Signaling Origin: Consumer Perceptions of Product of Canada and Made in Canada Food Labels

ABSTRACT

A Product of Canada label can be used on food if all major ingredients are grown or raised in Canada and the product is processed in a Canadian facility. A Made in Canada label is permissible when the final processing step occurs in Canada. Using survey data, we examine whether Canadian consumers understand the difference between these labels, their effectiveness as quality cues, and the relative importance of country-of-origin labels. A best-worst scaling experiment reveals a positive response to origin labels in general, and a Product of Canada label in particular. Nevertheless, few consumers understand the meaning of the labels or the difference between them. Probit regression models find little evidence of a relationship between valuing the source of ingredients or location of processing and choosing Product of Canada or Made in Canada labels. Consumers may be responding to the “Canadianness” of the labels, rather than what the labels signify.

KEYWORDS:

• best-worst scaling
• country-of-origin labeling
• information asymmetry
• source of ingredients
• labeling policy

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ A balanced incomplete block design allows comparisons across a large number of items to establish a full ranking of the items. The design controls the number of times each pair is compared and is derived from a Latin Square design for n items organized by n rows and n columns, where the items are positioned differently in each row and column. For further information on balanced incomplete block design see Weller and Romney 1988; Cohen (2009).

² It was necessary to ask the label knowledge questions prior to the BWS experiment since the label definitions are provided in the choice experiment. We note the possibility that this creates an ordering effect within the survey which may influence responses to the subsequent BWS questions. Nevertheless, we anticipate this possible effect to be small.

³ A copy of the survey instrument is available from the authors upon request.

⁴ The sample size (500) was determined by available resources. The survey was administered by the Canadian Hub for Applied and Social Research (CHASR) at the University of Saskatchewan. Respondents were recruited from a third-party vendor panel operated by Asking Canadians. The survey received approval from the University of Saskatchewan Behavioural Research Ethics Board in January 2022 (Beh #3138).

⁵ The dependent variable in the Made in Canada model uses ranking in the top three rather than ranking first due to an insufficient number of responses ranking this label as the first (most important) label.

⁶ Marginal effects measure the probability of a change in the dependent variable change for every one unit change in the explanatory variable.

⁷ As previously noted, the correlation coefficients in Table A3 also indicate a very low correlation between Product of Canada and Made in Canada being important food labels to respondents, and those respondents also indicating that where ingredients are from or where ingredients are processed into the final product, respectively, are important.