1. Introduction
Ethical and environmentally conscious consumers continuously rely on sustainability labels found on products to choose food products that have been produced and processed in a sustainable way [
1,
2,
3]. These labels are especially important on a product’s credence attributes, which can neither be observed pre-purchasing nor be experienced post-purchase. For such attributes, only the presence of a matching label denotes that the product satisfies the sustainability claim. A considerable number of sustainable labels have been developed in the recent past. This increase signifies an ever-increasing interest in sustainability consumption. However, the unbounded increase has fanned consumer confusion on what respective labels aim to address [
4,
5,
6,
7]. Further, it has increased the information burden on food products that consumers have to process before deciding which product to purchase. As a result, consumers often limit their reliance on these labels [
6,
8] in making their choices.
Although many studies have investigated the role of sustainable labels in consumption, few have studied the effects of environmental and altruistic attitudes on willingness-to-pay (WTP) for multiple labels in a food consumption setting [
9,
10,
11,
12,
13]. Further, whenever multiple sustainability labels are investigated together, correlation between the labels is rarely investigated or reported. This is despite the overlaps in objectives of many labels and the implicit knowledge that consumers tend to perceive sustainability labels in a similar manner. This study seeks to narrow these research gaps by investigating the effects of environmental and altruistic attitudes on WTP for fair trade and organic labelled coffee. First, we explore consumers’ recognition for fair trade and organic labels. Then, we investigate the WTP for fair trade and organic coffee. Thirdly, we assess the influence of demographic, environmental and altruistic factors on WTP for these labels. We use the New Environmental Paradigm (NEP) [
14], Attitude towards Helping Others (AHO) [
15] and Altruistic Social Behaviour (ASB) [
16,
17,
18] scales as they are among the most widely reviewed and accepted environmental and altruistic scales. Lastly, we provide a description of consumers’ association of WTP for the labels by estimating their revealed correlation.
In the study, we present results from a stated choice experiment [
19] on coffee preference in Flanders (Belgium) aimed at investigating willingness-to-pay for fair trade and organic labels. Investigating coffee is interesting since it is a classic fair trade product. It is largely produced by poor, Southern hemisphere countries and is heavily consumed in more developed countries [
20]. Secondly, it is considered as a pioneer product for sustainability consumption [
21]. Coffee is also a well-known food product consumed in Belgium, as well as in many European countries [
20,
21,
22]. As a result, we expected negligible biased choices resulting from a hypothetical setting in a stated choice experiment [
23,
24,
25]. Investigating fair trade labels (whose primary objective is to help less-fortunate people in far-off places) and organic labels (which capture peoples’ sensitivity to their own health and the environment) presents a fascinating scenario in revealing their concurrent roles on coffee choices. Furthermore, it can help to identify factors that determine preferences and understand consumers’ abilities to differentiate objectives and information provided by these labels in one study.
This study aspires to benefit market actors in several ways. For marketers and policy makers, the study provides insights on consumers’ WTP for fair trade or organic labels. It also provides an intrinsic consumer perception of the roles, objectives and overlaps for these labels by assessing revealed correlation in their WTP. We provide insights for products marketers by determining the important effects of environmental and attitudinal factors on consumers’ WTP for either labels. In studying multiple sustainability labels and determining their importance in consumer choices, WTP and correlation in their WTP, we implicitly question the need to study multiple labels—especially those like fair trade and organic—with a fine line between their objectives.
The study is divided into six parts. In
Section 2, we provide an overview of the available literature on fair trade and organic labels.
Section 3 discusses the data and methods used. Results are provided in the
Section 4. Discussion of results and conclusions are provided in
Section 5 while study limitations and suggestions for future research are given in the
Section 6.
5. Discussion and Conclusions
Results on label knowledge appear to positively update on what was reported by Rousseau [
33]. In Rousseau’s study which also assessed recognition of fair trade and organic labels in Flanders (Belgium), 60% of the respondents correctly identified fair trade compared to the 78% we found. Our 55% knowledge of organic label, however, appears to show a sharp improvement compared to the 6% reported by Rousseau. We find fair trade knowledge results within an expectable range, as is comparable to 71% reported in Italy [
34]. We also posit that additional time for organic label in the Belgian market could be responsible for the increase in its identifiability. This is especially in light of results reported by Van Loo et al. [
90] whose Flanders sample showed a higher preference for a national Belgian organic logo, certified by a private organization, to the then newly-introduced EU-organic label. The superior fair trade knowledge is likely attributable to the longer time it has been on the market compared to the EU-organic label that was introduced in 2010.
