An evaluation of the role of US consumer's institutional trust for food eco‐label preferences

Abstract

AbstractDemand for sustainable food products has continued to grow in the past decade. Consumers have not only expressed more interest in environmentally friendly products, but producers have been willing to expand and market sustainable products. As a signal, eco‐labels are intended to communicate about specific environmental product properties from producers to consumers. Because eco‐labels communicate credence properties, trust plays a significant mediating factor, as information asymmetry is present. Consumers must rely on producers acting in good faith to provide accurate claims while consumers must simultaneously avoid misinterpretation of the label. Building upon previous research on the role of trust in eco‐label preferences, this exploratory study seeks to evaluate how US consumers' level of trust in three major institutions (US government, corporations, and non‐profit organizations) to protect the environment shapes their preference for six major eco‐labels in the market (Fairtrade, local, natural, non‐genetically modified organism [GMO], organically grown, and certified organic). The analysis utilizes 2016 survey data obtained from the Natural Marketing Institute. The aim is to provide a basis in which to further examine institutional mechanisms for improving label signaling, which could minimize consumer skepticism and potentially increase environmentally conscious consumerism. In addition to confirming the profile for typical eco‐label consumers, the results demonstrate that trust in non‐profit organizations is positively associated with expressed preferences for certified Fairtrade and certified organic foods. Trust in government is a significant explanatory factor for natural labeling preferences whereas those that express very high interest in organic labels indicated trust in corporations.