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The Effects of Package Downsizing on Food Consumption

Author

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  • Cakir, Metin
  • Balagtas, Joseph Valdes
  • Okrent, Abigail M.

Abstract

Package downsizing is common among the leading producers of packaged food products in the United States. In this study, we examine the effects of package downsizing on household food-at-home consumption and expenditure. We perform an exploratory data analysis of shelf stable tuna and peanut butter markets using Nielsen homescan data. The data comprise grocery store transactions made by a large panel of households over a period of 7 years, 2004-2010. We find that manufacturers use downsizing to implicitly increase prices. Consequently, the average annual household expenditures of both products are considerably higher than their levels before downsizing. The annual average volume consumption of peanut butter remains stable, whereas the volume consumption of shelf stable tuna is approximately 10 percent below its level before downsizing, in spite of an approximately 5 percent increase in the annual package consumption.

Suggested Citation

  • Cakir, Metin & Balagtas, Joseph Valdes & Okrent, Abigail M., 2013. "The Effects of Package Downsizing on Food Consumption," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150680, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea13:150680
    DOI: 10.22004/ag.econ.150680
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    Cited by:

    1. Golovacheva, K., 2015. "Consumer response to unit price increase: The role of pricing tactics and consumer knowledge," Working Papers 6421, Graduate School of Management, St. Petersburg State University.

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    Keywords

    Food Consumption/Nutrition/Food Safety;

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