Organic‐and Animal Welfare‐labelled Eggs: Competing for the Same Consumers?

Abstract

To understand the market for sustainable foods, it is important to allow for heterogeneous preferences. However, most studies of consumer preferences for sustainable foods only investigate average consumer preferences. They do not take into account that some consumer segments attempt to purchase as much sustainable food as possible, others are indifferent to the notion of sustainable food, and still others consider sustainable food a complete hoax. The aim of this study is to explore the preferences for various types of premium eggs across these three consumer segments. We conduct a choice experiment including nine hundred Norwegian consumers and perform a behavioral segmentation based on the frequency of organic food purchase. We find that the segment purchasing the most organic food is willing to pay a significant premium for organic eggs over eggs displaying only enhanced animal welfare. However, most consumers who occasionally purchase organic products are unwilling to pay more for organic eggs than for enhanced animal welfare eggs, suggesting diminishing marginal utility for additional attributes. We find the third consumer segment attempts to avoid organic eggs, even when they cost the same as other eggs. Our findings suggest that organic products will be unsuccessful in acquiring larger market shares as long as most consumers are unwilling to pay a premium for organic products with all their cost increasing sustainable attributes over products that have only a single sustainable attribute, in our case enhanced animal welfare.