Consumer Attitudes Toward the Agri-food System and the Environment

International Markets Bureau MARKET ANALYSIS REPORT MARCH 2010 Consumer Attitudes Toward the Agri-food System and the Environment

Consumer Attitudes Toward the Agri-food System and the Environment EXECUTIVE SUMMARY Over the last two decades, the globalization of the agri-food system has resulted in an increased diversity of food products being offered to consumers in all parts of the world. As consumer choice has expanded, so has consumer awareness of the important link between the agri-food s ystem and the environm ent thereb y increasingly affecting their food choices. Agriculture and Agri-food Canada (AAFC) commissioned a literature review in 2007 examining consumer attitudes about the link between the agri-food system and the environment, from the perspective of several stakeholder groups. Key findings related to the consumer perspective are summarized in this report and placed in an international context. The full report 1 can be found on AAFC s web site. INSIDE THIS ISSUE Title here 0-0 HOW IMPORTANT ARE 3 Title ENVIRONMENTAL here ATTRIBUTES? 0 TRADING-OFF CONVENIENCE 4 Title PACKAGING here FOR 0-0 ENVIRONMENTAL Title SUSTAINABILITY here 0 CONSUMER TREND: 5 LOCAL FOODS CONSUMER TREND: 6 DOMESTICALLY PRODUCED CONSUMER TREND: 7 ORGANIC FOODS CONCLUSION 7 ADDITIONAL RESOURCES 7 KEY INFORMATION SOURCES 8-9 Local or regional food systems have been increasingly perceived as more sustainable... 1 [www4.agr.gc.ca/aafc-aac/display afficher.do?id=1243283137354&lang=eng] PAGE 2

HOW IMPORTANT ARE ENVIRONMENTAL ATTRIBUTES? When asked as an open-ended question, European consumers felt that freshness and taste were the most important food quality attributes (79% and 75%, respectively) (Torjusen, Lieblein, Wandel & Francis, 2001). With regard to environmental attributes, they ranked the lack of genetically modified organisms in third place (63%), while environmentally-sound production was mentioned by 26% of respondents. Similarly, Canadian consumers felt that freshness was the most important attribute (27%), followed by nutritional value (15%) (Ipsos Reid, 2007) (Figure 1). However, environmental attributes such as the environmental sustainability of production practices or whether a product is organic were not top-of-mind for Canadian consumers according to these 2007 results. Figure 1 Canadian Consumers Perceptions about Food Quality when asked: What is the first thing that comes to mind? Source: Ipsos Reid (2007) Although more recent results have not yet been published, there has been a great deal more public discussion on Canada s own environmental movement that could change these consumer attitudes in the near future (Anders, 2007). PAGE 3

TRADING-OFF CONVENIENCE PACKAGING FOR ENVIRONMENTAL SUSTAINABILITY Consumer willingness to trade convenience packaging for environmental sustainability has begun to emerge worldwide (Rano, 2008). According to a study of consumers from around the world, nearly 5 0 % o f g l o b a l c o n s u m e rs s a i d t h e y would b e w i l l i n g t o t r a d e c e r t a i n t yp e s o f convenience packaging, such as packaging designed for: easy storing at home; easy transport; and packaging that can be used to cook in, that doubles as a resealable container (49%, 47%, and 48%, respectively). Roughly one-third of global consumers said they would be willing to trade-off other types of convenience packaging, such as packaging designed for: preserving products; displaying food labelling, cooking, and usage instructions; keeping products in good condition; and keeping products clean and untouched by others (34%, 33%, 30%, and 27%, respectively). Globally, consumers were more willing to trade-off packaging attributes that were purely for convenience, but less so for those attributes related to food safety. However, results varied between different world regions and/or countries (Table 1). There may have been many reasons for these regional differences. For example, longer transportation and distribution channels in many western countries may have required more substantive packaging to avoid product damage or spoilage. Second, consumer shopping habits and the structure of the food system in Asia were still influenced by fresh markets (e.g., open air markets) and consumers from this region were accustomed to making multiple shopping trips every week. Table 1 Regional Differences in Consumer Willingness to Trade-off Convenience Packaging for Environmental Sustainability Country New Zealand Ireland, Czech Republic Europe and North America Latin America Asia, Thailand, Japan Preference Above average (over 60%) willingness to trade-off all types of packaging Above average (over 55%) willingness to trade-off all types of packaging Roughly 55 % were willing to trade packaging that can be re-used for other purposes at home. However, the majority was not willing to trade-off packaging designed for food safety purposes. Generally, European consumers were more willing to trade-off packaging than those from North America. They were the most willing to trade-off packaging that was designed to keep products in good condition. Asian consumers reported buying the majority of their foods fresh, with little to no packaging. Yet, Thai consumers demonstrated a low willingness to trade-off packaging, with only 27% willing to accept reduced packaging. Japanese consumers stated that aesthetics played an important role when buying food products, making packaging an important attribute in food purchasing decisions. Only 16% of Japanese consumers were willing to trade-off packaging for environmental sustainability. Source: Rano (2008) based on a report by The Nielsen Group PAGE 4

