Are All Organic Labels Treated Equally? The Influence of Retail Outlet on Consumer Perceptions of and Willingness to Pay for Organic Tomatoes

The primary objective of this paper was to determine the effect of retail outlet (supercenter, supermarket, farmers market, fresh format store) on consumer perceptions of and willingness-topay for organic grape tomatoes. Additionally, we examine whether information on the proposed Food Safety Modernization Act (FSMA) regulations alters perceptions and willingness-to-pay values differently across retail outlets. To address these questions, we conducted field experiments with 219 participants in two U.S. states in the fall of 2014. Results of the study show consumers’ perceptions of organic grape tomatoes vary significantly depending on which retail outlet the product is sold in, with farmers markets and fresh format stores receiving the most favorable evaluations and supercenters receiving the least favorable evaluations. However, when consumers are confronted with information on the proposed FSMA guidelines, safety perceptions of (and willingness to pay for, to a lesser extent) organic grape tomatoes sold in the most (least) favored retail outlets decrease (increase). This is likely explained by participants’ preferences for food safety – specifically an aversion to organic grape tomatoes grown by FSMA-exempt farmers, which participants believe to be most prevalent at farmers markets.