Assessing the Consumer Behavior, Market Coordination and Performance of the Consumer-Oriented Fruit and Vegetable Sector

<p>NON-TECHNICAL SUMMARY:<br/> In recent years, greater concerns with respect to diet and nutrition have led to an increased number of marketing and promotional messages focused on the benefits of eating fresh fruit and vegetables. Both consumers and retailers have responded to the spotlight on fresh produce, resulting in increased purchases, marketing resources and even new legislation to promote Specialty Crop production in the US. Consumers and households are also fueling changes in the food system as they seek to purchase their produce through channels as diverse as direct marketing and traditional supermarkets, and with expectations as broad as picking their own produce to highly branded products with 3rd party certifications. Still, little is known about the response of increasingly demanding consumers and food supply chain partners, the changing coordination and supply
chain responses of fruit and vegetable enterprises or the response to regulations and policies developed to oversee and guide new innovations in this sector. Our intended outcomes and impacts are to inform policymakers on the market performance of fresh produce enterprises under new policies and marketing strategies, and guide industry stakeholders in their long-term planning on consumer behaviors and demand changes.<p>
APPROACH: <br/>We will extend past research and work cooperatively with other states on models, surveying and experimental approaches to improve the validity of market valuation estimates on a variety of produce claims (production origin, organic, nutrient claims, other production protocols). As the methods used evolve (as discussed below), the group will collaborate on marketing studies, identified by industry and NGO groups as high priority, to evaluate consumer behavior. Specifically, we will focus on the emerging local market designations and integrate them into consumer demand and valuation analyses using techniques that incorporate product characteristics and locale. To assess the effectiveness of marketing programs, we plan to examine the impacts of various governmental health, local food and marketing order initiatives, sharing expertise on research design, and
coordinating in at least one case where a similar marketing platform has been adopted by other states (MarketMaker). In addition, we will use estimates from past and on-going market studies to evaluate expected impacts of various policies that form, change and evolve in produce markets, including, but not limited to Country of origin labeling, food safety and nutritional claims.
</p><p>PROGRESS: <br/>2013/01 TO 2013/09 <br/>Target Audience: Stakeholders in the specialty crop industry that seek a better understanding of market conditions, consumer behavior and pricing strategies that will allow them to be competitive and financially successful. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Graduate students have used these projects in several papers presented and theses written for their degrees. They are co-authors on several publications listed in this update. How have the results been disseminated to communities of interest? Since Dr. Thilmany has an Extension appointment, these findings have been presented throughout the state, region and nationally to industry stakehodlers as well as peer academics. What do you plan to do during the next reporting period to accomplish the
goals? Continue existing projects including: CSU is partnering with U of Kentucky (Woods and Ernst) to coordinate a focus group to explore key sustainability issues of emerging CSA structures across the US as one key �pocket� of activity in the US. CSU�s work with Building Farmers in the West (Utah members are also on the team), and integrates findings on direct market prices, costs of supply chain management and regulatory compliance into short course curriculum. Two new projects that will be initiated in 2014 include: Compiling a series of case studies illustrating the unique entrepreneurship emerging in local food systems. Trying to identify a typology of supply chains emerging under local food system developments in the US.<br/>
PROGRESS: <br/>2012/01/01 TO 2012/12/31 <br/>OUTPUTS: The team at CSU focused their work on several key labeling issues, with current projects focused on Corporate Social Responsibility initiatives (CSR), labels that signal Nutrition and environmental impact and a meta-analysis of papers that value geographical indicators (GI). Because of this extensive work on labeling, Dr. Costanigro led the development of an Organized Symposium on food labels at the 2012 AAEA meetings in Seattle. Some of that work was be presented at the 2012 FDRS meetings as well. In addition, presentations and publications on earlier work comparing the valuation of local and organic labels (and any complementarity) continue from earlier years, and were part of the program on Food environments in Boston, and featured in a USDA Ag Outlook session. The meta analysis of GIs focuses on this objective, as it
shows the relative return in the marketplace from government or private initiatives to provide benefits to food producers in particular locales. Some of the earlier valuation work on locally labeled apples is now integrated into an EDM model to show the produce welfare changes from continued segmentation of the apple market into more local marketing (in contrast to more traditional retail food supply chains). This work was part of Wenjing Hus PhD dissertation work. Her work also used USDA AMS retail, terminal market, shipping point, and CSU Extension farmers market price series to estimate marketing margins and transaction costs across regional markets. PARTICIPANTS: Marco Costanigro, co-PI Dawn Thilmany,co-PI Aurora Organic Dairy USDA Economic Research Service Oana Deselnicu, PhD student, now employed with Oracle Wenjing Hu, PhD student, now employed as Post-Doc at Cornell Dominique
Songa, MS student, now employed with Meijer foods TARGET AUDIENCES: Research is targeted to the industry, particularly consumer-focused farm and food companies who are refining their marketing strategies and supply chain partnerships. Some research also targets the policymaking audience by exploring the consumer and produce welfare impacts of changes in the marketplace. PROJECT MODIFICATIONS: Not relevant to this project.<br/>
PROGRESS: <br/>2011/01/01 TO 2011/12/31 <br/>OUTPUTS: Our primary work on objective one was completion and initial dissemination of consumer studies that use cutting-edge techniques to determine consumer values for a variety of labeling schemes including organic, fair trade, production origin and other sustainability criteria. An in-depth study of consumers' perceptions and valuation of local and organic produce has been completed. Two additional studies are in the final stages of data analysis: 1) an investigation of product differentiation strategies based on producers' corporate social responsibility record and 2) an evaluation of consumers ability to differentiate products based on environmental impact. Our team (including one graduate student) has been developing welfare analysis using equilibrium displacement models to evaluate how producer surplus changes under new
relocalization efforts (realizing higher consumer WTP, but also, increased marketing costs with more marketing channels). In addition, we are evaluating the regional economic impact of various local food efforts, such as Farm to School distribution. Colorado (Thilmany and graduate Gunter) are completing a series of case studies with UC-Davis on new values-based distribution networks. We also work with the national MarketMaker network to evaluate how that new marketing and promotion platform may be influencing promotional effectiveness of state level programs (Colorado Proud) and individual food enterprise listings. PARTICIPANTS: Marco Costanigro Stephan Kroll Martha Sullins Allie Gunter Wenjing Hu Gretchen Nurse, U of Arizona Dominique Songa Aurora Organic Dairy Colorado Department of Agriculture TARGET AUDIENCES: Small, direct market farms Differentiated agribusiness firms PROJECT
MODIFICATIONS: Not relevant to this project.</p>