Food Demand Survey - May 2015

The results of the May 2015 edition of the Food Demand Survey (FooDS) are now in.

Results reveal mixed changes in willingness-to-pay for disaggregate meat products.  However, stated purchase intentions for beef, pork, and chicken were all higher than last month as were expectations of price increases, suggesting an uptick in demand for meat.

As was the case in April, this month we again noticed an uptick in awareness of news about bird flu and an increase in concern about the issue.  That's two months in a row of notable increases in this issue.

We added several new ad hoc questions to the survey this month.  

The first set of questions were in response to the spreading avian influenza (bird flu) problem.  I've had several media inquiries (probably in response to this post) about the potential economic impacts of the outbreak.  One questions is whether domestic consumer demand for poultry and eggs will dampen in response to the outbreak.  My understanding is that avian influenza does not pose a human health or food safety risk, but of course that doesn't mean consumers believe the same.  As the regular tracking questions mentioned above suggest, consumers are becoming aware of the issue.  To delve into it a bit more, we added two agree/disagree questions. 

About 23% of respondents agreed or strongly agreed that they plan to eat less turkey and eggs because of the outbreak of avian influenza, and another 32% say they're concerned about the turkey and eggs they eat.  That's far from a majority, but it might be a large enough to affect demand.  Whether these beliefs will ultimately manifest themselves in the supermarket remains to be seen.  

A second set of questions were added to delve a bit deeper into the issue of labeling of GMO foods.  Yes, this an issue that has been much studied, and yes, consumer's answers to the question can't entirely be taken at face value (as my questions on preferences for DNA labeling have shown).  But, there seems to be some activity related to a GMO federal labeling initiative re-introduced by US Congressman Mike Pompeo from Kansas and others (see this for some discussion and background).  The bill has food industry support and it would move authority for GMO labeling to the FDA (and away from the states) and would only require labels if the FDA determines a health or safety risk.   

The first question asked: “Which of the following best describes your position on labeling of genetically engineered food?” Over half of the respondents answered, “Food companies should be required to label genetically engineered food in all circumstances”.  The other 46% of respondents expressed a more nuanced view.  About one fifth thought labeling should only be required if there is a health or safety risk and another 18% did not have a strong position. The remaining 6.5% of respondents stated “In general, food companies should not be required to label genetically engineered food but voluntary labels are permitted”.

Secondly, participants were asked: “How should the issue of mandatory labeling of genetically engineered food be decided?”  They could choose from one of six options.  

The majority, 61%, of the respondents stated “by the U.S. Food and Drug Administration (FDA)”.  Just over 10% of repspondents stated “I don’t know” and only 5% of respondents stated “by ballot initiatives in each state”.

Finally, the third question asked: “To what extent do you agree or disagree with each of the following statements?”  Participants were asked to rate each statement on a scale of 1 to 5 where 1 = strongly disagree, 3=neither agree nor disagree, and 5 = strongly agree.

Respondents rated the statement “In general, I support mandatory labeling or genetically engineered foods” the highest out of the nine statements with a score of 3.86.  The statement “Seeing a label indicating the presence of genetically engineered ingredients on a food product would increase the likelihood I’d buy the product” rated the the lowest of the nine statements with a score of 2.84. 

Thanks to David Ropeik who suggested a couple of the questions below related to effect of labels on perceptions on choice. 

Food Demand Survey - Two Years

It's a bit hard to believe, but we've now been running the monthly Food Demand Survey (FooDS) for two years!  We've put together a summary of the results over the last year.

Overall, meat demand (as measured by willingness-to-pay) has remained strong and has increased over the last year.  Expectations of price increases for meat are higher than last year, but have trended downward in recent months.  We've learned a lot of interesting things from the various ad-hoc questions, which you can find in the monthly releases.

Here are a few charts summarizing our findings over the last year or two.

Food Demand Survey (FooDS) - April 2015

The April 2015 edition of the Food Demand Survey (FooDS) is now out.  

Compared to last month, April witnessed reduction in willingness-to-pay for pork products and an increase in willingness-to-pay chicken products and for beef steak.  There was a 4% increase in stated expenditures on food away from home.

