Are consumers willing to pay a price premium for specific organic logos?

Since July 2010, prepacked organic food produced in the EU must be labelled with the new mandatory EU logo for organic food. However, there is a long tradition of voluntary organic certification logos in most European countries. In this paper we analyse the willingness-to pay (WTP) of European consumers for products with different voluntary organic certification logos to make recommendations for actors in the organic sector. Data was collected by means of choice experiments with 1,997 consumers of organic food in five EU countries, based on which a number of random parameter logit models were estimated. According to our results, there were great differences between the tested logos regarding the price premium that consumers were willing to pay compared to organic products without a logo. One to two logos with a considerable additional WTP could be identified per country. It is recommended to display these logos in addition to the mandatory EU logo, at least in a transition period. The additional WTP for the old voluntary EU logo was close or equal to zero in all study countries except Italy. For the new EU logo, it is therefore recommended to provide public financial support for communication campaigns on the new logo

Assessing consumer acceptance of organic sausage products without curing agents

This paper presents and comments the results of sales experiments on newly developed organic meat products. The main goal of a research study was to examine the issue of consumer acceptance of organic sausage products with no curing agents. The sales experiment lasted over 12 weeks and was run in six supermarkets offering several variants of organic sausages of which three were produced without curing agents and therefore looked different to the variants produced with nitrite. The results allow an analysis of the consumer acceptance for organic meat products produced with and without curing agents as well as a description of the influence of the introduction of organic sausage variants without nitrite on the share of total sales of organic and conventional sausages. Results show a significant increase in sales of organic sausages and even of total sales of sausages and therefore contradict often heard judgements of German market actors that an additional offer of sausages without curing agents would confuse consumers and would lead to a decrease of organic sales

Organic data network: Harmonising organic market data collection in Europe

This contribution emerged as part of the collaborative project “Data network for better European organic market information” carried out in the 7th Framework Programme of the EU. Data from an online and a telephone survey among organic market data collectors form the basis for the analysis of the current situation of statistics on organic market data. The results reveal a heterogeneous picture, because organic market growth and data collection within the organic food sector have developed differently throughout Europe. Building on the survey results, the quality of data collection approaches is evaluated through the application of the data quality dimensions relevance, accuracy, comparability, coherence, accessibility/clarity, and timeliness/punctuality (Eurostat, 2009). Thereby best practice examples are identified and used for the elaboration of guidelines for the harmonisation of organic market data collection in Europe

Classification of data collection methods (= Deliverable 3.1 of the OrganicDataNetwork project - Report on collection methods)

In this report, a number of evaluation and quality criteria for data collection and compilation methods were defined. The results of an online survey on all existing organic market data collection methods in Europe were compiled and assessed. Subsequently the quality of existing data collection and processing approaches was evaluated using the following data quality dimensions: relevance, accuracy, comparability, coherence, accessibility and clarity, and timeliness and punctuality. The quality assessment was carried out exemplary to determine some good examples of data collection and processing. These cases were chosen because they delivered a very holistic and comprehensive presentation of their approaches regarding data collection methods, analyses, quality checks, and publication

Farmer Consumer Partnerships: Information search and decision making - the case of ethical values of organic products

