Food for thought

Who doesn’t like eating food, talking about food, or planning the next food outing? If you answered yes, to any of these – then you are a foodie.

But the dialogue around food has changed in the last few years. Now the discussion ranges from how the food was grown or raised – who raised it – and who will pay for all the increasing consumer demands?

Foodies discuss the pros and cons of food grown locally, organic labels or if the price differences are acceptable. Where, in the past, someone might have asked if you are a Virgo or a Leo, they now ask if you are a vegan or a locavore or where you buy your produce or your meat?

John Cranfield, a Professor in the Department of Food, Agricultural and Resource Economics (FARE) at the University of Guelph, set out to find out what drives a foodie to purchase locally grown or organic food and if you bundle local and organic – what is the outcome?

His research focused on the economics of consumer behaviour and demand analysis at the individual, household and market level (largely in relation to demand for food and food products).

During the study, they discovered what one person views as “local”; another has a very different set of perimeters. In provinces where there has been extensive marketing campaigns to establish locally grown to mean food grown provincially, such as in Ontario with their “Good things grown in Ontario”, and the branding of Alberta beef – consumers had a wider-angled lens.

“In this study, we sought new information to help inform aspects of the marketing mix for producers of locally produced organic foods. The foods we focused on included two fresh products, Gala apples and tomatoes, and three processed products including pork tenderloin, whole grain bread and aged cheddar cheese.”

More than 2,000 people across Canada completed an online survey which asked whether they would buy different versions of products based on key attributes, including: nature of the production system (i.e. conventionally produced, organically produced but not certified, certified organic).

They were also asked whether the production system such as farmer direct, independent grocer or grocery chain and distance between production site and the consumer mattered.

“In the end, the three most important factors were price, taste and freshness. Interestingly, the three least important factors were fairness, tradition and convenience,” says Cranfield.

“As prices increased, respondents were less likely to buy the product. The same was true for distance, which is important, because it says that consumers prefer locally produced foods.”

He says that while premiums for “local” were higher for fresh products than for processed products, the premiums associated with “localness” fell as the distance between production and consumption increased.

Lastly, availability through farmer direct sales or independent grocery stores did not affect choice. Availability through grocery chains increased the probability of choosing the product.

Is there a market for

locally produced food?

“After accounting for price, and the product, it appears there is a market within Canada at a broader scale for people to buy locally produced food. But, when people think local, they think fresh. We couldn’t find the breaking point or at what distance the respondent viewed as no longer locally grown,” says Cranfield.

Cranfield says the Canadian Food Inspection Agency (CFIA) initially identified “locally grown” food as within a 50 km radius. They are in the process of changing that definition of locally-produced products to products produced within a particular province or within 50 km of the boundaries of that province.

For example, Cranfield says an apple produced in Gatineau, Quebec, would be considered local in Ontario. If you lived in Niagara Falls, an apple from Manitoulin would be considered local. But, an apple grown in Michigan or New York State wouldn’t be considered local, even though they are closer which makes the definition somewhat confusing.

Choices for marketing

local products.

Cranfield says that farmer’s markets aren’t the only place to market locally grown products. He says that, while there’s a temptation in agriculture for alternative/alternate marketing channels, the survey suggested the growth for purchasing looks to be more from grocery chains. But that`s not an easy road.

“It largely depends on what you’re selling when going through a conventional market. It requires a consistent supply and quality and one must meet the standards for food quality. It is often a barrier for producers to change their practices on farm to make a sustainable living.”

“When you choose to keep ownership past the farmgate, you need the skill set for marketing.”

“But remember – the person that grows it – doesn’t have to be the person that sells it. There are value chain alliances such as with local restaurants. In these types of gate-to-plate marketing, both parties must be clear about expectations and the value added.”

Eggs are also under

the microscope.

The study group has turned their attention to consumer demands in animal welfare related to eggs. In that survey, they asked the consumer online panel to choose what system they deemed the best for the egg laying hens.

“We’re finding that trust mitigates how much consumers are willing to pay for eggs from alternative systems. We did two different experiments. Through information supplied by our animal behaviour partners, we gave one set of survey respondents the basic low down about the different production systems. Then, armed with information from the animal science department, we gave others additional information about how each of the housing systems impacted the hen’s health and welfare both negatively and positively,” says Cranfield.

“The group exposed to additional information had a lower willingness to pay for eggs from alternative housing systems.”

“This suggests that the information consumers are exposed to becomes very important in the context of advocacy rights on both sides of the argument. We found that after putting scientifically valid information in front of consumers, they were less enthusiastic about paying more for eggs produced by hens in alternative housing systems.”

The sustainability conversation

Cranfield suggests that marketers tend to use or overuse the word sustainability or sustainable to describe a products’ worth. And without a clear meaning, it allows marketers to leave the interpretation open to consumers which can be advantageous – or not.

“I teach a lot of students who come from family-owned, large-scale commercial farms. Unfortunately, what people think of when they think of a once traditional family farm is much different from today’s farm businesses. Some folks are calling them factory farms, but they are still a family-run operation.”

“I have a frustration with people that twist some of the words to mean different things. The economic and commercial sustainability of these family-owned businesses drive the rural economy. Which we found was another reason why people buy local. It may not be about the environment or that a product is fresher or tastier. They purchase local to support the local economy.”

What next?

“Sustainability is sort of this codification of a whole bunch of issues often related to animal welfare issues, but increasingly it will relate to things like on farm practices and how you treat labour. “We’re starting to hear this from the U.S. with farm labour practices coming under the scrutiny of consumer and advocacy groups. Ag labour typically gets treated poorly and now it’s coming to the forefront of the foodie conversation.”

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