A preliminary comparison of the retail level effects of genetically modified food labelling policies in Canada and France

Most developed countries have adopted labelling policies for genetically modified (GM) food. In April 2004, Canada implemented a voluntary labelling policy for GM and non-GM food, while France adopted the European Union’s new extended mandatory labelling of GM food. I present the result of a qualitative survey of GM and non-GM food labels in supermarkets in Canada and France, five months after the introduction of the new policies. I find that there are almost no GM labelled products in France and non-GM labelled products in Canada. Each policy tends to crowd out the targeted label attribute. However, Canadian consumers can choose between GM and non-GM organic products, whereas there are only non-GM products in French supermarkets. Recent political developments in Quebec suggest that the labelling landscape may change in Canada, either with an increase in the number of non-GM products at the retail level or a transition towards a mandatory labelling policy like in France.     

Traceability adoption at the farm level: An empirical analysis of the Portuguese pear industry

Traceability is becoming a condition to operate in European food markets. Retailers impose more stringent standards than what is mandatory. An example is EurepGAP, a quality standard for good agricultural practices that imposes traceability as a main obligation. This research investigates the choice of traceability at the farm level in the Portuguese pear industry. Results suggest that in this industry farm-level adoption of EurepGAP traceability is best explained by the choice to sell to the United Kingdom (UK). For farmers selling to the UK, the odds of choosing the EurepGAP traceability level are significantly linked to membership in particular producer organizations, farm productivity, producing products under a protected designation of origin (PDO), and farmer’s age. While retailers and farmer organizations seem to drive traceability, policy adjustments may be required to reduce adoption costs upstream and extend compliance among producers that sell directly to consumers and market independently.     

Consumers’ willingness-to-pay for food safety labels in an emerging market: The case of fresh produce in Thailand

Food safety systems in emerging markets are currently facing a transformation period, becoming more stringent because of an increasing demand for safer food. Consequently, policy makers need to find strategies to increase food safety while giving the industry time to improve their performance. In Thailand, policy makers have adopted the strategy of upgrading food safety standards gradually. Government and private food safety brands and labels were introduced onto the market but little is known whether Thai consumers have preferences for them or not. This study is aimed at evaluating Thai consumers’ preferences for food safety labels and brands on fresh produce, using a surveyed based on discrete-choice experiments. A sample of 350 Thai consumers was surveyed in Bangkok and Nonthaburi in 2013. Quota sampling according to the shopping outlets and convenience sampling methods were adopted. Two hundred respondents were recruited at fresh-food markets and 150 respondents were recruited at supermarkets. We found that consumers are willing-to-pay more for both government led food safety label and private brands, but that there is high heterogeneity in their preferences. The high degree of social desirability for food safety labels confirms that food safety labelling policy should be supported. However, the provision of information and credibility are vital in order to mitigate the risk of consumer deception by self-claimed labels.     

Local food,food miles and carbon emissions: A comparison of farm shop and mass distribution approaches

This paper provides a critical commentary on the conception of food miles followed by an empirical application of food miles to two contrasting food distribution systems based on carbon emissions accounting within these systems. The comparison is between the carbon emissions resultant from operating a large-scale vegetable box system and those from a supply system where the customer travels to a local farm shop. The study is based on fuel and energy use data collected from one of the UK’s largest suppliers of organic produce. The findings suggest that if a customer drives a round-trip distance of more than 6.7 km in order to purchase their organic vegetables, their carbon emissions are likely to be greater than the emissions from the system of cold storage, packing, transport to a regional hub and final transport to customer’s doorstep used by large-scale vegetable box suppliers. Consequently some of the ideas behind localism in the food sector may need to be revisited.     

Does nutrition information on food products lead to healthier food choices?

