Explaining market shares of organic food: evidence from Swiss household data

Abstract

Purpose – The purpose of this paper is to identify those product characteristics that are of importance to consumers of organic food in Switzerland. Design/methodology/approach – In order to identify important organic product characteristics, this study applies a Generalized Linear Model using a six-year sample of Swiss household data distinguishing between organic and conventional products at the product level. Findings – The analysis reveals three product-related dimensions of importance. First, Swiss consumers prefer unprocessed organic products over highly processed ones suggesting that communicating potential benefits of organic food is more promising for unprocessed products. Second, organic consumers are reluctant to buy products with high price premiums. Third, Swiss consumers prefer domestically produced organic products over imported ones. Practical implications – The results imply that supporting organic agriculture in Switzerland is still promising from a policy and a marketing perspective as long as the organic price premium is not too high. Originality/value – This paper presents results regarding the determinants of the organic market share in Switzerland. They give a first understanding of which product characteristics determine organic market shares. From a policy as well as from a marketing perspective a further investigation at the household level is promising in order to understand and respond to the needs and expectations of Swiss consumers.