MUMBAI – In an era where the price of petrol has crossed ₹100 and gold has soared past ₹1 lakh per 10 grams, one thing seems frozen in time: a packet of Parle-G biscuits for ₹5. But as a viral video circulating on social media points out, this "magic price" isn't a result of charity—it’s a masterclass in an economic strategy known as Shrinkflation.
What is Shrinkflation?
Shrinkflation (a portmanteau of "shrink" and "inflation") is the practice of reducing a product's size or quantity while keeping its retail price the same. Instead of raising the price—which often triggers immediate consumer backlash—companies subtly reduce the "grammage" or volume of the product.
The Parle-G Evolution
Parle-G has famously protected its ₹5 price point for decades, making it a staple for millions. However, the contents of that iconic yellow wrapper have changed significantly:
1994: A pack cost ₹4 and weighed 100 grams.
2008: The weight dropped to 92.5 grams.
2021: The price finally moved to ₹5, but the weight was slashed to 55 grams.
Today: A ₹5 pack now typically contains only 50 grams of biscuits.
Why Not Just Raise the Price?
For FMCG (Fast-Moving Consumer Goods) giants like Parle, ₹5 and ₹10 are "magic price points." They represent convenience and affordability, especially for rural and lower-income consumers.
When Parle attempted to raise the price by just 50 paise years ago, sales reportedly plummeted by nearly 40%. By choosing to reduce the weight instead, the company maintains its "Value for Money" (VFM) image while offsetting the rising costs of raw materials like wheat, sugar, and edible oil.
The Result: Massive Growth
Despite the "shrinking" biscuits, the strategy has worked wonders for the brand's bottom line.
In 2013, Parle-G became India's first homegrown FMCG brand to cross the ₹5,000 crore sales mark.
By 2024, reports indicate the brand's revenue has surged to over ₹15,000 crore.
While the biscuits may be getting lighter, Parle-G’s heavyweight status in the Indian market remains unchallenged.
