PepsiCo Warns 'Shrinkflation' Is About To Hit Your Favorite Chip Brands

Imagine it's midnight, all the stores within 15 miles of your house are closed, and your only option to satisfy your late-night munchies is a bag of chips in your pantry. You open the bag, and to your dismay, it's half — if not more — air. As disappointing as this can be, there's a good reason for the emptiness, per Taste of Home. Apparently, the large amount of air at the top of the bag is actually nitrogen gas, a preservative that ensures chips maintain their shelf life. The use of nitrogen is backed up by a 1994 scientific study, which found that plain air would cause chips to become soggy (via Taste of Home).

Though this method is great for keeping chips fresh, it also minimizes the number of chips in a bag, helping companies save money during rising inflation. According to Go Banking Rates, the cost of potato chips has risen 7.2% in 2022, perhaps encouraging some consumers to make homemade chips. Here's how one company is battling rising costs.

The plan to retain current consumers

In a report on its second quarter earnings, PepsiCo announced its plan to combat rising potato chip costs, per Food Dive. CEO Ramon Laguarta said that the company plans to work on "mix and assortment solutions," which could lead to smaller bags of chips in variety packs. According to CFO Hugh Johnson, PepsiCo is more likely to decrease the amount of chips in a bag than increase the price per bag.

The company's revenue is up to $20.2 billion in the newest reports (via PepsiCo), an increase from $19.2 billion at the same time last year. This means consumers are still buying products amid increased prices, but that luck could run out if costs continue to climb. "There's still plenty of unknowns in terms of what's going to happen with consumer behavior ... But we still have six months to go and consumers are still sort of absorbing the impact on inflation on their overall spending," Johnson told analysts. Per PepsiCo's website, the company owns several chip brands, including Stacy's Pita Chips, Fritos, Lays, Ruffles, Doritos, Tostitos, Miss Vickie's, SunChips, Cheetos, and many others.