Consumer Preferences for Attributes of Organic Processed Foods: The Case of Soymilk In the United States

Organic soymilk has been one of the fastest growing products in the organic food sector in recent years. Due to the shortage of domestically grown organic soybeans, outsourcing became a practice in the industry. It was estimated by some industry insiders that about 50% of organic soybeans consumed in the United States were imported from China (Cornucopia Institute, 2009). In 2009, the Organic Consumers Association called for a boycott of Silk products because it was reported that Silk, the dominant national brand in organic soymilk market, sourced organic soybeans from China and Brazil based on disputable standards. Under public pressure, Silk brand soymilk started to substitute U.S. grown non-genetically modified (GM) soybeans for imported organic soybeans. Correspondingly, the organic label on the product packaging was changed to ―all natural. The same behavior is also observed for soymilk by other brands. Another notable trend in the soymilk industry is that the dominance of national brands is challenged by a boom of private labeled soymilk products offered by stores across these marketing channels. The impacts of these changes in the organic soymilk industry could be significant for the distribution of economic benefits among the supply chain players. Our primary focus is to find whether US consumers distinguish organic processed foods by the origin of ingredients and brand types. We expect our findings to have wider implications to other processed foods. Preliminary results show consumers are willing to pay premiums for processed food like soymilk with organic and non-GM ingredients. The premium for organic soybeans is significantly higher than that for non-GM beans. The results also indicate that US consumers perceive the product with ingredients sourced from different origins distinctively, with a strong preference for organic soymilk produced with domestically produced soybeans. In terms of brand preferences, respondents are willing to pay more for national brands relative to store brands. Responses suggest that taste is a major factor in differentiating brands of soymilk. The willingness to pay for attributes varied with income and demographic characteristics of the households. Female and higher income groups appear more willing to pay for soymilk with organic ingredients. Older people are less likely to purchase organic soymilk. Moreover, older and female consumers perceive domestically produced ingredients better than imported ones. Yet, the more educated consumers are less willing to pay a premium for domestically produced organic ingredients.