Shrinkflation is the same price for less product. Coffee that went from a pound to eleven ounces and ice cream from a half gallon to 1.75 quarts are the examples in John Gourville’s work at Harvard Reported. It’s tempting for the same reason it’s controversial: it moves the number customers don’t watch.

Why it works

Gourville and Jonathan Koehler’s 2004 working paper argued that consumers are more sensitive to price than to quantity Published. Field data agrees. Metin Çakır and Joseph Balagtas studied household purchases of ice cream in Chicago and found that demand responded to package size about a quarter as much as it responded to price Published. Aljoscha Janssen and Johannes Kasinger, in a 2026 study of a decade of US grocery scanner data, found downsizing more than five times as common as upsizing by sales volume, and shoppers more responsive to price than to size Published.

Why it backfires

It works when people don’t notice. When they do, they judge it more harshly than a price rise. In five preregistered experiments published in 2024, Ioannis Evangelidis found most people called a cost-driven price rise fair, but the same rise as a smaller pack less so: in the first study, 44.4% called the downsizing unfair against 30.7% for the price rise. The reason was deception. When the change was stated on the pack, the gap disappeared: 36.9% against 35.4% Published.

That is the whole ethics question in two numbers. Shrinking a pack isn’t unfair in itself. Hiding it is, and customers treat it that way.

A smaller pack is a price rise. Say so, and it’s judged like one. Hide it, and it’s judged worse.

Why it’s riskier for DTC

A DTC customer uses the product at a steady rate, so a smaller bottle runs out sooner, and on a subscription it runs out before the next box. They’re also the loyal, recent buyers who react most to feeling tricked (chapter 4). The customer most likely to notice your shrinkflation is the one you most want to keep.

What regulators say

• United States. The Government Accountability Office reported in July 2025 that downsizing added less than 0.1 percentage points to the 34.5% rise in consumer prices from 2019 to 2024, but 1.6 points in cereal and 3.0 in household paper. It noted proposed federal legislation to treat manufacturers’ downsizing as an unfair or deceptive practice Published. Connecticut’s attorney general backed a 2025 bill, HB 6856, requiring 12 months’ notice of downsizing on grocery staples; it was tabled and didn’t pass Reported.
• France. Since July 1, 2024, supermarkets over 400 square meters must post a notice next to downsized products for two months, stating the old and new quantity and the rise in unit price Published.
• South Korea. Since August 2024, makers of processed foods and household goods must disclose a size reduction for three months, with fines for failing to Reported.
• Austria. Since April 1, 2026, food and drugstore retailers must label downsized products for 60 days. Distance selling is exempt Reported.

None of these reaches a US DTC brand selling from its own site today, but the direction is clear, and the FTC Act’s ban on deceptive practices already applies. Have counsel review any pack change you don’t plan to announce.

The math customers do

The hidden rise is the old size divided by the new, minus one. A 16-ounce jar cut to 14 is a 14.3% rise per ounce; twelve bars cut to ten, 20% per bar Derived. Bigger rises than most brands would announce, which is why they’re done quietly.

How to change a pack in the open

1. Say it where they’ll see itOn the product page, near the price: “Now 14 oz (was 16 oz).” In the next email to anyone who bought it in the last six months. On the pack, if you can.
2. Show the unit pricePrice per ounce, per serving or per count, for both sizes during the change.
3. Fix the subscription cadenceIf the pack is smaller, the interval should be shorter, and subscribers should be told before the first smaller box.
4. Better: make it a tierLaunch the smaller pack as a new Good tier at a lower price and keep the original (chapter 7). The customer chooses, and nobody’s reference is quietly moved.

Do this

• List every size, count or formula change in the last two years. Any that wasn’t disclosed gets a note on the product page now; any planned change gets the four steps above.