Effects of the added sugar labeling on consumers' willingness to pay: The case of cranberry products under different nutrition-related information treatments

Authors: MA, XUEYING - Washington State University; GALLARDO, ROSA - Washington State University; CANALES, ELIZABETH - Washington State University; ATUCHA, AMAYA - University Of Wisconsin; Zalapa, Juan; IORIZZO, MASSIMO - North Carolina State University

Submitted to: Journal of Agricultural and Applied Economics
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: 3/11/2024
Publication Date: 4/22/2024
Citation: Ma, X., Gallardo, R.K., Canales, E., Atucha, A., Zalapa, J.E., Iorizzo, M. 2024. Effects of the added sugar labeling on consumers' willingness to pay: The case of cranberry products under different nutrition-related information treatments. Journal of Agricultural and Applied Economics. https://doi.org/10.1002/jaa2.121.
DOI: https://doi.org/10.1002/jaa2.121

Interpretive Summary: The goal of nutrition labeling policies is to help consumers make informed food choices. Recently, the FDA announced a rule update to the Nutrition Facts Panel (NFP) requiring the declaration of added sugars on the NFP of packaged foods and beverages with compliance dates starting in 2020. Considering this change, we conducted a choice experiment to examine consumers’ reaction to added sugars in two cranberry products (dried cranberries and cranberry juice) under different nutrition-related information treatments. Cranberry products make an interesting case study in that they exhibit a high content of phytochemical components with proven positive effects on human health, yet commercial products contain added sugars to improve their palatability. We estimated the willingness to pay for these products using a statistical model to account for taste differences due to response certainty. We found significant discounts for added sugars that varied across information treatments and consumer subsamples. Consumers who make Nutrition Facts Panel-informed food purchases exhibited larger discounts for added sugars. A positive information frame about the health benefits of cranberries across the three products included in this study was not found to consistently mitigate the negative impact of added sugars or to offset the impact of additional information on the recommended daily intake limits for added sugars. Although nutrition information efforts are particularly important to promote healthier eating among individuals with health risk factors, we found that consumers with dietary related chronic conditions assigned the same or smaller discounts for added sugars compared to healthier consumers.

Technical Abstract: The goal of nutrition labeling policies is to help consumers make informed food choices. Recently, the FDA announced a rule update to the Nutrition Facts Panel (NFP) requiring the declaration of added sugars on the NFP of packaged foods and beverages with compliance dates starting in 2020. Considering this change, we conducted a choice experiment to examine consumers’ reaction to added sugars in two cranberry products (dried cranberries and cranberry juice) under different nutrition-related information treatments. Cranberry products make an interesting case study in that they exhibit a high content of phytochemical components with proven positive effects on human health, yet commercial products contain added sugars to improve their palatability. We estimated the willingness to pay for these products using a generalized mixed logit model with a scale parameter to account for taste heterogeneity due to response certainty. We found significant discounts for added sugars that vary across information treatments and consumer subsamples. Consumers who make NFP-informed food purchases exhibited larger discounts for added sugars. A positive information frame about the health benefits of cranberries across the three products included in this study was not found to consistently mitigate the negative impact of added sugars or to offset the impact of additional information on the recommended daily intake limits for added sugars. Although nutrition information efforts are particularly important to promote healthier eating among individuals with health risk factors, we found that consumers with dietary related chronic conditions assigned the same or smaller discounts for added sugars compared to healthier consumers.