Six reasons
On this page11
Reason one, protection
Protection of the contents of the package. Headspace that stops a product crushing or abrading itself, which for a dry treat is a real function.
Reason two, the machines
The requirements of the machines used for enclosing the contents. A filler needs clearance, and the clearance it needs is a legitimate reason for space.
Reason three, settling
Unavoidable product settling during shipping and handling. Which is the reason that matters most for a dry bulk product and the one most often relied on.
Reason four, a function
The need for the package to perform a specific function, with the example given as where packaging plays a role in the preparation or consumption of a food. Room to scoop is a function.
Reason five, a reusable container
Where the container is part of the presentation of the food and has value both significant in proportion to the value of the product and independent of its function to hold the food.
Which is a high bar, stated carefully
Significant in proportion, and independent of its function to hold the food. A nice pail is not automatically a reusable container in this sense.
Reason six, inability to reduce
Inability to increase level of fill or to further reduce the size of the package, with the example given as where some minimum package size is necessary to accommodate required food labeling.
And that is the best line in this library
A package may lawfully be bigger than its contents in order to fit the label the law requires. The labeling rules justify the empty space.
The list is exhaustive as written
Nonfunctional slack-fill is the empty space filled to less than capacity for reasons OTHER than these. So a reason not on the list is not a defence.
Which makes the list worth reading before choosing a size
Because the question is not how much space there is, but which of the six accounts for it.