The search for healthier food options combined with the increase in nutrition-related diseases has given rise to nutritional trends such as eating gluten-free, taking supplements and adopting restrictive diets. This, in turn, produces trendy products that cater to certain food trends—often endorsed by celebrities and social-media influencers.
Now, two resource economists at the University of Massachusetts Amherst have published new research on European Review of Agricultural Economics showing that the popularity of fad foods boosts manufacturers’ profits, even though the products often exploit false nutritional assumptions.
Christoph Bauner, assistant professor of resource economics, and Nathalie Lavoie, associate professor of resource economics, developed a theoretical model that examines the product-development and pricing decisions of food manufacturers when a health fad shows the potential to bring new products to the market and how consumers are likely to respond.
“In our model, we can turn the trend on and off,” Bauner said. “We can compare when there is a trend, for example when people care about gluten-free products and when they don’t care more, and we can see how the market competes.”
Bauner and Lavoie found that a trendy product creates so much perceived difference compared to a standard product that competition between the two products is greatly reduced—allowing the manufacturers of both products to raise prices and profits at the expense of consumers. This can happen even if the trendy product is based on false health assumptions and has low nutrition and taste.
“There’s no incentive for the manufacturer of a conventional product to say, ‘Hey, that trendy product isn’t very good for you; it doesn’t do anything for you’—because they benefit from addressing that product as a trend,” Lavoie explained.
The research reinforces the advice that consumers should carefully consider which product fits their needs and avoid “trend jumping,” Bauner said.
For lawmakers it’s more complicated. The study found that in most cases, reliable information such as government-mandated package labeling to eliminate false assumptions about health benefits, is beneficial to consumers and can force the manufacturer of a product to cut prices and increase quality.
However, in the case of some fashion products where the perception of health benefits is low and fashion skepticism is high, it can be a loss in the consumer situation: a lower quality fashion product and a higher price conventional product.
The cost of eating gluten-free
The findings build on earlier research published by Bauner and Lavoie in 2022 that revealed that gluten-free products cost more than gluten-containing products, while the nutritional value is often lower. The analysis of more than 1,500 gluten-free breads, cookies and pastries introduced in the US between 2013 and 2022 represents the most comprehensive known comparison of gluten-free and gluten-containing products to date.
The study showed gluten-free products to be up to 85% more expensive than their gluten-containing counterparts. It also reveals significant differences in nutritional value, although it varies by product category.
All gluten-free products contain more fat than those containing gluten—as much as 113% more than in the bread category. However, gluten-free breads generally contain less sodium; gluten-free cookies have more fiber; and gluten-free pastries have less sugar and more fiber.
“Gluten-free products tend to be less healthy than regular ones,” says Bauner. “However, nutrition is not one dimension. For every product category we looked at, we found at least one dimension where the gluten-free product was better nutritionally, and several dimensions where it was worse.”
While gluten-free products are prescribed for those with celiac disease, wheat allergy and non-celiac gluten sensitivity, for the rest of the population there is no scientifically proven benefit.
“It’s important for consumers when considering a gluten-free versus a conventional product to look at all the attributes and compare,” Lavoie said. “The total fat is higher in gluten-free bakery products, and so is the price. However, for other nutritional characteristics, that the product is better varied-consumers should pay close attention to what they are concerned about.”
More information:
Christoph Bauner et al, Competing on trendy products: health misconceptions and market outcomes, European Review of Agricultural Economics (2023). DOI: 10.1093/eras/jbad012
Provided by the University of Massachusetts Amherst
Citation: Fad food products: Good for profit, not necessarily for health (2023, July 24) retrieved 24 July 2023 from https://phys.org/news/2023-07-fad-food-products-good-profits.html
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