes can escape collective awareness, allowing businesses to enhance profitability discreetly. By fostering transparency and leveraging psychological insights, consumers can better navigate and resist these hidden economic shifts.

For more insights and practical advice on behavioral science and business strategies, tune into Nudge Podcast every week with Phil Agnew.