This paper examines the link between nutrition label use and consumers’ healthier food choices. Label use is considered for the two main types of labels currently found on food products; nutrition facts panels and nutrition/health claims. This link is tested using a three-equation multivariate probit model. Data were obtained from an ad hoc survey conducted in two medium-sized Spanish cities. The results indicate that the use of nutrition information by consumers, whether this involves the fact panel or the claim labels, does influence consumer choice of healthier food products to the same extent, although different types of consumers use the various types of labels considered.     

Sustainability labels on food products: Consumer motivation,understanding and use

This study investigates the relationship between consumer motivation, understanding and use of sustainability labels on food products (both environmental and ethical labels), which are increasingly appearing on food products. Data was collected by means of an online survey implemented in the UK, France, Germany, Spain, Sweden, and Poland, with a total sample size of 4408 respondents. Respondents expressed medium high to high levels of concern with sustainability issues at the general level, but lower levels of concern in the context of concrete food product choices. Understanding of the concept of sustainability was limited, but understanding of four selected labels (Fair Trade, Rainforest Alliance, Carbon Footprint, and Animal Welfare) was better, as some of them seem to be self-explanatory. The results indicated a low level of use, no matter whether use was measured as self-reported use of different types of information available on food labels or as use inferred from the results of a choice-based conjoint analysis. Hierarchical regression indicated that use is related to both motivation and understanding, and that both motivation, understanding and use are affected by demographic characteristics, human values as measured by the Schwartz value domains, and country differences. The results imply that sustainability labels currently do not play a major role in consumers’ food choices, and future use of these labels will depend on the extent to which consumers’ general concern about sustainability can be turned into actual behaviour.     

The character of demand in mature organic food markets: Great Britain and Denmark compared

We investigate the organic food market in two selected European countries, Great Britain and Denmark, identifying main differences and similarities. We focus particularly on consumer perceptions and priorities, labelling schemes, and sales channels as a basis for assessing market stability and prospects for future growth. We employ a unique set of household panel data that includes information on stated values and concerns as well as registered purchasing behaviour. Most organic food on both markets is produced and processed by large-scale industrialised units and distributed through mainstream sales channels, consumer confidence being sustained at present by organic labelling schemes that appear to function well. However, a parallel market, based on the supply of goods through various direct sales channels to heavy users, prevails. We find that organic food purchase decisions are primarily motivated by ‘private good’ attributes such as freshness, taste and health benefits, attributes that may be perceived as being compatible with modern production and sales structure. Mature markets for organic foods nevertheless appear to be vulnerable to consumer dissatisfaction, particularly among heavy users of organic food products.     

How would Swiss consumers decide if they had freedom of choice? Evidence from a field study with organic,conventional and GM corn bread

In 2005, the Swiss expressed their negative attitude towards genetic engineering in agriculture by voting in favor of a ban to use genetically modified (GM) crops in domestic agriculture. At the same time, certain GM food products remain approved but are not on offer since retailers assume that consumers would shun labeled GM food. In our study we tested this claim by conducting a large-scale field study with Swiss consumers. In our experimental design, three clearly labeled types of corn bread were offered at five different market stands across the French and German-speaking part of Switzerland: one made with organic, one made with conventional, and one made with genetically modified (GM) corn. In addition, we tested the consistency between purchasing decision at the market stand and the previous voting decision on GMOs in 2005 by means of an ex-post questionnaire. The results of our discrete choice analysis show that Swiss consumers treat GM foods just like any other type of novel food. We conclude from our findings that consumers tend to appreciate transparency and freedom of choice even if one of the offered product types is labeled as containing a genetically modified ingredient. Retailers should allow consumers to make their own choice and accept the fact that not all people appear to be afraid of GM food.     

