Sustainability labels in the Spanish coffee market: A hedonic price approach

Abstract

Aim of study: Focused on the coffee sector, the purpose of this paper was to determine the implicit price paid for the main sustainability certifications (Fairtrade, Organic, Rainforest Alliance and UTZ certifications) using the hedonic price approach. Area of study: Spain. Material and methods: The total sample included 645 coffees. The characteristics were collected between the months of September and October 2021 from coffee packs sold in the main five supermarkets of retail chains in Spain. A log-log price/attribute function was used to estimate the hedonic price function. Main results: The attributes UTZ certification, origin, and coffee intensity received significant positive effects leading to higher premium prices of 28.51%, 25.50% and 26.50%, respectively. In contrast, Fairtrade certifications had a negative impact on the average price of coffee. Research highlights: The proposed model could be considered as a first approximation of a hedonic pricing model estimation for sustainable coffee in Spain. The results provide useful information for the coffee sector in developing effective marketing strategies that support the sustainability of food.

Keywords

• certified coffee
• sustainability stamps
• hedonic pricing methodology;
• Spanish market