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It's the turn of large retailers to reduce their formats to reduce their production costs in times of high food inflation.

Reflation in house brands

Open in full screen mode< p class="StyledImageCaptionLegend-sc-57496c44-2 sbxsP">Cases of reflation are also observed in the private label products of major retailers.

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Speech synthesis, based on artificial intelligence, makes it possible to generate spoken text from written text. Don't spare house brands, popular with consumers to save money. Already in the spotlight for their record profits, major Canadian food retailers are in turn reducing the formats of their new products.

Since January, we have spotted around ten products identified with the new label on the President's Choice website, the private brand belonging to Loblaw and sold in particular at Provigo and Maxi.

These new products on the virtual tablets rubbed shoulders with seemingly identical products, with the exception of one significant change: their weight was reduced.

The entire instant oatmeal line lost two sachets per box. The hot chocolate mix is ​​50 grams lighter and packages of frozen fruit, biscuits and granola bars, in particular, have undergone a slimming treatment. According to our observations, these new products were sold in grocery stores at the same price, or even more expensive.

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The mixture of 4 frozen berries is passed from 600 g to 500 g.

Instant oatmeal went from 430 g to 344 g.

Photo album: House brands 1

There's something that doesn't hold water, denounces Professor Jordan LeBel, specializing in food marketing. There is nothing wrong with making a profit, but not when it comes at the expense of the consumer, when they are sold less or of less good quality.

This is where, in the public interest, the government must get involved, argues the expert.

This fall, the federal minister of Industry François-Philippe Champagne had also criticized record profits in the retail grocery sector and urged retailers to stabilize their prices and offer discounts to consumers.

Still, Loblaw raked in profits of $14.5 billion in the fourth quarter of 2023, with sales up 2% at its grocery stores. For the entire year, its profits therefore amounted to 59.5 billion (+3.9% in groceries).

During the presentation of the financial results, the CEO of Lobaw, Per Bank, pointed out that consumers had purchased more products from house brands. They did so without perhaps knowing that the retailers had the same business practices as other food manufacturers.

When asked about the subject, Loblaw said all businesses face significant cost pressures from suppliers. It is becoming difficult to find a balance between this pressure and maintaining low prices, says Senior Director, Corporate Affairs and Communications, Johanne Héroux.

Developing different packaging formats and sizes helps us deliver value while by keeping purchase prices as affordable as possible.

A quote from Johanne Héroux, Loblaw Companies Limited

According to her, private label products continue to offer more value to consumers, with quality products at better prices.

The choice du Président, Sans nom, Compliments, Sélection, Great Value… the brands of major retailers have carved out a place of choice in grocery stores. They were created by Loblaw, Sobeys, Métro and Walmart, among others, in a desire to offer their customers products similar to national brands, but at a better price.

How? By avoiding the tablet fees required of manufacturers of national brands to have a place on their grocery store shelves, and listing fees. Retailers even save on promotional costs and packaging, which is often minimalist in design.

However, private labels are also not immune to rising costs of ingredients, transportation and labor. They must not only remain competitive compared to their competitors, but also maintain their profit margins, which are already up to twice as high on their products.

All the experts repeat it: even if consumers are offended by reflation, it is the price that counts first and foremost their eyes.

They will choose the cheapest format before the largest, especially if its price had to rise to maintain its original size, suggests economist and agronomist Pascal Thériault.

The consumer is noble in heart, but cheap in wallet.

A quote from Pascal Thériault, University McGill

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Ironically, the house brands of major retailers are manufactured by the same companies that produce the national brands, with whom they nevertheless compete.

It's better for them to do it, rather than letting someone else do it, recalls Pascal Thériault, adding that transformers are not that numerous here.

The companies that manufacture house brands are routine, with known recipes and slightly adapted formulations: a little less of this and that, explains Jordan LeBel. They often do this to occupy their production line, with an additional volume of products to leave the factory.

Redundation often has a domino effect, experts point out: when one company reduces its format, its competitors follow suit. Among the last to do so, house brands are not shying away.

When most national brand bacon packages went from 500g to 375g around the turn of 2014, Compliments, Great Value and Selection packages followed to continue offering a quality product at a competitive price, says a spokesperson of Metro.

Same in the orange juice and granola bars sections.

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These house or private brand products have changed format or have been launched with the quantity or weight that is now associated with the reference in their category.

