Factors Influencing Consumers’ Willingness to Pay for Organic Fruits and Vegetables: Empirical Evidence from a Consumer Survey in India

Numerous consumers confronted with increasing environmental problems, food safety issues, and augmentative health problems increasingly desire to have healthier and more natural foods grown in an eco-friendly manner. Hitherto organic foods only partly benefit from this increasing market environment, and their market share stays rather low despite high growth rates. This article aims to investigate consumers’ willingness to pay (WTP) for organic fruits and vegetables and relevant factors affecting consumers WTP. The contingent valuation method was selected to estimate WTP. Empirical data was drawn from a 250-consumer survey conducted in Bangalore during February 2013. A binomial logistic regression model was applied to obtain the value of WTP and determine the factors influencing it. The results indicated that about 90% of the consumers were willing to pay a premium price ranging between 5% to more than 100% in order to acquire better-quality fruits and vegetables; factors such as family income, size of the family, gender, and other opinion variables such as chemical residue in conventional foods, trust on retailers, taste, and environmental concerns significantly influence consumers’ WTP. More than 87% of the consumers indicated that high price, lack of availability, narrow range, and irregular supply are the major barriers for them to buy these products. The results provide useful evidence to pertinent governmental agencies in terms of assisting in the design of policies for the promotion of organic food production and marketing and reaching the target public. Furthermore, firms involved in the organic foods business may also see benefits when drawing information in order to calibrate marketing strategies.     

Can't Buy Me Green? A Review of Consumer Perceptions of and Behavior Toward the Price of Organic Food

Support for organic farming is a promising policy for improving sustainability in the food sector. Further consumer demand, however, is hindered by high prices. We review research from 2000 to 2014 on the role of perceived price, income, price knowledge, willingness to pay, and reactions to price changes on organic food. We find that price is the major perceived barrier to purchase. Income is only a partial explanatory factor and is superseded by psychographic variables. Willingness to pay a premium is around 30% (ranging from 0% to 105%) and depends on consumer segments and product category. Price knowledge is vague, and organic consumers' price sensitivity is relatively lower than that of occasional or nonorganic consumers. The results suggest that further market differentiation in terms of organic consumer segments and food categories is necessary. Furthermore, we discuss detailed implications for public policy and practice and present a future research agenda.     

Young Chinese and Functional Foods for Mobility Health: Perceptions of Importance,Trust, and Willingness to Purchase and Pay a Premium

Consumers’ desire to enhance diet and health has become a driver for the development of functional food products. China, with one of the largest markets in the world, offers huge potential for these foods. In the context of functional foods, specifically related to mobility health, this study aimed to understand Chinese consumers’ perceptions of the importance of these foods, trust, and willingness to purchase and pay a premium for such foods. A mixed-methodological approach using both focus groups and a survey was used to collect data from Chinese living in New Zealand. Findings show Chinese consumers place a high level of importance on their mobility health. Level of importance increased when asked about the believed importance of this area later in life. Key factors influencing Chinese consumers’ willingness to purchase functional foods were also identified: the carrier/nutrient combination; trust in the product’s country of origin and in the various institutions that may be involved in the production of functional food products; trust in both the product brand and how it is advertised; health motivation; and price. The study offers the food industry insights into the development and marketing of mobility-related functional foods targeted to this market.     

Brakes to organic market enlargement in Spain: consumers’ and retailers’ attitudes and willingness to pay

In Spain, consumption of organic products has not kept pace with production. Up till now, foreign markets have been a natural destination for excess supply. However, world trade liberalization might cause important commercial problems to Spanish producers that could be partially solved by enlarging the domestic market. The goal of this paper is to assess the opportunity for such enlargement focusing on two main aspects: consumers’ and retailers’ attitudes and willingness to pay for organic products. Concerns about health, natural diets or environmental issues could stimulate consumption, while retailing dynamism and competition to gain new market segments might favour distribution. Both aspects are investigated through two surveys addressed to consumers and retailers in two Spanish towns. The results confirm that only a small proportion of consumers and distributors show attitudes that might favour demand expansion. The most sensitized segments are willing to pay more for organic products, but this premium is still very far from the prevailing gap between conventional and organic food products.     

