Newly released results of project to determine the market potential and consumer willingness to pay (WTP) for chicken breast with different labels, particularly slow-growth labels, showed uncertainty about the future market potential for slow-growth chicken. It also revealed that most consumers are unfamiliar with broiler production in general and slow-growth chickens in particular.
The project, led by Dr. Jayson Lusk, distinguished professor and head of the department of agricultural economics at Purdue University, was developed and funded by The Food Marketing Institute, the Foundation for Food & Agriculture Research and the Animal Agriculture Alliance to look at sustainability-related poultry production practices with a focus on cage-free eggs and slow-growth broilers.
“There is increased pressure on food retailers to offer consumers alternatives that are perceived higher in animal welfare and sustainability,” Lusk noted in the project’s results. "However, such meat options have higher production costs. Whether higher costs can be offset by consumer willingness to pay (WTP) is uncertain.”
Lusk’s research team conducted a nationwide survey of more than 2,000 respondents in which participants were asked to make a series of choices among products that varied in price, production practices, labeling claims, product color and appearance. A choice experiment, which simulated retail purchases, was also included to compare slow-growth chicken breast demand among consumers exposed to different types of information and who made choices in the presence or absence of brands.
According to the project summary, core findings of the study are as follows:
- WTP for slow-growth chicken and the importance of this attribute in consumer choice are sensitive to the information provided and generally lower in importance than other labels, except when consumers are provided with information that is pro-slow growth.
- Knowledge of slow-growth chicken is low. Only 1.2% of respondents reported having previously purchased slow-growth chicken, and only 12% and 17% agree with the statements “I am very knowledgeable of slow-growth chickens” and “I have seen slow-growth chicken for sale in my grocery store.” Without pro-slow-growth information, consumers do not generally associate slow growth with high animal welfare. Only about16% of respondents believe chicken breasts are currently too large.
- The presence of brands significantly lowered demand for label claims such as organic, non-genetically modified organism (GMO) and no antibiotics, suggesting that brands partially serve as substitutes for these labels. Demand for slow-growth labels was not affected much by the presence of brands.
- If presented with a pair-wise choice between slow-growth chicken priced at a 50 cents/lb. premium and an unlabeled chicken breast, slow growth is projected to be chosen by 45%, 54% and 41% of respondents when given no added information, pro-slow-growth information and anti-slow-growth information, respectively, when no brands were present. With brands, the respective slow-growth choice probabilities are 49%, 54% and 39%.
- The most important attributes, in terms of the ability to move market share, when participants were given no added information/no brand condition are price and the presence/absence of organic, non-GMO and no added hormone labels. The two least important labels in this condition were slow growth and no antibiotics ever. When brands were present, the only label to increase in importance was an antibiotic absence label.
- There are multiple market segments consisting of consumers with distinct preferences for chicken breast attributes; depending on the treatment in question, 30-40% of consumers are insensitive to price changes. Consumer demographics are not predictive of WTP premiums for slow-growth labels. Only when pro-slow-growth information is provided do consumers' relative preferences for novelty, animal welfare and naturalness correlate with WTP premiums for slow growth.
“This research is a key component to bridging the communication gap between farm and fork,” said Kay Johnson Smith, Animal Agriculture Alliance president and chief executive officer. “Understanding consumer purchasing values can help food companies, farmers, ranchers and the agriculture industry connect with customers and start meaningful conversations about animal welfare and sustainability.”
Because the results showed that most consumers are unfamiliar with broiler production, Lusk suggested that marketing campaigns to promote a label could enhance demand for the characteristics, but opposition information could have the opposite result.