European consumer preferences for beef with nutrition and health claims: A multi-country investigation using discrete choice experiments

The European Union (EU) nutrition labelling policy aims to facilitate consumers’ food choice, stimulate innovation and facilitate the circulation of foods bearing claims across countries. However, the beef industry has not fully taken advantage of utilizing nutrition and health claims based on the EU nutrition labelling policy to differentiate beef products in the market. This study investigates consumer preferences for nutrition and health claims on lean beef steak. Two choice experiments were conducted among 2400 beef consumers in four EU countries (Belgium, France, the Netherlands, United and United Kingdom). Multinomial logit and error component models were estimated. Our results generally suggest that consumer valuation of nutritional and health claims varies across countries. In Belgium, the Netherlands and France, nutrition and health claims on saturated fat yielded higher utilities than claims on protein and/or iron, while the opposite was found among consumers in the UK. The results imply that marketing opportunities related to nutrition and health claims on beef are promising, but that different nutritional marketing strategies are necessary within different countries.     

Measuring the consumer benefits of improving farm animal welfare to inform welfare labelling

Policy makers in the European Union are envisioning the introduction of a community farm animal welfare label which would allow consumers to align their consumption habits with their farm animal welfare preferences. For welfare labelling to be viable the market for livestock products produced to higher welfare standards has to be sufficiently segmented with consumers having sufficiently distinct and behaviourally consistent preferences. The present study investigates consumers’ preferences for meat produced to different welfare standards using a hypothetical welfare score. Data is obtained from a contingent valuation study carried out in Britain. The ordered probit model was estimated using Bayesian inference to obtain mean willingness to pay. We find decreasing marginal WTP as animal welfare levels increase and that people’s preferences for different levels of farm animal welfare are sufficiently differentiated making the introduction of a labelling scheme in the form of a certified rating system appear feasible.     

The impact of expiration dates labels on hedonic markets for perishable products

This study draws inferences from a pre-registered field experiment to investigate how expiration dates impact consumer preferences for food products with different ages. Based on a power analysis, we recruited 373 adult participants for the experiment. The results demonstrate that expiration dates largely influenced the perceived freshness of a food product as they seem to indicate a quality standard. When no explicit expiration date was present, consumers believed that the product’s quality decreased monotonically as time passed. However, in the presence of an expiration-date label, consumers initially perceived the product as more acceptable, but then that perception changed quickly after the date of expiration to levels more consistent with what they would perceive if the expiration date was not present. These results support policies that label expiration dates for consumers, as these labels benefit consumers, producers, and the public, especially for times prior to the expiration date. These results also suggest that it is important to craft policy and market strategies for products that are past the expiration date, but are still safe to consume. Policies that set the expiration dates to the time where the taste quality begins to worsen would likely benefit both consumers and producers, while policies that set the expiration dates to the time where the food is no longer safe probably improve the public outcomes as it minimizes food waste.     

International trade related food miles – The case of Canada

At the beginning of the 21st century imports of agricultural and food commodities have become a major part of many nations’ food baskets. Indeed the global food system has several merits for nations, businesses and individual consumers’ well-being. However, as increasing evidence suggests that we are approaching an era of climate change and scarcity of cheap energy sources the sustainability of that system must be examined. One part of any food commodity chain is its ‘food miles’ – the distance the commodity travels from point of production to point of consumption, the required energy and resulting emissions. This paper presents a 1 year ‘snapshot’ of Canada’s total import related food miles. It presents an analysis of the distance imported foods traveled from around the world to major points of consumption in Canada and documents the equivalent carbon dioxide emissions related to those imports. It presents both a macro scale picture of the equivalent emissions related to transportation of imported food and a micro scale picture which focuses on specific commodities consumed in various parts of the country. It then discusses policy implications for food sustainability. Overall the research highlights that about 30% of the agricultural and food commodities consumed in Canada are imported, resulting in ‘food miles’ of over 61 billion tonnes km, leading to annual emissions of 3.3 million metric tonnes of CO₂. Of the various agriculture and food commodities studied, fruits and vegetables had the highest food miles related emissions.     