The CORE Organic pilot project ‘Farmer Consumer Partnerships’ aims at analysing and testing innovative communication strategies of organic companies with respect to ethical values as a means of reconnecting organic farmers and consumers against the varying cultural and behavioural backgrounds of consumers in five European countries (AT, CH, DE, IT UK). The previous work packages (WP1 and WP2) provided a selection of the most promising communication arguments with respect to ethical values of organic food based on literature review and on the farmers’ or farmers’ initiatives point of view. Based on this, the task is to narrow down the wide range of existing arguments related to ethical values in organic food production. Therefore, the arguments were categorised in a pragmatic way, taking into consideration the likely beneficiaries of these ethical activities and the expert rating of research partners. The final selection included the three major categories of economic, social and environmental concerns and, additionally, animal welfare as well as cultural issues. Finally, 14 ethical arguments belonging to the following sub-dimensions were chosen: biodiversity, animal welfare, regional production, fairness in relation to the farmer, care farming, social aspects of production, and the preservation of cultural features. The aim of this work package was to confront consumers with these ethical concerns and to identify the most promising communication attributes for further analyses within the next work packages. It was to be determined which ethical information is most interesting for consumers in the partner countries with respect to the purchase decision on organic food. Chapter 2 concentrates on the theoretical perspective of information search within consumer behaviour. Factors influencing extensiveness and content of information search are presented. Chapter 3 is dedicated to the description of the methodological approach of the research within this research step. For the analyses within this research, it was decided to use the Information Display Matrix (IDM). The IDM is a process tracing method aiming at monitoring the cognitive processes underlying information search, judgement and choice. The IDM was used to analyse the depth of information search regarding ethical values of organic food and to identify those ethical attributes most relevant for decision making. The two-dimensional matrix lists alternative product stimuli in columns, while product attributes are listed in rows. Each cell contains concealed information about a product-related attribute, which has to be accessed one after another by the subject in order to obtain the information (Jacoby et al. 1987, Mühlbacher and Kirchler 2003). The ethical attributes were tested with the product organic milk. The IDM was accompanied by a questionnaire aiming at the validation of the results obtained by the IDM, at an explanation of the information acquisition behaviour and at giving answers on the ‘real life’ information behaviour concerning organic food. 240 organic milk buyers were interviewed face-to-face, in a computer assisted manner in the five study countries. Subject of chapter 4 is the description of the sample regarding socio-demographic indicators of participants and ‘real life’ information and purchasing behaviour. Concerning the sources of information on organic food, the results show that ‘articles in newspapers etc.’ are preferred, followed by ‘conversation with family and friends’ and ‘product packaging’. ‘Information by sales personnel’ was frequently mentioned in Italy but rarely in Switzerland and in the UK. ‘Reports on radio or TV’ seem to be less important in Italy than in all other countries. When asked for the kind of information they had actively been looking for within the last two months, ‘product origin’ was mentioned most often, followed by information on ‘ingredients’. In Switzerland and Germany, on the other hand, information on ‘organic certification’ and ‘production and processing methods’ was ranked higher than information on ‘ingredients’. In Italy, information on ‘product quality’ was more frequently asked for than on ‘ingredients’ whereas in the UK, information on ‘food miles’ is more important. Information on ‘prices’ seems to be much more important in Austria than in all the other countries. Chapter 5 concentrates on the depth and content of information search for ethical values of organic food obtained by means of the IDM. On average, respondents spent 4:28 minutes for information search and opened 34 information fields within the IDM. There are marked differences between the countries. Besides socio-demographic factors like age and the level of education, attitudes regarding organic food consumption could be identified to have an impact on the amount of information looked for preceding the product choice. The importance of different attributes for the choice of the organic product was analysed via the share that each attribute has in all firstly accessed attributes and via the frequency of accession of each attribute. According to these indicators, the most important attributes are ‘animal welfare’, ‘regional production’ and ‘fair prices for farmers‘. These attributes were followed by ‘product price’, indicating that consumers tend to prefer cheaper products over ethical products with attributes like ‘care farming’, ‘social criteria of production’, ‘protection of biodiversity’ and ‘cultural aspects’. There are only minor differences between the countries in the order of the most important attributes. Only in Italy ‘product price’ seems to be more important than ‘fair prices’ and ‘animal welfare’. Factors impacting on the preferred ethical concern are age, gender, level of education and motives for organic consumption. Expected relationships between attitudes towards organic consumption and the preferred ethical concern proved to be weak. The choice decision shows that the cheaper organic product without any additional ethical values was preferred by 6% of the respondents only. While in Germany 3% decided in favour of the cheaper product, 9% of the Austrian respondents chose the cheaper one. This result allows the conclusion that a large share of consumers of organic food would be willing to pay a price premium for ethical products. The report is completed by some concluding remarks (Chapter 6) pointing at the appropriateness of the IDM for the task fulfilled but also its methodological limitations. The central result of the analyses of work package 3 for the whole project is the identification of the most important ethical values from the consumers’ point of view. However, there are still some open research questions, particularly as for the joint effect of different variables on the respondents’ information behaviour. The corresponding analyses will take place during the next months and will be published in scientific journals

Consumer perception of different organic certification schemes in five European countries

With the introduction of the new mandatory EU logo for organic food and farming, the various existing organic certification schemes in the European market face a challenge: Producers and retailers might only continue to display the existing organic logos on product packages if the underlying certification schemes offer consumers an added value compared to the mandatory EU logo and its scheme. The present study aims to identify potential added values that organic certification schemes could incorporate to differentiate themselves from the mandatory EU logo. The study explores consumer awareness and perception of different organic certification schemes and the corresponding logos, about which little is known to date. The qualitative approach with focus group discussions in the five European countries Czech Republic, Denmark, Germany, Italy and United Kingdom revealed that consumer knowledge of organic certification schemes is generally low. In Italy and the United Kingdom, the great majority of participants was not aware of any differences between the schemes that were discussed. In the Czech Republic, Denmark and Germany, several participants preferred a particular organic certification scheme over others. The following aspects could be identified as potential added values for certification schemes to differentiate themselves from the EU logo and the underlying scheme: Stricter production standards, stricter control, domestic origin, and fair prices for farmers

Communication of ethical values in organic farming

Due to globalisation and growing anonymity of trade with organic products, farmers in Europe are under pressure to lower their production standards in order to keep up with world-wide competition. On the other hand consumers increasingly criticise food products which were produced under unsatisfactory social and environmental conditions. A literature review indicates that consumers are willing to pay an additional premium for ethical values in organic production regarding social, environmental and economic concerns. This creates possibilities to differentiate from the organic mass markets by providing and communicating ethical values. So far, not much is known about which ethical values and arguments are comprehensible and important to organic consumers and how to communicate them most effectively. This contribution discusses some hypotheses on the communication of additional ethical values in the organic market and points at existing research deficits

