Skimpflation: How food companies are swapping ingredients to reduce costs

In addition to hiking prices and shrinking product sizes, some food companies have also been quietly downgrading ingredients to reduce manufacturing costs.

The practice has been dubbed “skimpflation” and it has already joined inflation and “shrinkflation” in grocery stores across Canada.

“Skimpflation is when a manufacturer reformulates its product with cheaper ingredients,” American consumer lawyer Edgar Dworsky told CTV News from Boston. “In skimpflation, you are getting less for your money.”

Dworsky tracks stealthy product changes. He points to toilet paper as an example of so-called skimpflation.

“Do you ever notice if its getting thinner?” said Dworsky, who posts his findings on the U.S. website www.consumerworld.org. “That’s one way manufacturers are kind of skimping on the product, using less paper pulp.”

Skimpflation can be difficult to catch because there are no specific laws requiring companies to disclose changes. Like shrinkflation, which is when you pay the same price for a smaller product, some say the practice helps keep consumer prices down amid inflation.

“The whole idea behind managing these things behind the scenes as a brand is to make sure that your products remain affordable,” Jeff Doucette, general manager at shopping information app Field Agent Canada told CTV News from Calgary.

Skimpflation is already happening in Canada, according to Sylvain Charlebois, a professor in food distribution and policy at Dalhousie University.

“Food manufacturers have used the skimpflation approach for many years,” Charlebois told CTV News from Halifax. “Companies will reformulate products in order to save money.”

Charlebois gives the example of a granola bar brand that changed its first ingredient from “milk chocolate” to something called “chocolatey coating,” which includes cheaper ingredients like palm oil.

“Cocoa prices are at a 44-year high right now,” Charlebois, who is also the director of the Agri-Food Analytics Lab, said. “That has really forced companies to use different sources of chocolate-flavoured ingredients.”