Organic‐ and Animal Welfare‐labelled Eggs: Competing for the Same Consumers?

To understand the market for sustainable foods, it is important to allow for heterogeneous preferences. However, most studies of consumer preferences for sustainable foods only investigate average consumer preferences. They do not take into account that some consumer segments attempt to purchase as much sustainable food as possible, others are almost indifferent to the notion of sustainable food, and still others consider sustainable food a complete hoax. The aim of this study is to explore the preferences for various types of premium eggs across three consumer segments. We conduct a choice experiment including 900 Norwegian consumers and perform a behavioural segmentation based on the frequency of organic food purchase. We find that the segment purchasing the most organic food is, as expected, willing to pay a significant premium for organic eggs over eggs displaying only enhanced animal welfare. However, most consumers, who only occasionally purchase organic products, are unwilling to pay more for organic eggs than for enhanced animal welfare eggs, suggesting diminishing marginal utility for additional attributes. We find that a third consumer segment attempts to avoid organic eggs, even when they cost the same as other eggs. Our findings suggest that organic products will be unsuccessful in acquiring a larger share of the market as long as most consumers are unwilling to pay a premium for organic products with all their cost increasing sustainable attributes over products that have only a single sustainable attribute, in our case enhanced animal welfare.     

Consumer Attitude towards Organic Labeling Schemes in Japan

ABSTRACT

Japan is the most lucrative organic market in the Asian region and is projected to account for about 80% of the Asian market revenues by 2009 (Kuhlmann and Jones, 2006). This study identifies Japanese consumer preference and interest in two major labeling information- source of organic certification/traceability and country of origin for organic food products. Stated preference method (SPM) based survey data was collected from two major cities in Japan in order to develop Japanese consumers' organic food choice model. Findings show that Japanese consumers are willing to pay 10% price premium for the organic food products compared to conventional products that have no specific labeling, suggesting a significant profit margin to be possibly captured by the organic producers and marketers. The Japanese consumers have perceived value of the JAS label in their stated preference and showed willingness to pay a price premium for this quality certification system, which validates the importance of government-regulated mandatory labeling. Regarding the country origin labeling issue, the Japanese consumers showed clear preference for the domestic organic products to the imported products, while showing no preference for any particular country origin for imported organic products. For private-voluntary organic labeling, the consumer organization-led organic label is considered to be more reliable source than the retailer-guaranteed organic label.     

Green Food Consumption in China: Segmentation Based on Attitudes Toward Food Safety

ABSTRACT

The objectives of this report are twofold: to examine the demographic factors that drive demand for green food and to segment Chinese consumers based on their attitudes toward food safety. An online survey was used to collect consumer behavior information. A total of 402 responses were obtained covering participants who lived in 24 provinces and municipalities in China. Probit modeling, analysis of variance, and cluster analysis are used. Income, education, age, gender, presence of young children, household size, and overseas experience are variables that have an impact on green food purchase. Young, wealthy men, who have young children and live in a small household, are likely to buy green food. The survey shows that Chinese consumers are willing to pay a price premium for green food; however, price will be a major factor restricting the growth of the green food label in China, given market prices. Three segments―the “distrustful consumer,” the “ambivalent consumer,” and the “trusting consumer”―are identified for market segmentation purposes.     

Are Local and Organic Claims Complements or Substitutes? A Consumer Preferences Study for Eggs

This paper provides an analysis of consumer preferences for product claims, specifically about origin and production methods. In particular, it addresses two important questions: i) whether consumers are willing to pay a premium for food products carrying these claims; and ii) whether local and organic claims are complements or substitutes. A choice experiment designed to estimate two‐way interactions was undertaken in Spain for eggs. The findings show first, that consumers are willing to pay a positive premium price for an enhanced method of production (that of barn, free‐range and/or organic instead of cage produced eggs) as well as for the proximity of production (local, regional and national over imported). Second, the findings show that consumer preferences for the claims are heterogeneous with two consumer segments being identified: “origin preference”, the larger segment, and the “production method preference”. Results show that organic and local claims were complements for the larger first segment but that free‐range and local/regional claims were substitutes for the second smaller segment. These results provide the marketing chains with insights applicable for pricing strategies.     

Interaction Effects among Labeled Attributes for Eggs in the United States

New labels for food products continue to be introduced in the United States. This paper estimates interaction effects among labeled attributes for eggs to investigate cases where affixing labels of “premium” attributes would indeed gain additional premiums in the U.S. market. A latent class analysis identified four consumer segments (Attribute Seekers, Price Checkers, Local Supporters, and Combination Responders). Several interaction effects were sufficiently large in magnitude to neutralize the main effects, but differently for each segment. While the combination of certified-organic with cage-free or local label yielded negative premiums in certain segments, the premium Attribute Seekers were willing to pay were considerable. Across all segments, preferences for locally produced products were robust singly or in combinations. Consideration of interaction effects and consumer segments are recommended for effective labeling strategies.     

