Evaluating of front-of-pack voluntary well-being messaging for milk powders targeting Chinese older adults: a hedonic price model

This study examines the price structure of milk powders targeting Chinese older adults, with special emphasis on the assessment of front-of-pack (FOP) voluntary well-being messaging (VWM), using a hedonic price model. Data of 456 sets of product prices and attributes were collected from official stores at online shops, TMALL.com and JD.com, in China. Prices were recorded 10 d before, during and 10 d after a major online promotion event (11th November 2021). A hedonic price model was employed to decompose explicit market prices into individual product attributes implicit prices, including essential attributes, milk source, brand origin, package material, nutritional composition, and non-essential attributes conveyed by FOP VWM, regarding nutrition, ingredient, health, sensory and certificate attributes. Results showed that above and beyond essential product attributes, non-essential attributes conveyed by FOP VWM were significantly associated with price. Specifically, significant price premiums were associated with dietary fiber claims (+12.7%), ‘no added sugar’ (+19.0%) and potential health benefits (+19.3%), as nutrition, ingredient and health-related FOP VWM respectively. However, nutrition claims regarding calcium and fat were negatively associated with price (−21.2% and −8.0%, respectively, when they were presented). Additionally, nutrition claims for protein and vitamin D, introducing farm environment, referring to imported ingredients, de-claring specific ingredients added, describing sensory characterizes and providing certificates on FOP were not significantly associated with price in this market. These findings provide manufacturers with information to better differentiate their products by producing and advertising attributes most valued by consumers.


