Tiered certification schemes for slower-growing chicken (Animal Ask)

A tiered certification and labelling scheme is a system where products are assigned different labels, depending on each product's performance on a particular attribute. A product's label can indicate one of multiple levels—for animal welfare, a tiered system assigns each product to one of multiple different categories of welfare conditions during farming. Tiered schemes can be contrasted with binary schemes, in which there is only one label and each product is simply labelled or not labelled. Tiered labelling schemes can also be called graded, multi-tier or multi-level labelling schemes.

In this report, we evaluate whether a tiered certification scheme can help increase the market share of slower-growing chickens in high-income (developed) countries. We address this question by reviewing the academic literature on tiered certification schemes and examining cases where tiered certification schemes have been used for marketing slower-growing chicken in other countries. This report is motivated by the observation that slower-growing chicken breeds is the most significant component of the BCC in terms of both animal welfare and industry investment, but that the lack of breed availability is the biggest current challenge to rearing chickens to meet the BCC in some countries.

Our key findings are:

• Market share: It is reasonable to expect a well-designed tiered labelling scheme to achieve initial market shares between 10 and 25% for slower-growing chicken (i.e. the higher tier of a tiered scheme). It is also reasonable to expect this market share to increase over time. This is the range of market shares observed for the slower-growing levels of well-designed tiered labelling schemes in other countries under normal market conditions (e.g. Germany, France, and Denmark). That said, a scheme may achieve a lower market share if it is poorly designed and not well-promoted (e.g. 3.5% in the UK). Alternatively, the slower-growing levels of a scheme can achieve a higher market share if it is well-supported (e.g. 55-60% for the Beter Leven scheme in the Netherlands, for which all tiers require slower-growing breeds).
• Price premium: The level of a tiered certification scheme that requires slower-growing breeds would probably attract a price premium somewhere in the vicinity of +27 to 110%. This is the range of price premiums observed in other countries for the lowest tier of the tiered schemes that still require the use of slower-growing chickens. The evidence suggests that the price premium is influenced more strongly by retailer pricing strategies than by production costs per se.
• Good design: It is critical for a tiered labelling scheme to be well-designed. This includes visual design (e.g. large, attractive logos, ideally with traffic light colours and a simple, standardised grading system using numbers or letters) and marketing (e.g. an appropriate advertising campaign and good shelf placement). To emphasise, the visual design and marketing can be a fulcrum for success or failure—in some tiered labelling schemes (e.g. Germany's Für Mehr Tierschutz scheme), poor visual design has been a key reason for the failure of the scheme to achieve a meaningful market share.

We also emphasise that the countries where slower-growing chicken has achieved the highest market share have used tiered certification schemes where all levels of the scheme require slower-growing chicken (e.g. Beter Leven in the Netherlands).