Local and/or organic: a study on consumer preferences for organic food and food from different origins

This paper gives a deeper insight into consumer preferences for different food products of varying place of origin (i.e. local, Germany, neighboring country, non‐EU country) and production practices (i.e. organic vs. non‐organic). Consumer surveys combined with choice experiments were conducted with 641 consumers in eight German regions. Mixed logit models were estimated to draw conclusions on consumers’ preferences for different product attributes. The Stimulus‐Organism‐Response model was applied to theoretically frame the key findings. Results reveal that consumers prefer locally produced food to organic food. However, conclusions on consumers’ preferences should not be generalized as they vary depending on product type and consumers’ place of residence. When looking at the willingness‐to‐pay estimates for ‘organic’ and ‘local’ while distinguishing among consumers from different regions of Germany, results indicate that consumers living in rural areas and consumers living in the eastern part of Germany are less willing to pay a premium for organic products than urban consumers and consumers from other parts of Germany. As preferences for origin attributes and organic production vary between different food products and in different regions of Germany, market actors should design marketing activities accordingly. This study adds to the international research on consumers’ preferences for organic and/or local food. The results provide better insights into preference structures, as more than one product has been included and surveys were conducted in different regions across Germany.     

Tradeoffs between sensory attributes and organic labels: the case of orange juice

Researchers have investigated the role of sensory attributes and organic labels on consumers’ preferences and perceptions of food, but few has examined whether sensory attributes are relevant for consumers who prefer organic food and the extent to which sensory attributes influence consumer's marginal willingness to pay for organic food. The objective of this study is to determine how sensory attributes and organic label work together to influence consumer's stated preference and marginal willingness to pay for orange juice. To achieve this, we conducted a blind sensory evaluation of two orange juices followed by a discrete choice experiment to determine the extent to which consumer's stated preference for orange juice labelled as organic is affected by sensory experience preceding the choice experiment. Random parameter logit models and latent class conditional logit models are used to explain stated preference. Results indicate that the effect of sensory attributes on consumer's marginal willingness to pay differed by organic juice and conventional juice.     

Willingness to Pay for Non‐biotech Foods in the U.S. and U.K.

This study uses closed‐ended and payment card formats to elicit willingness to pay for breakfast cereals made from non‐biotech ingredients. U.S. consumers were willing to pay a 10%∼12% premium to avoid biotech breakfast cereals, whereas U.K. consumers were willing to pay a 19%∼35% premium. Risk perceptions about agrobiotechnology proved to be an important factor shaping willingness to pay a premium for non‐biotech breakfast cereals. If consumers perceived risks to human health or environments from the use of biotechnology in crop/food production, or affiliated biotech foods unfavorably with morality or multinational corporations, they were more likely to pay a premium. Conversely, if consumers associated agrobiotechnology with various benefits (i.e., reduction in chemical use in crop production, mitigation of world food shortages, and improved nutritional content), they were less likely to pay a premium.     

Food Safety and Consumers' Willingness to Pay for Labelled Beef in Spain

Abstract

The objective of this paper is to assess the quality/safety value for beef consumers, measuring their willingness to pay a price premium for labelled beef. From a survey conducted among food shoppers within the household, consumers are segmented according to their safety perception of specific food products. For each segment, their willingness to pay for labelled beef is calculated. Finally, the main factors explaining such a decision are considered. The results indicate that food scares, the perception of a negative impact of agricultural production on the environment and health concerns are having a major impact on the food consumer purchasing decisions for beef. However, most consumers are not willing to pay a price premium for labelled beef.     

消费者安全乳品支付意愿研究

消费者对食品安全支付意愿的大小是决定食品安全市场能否长期存在并不断发展壮大的关键因素.本文应用条件价值评估法,基于对内蒙古呼和浩特市、和林格尔县200名消费者的随机调查数据,对消费者乳品安全支付意愿进行研究.研究结果显示,与普通牛奶相比,呼和浩特市与和林格尔县的消费者愿意为安全液态奶多支付29.33％的价格.安全液态奶的价格、消费者的购买经验、质量安全信息需求、风险感知、家中老人数以及家庭月总收入等因素,对消费者购买安全液态奶意愿具有显著影响.因此,本文提出,为提高消费者安全食品支付意愿,政府应不断增加质量安全信息供给,提高政府管制的公众信任度,加大安全食品标识的宣传力度.     

