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Research To Be Unveiled At The New York Produce Show And Conference Shows ‘Local’ Preference Versus Organic

Jim Prevor’s Perishable Pundit, October 21, 2010

Among the things that those of us at the Eastern Produce Council and PRODUCE BUSINESS are most proud of regarding The New York Produce Show and Conference is how hard we’ve worked to draw on the intellectual activity of the region. We’ve already highlighted workshops being presented by faculty at Cornell and at Rutgers:

A New Hypothesis On Local: To Boost Sales, Sell It Through Supermarkets… Cornell’s Miguel Gomez Previews His Upcoming Talk At The New York Produce Show And Conference

Rutger’s Professor Ramu Govindasamy To Speak Out At The New York Produce Show And Conference…Research On Asian And Hispanic Produce Marketing On The East Coast Identifies A Profitable Opportunity

We were also enthused to draw on the well regarded Department of Food Marketing at St. Joseph’s University. This workshop will unveil important research on the theme of “Local vs. Organic,” utilizing apples as a case study. The ground-breaking research was conducted by John Stanton, Professor, Department of Food Marketing, Fred Wirth, Associate Professor of the Department of Food Marketing and D.R. Wiley, a specialist in choice theory.

John Stanton is an academic powerhouse, editing the Journal of Food Products Marketing and is the author or co-author of many books, including More Stanton on Food Marketing. He also has a great presentation style and dry wit.

We asked Mira Slott, Pundit Investigator and Special Projects Editor, to learn more about the research John will present:

Dr. John Stanton
Professor and Chairman
Food Marketing Department
Saint Joseph’s University
Philadelphia, Pennsylvania

Q: What is at the heart of your research?

A: Two hot topics on the lips of consumers as well as producers are organic and local. The purpose of the research we did was to try and quantify the value to consumers of organic versus local. We used some reasonably sophisticated statistical techniques, which force consumers to make trade-offs between things. For example, if you ask airplane travelers how important is it your bags are on time, how important are precautionary safety measures, and how important is it that your flight is comfortable, they’ll say everything is important. You need to have relativity.

Q: How did you apply this relativity to your study?

A: We used apples as the subject because the commodity fit the criteria for our model. In theory, with local produce there is too much disparity between various products. Almost everyone buys apples, almost every state grows apples, consumers have options to buy local and organic apples, and the commodity is a common purchase. Apples met all conditions. Even though bananas are the most common, the commodity is imported and there is no locally grown.

Our research found locally produced to be preferable to organic. Local had far more impact in affecting consumer purchase intentions.

Q: Don’t consumers have a wide variance in their understanding and definition of local and organic? Did your research take that into account?

A: We purposely did not define local. We asked people what local meant, which confirmed what you said; some saw local just from the state, others went literally to product produced in the U.S., while some limited the scope to a particular region. For example, in the Philadelphia area, most said the Delaware Valley.

Q: How do you know the consumer’s choice was based solely on whether it was local or organic, and not on other attributes such as quality, price, variety, size, or a retail marketing event such as a visit from a local farmer… Perhaps a consumer might choose organic over local if the price differential fell within a certain range. What if the product was both local and organic… what if the consumer would choose either local or organic over the conventional option, etc.?

A: This was all built into the model. The trade-off analysis forces people to make choices between products by us systematically changing attributes, clearly the production method, local versus non-local, pricing in three ranges, size, textures, crisp or mealy, all these things factor into the equation.

Q: What consumer would choose a mealy apple?

A: We submitted our results to academic journals, and one criticism was who wants mealy? By giving people trade-offs, they never evaluated the attributes; they just had to pick out of choices. We go back and calculate the value of attributes that led to those choices.

Q: What did you learn?

A: In step with government grading, the preferred size was medium. If the apple was too large people didn’t want to eat it. The most expensive apple is the largest, but not necessarily the most preferred.

Q: You say your research showed that people valued local over organic. Were the statistical results notable?

A: More than notable, the difference was dramatic. We did this during the recession, so we were able to look at organic in an environment void of free-spending.

Q: Wouldn’t the fact that consumers were more price-conscious distort and skew the results?

A: Setting up this design for proper combinations is a major effort. It’s a complex statistical model called balanced incomplete block designs. The reason you do that is if you gave people every combination of apples, such that every alternative was available, they’d have 480 different choices. No one actually had to rank more than 6 apples, but we’re able to make statements related to 480 variables.

Q: Could you highlight some of the most intriguing?

A: This paper is going to focus on organic versus local, but our analysis is much broader in scope. We found in an area of apples, three distinct subgroups. One of the subgroups really valued all characteristics — texture, taste, crispness — and was willing to pay more for them. Another group valued health and much more organic and local, and then there were those all about price, the cheapest trumped other attributes. We also segmented by age, income levels, etc.

This was a four-part study. It started with focus groups and we learned a lot. One of the things that surprised me was that many people bought local for food safety reasons because they thought their neighbors wouldn’t poison them.

Perceptions of local varied. People didn’t really understand what organic was. It sounds good but when asked what is it, a popular answer would be no pesticides, but most really don’t understand organic.

The main point of our paper we’ll be discussing at The New York Produce Show and Conference is what impact the attribute of organic and the attribute of local have on consumers’ intentions to buy. Our research hit on a spectrum of issues. We’re trying to analyze all the data still. At our workshop at The New York Produce Show and Conference, if someone wants further investigation, we can talk about it.

The issue of the relevance to consumers of local and organic is not insignificant. We wonder if a lot of it doesn’t draw on a zeitgeist that is heavily influenced by a change in attitude by top chefs. They used to be all crazy for organic. We think the adoption of National Organic Standards made a focus on organic less appealing to chefs — after all, any consumer could buy a bag of Earthbound Farm organic salad and have an organic salad at home. The chef that focused on organic wasn’t really adding value. In contrast, a chef who features tomatoes from “Joe Miller’s Farm” is implying that he has carefully vetted that farm and is thus providing a value that consumers could duplicate only with great difficulty.

Of course, it is also true that marketers need to be cautious in playing to the consumers’ interest in local. If consumers see local like an empty vessel into which they can pour their hopes and dreams, then they will expect local to be cheaper, better tasting, safer, that it will help the environment, etc. — perhaps if local doesn’t deliver on all these dreams, it might cause a change in consumer attitudes down the roads.

In any case, we will be most interested in doing a deep dive into this important research.

If you would like to learn more about The New York Produce Show and Conference, you can do so here.

Register for the event right here.

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