Consumer views on the new mandatory EU logo for organic food

In July 2010, the new mandatory EU logo for organic food was introduced to make the identification of organic products easier for consumers. In the present study we analysed how consumers in five EU countries view a mandatory EU logo for organic food to make recommendations for agrarian decision-makers and market actors in the organic sector. The study was based on a combination of qualitative and quantitative methods with consumers of organic food in the Czech Republic, Denmark, Germany, Italy and the United Kingdom. Firstly, 15 focus group discussions were conducted to reveal the spectrum of consumer perceptions. In a subsequent survey with 2042 participants consumer views on key issues were quantified. Finally, the results of the qualitative and quantitative studies were brought together. Our findings suggest that a mandatory EU logo for organic food was basically welcomed in all countries, however, trust in the underlying production standards and the inspection system was not very pronounced (except in Italy). We conclude that the introduction of the new EU logo should be supported by communication campaigns to make clear what the new logo stands for and remove unfounded consumer concerns regarding the downscaling of standards and the trustworthiness of the inspection system

Executive summary report on the comprehensiveness and compatibility of organic market data collection methods ( = Deliverable 3.2 of the OrganicDataNetwork project)

Up to now, organic market data collection has been inconsistent, or data from different organisations and/or countries has not been comparable, because different methodologies have been used. Hence, the organic market suffers from information-asymmetry and a lack of transparency. Interpretations based on incomplete and inconsistent data might lead to wrong decisions and misinvestments. More coherent data collection and thorough data analyses are needed to overcome current dispersion and fragmentation of data sources. This executive summary gives a short overview on the current situation of organic market data collection in Europe by showing some results of a European-wide survey among data collectors. Furthermore the application of quality dimensions for the identification of ‘best practice’ examples is described in order to provide recommendations for data collection and compilation, the evaluation of existing data collection methods, and the assessment of data quality

Consumer preferences and willingness-to-pay for organic certification logos: Recommendations for actors in the organic sector. Report of the CERTCOST project

In many European countries, a variety of different organic certification logos and schemes is found in the market. In the countries of the European Union (EU), the new mandatory EU logo for organic food was introduced in July 2010, so that other organic logos can only be used in addition to the mandatory EU logo. Within the CERTCOST project, consumer perceptions, preferences and willingness-to-pay (WTP) regarding different organic certification logos were investigated. The seven study countries were Czech Republic, Denmark, Germany, Italy, Switzerland, Turkey and United Kingdom. The overall objective was to give recommendations for actors in the organic sector regarding the use and promotion of organic certification logos. Firstly, an inventory study was conducted in shops with an organic food range in autumn 2008 to get insights into the spectrum of different organic certification logos in the market and the extent of price differences among products with different organic logos. The analysis showed that the importance of different kinds of logos differed considerably between the study countries. Only a few significant price differences between products with and without certain organic logos were found. Secondly, consumer perceptions, preferences and WTP regarding different organic logos as well as consumer views on a mandatory EU logo were investigated by a combination of qualitative and quantitative methods of consumer research (focus group discussions conducted in spring 2009, choice experiments and structured interviews conducted in early 2010). The results revealed that consumers had a low level of factual knowledge about organic production standards and the organic control system. Nevertheless, consumers clearly preferred certain organic logos more than others. Different kinds of organic logos were preferred across the countries. In Denmark and the Czech Republic, consumers were willing to pay a considerably higher price premium for the governmental logo than for the other tested logos. In Germany, a high WTP was recorded for the logo of the farmers’ association Demeter and the governmental logo. In Italy, the old EU logo reached the highest WTP. In Switzerland, the logo of the farmers’ umbrella organisation Bio Suisse was clearly preferred. In Turkey, consumers were willing to pay the highest price premium for the logo of the certification body Ecocert. In the UK, the WTP was the highest for the logos of the Soil Association and the certification body ‘Organic Farmers & Growers’. In all countries, products without a logo just labelled with the prefix ‘organic’ were not trusted. The introduction of a mandatory EU logo was generally welcomed by the participants. However, trust in the underlying standards and the control system was not very pronounced except in Italy. The report briefly outlines the methods and results, while the focus lies on recommendations for different actors in the organic sector with regard to the use and promotion of organic certification logos. To increase consumer trust in the new mandatory EU logo, it is recommended that promotion campaigns should be carried out explaining what the logo indicates. Regarding the investigated governmental logos, it is recommended that their use should be continued, at least in a transition period, since a high level of consumer trust in the logos was recorded. For organic certification logos of private organisations it is recommended that their use should only be continued for logos that offer a clear ‘added value’ compared to the EU logo