IDEAS home Printed from https://ideas.repec.org/a/bpj/bjafio/v10y2012i1n9.html
   My bibliography  Save this article

The Impact of Food Environment on Private Label versus Branded Produce Choice

Author

Listed:
  • Schroeter Christiane

    (California Polytechnic State University, San Luis Obispo)

  • Cai Xiaowei

    (California Polytechnic State University, San Luis Obispo)

Abstract

Over the past two decades, retailers are providing more Private label foods (PL), which are directly competing with the National brand (NB) products. For years, PLs competed as generic and cheaper versions with their high-priced NB substitute. However, modern PLs have improved in product quality relative to NBs and are available in the premium, organic, and even produce sections with the goal to distinguish themselves from their competitors’ product lines. One of the fastest growing segments in the produce industry consists of triple-washed cello-packed spinach. Using a two-step Heckman model, we determine the impact of household purchase information, demographics, and food environment on PL spinach purchasing behavior. Given its regional dominance with regard to spinach production and fresh spinach consumption, we focus on households residing in the U.S. West. Results show that food environment is the main driver for PL spinach purchases. We determine that specialty stores might be traditional channels for purchasing organic PL spinach, while supercenters might take the role of the main outlet for conventional NBs. An understanding of what factors might encourage increased consumption of healthful foods is important to producers and marketers for developing effective strategies in order to reach beyond the traditional consumer base.