Women,men and organic food: differences in their attitudes and willingness to pay. A Spanish case study

The main purpose of this work consists of displaying the different attitudes of men and women towards organic food, and their willingness to pay for it, in three different consumer intensities: usual, occasional and potential consumers. Several surveys have been carried out to obtain a representative sample of regular food purchasers living in Castilla‐La Mancha (Spain). Statistic analysis previously detecting significant differences with regard to gender and type of consumer has been conducted by univariate analysis to describe attitudes, and multivariate analysis, through ‘logit’ models, to calculate maximum willingness to pay. Results show that women have a more favourable attitude (directly related to their lifestyle) to the purchase and consumption of organic food than men, whereas men are inclined to pay a higher price for organic food than women. In general, men are disposed to pay a higher increase in price than women.     

Consumer Preferences and Willingness to Pay for Bundled Fresh Produce Claims at Farmers’ Markets

This study uses a conditional logit with systematically varying parameters model to analyze consumer survey data collected at farmers’ markets in Utah. The purpose of this study is to examine consumption preferences and willingness to pay for differentiated fresh produce among farmers’ market shoppers in Utah. Three primary differentiating claims, namely conventionally grown of unknown origin, conventionally grown local (in-state), and organically grown of unknown origin, are investigated. Results indicate that consumer preferences and willingness to pay are higher for the conventionally grown local origin claim, emphasizing the importance of local origin labeling for directed marketed fresh produce. This claim was especially preferred among frequent farmers’ market shoppers and those who spend above average. Those who receive WIC and/or food stamp benefits show lower preferences for fresh produce. The shoppers are significantly sensitive to price increases. This study implies that marketing strategies and policy regulations aiming at promoting local, organic, labeling, and reinforcing repeated farmers’ market customers can positively impact purchasing preferences and willingness to pay for production-method-based and origin labeled products.     

Winning ugly: Profit maximizing marketing strategies for ugly foods

Ugly foods meet nutritional and safety benchmarks but deviate from cosmetic and size standards. The marketability of ugly food is a major factor that frustrates field-level food rescue efforts. We investigate opportunities to promote ugly foods in a way that converts uniform negative preferences towards ugly food to more diverse and horizontally differentiated preferences where some consumers prefer ugly food to standard offerings and pay a premium. We conduct an online discrete choice experiment and find a portfolio of marketing strategies that significantly enhance respondent willingness to pay for ugly carrots. Dual messages that simultaneously (1) link the purchase of ugly food to reductions in food waste and (2) suggest ugly food is natural and authentic significantly improve willingness to pay. We also find respondents tolerate some level of mixing of ugly with standard carrots. We find the most profitable strategy is to form bunches that include 40% ugly and 60% standard carrots and to sell the bunches with green leaves attached at farmers markets where consumers receive dual marketing messages. Profit simulations confirm that, in the absence of such marketing strategies, farmers rationally create waste by discontinuing harvest when the percentage of remaining carrots that are ugly is high.     

What’s behind organic certification of extra-virgin olive oil? A response from Italian consumers

Organic certification represents a growing business in international food market. In this article, an analysis of the factors influencing the purchase of organic extra-virgin olive oil is done for Italian consumers. A k-means cluster analysis was used to identify market segments. Results showed that it is possible to classify the Italian market into three clusters, respectively, indicating high, intermediate, and low willingness to pay a premium price (WTP) for organic certification of extra-virgin olive oil. Safety, nutritional, and health aspects appear to influence WTP. Factors concerning environmental sustainability and the supports to Italian food system are considered important, but do not play a fundamental role in increasing the consumer’s WTP.     

