PepsiCo reverses shrinkflation strategy after customer boycott

Frito-Lay's parent company, PepsiCo , said it's adding chips back to bags after shrinkflation wound up costing the company when consumers left Lay's and Doritos on shelves.

Inflation prompted the company to dial back the volume of its products, such as fewer chips in a bag or fewer bags in a pack. However, it learned an expensive lesson as consumers decided to purchase other brands or stop buying altogether. Now, PepsiCo is reportedly increasing the amount of chips in bags by 20% and adding two bags to its multipacks.

According to the company's latest earnings report , PepsiCo found that its revenue in Frito-Lay had decreased by 1% despite the savings measure. It had decreased its volume by 1.5%, according to the same report. However, the company recently told investors another reason behind the change.

“It’s the football season. There’s a lot of gatherings,” PepsiCo CEO Ramon Laguarta said in an earnings call last week.

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Meanwhile, sales of generic brands increased by 6%, according to market research firm Circana .

The Washington Examiner reached out to Frito-Lay for comment.