Feeling skimpy: Food industry waters down quality, services as costs rise

A corn syrup-infused “frozen dairy dessert” billed as an ice cream substitute. Cans of ham with 35% water. Smaller tubs of coffee beans with labels claiming to make the same number of cups as larger tubs.

It’s called “skimpflation,” and it’s a practice found in supermarkets across the country.

Industry analysts say the trend is growing as manufacturers lower the quality of products and cut the number of employees to offset cost increases in ingredients and staffing.

Customer interaction platform UJET on Tuesday released a survey of 1,600 consumers that found 66% had experienced skimpflation in the quality of service from companies like grocery delivery service Instacart in the past six months — and 87% said they would spend less or stop spending altogether on brands making such cuts.

“Food prices are under tremendous pressure due to the increased costs of raw materials and labor, pandemic-related inflation, existing supply chain challenges, and energy and transportation costs,” said Heather Garlich, a senior vice president at FMI — The Food Industry Association. “The ongoing crisis in Ukraine is also straining the global food system, compounding already high food prices.”

Ms. Garlich cited a shortage of sunflower oil that is forcing manufacturers to seek new suppliers or consider reformulating ingredients. About half of global sunflower oil came from Ukraine before the war with Russia cut off exports, she said.

Earlier this year, consumers complained on Twitter when red plastic tubs of Folgers Classic Roast shrank from 50 ounces to 43.5 ounces while still claiming to make “up to 400 cups.” Folgers responded that it was using a new “roasting technology” to create lighter-weight coffee beans.

Edgar Dworsky, founder and editor of the website Consumer World, said Folgers resorted to an old trick of “fluffing up” its beans to get more coffee out of them.

“Now whether you can still get ‘up to 400 cups’ from the new version is another story,” Mr. Dworsky said in an email. “Manufacturers don’t announce recipe changes or composition changes in their products.”

Mr. Dworsky said Breyers “played games” with ingredients even before the pandemic and removed so much milk fat from a “frozen dairy dessert” that the company could no longer call it ice cream.

Some butt or shank half-hams are advertised as 35% water, and some turkeys are 9.5% liquid solution.

As inflation remains at a 40-year high and real wage growth stagnates, pressure is mounting to cheapen food production further.

The Bureau of Labor Statistics reported Tuesday that the price of food rose 11.4% last month from August 2021, the highest annual increase since 1979. On Wednesday, the bureau reported that final demand prices for producers rose 8.7% over the same 12 months.

The Census Bureau reported Tuesday that the median household income dropped from $71,186 in 2020 to $70,784 last year. Over the same period, the number of Americans living below the poverty line rose from 37.5 million to 37.9 million.

Manufacturers also have reduced the package sizes of many products while keeping prices unchanged, a concept economists call “shrinkflation.” Consumer World reports that Charmin Ultra Strong toilet paper, Peet’s coffee, Suave shampoo, Cap’n Crunch cereal, Huggies diapers and Seventh Generation detergent have recently downsized their packages.

Because changing ingredients requires a long research and development process for Food and Drug Administration approval, it’s easier for restaurants and food companies to cut staffing and services in addition to watering down food, analysts say.

Julia Pollak, the chief economist for job website ZipRecruiter, said the tight labor market is causing “skimpflation” in customer service.

“There, it manifests itself as longer customer waits, fewer hours of service and lower access to customer support,” Ms. Pollak said.

Sean Higgins, a research associate at the libertarian Competitive Enterprise Institute, said companies have reason to be careful about switching ingredients. He noted the widespread customer complaints when Coca-Cola switched from using cane sugar to corn syrup as a sweetener in the early 1980s, another period of high inflation.

Mr. Higgins pointed out that supermarkets sell Nilla Wafers without actual vanilla and dried cherries or blueberries that are actually cranberries flavored to taste like other fruits.

“Most canned ‘pumpkin’ is not made from the orange variety carved into jack-o’-lanterns but actually a variety of squash,” Mr. Higgins said.

Michael Warder, principal at the Warder Consultancy financial services firm in California, said it’s impossible to predict how far skimpflation will go.

“With inflation, the pandemic, the recent heat waves, storms and flooding, people are having to make hard choices,” Mr. Warder said. “I believe these reevaluations eventually will be for the good.”

This story has been updated to clarify the labeling of frozen dairy dessert.