Consumers' preferences and willingness to pay for coffee sustainability labels

Abstract

AbstractConsumers are displaying an increasing awareness for the social and environmental impact of coffee production, and this is also reflected in their willingness to pay for sustainably produced coffee. For example, the Direct Trade label, which highlights a direct relationship between roasters and farmers, has gained popularity to strengthen the industry's efforts to make coffee production more sustainable. This leads to the question of whether consumers prefer coffee carrying this label. Hence, this research analyzes consumer preferences and willingness to pay for coffee labels representing sustainability efforts, such as the Direct Trade label. We informed participants about the efforts reflected by each sustainability label and utilized a hypothetical online choice experiment to determine US consumers' preferences and willingness to pay for coffee sustainability labels. The highest willingness to pay was found for coffee carrying both the Fair Trade and Organic labels, and the Direct Trade and Organic labels. The key findings of this study demonstrate that consumers are willing to pay more for sustainability labels that communicate efforts on solving social issues, followed by labels that highlight environmental issues. [EconLit Citation: C9].