INTRODUCTION
Globally, the population aged over 65 is projected to rise from 10% in 2022 to 16% in 2050 (United Nations, 2022), and following the One-Child policy implemented in 1980 to slow population growth, China has the largest and fastest-growing aged population (WHO, 2019).The Chinese proportion aged 65+ is predicted to reach over 30% by 2050 (Luo et al., 2021).Unsurprisingly, foods designed to deliver optimum nutrition to older adults are rising in China (Qiang et al., 2020).Milks, primarily formulated milk powders, dominate foods designed for Chinese older adults (COA), alongside pastries and porridges (Kang et al., 2019;Qiang et al., 2020).In 2022, there were more than 200 milk products available online claiming suitability for COA and 98.5% of them were formulated milk powders (Chen et al., 2022).However, which product attributes were valued by the purchasers and which were not in this specific market remain unknown.
Proposed by Rosen (1974), the 'hedonic price model' offers an opportunity to evaluate the relative value of product attributes by decomposing a product's explicit price (i.e., market prices) into implicit prices of product attributes.These implicit prices are then representative of the value of the attribute to the consumer.In hedonic price models, it is assumed that consumers purchase a product by equating the utility of each product attribute to its explicit price.For example, attributes, such as the brand origin or a lower fat content will be more or less appealing, affecting willingness to pay a price premium.The price variable is regressed on product attributes as independent variables, where the associated coefficients indicate the extent to which each attribute contributes to the final price.The partial derivative of the hedonic price, with respect to a particular attribute, is its relative value or implicit price (Ahmad et al., 2019).Understanding implicit prices of individual attributes for a product category is critical due to their impact for production and marketing (Oczkowski, 1994).A positive or negative implicit price indicates the attribute is positively Evaluating of front-of-pack voluntary well-being messaging for milk powders targeting Chinese older adults: a hedonic price model or negatively valued by consumers respectively.If the estimated implicit price is not significantly different from zero, this attribute is interpreted as not valued by consumers (Donnet et al., 2008).Implicit prices reveal consumer willingness to pay for attributes based on consumer purchasing behavior at market prices (Lee and Hatcher, 2001).Hedonic price models have been used extensively for analyzing price structure, initially in the field of real estate, and have been adapted for the food and wine market (Combris et al., 1997;Donnet et al., 2007).In the dairy sector, studies have focused on analyzing implicit prices of product attributes in the markets of fluid milk (Loke et al., 2015;Bimbo et al., 2016;Moon and Kim, 2021) and yogurt (Carlucci et al., 2013;Ballco and De-Magistris, 2018;Chen et al., 2021).
To evaluate product attributes, information associated to them needs to be perceived by consumers and on-the-pack (OTP) well-being messaging is a commonly used vehicle for communicating attributes of prepacked foods like milk (Moradi and Hort, 2021), especially where health and well-being is concerned.Well-being messaging has been defined as 'ways to communicate broad well-being benefits to the consumer through information about the product's contents or statements that link the product with favorable components, functions, or well-being outcomes' (Moradi and Hort, 2021).In a crowded market, OTP well-being messaging can differentiate a product from its competitors by providing information regarding, for example, packaging, nutrition, origin, ingredients, production, quality certification and sensory experience (Brentari et al., 2015;Chen et al., 2022).There are 2 categories of OTP well-being messaging, mandatory and voluntary.In China, mandatory well-being messaging (MWM) on prepacked foods (including name, nutrition information panel, ingredients list, package specification, manufacturer information, production date, shelf life, storage guide and production licenses) provides information about product essential attributes and describes the nature of the product.MWM is highly regulated according to Food safety national standard: Labeling of pre-packed foods (GB 7718-2011) and Food safety national standard: Nutrition labeling of pre-packed foods (GB 28050-2011).Voluntary well-being messaging (VWM), referring to the remaining information on the pack (including statements and descriptions about nutrition, ingredients, health, sensory and certificates), provides additional and optional information associated with product non-essential attributes in accordance with GB 28050-2011 and the Law of Advertisement in general.Both OTP MWM and VWM have been consistently proved to influence consumer buying intention and purchasing decisions (Huang and Lu, 2016;Hoque et al., 2018).Front-of-pack (FOP), on the other hand, immediately attracts consumer attention and key VWM is promoted on it, regarding nutrition (Batista et al., 2023), ingredients (Salazar et al., 2019), health (Hieke et al., 2016), sensory experience (McCrickerd et al., 2020) and certification (Ivanova et al., 2020).
In terms of their impact on price, previous studies of hedonic price models on dairy products have often focused on the value of essential attributes, such as packaging materials and sizes, brands and calcium contents (Loke et al., 2015;Bimbo et al., 2016), conveyed by MWM.However, since VWM is optional, it is a key strategy for manufacturers to provide/avoid certain attributes or the information of certain attributes that their target consumers value positively/negatively.For example, in Spain, health claims on yogurts were found to deliver a higher price premium than nutrition claims (Ballco and de-Magistris, 2018).Conversely, research suggested that in Chile, Chilean ingredient origin should not be emphasized on beef products, because Chile as a country of origin was a negatively valued attribute (Fernández et al., 2019).Despite the growing market of milks targeting older adults in China (Chen et al., 2022), little systematic research has been carried out on consumer evaluation of VWM and its impact on the final price.The aim of this study was to assess the premiums or discounts associated with product attributes of milk powders targeting COA conveyed by both OTP MWM (i.e., essential attributes) and front-of-pack VWM (i.e., non-essential attributes).Such knowledge will enable manufacturers to differentiate their products more effectively by producing and advertising attributes most valued by consumers.

MATERIALS AND METHODS
Based on the assumption that consumers make purchasing decisions by equating the utility of product attributes to its explicit price, a hedonic price model was employed to determine the value of essential and nonessential product attributes of milk powders targeting COA, using product prices and attributes extracted from online Chinese shops.

Products and Prices
Milk powders targeting COA were identified from online official stores on TMALL.com and JD.com (2 major online shops in China) by searching the key words: 'older adult' and 'milk powder' in Chinese among product titles.Products from official stores were exclusively selected to obtain the latest packages and market transaction prices (Oczkowski, 2016).Due to high turnover, official stores minimize the impact of market demand and supply variations (Espinosa and   , 1991) to approach the equilibrium market assumption for price (Rosen 1974).Furthermore, official stores guarantee milks are recently produced, thus omitting the impact of price reductions due to short remaining shelf-life.To capture price variations, prices from 1st, 11th and 21st of November 2021 (10 d before, on (11th), and 10 d after the 'Double Eleven' promotion event) were manually recorded.Double Eleven became a major online promotion event in China after Alibaba Group, the parent company of TMALL.com,registered the trademark of "11.11Shopping Carnival" in 2012 (Meng and Huang, 2017).Overall, 76 products were eligible from the 2 online shops and at the 3 time points.Therefore, 456 prices (76*2*3) were recorded for use in the hedonic price model.All eligible products in this study were formulated milk powders, which were made from at least 70% of dairy ingredients following China's Food safety national standard: Milk powder (GB 19644-2010).