Le magazine Protect yourselfnoticed, in 2022, that the majority of house brands had kept at least six bars in their boxes, while national brands had just removed one. This is no longer the case for many of them today. Several private brands which had maintained the 1.75 l of orange juice have also aligned themselves with the 1.5 l of their competitors.

Now, the format of 375 g of bacon, boxes of 5 granola bars and 1.5 l of orange juice serve as a reference in this product category among the majority of manufacturers.

Among other examples: packets of grated cheese lined up in 320g market formats or even 850g pots of margarine, 1, 5 l or 650 ml tomato sauce.

Even chains that pride themselves on offering the best prices, like Walmart and Costco, also sometimes succumb to discounting.

For example, we received dozens of emails and submissions when Kirkland brand toilet paper, sold at Costco, went from 425 to 380 sheets per roll last year.

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Posters explaining the change in size of Kirkland brand toilet paper accompanied the product displays in Costco warehouses.

Instead, Costco rates it as an improved product, with 17% thicker sheets. It’s a new product, with new specifications, assures its spokesperson Martin Groleau. It is estimated that fewer sheets will be used thanks to this improvement.

He also specifies that the total weight of the product has increased and that the 45 sheets were instead removed to keep the roll diameter the same. It also costs more to produce at Costco, said the spokesperson, but the retail price would not have increased that much.

We're hurt that people think we're being redundant. Our mandate is to improve the quality of the product, not to reduce quantities to charge customers the same amount.

A quote from Martin Groleau, Costco

With reduflation, however, everything is usually transparent. The practice is neither monitored nor regulated and both manufacturers and retailers are free to do as they wish.

Costco, however, assures that At the time of the change, posters indicated this to customers in its warehouses. The information would also have been communicated on social networks.

It sometimes happens that a product leaves the shelves to return in new packaging. But could it still be a case of re-flation?

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These Irresistibles brand products sold in particular at Métro and Super C have changed appearance, name and format .

Four Irrésistibles products from Métro have, for example, changed their name and packaging. Its cookie with dark chocolate pieces became the intense dark chocolate, the one with chocolate chips, the avalanche of chocolate chips and the soft chocolate brownies, a total chocolate brownie, just like the tuxedo cookie now the tuxedo brownie.

The four packages have also gone from 300g to 280g and are sold at the same price or more.

We'll call it new. It attracts the customer’s attention, assures Jordan LeBel. It works, but is it actually new? Perhaps we changed the nomenclature of chocolate, of a different quality. Maybe we adjusted the recipe.

I have the impression that this is a strategy that we are going to see more and more of. We changed something trivial, the look, to start fresh and make consumers forget what the old product was.

A quote from Jordan LeBel, Concordia University

For competitive reasons, Métro did not want to comment on the changes for each product individually.

When we reduce the format of one of our private label products, it is always for commercial considerations – most of the time, to follow the market, says its head of communications, Catherine Latendresse.

Private brands by definition offer competitive prices. If national brands reduce their prices, whatever the reason, private brands will want to adapt to remain competitive.

A quote from Catherine Latendresse, Métro

Empire, which owns the IGA stores and the Compliments brand, did not respond to our questions. Like Loblaw, the two Canadian retailers also announced profits of several million dollars in their most recent quarter.

We investigated re-flation for a year. Discover the conclusion of our file next week.

Greater attention given to ingredient lists and nutritional value tables for new products reduced format The President's choice also allowed us to notice certain changes in the recipes. For better or for worse?

Nutritionist Stéphanie Côté notes, for example, that sugar has moved from first to second place among ingredients behind oats in soft chocolate chip bars, but also behind skimmed milk powder in meringue.

It's an improvement that has an impact, a little, on the nutritional value, but it doesn't know if these changes are good in terms of taste.

The natural colors of turmeric and anatto have disappeared from the hot chocolate mix, the individual portion of which has also been increased, from 28g to 38g. Not only does the container contain less powder, but more is now needed to make one serving. While the old format had up to 18 servings, the new one only has 12.

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Caramel chip cookies more clearly mention the presence of allergens.

Caramel chip cookies more clearly mention the presence of allergens.

Photo album: House brands 2

Other products marked new on Loblaw's house brand website had retained their original format, such as salted caramel cookies, boxes of macaroni dinners and cheese and a bag of whole wheat loaf.

The packaging of the biscuits, however, more clearly mentioned the presence of allergens, while the macaroni dinner now counted as two servings rather than one and a half. The information in the Nutrition Facts tables has also been slightly adjusted, but with no major changes to the recipes.

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