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Changing consumer preferences: what this means for KI producers and the brand
Prof. Wendy UmbergerExecutive Director, Centre for Global Food & Resources
University of Adelaide2 April, 2019
Stewardship & Accreditation Schemes for KI – Workshop 1
Overview
• Drivers of changing consumer preferences and behaviour
• General trends – changing consumer preferences and behaviour
• Australian insights from research– Secondary data
– UofA GFAR Australian Food Insights Quarterly (started in Sept 2018)
– Two Australian consumer meat studies examining values for production and process (credence) from 2015 and 2017
• Implications for KI “brand”
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Food Consumption is changing
• Driven by – Increasing disposable incomes
– Globalisation
– Migration/Immigration
– Concerns about:
• Food safety,
• Health concerns,
• Impact of food production on environment and food system (e.g. animal welfare)
• Authenticity
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Value of Aussie household income & food consumption per person (1988-89 to 2016-17)
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Source: https://apo.org.au/sites/default/files/resource-files/2018/08/apo-nid188236-1196716.pdf
Aussie food expenditure per person, by main food type (1988-89 to 2015-16)
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Source: https://apo.org.au/sites/default/files/resource-files/2018/08/apo-nid188236-1196716.pdf
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Eating slightly less meatDeclined 3% from 2009-2014 (Euromonitor Intl.)Still high, average Australian consumed 92.5kg meat in 2015
Flexitarian / Semi-Vegetarian / ‘Vegetarians with benefits’
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• ~ 10% of Australians were vegetarian or vegan in 2013 (Roy Morgan 2014)
• 20% increase in vegetarianism from 2009 to 2013 (Roy Morgan 2014)
• Australia has the 3rd fastest growing vegan market (Euromonitor International 2018)
Changes have implications for Australian and KI ag/food industry
• Diet composition and relative food expenditures
• Increasing demand for information on ‘content,’ ‘where’ and ‘how’ food is produced – Nutrition information
– Origin/provenance (e.g. Kangaroo Island, Australian, etc)
– Production and process attributes (e.g. Organic, Free Range, Certified Humane, Grass-Fed etc.)
– Allergens and avoidance (e.g. gluten)
• Demand for organic food is growing (~5% per year)
• Functional food demand
• High value / luxury food
• Trust and governance of food system
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Source: https://www.eatforhealth.gov.au/sites/default/files/files/eatingwell/efh_food_label_example_130621.pdf
Front-of-Package Labelling Cues
Production claims
Certifications
Production claims
BRAND INFORMATION
‘Back-of-Package’ Information
Growth in Labelling Cues: “Credence Attributes”
Growth in Labelling Cues: “Credence Attributes”
Information age in food - good or bad?
• Increasing number of labels and claims
– health, safety, origin, production methods, quality
• Is “information asymmetry” increasing or decreasing?
• What is the role of industry, government, consumer?
• Information overload??
• Do consumers understand the claims?
• Cynicism is increasing
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Source and image: 2017 Australian Organic Market Report, http://austorganic.com/ao-market-report/
Australian barriers to buying more organics:
• 43% Lack trust in organic claim
• 27-23% Lack of reliable information that• Organic is better
for the environment
• Organic is healthier• Animals are treated
better on organic farms
• No GMOs
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University of Adelaide’s FoodIQ Studies:Insights into Australian food patterns
Food Insights Quarterly = FoodIQ
Online survey conducted quarterly Sept 2018 (n=1003), Dec 2018 (n=1103) & Mar 2019 (n=1076)
Food shoppers aged ≥18y
Nationally representative sample
Age
Gender
Location (metropolitan vs. other; and state/territory distribution)
Recruited by online panel provider
Survey Sampling International (SSI)
1. Screening questions
2. Household food expenditure
3. Personal food consumption
4. Changes to meat/protein consumption patterns and reasons for change
5. Food choice drivers
6. Attitudes and concerns regarding various food issues including food safety and novel production methods
7. Awareness and understanding of food labelling
8. Trusted information sources
9. Environmental attitudes and actions
10. Health and socio-
Australian consumption of animal products vs vegetarians and vegans(FoodIQ, Sept 18, Dec 18, March 19)
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77%
19%
4%0.60%
76%
20%
3% 1%
75%
19%
4% 2%0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Omnivore: I eat most animalproducts including meat, fish,
seafood and/or dairy
Semi-Vegetarian/Flexitarian: Iam cutting back on meat but
not avoiding it completely
Full-time Vegetarian: I do noteat meat but am still eating
other animal products
Vegan: I do not eat any animalproducts
% o
f sa
mp
le
Which of the following best describes your current food preferences?
