Organic Consumers’ Valuation for Food Miles Labels: Do They Get More Utility from Food Miles Information than Organic Attribute Information?

Demand for organic food increased significantly in Europe in the last decades, while organic food production did not grow at the same rate. Thus, international food trade of organic produce and food products also significantly increased. Transportation of food products around the world has prompted environment protection activists as well as farmers interest groups to question the actual environmental and social sustainability of such environment-friendly products and the related consumer food choices and “green” consumers are taking an interest not just on how their food is produced but also on where it comes from. The concept of food miles has been recently used to simplify the environmental damage associated to food transportation, as related to energy use, carbon emissions, or other impact measures. Although questionable, the implementation of a labeling scheme on food miles might reflect consumers’ and producers’ growing interest on specific characteristics of food products. This labeling scheme may partly overlap and on some extent also interfere with the already established organic food labeling, as well as with the growing trend of local foods and commercial box schemes in terms of target segments and purchase motivations. A mix among environmental, ethnocentrism/localism, hedonism and quality related motivations have been reported as success factors for commercial box schemes initiatives. At the best of our knowledge, however, no other study jointly evaluated consumer preference and willingness to pay for organic and food miles attributes in food products in Europe. To fill this void, we designed a choice experiment (CE) to jointly assess consumer WTP for organic foods and two types of generic food miles labeling programs: one which would provide information about the distance and time the food traveled (nmiles) and one which would provide information on the amount of CO2 emission from transportation (CO2). We evaluate if consumers are willing to pay more or less for the organic attribute than food miles information expressed in terms of the number of miles and amount of time the food travelled or in terms of CO2 emission. Using fresh tomato as the product of interest, the other attributes included are price (1.1, 2.1, 3.1, 4.1 EUR) and type of tomato (cherry, plum and brief). The choice set was created using an orthogonal design for “main effects” to reduce the 72 (4x2x32) possible combinations of attributes and levels. From the orthogonal design, 32 pair-wise comparisons of alternative fresh tomato scenarios were obtained, which were then randomly grouped into pairs and split into four different blocks of 8 choice sets, erasing one card from each block due to repetition of some combinations. We conducted our CE study during spring 2009 in Naples, Italy, administering about 200 face to face interviews. Given the hypothetical nature of our CE investigation, we used a cheap talk script to reduce hypothetical bias. The data were analyzed using three different econometric models: multinomial logit (MNL), random parameter logit (RPL), and Error Component (EC). Our results generally suggest that consumers are willing to pay a price premium for both organic products and products with food miles label. These findings are robust across the MNL, RPL, and EC estimation results. We found that organic consumers’ WTP for the two food miles labels is higher than their WTP for the organic attribute. This finding suggests that organic consumers are also interested in knowing the environmental impact of these products in terms of food miles. This may have important implications for consumers, producers and policy makers.