1. Organic Agriculture – Consumer and Market
Master Thesis
By Lorenzo Locci
Supervisors :
Drs. Ynte van Dam
Prof.dr.ir. JCM Hans van Trijp
Marketing and Consumer Behaviour Group
Improve the Effectiveness of
Sustainability Food Labels
- A Bounded Rationality Approach

2. 1 Introduction
1.1 Problem Statement and Description
1.2 Research Questions
1.3 Methodology
2 Bounded Rationality Approach
2.1 Bounded Rationality and Heuristics
2.2 The Process of Choice
2.3 Limitations of Non-compensatory Decision Rules
2.4 Conceptual Model
3 Hypotheses
4 Materials and Methods
5 Results
6 Discussion
7 Conclusion
Table of Contents

3. 1 Introduction
• Increasing demand for sustainability.
• Green, organic, fair trade, ecological, and locally
produced products are emerging in the market.
• Labels differentiate these products from the
mainstream ones.
• Different type of Sustainability labels
Focus mostly on to third party, type I and type III, certifications.

4. • Attitude-Behaviour Gap = a lot of concerns,
positive attitude, but disappointing sales
• Why?
– Higher Prices
– Lack of consumer knowledge
– Difficulty in obtaining Information
• Questioning the effectiveness of S. Food Labels
• Labels proliferation = Consumer confusion
• Few studies
1.1 Problem Description

5. I. How to improve the effectiveness of sustainability
food labels?
II. When are consumers more likely to notice
sustainability labels?
III. What would make sustainability labels more
satisficing?
1.2 Research Questions

6. • Literature study on: bounded rationality and
heuristics, grocery behaviour, shopping
environment, food labelling and packaging.
• Research on current European labels and their
use.
• Qualitative consumer research.
1.3 Methodology

7. Bounded rationality and adaptive behaviour account
for:
- Cognitive limitations
- Imperfect choice environment
- Limited time
Individuals make good-enough choices rather than
trying to determine the best option because of the costs
of acquiring information.
2 Bounded Rationality Approach

8. • Satisficing heuristics:
model of sequential search for alternatives
with costs.
• Fast and frugal heuristics:
selective search, rational ignorance, use of
simple tactics/criteria.
- One-Reason Decision Making
non compensatory strategies
- Recognition Heuristic
disjunctive and/or conjunctive decision rules
2.1 Bounded Rationality and Heuristics

9. • Satisficing criteria of choice
• Selective search
• Easy trade-off
• Decision Rule
• Refine tactics
2.2 The Process of Choice

10. • Principle of completing perceptions.
• Dual-Process (Kahneman):
- System 1, automatic and heuristic-based
- System 2, rule-based and logical
2.3 Limitations of Non-compensatory Rules

11. Criteria of
Choice
Distinctive
Product
Attribute(s)
- Price
- Brand
- Origin
- Durability
- Nutrition
- Labels
Adaptation
Level
Motivation
Type of
Consumer
Knowledge
and Past
Experience
Evaluation
Satisficing
Not
Satisficing
Consider
another
alternative
Consider
another
attribute
Feedback
Selection
Refine
Evaluation
Priority
Ordering
Involvement
Potential
Need
Satisfaction
Set of
Considered
Alternatives
“Consumer side – Desired goal” “Choice environment – Current state”
“Formation of trial – Progress towards the goal”
2.4 Conceptual Model

12. H1: The recognition principle is likely to be the first driver of
participants’ choices.
H2: The process of refine evaluation is reduced under time pressure.
H3: Familiars with sustainable products are more likely to use
sustainability as a primary criterion;
non familiars are more likely to use sustainability as a secondary
reason.
3 Hypotheses

13. H4: Familiars are more likely to mention labels and to have a higher
level of abstraction in inferences;
non-familiars are less likely to mention labels and more likely to
have a lower level of abstraction in inferences.
This tendency is enhanced under time pressure.
H5: Non-familiars will prefer product alternatives with simple
presentation of information, few labels (preferably textual) and few
claims;
familiars will infer more from detailed information, abundance of
labels.
Under time pressure, abundance of sustainability information may
be preferred also for non-familiars.

