The new study consisted of an online survey of 663 consumers to determine their willingness to pay for steak labeled with different attributes — being natural, grass fed or corn fed, fed without genetically modified feed and produced without growth hormones and antibiotics. Half of the participants were provided with the definition of natural, while half were not.
Results of the study showed that beef eaters who are unfamiliar with the US Dept. of Agriculture’s definition of natural are willing to pay $1.26 more per lb. for the products carrying only a “natural” label. The data also showed that people will pay $2.43 more per lb. for natural and no growth hormone if it is combined with other positively-perceived labels,
“Our results indicate that consumers who are unfamiliar with the definition of natural overestimate the positive effects of ‘natural’ production and therefore are willing to pay a premium for natural labeled beef,” said Carola Grebitus, assistant professor of food industry management at Arizona State Univ. “Labeling food with claims that are not clearly defined can be costly for consumers and hold disadvantages for food manufacturers or producers who don’t use such claims.”
In the other group, consumers who understood the USDA definition of natural were not willing to pay a premium for the natural label alone, unless the natural label appears together with other positively-perceived labels. Researchers found that informed consumers will shell out $3.07 more per lb. for steak labeled as natural and no growth hormones.
Those who already considered themselves familiar with the natural definition also did not place a premium on natural beef. However, they were willing to pay significantly more for the natural and grass-fed label combination – $3.80 more per lb. compared to the no label option, and $2.93 more per lb. for the natural and no growth hormones label.
These numbers supported the researchers' hypothesis that consumers who are familiar with the natural definition do not value it as a standalone label, but have a greater willingness to pay for a product that carries this label in combination with other positively-perceived labels.
The researchers also stated that policies or initiatives that would educate consumers more about the meaning of the “natural” label are needed. They said it was important not only for meat but for all food products labeled “natural.”
“Labeling food with claims that are not clearly defined can be costly for consumers and hold disadvantages for food manufacturers or producers who don’t use such claims,” Grebitus said.
Grebitus was one of the researchers on the project along with Rodolfo M. Nayga from the Univ. of Arkansas, plus Karen Lewis DeLong and Konstantinos G. Syrengelas from the Univ. of Tennessee.
The researchers concluded that the word ‘natural’ can be misleading and should be redefined if not banned on food products. Their conclusion went on to say that “the USDA and FDA should consider revising policies overseeing natural labeling, not only making them transparent but consistent with each other making it less confusing for customers.”