Consumers confused over 'organic' and 'non-GM' food labels

Thursday, 26 October, 2017

Researchers found that many consumers have difficulty distinguishing the difference between foods labelled as “organic” and “non-genetically modified”, with some viewing them as synonymous.

In June 2016, Congress approved the National Bioengineered Food Disclosure Standard, which gave companies two years to label genetically modified (GM) food using text, symbol or a quick response (QR) code. Therefore, consumers could either scan QR codes — a machine-readable optical label that displays information — or read plain text labels such as “contains genetically modified ingredients” to distinguish the contents of a product.

The study was conducted by Brandon McFadden, lead author and a UF/IFAS Assistant Professor of food and resource economics at the University of Florida, and Jayson Lusk,  Purdue University agricultural economics Professor, and was published in the journal Applied Economics: Perspectives and Policy.

Since labels have a strong influence over consumer purchasing choices, McFadden and Lusk researched the best ways to communicate whether a food has GM ingredients. A national survey of 1132 respondents was carried out to establish how much consumers were willing to pay for food labelled as “USDA Organic” compared to “non-GMO Project Verified”. Food labelled “USDA Organic” must not contain any GM material, whereas “Non-GMO Project” labels mean the food contains 0.9% or less GM characteristics.

The study looked specifically at how much consumers were willing to pay for a box of 12 granola bars and a pound of apples, identifying granola bars as a manufactured food commonly differentiated by its absence of GM material, while apples were defined as a fresh fruit that requires companies to tell if they contain GM material.

Results showed that consumers were willing to spend 35 cents more on granola bars labelled “non-GMO Project” than for the boxes that had the label “contains genetically engineered ingredients”. With the “USDA Organic” label, consumers were willing to pay 9 cents more.

With apples, respondents were willing to pay 35 cents more for those labelled “non-GMO Project” and 40 cents more for those labelled “USDA Organic”.

As a result, McFadden concluded that consumers cannot distinguish the definitions of the two food labels. He said: “For example, it’s possible that a product labelled ‘Non-GMO Project Verified’ more clearly communicates the absence of GM ingredients than a product labelled ‘USDA Organic’.”

Researchers also looked at the impact of QR codes on foods, and how much consumers were willing to pay for food labelled as GM if that information came from a QR code. They found that consumers were willing to pay more for GM food if the information was provided by a QR code.

McFadden said that if all respondents scanned the QR code there would not be a significant difference in their willingness to pay, but the fact that there was a large difference led him to assume many respondents failed to scan it.

This raises a crucial issue concerning the use of QR codes. Not only are many consumers confused about the difference between plain text labels but many fail to take into account QR codes at all.

“However, it is important to remember that this study is really a snapshot, and it is possible that over time, consumers will become more familiar with QR codes and be more likely to scan them,” stated McFadden.

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