Perception and Misperception of Food Labelling: Local and ...

Ben Campbell

Asst. Prof. and Extension Economist

Dept. of Agricultural and Res. Econ.

University of Connecticut

Perception and Misperception of Food

Labelling: Local and Organic

Collaborators Study 1 – Canadian Journal of Agricultural Economics, 2013 (Ontario Ministry of

Agriculture, Food and Rural Affairs, New Directions and Growing Forward

programs)

Sanelsio Mhlanga and Isabelle Lesschaeve, Vineland Research and Innovation Centre

Study 2 – International Food and Agribusiness Management Review, 2014

(USDA-Federal State Marketing Improvement Program)

Michigan State University,

Jennifer Dennis, Purdue University

Charlie Hall, Texas A&M University

Hayk Khachatryan, University of Florida

Chengyan Yue, University of Minnesota

What Drives the Purchase Decision?

Which basket would you buy?


CA peaches QC organic peaches CA organic peaches QC peaches


QC peaches CA organic peaches CA peaches QC organic peaches


Consumer Choices

Premiums are present (Darby et al. 2008; Yue et al. 2009; Campbell et al.

2010; Onozaka and McFadden 2011)

Foodland Ontario label:

$0.10 premium per pound overall and $0.35 premium for certain

segments of consumers (Campbell et al. 2010).

Canada Organic and Verified Organic labels:

$0.16/lb and $0.19/lb premium across all consumers.

Willingness to Pay for Local and Organic?

Background

Local sales

2008: $4.8 billion in U.S. local sales (Low and Vogel 2011)

½ from direct to consumer; ½ through intermediaries

Sourcing of product

24% of Loblaw Companies Limited produce was sourced locally,

with 40% being local during the summer of 2008 (Britnell 2010).

Increasing numbers of farmers’ markets and CSA’s

CT has mandated move from 1% to 5% local food and Ag.

products sales by 2020

Why care about Local?

Background

Local consumer is…. Positive indicator:

Higher income (Jekanowski et al. 2000; Brown 2003; Campbell et al. 2010)

Varying indicator:

Gender and higher education (Jekanowski et al. 2000; Brown 2003; Campbell et al. 2010)

Other factors: Environmental group members and involved in agriculture (Brown 2003)

Length of state residence and increased quality perceptions of local (Jekanowski et al. 2000)

Increased view of food being important and shopping at farmer’s market (Campbell et al. 2010)

Who Buys Local?

Introduction – Local food is…

• Darby et al (2008): freshness, support for local economy and farms, and

environmental sustainability.

• Yue et al (2009): freshness and safe to eat.

• Onozaka et al. (2010):

• health benefits and local economy most important

• seasonal availability of fresh produce as being limiting factors.

• Feagan et al (2004): shop at farmer’s markets are motivated by social

interactions, food freshness as well as support for local farmers.

Why Buy Local?

Background

Retail organic food market in 2008 (ERS and export.gov)

in Canada $1.5 billion

In the USA $22.9 billion

Market growth increasing, but at decreasing rate due to recession

Organic food imports: 80% (Canada); 15% (US)

OMAFRA (2009):

2007: 60% consumers bought some organic products

5% consumers buy 50% of all organic foods

Why care about Organic?

Background

Organic consumer is….

Positive indicator:

Age (Campbell et al. 2010; Fromatz 2006)

Higher educated (Campbell et al. 2010; Fromatz 2006)

Shop at farmers’ market (Campbell et al. 2010)

Varying indicator:

Race (Campbell et al. 2010; Stevens-Garmon et al. 2007)

Income (Campbell et al. 2010; Stevens-Garmon et al. 2007)

Who Buys Organic?

Background

Perception and drivers for purchasing organic products

Health concerns, food scares (Zanoli, 2004)

• Organic: lack of negatives (e.g. chemical residues (Ritson and

Oughton, 2007)

• Organic food is more nutritious and safer (Hamzaoui Essoussi,2008)

Tastes better, environmentally friendly production (Filion and Azari,

2002)

Why Buy Organic?

