The study – published in Food Quality and Preference – suggests that manufacturers and associations that use, or own, organic labelling schemes should put effort into measures that increase consumer awareness of the logo.
“According to our results, very few consumers trusted the generic labelling with the prefix ‘organic’ without a certification logo,” explained the research team, led by Dr Meike Janssen, University of Kassel, Germany.
“For almost all tested organic certification logos, the willingness-to-pay was significantly higher than for the generic labelling ... That even holds true for a fake logo investigated in Switzerland,” explained Janssen and her colleagues.
They said that forming consumer perceptions and attitudes regarding an underlying scheme – in terms of standards and control regime – is a key driver.
“These findings can be used by organic producers and processors for choosing an organic labelling scheme as well as distribution channel for their products,” said Janssen, noting that “retailers can use the information likewise.”
Organic trading
Trust is a delicate matter in the organic food market, as consumers are generally not able to validate whether a product is organic.
“In information economics, product attributes like these are called credence attributes,” explained the researchers.
“Unlike search attributes (e.g. price, colour) and experience attributes (e.g. taste, durability) which consumers can evaluate prior and after consumption respectively, credence attributes involve a high level of uncertainty from the consumer perspective,” they said.
As a result, consumer trust in the integrity of credence goods is of crucial importance, said Janssen and her team – who argued that this is particularly true if the credence attribute entails a price premium, as is the case with organic food.
Research findings
As part of the new study, Janssen and her colleagues conducted several ‘choice experiments’ and a total of 2,411 structured interviews with consumers of organic food in six European countries. Preferences and willingness-to-pay (WTP) for different organic logos were analysed.
They found great differences between countries as to which kind of organic logo was preferred by consumers. In Denmark and the Czech Republic, for example, they found that consumers are willing to pay the highest price premium for the governmental logo – whilst in Italy the old EU logo reached the highest WTP.
In Germany, a high WTP was recorded for the logo of the farmers’ association Demeter and the governmental logo. However, in Switzerland, the logo of the farmers’ umbrella organisation Bio Suisse “was clearly preferred,” said the team.
Willingness-to-pay in the UK was highest for the logos of the Soil Association and the certification body ‘Organic Farmers & Growers’, they found.
“It is advisable to label organic products with well-known organic certification logos that consumers trust,” concluded Janssen and her colleagues.
They argued that organisations who own an organic labelling scheme “should put effort into measures for increasing consumer awareness of the logo and forming consumer perceptions and attitudes regarding the underlying scheme in terms of standards.”
EU logo
Janssen and her team noted that – at the time of writing – “it remains to be seen how quickly the new mandatory EU logo will gain consumer awareness in the population.”
However, they argued that it is likely to take time until the new logo is widely trusted in countries where the former voluntary EU logo was not very common.
“In these countries, it thus seems advisable to additionally label organic products with an organic logo that consumers know and trust, at least in a transition period,” said Janssen and her colleagues.
Source: Food Quality and Preference
Published online ahead of print, doi: 10.1016/j.foodqual.2011.12.004
“Product labelling in the market for organic food: Consumer preferences and willingness-to-pay for different organic certification logos”
Authors: M. Janssen, U. Hamm