Is there a demand for eco-labeled restaurants: Consumer preference and willingness to pay for eco-labeled seafood restaurants

Abstract

With increasing concerns over the environmental impacts of the production process for seafood, many consumers are willing to pay premiums for eco-labeled seafood to support sustainable fisheries. Most studies of consumer preferences for ecolabels are conducted in the retail setting, focusing on food attributes. Limited attention is given to sustainable seafood consumption away from home and none about preferences for ecolabel certifications of restaurants. However, seafood consumption away from home at restaurants makes up a significant share of the total seafood consumption, and ecolabels are used only to a limited extent. Hence, consumer behavior at restaurants is important to the efficiency of ecolabels. Consumers’ preferences for eco-labeled seafood restaurants may reinforce the impact of the ecolabels. Using a national online survey, this article investigates consumer preferences and willingness to pay (WTP) for eco-labeled seafood restaurants. The results show a positive WTP (26%) for eco-labeled seafood restaurants, but varying by consumer groups.

Keywords:

• Ecolabels
• restaurants
• seafood
• willingness to pay

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 The MSC was created by the World Wildlife Fund (WWF), an international environmental organization, and Unilever, an international cooperation company and one of the world’s largest seafood retailers in 1996 (Gudmundsson & Wessells, 2000). MSC has proved to be the most used seafood ecolabel (Roheim et al., 2018), and it certifies the restaurants providing sustainable seafood being traceable to sustainable resources and being harvested, processed, and distributed in a sustainable way (MSC, 2018).

2 There are two types of eco-labeled restaurants, one provides certified food without being certified as a whole, and another type of restaurants get certified as a whole. In the survey, we ask participants to choose restaurants with ecolabel certification to measure the value of labels to restaurants.

3 Out of the 1,359 surveys collected, we excluded responses from individuals who did not consume seafood, resulting in 1,106 respondents who meet our criteria.

4 To test the significance of treatment effect, we compared the differences of consumer WTP in eco-labeled restaurants among the three groups of respondents. The results are consistent with the regression results in the model with the interactive variable of information treatment and consumer preferences for different features of restaurants. To test the effects of information treatment on other variables, we conduct tests on interactive variables with other demographic variables (age, gender, and income) in the model. The regression does not show significant estimates, therefore, is excluded from our final model report.

5 Our question asks participants how much they are willing to pay for a restaurant with eco-label certification compared to a regular restaurant with an average cost per person being at certain price range.

6 The questions include the average dish price in restaurants by seven different levels: less than $10, $11–$20, $21–$30, $31–$40, $41–$50, $51–$60, and more than $60. To ensure consistency, we designed seven price levels based on the market’s provided menu and asked consumers to make decisions within a hypothetical consumption setting. Actual price calculation was not performed.

7 The initial models have tested variables in addition to the reported model, such as whether the respondents had heard of these ecolabels, whether they live close to the coast, the number of adults in household, and some interactive terms. The interactive variables that was excluded include Knowledge*whether heard of these ecolabels, Inf*Gender, Inf*Age, Inf*Income, Inf*Features, and Knowledge*EvCon, which is involved with each of the environmental concerns’ questions.

8 The adjustment for the premiums by taking the square root of the original data is to meet the normality assumption for both hurdle model and tobit model.

9 In this survey, the higher the number of the respondents gives for the rank, the less important role that feature plays in consumers’ choices of restaurants. A negative parameter indicates that the feature is a more important one than the feature “cuisine style of the restaurant” for respondents when they choose the restaurants.

10 There are eight levels in the question to measure the frequency that respondents are eating away from home. A larger number indicates a situation with lower frequencies. Hence, a negative sign in the result means that the more frequently eating away from home respondents have higher premiums for eco-labeled restaurants.

11 There are of course a number of other attributes that can be important such as origin, a feature that can be unclear for seafood (Asche, Yang, et al., 2022), production technology (Uchida, Onozaka, et al., 2014; Uchida, Roheim, et al., 2014; Bronnmann & Asche, 2017; Asche, Eggert, et al., 2022), and product form (Love, Asche, et al., 2022).

12 The fitted values used here are conditional WTP, given the assumption that consumers have overcome the hurdle and are willing to pay premiums for eco-labeled restaurants. Adjustment of taking the square root of the premiums for the model is reverted to get the values in Table 5. The significance level of 5% is tested by the t-statistics obtained from the fitted values and the sample mean.

13 We use three levels (low, medium, and high) to reflect various consumers’ concerns for the environment, and this category is based on our survey questions.

14 Nonetheless, the number of fisheries certified, the number of ecolabels that producers can choose between, and products sold with an ecolabel has risen rapidly in recent years (Alfnes et al., 2018; Amundsen et al., 2019; Osmundsen et al., 2020). This has also led to several alternative explanations for why ecolabels are popular (Roheim et al., 2018). These vary from positive perspectives suggesting that the ecolabel, even without a price premium, encourages more sustainable production practices to more cynical observations opining that the proliferation of ecolabels reflect a race to the bottom where retailers claim sustainability with the cheapest label possible. The actual workings of the labels then become an empirical question. Examples of positive impacts not manifested by a premium include Roheim and Zhang (2018), who provide evidence that ecolabels change substitution patterns; Sogn-Grundvåg et al. (2019), who show that an ecolabel may reduce supply chain costs; and Amundsen and Osmundsen et al. (2019) who show that the certification process increases the production efficiency.

Additional information

Funding

This research has been conducted without any grant funding.