Beer and Organic Labels: Do Belgian Consumers Care?

We investigate whether beer drinkers are willing to pay a price premium for organic beer compared to conventional beer. Moreover, we identify subgroups of consumers with different preference patterns by investigating whether specific personal characteristics of the purchasers have an influence on this willingness-to-pay. Specifically, results are reported from a survey including a stated choice experiment of consumer decisions concerning beer purchases in Flanders (Belgium), focusing on organic labels. A non-probabilistic sampling method was used over the Internet and 334 responses were useable for the empirical analysis. Each respondent was asked to choose their preferred beer from a series of nine choice cards describing three different beer varieties. In this respect, we created a two-block design, each consisting of nine choice cards. Each respondent was randomly presented with one of the two blocks, so that an equal distribution of the blocks could be obtained. Overall, we find that our sample is statistically indifferent between a beer with an organic label and a similar beer without an organic label. This is in line with previous research that stated that consumers are unwilling to pay high price premiums for organic vice products, such as beer. We find no statistically different preferences for male or female respondents, or for members or non-members of nature protection organizations. However, we find a significant difference (p-value = 0.029) between primary beer shoppers who have a zero willingness-to-pay (WTP) for organic beer compared to similar non-organic beer and the reference group that has a negative WTP of 14 Euro per 1.5 L for organic beer. In addition, the WTP for beer drinkers older than 40 (negative WTP of 22 Euro per 1.5 L) and the WTP for frequent beer drinkers (zero WTP) are statistically different from the reference group (p-value = 0.019 and 0.000 respectively).