Consumer willingness to pay for redundant food labels

Previous studies, as well as market sales data, show some consumers are willing to pay a premium for redundant or superfluous food labels that carry no additional information for the informed consumer. Some advocacy groups have argued that the use of such redundant labels is misleading or unethical. To determine whether premiums for redundant labels stem from misunderstanding or other factors, this study seeks to determine whether greater knowledge of the claims - in the form of expertise in food production and scientific literacy - decreases willingness to pay for redundant labels. We also explore whether de-biasing information influences consumers’ valuations of redundant labels. An online survey of 1122 U.S. consumers elicited preferences for three redundantly labeled products: non-GMO sea salt, gluten-free orange juice, and no-hormone-added chicken breast. Respondents with farm experience report lower premiums for non-GMO salt and no-hormone-added chicken. Those with higher scientific literacy state lower premiums for gluten-free orange juice. However, after providing information about the redundancy of the claims, less than half of respondents who were initially willing to pay extra for the label are convinced otherwise. Over 30% of respondents counter-intuitively increase their premiums, behavior that is associated with less a priori scientific knowledge. The likelihood of “overpricing” redundant labels is associated with willingness-to-pay premiums for organic food, suggesting at least some of the premium for organic is a result of misinformation.     

The impact of mandatory trans fat labeling on product mix and consumer choice: A longitudinal analysis of the U.S. Market for margarine and spreads

The impact of changes in food labeling policy on food consumption depends on how market participants—both firms and consumers—react to the changes across all products in the market. We investigate how both responded to the U.S. Food and Drug Administration’s 2006 rule mandating that the quantity of trans fat in food products be separately labeled on the mandatory Nutrition Facts Panel across an entire differentiated product category. Using a longitudinal data set tracking both product offerings and consumer purchases in the market for margarine and spreads for over a decade, we analyze how product mix and consumer purchase behaviors were influenced by the new regulatory requirement. We find that the number of products bearing voluntary “trans fat free” labels increased after the labeling regulation was implemented. However, a large number of the newly introduced products exited the market within five years. As a result, the FDA’s 2006 rule had a stronger short-run than long-run effect on product offerings. Even after the introduction of additional “trans fat free” labeled products, such products remained only a small percentage of margarine and spreads product offerings, increasing from a pre-regulation level of 2.3% of the market to a peak of 6.5% in 2007 before dropping to 3.1% by 2011. In addition to firm response, we examine demand-side reactions to the 2006 rule and find that consumers significantly increased their expenditures on “trans fat free” labeled products soon after the labeling changes were implemented, increasing from about 1.2% of the market in 2001 to a peak of 5.9% in 2007, before returning to 1.8% in 2011. We further explore variations in responses across different demographic characteristics. Although long-run effects are small, the market for “trans fat free” labeled margarine and spreads settled into a new equilibrium with a somewhat higher level of products in the market than prior to the 2006 rule taking effect and a somewhat higher share of expenditures in the category. Overall, our category-wide analysis of both firm and consumer behavior indicates that the effects of the labeling policy change were smaller in the longer run in this market than would be indicated by an analysis of only new product introductions in response to the policy change.     

Consumers’ valuation for food traceability in China: Does trust matter?

Food safety is a very important topic in China. We investigate Chinese consumers’ preferences and willingness to pay (WTP) for food traceability using a choice experiment. Given that consumers’ trust in the food system may affect their preferences and WTP, we also assess the interaction between consumers’ trust in government’s supervision of food safety and food labels and consumers’ preferences for traceable food products. Using data collected from a choice experiment on Fuji apples in a face-to-face survey in six Chinese cities, the results show that (i) consumers are willing to pay for traceable food but their valuations can differ upon the degree of their trust in government’s supervision of food safety and food labels; (ii) consumers are willing to pay for traceability with strong evidence of preference heterogeneity; (iii) government is not the most trusted safety inspection and certificate authority as found in prior studies using animal food products in China.     

