Farmer-owned brand purchases: The importance of label comprehension and price fairness perception

Grashius, Jasper and Ye, Su (2023) Farmer-owned brand purchases: The importance of label comprehension and price fairness perception. STUDIES IN AGRICULTURAL ECONOMICS, 125 (1). pp. 37-44. ISSN 1418-2106 (print); 2063-0476 (online)

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Abstract

The farmer-owned label is a relatively recent addition to the crowded landscape of information on food and drink product packages. Due to its novelty, research on the farmer-owned label is still scarce. Using 451 responses from random food consumers in the United States, we attempt to explain variability in the purchase of farmer-owned brands in ten different food and drink product categories in terms of label comprehension and price fairness perception. Our structural equation model results are contrary to expectations: we find a negative relationship of label comprehension to the farmer-owned brand share, which implies food consumers do not support the various implications of farmer ownership of food brands. In addition, respondents who perceive more distributive price fairness and procedural price fairness purchase a higher proportion of farmer-owned brands. Implications for researchers, practitioners, and policymakers are discussed.

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