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Absence labels: How does information about production practices impact consumer demand?

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Consumer preferences for organic wine labels are complex. While both organic wine and wine made with organic grapes command a premium, detailed information on certification and conventional practices can decrease willingness-to-pay (WTP) for all wine types.

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Area of Science:

  • Consumer Behavior
  • Food Marketing
  • Agricultural Economics

Background:

  • Absence labels, like organic, are perceived by consumers as indicators of specific ingredient or production exclusions.
  • Organic labels often lack clarity regarding distinct certification standards, leading to potential consumer confusion.
  • Limited research exists on how information about conventional production practices influences consumer demand for labeled products.

Purpose of the Study:

  • To investigate consumer demand and willingness-to-pay (WTP) for conventional wine, organic wine, and wine made with organic grapes.
  • To analyze the impact of providing information on certification standards and conventional winemaking practices.
  • To understand how these informational cues affect consumer preferences for absence-labeled products.

Main Methods:

  • An artefactual experiment was conducted with 128 adult non-student participants.
  • Participants were presented with information on wine production standards, including details on conventional winemaking practices.
  • Consumer demand and WTP were measured for different wine categories (conventional, organic wine, wine with organic grapes).

Main Results:

  • Both organic labels (organic wine and wine with organic grapes) showed a significant and similar willingness-to-pay (WTP) premium.
  • Information about certification standards and conventional practices reduced WTP across all wine categories.
  • This WTP reduction effect diminished for organic wine when conventional practices were detailed, but persisted for wine made with organic grapes.

Conclusions:

  • Consumer WTP for organic wine labels is sensitive to the clarity of certification standards and knowledge of conventional practices.
  • Transparency regarding production methods can moderate the perceived value of absence labels in the wine market.
  • Further research is needed to fully understand the nuances of consumer perception for different types of organic claims.