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Food companies cut soaring costs by modifying containers, contents inside
By Mike Hughlett
Chicago Tribune
Published on Tuesday, Aug 19, 2008
Consumers might not have noticed, but their bottles of Coke are slimming down: The cap on the 20-ounce bottle is a tad smaller these days — and 24 percent lighter.
Kraft Foods' new salad dressing bottles have gone on a diet, as well. They use 19 percent less plastic and take up less space in shipping containers.
Seemingly mundane packaging modifications can lead to important cost savings for big food companies, as they grapple with soaring commodity and energy costs.
Food companies also are turning to another packaging tactic in the cost war: shrinking the contents inside. Over the past several months, products ranging from mayonnaise to breakfast cereal have been stuffed into containers that hold an ounce or two less, but cost the same.
Shrinking a container is less obvious to consumers than raising prices, said Chris Waldrop, director of the Consumer Federation of America's Food Policy Institute. He doesn't fault food makers.
''But if you are going to do it, be honest and transparent about it,'' he said, noting that most companies don't publicly announce shrinkage.
Food inflation has been raging at a rate not seen since the early 1990s. The root cause: soaring prices for staple commodities like wheat, combined with escalating oil prices, which translate into higher transportation and packaging costs.
Food companies can't pass down to consumers all their cost increases, so tinkering with packaging can be an important tool in saving money.
''Companies always put a focus on (cutting packaging costs), but in this environment, they are certainly putting more and more focus,'' said Joseph Hotchkiss, chair of Cornell University's food science department and a spokesman for the Chicago-based Institute of Food Technologists.
In the food business, packaging costs include everything from the raw materials for bottles and boxes to the amount of space products take up in trucks and on shipping pallets.
Broadly defined, packaging costs often outweigh ingredient costs, he said. And a penny shaved off packaging can translate into millions of dollars in savings for a high-volume consumer
product, Hotchkiss said.
One key tactic is ''source reduction'' — reducing the amount of plastic, aluminum, glass, paper or other materials used to make a container. And it usually has a positive byproduct: reducing waste, packaging experts say.
Last year, Atlanta-based Coca-Cola began putting smaller caps on plastic bottles holding 24 ounces or less of the company's carbonated beverages and its Dasani brand water.
It was a major project: Engineers had to ensure a proper seal to avoid leakage or a cap blow-off. ''There is a lot of sophistication to the design of a bottle cap that is often overlooked,'' said Scott Vitters, Coca-Cola's director of sustainable packaging.
The payoff: a lid that is effectively 24 percent lighter, and thus a big reduction in plastic usage. Last year, Coke cut plastic intake by 4 million pounds because of the new cap. This year, as the cap rollout is completed, those savings should rise to 40 million pounds. Coke declined to translate that into dollars.
Kraft, with its new salad dressing container, has cut its plastic consumption by 3.4 million pounds annually, the equivalent of 70 million plastic beverage bottles, the company says. The new package, through an engineering redesign of the bottle's shape, also takes up so much less space that Kraft's suppliers can ship 18 percent more dressing bottles per truckload — another source of savings.
A wide variety of products have gone under the shrink ray this year: Frito-Lay's snack chips, including Lays and Doritos; Kellogg's Froot Loops, Apple Jacks and Cocoa Krispies cereals; ice cream sold under the Dreyer's and Breyers brands.
Consumers might not have noticed, but their bottles of Coke are slimming down: The cap on the 20-ounce bottle is a tad smaller these days — and 24 percent lighter.
Get the full article here.
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