The approximate price premiums for a 250 g of fair trade coffee and organic coffee were similar throughout our analysis. The presence of a fair trade label was associated with a WTP estimate of 2.1€ in the MNL model. This represented a 34 (88)% of the most (least) expensive coffee hypothesised. Similarly for the organic label, the WTP estimate was 2.2€ representing 36 (92)% of the most (least) expensive coffee. The mean WTP estimates for both labels in mixed models was 1.7€ (28% and 72% of most expensive and cheapest coffee respectively). The similarity in WTP for organic and fair trade has been reported before for French chocolate consumers [
40]. Didier et al. [
40] found that the WTP for an organic and a fair trade chocolate bar of 100 g was 1.25€ (179% of the average price for a standard chocolate) and 1.31€ (187%) respectively. The absolute estimates were similar to separate estimates for a 250 g packet of coffee from two studies in Italy [
34,
44]. Rotaris et al. [
44] reported an average extra premium of 2.2€ which was 34 (146)% of the most (least) expensive fair trade alternative. The WTP for organic coffee reported by Gallenti et al. [
34] was 2.8€ representing 31 (93)% of the most (least) expensive alternatives. However, our fair trade WTP estimates differ substantially. Gallenti [
34] found a WTP of −4.3€ for fair trade. The authors posit that the negative estimate was as a result of not modelling the heterogeneity towards the fair trade label.
These WTP results contradict other results in past studies that have shown unequal, non-unidirectional conclusions on fair trade and organic labels. Rousseau [
33] found the WTP for a 100 g of a Belgian chocolate bar to be 2.03€ (representing 41 (203)% of the most expensive (cheapest) alternative) for fair trade. The WTP estimate for the organic label was negative and close to zero. Loureiro et al. [
35], using a different WTP elicitation approach and a Weibull model, also found that fair trade coffee carried a higher premium than organic labelled coffee in the state of Colorado (US). Van Loo [
36] found WTP for organic coffee to be
$1.16 (11 (27)% of most (least) expensive options) while fair trade had
$0.68 (7 (15)%) for a package of 12 oz at the University of Arkansas Sensory Service Center (Fayetteville, AR, USA). Similarly for Meyerding [
49], the organic label had a higher part-worth utility compared to the fair trade label for labelled tomatoes in Germany. These results, highlighting a few studies that have compared willingness-to-pay for organic and fair trade products, underline the fact that clarity on which of these two labels is superior is non-existent. Perhaps, this is the reason we observed equivalent relative importances and a high correlation in WTP. It could point to consumer inability to tease-out differences in aims advocated by sustainability labels. The results also show that the estimates are highly dependent on study location, products considered and methods used.
Our findings support results reported elsewhere [
9,
10,
91] showing that environmental and altruistic attitudes have important roles in driving consumer decisions and willingness to pay for sustainable products.
Environmental pro-activeness and altruism were significantly associated with WTP for fair trade coffee. The positive NEP and AHO effects were intuitively expected given the compatibility between objectives of fair trade and underlying reasons for being pro-environmental and pro-help-others. The positive ASB effect mirrors the congruence between the fair trade objective of helping other people over oneself and the motivations to minimize personal benefit in the reversed self-enhancement ASB items used in the study.
WTP for organic coffee was positively and significantly affected by being pro-environmental and altruism. The positivity shown by pro-environmental respondents naturally stems from the underlying pro-environmental objectives advocated by organic labels. This relationship is unequivocal as has been shown in cases of ecologically-themed conservation studies [
56,
71,
92]. The positive effect of altruistic social behaviour shows that individuals with a collective environmental concern are more likely to purchase pro-environmental food products like organic coffee.
Our lack of demographic effects on WTP for either labels is, however, not unique. Equally, past literature does not present unambiguous results in this respect [
22,
46,
54,
55].
A high correlation was observed between WTP for fair trade and organic labels. This was also manifested through identical relative attribute importances, equivalent WTP estimates and similar effects of attitudinal variables on both labels. The high correlation between WTP for fair trade and organic labels could imply a lack of clarity on the objectives that these respective labels seek to promote as perceived by consumers, or it could be a tacit reasoning that a product satisfying either label will automatically accommodate the other label.
The findings from this study provide multi-faceted implications concerning the effects of environmental and altruistic attitudes on the willingness-to-pay for organic and fair trade coffee. First, we affirm that providing additional information through fair trade and organic labels can spur consumer demand for sustainably-produced products. Second, we provide evidence of existence of positive links between organic (green) consumer behaviour and pro-environmental attitudes, as well as between fair trade-motivated consumer behaviour and attitudes towards both altruistic social behaviour and helping other people. These findings are key considering that while modelling socio-economic effects on WTP for sustainability labels has been vastly investigated, the often uninvestigated effects of environmental and altruistic attitudes appear more intuitive, direct and often show significance. Third, the increased WTP premiums associated with both environmental and altruistic attitudes demonstrates to policy makers, marketers and other market players the importance of including consumers’ attitudinal questions in market segmentation policies.
Fourth, we include correlation in WTP for fair trade and organic labels to explicitly provide insights of consumers’ perceptions of overlaps in the objectives for these labels. Although objectives of some labels are often highly similar, existing studies that have studied multiple sustainability labels have often overlooked the correlation aspect in their WTP models. This (un)intentional inattention to model the correlation conceals the reality of overlaps in labels’ objectives and the implicit problem consumers face in identifying the core objective(s) of each and every label they come across on products. The high correlation reported in this study shows that more consumer education is needed on the primary goals advocated by the fair trade and organic labels.