Responsibly produced food commands a higher price

According to a Conscious Consumer study, Americans are willing to spend more per week for food from companies that can reliably demonstrate good corporate responsibility.

A “Conscious Consumer” survey conducted by Gibbs rbb in August 2014 of 2,010 U.S. adults revealed that Americans are willing to spend on average 31 percent more per week on food and beverage merchandise that was responsibly produced.

What is a “Conscious Consumer”? These consumers care as much about where and how food is produced as they do about the brand, nutritional value and price. They are an important segment of the 768 billion dollar grocery market – a growing mid-class that is concerned with corporate social responsibility, sustainability, and recycling. Corporate social responsibility is when food and beverage goods are produced in ways that promote the health of the planet, humans and food safety. Two-thirds of the grocery market growth will come from the conscious consumer group according to the food and beverage industry consultant Gibbs rbb.

In other words, Americans are making their food purchasing decisions based on their values, and are willing to pay a premium for products that align with their values. These conscious consumers will also abandon a company if their products are recalled, have irresponsible labor practices or harm animal welfare. Therefore, the ability of a company to clearly demonstrate that they have good corporate social responsibilities can have a significant impact on that company’s market share and profits.

A similar experiment conducted by University of Georgia and University of West Georgia staff and published in the Journal of Consumer Affairs 2005 article “The effects of corporate social responsibility and price on consumer responses” has analogous conclusions: Results from a national sample of adults indicate that corporate social responsibility in both domains (environmental and philanthropy) had a positive impact on evaluation of the company and purchase intent. Furthermore, in the environmental domain corporate social responsibility affected purchase intent more strongly than price did.

Ideally, this relationship of consumers’ values corresponding to their purchasing decisions and product loyalty could potentially make an impact on our food system. Socially responsible business practices could increase and become more standard as food and beverage companies try to increase their market share. For example, increased recycling of products will increase the number of recycling businesses and thus become a more important component of the food system.

Conscious consumer values of food safety, environmental sustainability, and animal and worker welfare also seem to correspond to the Michigan Good Food Charter’s definition of good food:

  • Healthy - It provides nourishment and enables people to thrive.
  • Green - It was produced in a manner that is environmentally sustainable.
  • Fair - No one along the supply chain was exploited for its creation.
  • Affordable - All people have access to it.

The Michigan State University Extension Community Food Systems work group has adopted the “good food” definition of the Michigan Good Food Charter. This definition embodies the concept of the “triple bottom line” where people/society and planet/ecology share equally with the business goal of profit. According to the poll by Gibb’s rbb, that philosophy is right on target to gaining market share.

Did you find this article useful?