CONSUMER TREND: LOCAL FOODS The local food concept began in Europe where consumers associated local foods with attributes that went beyond the actual definition of local; for example, these foods were seen as organic, healthier and safer, with a traceable origin, raised with enhanced animal welfare, as well as being produced more in keeping with traditional production methods (Darby, Batte, Ernst & Roe, 2008). In addition, local foods have been defined based on the distance the food travelled (e.g. 100- mile diet), whether it was produced within certain political boundaries (e.g. region or country), or if it was produced within a particular environmental region (e.g. micro-climate or watershed). Source: The Hartman Group In many developed countries, re-localization of the food s u p p l y t h r o u g h a r e n e w e d f o c u s o n l o c a l agriculture has been closely linked to the food miles concept. Local or regional food systems have been increasingly perceived as m ore sustainable, as they limit food transportation by reducing the amount of food imported into a particular country (Chinnakonda & Telford, 2007). In Canada, for instance, there is nationwide growth in farmers markets and farm gate sales, driven by consumers desire to have more control over food sourcing, high valuation of perceived enhanced taste and nutrition, and a willingness to support ethical and environmental values (Anders, 2007). In the Canadian context, many farmers markets actively pursue certification to guarantee local (or at least provincial) sourcing of all foods sold (Helsop, 2007). Further, the majority of local agri-food system initiatives are concentrated in provinces with higher population density, such as Ontario, British Columbia, and Quebec, as they tend to only be successful when they are F o o d M i l e s a n d E c o l o g i c a l F o o t p r i n t s Since the late 1990s, food miles the distance food travels from farmers to consumers has become a new term in relation to an environmentally sustainable agrifood system (Iles, 2005). The ecological footprint concept is much broader than that of food miles, as i t a c c o u n t s f o r t h e f l o w o f energy and matter to and from the production of a specific good or activity. Besides representing a much more comprehensive concept that is, therefore, more difficult to measure in practical terms, the ecological footprint concept is appealing in that consumers can visualize the environmental impact of their buying decisions and d e m a n d e n v i r o n m e n t a l l y sustainable improvements. located near large urban centres (Sustainable Agriculture Research and Education, 2008). Similarly, consumers in the United States (US) say they are willing to pay more for local foods than those that are processed in the US, but are of unknown origin (Chinnakonda & Telford, 2007). However, the localization of agri-food systems requires changes along the entire food value chain, including the altering of land-use patterns and production methods to satisfy local consumer demands (Pretty, Ball, Lang & Morison, 2005). Yet proximity alone may not sufficiently measure environmental sustainability, and more localized agri-food systems may face tough competition with regard to prices and availability. Further, price-sensitive consumers and those who are less concerned about the environment are not likely to change their consumption habits, especially when food prices rise (Hu, Hunnemeyer, Veeman, Adamowicz & Srivastava, 2006). PAGE 5

