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‘Health’ labels on products reduce consumers’ willingness to pay

A study into front-of-packaging “health” labelling finds that these labels alone can lower US consumers’ willingness to pay.

However, the negative impact on willingness to pay is reduced when supported by credible information, for example, when the product meets Food and Drug Administration (FDA) standards for low added sugar, sodium, and saturated fat.

This way a key finding made by researchers from the University of Florida, Texas A&M University, and Korea University who explored the value consumers put on front-of-pack (FOP) “health” labelling.

The team, who published their findings in the Food Policy journal, assessed the labelling in relation to FDA guidelines. They sought to provide critical insights into how US consumers respond to the FDA-endorsed “healthy” label.

The label is considered a key policymaking tool designed to promote and encourage healthier food choices.

Front-of-pack labels’ role in communicating health

FOP labels play a pivotal role in the uptake and sales of “healthy” foods, providing quick, accessible nutritional information designed to assist consumers in making more informed choices.

While not all FOP labels are designed to encourage healthier choices, the new FDA-proposed “Healthy” label aims to do just that. On 19 December 2024, the FDA confirmed it had passed its final ruling on health-centric claims on food labelling, with the update available to manufacturers for voluntary use on their FOP food labels.

Designed to align with current nutritional science and federal dietary guidance, the FDA’s latest insights show that three-quarters of US consumers have dietary patterns that are low in vegetables, fruits, and dairy. Furthermore, 90% of the US population exceeds the Chronic Disease risk reduction limits for sodium, 77% exceed the limit for saturated fat, and 63% exceed the limit for added sugars.

“Our study found that health labels alone can sometimes reduce consumers’ willingness to pay for products,” Jianhui Liu, PhD candidate in food and resource economics at the University of Florida, told Ingredients Network.

This may be due to perceptions that “healthy” foods compromise on taste or that health labels are marketing tactics rather than genuine indicators of quality.

“However, when supported by credible information – such as meeting FDA standards for low added sugar, sodium, and saturated fat – the negative impact on willingness to pay is reduced,” said Liu.

Presentation and positioning are powerful indicators of success

Furthermore, the researchers found that FOP labels' effectiveness depends heavily on the design and context they are presented in. Leaders and food companies can subsequently centre their efforts on creating and positioning food labels in appealing ways for consumers.

Awareness and knowledge of the positive and negative components of FOP labels can ensure that brands maximise their stand-out potential on supermarket shelves.

“Our study highlights that credible endorsements, such as FDA qualifications, enhance consumer trust and willingness to pay,” Liu explained.

Food companies need to focus on clarity, credibility, and trust when designing FOP labels that resonate with consumers. Labels that are overly complex, ambiguous or perceived as reducing taste appeal can discourage consumers.

“It’s important for companies to recognise that while health labels aim to promote better choices, they can also backfire without credible backing or if they suggest a compromise on quality,” Liu added.

Positive FOP elements include the use of simple language, visually appealing designs, and clear nutritional information. Integrating educational elements and ensuring transparency can help build consumer confidence and improve label effectiveness.

Cross-sector collaboration can drive label confidence

The legal landscape, education efforts, and the food manufacturing space can team up to pursue a consistent and comprehensive FOP approach.

“Optimising FOP labels benefit from collaboration between policymakers, educators, and food manufacturers,” said Liu.

Effective legal frameworks can provide clear standards, ensuring consistency and reliability throughout the food industry. Educational initiatives can help consumers understand the meaning behind food labels, debunking misconceptions and improving label comprehension.

“Our study suggests that detailed information about label qualifications positively influences consumer perceptions, making educational campaigns especially valuable,” Liu noted. “Food manufacturers can support this effort by adopting transparent labelling practices and contributing to public education.”

A joint effort – similar to the FDA’s educational campaign after updating the Nutrition Facts label in 2018 – can strengthen the impact of FOP labels, encouraging healthier choices while maintaining consumer trust.