The market share for sustainable products – such as organic products, but also ‘healthy choice’ food – is rather low.
This is because very few Dutch consumers are willing to pay more for it, conclude Prof. Peter Verhoef and Dr Jenny van Doorn of the Marketing department of the Faculty of Economics and Business of the University of Groningen.
Consumers actually want to pay less for healthy products.
One of the reasons is that consumers judge sustainable food to be of inferior quality.
The research results of Verhoef and Van Doorn have been published on 16 October 2009 in the journal Economische en Statistische Berichten.
Minister Verburg of LNV [Agriculture, Nature and Food Quality] wants the Netherlands to lead the field internationally by 2015 in the production and consumption of sustainable food and hopes to achieve this with a larger and more diverse range.
However, because this new consumer research reveals that the high price and ideas about inferior quality will be an obstacle, Verhoef and Van Doorn suggest that (subsidized) price reductions and an emphasis on quality aspects should be given greater weight in the information provision.
The researchers included not only products designed to improve nature, the environment and welfare (the bio, eko and fair trade labels) under sustainable products, but also food that promises that it is good for individual health, such as ‘light’ products.
Verhoef and Van Doorn conducted their research in a pool of 1180 Dutch consumers and for eight product categories:
jam, yoghurt, rice, margarine (basic provisions), soft drinks, chocolate, coffee and beer (luxury products).
They charted how prepared consumers were to pay more for products claiming to be or labelled as sustainable.
Motives that could possibly be behind this behaviour were investigated, such as views on the quality of the product, how healthy the product is and social attitudes towards the contribution made by the purchaser to humanity and the environment.
Verhoef and Van Doorn established that consumers are only prepared to pay more for products with a ‘bio’ (organic) claim, but even then only up to six percent more.
Current price differences are often much higher, between ten and forty percent.
The Dutch consumer turns out to want to pay five percent less for products that claim to be healthy.
They think that these healthy products are less tasty and do not contribute enough to a ‘social feeling’ to justify the high price.
It is also remarkable that consumers consider not only organic but also fair trade and healthy products to be of inferior quality.
It is therefore important that quality judgements about sustainable food improve significantly so that the Dutch consumer is persuaded to eat more environmentally friendly products.
There turns out to be a difference between luxury and basic foods – consumers act much more rationally with regard to basic products and much more emotionally with the luxury categories, where matters like guilt can play a role.
For example, a consumer could feel guilty about eating chocolate and perhaps ‘buys off’ that feeling by choosing fair trade chocolate –
‘I’m enjoying it, but doing something good as well.’
Marketing could exploit that feeling of guilt to increase the consumption of organic and fair trade luxury goods, but a different strategy is needed to improve the sales of basic provisions.
Above all, the quality perceptions must be improved.
Prof. P.C. Verhoef, tel. + 31 (0) 50 363 7320 / 70 65
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