Key points to remember:
- Consumers have reduced their purchases of breakfast cereals with the new warning labels for unhealthy foods.
- The chocolate and cookie categories did not show the same impact.
- Low- and middle-income consumers and families with children are more likely to pay attention to food warning labels.
BALTIMORE, MD, October 13, 2022 – In 2016, Chile introduced the phased implementation of a comprehensive and mandatory food labeling law, designed to warn consumers about the risks of unhealthy foods. To do this, the law required that if a product contained excessive amounts of certain nutrients (such as sugar), which are considered unhealthy if consumed in large amounts, the product had to display mandatory warning labels on the product. ‘packaging. In addition, several other countries have already adopted these new warning labels.
This led researchers to wonder if the new regulations would have any effect. After conducting extensive research, the results showed that the impact of warning labels is different across product categories and demographics.
The researchers’ study, published in the current issue of the journal INFORMS Marketing science is titled “Identifying the Effects of Food Labeling on Consumer Behaviour” and is authored by Sebastian Araya, Carlos Noton and Daniel Schwartz, all of the University of Chile and affiliated with the Institutes of Market Imperfections and Public Policy (MIPP) and Complex Engineering Systems ( ISCI) and Andres Elberg from the Pontificia Universidad Católica de Chile.
“During the transition to compliance, store shelves included inventory of existing packaging (without warnings) from before the regulations were enacted, and new products whose packaging was compliant with the new regulations,” says Elberg. . “This allowed us to collect daily data on the label status of specific products (at the Universal Product Code level [UPC] level) and monitor variations in shopping habits across time and stores. »
The study authors combined label information with individual-level transaction data from a big-box retailer. They focused on three categories that included many products that were expected to require warning labels: breakfast cereals, chocolates and cookies.
Researchers found that shoppers’ responses to warning labels varied between product categories.
“In the breakfast cereal category, warning labels reduced purchased volume by 6.2 percent,” says Schwartz. “In the chocolates and biscuits categories, we found inconclusive evidence, meaning we couldn’t see a noticeable impact on sales.” He concludes: “Food labeling information may be necessary but not sufficient to stimulate consumers’ healthier choices.
“The breakfast cereal category is the category that revealed the most,” Noton says. “Our estimates from a household analysis indicate that middle-to-low-income consumers, as well as families with children, are indeed sensitive to warning labels. These results are based on actual shopping behavior which may differ from what people say they do.
“This effect is probably best explained by a noticeable shift in purchases from unhealthy to healthy products and, to a lesser extent, a reduction in purchases in this category,” adds Araya.
Link to study
About INFORME and Marketing science
Marketing science is a leading, peer-reviewed, research-driven academic marketing journal using quantitative approaches to study all aspects of the consumer-business interface. It is published by INFORMS, the leading international association of operations research and analytics professionals. More information is available at www.informs.org Where @informed.
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