Positioning GM Food Product : Benefits, risk and loss aversion considerations

Labeling of genetically modified (GM) food products in the EU is considered to be the reason for the decline in the export of soybeans from the US to the EU. Debate about content labeling (free of GM ingredients/contains GM material) is an example of the importance attributed to labeling formats that affect choice. Labeling regulations currently act as an active import barrier to US export of potatoes, corn, and soybeans among other products. However, labeling of GM products can also be used to inform consumers about product benefits and could increase GM food acceptance rather than blocking it. In this study, we analyze the effectiveness of four different positioning tactics in inducing adoption using four new types of GM potatoes that vary in their benefits: improved taste; high-temperature, which reduces the risk of cancer; low-calorie that reduces the risk of diabetes and cardiovascular diseases; and antioxidant varieties, comparing them with traditionally grown potatoes. While it has been shown that consumers are willing to pay a price premium for genetically modified (GM) food products if such products are designed to enhance wellbeing, information on biotechnology’s capacity to reduce health risks is likely to reduce the acceptance rate. It is argued that information on lower risk may actually increase consumers’ accessibility to health hazards increasing the likelihood of rejecting upfront the new technology despite its advantages. Our results indicate that given the right positioning, the majority of consumers are willing to purchase GM foods that either reduce risk or increase benefits. While the acceptance of GM food was higher when the benefit was better taste, and lowest when it primed lower hazard of illness, more than 65% of consumers were willing to pay a price premium even for the less desirable positioning. Results and managerial implications are discussed,