Utah Consumer Preferences and Willingness to Pay for Specialty Labeled Fruit Products
Kynda Curtis, Professor
and
USU Extension Specialist, Department of Applied Economics
Makaylie Langford, USU Extension Intern, Department of Applied Economics
Marcelo Pignatari, Graduate Research Assistant, Department of Applied Economics
Introduction
Understanding consumer attitudes and preferences for specialty labeled foods is a popular area of study. Insights derived from these studies are valuable for producers and marketers to assess whether their products meet consumer needs and which certification, or labeling programs are highly valued. Understanding consumer preferences enables growers to take advantage of the premiums associated with differentiated products. Additionally, policymakers can use these findings to develop programs aligned with emerging consumer preferences, promoting the implementation of food certification initiatives.
Previous research shows consumers are willing to pay premiums for products featuring specialty labels, such as locally grown, organic, GMO-free, etc. (Blare et al., 2019; Carroll et al., 2013). Consumer preferences for local labels are associated with environmental and quality considerations, local community support, and perceived freshness (Grebitus et al., 2013; Darby et al., 2008). Similarly, consumers associate organic labels with perceptions of healthiness, tastiness, lower pesticide levels, and better overall quality compared to conventionally produced food (Yazdanpanah et al., 2015; Loebnitz & Aschemann-Witzel, 2016).
In this fact sheet, we discuss the results of a 2023 study examining Utah consumer preferences and willingness to pay (WTP) for fruit products labeled local (Utah’s Own™), organic, and GMO-free. We discuss and compare survey respondents past consumption, awareness, preferences, and attitudes toward these labeling programs. Additionally, we examine consumer WTP values for each of these labels for three fruit varieties and fresh and dried products, namely fresh apples, strawberries, and dried tart cherries.
Study Overview
The study was conducted in the fall of 2023 through an online survey of Utah consumers, aiming to determine consumer attitudes and purchasing behaviors related to fruit products. Researchers also sought to assess which fruit attributes Utah consumers value, such as organic or locally grown. Survey questions were developed based on previous research on consumer preferences and willingness to pay for specialty labeling
and production programs. The survey was administered via Qualtrics response panel and represents Utah demographics. A total of 384 Utah consumers, or respondents, completed the survey.
Respondent Demographics
As shown in Table 1, most respondents (76%) were aged 18 to 54 years old. Two-thirds of the respondents were female, while just under a third were male. Most respondents (83%) were white followed by Hispanic or Latino (7%). Many respondents (61%) had at least some college education and more than 95% had completed high school or a GED. Nearly half (48%) of the respondents were employed full-time, and an additional 15% were employed part-time. When respondents were asked to indicate their annual household income, the most common (34%) response was $50,000 to $99,999, followed by $10,000 to $49,999 at 26%. Just over half of the respondents (54%) were married, and nearly half (46%) had children under 18 years old living in their household. Sample demographics closely mirror overall Utah demographics.
Table 1. Respondent Demographics
Annual household
(2022) Less than $10,000
$10,000–49,999
$50,000–99,999
$100,000–149,999
$150,000 or more
Familiarity With Specialty Labeling Programs
Respondents were asked to indicate their level of familiarity with various specialty labeling and production programs (see Figure 1). The programs included organic, locally grown, Utah’s Own, natural, and non-GMO. For all labels, the most common response was “not familiar at all,” which was selected by 30%–39% of respondents. No more than 16% of the respondents indicated that they were extremely familiar with any of the labeling programs. They were most familiar with the organic and non-GMO labels Despite this apparent lack of familiarity, more than half of the respondents (58%) chose not to receive more information about these labeling programs when asked if they would like further information
Figure 1. Familiarity With Specialty Labeling Programs
Organic
Respondents were asked to complete a short quiz to gauge their knowledge of organic production practices. The average quiz score across all respondents was 47.14%. Only 11 (2.8%) of the respondents correctly answered all the questions, while 12% of the respondents answered none of the questions correctly. Given their lack of familiarity with these labeling programs, it’s puzzling that when questioned about their history or past consumption of specialty labeled foods, the majority (73%) reported that they consume foods with specialty labels (organic, non-GMO, natural, grass-fed, or locally grown) at least several times per month.