Product Differentiation with Credence Attributes and Private Labels: The Case of Whitefish in UK Supermarkets

The retail market for seafood is dynamic with substantial competition both amongst retailers and between private labels and national brands. New product attributes are added in attempts to differentiate products and to attract consumers. Credence attributes, in particular those related to eco‐labels and fishing method, have become more common. But little is known about how these and other credence attributes are valued in the retail market. In addition, little is known about price differences between private labels. To estimate the value of these attributes, weekly in‐store observations of selected frozen whitefish products were conducted in seven UK retail chains in the city of Glasgow. An estimated hedonic model shows a substantial price premium for fishing method (line‐caught), a premium for both home (Scottish) and non‐home country of origin (Icelandic) and a premium for the Marine Stewardship Council eco‐label. An uncertified eco‐label owned by a large seafood manufacturer leads to reduced price. The study also reveals substantial price differences between private labels for whitefish. The results contribute new insights regarding opportunities for differentiation by credence attributes which may lead to more sustainable and effective resource use along the value chain for frozen whitefish.     

Attitudes and Preferences of Kosovar Consumer Segments Toward Quality Attributes of Milk and Dairy Products

ABSTRACT

The dairy market is one of the fastest growing agri-food sectors in Kosovo, yet the farm structure is fragmented. The level of productivity is lower compared with European Union levels and shows potential for improvements. The consumption of dairy products is expected to rise due to income growth and segmentation of consumers that would reflect different preferences for low-fat or zero-fat products, products with natural additives, and so on. On the market level, a significant share of the consumed milk and dairy products is imported. This study aims to better understand attitudes and preferences of Kosovar consumer segments toward milk and dairy products. A quantitative survey with 300 consumers was conducted in major Kosovo cities. Applying a reduced version of the Food Related Lifestyle instrument identified three distinct consumer segments: the conservative consumer segment, the socially oriented foodie, and the information-seeking eco-consumer. The latter two segments are especially open to trying new food products and actively search information about food. All three consumer segments show strong consumer patriotism by believing that domestic milk and cheese are safer than imported products and are of higher quality. This indicates the strong market potential for dairy farmers and companies in the Kosovo, which should develop new food products having these segments in mind. The authors explore the strategies that farmers and companies should use to better target these consumer groups and gain greater access to desirable segments.     

Spatial price premium transmission for Meat Standards Australia‐graded cattle: the vulnerability of price premiums to outside shocks

Studies of market integration show that price changes are transmitted spatially through arbitrage. Transmission across differentiated agricultural products is important to investigate, but it has not been explored given its complexities for assessment. Using data from Australian cattle markets, we examine the dynamics of Meat Standards Australia price premium transmission between states. An impulse response function analysis using Bayesian vector autoregression with sign restriction identification shows that shocks to prices and price premiums are partially transmitted contemporaneously between markets and it takes several weeks to complete transmission. In addition, we find an asymmetry of price and price premium shocks originating in Southern Queensland that have an inverse immediate impact in New South Wales, and take months to transmit the usual price response. This outcome may be explained by differences in cattle availability in each state, which can be related to forage availability due to weather conditions. Based on these results, producers can forecast fluctuations on price premiums and adjust their cattle supply accordingly.     

Valuing Quality Attributes and Country of Origin in the Korean Beef Market

For beef exporters, one of the important questions in the Korean beef market is why Korean consumers are willing to pay almost three times more for domestic Korean beef than they pay for imported beef. To answer this question, we surveyed 1,000 shoppers in Seoul, Korea, and conducted a conjoint analysis on consumers’ willingness to pay (WTP) for country equity of domestic vs. imported beef and quality attributes of marbling, freshness, genetically modified organism (GMO)‐free feed ingredients and antibiotic‐free production. Among all factors contributing to the price differentials, the most important factor seems to be the country of origin followed by the use of GMO feeds and antibiotics in beef production, marbling grade and freshness. This study finds that Korean consumers value origins of imported beef approximately $14/lb less than the Korean origin. Korean consumers’ valuation of beef quality and country of origin differs by some demographic groups: older vs. younger generations, homemakers vs. non‐homemakers and consumers who prefer to purchase packaged beef vs. consumers who prefer to purchase butcher shop beef. Our empirical findings suggest that the top priority for beef exporters who wish to increase sales and value of their beef in the Korean market must be to counter Korean consumers’ strong ethnocentrism by improving the value of their country of origin.     

