Economia agro-alimentare /

Food Economy
An International Journal on Agricultural and Food Systems
Vol. xx, Iss. x, Art. x, pp. x-xx - ISSN 1126-1668 - ISSNe 1972-4802
DOI: 10.3280/ecag3-2020oa11036

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Anonymous Author 1, Anonymous Author 2, Anonymous Author 3

Introduction

For many consumers, ethical attributes are relevant considerations that can influence
their purchase decisions. Labelling can serve as an important information vehicle for
consumers. Labels are used to help firms or producers to effectively communicate
information about the production or product quality, especially for credence attributes
such as ethical process attributes. By enabling firms and producers to relay more
information about their products to consumers, labels can reduce information
asymmetry. Thus, labels are used as signals by transforming credence qualities, such as
production or product attributes, into search goods.

As discussed above, there are different types of labelling strategies used in food
packaging that communicate the underlying standards and features of a product. To
summarise the different types of labelling available, Table 1 gives an overview of the
four possible labelling strategies. In the following sections, these four food labelling
types will be presented in more detail.

1. Background

Presenting metric variables on a label, as done with nutritional labels, is a third option
to provide information to consumers about a product. In a metric labelling system, the
different levels imply different price levels but whereas nutrient labels and the
evaluation of nutrients are a means to prevent unhealthy food choices, ethical labelling
explains the production process. Furthermore, nutrient labelling is an atypical example:
different product types (e.g. full cream milk or skim milk) are contrasted. This has been
verified by different consumer studies that suggest that consumers prefer simpler
binary nutrition labels (Annunziata et al., 2011).

Binary labels

Binary labels are the most commonly used labels and dominate the labelling market.
However, binary labels provide only a rough indication of product quality. Although a
label should be an orientation for consumers while shopping, it has been reported that
consumers perceive the increasing number of binary labels as confusing (Annunziata et
al., 2011).

Multi-level labels

A multi-level label can be used to classify the gradation of a product’s ethical standard.
There has been little consumer research carried out on the impact of multi-level
labelling systems used to indicate the underlying production or process standards of
food products. Furthermore, Canavari et al. (2017) have suggested the use of a multi-
level ecolabel designed especially for the food sector. This study will aim to fill the
void in the literature by using an example of an animal welfare multi-level labelling
system.

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2. Materials and methods

In the first survey, the respondents had information about the meaning of a two-stage
animal welfare label. The two-level animal welfare label used in both of the consumer
surveys was introduced in 2013 by the leading German animal protection association,
the German Animal Protection League (Huffaker and Castellini, 2011), which is also
the brand allocator. The premium level has higher standards and is marked with two
yellow stars (Fig. 1, right). The first consumer survey took place between August and
September 2011 with 306 respondents. The study was carried out with household
decision makers concerning food purchases across Germany.

3. Results

The average wtp for the cutlet was 32.4% higher in comparison with the reference
price. For the label with one star, the price premium was 32.6% higher and for the label
with two stars, 32.2% higher. A less unexpected result could be observed for the low-
fat ham, where the wtp for the premium level is 4.9 percentage points higher than for
the access level. The wtp for the premium level is lower than for the one-star label.

4. Conclusions

This confirms the assumption that a multi-level label enhances information overload
and that a multi-level label is not clear to consumers without additional information
being provided. In conclusion, it can be said that information overload is the basic
underlying issue of food packaging labelling systems. Nevertheless, consumer choices
can be better informed with multi-level label systems as confirmed by Aarset et al.
(2004), and Annunziata et al. (2011). It seems that the two-star products introduce
higher heterogeneity compared to one-star products.

Acknowledgements

Do not include them in the manuscript for peer review.

References

Aarset, B., Beckmann, S., Bigne, E., Beveridge, M., Bjorndal, T., Bunting, J., &
Young, J. (2004). The European consumers’ understanding and perceptions of the
“organic” food regime: The case of aquaculture. British Food Journal, 106(2), 93-
105. doi: 10.1108/00070700410516784.
Annunziata, A., Ianuario, S., & Pascale, P. (2011). Consumers’ attitudes toward
labelling of ethical products: The case of organic and fair trade products. Journal
of Food Products Marketing, 17(5), 518-535. doi:
10.1080/10454446.2011.618790.
Canavari, M., Imami, D., Gjonbalaj, M., Gjokaj, E., & Alishani, A. (2017). Urban
consumer preferences for food in post-conflict economies - the case of Kosovo. In
C. Chan, B. Sipes, & T. Lee (Eds.), Enabling Agri-entrepreneurship and
Innovation: Empirical Evidence and Solutions for Conflict Regions and
Transitioning Economies (pp. 148–163). Wallingford, UK: CAB International.
Huffaker, R. G., & Castellini, M. (2011). Detecting deterministic food-system
dynamics from observed price data. In 5th International European Forum on
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Anonymous Author 1, Anonymous Author 2, Anonymous Author 3

System Dynamics and Innovation in Food Networks, University of Bonn,

Germany, February 14-18, 2011, Innsbruck-Igls, Austria.