Consumer Preferences for Private Label Brand vs. National Brand Organic Juice and Eggs: A Latent Class Approach

Abstract

Many retailers have expanded and diversified their private label food product assortment by offering premium-quality private label food products such as organic products. With price being identified as the major barrier for organic food purchases, private label organic food products could be a suitable and more affordable alternative for many consumers. While numerous studies have examined consumer preferences for organic food, very few organic food studies have incorporated the concept of private labels. This study addresses this research gap by studying consumer preferences and willingness to pay for national brand and private label organic food using a latent class model. Specifically, this study analyzes consumer preferences for organic eggs and orange juice and the effect of national branding versus private label. Findings show heterogeneity in consumer preferences for production method and brand, with three consumer segments being identified based on their preferences for both juice and eggs. For eggs, about half of the consumers prefer private label and organic production, whereas one-quarter clearly prefers organic, and another quarter is indifferent about the brand and the organic production. For orange juice, the majority (75%) prefer the national brand. In addition, one-quarter of the consumers prefers organic juice, and about one-third values both organic and the national brand.