FDA’s New 'Healthy' Label Boosts Sales and Consumer Willingness to Pay Premium Prices

The U.S. Food and Drug Administration’s (FDA) updated definition of the term “healthy” is reshaping consumer behavior, according to new research. In 2024, the FDA revised its 1992 definition to align with current nutrition science and federal dietary guidelines. The agency also proposed a new “FDA healthy” label icon for food packaging, which remains under review.

A study led by researchers from Oregon State University and Tufts University examined how consumers respond to these labels when shopping for snacks. The findings reveal that shoppers are not only more likely to select healthier options but also willing to pay a premium for products bearing the FDA’s endorsement.

“Our main finding is that trust in government was an important part for people and that they were willing to pay more for that label,” says Katherine Fuller, lead author of the study and an assistant professor at Oregon State University who specializes in consumer behavior, particularly in food and sustainability. Fuller notes that the results align with prior research on the USDA “organic” label, which has historically commanded higher prices.

The study, published in Food Quality and Preference, involved an experiment conducted in 2023 with 267 shoppers at six grocery stores in the Boston area. Participants were given tablets and shown images of 15 real-world products, including 9 healthy and 6 unhealthy options. They first viewed the products without any labels and then again with either a generic “healthy” label or the proposed FDA “healthy” label—applied only to products meeting the new FDA standards.

Participants received $5 in cash and a $10 store gift card, with the option to apply the $5 toward a product of their choice. This approach ensured that their decisions had real economic consequences, mimicking an authentic shopping experience.

“Giving study participants purchasing power in a setting that mirrored a real shopping experience let us better observe how the labels might influence behavior,” says Sean Cash, senior author of the study and chair of the Division of Agriculture, Food, and Environment at Tufts University’s Gerald J. and Dorothy R. Friedman School of Nutrition Science and Policy. Cash, an economist studying food policy and consumer behavior, adds that the experiment provided valuable insights into label efficacy.

Participants also completed a survey detailing their demographics, knowledge of healthy food options, and levels of generalized trust and trust in government. Key findings from the research include:

• Consumers were more likely to choose healthy snacks over unhealthy options.
• Healthy snack selection increased when products displayed a healthy label icon.
• Both the FDA and generic “healthy” labels were associated with higher selection of healthy snacks, but only the FDA label showed a statistically significant effect.

Previous studies have also shown that consumers are willing to pay more for products with health-related labels, reinforcing the impact of regulatory endorsements on purchasing decisions.