Maximising export returns: Consumer attitudes towards attributes of food and beverages in export markets relevant to New Zealand

Abstract

The aim of this study is to explore consumer preferences towards selected key attributes in food, beverage, and other products in China, India, Indonesia, Japan and the United Kingdom (UK). The targeted consumer groups are the middle and upper class consumers in each country who are expected to be more likely to be willing to pay premium for these attributes in food and beverages, hence informing the New Zealand industries of possible opportunities for maximising their export returns. This study is part of a wider research project ‘Maximising Export Returns (MER)’, a three year project undertaken by the Agribusiness and Economics Research Unit (AERU) at Lincoln University funded by the New Zealand Ministry for Business, Innovation and Employment (MBIE). This project aims to explore how export firms can obtain price premiums by considering credence attributes in their products for overseas markets. This research builds on previous work of the AERU which showed that overseas consumers (including those in the UK, China, and India) value different attributes in food products (Saunders et al. 2013). The study assessed consumers’ willingness to pay (WTP) and preferences for the certification of certain attributes in lamb and dairy products; results showed that food safety was the most important attribute. Not surprisingly, India and China rated food safety certification as more important than respondents from the UK. However, more surprisingly, in most cases Indian and Chinese consumers valued other credence attributes more than consumers in the UK, including organic, environmental quality, animal welfare and recyclability (Saunders et al. 2013). In a pilot study, further surveying expanded the research to firstly include more countries such as Indonesia, Japan and Korea and secondly to assess in more detail the importance of factors affecting key credence attributes in food products and the relationships between them. The pilot survey explored consumer attitudes towards seven attributes in food products and then selected four of them for more detailed analysis; these were animal welfare, environmental quality, health food and food safety. Survey participants were asked to rate the importance of a range of factors underpinning these four attributes, which suggested some associations between them. Environmental quality, for example, was listed in the three developing countries as one of the top five factors associated with food safety (Saunders et al. 2015). The information gained from the pilot survey assisted the development of the scope of this study. In this study, the selection of credence attributes is expanded to ten key attributes in food and beverages that are important to consumers in five New Zealand exports markets, then six of these attributes are selected to assess underpinning factors in more detail as the pilot study showed that the factors influencing these key credence attributes differed across markets. The six key attributes are food safety, environmental condition, animal welfare & health, human health enhancing foods, social responsibility and the role of traditional cultures. The method of this study included a structured and self-administered online survey. Primary data was collected using Qualtrics™, a web-based survey system. Five surveys were conducted in March/April 2015 to assess consumers’ attitudes towards attributes in food and beverage products. The surveys were distributed in two developed countries (Japan and the UK) and three developing countries (China, India and Indonesia) and had a sample size of 1,000 consumers in each country. The survey also included a choice experiment to assess consumers’ willingness –to – pay (WTP) for attributes in different types of food and beverages, however these results are not in the focus of this report. Additionally, the WTP results will be used to estimate the potential benefits to New Zealand through modelling different scenarios using the Lincoln Trade and Environment model LTEM; a partial equilibrium trade model which forecasts the international trade, production and consumption of agricultural commodities.