Purchasing alliances and product variety

We analyze the impact of purchasing alliances on product variety and profit sharing in a setting, in which capacity constrained retailers operate in separated markets and select their assortment in a set of differentiated products offered by heterogeneous suppliers (multinationals vs. local SMEs). Retailers may either have independent listing strategies or build a buying group, thereby committing to a joint listing strategy. This alliance may cover the whole product line (full buying group) or only the products of large suppliers (partial buying group). We show that a buying group may enhance the retailers’ buyer power and reduce the overall product variety to the detriment of consumers. Our most striking result is that partial buying groups do not protect the small suppliers from being excluded or from bearing profit losses; they may even be more profitable for retailers than full buying groups.     

Price dispersion and seller heterogeneity in retail food markets

Price dispersion, i.e. a homogeneous product being sold at different prices by different sellers, is among the most replicated findings in empirical economics. The paper assesses the extent and determinants of spatial price dispersion for 14 perfectly homogeneous food products in more than 400 retailers in a market characterized by the persistence of a large number of relatively small traditional food stores, alongside large supermarkets. The extent of observed price dispersion is quite high. When prices in an urban area (where the spatial concentration of sellers is higher) are compared with those in smaller towns and rural areas, differences in search costs and the potentially higher degree of competition do not yield lower prices. Other counteracting factors, including differences in seller costs and consumer incomes, make prices, on average, higher in the urban area for 11 of the 14 products considered. For many, but not all, the products supermarkets proved to be less expensive than traditional retailers, although average savings from food shopping at supermarkets were extremely low. Finally, the results of the study provide evidence that retailers have different pricing strategies and these differences also emerge for supermarkets belonging to the same chain. The results presented in the paper suggest that a variety of factors play a role in explaining price dispersion. In addition to differences in seller costs, the contemporaneous heterogeneity of retailers (in terms of services provided) and consumers (in terms of search costs and preferences) makes the emergence of monopolistic competition possible as well as allowing small traditional food retailers to remain in business.     

Individual antecedents to consumer intention to switch to food waste bioplastic products: A configuration analysis

Food waste management remains a significant economic and sustainability problem and is being actively addressed by scholars, governments, and organizations around the world. Bioplastics, which are biodegradable plastics derived from food waste, are a recent innovation that might contribute to managing this waste in a more sustainable manner. Unfortunately, many of today's consumers are not necessarily ready to consider such alternatives. Consumer switching to sustainable products is a tenuous topic, as consumers often value other product attributes (i.e., cost, quality, and associated prestige) more than their sustainability attributes (i.e., fewer natural resources expended, lower carbon footprints, and end-of-life recoverability). A greater understanding of consumers' intention to switch to bioplastic products provides opportunities for firms to develop state-of-the-art, profitable, and sustainable food systems. Considering the complex set of inter-relationships surrounding consumer involvement in sustainable innovations and associated supply chain strategy, this research leverages complexity theory and a qualitative comparative analysis research approach to uncover eight different, yet equifinal, configurations of antecedents that motivate consumer intention to switch from new plastic products to equivalent products made from bioplastics.     

Chinese consumer demand for food safety attributes in milk products

Little is known about emerging demands for food safety among consumers in developing countries. This study presents results of an investigation of consumer awareness, willingness to pay, and price premiums for milk products manufactured using Hazard Analysis Critical Control Point (HACCP) management, a quality management system used to reduce food safety risks. Chinese food processors initially sought HACCP certification to access export markets, but now HACCP is rapidly being adopted for domestic products and HACCP logos have begun to appear on labels in China. A survey of Beijing consumers found that less than one in five respondents was aware of HACCP, and most who had heard of HACCP had learned about it within the previous year. After receiving information on HACCP nearly all respondents were willing to pay a modest price premium for HACCP-certified products. Products with HACCP labels in Beijing supermarkets sold at a price premium of about 5% over products without such labels, holding other product attributes constant. The results indicate that demand for food safety is emerging as an attribute demanded by Chinese consumers.