Does Organic Labeling Have a Placebo Effect?

Organic syrup label | Photo: fishermansdaughter, with some heavy editing/Flickr/Creative Commons License

I've rallied on and on and on in this space about the need for accurate labels on foods -- and, surely, will continue doing so -- because it only makes sense. For consumers to be able to accurately choose what kinds of foods to purchase, they need to be accurately informed as to what exactly they're purchasing. Anything less, and it's simply throwing darts blindfolded at a giant wall. (And in this case, if you aim poorly, the darts could end up doing a 180-degree pivot at the wall and aiming their sharp points back at your body.) But throughout my rantings, I've neglected to mention the other half of the labeling relationship: The consumer.

While the producer's job is to be forthcoming about what they're producing, it's the consumer's job to actually read those labels and understand what they mean. This is what was going through my mind while reading about a compelling new study The Atlantic put together to determine how the inherent feeling about a product is informed by its label, specifically the near-ubiquitous "organic" label. I'll allow them to explain their own methodology:

That bolding is from me, seeing as it's the most important part of the whole thing.

As you'd imagine, most of the respondents enjoyed the food labeled "organic" a whole lot better than the "non-organic" version. At least, they felt it was "more nutritious" and "lower in fat and calories." (Kind of strangly, the respondents preferred the taste of the "non-organic" cookies, at least until you take into consideration that when people want their junk food, they want their junk food.) But the most important aspect of the study, the part that, no doubt, plenty of food manufacturers have already discovered using their own methodologies and test groups, is the final question asked of the respondents.

After tasting the "organic" and "non-organic" foods and talking about their various feelings, they were asked how much more they'd pay for the organic variety:

If only we were so lucky.

As this piece in the New York Times from last June points out, in many cases companies actually charge quite a bit more than that. In the piece, the difference between Kraft Organic Mac and Cheese and the same brand's non-organic version is explored. On Amazon.com, the latter non-organic kind goes for $19.64 for a dozen 7.25-ounce boxes while the organic variety goes for $25.32 for a dozen 6-ounce boxes. Crunching the numbers, that's 23 cents an ounce for non-organic and 35 cents an ounce for organic. Crunching even further, that's about a 52% increase if you want to purchase the organic version. It makes sense, then, how the organic food industry could rake in upwards of $30 billion a year.

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Which isn't to say organic foods aren't worth more, or that the value of organic should somehow be diminished. It's just that consumers need to be aware that food producers are themselves aware consumers want that organic goodness. And, more importantly, that they're willing to pay a premium for such items, thusly leaving themselves open to be exploited for simply the addition of seven simple letters on a box. Consumers have to be aware this is happening. As the study concludes, there's hope if they do:

In other words, the way to keep yourself from being taken advantage of by companies simply getting on the latest buzzword bandwagon is to understand what, specifically, organic means on a product-by-product basis. Maybe you don't need to buy organic everything. Or maybe you need to dig deeper on certain products to see just what, exactly, the word "organic" means. Doing anything else is simply not keeping up your end of the labeling bargain.

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