Wave 1: Sept 2018 Wave 2: Dec 2018 Wave 3: Mar 2019
What is important to consumers when purchasing food? (FoodIQ, March 2019, n = 1076)
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23 3 3 4 4 5
6 6 67
8
10
15
18
6
10
7 89
109
11 1210
12
1415
18
22
0
5
10
15
20
25Mean allocation of points
Australians’ confidence in the safety of their food supply(FoodIQ, Sept 18, Dec 18, March 19)
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Sept 2018Mean =
5.47N =1003
Dec 2018Mean =
5.53N =1076
March 2019Mean =
5.59N =1103
Australian’s opinions on 3 most important FOOD SAFETY issues? (FoodIQ, Dec 2018, n = 1076)
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Australian Consumer Attitudes: Safety, Quality, Provenance(FoodIQ, Sept 2018, n = 1003)
22
15
14
17
22
32
32
29
35
34
30
14
10
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
I prefer to buy food that has been produced inAustralia
I am satisfied with the eating quality of food productsavailable in Australia
I am satisfied with the safety of food productsavailable in Australia
Strongly disagree Disagree Somewhat disagree
Neither agree nor disagree Somewhat agree Agree
Strongly agree
81% are satisfied with quality
81% care that it is Aussie
76% are satisfied with safety
Australian Consumer Attitudes: Environment & Production Methods(FoodIQ, Sept 2018, n = 1003)
23
4
6
4
4
8
7
7
8
7
5
7
3
7
12
13
12
15
14
8
12
5
11
13
15
14
15
15
40
33
42
27
32
32
29
36
31
26
25
25
26
19
18
20
14
17
12
11
14
19
11
10
11
7
9
5
7
7
5
5
6
6
6
7
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Food production has significant negative environmentalconsequences
I am concerned that food production harms the environment (e.g. byincreasing greenhouse gases)
I would prefer to buy food products that are carbon neutral
The welfare of animals used to produce food products is as good ascan be expected in Australia
I am so concerned about the use of hormones…
I am concerned about the use of antibiotics ...
I am concerned about the use of pesticides…
I am concerned about the use of glycophosphate (Roundup)…
I am concerned about foodborne contaminants (e.g., Hepatitis A, Campylobacter, Listeria, salmonella, E. Coli)…
Strongly disagree Disagree Somewhat disagree Neither agree nor disagree
Somewhat agree Agree Strongly agree
Australian Consumer Attitudes: GMOs(FoodIQ, Sept 2018, n = 1003)
24
8
6
11
4
3
2
1
2
14
7
8
5
4
3
2
1
20
12
15
10
8
6
2
3
30
41
33
42
43
26
27
20
16
19
18
19
23
30
28
25
8
11
8
11
10
20
23
25
4
5
6
8
9
13
17
23
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
I feel sufficiently informed about biotechnology/geneticallymodified food
Genetically modified foods are safe to eat
I would have no concern purchasing food labelled as ‘GM’ (genetically modified)
There is a chance of eventually becoming ill from repeatedlyconsuming genetically modified food
Genetically modified foods pose a risk to the environment
I want to know more about biotechnology/geneticallymodified food
Genetically modified food should not cost more than non-genetically modified food
Labelling of ‘GM’ (genetically modified) food is important
Strongly disagree Disagree Somewhat disagree Neither agree nor disagree
Somewhat agree Agree Strongly agree
73%
68%
63%
42%
63%
32%
35%
28%
Australian Consumer Attitudes: Trust for Information(FoodIQ, Sept 2018, n = 1003)
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How much do you TRUST the following people/organisations to provide accurate information about FOOD SAFETY?
4.64
4.66
4.68
4.81
4.83
4.83
4.84
5.20
5.24
1 2 3 4 5 6 7
Food Industry Associations (e.g. Australian Food…
Environmental organisation (e.g., Landcare,…
Farmer Associations (e.g. Cattle Council…
Animal rights organisation (e.g., RSPCA)
Farmers (e.g. an individual farmer)
Dietitians and nutritionists
Consumer organisation (e.g. Choice)
CSIRO- Commonwealth Scientific & Industrial…
Doctors/medical professionals
Trust in different sources
Do not trust at all Trust completely
Australian Consumer Attitudes: Trust for Information(FoodIQ, Sept 2018, n = 1003)
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How much do you TRUST the following people/organisations to provide accurate information about FOOD SAFETY?
