Different unit price of packaging sizes matter for food waste : A case study how companies' price strategies of different packaging sizes of dairy products affect the emissions of CO₂ equivalents

Abstract:

One third of all food that is produced ends up as waste, making it an important for society. Companies in food sector offer various packaging sizes to consumers to meet different household needs, where smaller packaging sizes often have a higher unit price than larger packaging sizes. In Sweden, 70% of households consist of 1-2 person households, which indicate a need for smaller packaging sizes. Price is a determining factor in the choice of products, which may mean that consumers choose packaging size by price and not after their need. 

This master thesis has focused on dairy products because it is one of the product groups where wastage is highest. Furthermore, dairy products are important in the Swedes diet, have high emission of CO2-equivalents and can be bought in different packaging sizes. 

The purpose of this master thesis was to investigate how companies’ price strategy influence product price of small versus large packaging and also to investigate the emission of CO2-equivalents of different packaging sizes. This was done in order to get a better understanding of the subject and to find a recommendation for companies to help households to reduce food waste. A case study was used as research strategy, and through a mixed-method with calculations, interview, price gathering and collection of secondary data a result has been presented. 

The results indicate that more food can be wasted from an economical perspective than from the perspective with emission of CO2-equivalents, which is true for all investigated products. It results in lower emission of CO2-equivalents if the customers purchase smaller packaging instead of waste food. However, there will be difficult to reduce the amount of household food waste if it continues to be economically motivated to waste food instead of purchase smaller packaging. A cost based pricing of food products is not useful if the consumers shall reduce their food waste, since price is an important factor when choosing products. One way to reduce the household food waste is to shift towards more value-based strategies when pricing products. This might reduce the unit price gap between different packaging sizes.