Appetite 74 (2014) 107–115

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Research report

Product reformulation in the food system to improve food safety. Evaluation of policy interventions Giuseppe Marotta, Mariarosaria Simeone ⇑, Concetta Nazzaro DEMM, University of Sannio, via delle Puglie 82, 82100 Benevento, Italy

a r t i c l e

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Article history: Received 8 July 2013 Received in revised form 8 November 2013 Accepted 4 December 2013 Available online 16 December 2013 Keywords: Product reformulation Healthy diet Food choice Innovation Marketing strategies

a b s t r a c t The objective of this study is to understand the level of attention that the consumer awards to a balanced diet and to product ingredients, with a twofold purpose: to understand whether food product reformulation can generate a competitive advantage for companies that practice it and to evaluate the most appropriate policy interventions to promote a healthy diet. Reformulation strategy, in the absence of binding rules, could be generated by consumers. Results from qualitative research and from empirical analysis have shown that the question of health is a latent demand influenced by two main factors: a general lack of information, and the marketing strategies adopted by companies which bring about an increase in the information asymmetry between producers and consumers. In the absence of binding rules, it is therefore necessary that the government implement information campaigns (food education) aimed at increasing knowledge regarding the effects of unhealthy ingredients, in order to inform and improve consumer choice. It is only by means of widespread information campaigns that food product reformulation can become a strategic variable and allow companies to gain a competitive advantage. This may lead to virtuous results in terms of reducing the social costs related to an unhealthy diet. Ó 2013 Elsevier Ltd. All rights reserved.

Introduction Many processed foods contain high levels of unhealthy nutrients such as salt, hydrogenated fats, sugar and saturated fat. In developed countries, dietary changes have led consumers to exceed in the consumption of some of these products and in many cases consumers intake is beyond World Health Organisation recommended maximum levels (Traill, Gennaro, Koziol-Kozakowska, Kuhn & Wills, 2012). In Europe there are numerous public policies to promote a healthy diet. Studies conducted to analyse the existing measures in Europe to promote healthier eating counted 121 policy interventions in 2011 (Capacci et al., 2012). Among government actions to encourage the private sector to promote healthy eating, reformulation is one of the potential measures, but it is still marginal in Italy and in many other European countries. Our paper aims to examine the role of product reformulation for the food industry and to investigate whether this strategy can help those companies that decide to adopt it to gain a competitive advantage. Our findings will, on the one hand, increase knowledge of consumer awareness to guide future educational campaigns and, on the other, suggest tools to enable companies engaged in product reformulation, to find the right way to inform consumers about the

safety attributes of their products, compared to other competing products on the market. The research focuses on the factors that influence consumer selection of healthy food with specific ingredients, with the aim to delineate those market segments in which product reformulation can be a successful marketing strategy. The research was designed to provide answers to the following five research questions: 1. Consumer awareness and attention with respect to food safety: are consumers informed and aware of the quality of ingredients in processed products? 2. Can the nutritional information on the products solve the problem of asymmetric information and lead consumers to make informed choices? 3. Are ‘healthy-minded’ consumers more likely to trust transformers (industrial brands) or distributors (private labels)? 4. Can the product reformulation of healthy products be a competitive strategy for businesses, discernible by consumers in the food choice process? 5. Which policy tools are most effective in reducing market distortions and in promoting a more healthy diet? Food chain and healthy diet

⇑ Corresponding author. E-mail address: [email protected] (M. Simeone). 0195-6663/$ - see front matter Ó 2013 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.appet.2013.12.003

Figure 1 below proposes a theoretical scheme of the food chain and health. It stems from the analytical work of Marotta, Nazzaro

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(2012a,b). Figure 1 should be read by differentiating between the two quadrants that are to the right and to the left of the food system components. The chain that is on the left, creates a virtuous circle in each component ending up with the improved healthy diet. The right quadrant illustrates a system that generates social costs for the country, due to information asymmetry and the opportunistic behaviour of the different actors in the supply chain. The left part of Fig. 1, shows a virtuous model for all operators in the food chain. The orientation to social responsibility of the various stakeholders leads to the reformulation of the product in a healthy manner, by means of a clear communication policy of the ingredients used in the transformation process, in order to promote an informed and responsible choice on the part of the consumer. This pattern of supply-chain behaviour leads to social benefits and welfare (Menghini, 2011). In the right part of the diagram, a model of a profit-driven food chain, is represented, in which the opportunistic behaviour of some operators and information asymmetry may determine conditions which induce food choices and, therefore, lead to undesirable effects on the consumers’ health, bringing about social costs. Opportunistic behaviour (model on the right in Fig. 1) can sometimes be induced by the conviction, on the part of operators, that repositioning their products may scare many consumers who perceive such reformulated healthy products as expensive and less tasty. Erroneously, the externalities of production refer mainly to environmental damage, but from the observation of reality several examples of damage to the health of the consumer emerge. The market imperfection analysed in this work focuses on the consumer and stems from the lack of information s/he has at the time of purchase. This sometimes leads him/her to make choices based on the quality perception of a product, not having the possibility to reach the desired level of food safety. The solution for these market imperfections should be sought in the intervention of the government, which often fails to apply valid regulations. Lack of intervention can stem from partial information and/or from the pressures of interest groups and lobbies. In the virtuous quadrant in Fig. 1, the imperfections are corrected by means of a regulatory framework and by traders who opt for a model of business-oriented social responsibility through repositioning strategies which focus on creating both economic

and social value (Marotta and Nazzaro, 2012a; Marotta and Nazzaro, 2012b).