Product Attributes
In an online shopping context, consumers obtain information about products via images, mostly FOP, and product descriptions provided on the website.Product essential attributes (including milk source, brand origin, packaging material, and nutritional composition) were extracted from the MWM that appeared on the FOP image, and product descriptions when the MWM was provided on other sides of the pack, such as the nutrition information table.Non-essential attributes regarding statements and descriptions on nutrition, ingredient, health, sensory, and certification, were extracted from FOP VWM.If an imported product was in its original package, product attributes were extracted from wellbeing messaging provided on its imported sticker (in Chinese) as described by Chen et al. (2022).Detailed working definitions and examples of product essential and non-essential attributes are listed in Table 1.

Statistical Analysis
Based on the theoretical approach developed by Lancaster (1966) and mathematical formation of Rosen (1974), hedonic price models decompose the explicit price into the implicit prices of product attributes via regression.Under the assumption that the market explicit prices reflect consumer evaluation of all product attributes known from the information available (in this case the online product descriptions of FOP MWM and VWM), price is a function of the product attributes, which can be expressed using semilogarithmic regression as follow: where D i represent dummy variables, X j represent continuous variables, α, β i and γ j are the coefficients to be estimated and ε is the random error component.
A dummy variable has a value of 1 or 0 to indicate yes or no (presence or absence) of a product attribute.In this study, most attributes were dummy variables, except for price and nutritional composition which were continuous variables.Variable typology and descriptive statistics of the variables are reported in Table 2 and standard error was calculated for continuous variables only.For dummy variables, the 'reference' attribute was the one when all other attributes were 0 in its category.For example, Pre was the reference when During and Post equalled 0 in promotion event category (Table 2).When During or Post equalled 1, the implicit price of During or Post was calculated compared with Pre as the 'reference'.
The relative effect on price in view of the change in one unit of the independent variable was calculated by its derivative and the relative effects of dummy variables i were adjusted according to Kennedy (1981): where F is relative effect of a product attribute on price and V(β i ) is the variance of the coefficient β i .
Relative effect on price is a positive or negative percentage added to, or deducted from, the price for every unit change of the independent variable.For example, when During changed from 0 to 1 in promotion event category, indicating prices were recorded during the promotion event, its relative effect on price was calculated, representing the price variation as a percentage During the promotion event comparing to the Pre promotion event, the 'reference'.

RESULTS
Table 3 summaries the results of the hedonic price regression.There was a total of 456 observations and the independent variables explained 76.7% of the variation (adjusted coefficient of determination R 2 = 0.767, P < 0.01) with a mean variance inflation less than 1.90, reflecting the low impact of collinearity.Prices were negatively associated with the promotion event, leading to a 9.6% price drop during promotion compared with pre-promotion.Additionally, post-promotion tended to have a negative impact on the price as well (P = 0.06), compared with pre-promotion prices, indicated that Chen et al.: Value of voluntary well-being messaging prices were only partly restored in the period after the promotion event.Note that different online shops were not significantly associated with price, indicating no retailer effects.

Essential Attribute Impact on Price
Alternative milk sources (yak, sheep and camel) were positively associated with price, with a +330.8%price increase, compared with cow milk (the reference).Brand origin was also significantly associated with a price premium with international brands costing +10.4% more in general.Compared with tin packaging, bags and boxes introduced a −19.7% and +53.1% variation in price, respectively.Regarding nutritional composition, a 1 g/100 g increment in protein concentration resulted in a +4.6% increase in price, while a greater concentration of calcium was associated with a significant price discount (−2.4% per 100 mg/100 g calcium).Besides, there was a significant positive association between milk fat level and the price (+0.8% per 1 g/100 g fat).

