The mechanism by which organic labelling affects consumers’ willingness to pay (WTP) for wine is not yet fully understood. Organic labelling not only transports information about environmental benefits, but may also influence consumers’ perceptions of quality and taste. The purpose of this paper is to separate the information effect from the perception effect of an organic label on WTP.Design/methodology/approachTaste and quality perceptions of 110 German consumers and their WTP for white and red wines were collected in a second-price auction in conjunction with a blind tasting. Each measure was recorded under two experimental conditions: with and without organic labelling. Serial mediation analysis is used to identify the information and perception effect of an organic label on WTP. A moderating effect of commitment to organic consumption is considered.FindingsWines marketed as organic are perceived as tastier and of higher quality and value. The organic labelling effect is stronger for committed organic consumers. Mediation analysis confirms perceived better taste as a key driver for WTP, especially for less committed organic consumers. The findings highlight perceptions of wine quality as the main mediator through which organic labelling affects WTP for red wine and for committed organic consumers.Originality/valueThis paper adds to the literature by decomposing the signalling mechanism of organic labelling and by emphasising the role of individual characteristics in determining its magnitude and pathways. Implications from a marketing and wine industry’s perspective are discussed.
International Journal of Wine Business Research – Emerald Publishing
Published: Jun 12, 2019
Keywords: Labelling; Wines; Consumers; Experimental auction; Moderation and mediation analysis; Organic halo; Within-subject design