K Jan 2025 72.500 put

Dismantling misconceptions about shrinkflation: Kellanova CEO

Shrinkflation, or the process by which items shrink in size or quantity while prices increase or remain the same, has put pressure on the consumer. This phenomenon can be seen across many aisles in the grocery store, but Kellanova (K) claims it is downsizing its portfolio of food brands less than it was five years ago. Yahoo Finance Executive Editor Brian Sozzi is joined by Kellanova Chairman, CEO, and President Steve Cahillane for Wealth! to give insight into the company's performance and the consumer, helping dismantle misconceptions about shrinkflation. Cahillane shares an example of the company's efforts to consider the customer and inflation when downsizing products: "If you think about from a consumer standpoint, if the magic price point for a consumer for a snack is, say, $1 and it used to cost $0.70 to make that product, but now it costs us $0.90 to make the product, clearly you can't continue to sell it for $1, so you're left with a choice. Do you raise to $1.20? Or do you make the pack size smaller so you can continue to sell it for a dollar but make only 10% on it? I think that's sometimes lost in this conversation about shrinkflation and if big food is out to rip off consumers. No, not really, not at all. It's about making sure you can meet the consumer where they want." For more expert insight and the latest market action, click here to watch this full episode of Wealth! This post was written by Nicholas Jacobino