Welcome to the (Label) Jungle? Analyzing How Consumers Deal with Intra-sustainability Label Trade-offs on Food

Sustainability labels provide consumers with information about the production process, but the number of specialized labels is increasing rapidly. Different label combinations on one product can lead to trade-offs for consumers since sustainability dimensions, e.g., animal welfare and climate impact, may conflict. Consumers may face a combination of sustainability labels where not all characteristics are positive. The likelihood of a combination of positive and negative labels is particularly high when certain labels become mandatory. It is unclear how this influences the decision-making of consumers. This study analyzes the effect of different multi-level sustainability labels: animal welfare label, climate label, and a binary label (organic), and a nutritional label: the Nutri-Score on two food products. We measured the willingness to pay (WTP) for chicken breast and whole milk for different label combinations using a discrete choice experiment with 985 German consumers. Our results provide first indications that the presence of a sustainability label does not diminish the marginal utility of another sustainability label and that the effects of a negative label on the WTP cannot be compensated by a positive label. Consumers can handle two different types of labels at the same time and seem to be able to cope even with contradictory information in a trade-off situation between different sustainability dimensions. For manufacturers, this means that they should avoid scoring negatively on any sustainability dimension.