The reformulation of food products for a healthy diet The reformulation of food product labelling, aimed at improving food safety through the innovation process followed by the industry, may be the result of mandatory regulatory actions or voluntary cooperation actions among food-producing industries (Traill et al., 2012). To encourage companies to reformulate, there are sometimes collaborative actions between the government and the food industries. In Italy, there is no binding regulation aimed at product reformulation and thus no obligation to reduce the presence of unhealthy ingredients (e.g. to avoid hydrogenated fats, banned in other countries). There are, however, some-voluntary agreements, for example the one stipulated between the Ministry of Health and some producers of bakery products including leading companies, such as Barilla, for salt reduction and the elimination of hydrogenated fats (trans fats). The agro-food industries are faced with the two following choices: – To continue to produce unhealthy food by increasing the asymmetric information between producers and consumers on the basis of erroneous and misleading marketing communication. – To reformulate their products and thus reduce market failure to act in accordance with corporate social responsibility. This could generate a competitive advantage over other companies in the market (Scarpato & Simeone, 2013; Simeone & Marotta, 2012). In the first case, we are faced with the opportunistic behaviour of an economic agent, generally a corporation that produces junk food and gains commercial benefits from such production, but does not pay all the social costs associated with the consumption of its products. We are therefore facing the classic example of market failure. Due to information asymmetry, the consumer does not have sufficient information on food products and on the presence of unhealthy ingredients, this results in a limited cognitive ability to choose his/her own basket of food products. This situation,

Fig. 1. Food chain and healthy diet.

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known as ‘‘bounded rationality’’ (Johnston, 2012) implies that consumers cannot maximize their utility because they do not possess all the relevant information to make a rational purchasing choice. This lack of information does not allow for a reasoned choice and takes the form of a negative externality: the damage is inflicted without consumers being aware of it, often guided in their purchasing decisions by misleading advertising that amplifies the asymmetry of information, and promotes harmful products, due to the lack of regulatory norms. The second case concerns all those industries that adopt a product reformulation strategy based on the reduction of unhealthy ingredients (salt, sugar, trans fat, etc.). They aim to obtain a competitive advantage from the consumer, based on his/her selection of healthy products. In order to be effective, the reformulation strategy must be accompanied by an active communication strategy to make consumers aware of the healthy characteristics of the reformulated product. Reformulation would not be sufficient without this communicative strategy and therefore would not produce the desired results: competitive product repositioning and the improvement of social welfare. Product reformulation may not be sufficient to obtain these effects if and when consumers are not able to recognize the safety attributes. There are limits to efficiency in the production of safety and the failure to achieve a perfectly competitive market. The market is in equilibrium when the price the consumer is willing to pay for a marginal increase in safety is equal to the price at which the supplier is willing to produce such an increase safety (Henson & Traill, 1993). So there is an acceptable level of risk, considering the costs and benefits. Reducing the risk to zero, if it were possible, would cause an unreasonable increase in costs. The limits to achieving a perfectly competitive market are related to incomplete consumer information regarding the real risk (scientific data) and the perceived risk: psychological, social, institutional and cultural. The factors that determine food expenditure are of two types: neoclassical factors which are derived from population, income and relative prices, and the other two factors which derive from the analysis of marketing and are related to the structure of the population and to food preferences. In order to investigate how consumer choices are made with regard only to the ability to discriminate on the basis of the available information and the ability to process it at the time of purchase, we define the following variables: IC = Information campaign (food education) SCUF = Social Cost of Unhealthy Food CC = Consumer choices IT = Information tools (labelling, advertising campaigns, information provided by the manufacturer) UI = Use of information CI = Costs for the consumer to access the information IL = Information on the labels PI = Producers’ information CMP = Communication marketing practices (incorrect) that widen the information asymmetry gap.

