Consumer response to functional foods produced by conventional, organic, or genetic manipulation

The agro-food industry is developing a “second generation” of genetically modified (GM) foods that can offer functional health benefits to consumers. Many consumers, however, are turning to organic foods in order to avoid GM foods. This report attempts to differentiate consumer valuation of functional health properties in conventional, organic, and GM foods. A representative sample of 1,008 Canadian household food shoppers responded to twelve stated-choice experiments during a telephone survey. Because opinions about organic and GM foods varied greatly, random parameters logit models were used to analyze their choices. Results indicate that many Canadian consumers will avoid GM foods, regardless of the presence of functional health properties. For others, the introduction of GM functional plant foods should increase acceptance of GM production methods, but many consumers will likely avoid functional foods derived from GM animals. The organic food industry could also profit from the introduction of organic functional foods. [EconLit citations: I120; D120.] © 2004 Wiley Periodicals, Inc. Agribusiness 20: 155-166, 2004.