February 2023
Applied Economics/2023-02pr
Consumer Taste Beliefs Impact Organic Specialty Baked Good Pricing Tatiana Drugova, Postdoctoral Fellow, Department of Applied Economics Kynda Curtis, Professor and Extension Specialist, Department of Applied Economics
Introduction Taste is one of the most important food product attributes, including specialty bakery products (Drugova et al., 2020; Kuhar et al., 2020). Consumers do not always have accurate product taste information, such as that based on their actual past experiences with the product. Often, they rely on their perceptions and beliefs, which may be influenced by other product information, such as appearance or labels, both of which may bias consumer taste evaluation either positively or negatively. In turn, taste beliefs rather than actual taste may influence consumer demand and their willingness or purchase or pay for a product (Malone & Lusk, 2017; Neuhofer & Lusk, 2021). In this fact sheet, we discuss how consumer taste beliefs related to organic specialty baked goods differ from their taste beliefs for conventional specialty baked goods, and whether this difference affects the amount consumers are willing to pay for organic-labeled specialty baked goods. In other words, we examine how an organic label on baked goods affects taste perceptions and willingness to pay (WTP). Further, we examine whether providing
information about organic labeling standards changes consumer taste beliefs and impacts WTP for organic baked goods. Finally, we examine the impact of providing taste information to mimic scenarios where respondents know the actual taste, to examine if the provided taste information can compensate for negative taste beliefs. The analysis used three different specialty baked goods—bread loaf, croissant, and large cookie.
Data Overview Data were collected through a nationwide consumer survey, which was conducted online in fall 2021. In total, we received 721 responses, of which 359 respondents were provided information about organic labeling standards (treatment group), and the remaining 362 respondents did not (control group). Table 1 reports summary sociodemographics for each group. No significant differences exist in average age, proportion of females, proportion of households with children, average education, and average income. This is important to ensure that results are not due to or biased by differences between the two groups. The only difference is the higher proportion of Caucasians in the control group.
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