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ignores the economic and social value of information associated with the products to be consumed. Information is a public good and its use creates a true social benefit. Education in the use of information is one of the variables which serves to reduce the social cost of food production (SCUF). Therefore, in order to avoid market failure, reformulation must be combined with clear and transparent information about the ingredients (IT) used in the production process, and information campaigns on the effects on the consumers’ health of consumption of some ingredients. Information campaigns (food education) are essential because, on the one hand, they lead to an increase of awareness of the social value of food information and, on the other, they induce consumers to make use of such information (UI). In many cases, although the information tools are effectively available on the product (IT > 0, information from the label), the consumer does not make use of such information (UI = 0). This happens because labels are difficult to read and time consuming. In these cases, the consumer is guided by the industry’s and retailer’s tools that may, in some cases, provide reassuring messages though not always faithful to the real features of the product. If the consumer is unwilling to use the information tools because CI is high or because the marketing messages are able to convince him/her, the risk of market failures is very high and so too are the potential damages to the consumer’s health. At this point a new variable must be introduced into the model: information campaigns for food education. This variable, that we define IC, helps the consumer to understand the social value of information and to use it in an appropriate manner. Therefore, UI is negatively correlated with CI and positively correlated with IC. The problem of information is thus defined by the relationship between food attributes and raw materials and by the distribution of information among agents. Agents may well have to mitigate the effects of asymmetric information in order to improve the product safety. A factor, which occasionally drives food companies to reformulate food products, is the competition with supermarket chains which in pursuing the goal of a differentiation policy, offer a wider range of own brand products that follow the standards of healthy eating. In the absence of binding regulations, food producers may well decide to reformulate their products on the basis of ‘‘emerging’’ consumer instances that pay greater attention to food safety and due to the pressure from major retailers who want to differentiate their products by proposing new lines of healthy products on their shelves. Less innovative industrial companies might not consider the reformulation strategy appropriate unless there is evidence of binding regulations or of an information campaign for healthy eating promoted by the government. In this scenario, the awareness and the level of consumer information acquires considerable significance both to understand and guide consumer information campaigns, be they public or private (Rotondo, Cesaretti, & Scarpato, 2013), and to provide feedback on the ability of food companies to gain a competitive advantage from a strategy of reformulation.

Literature review: reformulation of food and consumer risk perception of a healthy diet

We can say that: SCUF = f (CC) CC = f (IT, UI) UI = f (CI, IC) IT = f (E, PI, M) With regard to the variable UI it must be said that there are several elements that divert the attention of the consumer, thus limiting the use of information. This is because the consumer often

A review of the literature on product reformulation strategies in the food industry, reveals a low number of contributions. Similarly, there are not many studies that perform specific analysis on consumer acceptance of reformulated products. Studies on consumer choices underline that the focus on price and quality are the main barriers to reformulation, as shown in the contribution by Ratnayake, L’Abbe, and Mozaffarian (2009). Other studies on consumer choices study the impact of a logo on food safety as an incentive to reformulation, thus leading the consumer to choose

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a reformulated product (Young and Swinburn, 2002). Finally, other investigative studies analyse reformulation practices in different countries and examine the promotional role played by governments within each Country (Traill et al., 2012). Reformulation practices can be limited by consumer acceptance, food safety and sometimes even the type of product itself, which by its nature cannot be changed in order become more healthy (e.g., low fat) (Van Raaij, Hendriksen, & Verhagen, 2008). This emerges from several works carried out on consumer choices linked to the problem of consumer acceptance of reformulated products (Ratnayake et al., 2009; Simeone & Marotta, 2010), Webster (2009) illustrates how often the consumer does not appreciate the products for which there are warnings like low-salt or low-sugar, because he/she associates them with inferior products, tied to a particular diet. Consumers who read labels tend to use less saturated fat and fewer calories (Kim, Nayga, et al., 2000). Labels which provide nutritional value and healthy diet information are advantageous only when consumers are motivated to use such information. As emerges from the literature, not all adults read product labels before buying food and this attitude has decreased recently (Variyam and Todd, 2008). Nutritional information helps to improve food selection (Kim, Nayga, et al., 2001). Moreover, results of quantitative studies demonstrate how food choice varies considerably depending on demographic characteristics as emerges from the work of Bates, Prentice, and Finch (1999), Krondl, Lau, Yurkiw, and Coleman (1982), Fagerli and Wandel (1999) and finally, from the contribution of Blake and Needs (2003) with a focus on understanding the cognitive process of choice among rural women with a low average income. In particular, Bates et al. (1999) illustrate the most significant gender differences in food choice: women hate butter, whole milk, some types of drinks, while men drink more alcohol and beers. Similarly Wardle et al. (2004) show that women hate foods with high fat content. Conner, Johnson, and Grogan (2004), found that there are gender differences in the ways men and women relate physically to images and their subsequent food choices, on the whole women want to be thinner. In food purchases, the so-called ‘rule of thumb’ (Pratkanis & Aronson, 1992) often prevails, this leads consumers to make their own choices using limited information. This rule, based on findings from cognitive research, prevails in the following situations: when consumers have an overload of information, when he/she has a limited amount of time, when she/he does not perceive the problem to be important, when there is a lack of knowledge and information and when specific associations between product and risk come easily to the consumer’s mind. Mazzocchi, Lobb, Traill, and Cavicchi (2008) in their work, through the use of cluster analysis, show how consumers react to the perceived risk rather than real risk and Stefani, Cavicchi, Romano, and Lobb (2008) always using a cluster analysis, explain how purchasing intentions are influenced by different levels of risk perceptions and trust in food safety information. Moreover, according to the most reliable literature (Weinstein, 1980), the consumer perceives himself/herself to be relatively invulnerable to particular risks and this phenomenon is known as ‘‘optimistic bias’’ or ‘‘unrealistic optimism’’. Many food-related risks such as cardiovascular disease, weight-gain and obesity are associated with this ‘‘optimistic bias’’. This attitude cannot be a consequence of the limited information available. An interesting example comes from the study by Gatenby (1996) which shows the existence of optimistic bias in the potential risks associated with a high fat diet. Attention to product quality and therefore to reformulation is also of interest for restaurants and for those who sell ready-made retail food. This attention stems from the increasing number of opportunities for social business lunches and dinners (Kant & Graubard, 2004). In many studies, eating out has been associated with poor diet quality. As demonstrated in the study by Todd, Mancino, and Lin

