Consumer Preferences and Willingness to Pay for Multi-Labeled Produce at Farmers' Markets

Abstract

Differentiating products through labeling has been shown to be an effective strategy for increasing market share and pricing over undifferentiated products. This study examines consumer willingness to pay for multiple labeled (by both production type and origin) differentiated produce among farmers’ market shoppers in Utah. Three primary differentiating claims are investigated, including conventionally grown of unknown origin, conventionally grown local (in state), and organically grown of unknown origin. Results indicate that consumer willingness to pay for products grown conventionally in Utah (locally) outweigh that for either organically or conventionally grown of unknown origin. Information on organic production practices increased the likelihood of purchasing products conventionally grown in Utah, while it had negative impacts on preferences for conventionally and organically grown of unknown origin. Results provide insight into the potential impact of certain labeling programs on grower revenues.