Respondents were asked to indicate their level of agreement with statements regarding certified organic fruit products. As shown in Figure 2, less than half of the respondents (44%) somewhat or strongly agreed that organic products are fresher. Similarly, only 39% of the respondents agreed that organic products taste better than conventional products. However, slightly more than half of the respondents (52%) agreed that organic products are healthier than conventional products, and 55% agreed that organic products are safer than conventional products. A strong majority (75%) somewhat or strongly agreed that organic products are too
Though many consumers see organic products as safer and healthier, they also feel they are too expensive.
expensive. These results indicate that although many consumers see organic products as safer or healthier, organic products are too expensive for many consumers, and the favorable attributes do not justify the price.
Figure 2. Agreement With Organically Grown Statements
Local
Respondents were also asked to indicate their level of agreement with statements about locally grown fruits (see Figure 3). Most respondents (85%) agreed that local products benefit local farmers. A strong majority (77%) also somewhat or strongly agreed that local products are fresher than non-local products. More than half of the respondents (56%) agreed that local fruit products taste better than non-local fruits, while few (10%) disagreed. Additionally, more than half of the respondents (61%) indicated that local products were important to them.
Nearly as many respondents agreed (41%) as were neutral (39%) when asked if they felt local products were healthier than non-local products, but very few respondents (19%) disagreed. More respondents agreed (31%) than disagreed (17%) that local products are safer than nonlocal products. When asked about the selection of local products, more respondents disagreed (39%) than agreed (26%) that the selection of local fruits is poor. Many respondents were neutral about the price of local fruit products, and only slightly more respondents agreed (30%) that local products were too expensive than disagreed (29%). These results suggest that locally grown products are generally viewed favorably among Utah consumers, and product price isn’t as big of a hurdle to purchasing as organic products.
Image is used with permission, courtesy of Utah’s Own
Willingness to Pay for Specialty Labeled Fruit
Respondents were asked to complete 24 different bidding “choice tasks” in which they chose between two products with various attributes. Consumer willingness to pay for dried tart cherries (6-ounce package) and fresh gala apples and strawberries (1 pound) were assessed through eight choice tasks. The choice tasks for all three fruit products presented various combinations of the following labels: local (Utah’s Own), organic, and non-GMO, and a price level. The gala apple and strawberry choice tasks included a fourth label, a freshness guarantee, meaning the fruit had no visible signs of decay.
Survey respondents often consumed fresh strawberries and apples (29% and 27% respectively, consumed at least once a week), but more than half (58%) had never consumed packaged dried tart cherries (see Table 2). When asked how much they typically spend each time they purchase the specified fruit products, the average amount spent per purchase for dried tart cherries was $4.84, while the average amount spent on apples was $6.79. Respondents spent the most on strawberries, with an average purchase amount of $7.28.
Fresh gala apples
Fresh strawberries
Dried tart cherries
Note. (standard deviation)
Pricing
For all choice tasks, respondents primarily chose the product option with the lower price. Large product price discrepancies between options led to more respondents choosing the less expensive option across all products. When the price of both product options was higher, regardless of the relative difference in prices between the two options, a greater proportion of respondents chose neither. This suggests that Utah consumers are highly sensitive to price.
For each product, the choice most often made by respondents was when all product characteristics were featured and at the lowest price. When a lower price was the product’s only attribute, a lower proportion of respondents selected the product. This shows that although the respondents consistently preferred lower prices, they were also influenced by the other product characteristics.
Local products were also selected by most respondents when they were the cheaper of the two options. For dried tart cherries, the highest proportion of respondents selected the local product when it was also organic and cheaper or had all characteristics combined. For gala apples and strawberries, the highest proportion of respondents selected the local product when it was also cheaper and non-GMO or had all characteristics combined.
Like locally labeled products, organic products were selected by most respondents when they were the cheaper option. Among all the organic dried tart cherry products, the highest proportion of respondents selected the product when it was local and the cheaper option or had all characteristics together. Organic strawberries and organic gala apples were selected by the highest proportion of respondents when they were fresh with no visible signs of decay or had all characteristics together.
Strawberries
Researchers assessed consumers’ willingness to pay for fruit with various attributes based on a multinomial logit model of the respondents’ answers to the choice tasks. For a 1-pound package of strawberries, results
indicated that consumers were willing to pay a $0.37 premium for products with the freshness guarantee (see Table 3). In comparison, they were willing to pay a $0.41 premium for non-GMO, and a $0.50 premium for organic products. Local products that were labeled as “Utah’s Own” had the highest premium for strawberries at $1.39.