(2010), meals taken outside the home increase calorie intake and the percentage of saturated fat and added sugar consumed. It would therefore seem that the problem of the consumer’s ability to discriminate products on the basis of the quality of ingredients is increasingly emerging in the literature (Todd et al., 2010). Differentiation, in this sense, is also being implemented by large retail chains, as is clear from several contributions. Such retail chains have increased the level of consumer acceptance towards private labels through continuous quality improvements. This is also the result of privileged access to information in large-scale retailers. This aspect also favours retailers as regards product differentiation and the possibility to improve the nutritional characteristics of a product compared to the same item produced by the leading brands (Stauder, Kurthy, Juhasz, Konig, & Nechay, 2012). Results from recent studies show that in some cases, private labels are preferred to national brands, especially in the context of healthy products (Weaver & Moon, 2010). Consumer attitudes towards the purchase of reformulated food products: an exploratory analysis Research methodology We conducted two focus groups and administered a questionnaire to the person of the family in charge of food expenditure. The aim was to understand the level of consumer knowledge about reformulated products, about the unhealthy ingredients used in the industrial products and the trust that consumer place in the safety level of industrial brands and private labels. The focus groups were allowed to investigate certain issues in depth, while the questionnaire was functional to an empirical analysis. The study focused on the city of Benevento, which is an area of great interest for five main reasons. It is a prominent city from the point of view of art, it benefits from important tourist flows, it has a rural tradition, a deep cultural identity and the local university has helped to further enrich the social and human capital. Focus groups The qualitative analysis is based on the organization of two focus groups, segmented on the basis of age. Through the two focus groups it was possible to fully investigate how age can influence attitudes, motivations, behaviour in choosing healthy foods and the ability to discriminate between foods on the market, with different levels of safety and confidence in the industrial brand and/or the private label. The focus groups, through the interaction among the participants allowed us to understand how their views converge and/or diverge and the reasons for this. Few studies based on focus groups make a comparative evaluation among different age groups. Indeed, in most investigative works there is an in-depth analysis of only one demographic group. Edstrom and Devine (2001), Dibsdall, Lambert, and Frewer (2002), Blake and Needs (2003) analyse women, Paisley, Sheeshka, and Daly (2001), Ristovski-Slijepcevic and Chapman (2005) studied couples, Wolfe, Frongillo, and Valois (2003) studied adults, Croll, Neumark-Sztainer, and Story (2001) adolescents, Hesketh, Waters, Green, Salmon, and Williams (2005) children. Following the paper proposed by Chambers, Lobb, Butler, and Traill (2008), also on the theme of healthy eating, and a few others that have followed a comparative approach, studying, for example, ethnic differences (Cullen, Baranowski, Rittenberry, & Olvera, 2000), or differences in ‘age and gender among adolescents’ (Bauer, Yang, & Austin, 2004), we organized two focus groups segmented on the basis of age. In this way we were able to understand and evaluate the reasons why opinions differed between the two groups on the basis of age and to evaluate which factors caused the differences to arise.

