THE ROLE OF LABELLING IN CONSUMERS’ FUNCTIONAL FOOD CHOICES

Abstract

Given the credence nature of functional food attributes labelling plays a key role in allowing consumers to make informed choices about foods with enhanced health attributes. The degree to which a particular jurisdiction permits health claims for food products and the type of allowable health claim influence the information set available to consumers. In Canada the regulatory environment governing health claims for functional food products is somewhat more restrictive than in other jurisdictions, including the United States. Food manufacturers therefore also use visual imagery to suggest a health benefit, such as the picture of a red heart to imply that a product has heart health benefits. The paper characterizes these labelling strategies as “partial labelling”, while “full labelling’’ refers to formal health claims on food labels, ranging from general (structure-function) claims, to risk reduction claims, to disease prevention claims. This paper explores the effect of labelling (full and partial) on consumers’ functional food choices. How might different types of labelling information and the verification of health claims by different agencies affect consumers’ preferences for functional foods? Using data from an online survey of 740 Canadians conducted in summer 2009 the paper uses discrete choice modelling to examine the responses of Canadian consumers to different product labelling strategies for milk enhanced with Omega-3. Conditional Logit and Latent Class models are estimated. Preliminary results suggest that full labelling is preferred over partial labelling, but primarily for risk reduction claims. There is no significant difference between a function claim, such as “good for your heart” and partial labelling in the form of a red heart symbol. The choice experiment included verification of health claims by a government agency (Health Canada) or by a third party (Heart and Stroke Foundation). The preliminary results suggest that consumers on average respond positively to verification of health claims, however, the latent class model reveals considerable heterogeneity in consumer attitudes toward the source of verification. Interactions between key-socio-demographic and attitudinal variables and the main effects variables in the choice experiment provide further insights into consumer responses.