Non-essential Attribute Impact on Price
Non-essential attributes conveyed by FOP VWM were associated with price in multiple cases.As nutrition-related VWM, claims regarding fat (low in fat or reduced fat) and calcium (contain calcium or high in calcium) equated to price discounts (−8.0% and −21.2%, respectively), while claims on dietary fiber (contain dietary fire or rich in dietary fiber) resulted in a +12.7% price increase.Within ingredient-related VWM, introducing the farm environment, referring to imported ingredients and declaring specific ingredients added, such as probiotics, did not impact the price significantly.However, the claim of 'no added sugar' led to a significant price premium of +19.0%.Health claims as health-related VWM carried a +19.3% price premium as well.However, sensory characteristics from sensory-related VWM and production certificates as certificate-related VWM were not valued by the consumer according to the model.

Discussion
Under the assumption that consumers purchase a product for its attributes that maximize its utility (Lancaster, 1966), this study applied the hedonic price model using explicit prices from online shops to estimate the implicit prices of essential and non-essential attributes revealed on pack.To the best of the authors' knowledge, this is the first attempt to comprehensively analyze the market value of FOP VWM on milk powders targeting COA in different online shops accounting for sales promotions.The substantial adjusted determination coefficient (R 2 = 0.767) indicated a good fit of the model.Overall, the results showed that above and beyond other essential attributes, non-essential attributes conveyed by FOP VWM were often valued by the consumers.

Nutrition-related Voluntary Well-being Messaging
Consistent with previous studies on milk products (Wang et al., 2008;Gulseven and Wohlgenant, 2017;Yang and Dharmasena, 2020), protein content was found to have a positive association with price.On the other hand, the nutrition claim for protein, was not significantly associated with a higher price premium.This lack of a positive association of nutrition claims with price was also found for calcium and vitamin D in this study.These findings may be explained by the facts that, first, milk products are rich in such nutrients originally (Pereira, 2014;Wiley, 2015) and second, these nutrition claims fail to differentiate the market due to a loophole in Chinese food labeling regulation (Chen et al., 2022).The Chinese 'one-size-fits-all' rule has set the criteria too low for protein, calcium and vitamin D claims to differentiate competitors under the milk  powder category, which is inherently abundant in those nutrients (Chen et al., 2022).Under similar regulations regarding OTP nutrition claims for food in Europe and Korea, Trestini and Stiletto (2020) reported protein enrichment stated on the label did not lead to a significant price premium for fluid milk in Italian market.Ballco and De-Magistris (2018) found that OTP nutrition claims on calcium were significantly associated with a 10.55% price drop of yogurts in Spain and Moon and Kim (2021) reported that vitamin fortification claims had a negative value, −34.6%, for fluid milk in Korean.
In the United States milk market, however, OTP nutrition claims for vitamins and minerals were found to be positively associated with price (Gulseven and Wohlgenant, 2017).This may be due to the United States nutrition claim regulations setting criteria based on reference amounts customarily consumed rather than per 100 g, allowing effective comparisons among the competing milk products (FDA, 2013).In this study, the dietary fiber claim was the only nutrition claim that drove price up.Dietary fiber, not naturally found in milk, was added to some milk powders such that the manufacturers can claim it 'contains dietary fiber' or, at higher addition levels, 'high in fiber' according to Chinese regulations.The criteria to make claims on dietary fiber are discriminating (Chen et al., 2022), and so dietary fiber claims are effective with consumers as well.There is evidence that domestic labeling policy has substantial influences on consumer valuation of food attributes in the US.For example, in 2001 the recombinant bovine somatotropin (rBST) free label did not carry a significant price premium for milk.However, after FDA began enforcing voluntary rBST free labeling guidelines in 2003 to protect American consumers from false or misleading labeling (FDA, 2003), rBST free label became positively associated with the price of milk in 2004 (Kolodinsky, 2008).
In contrast to studies on processed meat where a reduced fat attribute was positively associated with the price of meat products (Vickner, 2015), here fat con- tent was positively associated with price (+0.8% per 1 g/100 g fat) and fat claims (including skimmed, low in fat and reduced fat) were responsible for a −8.9% price drop in milk powders targeting COA.This finding is in line with previous studies, which reported attributes of no fat or reduced fat associated with negative implicit price for milks in the market of Europe and United States (Bittmann and Scharnhop;Smith et al., 2009;Bimbo et al., 2016).This is because milk fat has a positive market value (Gillmeister et al., 1996) such that reducing fat content allows manufacturers to drop the price (Smith et al., 2009).Notably, nutrition claims on fat are not compulsory in the Chinese food labeling regulation (GB 28050), and consequently, there were about 4% (18 out of 456) of observations not making FOP claims on fat when they were eligible to do so, which might be manufacturer's strategy to avoid having to have the expected price discount.