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Protocol Two focus groups with 12 participants each were formed. In each focus group the rule pertaining to qualitative studies was followed to create homogeneous groups in order to facilitate an open discussion among the participants. The recruitment was carried out through a university mailing list that was sent to 50 people, including employees, professors, graduate and undergraduate students of the University of Sannio. All selected participants are domiciled in the city of Benevento. The 12 participants in the first group were aged between 18 and 30, as it was in the work of Chambers et al., 2008, including 6 men and 6 women. The second group was composed of 12 participants aged between 31 and 60, (Chambers et al., 2008). Three men and three women in the group were parents of children aged from 6 to 14 years old. Outline of the discussion In the initial phase of the group formation, participants were invited to introduce themselves to the group. The discussion concentrated on dietary habits, food safety in industrial products and ingredients responsible for damage to health. Debate was generated on the quality of well-known brands within the industry and on those of the smaller producers and private labels. The discussion ended with the importance of health food product reformulation. The two focus groups were characterized by three phases: – In the first phase we investigated the purchasing habits, the importance of labels for consumers, and in particular whether consumers actually read the ingredients. The debate focused on food product reformulation regarding fats. Stimuli were provided by showing the participants 5 different brands of biscuits ‘‘frollini’’. Reference was made to two industrial brands (both with vegetable fats, without further specification of the type and on the possible hydrogenation), two private labels (including one with the indication of non hydrogenated fat and the other with extra virgin olive oil), and a low price product (which states no hydrogenated fats) in order to analyse the fats used in different brands of biscuits. This stage of the investigation illustrated the perception that consumers have of such trademarks and the confidence they attach to the different actors in the supply chain. The debate focused on the reformulation of products with regard to the type of fat content in biscuits. – The discussion on the fat content in biscuits was further developed in the following stages. – In the second phase the focus groups were shown 5 packets of biscuits including two industrial brands (premium price, which both use extra virgin olive oil from fat), one private label (where the label states non-hydrogenated fat), one reformulated lower price brand (claims not to use hydrogenated fats) and a product with owl messages such as light, low calorie, healthy (but declaring in the ingredients the presence of vegetable fats without further specification of the fat type or information about hydrogenation). – Finally, in the third phase a number of risks associated with certain ingredients were presented to consumers and the moderator asked the participants to look carefully at the labels of brands with different qualities of fat in the ingredients. At this stage, several participants stated that they would also buy the less well known brands, if reformulated. Analysis of the first phase – Group 31–60 years. The attention to ingredients is very low in this group, which seems to place trust mainly in the brand. Participants, who were also parents, even after looking at the

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labels, despite the high level of education, do not seem to have enough information or knowledge to discriminate among products on the basis of the ingredients stated on the label. They claim to be oriented to purchasing products of Healthy value belonging to the high market segment and with well-known brands but after looking at the products they did not focus much on the information present on the label. In this age group it seems that men in particular buy the most well known industrial brands though some of the women are also more open to buying private labels, even if women state they buy more of the first type of products. The older people in the group, however, appeared to trust the regulations, which they consider to be the only guarantee of a product. They don’t appear to consider the reading of labels important. In general, results have shown that, in this group (31–60), there is great confidence in the historic industrial brands, with a strong family identity and a significant market share in their segment. The same group claims to buy such national brands because they perceive them to be of a higher quality than the lower price products. – Group 18–30. Most of the participants seem to trust both the leading brands and the private labels and pay little attention to the labels. They claim to look at the labels only when they are following a weight loss diet, to verify the caloric intake of food. In fact, when the products were presented to the participants of this group most of them checked only the brand and the calories. Only two participants appeared to be able to read the labels and to underline the weaknesses in the regulations regarding the definition of ingredients. The participants read the labels carefully and also buy lesser-known products if they contain healthy ingredients. In this age group there seems to prevail a limited knowledge of what constitutes a healthy diet. The trust in private labels is high because they are perceived to be controlled by the manufacturer, often known to be a leading brand, and by the distribution chains. Going into the specifics of the ingredients, in this first phase, there emerged from the focus group a total lack of knowledge about the risks of consumption of hydrogenated fats. In fact, none of the participants said they discriminate against products on the basis of the presence or absence of hydrogenated fats. In the youngest group, some of the participants pay attention to cane sugar and products sweetened with fructose. A trend of claiming knowledge about high quality food emerges among the youngest. This would appear to stem more from a need to stand out rather than from the intention to pursue a healthy diet. This aspect emerges from the strong contradictions arising in the debate which the moderator, at the end of the focus group, pointed out to the participants. This consumer segment is able to understand only the following aspects of the labels: the low number of calories and the use of sweeteners and fats. They seem to show no interest in the importance of salt reduction, non-use of hydrogenated fats and on the reduction of saturated fat and sugar. Analysis of the second phase Stimuli: two industrial brands (top of the range), one private label, one low price reformulated product and two packages with owl messages. In order to gain understanding of the real knowledge and attention to the label and to the ingredients, the moderator decided to show five packets of biscuits including two top of the line industrial brands both using extra virgin olive oil as fat, a private label where non-hydrogenated fat is stated on the label, one lower price