Do not trust at all Trust completely
1 2 3 4 5 6 7
Celebrity chefs
Supermarkets (e.g. Coles, IGA, Woolworths, Aldi)
Food Processors (e.g. dairy, meat or grain processor)
Animal protection organisation (e.g., Voiceless,…
Independent or local food stores (e.g. butcher,…
Family/Friends/Work colleagues
Universities
Government/government agencies (e.g. FSANZ-…
Trust in different sources
2015 & 2017 Australian Meat Studies
• Nationally representative – Roy Morgan meat buyer data
• Food shopper • Purchase meat at least monthly • Sample quotas, Age
– Gender– Location (States/Territories & City vs. Country)
• Also stratified by:– Education level– Respondent income – Employment
1. Screening questions
2. Meat behaviour
3. Awareness and use of meat product labelling
4. Choice experiment
5. Perception of credence claims
6. Concerns about meat
7. Knowledge of livestock management practices
8. Experience with livestock
9. Attitudes towards meat production and farm animal welfare
10.Socio-demographics
Funded by ARC Linkage (LP130100419)
Meat Cuts
Beef Chicken Pork Lamb
Mince
Preferred
Beef
Steak
Breast
Fillets
Thigh
Fillets
Leg
Roast
Loin
Chops
Leg
Roast
Loin
Chops
Meat Attributes & Levels
Production
method
Farm
Animal
welfare
status
Organic
status
Other
claims
Other
claims
Price per
kg
Beef & Lamb:
Pasture-raised
Chicken & Pork:
Free Range
Certified
Humane
Certified
Organic
Antibiotic
Free
No Added
Hormones 4 levels per
meat cut
Conventional None None None None
Credence claims
24%
29%
29%
23%
16%
31%
25%
34%
34%
32%
45%
46%
38%
43%
52%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
ALL SAMPLE
BEEF
CHICKEN
PORK
LAMB
Disagree Neither Agree
“The welfare of cattle/chickens/pigs/sheep used to produce meat is as good as can be expected” (n=1205, 2017)
Animal welfare attitudes (% agree /strongly agree, 2017): “Transport concerns? Impact on behaviour?”
Animal welfare attitudes (% agree /strongly agree, 2017): “Animal welfare has personal benefits…”
0%10%20%30%40%50%60%70%80%90%
100%
FreeRange
Organic
CageFree
GrowninAustralia
NoAddedHormones
RSPCAApproved
Grain-Fed/Finished
Grass-Fed/Finished
Anbio
c-Free
PastureRaised
2015 2017
Consumer Awareness of Claims in Meat, 2015 vs 2017
Growth in Awareness of Animal Welfare Claims? 2015-2017
Australian Consumer Perceptions of Claims (2017, n = 1205)
Australian Consumer Perceptions of Claims (2017, n = 1205)
Willingness to Pay for Credence Attributes
• No Added Hormones > all other claims (P<0.01)
WTP (95%CI)
Free Range/Pasture Fed $1.66 (1.29 – 2.03)
Certified Organic $1.33 (0.94 – 1.69)
Certified Humane $1.67 (1.30 – 2.07)
Antibiotic Free $1.38 (1.02 – 1.73)
No Added Hormones $2.55 (2.12 – 3.03)
Willingness to pay differs by meat type (2015, n = 1009)
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
Organic An bio cFree Produc onmethod
Cer fiedHumane
NoAddedHormones
WTP
($/Kg)
LambChickenPorkBeef
• Drivers of preference differences are difficult to determine using socio-demographics
Less likely to select than younger respondents
60+
Certified Humane
No Added Hormones
Certified Organic
Less likely to select than females
More likely to select than lower income
Higher than average income
Males
Consumers have heterogeneous preferences /values for credence attributes
3 Unique Segments: Class 1 (24%)
Credence motivated • Somewhat sensitive to price and cut• High premium for all credence attributes
1. No added hormones (*)
2. Free Range 3. Organic (*)4. Humane production5. Antibiotic Free (*)
• Highest % of consumers perceive benefits of credence cue, • particularly benefits such as taste, safety, health
• Most knowledgeable, concerned, and previously purchased credence-differentiated products
• City dwellers
3 Unique Segments: Class 2 (32%)
Animal Welfare & Cut important,
Price insensitive
• Cut drives the purchase decision, followed by animal welfare
• High premiums (WTP) for1. Humane production (*)
2. Free Range
3. No added hormones
• Discount organic
• Higher than average % of consumers perceive benefits
3 Unique Segments: Class 3 (44%)
Price sensitive skeptics• Price drives purchase decision
• Lower than average premiums (WTP) for
1. No added hormones
2. Humane production
• Low % perceive benefits from credence attributes
Summary and take home messages
• Australian consumers’ preferences for food and food attributes are changing, similar to global consumers
• The market is highly segmented and there are opportunities to target specific segments
• A “brand” is not enough
• Must understand the “values” of the individual consumer segments
• “Why” might people value KI? – Clean and green image?
– High quality?
• What is the relative value of KI vs other attributes?
• “Who” might value KI?
• How to maintain brand integrity?
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Take home messages (2)
• Growing confusion about claims
–Cynicism
–Misperceptions and information asymmetry are significant issues
• Credibility is crucial to maintain any “value” in credence attributes
• Standards for claims and certifications are needed for “credence”
Thank you!
http://www.adelaide.edu.au/global-foodhttp://www.adelaide.edu.au/global-food/blog/
[email protected]@WendyUmberger