Suggested Citation

  • Schroeter Christiane & Cai Xiaowei, 2012. "The Impact of Food Environment on Private Label versus Branded Produce Choice," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 10(1), pages 1-23, November.
    • Handle: RePEc:bpj:bjafio:v:10:y:2012:i:1:n:9
    DOI: 10.1515/1542-0485.1375
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/1542-0485.1375
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/1542-0485.1375?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Anders, Sven M. & Ahmad, Waseem, 2011. "Private Label and National Brand Pricing and Promotional Strategies in Health Differentiated Product Categories: Canadian Evidence," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114223, European Association of Agricultural Economists.
    2. Connor, John M & Peterson, Everett B, 1992. "Market-Structure Determinants of National Brand-Private Label Price Differences of Manufactured Food Products," Journal of Industrial Economics, Wiley Blackwell, vol. 40(2), pages 157-171, June.
    3. Bontemps Christophe & Orozco Valerie & Réquillart Vincent & Trevisiol Audrey, 2005. "Price Effects of Private Label Development," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 3(1), pages 1-18, February.
    4. Michael B. Ward & Jay P. Shimshack & Jeffrey M. Perloff & J. Michael Harris, 2002. "Effects of the Private-Label Invasion in Food Industries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(4), pages 961-973.
    5. Christophe Bontemps & Valérie Orozco & Vincent Réquillart, 2008. "Private Labels, National Brands and Food Prices," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 33(1), pages 1-22, August.
    6. Dettmann, Rachael L. & Dimitri, Carolyn, 2007. "Organic Consumers: A Demographic Portrayal of Organic Vegetable Consumption within the United States," 105th Seminar, March 8-10, 2007, Bologna, Italy 7899, European Association of Agricultural Economists.
    7. Zhuang, Yan & Dimitri, Carolyn & Jaenicke, Edward C., 2009. "Consumer Choice of Private Label or National Brand: The case of organic and non-organic milk," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49207, Agricultural and Applied Economics Association.
    8. Schroeter, Christiane & House, Lisa & Lorence, Argelia, 2007. "Fruit and Vegetable Consumption among College Students in Arkansas and Florida: Food Culture vs. Health Knowledge," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 10(3), pages 1-27.
    9. Stevens-Garmon, John & Huang, Chung L. & Lin, Biing-Hwan, 2007. "Organic Demand: A Profile of Consumers in the Fresh Produce Market," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 22(2), pages 1-8.
    10. Sanjay K. Dhar & Stephen J. Hoch, 1997. "Why Store Brand Penetration Varies by Retailer," Marketing Science, INFORMS, vol. 16(3), pages 208-227.
    11. Jayson L. Lusk & Kathleen Brooks, 2010. "Who Participates in Household Scanning Panels?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(1), pages 226-240.
    12. Schroeter, christiane & Ritchie, Jennifer L. & Rickard, Bradley J., 2011. "Factors that Influence Prices for Cool-Climate Wines: A Hedonic Analysis of the Market for Riesling," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 29(1).
    13. Heckman, James J, 1990. "Varieties of Selection Bias," American Economic Review, American Economic Association, vol. 80(2), pages 313-318, May.
    14. André Bonfrer & Pradeep K. Chintagunta, 2004. "Store Brands: Who Buys Them and What Happens to Retail Prices When They Are Introduced?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 24(2), pages 195-218, March.
    15. Dimitri, Carolyn & Oberholtzer, Lydia, 2009. "Marketing U.S. Organic Foods: Recent Trends From Farms to Consumers," Economic Information Bulletin 58615, United States Department of Agriculture, Economic Research Service.
    16. Astrid Jonas & Jutta Roosen, 2008. "Demand for milk labels in Germany: organic milk, conventional brands, and retail labels," Agribusiness, John Wiley & Sons, Ltd., vol. 24(2), pages 192-206.
    17. Bonanno Alessandro & Lopez Rigoberto A., 2005. "Private Label Expansion and Supermarket Milk Prices," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 3(1), pages 1-18, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Schroeter, Christiane & Cai, Xiaowei, 2012. "The Impact of Food Environment on Branded vs. Private Label Produce Choice," 2012 AAEA/EAAE Food Environment Symposium 123197, Agricultural and Applied Economics Association.
    2. Zhuang, Yan & Dimitri, Carolyn & Jaenicke, Edward C., 2010. "Price Reactions And Organic Price Premiums For Private Label And Branded Milk," 115th Joint EAAE/AAEA Seminar, September 15-17, 2010, Freising-Weihenstephan, Germany 116388, European Association of Agricultural Economists.
    3. Fabian Bergès & Philippe Bontems & Vincent Réquillart, 2009. "L'impact économique du développement des marques de distributeurs," Economie & Prévision, La Documentation Française, vol. 0(3), pages 41-56.
    4. Sckokai, Paolo & Soregaroli, Claudio, 2008. "Impact of private label development across retail formats: Evidences from the Italian dairy market," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 87(2).
    5. Markus Lampe & Paul Sharp, 2014. "Greasing the wheels of rural transformation? Margarine and the competition for the British butter market," Economic History Review, Economic History Society, vol. 67(3), pages 769-792, August.
    6. Raj Sethuraman, 2009. "Assessing the External Validity of Analytical Results from National Brand and Store Brand Competition Models," Marketing Science, INFORMS, vol. 28(4), pages 759-781, 07-08.
    7. Johansen, Bjørn Olav, 2012. "Private Labels, Rent Shifting And Consumer Welfare," Working Papers in Economics 02/12, University of Bergen, Department of Economics.
    8. Castellari, Elena & Moro, Daniele Daniele & Platoni, Silvia & Sckokai, Paolo, 2014. "Investigating the impact of Private Labels on National Brand prices in the Italian yogurt market," 2014 Third Congress, June 25-27, 2014, Alghero, Italy 173020, Italian Association of Agricultural and Applied Economics (AIEAA).
    9. Richards, Timothy J. & Hamilton, Stephen F. & Patterson, Paul M., 2010. "Spatial Competition and Private Labels," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 35(2), pages 1-26, August.
    10. Venturini, Luciano, 2006. "Vertical competition between manufacturers and retailers and upstream incentives to innovate and differentiate," 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece 10050, European Association of Agricultural Economists.
    11. Castellari, Elena & Moro, Daniele & Platoni, Silvia & Sckokai, Paolo, 2018. "Retailers’ strategies and food price dynamics: Evidence from dairy scanner data," Food Policy, Elsevier, vol. 74(C), pages 212-224.
    12. Li, Xun & Wang, Rui & Lopez, Rigoberto A., 2016. "Energy Shock and Price Adjustment: National Brands vs. Private Labels of Retail Milk Products," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235613, Agricultural and Applied Economics Association.
    13. Volpe III, Rickard James, 2014. "National Brands, Private Labels, and Food Price Inflation," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 46(4), pages 1-16, November.
    14. Volpe, Richard J., III, 2011. "Evaluating the Performance of U.S. Supermarkets: Pricing Strategies, Competition from Hypermarkets, and Private Labels," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 36(3), pages 1-16, December.
    15. Fabian Bergès & Zohra Bouamra-Mechemache, 2012. "Is producing a private label counterproductive for a branded manufacturer?," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 39(2), pages 213-239, April.
    16. Schroeter, Christiane & Cai, Xiaowei, 2011. "It’s All About Produce: Flexing the Muscles of Western U.S. Organic Spinach Consumption," Western Economics Forum, Western Agricultural Economics Association, vol. 10(2), pages 1-13.
    17. Meilin Ma & Ralph Siebert, 2021. "The Impact of Private Label Introduction on Assortment, Prices, and Profits of Retailers," CESifo Working Paper Series 9380, CESifo.
    18. Sckokai, Paolo & Soregaroli, Claudio, 2006. "Do consumers benefit from private label development?," 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece 10068, European Association of Agricultural Economists.
    19. Wu, Lifang & Yang, Wei & Wu, Jessica, 2021. "Private label management: A literature review," Journal of Business Research, Elsevier, vol. 125(C), pages 368-384.
    20. Anania, Giovanni & Nisticò, Rosanna, 2014. "Price dispersion and seller heterogeneity in retail food markets," Food Policy, Elsevier, vol. 44(C), pages 190-201.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bjafio:v:10:y:2012:i:1:n:9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.