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reformulated brand claiming not to use hydrogenated fats, and a product with owl messages (light, low calorie, healthy) but declaring among the ingredients vegetable fats without any further specification of hydrogenation and type. After looking at the labels, at this stage, there is the prevailing tendency to purchase products with owl messages that are poorly connected to the nutritional formulation of the product. The use of these packets of biscuits has enabled us to provide stimulus to the participants in order to place them in a realistic situation when selecting the products. A round table was set up with the products and each participant had the opportunity to comment on the labels and the messages shown on the label (light, healthy products, natural product, etc.). In the group from 30 to 60, the choice fell on industrial brands with owl messages. To the questions posed by the moderator, participants responded with the words used in the owl message, especially ‘‘natural light.’’ A more rigorous reading of the labels emerged once again from the participants with children in early childhood. In the group aged 18–30 the same attitudes emerged as to the use of owl messages, the only difference was that during the discussion some participants claimed to have been alerted to the importance of the labels by the nutritionist. Following this, other participants said they read the calories on the label, again without focusing on specific ingredients. The behaviour of the participants shows that those who claim to read the labels pay attention mainly to the information shown about the product (light, natural, reduced fat, etc.). Slogans used to market the product are sufficient to convince consumers, and they are perceived as a message that summarizes the product information reported in detail on the label. This attitude seems to show that the marketing practices of food producers are able to accentuate the information asymmetry between producers and consumers and to contribute to the phenomenon of an unbalanced diet. Focus group results confirm the ‘‘rules of thumb’’ in purchasing decisions that, as established in cognitive research, prevail in the following situations: when consumers have an overload of information, when they have little time, when the problem is not felt to be important, when there is a lack of knowledge and information and when specific associations between products and risk come easily to the consumer’s mind (Pratkanis & Aronson, 1992).

Analysis of the third stage In the third part of the focus the participants where instructed on how to read the label and given information about the damage caused by some unhealthy ingredients, such as the type of fat used, common in processed foods, and it was shown how owl message can sometimes be confusing for the consumer. Both groups showed a lack of knowledge and attention relating to the ingredients of the processed food and a trust in the declarations and slogans on the product. The group from 30 to 60 years old showed a great disappointment with some brands consumed frequently. They recognized the need to devote more time to food choices and appeared remarkably open also to purchasing minor brands. Three or more participants in the group from 18–30, after listening to the information provided by the moderator, said they would investigate the quality of the products of the chain where they usually go shopping, paying more attention to the ingredients on the private labels. Other participants manifested their discontent and became aware of having fallen into the trap of confidence, even for food purchases.

Questionnaire The questionnaire was administered after the focus groups, this allowed us to refine the variables investigated, integrating what had already been included on the basis of the economic literature considered. The 114 questionnaires were administered in the city of Benevento through a non-probability sampling from reasoned choice. The face-to-face interview was conducted during the months of October–November and December 2012 interviewing a sample of consumers, responsible for the purchases, in the centre of the city. In order to include different consumer groups in the sample, questionnaires were administered at three different times: from 10 am to 1 pm, from 4 pm to 5.30 pm and from 7 pm to 8 pm. The questionnaire initially introduces the evidence which has emerged from the literature and contains references to ingredients which are harmful for health. It aims to test consumer knowledge with respect to a balanced diet and the natural ability to choose products, based on the ingredients. The questionnaire allowed us to understand the relationship between perceived product quality and brand reputation and the role played by marketing on this perception, the trust in the producer, in the distributor or in the whole value chain of origin. The questionnaire is made up of 16 questions and is divided into sections. The first section refers to meal structuration and to the frequency of eating out, also introducing interviewees to the nutritional value of the dishes eaten outside the home. The second section refers to the frequency of weekly consumption of foods, considered unhealthy, junk food, sweet and savoury snacks, sweetened soft drinks, sauces, sweets. This section opens with a picture response technique, in particular a cartoon test, where two people have lunch together and the waiter asks them: what shall I bring you to drink? In the third section we find references to the evaluation of the product attributes upon receipt, reading labels, and in particular the information that consumers check on the label. After several questions designed to elicit the importance of the attributes of food safety, we enter the more specific stage, in particular regarding the ingredients of industrial products. Using a Likert scale with a five-step scoring scale, we analyse the ingredients to which the consumer pays attention in product choice. We analysed the following product characteristics: products without hydrogenated fats, without sugar, with brown sugar, sweetened with fructose, sweetened with other sweeteners, with low salt content, with no preservatives, dyes and additives. Finally, through the ‘‘third person technique’’ we ask, still using the Likert scale, which products the Italian consumers buy among the following: biological products, products devoid of hydrogenated fats, dietary products and products on promotion. Finally, the questionnaire also refers to the possibility/likelihood of buying private labels with the aim to understand the role of trust that own brand product may have and the confidence that the interviewee invests in them. The fourth section includes questions designed to assess the consumer’s ability to discriminate between foods with different levels of food safety and the understanding of the effects of marketing practices in consumer choices. In this section questions were also included to explore whether the consumer distinguishes healthy products at the time of purchase, if he is informed on the risk of hydrogenated fats, if he can discriminate products on the basis of the quality of their ingredients and if the consumer is aware of the damage caused by a high-calorie diet. Finally, in the last section we find personal data such as gender, age, role in the family, number of members, education level of the respondents and area of residence segmented between the city centre, suburbs and rural areas.

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G. Marotta et al. / Appetite 74 (2014) 107–115 Table 1 Socio-demographic characteristics of the sample.

