Study: Labels matter to consumers

Consumers may put a lower value on food products containing genetically modified ingredients, suggests a recently released study by the USDA's Economic Research Service.

“The Effects of Information on Consumer Demand for Biotech Foods” gave real consumers real choices to create data on their economic choices and incentives, USDA says. Specifically, the laboratory auction experiment asked 172 consumers from two Midwestern cities to place a value on a 5-pound bag of potatoes, a 32-ounce bottle of vegetable oil, and a 1-pound bag of corn tortilla chips — each with and without biotech labels.

Overall, consumers in the study discounted food items labeled as genetically modified by 14 percent.

“The results indicate that consumers' willingness to pay for food products decreases when the food label indicates that it was produced with the aid of modern biotechnology,” the study's authors say. “Assuming that the participants in the experiment are representative of the U.S. population, there appears to be a strong preference for non-biotech. In addition, given that participants in the study did reveal a significant discount for foods labeled as genetically modified, a mandatory biotech labeling policy seems likely to reduce demand for biotech products.”

Despite these findings, the good news appears to be that the demand for both non-biotech and biotech products is influenced by the type of information provided to consumers.

In the USDA study, participants were given one of six packets of information about biotechnology, which contained either pro-biotech statements only, anti-biotech statements only, unbiased scientific statements, or a mix of any or all of the three. In each case, the information provided was clearly labeled as to its source. Pro-biotech statements were provided by biotechnology companies including Monsanto and Syngenta. Greenpeace provided anti-biotech information. Unbiased scientists and academics provided the third-party information.

Statements provided by both opponents and proponents of biotechnology targeted consumers' emotions with words or phrases ranging from “healthy,” “nutrient-enhanced,” and “environmentally helpful,” to “catastrophic,” “morally wrong,” and “risky.”

What the USDA study found was consumers who received only pro-biotech information gave a slightly higher value to the biotech-labeled products, while consumers receiving only anti-biotech information under-valued genetically modified foods by an average of 5 percent. Those consumers who received statements from both the biotechnology companies and Greenpeace also placed a lower value on the biotech-labeled foods.

“Individuals place a greater weight on negative information than on positive information, but science-based pro-biotech information strongly offset anti-biotech information,” say the USDA researchers involved in the consumer experiment.

Those consumers receiving only negative information about agriculture biotechnology paid 35 to 38 percent less for food products labeled as genetically modified. When the negative information was coupled with independent, third party information, consumers were willing to pay 17 to 22 percent less for genetically labeled food. Likewise, when given only positive information about agricultural biotechnology, consumers gave the genetically modified products a higher value than the plain-labeled food for two of the three food items. However, when provided with both positive information about biotechnology, and the independent third-party information, consumers bid higher or plain-labeled food in all three cases, the study reports.

“This study provides new evidence on the powerful role of information in shaping consumer response to agricultural biotechnology, and reveals that consumers react not just to the content of information, but also to the source,” USDA says. “Scientific, verifiable information had a larger moderating effect on consumers' reaction to anti-biotech statements than pro-biotech statements from biotech companies.”

Researchers involved in the consumer study also say the results highlight the erratic effect of biotech labeling in the absence of unbiased scientific information. Without scientific information, the bid-price for biotech-labeled foods varied from slightly above that of plan labeled foods to 35 percent below. With scientific information and pro-biotech and anti-biotech information, consumers' gave biotech-labeled foods a value that was only slightly below the value they placed on plain-labeled foods.

The issue, proponents of food labeling say, is consumers have a right to know whether their food has been produced using genetic engineering. On the other hand, opponents of mandatory labeling argue that labeling will confuse, and in many cases, unnecessarily alarm consumers.

e-mail: [email protected].

TAGS: Management
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