The Parle-G Pricing Secret: How the Iconic Biscuit Maintained Its Price for 25 Years

For over 25 years, the beloved Parle-G biscuit defied economic trends by maintaining the same price of ₹4 for a small packet. From 1994 to 2021, Parle-G remained a staple snack for millions of Indians, known for its affordability and taste. However, in 2021, the price was finally increased to ₹5, marking the first change in over two decades.

So, how did Parle-G manage to keep its price stable for such a long time despite rising production costs? The answer lies in a combination of operational efficiencies and a psychological pricing strategy known as "shrinkflation."

What is Shrinkflation?

Shrinkflation is a pricing tactic where a product’s size or quantity is gradually reduced while the price remains unchanged. This subtle adjustment helps companies manage rising costs without alienating customers by hiking prices directly.

Parle-G employed this strategy effectively over the years. When the small packet of Parle-G biscuits was first introduced, it weighed 100 grams. Over time, the size of the packet was gradually reduced:

• 100 grams → 92.5 grams
• 92.5 grams → 88 grams
• 88 grams → 55 grams

Despite these reductions, the small packet maintained its price at ₹4, and the change in size went largely unnoticed by customers. This was partly due to Parle-G’s ability to retain the perception of a "small packet," ensuring that the reduction did not feel dramatic.

Operational Efficiencies Behind the Pricing

While shrinkflation played a key role, Parle-G also focused on improving its operations to sustain its pricing model. Factors such as optimizing production processes, bulk purchasing of raw materials, and maintaining efficient supply chain management helped reduce overall costs.

These measures allowed Parle-G to absorb the impact of inflation and rising input costs, ensuring that the product remained affordable for its target audience.

The End of the ₹4 Era

In 2021, after 25 years, the price of a small packet of Parle-G increased by ₹1, bringing it to ₹5. While the increase was modest, it was a reflection of unavoidable economic pressures. Even so, the biscuit remains one of the most affordable and widely consumed snacks in India.

Why Shrinkflation Works

Shrinkflation operates on the principle of minimizing customer perception of loss. Customers are more likely to notice a price hike than a slight reduction in size, making shrinkflation a less disruptive strategy. By implementing this approach gradually, Parle-G maintained customer loyalty while adapting to changing economic conditions.