Sex Female Male Average age

Table 2 (continued) Sample

Cluster 1 V. test

Mod/class

Percentage 67.54 Mode

32.45 67.55

Cluster 3 V. test

Mod/class

Percentage 11.40 Mode

6.49 6.45 6.33 6.02 5.95 5.43 5.10 4.76 4.57 4.51 4.40 4.38 4.11 4.00 3.99 3.88 3.46 3.35 3.12 2.95 2.84 2.76 2.69 2.53 2.33

84.62 100 100 100 84.62 76.92 92.31 61.54 61.54 100 61.54 100 100 84.62 100 53.85 76.92 61.54 100 38.46 92.31 61.54 69.23 30.77 38.46

Buys prod with brown sugar Buys biological juice Buys prod with specific ingredients Not very interested in offers Eats lunch out every day Drinks water during meals Eats fat free Postgraduate degree Buys biological products Eats between meals Eats chocolate every day Controls additives Controls the fat in the product Eats fresh home-made cake once a week Controls calories Eats products without hydrogenated fats Buys private labels Has dinner in restaurant twice a week Reads the labels Drinks juice every day Feels confident about the choice of quality products Eats sweet snacks every day Not very interested in diet products Knows the problems caused by trans fat Controls carbohydrates intake

42 Education Primary Middle High school Degree Postgraduate Residence Rural area Semi-urban area Urban area

7.9 27.2 32.5 21.9 10.5 21.9 26.4 51.7

Table 2 Description of the three clusters. Cluster 1 V. test

Mod/class

Percentage 67.54 Mode

5.45 4.61 4.39 4.26 4.23 3.55 3.52 3.52 3.26 3.26 3.03 2.58 2.50 2.34 2.33

76.62 42.86 45.45 38.96 32.47 51.95 31.17 31.17 28.57 28.57 31.17 22.08 37.66 32.47 28.57

No eating between meals Not informed on trans fat High school Could buy without trans fat Buys biological Likely to buy PL Attention to fat Buys products with brown sugar Products sweetened with fructose Products on offer Drinks water during the meal Natural sweeteners Attention to the price Diet products Eats sweets 2–3 times per week

Cluster 2 V. test

Mod/class

Percentage 21.05 Mode

6.94 6.75 6.02 5.65 4.88 4.74 4.23 4.05 3.96 3.54 3.51 3.46 3.43 3.33 3.23 3.22 3.21 3.07 3.03 2.84 2.84 2.77 2.75 2.74 2.63 2.63 2.60 2.53 2.52 2.52 2.45 2.33

75 83.33 75 95.83 91.67 83.33 91.67 91.67 87.50 37.50 29.17 58.33 79.17 41.67 91.67 29.17 45.83 83.33 95.83 41.67 41.67 45.83 75 50 45.83 45.83 66.67 25 29.17 58.33 62.50 29.17

Not interested in trans fat Not interested in fat free Not interested in sugar free Not interested in brown sugar No sweetened with fructose Does not read label Does not check fat Never has lunch out No natural sweetener Eats chocolate every day Primary school Middle school Does not recognize healthy food Not interested in biological Does not know about trans fat Not likely to buy private label Once a week fast food Not interested in calories Never uses sauce Carbonated drinks during meals Unaware of problems from eating high calories Lives in rural area Prefers national brand Eats fresh home-made cake quite often Drinks fruit juice regularly Drinks wine during meals Eats between meals prefers fruit juice with low content of fruit Never eats sweet snack Diet products Never eats salty snacks More than 60 years old

Data analysis and findings The cluster analysis is a statistical technique to discover a structure within data collected on several variables related to statistical units. In our case we apply a factorial approach in the first step (Multiple Correspondence Analysis) in order to reduce the original space into a more suitable representation and subsequently a cluster approach. In order to compute the distance between the couple of points we use Ward’s minimum variance methods. Observing the dendrogram we decide to consider three classes to classify the statistical units. In the following part there is the description of the three clusters which resulted from the analysis (see Table 2). The characteristics of the sample are reported in Table 1. In the first cluster, which represents 67.54% of the sample, a consumer profile with upper secondary education emerges, which attaches no importance to the ingredients. Hydrogenated fats, sugar, natural sweeteners, organic products do not make any difference to the products bought. S/he trusts private labels and seems interested only in the reduction of fat and calories. This profile is highly likely to buy products on offer. We have defined this type of consumer ‘‘non-critical’’. The second cluster, consisting of 21.05% of the sample, is characterized by a lower consumer education (primary school), older than 60, much less concerned about the ingredients even compared to the first cluster. S/he is not aware of the risks associated with particular ingredients, s/he bases food choices on the leading brands. This consumer does not eat sweet snacks and states s/he is not interested in eating out at restaurants and is not interested in acquiring knowledge about the nutritional characteristics of the food s/he consumes outside the home. S/he is not interested in acquiring more information about food products, s/he seems to trust the leading brands, but not private labels. From the cartoon test this consumer would appear to drink wine and eat confectionary food once a week. We have defined this cluster: ‘‘traditionalist poorly informed consumer.’’

