Consumers’ Willingness to Pay for Sustainability and Other Attributes

Evidence gathered by four separate Our Land and Water research programmes has found that food shoppers in New Zealand’s key export markets do value attributes produced by responsible farming. A new plain-language Research Findings Brief summarises this research.

Key points:

• Changing practices on farms to meet new water and climate regulations can be turned into a marketing advantage in
  New Zealand’s food export markets, and has the potential to significantly increase farm profitability.
• Consumer willingness to pay (WTP) research provides evidence that consumers of New Zealand food exports will pay a price premium for sustainability and other attributes (credence attributes). This can increase returns to domestic producers and offset the costs of providing these attributes.
• Credence attributes – product attributes such as environmental sustainability, animal welfare and cultural authenticity – are not directly observable by consumers at the point of sale, and are strongly related to on-farm production.
• Research suggests the highest WTP is for certified organic products (31% premium for red meat, 29% for dairy products), and the lowest WTPs are for traceability (18% premium for red meat, 26% for dairy) and for a broad ‘environmentally friendly’ claim (19% for red meat, 25% for dairy).