Segmenting Irish Food Consumers Using the Food-Related Lifestyle Instrument

Abstract

This paper reports on the food-related lifestyle (FRL) segments identified in Ireland, based on a nationally representative sample of one thousand households. The objectives are to use the food-related lifestyle instrument developed by the Centre for research on customer relations in the food sector in Denmark (MAPP) to segment Irish food consumers based on attitudes towards the purchase, preparation and consumption of food products and to profile these segments by attitudes and socio-demographic variables. The sixty nine FRL items were scored and scale reliability tested. The structure of the FRL dimensions was tested with exploratory factor analysis using principal component analysis and varimax rotation. Hierarchical cluster analysis (HCA) using Wards method was employed for market segmentation. Profiles of the clusters (segments) were achieved by comparing the mean scores on the dimensions for each segment with the population mean scores on the same dimensions.

Six distinct food-related lifestyle segments were identified. The hedonistic segment, representing 28 percent of consumers was the largest group, followed by conservative consumers (21%), extremely uninvolved consumers (16%), enthusiastic consumers (14%), moderate consumers (13%) and adventurous consumers (8%). The segments were found to have different attitudes towards food and different socio-demographic profiles.     

Willingness to Pay for Multiple Quantities of Animal Welfare Dairy Products: Results from Random Nth‐, Second‐Price,and Incremental Second‐Price Auctions

Nonhypothetical experimental auctions are used to elicit willingness to pay for humane animal care‐certified dairy products: cheese and ice cream. We use second‐price, random Nth‐price, and incremental second‐price auctions in multiproduct, multiquantity, and multiround contexts. The results contrast participants’ bids across different auction mechanisms and different products. Differences in bidding patterns are detected across auction mechanisms as well as products. Our results suggest that subjects on average are only willing to pay a premium price for one unit of humane animal case‐certified ice cream but not for multiple quantities.     

Markups,organic agriculture and downstream concentration at the example of European dairy farmers

A competitive environment, highly concentrated processing and retailing sectors as well as increasing decoupling of direct payments from production volumes and the area under cultivation incentivizes farmers to find alternative ways to improve their bargaining position towards downstream companies. This article explores the possibilities of organic agriculture to enhance the bargaining power of farmers along with the role of concentration in downstream industries. Using a dataset with more than 200,000 observations from approximately 40,000 dairy farms, I estimate markups of price over marginal cost in dairy farming as a measure of market power in the EU. The results show that organic farmers achieve a significant markup premium over conventional farmers. With increasing market shares of organic milk in total milk production markups of conventional farmers diminish whereas those of organic farmers are unaffected. Farm-level markups decrease with increasing market shares of medium-sized dairy processors and increase with increasing market shares of large processors. The presence of large multinational retail chains shows an adverse impact on farmers’ markups.     

Marketing Olive Oil Products in the Tunisian Local Market: The Importance of Quality Attributes and Consumers' Behavior

This article is, to the best of our knowledge, the first investigation of Tunisian olive oil consumer behavior by the use of the conjoint analysis technique. The conjoint experiment was based on carefully selected olive oil attributes: type, taste, color, packaging, region of origin, and price. The results have important implications to improve the marketing of olive oil in the local market by focusing on key preferred attributes. Consumers were found to prefer more extra-virgin, followed by virgin olive oil, to pomace oil. They also showed higher preference for green colored olive oil with strong flavored taste. Contrary to a common belief in Tunisia, the region of origin attribute did not show significant effect on consumers’ purchasing decisions. The results show also that Tunisian olive oil consumers are price sensitive and therefore any price strategy to introduce bottled products should take into account consumers’ preferences for bulk purchase.     

Importance of Standardizing Raw Milk Quality for the Enhancement of Croatian Market Competitiveness

In the European Union member states (EU), it is necessary to evaluate hygienic condition of milk in order to determine milk price. Similar requirement was set by the Republic of Croatia in 2000. The Rulebook defines minimal quality criteria that fresh raw milk must have in order to be purchased. Upon completion of analysis, milk is classified into quality classes, each having a defined price. Increased value of somatic cell count (higher than 400,000/ml) and micro ogranism (MO; higher than 100,000/ml) directly decreases the raw milk price, whereas higher content of fat and protein causes its increase. Since the system of market milk price formation was established, producers have been stimulated to produce milk of higher quality: in a total of milk being purchased, the highest quality milk share increased from 23.3% to 34.2%. Referring to a trend of milk purchase price reduction in the EU, and considering the current high milk purchase price in Croatia, Croatian producers have an opportunity to improve conditions in milk industry before the country joins the EU. Current milk production needs to be increased and milk quality also needs to be improved in order to make Croatian milk production more competitive on the European and world market.     

