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Are consumers willing to pay for innovative sustainable foods?

Innovative sustainable animal products and plant-based alternatives can plug health and environmental concerns – but consumer willingness to pay for these products remains variable, finds an EU-funded study.

The EU's scientific research initiative Horizon Europe has supported an investigation into whether consumers across the globe are willing to pay for “sustainably innovated animal products and plant-based alternative foods”.

According to researchers from Germany, Czech Republic and Italy, replacing animal-based foods in human diets with innovative alternatives certainly addresses concerns regarding health, environmental sustainability and animal welfare but whether consumers are willing to pay for such innovations “remains unclear”.

Balancing the food innovation line

Writing in Future Foods, the team presented findings from a meta-analysis of 67 existing studies to shed light on the issue. Review results showed that willingness to pay estimates are “highly heterogeneous” and very much “product and context specific”.

“On average, consumers are willing to pay more for innovative alternatives, when they improve animal welfare or environmental sustainability compared to their respective conventional animal products,” the researchers wrote. “In contrast, for plant-based options and foods developed in a laboratory or through genetic engineering, consumers require a discount to choose these alternatives over the conventional product.”

For products based on insects or functional food innovations designed to improve health, no real difference was found in willingness to pay versus reference products.

Overall, findings showed that “the higher the level of innovativeness, the less consumers are willing to pay” – across all product categories, albeit with regional differentiation. In Europe, willingness to pay maintains a positive average for innovative foods, with consumers willing to pay an average of 20% more for these products versus reference animal products. In North America and Asia, however, consumers require discounts of 31% and 39%, respectively, to choose the innovative product options.

Market potential and consumer targets

Food innovations with the most market potential globally, therefore, remain those focused on improving animal welfare and environmental sustainability but with a “comparably low level of innovativeness”, the researchers said.

“These findings imply that emphasising the environmental sustainability, animal welfare or health attributes rather than the technological details in the product framing makes consumers more receptive to the innovative products,” they added. Innovative alternatives also need to remain “price-competitive”, particularly if they are designed to replace often consumed products or if they target price-sensitive consumers.

However, the review outlined differences depending on consumer groups. Consumers with high levels of disgust, food neophobia, and general aversion toward insects, for example, show low willingness to pay for related food innovations. Consumers with a strong interest in nutrition and the environment, however, show an openness to pay for lab-based meat substitutes. Younger and more educated consumers express a positive willingness to pay for food alternatives classified as environmentally beneficial due to feed additives versus traditionalist consumer segments.

“The review highlights that not all innovative products will become the average consumers' preferred option,” they said, but rather attract specific consumer groups instead. Identifying and targeting these groups, therefore, will be key to establishing innovative food products that are socially desirable alternatives to animal products.

Policymaking for “positive influence”

The researchers suggested that policymaking could leverage insights from this review to “positively influence the perception of innovative products”. Targeted information and even subsidies to lower prices in some cases could help shift patterns where willingness to pay remains low, they said, and certain actions could help provide an “innovation-friendly regulatory environment”.

Policymakers, however, will need to be aware of the acceptance and contextual differences based on consumer groups and food innovation categories ahead of any work, they added.