Background

Perceptions –Ideal Situation

Production definition

Retail definition

Consumer definition

Background Canada’s organic food certification system ‘little more than an

extortion racket,’ report says - National Post 11/24/2012

340 comments:

“This is the second article I've seen recently condemning organic food. I have no doubt such articles are planted by big agra.” OnceProudCanadian

It doesn't "condemn organic" at all. It questions the *labelling* and claims of being organic.” steveintoronto

“And one thing the article fails to point out is that organic, by definition, also means (or I have read that it does) locally grown. We ought to be supporting local growers wherever possible.” CaringForThePlanet

“It has been known for years, that the "organic" label means nothing more than higher prices without any advantage over products not labelled thus. I stopped spending my $$$s for this stuff a long time ago. It's just a "feel-good" scam. No benefit to the healthy body & only slight to false pride.” rattler

Background

Perceptions – How did we get to where we are at?

Production definition

Retail definition

Consumer definition

Government Industry

Media

Academic

Background

Some examples:

Government

USDA -- 400 miles or less

State government -- Within state, BUT varies by

state

Canadian Food Inspection Agency (CFIA) – Interim

Rules

Food produced in the province or territory in which it

is sold (e.g. “Product of Nova Scotia”, “Foodland

Ontario”, “Buy BC”, or “Quebec Vrai”

Or, Food sold across provincial borders within 50 km

of the originating province or territory

Background


Some examples:

Government

Public

“Canada’s organic food certification system

‘little more than an extortion racket,’

report says” National Post, Nov. 2012 by

Adiran Humphreys

Literature Review

When It Comes To Buying Organic, Science And Beliefs Don't

Always Mesh by NPR

But many of you wrote in to us and to Morning Edition to let us know

you weren't happy with the study or our coverage of it. What about

environmental benefits? you asked. How could pesticide residues on

conventionally grown food not be bad for us? What about genetically

modified food? And, aren't you just shilling for the big food companies

http://www.npr.org/blogs/thesalt/2012/09/07/160681396/when-it-

comes-to-buying-organic-science-and-beliefs-dont-always-mesh

http://www.npr.org/blogs/thesalt/2012/09/07/160681396/when-it-comes-to-buying-organic-science-and-beliefs-dont-always-mesh



























Background


Some examples:

Government

Public

Media

Organic: A Journalist's Quest to Discover

the Truth Behind Food Labeling – by Peter

Laufer, Discussed on NPR July 2014

“Canada’s organic food certification system ‘little

more than an extortion racket,’ report says”

National Post, Nov. 2012 by Adiran Humphreys

Background


Some examples:

Government

Public

Media

Retailers

- Wegmans has been running a TV

commercial. It asserts that organically

grown produce tastes better than

conventionally grown produce. –

Perishabale Pundit newsletter Nov. 2014

- Retailers differ on local (Britnell

2010; Martinez 2010): Within state,

Hours to transport, Within country

Whole Foods –

Introduced

October 2014

(Mis)Perceptions

So what do consumers think……

Study 1: Results Overall percentage of CANADIAN consumers believing a characteristic represents

local and organic. (Campbell et al. 2012)

Definition Local Organic

Number of Consumers 891 891

Definition

No synthetic pesticide use 11.0% 82.9%

No natural pesticide use 5.3% 29.0%

Produced organically 12.0% 16.7%

Less pesticide residue on products 11.1% 35.2%

Better for the environment 27.7% 52.1%

Products have a longer shelf life 21.1% 7.5%

Better taste 38.2% 33.2%

More nutritious 22.2% 33.7%

Artificial fertiliser used 4.8% 3.3%

Natural fertiliser used 13.5% 55.2%

Non genetically modified 12.9% 54.8%

Lower carbon footprint 27.6% 26.8%

Lower greenhouse gas emissions 21.5% 24.0%

Decreased miles to transport product 72.5% 15.4%

Some other characteristic not listed 9.9% 6.1%

I do not know what local is 4.3% 4.3%





Definition



Produced organically 12.0% 16.7%


















Definition



Produced organically (locally) 12.0% 16.7%














Perceived knowledge of local? By region

BC ON QC West Central Atlantic All

None 15% 12% 13% 16% 13% 16% 13%

Somewhat 68% 73% 67% 75% 77% 56% 71%

Very 17% 15% 20% 9% 10% 28% 16%

Definition

No

Knowledge Some Knowledge

Very

Knowledgeable

No synthetic pesticide use 10 10 17 **

No natural pesticide use 6 5 7

Produced organically 8 11 20 **

Less pesticide residue on products 6 * 11 18 **

Better for the environment 13 *** 29 35

Products have a longer shelf life 13 ** 21 28 *

Better taste 20 *** 38 58 ***

More nutritious 13 ** 20 41 ***

Artificial fertiliser used 3 4 8

Natural fertiliser used 8 ** 13 20 **

Non genetically modified 8 * 12 20 **

Lower carbon footprint 21 * 27 36 **

Lower greenhouse gas emissions 14 ** 21 30 **

Decreased miles to transport product 66 * 73 74

Some other characteristic not listed 9 10 12

I do not know what local is 13 *** 3 1 ***

Perceived knowledge of local?

