Incentivizing Healthy Food Choices Using Add-on Bundling: A Field Experiment

48 Pages Posted: 9 Dec 2022 Last revised: 26 Jun 2023

See all articles by Nymisha Bandi

Nymisha Bandi

Desautels Faculty of Management, McGill University

Maxime C. Cohen

Desautels Faculty of Management, McGill University

Saibal Ray

McGill University - Desautels Faculty of Management

Date Written: November 14, 2022

Abstract

How can retailers incentivize customers to make healthier food choices? Price, convenience, and taste are known to be among the main drivers behind such choices. Unfortunately, healthier food options are often expensive and not adequately promoted. Interestingly, we are observing recent efforts to nudge customers toward healthier food. In this paper, we conducted a field experiment with a global convenience store chain to better understand how different add-on bundle promotions influence healthy food choices. We considered three types of add-on bundles: (i) an unhealthy bundle (when customers purchased a coffee, they could add a pastry for $1), (ii) a healthy bundle (offering a healthy snack, such as fruit, vegetable, or protein, as a coffee add-on for $1), and (iii) a choice bundle (the option of either a pastry or a healthy snack as a coffee add-on for $1). In addition to our field experiment, we conducted an online lab study to strengthen the validity of our results. We found that offering healthy snacks as part of an add-on bundle significantly increased healthy purchases (and decreased unhealthy purchases). Surprisingly, this finding continued to hold for the choice bundle, that is, even when unhealthy snacks were concurrently on promotion. However, we did not observe a long-term stickiness effect, meaning that customers returned to their original (unhealthy) purchase patterns once the healthy or choice bundle was discontinued. Finally, we show that offering an add-on choice bundle is also beneficial for retailers, who can earn higher revenue and profit.

Keywords: Healthy Eating, Field Experiment, Nudging, Bundling

Suggested Citation

Bandi, Nymisha and Cohen, Maxime C. and Ray, Saibal, Incentivizing Healthy Food Choices Using Add-on Bundling: A Field Experiment (November 14, 2022). Available at SSRN: https://ssrn.com/abstract=4276735 or http://dx.doi.org/10.2139/ssrn.4276735

Nymisha Bandi

Desautels Faculty of Management, McGill University ( email )

1001 Sherbrooke St W
Montreal, Quebec h3A 1G5

Maxime C. Cohen (Contact Author)

Desautels Faculty of Management, McGill University ( email )

1001 Sherbrooke St. W
Montreal, Quebec H3A 1G5
Canada

Saibal Ray

McGill University - Desautels Faculty of Management ( email )

1001 Sherbrooke St. (W)
Montreal, Quebec H3A 2M1
Canada

HOME PAGE: http://people.mcgill.ca/saibal.ray/

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
51
Abstract Views
1,271
Rank
686,660
PlumX Metrics