Do healthy foods have a price perception issue?
While Whole Foods has long battled its “whole paycheck” nickname, a new university study finds that the retailer is not alone in facing such biases in the price perception of healthy foods.
While organic ingredients and gluten-free foods may indeed cost more for legitimate reasons, the study finds consumers extend this thinking to a broad range of products, potentially leading to an avoidance of healthier options — or overpayment for them.
“Across five studies, we find that consumers do subscribe to a general lay theory that healthy = expensive despite the fact that this relationship is unlikely to be true in all product categories and contexts,” the report states. “As a result, this lay theory is over-applied beyond the categories where it is objectively true.”
The study came from professors at The Ohio State University, Vanderbilt University and University of Georgia. The findings were published online in the Journal of Consumer Research.
In two of the studies, consumers inferred products were healthier based on price alone. Similarly, consumers assumed foods identified as healthier would cost more.
Another study found that consumers fall back on price when there are not clear differences in the nutritional benefits of various options. The “healthy = expensive” theory also leads consumers to believe that a particular “healthy” ingredient is more important when an item containing it has a higher price.
Further, a lower-priced item — a $2.00 “protein bar” — led respondents to seek out more product reviews than when considering $4.00 one.
The study said the “expensive-equals-healthy” bias particularly impacts families looking to balance budgets.
“It makes it easier for us when we’re shopping to use this lay theory, and just assume we’re getting something healthier when we pay more,” said Rebecca Reczek, co-author of the study and professor of marketing at The Ohio State University, in a statement. “But we don’t have to be led astray. We can compare nutrition labels and we can do research before we go to the grocery store. We can use facts rather than our intuition.”
- The strange effects of thinking healthy food is costlier – Ohio State University
- The myth that healthy foods cost more may have a negative impact on consumer choices – Vanderbilt University
DISCUSSION QUESTIONS: Is the “healthy = expensive” bias a benefit or detriment to the better-for-you trend for food retailers? Should stores try to correct flawed price perceptions and, if so, how should they do so?
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12 Comments on "Do healthy foods have a price perception issue?"
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President and CEO, Stealing Share
Price is always in the mix. But the real metric is value.
If a shopper is committed to healthy choices they will pay more for them. It’s about the belief that you get what you pay for.
The real issue with healthy choices can be found in the self-definition of the buyer. A vegan, for example will not compromise. However, many in the healthy choice consumer segment are not so committed. Healthy choices are just one of the ways in which they estimate value.
Healthy choice marketers need to do more than just show up on the shelf to influence those mildly-committed shoppers.
President, Max Goldberg & Associates
Retailers and marketers are to blame for a good deal of the healthy = expensive equation. Marketers trumpet health benefits, many dubious, on packaging, while retailers have trained consumers to believe that organic = expensive. So as much as consumers have been told to read labels, many either gravitate towards or shy away from more expensive offerings. Individual retailers can use their influence to affect packaging and pricing. They can use their advertising and signage to message consumers. But until there are more uniform standards, consumers will equate higher prices with better-for-you foods.
CEO, President- American Retail Consultants
Yes, we have long charged a premium for healthy (and nutritious) foods. Add organic and specialty foods to the mix and the American consumer has a belief that healthy starts with more money. Until healthy starts to go mainstream and becomes a cost-competitive category, this will not change. So long as healthy foods compete in a niche category, the (perhaps correct) high price perception will continue to thrive in the consumer’s mind.
Managing Partner, Advanced Simulations
The good news is, retailers can charge more for “healthy” foods. The bad news is, many-to-most shoppers won’t pay the premium. Getting shoppers to read labels and try to figure out what’s healthy is unlikely to work — it goes against all sorts of habits and time constraints. How about a simple “good for you” price tag for anything that can reasonably be described as healthy?
Senior Vice President, Dechert-Hampe (retired)
I would offer a slight amendment to your thesis — “marketed as healthy = expensive.” This perception will put a cap on natural and organic sales for a while. I know I consciously avoid the “organic” label in the produce section and go looking specifically for the “regular stuff.” I don’t even bother to compare prices any more.
Whole Foods does own a bit of this. They pioneered the segment and, in fairness, often did provide a higher quality product that justified higher prices — even if “healthier” wasn’t a legitimate part of that justification. They found a horse that worked and they rode it.
But what blew things up in this gravy train was the traditional grocer and even the big box grocers who understandably wanted to juice their margins, particularly in meat and produce, with the “healthy” label. Eventually the real (lack of) difference in the nutritional value of most of the “all natural” and “organic” foods came to light. And consumer skepticism grew just a little bit more.
Strategy Architect – Digital Place-based Media
Brands and their retail partners are doomed to this default perception unless they move to a “feature = benefit = price” model. The ingenuity of product package labeling often does little to express this value proposition in tangible terms. So as long as consumers are willing to believe and not understand what they read (and brands prefer not to disadvantage themselves with clarity and explanation), price and branding will be the weapons of choice on the product selection battlefield. Savvy consumers make decisions based on information. When all else appears equal, price wins every time.
sales management consultant
President, The Treistman Group LLC
It’s still a worry to some marketers that “healthy for you” means it doesn’t taste as good. That’s just another confounding ingredient in this issue that relates to consumer assessments at the point of sale. I believe it is a matter of value for the money for me and my family as it intersects with taste and a significant difference in what we consume.
For stores to help consumers evaluate prices and value related to “healthy” choices they will have to show the continuum from where it matters a lot to where it hardly matters at all. That may be difficult to convey, but it would sure go the distance in helping shoppers who want more information to make their decisions.
CFO, Weisner Steel
There are indeed a lot of misperceptions about healthy food, and — though not to single him out — advances two of them: that “healthy” equates to organic or, somehow, gluten free. These ideas, and others like them, have little to do with eating a nutritious, well-balanced diet, which is readily available … at normal prices.
But what is the impact for retailers trying to sell various quixotic “healthy” foods (whether people really need them or not)? I would think they are mixed; on the one hand, the perception probably discourages many people from even looking at them. OTOH, those who do commit to buy are more likely to accept a price premium … however unjustified it may be.
But the impact on consumers is clear: a skewed demand curve = flawed pricing.
EVP Thought Leadership, Marketing, WD Partners
As with everything, “When value exceeds price, a sale is made.”
In this space I see less brand and more product involvement, and have long advocated that the brands that make healthier food more approachable, accessible, and affordable will establish themselves as category leaders, so long as they maintain their integrity and do not alienate hardcore consumers.
I love studies like this — revealing the true complexity of shopping and choosing up against a wide range of the clever marketing. And the complexity of being a company making a smart product that offers real value — attempting to get your product trusted and your price right among this morass of complications.
What I observe most, though, is that in the absence of meaningful information about products, consumers fall back on price as the shorthand for making a choice. (Paraphrased from Sergio Zyman.) This plays AGAINST most marketers.
Let me recommend two things. Marketers need (a) traditional (not online), fundamental and primary research among the consumers in the market/category within which they sell to understand the specific challenges they face in price and understanding then (b) communicate the value of their product with advertising — give consumers meaningful information about your product.