The Federal Government of Germany as well as the European Commission are discussing the establishment of an animal welfare label. This label should enable consumers to make a conscious purchasing decision on animal welfare products. Various studies show that many consumers (in Germany around 20 %) prefer products produced under animal friendly conditions. However, the supply of such products is limited. The following study examines the source of this discrepancy by way of an action‐based analytical approach and identifies different barriers within the supply chain that prevent the establishment of a market segment for animal welfare products. Although consumer demand will be decisive for long‐term success, first of all the stakeholders of the supply chain must be convinced. If the stakeholders are not prepared to participate in an animal welfare program the diffusion phase can take a very long time or even fail. This study presents such supply chain barriers and interprets them in the light of neoinstitutionalism.