Procter & Gamble confirmed today that it has shrunk the size of its Folgers Classic Roast and Coffeehouse Series as part of an "enhanced, proprietary roasting process."
The former 13-oz. can has been reduced to 11.3 ozs. Folgers also has introduced a new 33.9-oz. can, down from 39 ozs. Prices for the new lineup remain the same, said P&G rep Jen Becker.
Jim Wisner, president of Wisner Marketing Group, Libertyville, Ill., views the move as P&G's cost-saving strategy, as the company (and other CPGs) struggle with rising fuel and commodity costs. The price of green coffee beans, in particular, rose 22% since January of this year, per Intercontinental Exchange.
"The primary motivation for a lot of these companies is, 'How do you address downsizing and do it in a way so that the consumer doesn't get a sudden jolt from seeing the really dramatic price change?" Wisner said.
In its earnings call earlier this week, P&G cited lower overhead costs as a key factor in the company's fourth quarter success. The company reported earnings per share of 92 cents, up two cents from analyst estimates. During the conference, CFO Clayton Daley told analysts P&G will have to further tighten its belt to offset an additional $3 billion increase in commodity costs for the 2009 fiscal year.
P&G, however, assured that it's not a case of "package shrink"
