Since our economy got shaky in 2009, food manufacturers have tried to find innovative ways to increase their profits. When food manufacturers find profits dropping, they usually have three choices – increase the price of their products, swap out one
ingredient for a less expensive one, or make the package smaller. People notice when their dollar doesn’t go as far or their favorite food doesn’t taste quite the same, so food manufacturers typically try to find ways to make packages smaller without alerting the consumer to
the change. Jars might have indented bottoms, boxes that have the same height and width are thinner, or items that traditionally were sold in pound or gallon units have a few fewer ounces. Some companies even market this as a benefit to consumers by advertising a lower calorie product sold at the same price as the traditional product. The lower calorie count isn’t from a change in recipe, but from a change in size.
The government in India noticed this trend in its country and decided to do something about it by regulating package sizes. Starting November 1, 2012, certain items, like cookies, crackers, coffee, and butter, will only be sold in standard sizes so the consumer doesn’t have to deal with ambiguity at the grocery store. The flip side of these new regulations is that prices will likely rise. Food manufacturers will have to spend more money both on new packaging and providing the customer with more product, and these costs will be passed on to the consumer. Companies will also be restricted from providing customers with promotional packages that offer a greater percentage of product than normal because these promotions will put the packages outside of the standard sizes. Read more about these changes in an article titled, “Pay more for FMCG goods from Nov 1 on new packaging rules.”
EquipNet likes to help companies think outside the box and gives food manufacturers ways to save money other than increasing prices, decreasing packages, or changing formulas. Food manufacturers can save thousands in production costs just by keeping close track of their assets. Read about our Asset Redeployment Management System to learn more.