Ingredient-related Voluntary Well-being Messaging
We found that farm environment attributes, in both textual and graphical form, were not associated with price.Additionally, claiming imported ingredients, including the milk base and minor ingredients, were also not significantly associated the price.Ingredient-and production-related VWM have been frequently used on Chinese domestic milk products to promote food safety (Chen et al., 2022) since Chinese consumers' confidence in domestic dairy products was undermined following the melamine contamination scandal in 2008 (Li et al., 2021).Consequently, imported food products generally enjoy a higher reputation than domestic ones in China (Knight et al., 2008).In this study, products made by international brands carried a higher price premium, indicating Chinese consumers value brand origin over farm environment and imported ingredients claims (as well as domestic certificates) regarding food quality and safety messaging.
According to the model, claims on specific added ingredients were not valued by the consumers.A key reason could be COA's lack of understanding concerning those ingredients (such as probiotics, unsaturated fatty acids, etc) in milk powers.Previously, Chen et al. (2021) found that adding probiotics was, however, positively associated the price of yogurt in China which may reflect Chinese consumer perceptions that yogurt has 'probiotics' and is 'good for gut health' (Hay et al., 2021).For milk powders, however, it appears additional information may be needed alongside specific ingredients added claims relating to their function and health benefits to attract a price premium.
Sugar-sweetened milk has long been available on the Chinese market to improve the taste of milk for drinking directly (Liang et al., 2007;Zhu et al., 2022).However, as the evidence of health risks caused by sugar overconsume accumulates (Lustig et al., 2012), it is not surprising that the 'no added sugar' attribute led to a positive price premium for milk targeting COA.Comparably, Chen et al. (2021) found yogurt with 'added sugar' was associated with price reduction in the Chinese market.According to a survey, Chinese older adults would like to spend more on their general health than the younger generation (Tian, 2020), contributing the positive value of 'no added sugar' claim when purchasing milk powders for COA.

Health-related Voluntary Well-being Messaging
Health VWM, including textual and graphical health claims to infer health benefits, was associated with a significant positive price premium.This finding agrees with a previous study, in which a significant price increase (+19.7%) was found when nutritional benefits (health-related) were claimed on the pack of fluid milk (Loke et al., 2015).Furthermore, Ballco and De-Magistris (2018) found that, in contradiction to the calcium content claims that negatively affected yogurt prices, calcium-related health claims carried a positive price premium, suggesting that health claims outperform nutrition claims in consumers valuation.Xu et al., (2020) found that Chinese consumers considered health claims, both in general and in specific, more important than nutrition claims based on a milk choice experiment.The higher value of health versus nutrition claims may stem from fact that health claims define the potential benefits of a nutrient (e.g., calcium is good for bones) or the product (e.g., bone health formula) more directly than nutrition claims (e.g., high in calcium) which require additional knowledge to fully understand the associated benefits.

Sensory-related Voluntary Well-being Messaging
According to Chen et al. (2022), sensory descriptions were the least popular category of OTP textual VWM that appeared on milks targeting COA.Here, FOP sensory descriptions were not significantly associated with the price of milk powders targeting COA.In the wine industry, sensory evaluation has long been a standard operation in both China and the rest of the world (Francis and Williamson, 2015;Chu et al., 2020).However, no significant association between wine sensory scores from expert judges and the price has also been found, due to a lack of sensory information being available to the consumers (Cardebat and Figuet, 2009).Chinese consumer's willingness to pay was influenced by the objective characteristics of wine when consumers were provided with full information on wine during tasting (Yip, 2019).Similarly, although there were generic FOP sensory descriptions presented on milk powders targeting COA in this study, they were not valued by Chinese consumers according to the hedonic price model, suggesting a more detailed and standardised sensory rating system may be needed.Despite no positive association between sensory descriptions and price in this study, positive perceptions of sensory attributes as labeling information regarding Chinese consumer buying intention for milk products has been reported (Hoque et al., 2018) such that OTP sensory descriptions may still be a valuable aspect for focus by marketers.