Product attributes and consumer acceptance of nutritionally enhanced genetically modified foods

Using data from a national survey, this study analyses US consumers’ acceptance of genetically modified foods that provide additional nutritional benefits. Using an ordered probit model, this study examines the relation between the willingness to consume genetically modified foods and consumers’ economic, demographic and value attributes. Empirical results suggest that despite having some reservations, especially about the use of biotechnology in animals, American consumers are not decidedly opposed to food biotechnology. Consumers’ economic and demographic variables are only weakly related to their acceptance of food biotechnology, especially when technology involves plant‐to‐plant DNA transfer. However, public trust and confidence in various private and public institutions are significantly related to their acceptance of food biotechnology. Overall, consumer acceptance of bioengineered foods is driven primarily by public perceptions of risks, benefits and safety of these food products.     

Drivers of and Barriers to Organic Purchase Behavior

Using a cost–benefit approach, this study is the first to jointly investigate supply-side factors and consumer characteristics that drive or hinder organic purchases. With scanner data that track actual purchase behavior in 28 product categories, the authors find that organic products are less popular in vice categories and categories with high promotional intensity and more popular in fresh versus processed categories. Biospheric values that reflect a person's concern for the environment and animal welfare increase organic purchases. Quality and health motives drive organic purchases only in certain categories, in particular categories with a low promotional intensity. Egoism and price consciousness act as barriers to organic purchases.     

Analyzing Price Premiums for Foods in Japan: Measuring Consumers' Willingness to Pay for Quality-Related Attributes

This study attempts to elucidate the characteristics of price premiums for food products from the consumers' viewpoint. After conducting a survey, consumers' willingness to pay (WTP) for 13 important food elements is analyzed for 10 food categories. The main findings were first, the categories that can easiest achieve a price premium are fruit and vegetables and meat and fish with the hardest being snacks and sweets and frozen foods. Second, the food element most related to price premiums is safety while the least related is convenience. Finally, an appropriate level for price premiums for food products is generally about 20%.     

Effect of Normative and Affective Aspects on Willingness to Pay for Domestic Food Products—A Multiple Price List Experiment

There is limited knowledge about which factors underlie consumers’ preferences for domestic food products. We used a non-hypothetical multiple-price list experiment to investigate the effect of affective (product-related emotions) and normative (consumer ethnocentrism and subjective norms) factors on consumer willingness to pay for domestic food products. A total of 166 Croatian consumers were given a choice between domestic and foreign food products with different price premiums for domestic food. The results indicate that consumers are willing to pay a premium for both low- and high-involvement domestic food products. Consumer willingness to pay for domestic products is influenced by ethnocentrism, product-related emotions, and sociodemographic variables, but not by social norms.     

Consumer Buying Behavior of Genetically Modified Fries in Germany

A purchasing experiment in which genetically modified and conventional fries were offered for sale at mobile fast food stands in Germany was conducted to identify factors influencing the willingness of consumers to purchase genetically modified fries. In total, 331 purchasing decisions were made: 56.5% decided to purchase conventional fries, 22.4% genetically modified fries, and 21.1% no preference. A logistic regression model analyzing questionnaires found that worry about pesticides, frequency of organic food purchases, the acceptability of genetically modified foods with environmental benefits, and perceptions of health risks from genetically modified foods significantly impact the willingness to purchase genetically modified fries.     

Adolescents’ attitudes towards organic food: a survey of 15‐ to 16‐year old school children

Adolescents are the consumers of tomorrow; therefore policies aimed at increasing organic food consumption should address the needs of this group. To discover their attitudes towards organic food and their knowledge of the subject, a survey among almost 700 school children aged 15–16 years was conducted. Four main groups of questions were used: adolescents’ knowledge of organic food, attitudes, whether they bought organic food and the perceived influences they exerted on the buying patterns of their parents. From the survey it can be concluded that adolescents’ attitudes towards organic food are positive, but their knowledge of and their willingness to buy it are low. Campaigns aimed at encouraging the purchasing of organic food targeted at adolescents should particularly emphasize those characteristics of organic foods that they can relate to their interests and ethical preferences, for example, animal welfare and environmental considerations.