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The third cluster, the smallest, as it represents 11, 5% of the sample, is characterized by a consumer with a very high level of education (post-graduate) who, in all likelihood, purchases products with cane sugar and always buys products with specific ingredients. S/he is not likely to buy products only because they are on offer. Buying organic, reading the label very carefully, s/he is aware of the risks associated with specific ingredients and s/he has a very close relationship with the supermarket chains. This consumer believes s/he can easily identify the products for a healthy diet and seems, in all likelihood, willing to buy private labels. S/he chooses healthy products and pays scant attention to dietary products. We have defined this cluster: ‘‘critical and responsible consumers.’’ The first two clusters point to the phenomenon of the ‘‘trap of trust’’, which has already emerged from the focus groups. These consumers are victims of the brand image and of the lack of information provided, this makes them sensitive only to the marketing strategies employed by the brand. These consumers are guided in their food choices by confidence in the industrial and/or commercial brands. They usually choose brand leader products without reading the label and consequently the ingredients contained in the product. Investment in the marketing of the brand image is, with respect to this type of consumer, a winning competitive strategy for the firm which by diverting attention from the information variables on ingredients, determines the market failure and therefore the resulting social cost in terms of damage to the health of consumers. This phenomenon is called the ‘‘Trap of confidence’’ in the sense that the brand name confidence undermines the demand for information on products and leads to potentially unhealthy purchasing decisions. In the model presented in Section 3, the total trust in the brand, and therefore in its marketing practices (M) can minimize the time to decide (CI) and eliminate the role of IT in purchasing decisions. Considering that these two groups make up 88.6% of the sample, in this scenario characterized by a low level of information, can reformulation be a source of competitive advantage for the companies that adopt it?

Discussion and conclusion The objective of this study is to understand the level of knowledge and of attention that the consumer awards to a balanced diet and to product ingredients, with a twofold purpose: to understand the information needs of consumers and to investigate whether food product reformulation can generate a competitive advantage for the companies that practice it. As regards the first objective, from an analysis of the status quo, it is clear that the Italian government has not acted to change the rules in the food market. However, the government must provide guidance for consumer food choice through better information mainly because the transaction costs that arise from asymmetric information can result in increased social costs related to health (Mancini, Marotta, Nazzaro, & Simonetti, 2012). Indeed, private agents who forfeit the adoption of food safety strategies transfer to the consumers the charges associated with unhealthy products: from the private point of view, that is, there may be a trade-off between transaction costs and social costs. For companies to become ‘‘socially responsible’’ and to find it convenient to reformulate their products, a widespread information policy on behalf of the government is essential. The consumer, even when s/he is aware of the close link between diet and health, does not seem to be in a position to choose appropriate foods due to a lack of information about certain risks. This may sometimes be increased by the confusion that stems from the marketing strategies employed, as was demonstrated by the results of the focus groups conducted.

Our study produced a very interesting result. Critical consumers concerned about food ingredients tend to place great trust in private labels. On the basis of what emerges from the literature, these labels seem to have a higher likelihood of innovating in this direction (Weaver & Moon, 2010). The uninformed consumer, however, often trusts the national brands which may sometimes, behind a familiar image and identity, hide ingredients harmful to health (e.g. hydrogenated fats) or excessive quantities of certain ingredients (sugar, salt, saturated fat), responsible for an unbalanced diet and an increase in daily caloric intake. The consumer, in many cases falls victim to the brand image (the trap of trust). 88.6% of our sample consumers, though aware of the close link between diet and health, are not in a position to choose healthy products because of the lack of knowledge regarding certain risks associated with ingredients. The study shows that the lack of information and especially the marketing strategies adopted by companies, can increase the information asymmetry between producers and consumers and can also generate social costs related to the problems caused by an unhealthy diet. These factors can make investment in product reformulation unprofitable for companies, because even for those consumers most concerned about a healthy diet, the major factors that come into play when making food choices are the trust in the brand and the owl messages on the products. It would therefore seem that in the absence of a voluntary reformulation of industrial products, in Italy there could well be the need to act by means of compulsory regulation. Results from studies have indeed shown that although many companies commit to a reformulation strategy as part of the manufacturers’ and distributors’ corporate social responsibility to improve their image in the market, in many European countries product reformulation would still appear to interest a very small number of companies (Traill et al., 2012). The question of health is a latent demand. In the absence of binding rules, it is therefore necessary that the government implement information campaigns (food education (IC)) aimed at increasing knowledge regarding the effects of unhealthy ingredients, in order to inform and improve consumer choice. It is only by means of widespread information campaigns (Stefani et al., 2008) that food product reformulation can become a strategic variable and allow companies to gain a competitive advantage. This may lead to virtuous results in terms of reducing social costs related to an unhealthy diet. The results of this study confirm the need to pursue this research path in order to measure consumers’ willingness to pay for reformulated products, before and after acquiring information about the risks that stem from the use of potentially harmful ingredients. The different perception that still exists in consumers’ evaluation of private labels and industrial processed food must also be taken into account.

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