Ethical labels such as “fair trade” or “organic” influence consumer choices positively, according to a new study from the University of Göttingen, Germany. The researchers highlight that “ethical” claims seem to significantly impact purchasing decisions because they make consumers “feel good,” for supporting sustainable supply chains. However, ethical labels influence purchasing decisions only when they are known and easily recognized by consumers, while unknown labels are perceived as confusing, according to the authors.
Published in the Journal of Cleaner Production, the study found that price is the most important decision criterion, followed by ethical claims and the country of manufacture.
The sales figures of products touting ethical claims often remains low, according to the researchers, who sought to examine to what extent factors that affect consumers’ own benefit – such as the “warm glow of giving,” which is the personal benefit t people feel when they do good – influence purchasing intentions.
“We did hypothesize that the good feeling when doing good is stronger in the case of pro-social claims, like fair-trade, because previous research has shown that selfish purchasing motives, like pride and satisfaction, play a role when consumers intend to purchase fair-trade products. Nevertheless, the much stronger influence of the warm glow on the fair-trade choice as compared to organic and carbon-neutral took us by surprise. Interestingly, this effect is much stronger for the German sample, which is another surprise,” Sarah Iweala, lead author and Doctoral student in the “Global Food” research training group, tells.
The researchers, who are part of the working group “Marketing for Food and Agricultural Products,” followed two different groups of consumers; one from Germany and one from the UK. Each group consisted of 450 people who made virtual purchasing decisions. The available chocolate products they were offered, varied in terms of price, ethical claims, country of origin of the cocoa and country of manufacture.
The ethical claims on the products included organic, fair trade and Carbon Monoxide (CO)-neutral. Additionally, there was an alternative product with no claims. The study participants responded to questions about their purchasing intentions, values and feelings when buying.
The results showed that “feeling good” about purchases influenced choices and “the prospect of getting a good feeling clearly attracts many consumers to buy products which make ethical claims,” according to the authors.
Yet the intention is often not put into practice, the researchers note. During the actual decision to buy, the influence of the “warm glow of giving back” was only relevant for fair trade chocolate. The researchers assume that this is partly due to the strong association with the common good of the fair trade label, which supports farmers in developing countries.
“Other studies have shown that consumers also associate positive health aspects with organic food,” says Iweala. “Of course, this dilutes the label’s association with the common good.”
Recognizing the logo also proved important. Although consumers indicated that they felt good when they reduced their CO footprint, this good feeling did not lead them to choose the CO neutral product. This can be explained by the low profile of this particular ethical logo. Both in the UK and Germany, less than 20 percent of the participants stated that they had already seen “carbon neutral” branding while shopping.
However, more than 90 percent of consumers were aware of the fair trade logo. “If consumers don't know what a label stands for, they can't feel good about it when they shop and so it can't become a deciding factor in their shopping choices,” says Professor Achim Spiller, Head of the working group “Marketing for Food and Agricultural Products.”
“Our results show that in the marketing of ethical products, the social benefit should be communicated through a direct approach,” the authors conclude. “It is also important for marketing that labels can only have an effect on the market if they are known. Today's flood of frequently unknown labels is counterproductive.”
“In particular, this last observation supports the importance of large-scale public awareness campaigns when introducing new labels in order to increase their effectiveness; such as the campaign of the German organic label BioSiegel. The result of this campaign can be seen in our study: more than 90 percent of the German participants are familiar with the label. In the UK this number is below 50 percent and it played a large influencing factor in the evaluation of the chocolate with the organic claim. The fact that more than 90 percent of all participants know the fair trade label shows that fair trade has done a very good job in this regard,” notes Iweala.
Sustainability, a transparent supply chain and ethical practices are increasingly becoming a concern for consumers who opt to support more environmentally-friendly and humanitarian practices. In the past, some parts of the cocoa industry have been widely criticized for involvement in child labor and environmental degradation, among other issues.
Reports of minors being made to work in Côte d’Ivoire, Ghana and other cocoa-producing countries date back two decades or more. According to the 2018 Cocoa Barometer, a report by 15 European non-profit organizations, as many as 2.1 million child laborers are working in West Africa alone. Deforestation is one of the biggest causes of global warming and threatening the ecosystem that provides chocolate ingredients.
Earlier this month, the top cocoa-producing countries of Côte d’Ivoire and Ghana, alongside the world’s leading chocolate and cocoa companies, released action plans to end deforestation in the cocoa sector and restore forest areas. In what is being touted as a “milestone moment” in the West African cocoa supply chain, the governments and companies have committed to no further conversion of any forest land for cocoa production and have pledged to eliminate illegal cocoa production in protected areas.
Industry has been working hard to address some of the bigger concerns. Nestlé and Mondelēz International recently laid out action plans to expand programs to combat deforestation in West African cocoa-growing regions. As part of a drive to scale-up their efforts to eliminate deforestation and restore forests in the Côte d’Ivoire and Ghana, some of the biggest players in the cocoa supply chain are publishing their pledges on how to move towards deforestation-free commodities by 2020, while also improving transparency and traceability in the cocoa supply chain.
In addition, chocolate and cocoa manufacturer Barry Callebaut published its Forever Chocolate Progress Report 2017/18, listing the progress made towards its target of making sustainable chocolate the norm by 2025. According to the company, 44 percent of the cocoa and 44 percent of the other ingredients that the group uses for its products are sustainably sourced. And, although there may still be a significant way to go, Barry Callebaut reports it is on track to completely eliminating unsustainable and controversial practices that are often linked to the cocoa supply chain.