Table 3. Willingness to Pay by Label
When consumers’ willingness to pay for strawberries with a variety of different labels was assessed, consumers were willing to pay the most for a pound of strawberries that was both local and organic, with an average value of $5.77 (see Table 4). Consumers were willing to pay the least for strawberries that were not labeled with any specialty attributes, with an average value of $3.56. When strawberries were labeled with multiple attributes, consumers were willing to pay more than for any of the attributes alone. Strawberries labeled as local were valued above any other product labeled with only one attribute.
Table 4. Willingness to Pay for Strawberries by Label and Label Combinations
Note All values are statistically different from the non-labeled strawberries value at a 95% confidence interval (CI).
Apples
Respondent willingness to pay for a 1-pound package of apples followed a similar pattern, with the freshness guarantee label bringing the lowest premium at $0.02 and the locally grown label the highest premium at $0.79. Respondents were willing to pay $0.20 more for a product that was labeled as organic over a product that was not labeled. Non-GMO apples had a similar premium at $0.24. The much lower premium ($0.02) for apples labeled “freshness guaranteed” compared to strawberries may be because apples have a longer shelf life, unlike strawberries, which spoil more rapidly.
Dried Tart Cherries
Local products maintained their position with the highest premiums for the 6-ounce package of dried tart cherries. Compared to non-labeled products, consumers were willing to pay $1.73 more for dried tart cherries
labeled as Utah’s Own. Consumers were willing to pay a premium of $1.09 for the organic product and a premium of $0.33 for the non-GMO product over the non-labeled product alternative
Conclusions
Although many respondents reported that they were unfamiliar with specialty labeling programs, more than half of the respondents declined the offer to receive further information. This result may demonstrate a lack of interest in labeling programs, but the analysis of the choice tasks showed that consumers were willing to pay more for fruit products exhibiting specialty labels. Since many participants showed disinterest in receiving additional information, advertising or educational campaigns might prove more successful by focusing on concise, “bite-sized” content that quickly and clearly communicates essential information. More than 95% of those surveyed reported they have at least a high school diploma or had completed a GED program, so education and advertising campaigns should be geared to match their education and literacy levels.
Study results show that although Utah consumers are highly price sensitive, they do value other fruit product attributes. Local products labeled “Utah’s Own” were shown to be valued most highly, though organic products were also favored. Non-GMO products were less valued by Utah consumers in comparison to the other attributes. This makes sense as organic products must also be non-GMO.
When consumer willingness to pay was evaluated, local products were shown to have the highest premiums compared to products that were labeled as organic or non-GMO. Respondents’ reported level of agreement with statements about organic and local products showed that they were neutral about organic products but tended to view local products favorably. Most respondents agreed that local products were fresher and that purchasing local products benefited local farmers. Therefore, promotional activities and education initiatives focused on freshness and the community benefits of locally grown fruit has potential to more effectively connect with consumers compared to campaigns emphasizing other factors not valued by consumers.
Acknowledgments
This material is based upon work that is supported by the National Institute of Food and Agriculture, U.S. Department of Agriculture, under award number 2020-38640-31523 through the Western Sustainable Agriculture Research and Education program under project number SW21-923. USDA is an equal opportunity employer and service provider. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture.
References
Blare, T., Donovan, J., & del Pozo, C. (2019). Estimates of the willingness to pay for locally grown tree fruits in Cusco, Peru. Renewable Agriculture and Food Systems, 34(1), 50–61.
Carroll, K. A., Bernard, J. C., & Pesek Jr, J. D. (2013). Consumer preferences for tomatoes: the influence of local, organic, and state program promotions by purchasing venue. Journal of Agricultural and Resource Economics, 379–396.
Darby, K., Batte, M. T., Ernst, S., & Roe, B. (2008). Decomposing local: A conjoint analysis of locally produced foods. American Journal of Agricultural Economics, 90(2), 476–486.
Grebitus, C., Lusk, J. L., & Nayga Jr, R. M. (2013). Effect of distance of transportation on willingness to pay for food. Ecological Economics, 88, 67–75.
Loebnitz, N., & Aschemann-Witzel, J. (2016). Communicating organic food quality in China: Consumer perceptions of organic products and the effect of environmental value priming. Food Quality and Preference, 50, 102–10
Yazdanpanah, M., Forouzani, M., & Hojjati, M. (2015). Willingness of Iranian young adults to eat organic foods: Application of the Health Belief Model. Food Quality and Preference, 41, 75–83.
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July 2024
Utah State University Extension
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