CONSUMER TREND: DOMESTICALLY PRODUCED FOODS While consumers do not base their food choices solely on the country of origin, it is an important criteria (Anders, 2007). For example, country-of-origin labels can serve as a cue for product quality, as products from certain countries may be perceived as being bettertasting, safer, or produced under more sound environmental practices. In other situations, country of origin and quality may not be linked in consumers minds, but they may have strong preferences towards a certain country in many cases, their home country. For example, US consumers express a strong preference for domestic products due to their national pride and strong belief in the superiority of their agri-food system (Lusk, et al., 2006). European consumer studies suggest that at least a portion of consumers desired information on foods or process attributes relate to potential food safety and health risks (e.g., pesticide residues, microbial hazards, and genetically modified ingredients) (Anders, 2007). As such, country-of-origin information may serve as a default indicator of trust or distrust in the production methods and product quality. For example, consumers may have perceived produce from developing countries as posing a greater threat to food safety and health than foods imported from a developed country (Heslop, 2007). Food products from developing countries are often perceived to be of unknown/ uncertain quality and/or safety, and are only accepted if certified quality and safety guarantees are provided by a credible and trustworthy information source (e.g., a brand name). Consumer research commissioned by AAFC found that Canadian consumers strongly stated a preference for easily-identifiable domestic products over imported ones, especially fresh products, such as poultry, meats, produce, and seafood/fish (Ipsos Reid, 2007). They also reported preferring food that has been grown locally or in Canada, rather than outside Canada. However, this preference was substantially lower when ref erring to process ed f oods. Respondents acknowledged that a large proportion of foods have A trend or just another passing fad? It is not the first time we have seen a green movement, so is this time any different? Back in the 1990s, there was an unsuccessful green movement that d i d n o t r e s u l t i n m a k i n g t h e e n v i r o n m e n t a f a c t o r i n f o o d - p u r c h a s i n g d e c i s i o n s d e s p i t e consumers strong desire to do so (Sloan, 2007). It is different this time. Consumers are now connecting personal health, food safety, and environmental concerns. Rather than seeing consumer trends that are driven purely by environmental concerns, numerous consumer trends are partly driven by environmental concerns, in addition to concerns related to how far food travels and its overall ecological footprint, if they can be sourced locally or in their own country, and if they are grown using organic production methods. been imported from the U.S. and that imports were required to overcome seasonal limitations. Origins beyond North America were not mentioned, suggesting that the awareness of the distance many foods travel was limited among respondents. However, it is necessary to further validate these results through direct observation of consumers in a retail setting. Source: The Hartman Group PAGE 6

CONSUMER TREND: ORGANIC FOODS Many consumers of organics associate organic foods with production attributes, such as prohibiting the use of synthetic pesticides and fertilizers, as well as genetic modification technology (Marchesini, Hasimu & Regazzi, 2007). Organic is also often implicitly perceived to be local, at least in comparison to many globalized, conventional agri-food supply chains. This is one possible explanation for certain consumer segments across many developed countries tending to have positive perceptions of organic food systems. However, personal health concerns and overall environmental concerns are the two most commonly stated motives for purchasing organic foods, with personal health being more important than concerns for the environment (Tregear, Dent & McGregor, 1994; and Wandel & Bugge, 1997). While many consumers, especially those in more affluent western societies, consider organic products to be a more environmentally sustainable alternative, higher prices are often mentioned as the main hurdle to buying organic on a regular basis or at all (Grebitus, Yue, Bruhn & Jensen, 2007). In Canada, consumer demand for organic foods is growing beyond its traditional customer base of speciality stores, farmers markets, and farm gate shoppers (Anders & Moeser, 2008). Canadians tend to be willing to pay higher prices for organic foods, up to a 10% premium (Haghiri & McNamara, 2007). In addition, consumer research findings suggest that organic food purchases are motivated by several reasons: they are perceived to be healthier, more nutritious, and better tasting than non-organic foods; no synthetic chemicals are used in the production process; and they are less exposed to environmentally harmful substances (Haghiri & McNamara, 2007). Interestingly, it is also suggested that consumers of conventional foods do not buy organic foods because they are more expensive, only irregularly available, show less variety, are of lower overall quality, and they do not provide enough incentives to change existing consumption patterns. CONCLUSION Production practices believed to be more environmentally friendly such as organics, 100-mile diets designed to reduce the environmental impact of transporting foods from distant markets, and reduced packaging all have strong positive connotations for a growing number of today s consumers. This small but growing global trend has led food supply chain participants to target environmental attributes when developing and positioning their product offerings. ADDITIONAL RESOURCES Agriculture and Agri-food Canada. (2009). Growing Green: The Future of the Retail Food Industry. Retrieved from Agriculture and Agri-Food Canada Web site: www.ats.agr.gc.ca/us/4351_e.htm PAGE 7