There was a spike in stated awareness of and concern for bird flu, an issue that has been much in the news in past weeks.  There was a fall in awareness of and concern for GMOs in April compared to March.

We added three ad hoc questions in response to suggestions by followers of FooDS.  The first two questions dealt with knowledge and concern regarding Bisphenol A (BPA).

We first asked, “Which of the following is true about Bisphenol A (BPA)?”

Overall, respondent's didn't seem to know much about BPA.  For each item, the majority of respondents answered “I don’t know”. The most believed statement (a factually true statement), with 34.8% of respondents answering “true”, is that BPA is used to make plastics. The least believed statement (a factually false statement), with 19.15% of respondents answering “false”, is that BPA is a fertilizer. 

Then, on the next page, we asked, "Relative to the other issues we previously asked about, how concerned are you that BPA poses a health hazard in the food you eat?” The modal response, with 37.64% of respondents, was “neither unconcerned or concerned” that BPA would pose a health threat. 39% stated they were either somewhat or very concerned. The average level of concern on a five-point scale was 3.19, which would place BPA concern below concerns over E. Coli, Salmonella, Hormones, Farm Animal Welfare, Antibiotics, and GMOs but above concerns over Bird Flu, Mad cow, Swine Flu, Pink Slime, and Greenhouse Gases.

Finally, the last ad hoc question shifted gears and asked respondents to indicate their beliefs about McDonald's vs. Chipotle.   We asked, “Which of the following companies do you think best fits each of the following descriptions?”

Over half of the respondents stated that McDonald's is more profitable, more convenient, and
more affordable. 61% of respondents stated that Chipotle is higher in quality and 58.42% stated they sell fresher food. Approximately one third of participants responded saying they did not know who was more socially responsible, Chipotle or McDonalds. 

Why don't people vote like they shop?

There have been several recent cases where there is an apparent disconnect between the way people vote on food issues and how they shop for food.  Examples include votes on GMO labeling or bans (which are more popular with voters than non-GMO products are with shoppers) and animal welfare issues (voters in several states have banned cages/crates employed in the vast majority of purchased retail products).  The issue is of importance to agricultural producers, who must adopt costly new practices that consumers haven't been fully willing pay a premium for in the marketplace.  

There has been a lot of academic speculations about the causes of this vote-buy gap, but we still aren't sure why it exists.  I'm now working on a research project with Bailey Norwood here at OSU, Kate Brooks at University of Nebraska, and Glynn Tonsor at K-State to delve a bit deeper into the issue.  

In the most recent Food Demand Survey (FooDS), I thought I'd ask every day people why they think the vote-buy gap exists.  Here's the question I asked:

“In 2008, 63% of voters in California voted to ban the use of small cages for egg-laying hens. However, at the time around 90 to 95% of the eggs Californians purchased came from small cages and only 5 to 10% were cage free. So, a majority of voters voted to ban a product that a majority of shoppers routinely bought. Why do you think there is such a gap between how people voted and how they shopped for different types of eggs?”

The question was open-ended and respondents could type anything they wanted in an empty box. 

I went through the answers and tried to categorize them into competing explanations for the gap.  Not all answers were mutually exclusive, so I put some of them in more than one category.  

Here were the common responses (note that 46% of responses responded with some form of "I don't know" or did not provide a cogent response).

The information hypothesis (mentioned by 27% of all respondents and 59% who provided an answer).  The gap is caused by a lack of information: people did not know they were buying cage eggs in the grocery store, and they wouldn't have bought them if they knew more.  Example responses include things like "Because they did not realize what they were purchasing" and "shoppers didn't know that eggs were coming from small caged hens" and "Most people don't understand where their food comes from."

The price hypothesis (mentioned by 14% of all respondents and 29% who provided an answer).  The gap is a result of the high price of cage free eggs in the grocery store: prices are more salient in the store than when voting.  Example responses include "price is everything, people buy what is available at  a cheap price" and "Because people do not have money to pay for more expensive eggs."

The consumer vs. citizen hypothesis (mentioned by 8% of all respondents and 17% who provided an answer).  People have two selves: the citizen who wants to do the "right thing" in the voting booth and the consumer who pays more attention to themselves and prices when shopping.  Example responses include, "sometimes people say what they think is politically correct but don't act in the same manner" and "People voted with their hearts/ethics" and "I don't think they considered how they bought the products.  They voted as they did because they know it is the right thing to do."