Definition BC Ontario Quebec West Central Atlantic

No synthetic pesticide use 13 12 10 9 8 3 **

No natural pesticide use 6 6 5 3 2 ** 3

Produced organically 20 *** 10 13 9 10 9

Less pesticide residue on products 12 11 17 12 8 0 ***

Better for the environment 34 * 27 37 19 ** 22 25

Products have a longer shelf life 18 24 16 20 14 * 25

Better taste 38 42 30 29 ** 34 44

More nutritious 22 24 19 19 17 22

Artificial fertiliser used 3 5 2 ** 10 * 3 3

Natural fertiliser used 15 14 14 10 12 6

Non genetically modified 12 15 16 7 *** 7 * 19

Lower carbon footprint 34 * 26 32 21 20 44 *

Lower greenhouse gas emissions 23 21 22 21 19 25

Decreased miles to transport product 75 72 65 71 80 78

Some other characteristic not listed 10 10 8 12 10 0 ***

I do not know what local is 4 4 6 4 3 3


CN

Eastern

European

Western

European

African/

Caribbean

Chinese/

Japanese Other Asian Other Ethnic

No synthetic pesticide use 11 12 9 23 8 10 12

No natural pesticide use 5 5 4 12 7 7 2 **

Produced organically 13 12 4 *** 15 15 22 ** 15

Less pesticide residue on

products 11 15 9 27 * 7 11 11

Products have a longer shelf

life 21 25 24 23 12 ** 21 18

Better taste 42 47 41 35 20 *** 29 *** 34

More nutritious 23 25 23 27 15 ** 20 23

Artificial fertiliser used 5 5 5 12 1 *** 7 2 **

Natural fertiliser used 17 13 13 * 23 1 *** 11 * 8 ***

Non genetically modified 12 25 ** 13 19 7 * 11 12

Lower carbon footprint 26 28 35 *** 31 31 23 18

Decreased miles to transport

product 74 78 80 ** 65 65 57 *** 66


Distance BC ON QC West Central Atlantic All

Produced within 0 -10km 8% 6% 11% 6% 7% 0% 7%

Produced within 11 - 20km 6% 11% 5% 7% 8% 6% 8%









Produced within 101 -150km 7% 4% 5% 6% 2% 13% 5%

Produced within 151–250km 2% 3% 0% 5% 7% 3% 3%

Produced 250km or greater 3% 1% 2% 3% 2% 0% 2%

Produced in my province 34% 27% 35% 26% 24% 47% 29%

Produced in Canada 0% 4% 8% 16% 17% 0% 6%

Produced in Canada/USA 0% 0% 0% 1% 0% 0% 0%

Produced in North America 0% 1% 0% 0% 0% 0% 0%

World 0% 0% 0% 0% 0% 0% 0%

Where is the geographic boundary?

30%

25%

Consumer Profiles

• 50km or less:

• Demographic – lower income, not from Central or West,

not Eastern European

• Behaviour – none

• Geographic location: increased household size

Consumer Profiles

• 100 mile diet:

• Demographic – male, higher educated, not from Quebec

and not ethnic

• Behaviour – none

• Geographic location: growing area population, increased

household size

Consumer Profiles

• Within province:

• Demographic – lower educated, from BC, Quebec, and

Atlantic, Eastern European, Other Asian and

African/Caribbean

• Behaviour – shop at chain store but not farmers' markets,

food matters, purchase increased amounts of local

• Geographic location: younger, higher income areas

Consumer Profiles

• Within Canada:

• Demographic – not from BC, lived less time in Canada

• Behaviour – not "very knowledgeable,” shop at chain

store

• Geographic location: older, higher employment levels

Are There Differences?

