Incentives for Change

800 Consumers in California and Shanghai Tell Us They’d Pay More For NZ Products

Integrating Value Chains research finds consumers in California are willing to pay an extra 22% for NZ sourced and processed ground beef; 7 reports have been published.

深圳 Shenzhen 福田 Futian_福華路 Fuhua Road 怡景中心城 Central Walk Shopping Mall Carrefour Supermarket

Seven reports from Phase I of the Integrating Value Chains research programme, part of the Our Land and Water National Science Challenge, were published on the AERU’s dedicated website on 30 June 2018.

Phase 1 focused on 4 products, chosen in collaboration with stakeholders, for their potential to create value for New Zealand in a way that could be shared with producers. The 4 products and key markets were:

  • kiwifruit in Shanghai
  • yoghurt in Shanghai
  • beef in California
  • wine in California

Four choice experiment surveys of 800 consumers in these markets showed what environmental, social and cultural credence attributes consumers were willing to pay for. We found it is possible to identify different preferences for credence attributes in different market segments, resulting in a wide range of different values of willingness-to-pay in these segments.

Perhaps unexpectedly, consumers in California stated they were willing to pay an extra 24% for NZ sourced and processed ground beef, a 22% premium for enhanced animal welfare and 24% for pasture reared beef.

These elements will be used to provide consumers with evidence supporting a product’s claimed attributes, improve market access, deliver value to consumers, and so achieve a premium for export products from New Zealand. The research will provide protocols to modify or design value chains which share market value from consumers through to producers. It also identifies the on-farm practices currently being undertaken which can add value as well as those which could be modified.

Beef and Lamb NZ is using this research to develop its New Zealand Red Meat Story for international markets, and to underpin its environment strategy to ensure the claims from this $7B industry are being met. The potential in the US market is an extra revenue (assuming 20% premium) of $238 million in export returns. This organisation has commissioned the research team to replicate its surveys for other international markets, resulting in an extra $90,000 of additional co-funding for this research.

This research was conducted by Professor Caroline Saunders, Professor Paul Dalziel, Associate Professor Peter Tait, Dr Mark Wilson, Dr Bill Kaye-Blake, Dr Karyne Rogers, Dr Tanira Kingi, Dr John Reid, Alistair Mowat.

For more on this research project see Integrating Value Chains


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