Food-Related Lifestyle Segments in Ireland with a Convenience Orientation

Abstract

This paper reports on an investigation into the convenience orientation of various food-related lifestyle segments in Ireland. The food-related lifestyle instrument developed by the Centre for research on customer relations in the food sector (MAPP Institute in Denmark) provided a valuable framework for the development of this analysis.

This instrument was applied in Ireland in 2001, with a nationally representative sample of one thousand Irish consumers. Six distinct food-related lifestyle segments were identified (Ryan, 2002). The lifestyle instrument grouped consumers in terms of their attitudes towards the purchase, preparation and consumption of food products in general.

This research investigates the degree to which these food-related lifestyle segments are convenience-oriented by investigating their attitudes towards convenience and their purchase frequency for a range of convenience foods. The convenience element was developed following a review of the Irish convenience food market, which highlighted a number of convenience-related food issues driving this market. This study identified the food-related lifestyle segments that were particularly convenient oriented. These segments were further explained by relating their purchase frequency for a range of convenience products.

The attitudes of the various food-related lifestyle segments towards convenience foods and purchase frequencies for convenience foods differed. Three of the food-related lifestyle segments were identified as having a convenience orientation, namely the hedonistic, the extremely uninvolved and the adventurous segments.     

The Effect of Extrinsic Product Attributes of Pineapple Juice on Consumer Intention to Purchase

This study aimed to investigate the extent to which consumer information concerning several attributes of the pineapple juice packaging, including the manufacturing process, influenced the consumer intention to purchase. It is suggested that high-pressure technology retains nutrients as vitamins and keeps sensory attributes closer to those of fresh foods. These advantages meet the increasing consumer demand for healthy products and a more differentiated food assortment. However, the benefits provided by these products are not always communicated to consumers. Although information about the technology (high-pressure) had been positively considered by consumers when fruit juice consumption was taken into account, fewer studies have focused on this aspect. The effect of 5 attributes of the package (information on manufacturing process, product definition, production information, price, and brand name) on the pineapple juice consumer intention to purchase was investigated by 96 fruit juice consumers. Information about technology (high-pressure) positively contributed to the consumer pineapple juice intention to purchase and showed to be essential when it is applied on pineapple juice production, being a useful approach when adequately communicated to consumers.     

The Elusive Price Premium for Ecolabelled Products: Evidence from Seafood in the UK Market

Ecolabelling is an increasingly important tool used in the promotion of sustainable forestry and fishery products around the world. Whether the consumer is actually paying a price premium for ecolabelled products is of fundamental importance as it indicates a return on the investment of sustainable practices, providing an incentive for producers to undertake such practices. This article seeks to address the question of whether or not an actual premium is being paid by consumers for ecolabelled seafood by conducting a hedonic analysis of Marine Stewardship Council (MSC)‐certified frozen processed Alaska pollock products in the London metropolitan area in the UK market using scanner data. Regression results show a statistically significant premium of 14.2%. This implies the presence of market differentiation for sustainable seafood and the potential of the MSC’s fisheries certification programme to generate market incentives for sustainable fisheries practices.     

“农户+合作社+超市”模式下的农产品价格形成研究——以北京番茄市场为例

农超对接有效缩减了农产品流通环节,有利于建立农户与零售商之间稳定的购销关系,有利于稳定农产品价格,促进农产品市场健康发展。文章基于“农户+合作社+超市”模式,以蔬菜产品为例,分析农超对接模式中的农产品价格形成。研究发现:农户与蔬菜合作社之间的议价能力是决定农产品价格形成的关键;在农户对番茄收购价格议价能力大于合作社的情况下,以完全成本计算的番茄理论均衡收购价格最接近番茄实际收购价格;在合作社目标利润率为15%的情况下,番茄均衡零售价格最接近其实际零售价格。     

Willingness to pay for brands: a cross‐region,cross‐category analysis

Using survey data collected in multiple locations (California and Texas in the United States and Revohot in Israel), we quantify category‐ and location‐specific variations of consumers’ willingness to pay (WTP) for brand products after controlling for consumer characteristics. We find that consumers have a similar qualitative assessment of brand value in different product categories across different locations. That is, consumers have a stronger preference and higher WTP for brands in consumer electronics, followed by clothing and then processed food, and the lowest in fresh produce. Furthermore, we simulate price premiums and market shares of brands relative to generic products in different categories. Simulation results suggest that brands in fresh produce have the highest price premium but lowest market share. Despite the similarities, the magnitude of WTP for brands as well as the simulated price premium and the corresponding market share in the same product category are location variant. The similarities and dissimilarities suggest validity of having global brand strategies adapted to local conditions, that is, the so‐called “thinking globally and acting locally” strategy.