Paying Premium For Shelf Life

Paying Premium For Shelf Life US Department of Agriculture
More than objective attributes, consumer behaviours are governed by perception and quality association. Participants of a survey said that they are willing to pay for extended shelf life, but only if food safety is not jeopardised. By Carola Grebitus, Arizona State University

The food industry is characterised by saturated markets and increasingly homogeneous products particularly for fresh raw food products such as ground beef. In addition to this, the public image of the US food industry has been frequently damaged by food safety issues such as food-borne illness outbreaks.

Consumers constantly demand higher food safety and greater food safety assurance especially with regard to meat products. Thus, food processors and food retailers must have a sound understanding of market trends, particularly of consumers’ quality perceptions and evaluation in order to be competitive and provide differentiated products as well as successful product innovation.

From the industry’s perspective, investing in new process technologies is a key factor towards improved food safety. Technological advancements have the potential to alleviate the risk of microbial food hazards to consumers. However, in order to market products effectively, it is important for the industry to analyse which parameters influence consumers’ purchase decisions.

In a way, companies have to create a product the consumer has been waiting for at the moment he/she is asking for it without cutting back on the product’s quality. As managers learn about the importance of certain quality attributes—and define and measure it objectively from the company’s perspective, they need to consider the quality that consumers associate with a food product, which oftentimes is not equivalent to this objective quality evaluation.

Rather than thinking in objective scientific parameters, consumers do not buy attributes, they shop for subjective product benefit. Hence, consumers’ perception of the quality parameters they care for have to be investigated.

For example, for consumers, it is very important that products have an attractive colour on the shelf because the product’s colour is the first quality attribute that consumers use when assessing quality. Not only does colour plays an important role for consumers food choices, it also determines the customers’ quality expectations, even though the colour neither affects taste nor shelf life and does not predict quality of products such as fresh meat.

Safety Issues

Shelf life being of interest to consumers comes with the notion that the food consumed might be spoiled. In this context, 106 participants from the Midwest, US, were asked to indicate how the following issues affect their meat consumption patterns (1=no effect and 5=major effect). Results show that food safety in general has the strongest effect. E coli, salmonella and L monocytogenes are especially worrisome to consumers. As the results show, none of the mentioned issues are taken lightly by the customers, though foot and mouth disease has the least effect.

Quality Attributes

When purchasing fresh meats, several attributes are important to customers. In the same study, respondents were asked to indicate how important each of the following attributes is when purchasing ground beef (1=not important and 5=very important).

Results reveal that shelf life ranks fourth after fat content, colour and flavour. More specifically, 48 percent of the sample thought the date of expiration is very important and only three percent think it is not important at all.

Interestingly the date of packaging is of less importance to shoppers and whether it is freshly ground in the store and packaged in store or by producer is of very little importance to them in making their ground beef purchase decision.

Quality Perception

Shelf life plays a big role on consumers’ ground beef purchases. The picture is a little bit different when asking consumers ‘what comes into your mind when you think about pork quality’.

The 260 participants surveyed in Germany came up with 824 associations in this free elicitation task. Taste (10 percent), antibiotics (8.1 percent), freshness (7.7 percent) and origin (7.7 percent) were the characteristics most often associated with pork quality.

Only 0.5 percent of all associations were related to shelf life per se. The impact of shelf life was more evident when the same participants were asked what attributes are important to them when purchasing pork.

Out of the 260 respondents, 46 percent claimed that shelf life is important to them. Further tests revealed that if shelf life was important to consumers, they were more likely to consume organic pork instead of conventional pork.

In another study, 702 pork shoppers were interviewed at the point of sale to investigate whether certain quality attributes are most important, second most important or least important to consumers when shopping for pork products.

The Dinner Series Cambridge US
The Dinner Series, Cambridge, US

Results show that price (29.9 percent) and shelf life (15.5 percent) are the two most commonly cited attributes as being the most important factor. However, 18 percent chose shelf life to be the second most important attribute with regard to the purchase of pork. For eight percent of the respondents, shelf life was the least important criterion concerning the purchase of pork.

