What We Can Do
Market, Regulatory, and Agricultural Economics Studies
This paper reviews recent consumer studies evaluating comprehension of a novel form of food labeling, qualified health claims, now permitted by FDA. The joint goals of qualified health claims are to encourage firms to make accurate, science-based claims about the health benefits of their products while helping consumers prevent disease and improve their health through sound dietary decisions using enhanced nutrition information. This paper examines whether consumers can differentiate between multiple levels of health claims and determines if a front label visual aid helps consumer understanding. Results of experimental consumer attitude studies are presented which suggest that people do not perceive significant differences between the three levels of qualified claims and traditional (unqualified or SSA) health claims. An additional experiment suggests that a visual aid (report card) may be an important device to help consumers distinguish between the levels of health claims. However, thought-listing data suggests that consumers use the report card to draw inferences about overall product quality rather than the strength of scientific evidence supporting the health claim. Implications of these findings for the future regulatory oversight and marketing of functional food products are discussed.
In response to dramatically increasing adoption in consumer markets, the National Organic Program (NOP) initiated novel labeling standards for food products in the US in 2002. This program is a particularly relevant standardization effort for multi-ingredient processed foods. Rather than a simple binary message (organic or not), gradations of organic content are now codified. No existing published study evaluates consumer willingness to pay or motivation to purchase in response to such a rich organic label. This article presents evidence of the impact of the NOP through analysis of data collected in seven central Ohio, USA grocery stores. Results suggest that consumers are willing to pay premium prices for organic foods, even those with less than 100% organic ingredients. The magnitudes of WTP premia varied significantly among consumer groups, suggesting that targeted marketing may be effective for organic merchandisers.
Recent trends in the marketing of functional foods suggest that multiple-benefit products are becoming more common. Yet it is unclear which consumers are most interested in or best served by, such novel or new generation functional foods. With emerging scientific evidence of efficacy and more diverse products offered for sale, a broader range of consumers are likely to become interested in dietary interventions to enhance health. Consumers will likely respond based on a range of motivation, health conditions, and knowledge levels suggesting "one size will not fit all." Given such an evolving marketing environment, this paper presents one research technique exploring differences in consumer preferences and valuations for a novel functional food product-a tomato juice containing soy. A discrete choice experiment is applied to examine consumer valuation of this novel functional food. Data were collected from 1704 households in Ohio through a mail survey. The choice experiment manipulates whether or not the product is organic, whether it contains natural or fortified nutrients, and product price. Estimates of consumer willingness to pay a premium price are based on condition I models, which permit an examination of consumer preference and valuation heterogeneity for key product attributes. Results indicate that health benefits and ingredient naturalness are positively valued, but such preferences and valuations depend on an individual's education, income, and food purchase behavior. Naturally accuring nutrients are preferred over fortification. Considerable heterogeneity is found in the data suggesting that a range of market segments may exist.