Food labelling and Chinese consumer preference for naturalness - A new way to differentiate grass-fed dairy products

Due to the lack of recognized differentiation for grass-fed dairy products, producers of quality products have failed to capture consumer premium. This study investigates Chinese consumers' preference for the naturalness attributes of grass-fed dairy products as potential criteria for product differentiation of grass-fed milk. We examine how grazing conditions (e.g., pasture grazing), animal feed (e.g., fed grass), functional improvement (e.g., increase the content of CLA, Omega-3 and Vitamin B), and imagery property (healthy, natural, tasty, and sustainable) affects consumers' preference and willingness to pay. Interestingly, consumers reported higher premiums for grazing conditions, animal feed, and functional improvements compared with imagery property attributes. Contrary to the conventional belief that functional improvement attracts the highest consumer premium, we found that for the majority of respondents (who have high preference for naturalness), grazing conditions were the most important factor. This study provides evidence on consumer preferences for the sub-attributes of grass-fed products, and therefore develops a potential framework to differentiate grass-fed products using naturalness criteria.