Sell more for less or less for more? The role of transparency in consumer response to upcycled food products

The sustainability agenda requires greater resource efficiency and a more circular economy. There are new technologies that allow value increase through upcycling and waste-to-value production. However, they come at a cost to businesses, and consumers are not necessarily willing to cover these costs. This leads to the question of the right degree and type of transparency in corporate communication: Transparency has shown to increase consumer trust, but the role of disclosing cost is debated in literature. Considering business profitability, the sustainability agenda, and the emerging consumer trend towards plant-based food, we discuss traditional and current upcycling initiatives and our empirical findings on the background of considerations on full or selective information disclosure. We study upcycling for the case of plant-based food product ingredients from side-streams of industrial potato starch production. In three online experiments, we show that a higher degree of transparency in communicating sustainability efforts increases product choice only to a minor degree or even affects it negatively. Fair price perception increases for upcycled alternatives, but only when cost transparency, a specific type of transparency, is disclosed. This leads to a tradeoff consisting of selling either more of the product but for lower price, or less product but at a higher value, that is, more for less or less for more. Results provide decision makers in businesses aiming at cleaner production with a more profound knowledge base to make informed decisions on whether and how to disclose to consumers that upcycling was used in the production process. (C) 2020 Elsevier Ltd. All rights reserved.