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    Size Does Matter

    Ice cream packaging is shrinking as manufacturer cost is rising.

    EGG HARBOR TOWNSHIP, N.J. -- The half-gallon ice cream container the sweet standard of convenience store and grocery store freezers for decades is quietly starting to shrink.

    While manufacturers over the years reduced the package size of everything from candy bars to dish detergent, the traditional ice cream "brick" remained what it was the half-gallon.

    Now, pinched by rising costs of ingredients and afraid to hike prices already above $5, at least two ice cream makers have started silently phasing out the half-gallon with a 1.75-quart carton. Others are considering doing the same, the Associated Press reports.

    Dreyer's, which is based in Oakland, Calif., and sells the Dreyer's and Edy's brands, began introducing the smaller package in March. The new and old cartons can be found side-by-side during the transition, identical in shape and design and price. Asked about the move, Dreyer's cites a $30 million jump last year in the cost of butter fat and other ingredients. Dreyer's is one of the biggest manufacturers, with annual sales of $1.4 billion.

    "We have over 100 flavors and many of them because people are preferring indulgent, chunky flavors cost more to produce than regular flavors like vanilla," spokeswoman Dori Bailey told the AP. "We'd like to keep the cost at a price that's more affordable for folks."

    Schwan's, which sells retail primarily via a 7,000-vehicle fleet of home delivery trucks, made the switch in late 2001, phasing out half-gallon cartons in favor of a 1.75-quart lidded container.
    "When costs trend up, you have a choice to make: Do you raise the unit price or do you reduce the unit?" said John Nabholz, spokesman for Schwan's Sales Enterprises, based in Marshall, Minn. "You can't lose money on a product and stay in business."

    Other major ice cream makers are sticking with the half-gallon for now. About three quarters of all ice cream is sold by the half-gallon, according to the International Ice Cream Association.
    Good Humor-Breyer's, which boosted its half-gallon price by 30 cents in mid-2001 because of rising costs, has no plans to shrink its packages. "If we can avoid passing it on to the consumer, that's what we'll do," said spokeswoman Lisa Piasecki. "So far, we have."

    Turkey Hill dairy, in Lancaster, Pa., has no plans to switch to half gallons but introduced the idea to a pair of focus groups last week, to gauge consumer reaction, according to spokeswoman Melissa Mattilio.

    Using the 1.75-quart and half-gallon Edy's containers as examples, Turkey Hill market researchers asked them how they felt about such shrinkage. "We just asked if anyone was aware that this had happened," Mattilio said. "No one had noticed at all. When it was pointed out to them, they said, 'That doesn't seem too right, but what are we really going to do about it?'"

    But customers do notice change, according to ice cream industry consultant Malcolm Stogo. "The public does not like to see downsizing. They think they're being cheated. Putting a 1.75-quart container out instead of a half gallon container is very deceptive," said Stogo, author of "How to Succeed in the Incredible Ice Cream Business."

    Manufacturers have heard such complaints, but sales haven't been significantly affected, they say. "We've had a few people say, 'Wait a minute, there's less ice cream in this package,"' said Nabholz, of Schwan's. "But our research shows there's effectively the same yield. It's a more user-friendly package and it's more efficient."

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