Why is it more expensive to make a homemade pizza than to buy a frozen prepared pizza?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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If it is always true that frozen prepared pizzas are cheaper than homemade pizzas (and I am not sure that it always is true as I have seen people do calculations claiming that their homemade pizzas are cheaper) there are two main reasons. 

First, there is the fact of economies of scale.  A person making a pizza at home will be buying all of the ingredients at retail price.  They will not typically be getting any kind of a special deal on the ingredients.  By contrast, a company buying huge quantities of flour, cheese, pepperoni, and other ingredients is surely getting a much lower price than the person making their pizza from scratch.

Second, there is the fact that the quality of the ingredients may be different.  A person making their own may buy a higher quality of flour or of cheese.  They may buy fresh vegetables to use as toppings.  By contrast, the company making the frozen pizzas might be using the lowest quality of ingredients that they can legally use. 

Thus, frozen pizza companies have two ways of reducing prices.  They can benefit from economies of scale and they are likely to use lower-quality ingredients.

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