14. • Qualitative Consumer Research
• Think-Aloud protocol
• 20 Dutch speaking students, familiar with green
products and non-familiar.
• Time pressure manipulation
• Coding Category: statements of decision criteria,
mentions of sustainability, level of abstraction in
inference, information usability...
4 Materials and Methods

15. H1 40% mention Recognition in1 st
quotes (2out of 5) 40% mention Recognition in 1st
quotes (2out of 5)
H2 H4 70% of the all the inferences are Low level of abstraction 39% of the all the inferences are Low level of abstraction
H2 H4 30% is High level of abstraction 61% is High level of abstraction
H2 Average of 2.5Criteria of choice used by each participant Average of 4Criteria of choice used by each participant
H3 Order of Criteria of Choice: Order of Criteria of Choice:
1st
Recognition, 2nd
Health, 3rd
Price, 4th
Taste, 5th
Organic, 6th
Origin 1st
Health, 2nd
Recognition, 3rd
Taste, 4th
Price, 5th
Organic, 6th
Origin
H3 All quoted coded Dc Org had positive valence (Dc Org +) All quoted coded Dc Org had positive valence (Dc Org +)
H4 9Mentions of Sustainability Labels (S.L.) 13Mentions of Sustainability Labels (S.L.)
H5 No thoughts about information usability Reported explicit preference for less busy packages
H1 20% mention Recognition in1st
quotes (1out of 5) 80% mention Recognition in1st
quotes (4out of 5)
H2 H4 92% of the all the inferences are Low level of abstraction 77% of the all the inferences are Low level of abstraction
H2 H4 8% is High level of abstraction 23% is High level of abstraction
H2 Average of 3Criteria of choice used by each participant Average of 4.5Criteria of choice used by each participant
H3 Order of Criteria of Choice: Order of Criteria of choice: Not
1st
Recognition, 2nd
Health, 3rd
Origin, 4th
Taste, 5th
Price, 6th
Organic 1st
Health, 2nd
Recognition, 3rd
Taste, 4th
Price, 5th
Organic, 6th
Origin Familiar
H3 All quoted coded Dc Org had negative valence (Dc Org -), few (Dc Org +) All quoted coded Dc Org had negative valence (Dc Org - )
H4 3Mentions of Sustainability Labels (S.L.) 4Mentions of Sustainability Labels (S.L.)
H5 Scepticisms and mistrust when facing high amount of labels Excessive amount of labels and claim discourage information search
Time Pressure No Time Pressure
Familiar
5 Results

16. H1 Accepted
The first alternative recognized is likely to be inspected first because,
and it is more likely to be chosen.
H2 Accepted
Under time pressure, the information items consulted and the
numbers of criteria tend to be less, and the level of abstraction in
inference tends to be lower.
H3 Not Accepted
Organic (together with origin) seem to be secondary.
This criterion has a positive valence for those familiar and a negative
valence for non-familiars.
5.1 Hypotheses testing

17. H4 Partially accepted
Familiars are more likely to mention labels and to have a higher
level of abstraction.
Non-familiars are less likely to mention labels and more likely to
have a lower level of abstraction.
This tendency is not enhanced under time pressure.
H5 Rejected
Simple presentation of sustainability information is always
preferred, even under time pressure.
Textual labels were generally more attended than pure figure
labels.

18. • Sustainability Labels in their Context
Food choices are low involvement, frequent, time and budget constraints.
 Recognition helps consumers in their short cut decision making (H1)
Exposure from typical grocery store and advertisement.
 Recognition is mostly for products not sustainability labelled products
• Cost of Acquiring Information
Tendency to under-search and to stay with the default choice
Minimizing cognitive effort, especially under time pressure (H2)
Sustainability is a secondary, with difference between familiars and non-familiars (H3)
Familiars spent more effort in their choice process (H4)
• Changing Current Choice
Consumers refine their tactics, and criteria, and consult additional information when
current behaviour is not satisfactory.
6 Discussion

19. • Improve the Current Use of Sustainability Labels
The way the information is presented and the format influences
the effectiveness of labels.
6 Discussion
Abundance of S. Labels:
- more chances to recognize some logo
- overall impression of sustainable and high quality
BUT
- too overwhelming, thus, avoided (H5)
- attempt to give a greener image to a product
Better few Labels and claims:
- requires less cognitive recourses
- may help to inferring other relating attributes
BUT
- consider consumer knowledge beforehand
- label format (text, figure)

20. Confusing label information:
- difficult to interpret and misleading
- higher cost of acquiring information
- harder to compare more and less sustainable products
6 Discussion

21. II. When consumers consider products outside their habitual set
of choices, variety seeking, and when time is not pressing,
sustainability and S. labels can play a role as secondary reason of
choice.
III. In these situations, consumers would benefit more in their
inference from easy presentation of sustainability information,
few labels (preferably textual) and claims.
Thus
I. The effectiveness of sustainability food labels can be improved
by providing labels information in an easily understandable
manner that considerably reduces the time and the degree of
cognitive effort spent in acquiring and processing information.
7 Conclusion

22. Thanks for your attention
AND
… any questions?