Consumers, particularly those who occasionally or habitually buy organic chicken, are willing to pay a premium price for organic meat, according to a study conducted by personnel at the University of Arkansas System Division of Agriculture Center for Food Safety. The extent of their willingness to pay the premium, however, depends on the type of organic label.
Ellen Van Loo, a former UA food science graduate student who is now a doctoral researcher in the food consumer science unit at the Department of Agricultural Economics at Ghent University in Belgium published the findings in Food Quality and Preference
Van Loo stressed, that considering that consumers thought of high price premiums as the strongest limiting factor when purchasing organic meat, it was important to know consumers' willingness to pay for these products. Willingness-to-pay estimates could also provide insights on how consumers valued the organic attribute in meat products and could be used as input in analyzing the marketability of the products.
Surveys of consumers asked them to make choices in hypothetical situations regarding purchases of chicken. The surveys found that consumers would be willing to spend a 35% premium for a general organic labeled chicken breast and would pay a 104% premium for a USDA-certified organic labeled chicken breast. (To receive the USDA organic certification, a product must meet the agency's organic requirements for production, handling and processing and accredited agents must have certified the farm and the handling and processing companies.)
When broken down further, the survey results showed that consumers who do not generally buy organic products would be unwilling to pay a premium, occasional buyers of organic products would pay a 35.7% premium for a general organic labeled chicken breast and a 97.3% premium for USDA-certified chicken breast, and habitual buyers of organic products would pay a 146% premium for a general organic labeled chicken breast and 244.3% premium for USDA-certified chicken breast.
Van Loo noted that more research is needed that would include real market data reporting actual consumer purchases.
Source: University of Arkansas