While it seems that shelf life is not necessarily the most important attribute for consumers when purchasing ground beef or pork, the picture is quite different with regard to milk.

When asked how important certain quality attributes are to make a purchase decision for milk 86, percent out of 260 German consumers answered that shelf life is indeed important to them—shelf life being the top answer out of 25 different characteristics.

A customer segmentation via cluster analysis further uncovered that a certain group of consumers is mainly interested in shelf life, price and fat content. These consumers prefer UHT (skim) milk over fresh milk because UHT skim milk offers an extended shelf life in addition to the healthiness of a reduced fat content.

Modified Atmosphere Packaging

As has been shown, shelf life is important for consumers to make purchase decisions and so is colour. Certain technologies such as modified atmosphere packaging (MAP) are in place to extend shelf life and stabilise the colour of products such as meat, fish, cheese and fruits and vegetables.

MAP replaces the air in the headspace of packages with a single gas or a mixture of gases such as high oxygen atmospheres, with a minimum of 60 percent oxygen or blends of oxygen with carbon dioxide. MAP is used primarily to extend the shelf life of food products.

When carbon monoxide is added to the gas mixture in minute amounts ,the colour of meat is stabilised because carbon monoxide binds to myoglobin and forms carboxymyoglobin which results in a stable bright red muscle colour in order to meet consumers’ expectations of meat colour.

A recent study investigated whether consumers accept ground beef packaged under a modified atmosphere with and without carbon monoxide. The results for 106 consumers from the Midwest, US, show that participants only prefer an extended shelf life for ground beef if they are informed about the packaging technology (MAP).

With regard to colour, it becomes evident that consumers prefer both light red and cherry red coloured ground beef over brownish red ground beef. However, when consumers are being informed about carbon monoxide being a component of the gas mixture in the packaging their acceptance of the cherry red colour drops.

The response of German consumers (112 participants) was investigated to determine whether they accept the extended shelf life. Results show that only some German shoppers prefer ground beef with an extended shelf life (before and after additional information on the MAP technology). However, German customers do favour light red and cherry red colour for ground beef.

Consumer Knowledge

The analysis was extended by not only including the effects of colour, shelf life and MAP, but also consumers’ knowledge regarding food safety issues. The results show that the 106 US participants considered themselves to be more knowledgeable concerning shelf life and meat packaging practices in general than they were about more specific technologies such as high/low oxygen packaging or carbon monoxide in food packaging.

A share of 16 percent had heard recently anything about MAP in the mass media and 21 percent recalled hearing about carbon monoxide in food packaging in the mass media. Furthermore, results show that in the case of ground beef consumers were willing to pay US$0.36 per pound more for extended shelf life compared to a three-day shelf life after being informed about the use of MAP technology.

Information on the use of carbon monoxide-MAP reduced the willingness to pay for the shelf life extension from US$0.36 to US$0.13 per pound of ground beef. Consumers were willing to pay US$0.16 per pound in value more for the brighter (aerobic and carbon monoxide) red colour but introducing information on the use of MAP technologies led to a reduction in willingness to pay for colour from US$0.16 down to US$0.05 per pound.

Individual knowledge and media coverage showed only a slight effect on the willingness to pay. However, ‘knowledge of carbon monoxide in food packaging’ and ‘having heard about carbon monoxide in food packaging in the mass media decreased the willingness to pay for colour generated with carbon monoxide-MAP.

Consumers’ willingness to accept new technologies in food production and processing addresses a significant public health policy issue. The different results provide implications for marketing and product development regarding consumer responses to shelf life extension and information on packaging technologies.

In particular, industry recommendations can be made with regard to consumer willingness to pay price premiums for the additional benefits from extended shelf life, stabilised colour and increased food safety using MAP.

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