Country of origin labeling for complex supply chains: the case for labeling the location of different supply chain links

Abstract

We investigate the value of a country of origin label (COOL) that separately identifies the geographic location of different stages in a food product's supply chain. We estimate the willingness-to-pay (WTP) of U.S. consumers for a packaged cereal product where the key grain ingredient may be grown in one country and processed in a second country (multicountry supply chain) and compare it to equivalent products that have both stages located in a single country. We find consumer WTP for products with single-country and multicountry supply chains are statistically different, meaning that simplifying a multicountry label by listing only the country where the ingredients are grown or only the country where the ingredients are processed can result in different consumer values. We also find that for countries with a poor quality reputation, consumers respond more negatively when that country has the "last touch" than when that country's involvement is limited to upstream supply chain links.JEL classifications: D12, D82, Q18

How country of origin influences Chinese consumers' evaluation of imported milk?

“…COO is important to signal the quality and safety of food products and is an important informational cue guiding purchase behavior when product information is asymmetric (Bilkey and Nes, 1982; Alfnes, 2004; Verbeke and Ward, 2006; Dekhili and D'hauteville, 2009; Yeh et al , 2010; Holdershaw et al , 2013; Twine and Rude et al , 2016; Xie et al , 2016; Yu et al , 2016). Understanding the impact of COO on consumer behavior has become essential to policy makers and food marketers (Bienenfeld et al , 2016).…”

Consumer preferences for organic production methods and origin promotions on ornamental plants: evidence from eye-tracking experiments

“…Increased demand comes from perceptions of local/domestic products being higher quality, safer, more environmentally friendly, and economically beneficial to local/domestic markets (Costanigro et al., ; Xie et al., ). Additionally, federal law requires country of origin labels on fresh produce (USDA‐AMS, ), which has stimulated studies on consumer preferences for foods from different origins (Bienenfeld et al., ; Ehmke et al., ). Studies investigating ornamental plant origins are more limited and often focus on state promotional campaigns.…”

Consumer preferences for three dimensions of country of origin of a processed food product

“…Jin and Zhou, 2014;Miller et al, 2017;de-Magistris et al, 2017;Bazzani et al, 2018). However, to the best of our knowledge, Bienenfeld et al (2016) focused on the multidimensionality of the COO for processed food products. Bienenfeld et al (2016) conduct a discrete choice experiment (DCE) study to measure consumer preferences for two dimensions of the COO of a packaged cereal product in the US.…”

“…However, to the best of our knowledge, Bienenfeld et al (2016) focused on the multidimensionality of the COO for processed food products. Bienenfeld et al (2016) conduct a discrete choice experiment (DCE) study to measure consumer preferences for two dimensions of the COO of a packaged cereal product in the US. The two dimensions correspond to the locations of the two stages of the product's production process: the country where the grain in the product was grown (the country of growing or COG) and the country where the grain was processed and packaged (the country of processing or COP) [1].…”

“…Although Bienenfeld et al (2016) provide significant findings and implications regarding consumer preferences for the COO of processed food products, their study has two limitations. First, their findings are derived from a consumer survey conducted in the US, and the countries used as the levels of the COO-related attributes are the US, England and China.…”