Consumer packaged goods (CPG) companies are rolling out a wave of smaller, more affordable products in response to continued pressure on consumer budgets. According to a report in The Wall Street Journal, major brands including PepsiCo, Campbell Soup Co., and Mondelez International are shrinking package sizes across snacks and beverages to offer a broader range of price points and keep shoppers engaged.
PepsiCo now sells Lay’s potato chips in a half-dozen sizes, ranging from 50 cents to $5. Mondelez is offering Milka chocolate bars from under $1 to $6 and has launched new, smaller sleeves of Oreo cookies and Ritz crackers priced around $3. Campbell’s has also leaned into this strategy with grab-and-go 2.5-ounce Goldfish packs that retail for less than $2.
“Consumers are going into small pack sizes to optimize their absolute budget,” said Mondelez CFO Luca Zaramella. “The $3, $4 as opposed to the $6, $7, particularly in snacks, are becoming a clear center of gravity.”
These smaller formats are not just about affordability. They often carry higher margins and help brands maintain sales volumes even as consumers reduce their discretionary purchases. Mondelez, for example, saw North American revenue fall 4.1% in the first quarter, but modest gains in cookies and crackers were largely driven by more accessible package options, executives said.
This approach is part of a broader shift as shoppers seek to cut costs by purchasing fewer items, visiting stores less frequently, and opting for private labels. “It’s really around looking at purchasing power to make sure [consumers] can get into the franchise,” said Rob Holston, head of EY’s global consumer products sector. “And once they get in there, as they get … more money in their pocket, they can actually move into larger pack sizes.”
The strategy has extended beyond food. Diageo is introducing smaller bottles of Don Julio tequila, and even bulk retailer Costco has scaled back its muffin packs from 12 to 8 while reducing the price to $6.99. “There are examples, like the muffins, where we go a little smaller because that’s the right size for the member to give the best value,” said Costco CFO Gary Millerchip.
Still, this shift comes with challenges. The proliferation of packaging formats can create tension in retail environments where shelf space is limited. “There’s only so much space for some of these categories,” said Bonnie Herzog, senior analyst at Goldman Sachs. “And it’s harder to come by.”
Packaging firms are working to ease the complexity. Ken Bowles, CFO of packaging giant Smurfit Westrock, told WSJ that companies can add new sizes while managing costs by tweaking materials or improving shipping efficiencies.
While smaller sizes may not offer better value per ounce, brands are betting that affordability at the register will help them retain shoppers. As Zaramella noted, “We need to be able to hold on to our consumers that have a limited amount of out-of-pocket spend.”
