Going local – a way to increase value-added in organic food products?

The LOCO research project investigates the consumers’ interest in local organic foods, and whether they are willing to pay an additional price premium for organic food products, if they are also produced locally.

2017.09.27 | Professor Jørgen Dejgård Jensen, KU-IFRO

Danish supermarkets are increasing their focus on local food products, with special sections or shelves dedicated to local products. This trend indicates and increasing interest in local foods from the Danish consumers. Organic products are often present on these shelves, but it is not perfectly clear, whether the consumers perceive the localness of the products as adding extra value to the products. The LOCO research project has been established to investigate, to which extent local origin is important to the consumers’ perception of organic food products, and whether this makes the consumers more prone to buy and pay extra for the local products. 

While the distinction between organic and non-organic foods is normally well-defined, due to clear rules for organic production methods in Denmark and in many other countries, there are not equally clear criteria that can be used to define, when a food product can be marketed as ’local’. In some contexts, products have to be produced within short distance from the place of sale in order to be considered as ‘local’. In other contexts, a named locality (e.g. the island of Bornholm, the West Coast) is emphasized in a country-wide marketing of a product. The perception of local food products is often also connected to the degree of ‘closeness’ to the production, e.g. information about the producer, the length of the value chain, etc. If marketing as ‘local’ should add value to a product, it is hence important to be aware, what the consumers perceive as the added value. 

Research activities in LOCO

Consumers do not necessarily distinguish strongly between ‘local’ and ‘Danish’ food products.  That is one of the findings from a series of focus groups interviews, which aim at investing the consumers’ perceptions and buying motives in relation to local foods. As a follow-up to these interviews, a questionnaire survey has been conducted among a representative sample of Danish consumers. In this survey, the consumers’ propensity to choose local product varieties and their willingness to pay extra for these varieties are investigated. A particular focus of the survey is to what extent it is important that the products are organic and whether there are differences across product categories. The survey data are currently being analysed, and the first results are expected to come in the late autumn 2017. 

Among firms, there appears to be a connection between their geographic sourcing of ingredients and the product types they are marketing. This is one of the outcomes from the projects’ third part – mapping of Danish production and distribution firms in the domain of local food products. Firms based on ingredients from the local area tend to be well represented within dairy and beverages, but relatively weakly within meat, fruits and vegetables. The opposite seems to be the case for firms based on own produced raw materials. The idea of the project is to confront such relationships with findings from the consumer studies, and it is expected that this will identify new and unexploited market opportunities for local organic foods. 

The LOCO project is a research activity in the Organic RDD 2- programme coordinated by ICROFS
(International Center for Research in Organic Farming and Food Systems). The project has obtained funding from the Green Development and Demonstration Programme (GUDP) in the Danish Ministry of Environment and Food.

Visit the project website of LOCO 

Agriculture and food