Gaps in knowledge on how organic food prices affect consumers, says study

Between January 2000 and December 2013 there had been “great interest​” into research on the price of organic food and its price premiums over other food with 194 studies being conducted, said the review published in Food Quality and Preference​.

But the majority of the studies had researched consumer-internal processes (perceptions, knowledge or willingness to pay) connected to consumer behaviour regarding prices, while “only 20 articles had looked in to resulting consumer behaviour while two studies included both​”, it said.

In order to get conclusive insights into consumer behaviour and to specify consumer behaviour models, the results of research on consumer-internal processes needed to be matched “with tests of actual consumer behaviour, e.g., price tests at the point of sales​,” it added.

Focus on “heavy buyers”​

Results that showed that the prices of organic foods were a deterrent to consumer purchase were also only “conditionally useful​” to researchers This was because the market volume was growing and was set to grow in future in the light of consumers becoming increasingly aware of  “environmental and social topics​”, said the report.

There was no point either in drawing conclusions from the price sensitivity of all consumers in a country “if only a very small proportion of all consumers is responsible for a high percentage of all organic food purchases​”, it said, referring to previous research.

The previous study had shown an analysis of household panel data for the German market where only 17% of the German population were responsible for 76% of all organic food purchases.

“Thus, it is advisable for further studies to pay special attention to the consumer price behaviour of heavy and medium buyers of organic food​”

Price sensitivity​

Price-sensitive behaviour required a certain degree of price knowledge and a small amount of empirical evidence on the topic “prohibits well-founded argumentation​”.

Though a “solid body of knowledge” existed on the cognitive processes such as ‘price perception and evaluation’, there were very few studies that investigated ‘price knowledge’, said the report.

Although existing findings indicated that general consumer price knowledge was low, stronger focus on suitable sampling techniques was needed in order to increase the explanatory power of research, it said.

Furthermore, the majority of studies had been concerned with the willingness-to-pay for organic food and had found mixed and contradictory results.

“The improvement of sampling techniques, the increase of comparability of results and the deepening of analyses is recommended​,” it said.

Source: Food Quality and Preference​

Vol: 43, doi:10.1016/j.foodqual.2015.02.002​

“How are organic food prices affecting consumer behaviour? A review​”

Authors: M. Rödiger and U. Hamm