Consumer preferences for the origin of ingredients and the brand types in the organic baby food market

Abstract

This study investigates consumers’ preferences for organic baby meals. The growth of the U.S organic industry has been notable during the last two decades. The U.S. organic farmers do not produce enough quantity to meet the increasing U.S demand for organic food, and increasingly more organic foods are manufactured from organic ingredients produced outside the U.S. Tensions have emerged in the organic sectors as large-scale companies have seized opportunities to sell products differentiated with the organic label. The study aimed to estimate U.S. consumers’ willingness to pay (WTP) for selected attributes (type of brand, production attributes, and origin of ingredients) of baby meal products using a choice-based conjoint analysis. The organic offerings represent a nontrivial share of this market. In recent years, offerings under store brands have also been increasing. The study identified that consumers preferred a major national brand with a large market share such as Gerber (80%) to the other types of brands including store brands. In terms of product characteristics, pesticide free and non-GMO products were seen as consumers’ top priorities. Consumers would not buy products that did not exhibit these two characteristics. Minimally processed products seemed not to matter for the majority of consumers, and these products (sold frozen) were expected to be a niche market. Besides, a product made with U.S ingredients (organically or non-organically grown) was associated with a higher utility. Firms can run a cost-benefit analysis to see if sourcing U.S. ingredients could increase profit. Running experimental auctions are recommended to firms that want to elicit WTP for U.S grown ingredients and implement an efficient marketing strategy. This study is a preliminary analysis that highlighted consumers’ preferences in the baby food market, and future analysis would complement the findings.