Labeling strategies to overcome the problem of niche markets for sustainable milk products: The example of pasture-raised milk

Abstract

Pasture-raised milk is gaining in importance in some European countries and in the United States. The production of pasture-raised milk is linked to higher costs, as the milk is normally collected and processed separately from conventional barn milk. This could hinder the production of sustainable milk products. We discuss alternative labeling strategies that allow the mixing of pasture-raised (sustainable) and conventional milk to reduce costs and break free from the current niche market. The lower price would allow for more pasture-raised milk to be produced and enter the mainstream market. The aim of this study was to analyze consumers' willingness to pay for alternative labeling types using a discrete choice experiment with 1,065 German milk buyers. The 2 alternative labels, besides the classical labeling approach, are based on the mass balance approach (at least 50% pasture-raised milk in a package) and cause-related marketing (support of farmers who keep their cows on pasture). The discrete choice experiment was combined with a cluster analysis to get a deeper understanding of the buying behavior of the diverse consumer segments for milk. We found that all consumer groups prefer the classical label where products are segregated but also understand the benefits of cause-related marketing. The average consumer was willing to pay €0.50 more for pasture-raised milk certified with the classical label and €0.38 more for pasture-raised milk labeled with a cause-related marketing claim. However, differences between the clusters are strong: The smallest cluster of ethically involved consumers (15%) is willing to pay the highest premiums, especially for the classical label. Cause-related marketing is an interesting alternative for involved buyers under price pressure (41%), whereas the mass balance approach is little understood and thus less valued by consumers. From our results we concluded that cause-related marketing (in our case, the support of pasturing of dairy cows) can be useful for dairies for which it is not efficient to collect and process products separately. This approach is furthermore suitable for reaching consumers who are mainly interested in altruistic issues but at the same time are more price sensitive, as this labeling strategy does not need separate collection and processing and can thereby be marketed at a lower price.

Toward Specialized or Integrated Systems in Northwest Europe: On-Farm Eco-Efficiency of Dairy Farming in Germany

“…This may, in turn, increase the farm revenue considerably, if environmental services linked to dairy production are fulfilled. Beyond these policy developments, there is also a continuous increase in consumer acceptance of sustainably produced dairy products, and increased readiness by consumers to pay a higher price for labeled produce that reflects this (Kühl et al, 2017). However, it also has to be highlighted that specialized confinement systems are less dependent on soil physical and soil chemical properties, as the utilization of grass and maize by cutting is generally easier than managing intensive rotational grazing.…”

Goat Dairy Product Assortment in Different Sales Channels in Northwestern Italy

“…This last result is also confirmed for cow’s milk cheeses, for which the best quality/price ratio is in large-scale distribution, where, moreover, the offer is often enhanced by the promotion of prices [32,34,35]. Price competitiveness in farmers’ markets remains high, also for other products (cow’s or sheep cheese), in accordance with price policies that do not see intermediaries intervening in the price increase, unless it is the sale of niche products or provision of special production systems [55,57].…”

How Strong Is Your Coffee? The Influence of Visual Metaphors and Textual Claims on Consumers’ Flavor Perception and Product Evaluation

“…Textual claims represent informational cues that can be processed rationally. For instance, food labels (such as health, organic or fair trade labels) can evoke consumer skepticism ( Tootelian and Ross, 2000 ; Grunert, 2002 ; Grunert and Wills, 2007 ; Sirieix et al, 2013 ; Fenko et al, 2016b ). The fact that consumers express concern about the truthfulness of the information presented on labels and perceive some of the claims as misleading ( Szykman et al, 1997 ; Hamilton et al, 2000 ; Chan et al, 2005 ) suggests that textual claims are likely to be processed deliberately and evaluated critically.…”