Certificate-related Voluntary Well-being Messaging
'Organic Food' certificates often attract a positive price premium for dairy products in various markets (Smith et al., 2009;Bimbo et al., 2016;Gulseven and Wohlgenant, 2017).However, in this study, certificates on packaging denoting 'Organic Food' or 'Green Food', did not significantly associate with the price of milk powders targeting COA.This likely reflects a lack of recognition and/or confidence by Chinese consumers regarding certificates in this specific market.For example, a previous survey conducted in Beijing found that less than 20% of participants were aware of Hazard Analysis and Critical Control Point as an OTP production certificate (Wang et al., 2008).A further survey conducted in Guangzhou found that most consumers had heard of the 'Green Food' certificate, but only 15.5% of consumers had a clear idea of what it stood for (Zhang, 2010).Media coverage of illegally granted certificates and unqualified organic milk products tends to erode consumer trust in certification systems and thus the value of certificates presented on pack (Zhang et al., 2015;Liu et al., 2022).Wang (2015) reported that consumers in Beijing and Zhengzhou are willing to pay for traceability and self-operating farm attributes rather than the organic farming attribute when purchasing milk powders.The results suggested an importance of familiarity and trust of certificates to perceived value.Additionally, not only have multiple certificates been shown to not guarantee willingnessto-pay premiums (Tebbe and von Blanckenburg, 2018) but also certain combinations of certificates and labels have been reported to lead to a detraction from their value (Sirieix et al., 2013), which was potentially explains their non-significant result in the current study.

Implications
The findings presented here have significant implications for future development of products as well as FOP VWM for milk powders targeting COA.Previous studies have argued that a price premium represents not only consumer willingness-to-pay for an attribute, but also the higher marginal costs of producing it (Maguire et al., 2004;Donnet et al., 2008).It is true for essential attributes.For example, the cost and price of a tin packaging, which is a durable and long-lasting material, were more than a bag, but less than a box with subpackagings inside, which offers additional layers of protection.However, certain non-essential attributes such as 'no added sugar' and health claims as FOP VWM were positively valued by consumers and drove the prices up without additional production costs.Such VWM, thus, were encouraged to use as long as they are genuine and accurate according to Chinese laws.On the other hand, the price premium a consumer is willing to pay depends on the information provided by the manufacturers and how it is perceived by consumers (Sethuraman and Cole, 1999).Consequently, the non-essential attributes that were negatively associated with price, such as nutrition claims on calcium and fat, were not recommended to be highlighted on pack for this category of products to avoid the potential price discount.

Limitations and Future Work
It is worth noting that a hedonic price model using market prices can generate biased estimates of willingness to pay by only reflecting willingness to pay of the consumers who decided to purchase (Lee and Hatcher, 2001).Further studies could consider sales volumes in the hedonic price model to give more weight to popular products (Bimbo et al., 2016).

CONCLUSIONS
In addition to essential attributes, non-essential attributes conveyed by FOP VWM were significantly associated with the price of milk powders targeting COA.Dietary fiber claims were positively associated with price.However, claims regarding calcium and fat were negatively associated with the price, and protein and vitamin D claims did not impact price, potentially due to the feature of local food labeling regulations.Claims of 'no added sugar' and potential health benefits as ingredient-related and health-related FOP VWM had positive implicit prices.Other FOP VWM did not carry a price premium in this market.Understanding consumer engagement with FOP VWM provides insight into the aspects that purchasers do and do not value within this product category.
Chen et al.: Value of voluntary well-being messaging

Goodwin
Chen et al.: Value of voluntary well-being messaging Chen et al.: Value of voluntary well-being messaging Chen et al.: Value of voluntary well-being messaging

Table 1 .
Chen et al.:Value of voluntary well-being messaging Working definitions of product essential attributes and non-essential attributes conveyed by front-of-pack voluntary well-being messaging for milk powders targeting Chinese older adults 1 VWM = voluntary well-being messaging.

Table 2 .
Variables description in hedonic price model 2N/A = not applicable.3VWM = voluntary well-being messaging.

Table 3 .
Chen et al.: Value of voluntary well-being messaging Estimated parameters in hedonic price model (n = 456) 1 VWM = voluntary well-being messaging.