Fast Facts: Will Consumers Pay Extra for More Transparent Food Labels?

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In January 2022, we asked our panelists (each of whom has purchased a plant-based meat or dairy product in the 90 days prior to signing up for our panel) how much extra they would be willing to pay for a food product with a detailed label – one showing exactly where and how the product and each one of its ingredients were sourced. Although 38% of respondents say they wouldn’t pay anything extra for such a label, 62% indicate a willingness to pay at least something extra.

sustainable consumers view of transparent food labels

An opportunity for sustainable brands

Despite consumers’ unwillingness to pay a large premium for expanded labels, their interest in the concept is clear. And this may come as no surprise: many trends that have gained momentum in recent years, like health and wellness, sustainability, and ethical consumption, can be tied to transparency and the desire to better understand our food and its journey to us.

In fact, according to research from FMI – The Food Industry Association, which interviewed 1,035 US grocery shoppers in September 2021, 72% of shoppers say that detailed information about a food’s ingredients and production is important or extremely important to them. FMI found several reasons underlying this consumer sentiment, including health and well-being (78%), a desire to buy more eco-friendly products (69%), and an interest in more information, generally, about their purchases (78%).

Plus, according to findings from that same FMI report via Supermarket Perimeter, “Nearly two-thirds of consumers would switch from a brand they usually buy to one that provides more in-depth product information beyond just nutrition facts.” And although that statistic doesn’t factor in the price increase that might result from such a brand switch (and how consumers’ answers might change accordingly), it still shows an opportunity for brands with strong product and ingredient stories. 

Sustainable and ethical brands that are able to lead with compelling narratives around their products and ingredients – whether to underscore sustainable sourcing, ethical production, superior quality and/or nutrition, or countless others – can offer consumers the transparency they’re seeking. 

The question then becomes how to implement this insight. We’ve already started to see efforts to bring these sorts of labels to life, like ones that show the environmental impact of a product based on factors like carbon, water use, pollution, etc., which can be displayed to consumers as one score on the front of packaging. And emerging technologies like blockchain may enable companies to take this transparency to a new level. 

But it does seem worth asking: how can brands offer this product story and level of transparency right now, while balancing impact, resonance, usefulness, and practicality? This is especially important to consider in light of consumers’ unwillingness to pay large premiums for such labels. Efforts to provide consumers with this detailed information will have to be thoughtful, creative, and cost effective.

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Moonshot Collaborative

Moonshot Collaborative is a consumer research firm that provides unparalleled access to thousands of plant-based and sustainability-minded shoppers to help you understand their purchase decisions and how you can appeal to them more effectively.