Can a Multi-Level Label do Better than a Binary Label for Animal Welfare? A PLS-Analysis of Consumer Satisfaction

Abstract

Labeling is an important marketing tool for food producers and retailers. With growing product heterogeneity, labels can help consumers differentiate higher quality products on supermarket shelves. Currently, most labels are of a binary nature—meaning a product either has certain characteristics or not—although there is a larger product heterogeneity in the food market than just two standards. A multi-level label might be a solution to addressing this problem. The objective of this article is to investigate if influences on consumer satisfaction with ethical food labeling systems differ between a binary and a multi-level labeling system. A consumer survey was carried out in Germany (n = 1,538) comparing the two types of labels with a split-sample approach. The influence of five factors (comprehensibility, involvement, time pressure, trust and use), derived from the literature, were analyzed in a structural equation model. All these factors influence satisfaction with labeling. Furthermore, differences between the two labeling systems were detected. This article delivers important results for food producers and policy makers. The group comparison indicated that trust as a precondition is more necessary for a binary label whereas time pressure factors reduce satisfaction with multi-level labeling.