Local Perception

Total U.S. Canada

Number 2517 1713 803

I do not know what local (organic) is 4% 4% 4%

Decreased miles to transport product 67% 65% 72% ***

Better for the environment 40% 37% 45% ***

Lower carbon footprint 35% 32% 41% ***

Lower greenhouse gas emissions 26% 23% 31% ***

Less pesticide residue on products 20% 21% 18%

No synthetic pesticide use 17% 17% 16%

Produced organically 23% 25% 20% ***

Artificial fertiliser used 3% 3% 3%

Natural fertiliser used 21% 21% 21%

No natural pesticide use 9% 10% 8%

Non genetically modified 22% 22% 23%

Products have a longer shelf life 23% 21% 26% ***

Better taste 44% 44% 44%

More nutritious 29% 28% 32% *

Higher prices 21% 20% 23% *

Some other characteristic not listed 5% 5% 6%

Results: Study 2

Given the varying meanings of local

and that they are often used

interchangeably, resulting in

confusion amongst consumers

(CPMA 2011).

Organic Perception

Total U.S. Canada

Number 2517 1713 803

I do not know what local (organic) is 3% 3% 3%

Decreased miles to transport product 12% 12% 14%

Better for the environment 53% 53% 53%

Lower carbon footprint 30% 30% 29%

Lower greenhouse gas emissions 24% 24% 24%

Less pesticide residue on products 51% 50% 52%

Produced locally 17% 17% 18%

No synthetic pesticide use 67% 67% 66%

Artificial fertiliser used 4% 5% 4%

Natural fertiliser used 61% 60% 64% *

No natural pesticide use 25% 26% 24%

Non genetically modified 57% 56% 59%

Products have a longer shelf life 9% 9% 10%

Better taste 36% 35% 37%

More nutritious 40% 41% 38%

Higher prices 54% 53% 57% **

Some other characteristic not listed 0% 0% 0%

Results: Study 2

Canadian Organic Growers (2011):

“Sadly, "local" and "organic" have

had the misfortune of entering our

vocabulary as separate concepts and

then getting jumbled into one,

unclear concept.”

Local: Accurate Definition

• Accurate – Decreased miles to transport

• Demographic – Older Caucasian females living in suburban

areas (compared to urban)

• Behavior – Heard of terms sustainable and eco-friendly,

purchase less organic produce, purchase more local produce

Local: Nutrition/Taste

• Nutrition/Taste – More nutritious/Better tasting

• Demographic

• Lower income (both) -- who buys and will pay premium?

• Older (better taste)

• Not urban (better taste)

• CANADIANS (more nutritious)

• Behavior – Heard of term eco-friendly, purchase MORE

organic produce

Local: Environmental

• Environmental – Better environment, lower carbon

footprint, lower greenhouse emissions

• Demographic – CANADIAN, younger, not suburban area,

Caucasian


purchase MORE organic produce

Local: Environmental (Inaccurate)

• Environmental – Organic, no synthetic pesticide use, less

pesticide residue

• Demographic – Younger, rural, higher educated


organic produce

Local: Higher Priced

• Higher Priced

• Demographic – CANADIAN, younger, female, Caucasian

• Behavior – Heard of term sustainable, purchase LESS local

produce

Organic: Accurate Definition

• Accurate – No synthetic pesticide

• Demographic – Caucasian females living in the US


purchase more local produce

Organic: Nutrition/Taste

• Nutrition/Taste – More nutritious/Better tasting

• Demographic

• Lower income (better taste) -- who buys and will pay premium?

• Younger (more nutritious)

• Suburban (more nutritious)

• CANADIANS (better taste)

• Higher educated (more nutritious) – contradicts Stanford study

• Behavior – Purchase MORE organic produce

Organic: Environmental

• Environmental – Better environment, lower carbon

footprint, lower greenhouse emissions, less pesticide

residue

• Demographic – Lower incomes, Caucasian, higher education


purchase MORE organic produce

•

Organic: Inaccurate

• Environmental – Local, decreased miles to transport

• Demographic – Younger, rural, higher educated


organic produce

Organic: Higher Priced

• Higher Priced

• Demographic – Live in urban area, female, Caucasian

• Behavior – Heard of term sustainable and eco-friendly,

purchase LESS organic produce

Conclusions Review…

There ARE misperceptions about local and organic

Local and organic are the same for many

Less pesticide residue for local

Non-GMO for local

Canadian and U.S. consumers DO have some differing perceptions

Canadian consumers more likely to associate environmental benefits with local, but…

More likely to associate higher prices

US consumers more likely to associate local with organic

Organic purchasing plays a large role in local perceptions

Conclusions

As a Value Chain member, why should you care what

is perceived as local and organic?

Because:

May alienate market (e.g. buy a Rolex but really a Rolax)

Creates efficiencies when understand market (e.g.

marketing)

Creates a better relationship with your clientele

Trust

Thank You

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Perception and Misperception of Food Labelling: Local and ...

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