Tonight I was reminded tonight of an almost forgettable phenomenon. I am not a big fan of fast food, but I happened to pick up Sonic tonight. With my combo deal, I received a couple packets of Ketchup. I looked at the little packets and almost laughed. Four packets, all just a hint larger than a crushed pine nut. And there it hit me. These things just keep getting smaller. Year after year, things like this keep getting smaller.
Last week, I caught up with a former colleague (and good friend) over a lunch at Pei Wei. One of the things we talked about was the benefits of going to college. Or ultimately, is college worth it? What do you learn? Now, fresh out of college (go Baylor Bears), I could not tell you what I learned. But 10 years later, I can go on all day. Business case studies, product break throughs, accounting methods, pricing theory, operations, process efficiency, negotiating, and yadda yadda yadda. Of course I did learn a lot about technology, but typically that knowledge expired almost as fast as each day. I do remember from one class the discussion of shrinking products. It's a reality. More times than not, the 80 cents you pay for a 350 milliliter can of soup will probably cost 90 cents next year. It will come in the same can, but will only have 330 milliliters of soup. And of course the metal that makes the can will be a little thinner. Pretty soon you'll be able to open it with your fingernail.
Somehow we Americans are so hell-bent on cost savings, and quarter over quarter profit growth, that implementing methods to meet those goals tend to border on deception.
Have you seen a fun size candy bar lately? It used to be a good two bites. Now it's a mere bite and a half, or just one bite if you're in a hurry. Or what about the fun pack of Doritos? There's like 8 chips in that bag now, and 4 of them are broken. But there's a whole lot of air. I know you've seen it. You open up the bag and it looks like there's just a few chips hanging out in the bottom of the bag.
Profits. Cost Cutting.
Those must be important words, because they clearly and overly dictate American business. Quantity is getting smaller while Quality is on the chopping block. My Ketchup packet was enough for 1 onion ring... and I'm light on the sauce.
But keeping the example of the Ketchup packet condiment, why not take the packaging from a 3 ink printing to 1 ink? Product display isn't that important, because the end consumer isn't buying it. It's a freebee. You know you want it or you don't before you even get your food. How about just red. One red box with Heinz written in the middle. If costs need to be cut, don't give me less product. That is such a cheap shot. Anyone can cut costs by shrinking product.
I believe that some of the most creative and brilliant business minds are here in the states. Those brilliant minds need to come up with cost savers other than shrinking product. I'm just expecting my can of coke to shrink from 355 ML to 350 ML.
On the flip side, God bless Harley Davidson. Killer quality. Limited production. Could they make more money? Absolutely. But they choose to keep the integrity of the brand, their quality, and iconic status of their product. There's probably a 100 things they could do tomorrow to fatten up the margins, all of which would deteriorate quality. Now that's an American icon.
In closing, how long can you shrink product and still have product? There is an end to that rope, wherever it is. You will eventually have to come up with a real idea, because shrinking won't save the profit every time.