Price strategies for sustainable food products

Abstract

Purpose

Sustainable products often suffer a competitive disadvantage compared with mainstream products because they must cover ecological and social costs that their competitors leave to future generations. The purpose of this paper is to identify price strategies for sustainable products that minimize this efficiency disadvantage.

Design/methodology/approach

The strategies and their determinants from the pricing environment are derived from an inductive sequential case study of certified food products, such as organic and fair trade products. Data are collected through desk research and interviews.

Findings

The results reveal six different strategies that build on three basic mechanisms: cost-based pricing in combination with price fairness, increasing willingness to pay through perceptions of quality and/or price, and price stability in which costs are compensated for by scale and/or learning effects.

Research limitations/implications

The framework can help companies that offer sustainable products strengthen their market positions and it can help policy makers that partly rely on markets to achieve sustainability objectives.

Originality/value

The existing pricing literature on sustainability predominantly takes a consumer approach. This study breaks new ground by extending this work with a strategic marketing approach offering a choice set of strategies for managers.

Citation

Ingenbleek, P.T.M. (2015), "Price strategies for sustainable food products", British Food Journal, Vol. 117 No. 2, pp. 915-928. https://doi.org/10.1108/BFJ-02-2014-0066