The use of food labels such as “grass-fed,” “raised without antibiotics” and environmental labels can impact what consumers buy and how businesses and retailers market products, researchers at USDA’s Economic Research Service (ERS) reported.
The researchers conducted three studies and found consumers were willing to pay a premium for labels regarding animal raising claims or other attributes, despite consumers not fully understanding the label.
ERS researchers looked at consumers’ willingness to pay extra for grass-fed and organic beef as a safety factor. The study asked 1,010 U.S. consumers about their perception of the food safety risk of contamination from bacteria, viruses and toxins associated with eating beef. Consumers were also asked if they agree that grass-fed beef is safer than grain-fed beef.
“Overall, most respondents perceived low food safety risk from eating beef, as only about one-third reported ‘a moderate amount’ to ‘a great deal’ of risk,” Kar Ho Lim and Elina T. Page, ERS research economists, wrote. “Nearly 40 percent believed grass-fed is safer compared to conventional beef; in contrast, nearly 50 percent believed organic beef is safer.”
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The study found that consumers who agreed or strongly agreed that grass-fed beef was safer were willing to pay $2 more per pound than conventional grain-fed beef, and consumers with a high-risk perception were willing to pay $3 more per pound. A similar pattern was observed for organic beef.
Researchers concluded, “Some consumers are drawn to grass-fed beef for perceived food safety, even though the scientific literature is inconclusive as to whether grass-fed is safer than conventional.”
Another study found similar results, with consumers willing to pay a premium for canned tuna with environmental labels. The study looked at their willingness to pay extra for canned tuna with the Marine Stewardship Council’s sustainable seafood eco-label. The research found 1,000 consumers were willing to pay extra, but the willingness depended on the country of origin.
For canned tuna with the “product of USA” label, consumers were willing to pay 45 cents more on average per can for products with the eco-label. For products from Vietnam and Ecuador, consumers were willing to pay 70 cents and $1.13, respectively, more for the eco-label.
Lastly, researchers at ERS found that consumer spending on poultry with the “raised without antibiotics” label increased from 2012 to 2017. Using scanner data, researchers found that spending on raw, fresh and frozen chicken with the label increased from 4 to 11 percent during the time period, and processed products increased to 9 percent.
The study found that 26 percent of consumers were very concerned about antibiotics in poultry production, and 44 percent of consumers were not concerned. The study also examined chicken prices with the “raised without antibiotics” label and found that, on average, raw chicken and processed chicken with the label were 87 percent and 55 percent more expensive, respectively, compared to similar conventional chicken products.
Lim and Page concluded that food labels are becoming common practice, but more research on consumers’ interpretation of the labels is needed. — Charles Wallace,WLJ editor
