A price premium for the farmer-owned label? A choice experiment with milk consumers in the Netherlands

Organized milk producers may use marketing mechanisms in response to price and policy variability. While adopted by numerous milk producer co-operatives across the world, the farmer-owned label is not yet used in the Dutch consumer marketplace. We estimate the viability of the farmer-owned label in the Netherlands with a branded choice experiment. We observe a significant and positive willingness-to-pay for the farmer-owned label, but only given the disclosure of additional information in terms of profit allocation to farmers as opposed to investors. Further variation in the willingness-to-pay across attributes is indicative of its complex position in the crowded landscape of marketing mechanisms. [EconLit Citations: C25, D83, D91, Q13].

Automated summary

Although the farmer-owned label is not yet used in the Dutch consumer marketplace, a branded choice experiment revealed a significant and positive willingness-to-pay for it among consumers, provided that additional information on profit allocation to farmers instead of investors is disclosed. This suggests that the farmer-owned label has potential in the crowded landscape of marketing mechanisms.