The availability hypothesis (mentioned by 5% of all respondents and 11% who provided an answer).  More consumers don't buy cage free eggs because they aren't available (or aren't convenient) in the stores in which they shop.  Example responses include, "cage free are less available and cost more" and "There wasn't many choices available for eggs in the supermarket.  You purchase what you can see" and "Consumers want cruelty free eggs but are frustrated that they aren't available at convenient stores where they already shop."

The apathy hypothesis (mentioned by 4% of all respondents and 9% who provided an answer).  Consumers don't care (or don't think) about animal welfare when shopping, but they might vote for an animal welfare policy when confronted. Examples include, "i don't think they cared much" and "I don't think about it when buying my eggs. I'm sure most people don't think about it."

Selection hypothesis (mentioned by 2% of all respondents and 1% who provided an answer).  A sample of voters is not the same as the sample of shoppers.  The types of people who vote have a stronger preference for  cage free eggs than the population of people who shop.  An example includes, "I think in general people who are passionate about an issue such as animal welfare are more likely to vote and participate in "get out the vote" campaigns to encourage voting. So in elections when many people choose not to vote (or are unable to for economic reasons), it is easier for groups who feel strongly about an issue to pass such bans." 

Induced innovation hypothesis (mentioned by 2% of all responses, and 1% who provided an answer).  People don't buy cage free eggs now because they're too expensive, but voting for the policy will force producers and retailers to price them lower at a point consumers are willing to pay.  An example response includes, "Some cannot afford the higher price eggs, but if all producers were forced to have better living arrangements the prices would then drop."

A number of hypotheses that I often hear mentioned among academics were rarely if ever mentioned by the respondents.  For example, the free riding/public good hypothesis (that even though my individual purchase doesn't much affect animal welfare my vote might matter because more animals are affected) or the commitment hypothesis (I really want to buy cage free eggs but I keep backsliding; a ban can force me to behave as I really want to).  

There were a number of mentions of food safety and health.  It wasn't clear to me precisely how these translated into a vote-buy gap, but I thought it was worth mentioning nonetheless.  

Food Demand Survey (FooDS) - March 2015

The March 2015 edition of the Food Demand Survey (FooDS) is now out.

The release of the federal dietary guidelines did not seem to have a measurable effect on meat demand as consumer willingness-to-pay (WTP) for all meat products (except steak) increased from February to March.  WTP for pork chop increased by almost 12% and chicken breast by 8%. WTP for all meat products are higher relative to this time last year.  Food spending at home was up this month, but spending away from home was down from a record high last month. 

Three new ad hoc questions were added this month, two of which are discussed here.  

The first question was motivated by a research seminar that Marc Bellemare from University of Minnesota presented here at OSU last month.  His research suggested that an increase in the number of farmers markets in a particular location was associated with an increase in foodborne illnesses in that location.  I was curious whether consumers thought farmers market food was more or less safe than grocery store food (it was also a question Marc was keen to ask).  So, respondents were asked,  “Compared to food from a supermarket, do you believe food from a farmers’ market is more likely or less likely to cause food borne illnesses resulting from bacterial or viral contamination?”

There was no clear consensus. About 28% or respondents thought food from a farmers’ market was more likely to cause illness than from a supermarket, about 45% thought “food from a farmers’ market is neither more or less likely to cause food borne illnesses than food from a supermarket” and 27% thought farmers’ market food was more safe than supermarket food. 

The second question stated: “The Federal Dietary Guidelines Advisory Committee recently released preliminary dietary guidelines for Americans. Which of the following do you think is true?” Eleven items were presented, and respondents indicated true, false, or I don’ t know. Approximately 41% of participants believe that the committee’s dietary advice is not trustworthy and 65% thought the advice would change in 10 years. About half the respondents thought the guidelines should consider effects on the environment, 21% disagreed, and 32% unsure. About half the respondents correctly knew the committee recommended less meat consumption. Almost two thirds thought the committee cautioned against dietary cholesterol.

A third question was also asked that I'll discuss in a separate post.