KEY INFORMATION SOURCES Anders, S.M. (2007). Consumer Attitudes towards the Link between the Agri-food System and the Environment: An Analytical Literature Review of Stakeholder Perspectives. Retrieved from Agriculture and Agri-Food Canada Web site: www4.agr.gc.ca/aafc- AAC/display-afficher.do?id=1243283137354&lang=eng Anders, S., & Moeser, A. (2008). Assessing the demand for value-based organic meats in Canada: A c om bined retail a nd household s c ann er - data ap proach. Inter n atio na l J ourna l of Consumer Studies, 32(5), 457-469. Chinnakonda, D., & Telford, L. (2007). Local and Regional Food Economies in Canada: Status Report. Retrieved from Agriculture and Agri-Food Canada Web site: www4.agr.gc.ca/aafc-aac/ display-afficher.do?id=1201537185705&lang=eng Darby, K., Batte, M.T., Ernst, S., & Roe, B. (2008). Decomposing local: A Conjoint analysis of locally produced foods. American Journal of Agricultural Economics, 90(2), 476-486. Grebitus, C., Yue, C., Bruhn, M, & Jensen, H.H. (2007). What Affects Consumption Patterns of Organic and Conventional Products? Paper presented at American Agricultural Economics Association Annual Meeting, Portland, Oregon, July 29-August 1, 2007. Haghiri, M. & M. L. McNamara (2007). Predicting consumers acceptability of pesticide-free fresh produce in Canada s maritime provinces: A probit analysis. Journal of International Food & Agribusiness Marketing, 19(4), 45-59. Heslop, L. A. (2007). Literature Review of Canadian Consumer Attitudes and Perceptions. Retrieved from Agriculture and Agri-Food Canada Web site: www4.agr.gc.ca/aafc-aac/display-afficher.do? id=1196275484318&lang=eng Hu, W., Hunnemeyer, A., Veeman, M., Adamowicz, W., & Srivastava, L. (2006). Trading off health, environmental and genetic modification attributes in food. European Review of Agricultural Economics, 31(3), 389-408. Iles, A. (2005): Learning in sustainable agriculture: Food miles and missing objects. Environmental Values, 14(2), 163-183. Ipsos Reid. (2007). Canadian Domestic Branding Part 1: Quantitive Research. Retrieved from the Agriculture and Agri-Food Canada Web site: www4.agr.gc.ca/aafc-aac/ display-afficher.do? id=1231265818352&lang=eng Lusk, J.L., Brown, J., Mark, T., Proseku, I., Thompson, R., & Welsh, J. (2006). Consumer behavior, public policy, and country of origin labeling. Review of Agricultural Economics, 28(2), 284-292. Marchesini, S. Hasimu, H., & Regazzi, D. (2007). Literature review on the perception of agro-foods quality cues in the international environment. Paper presented at the 105th European Association of Agricultural Economists, Bologna, Italy, March 8-10, 2007. Pretty, J.N., Ball, A.S., Lang T., & Morison J.I.L. (2005). Farm costs and food miles: An assessment of the full cost of the UK weekly food basket. Food Policy, 30, 1-19. Rano, L. (2008). The packaging that consumers will give up survey. Retrieved from the Food Production Daily Web site: www.foodproductiondaily.com/packaging/the-packaging-that-consumerswill-give-up-survey PAGE 8

Sloan, E. (2007, December). New Shades of Green. Food Technology, 61 (12): 16. Sustainable Agriculture Research and Education. (2008). Exploring Sustainability in Agriculture. Retrieved from the Sustainable Agriculture Research and Education Web site: www.sare.org/publications/explore/index.htm Tregear, A., Dent, J.B., & McGregor, M.J. (1994). The demand for organically grown produce. British Food Journal, 96, 21 25. Torjusen, H., Lieblein, G., Wandel, M., & Francis, C.A. (2001). Food system orientation and quality perception among consumers and producers of organic food in Hedmark County, Norway. Food Quality and Preference, 12, 207-216. Wandel, M., & Bugge, A. (1997). Environmental concern in consumer evaluation of food quality. Food Quality and Preference, 8(1), 19-26. PAGE 9

The Government of Canada has prepared this report based on primary and secondary sources of information. Although every effort has been made to ensure that the information is accurate, Agriculture and Agri-Food Canada assumes no liability for any actions taken based on the information contained herein. Consumer Attitudes Toward the Agri-food System and the Environment Her Majesty the Queen in Right of Canada, 2010 ISSN 1920-6593 Market Analysis Report AAFC No. 11186E Photo Credits All Photographs reproduced in this publication are used by permission of the rights holders. All images, unless otherwise noted, are copyright Her Majesty the Queen in Right of Canada. For additional copies of this publication or to request an alternate format, please contact: Agriculture and Agri-Food Canada 1341 Baseline Road, Tower 5, 4th floor Ottawa, ON Canada K1A 0C5 E-mail: infoservice@agr.gc.ca Aussi disponible en français sous le titre : L attitude des consommateurs par rapport au système agroalimentaire et à l environnement