Journal
JOURNAL OF CLEANER PRODUCTION
Volume 195, Issue -, Pages 21-31Publisher
ELSEVIER SCI LTD
DOI: 10.1016/j.jclepro.2018.05.039
Keywords
Consumer behavior; Segmentation; Supply chain; Certification; RSPO; Mass balancing
Categories
Funding
- German Research Foundation [GRK1666]
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European consumers are increasingly concerned about palm oil production, yet the uptake of certified sustainable palm oil (CSPO) has been slow. Labelling systems have been proposed to increase sustainable consumption, but they usually require segregated supply chains and push certified products into niche markets. In contrast, this study introduces mass balancing as a product differentiation strategy that drops the stringent requirement of segregation and aims for the mainstream market. Mass balance (MB) supply chains enable certified and non-certified palm oil to be mixed and processed together, while the product carries a sustainability label. Its cost effectiveness helps accelerate the uptake of a certification standard by processors, but the catch lies with consumers who can no longer be sure about the sustainability of palm oil in certified products. The aim of this study is therefore to assess how consumers trade off transparency in oil palm markets (i.e., certainty about the physical presence of CSPO) against retail price. The results of a choice experiment using chocolate bars suggest that consumers prefer products from segregated supply chains. Loss of transparency as inherent in MB products reduces consumer valuation, but all but the low-price shoppers prefer MB products to unlabeled alternatives. There is, therefore, a case for labelling MB products. The fact that consumers favor a guaranteed minimum of CSPO in MB products should be taken into account when developing partial product claims. The article concludes with implications for the uptake of sustainability standards in cost-driven commodity markets. (C) 2018 Elsevier Ltd. All rights reserved.
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