Why does produce cost less than packaged food?
Submitted by Aguanomics Blog
This [unedited] guest post is by a student in my EEP100 class (background post).
Please praise/critique/comment on its economic quality and importance to you.
Shelley Woo says:
The crazy thing is that fresh healthy and delicious produce costs so much less than processed unhealthy packaged food. Now, how does that make sense? Don’t we usually pay more for a healthier option like purchasing organic or natural foods? I find this so interesting because I would expect to pay a high price for fresh fruits and vegetables that were on a farm a couple days ago. Now what we don’t think about is the packaging cost and marketing for the packaged product to be sold. With packaged products, there must be some appeal or special aspect that the product can offer. So the extra variable cost can get expensive, so the consumer ends up paying more for their product. Whereas fresh produce that comes from directly from the fields and into the supermarket, it takes less cost to sell it because most fruits and vegetables are more or less the same. There isn’t as much as a difference in the way it looks unlike packaged products. If a person wants to buy a banana, they would just buy the cheapest one and as every banana company competes with the other, the price is driven down because there is not much a difference between the
two goods.
Bottom Line: The extra cost in packaging products makes packaged food more expensive than produce which comes directly from the fields and ready to sell, so buying produce is a real bargain and contributes to a healthier diet.
