Food Demand Survey (FooDS) - January 2017

The January 2017 edition of the Food Demand Survey (FooDS) is now out.

After reporting a decline in willingness-to-pay (WTP) for virtually all food products last month, WTP increased for all food products rebounded, with all food products experiencing gains of at least 7%. Steak, deli ham, and chicken wings experienced the largest percent increase in WTP. WTP for both beef products is higher than one year ago, but the opposite was the case for both pork products.

There was a bit of an uptick in reported spending on food away from home, and consumers report expecting higher meat prices in coming weeks relative to last month.  

An ad hoc question was added this month on food waste.  Subjects were shown the following question, which was loosely based on the questions posed by Violeta Stancu and colleagues in this paper published in 2016 in the journal Appetite.  (Note that the order of items was randomized across respondents).  

The most common answer for each item was “hardly any”.

Models were used to estimate the percent of food thrown away each week for each product category. On average, more fresh fruits and vegetables were said to be thrown away than compared to  the other food categories, with 12.7% of this type of food being thrown away. Meat and fish was ranked as the least likely to throw away, with respondents stating only 9.8% of all meat and fish bought was thrown away.

Analysis of demographic data shows (averaged across all food categories), females report about 3 percentage points more food thrown away than men; younger individuals about 10 percentage points more than older consumers; people on SNAP (aka “food stamps”) about 6 percentage points more food is thrown away than by than people not on SNAP; and higher income individuals say they throw away about 5 percentage points more food than lower income individuals.

One of the issues we aim to explore with additional analysis is the extent to which stated food waste behavior is related to risk and time preferences.  

Food Demand Survey (FooDS) - December 2016

The December 2016 edition of the Food Demand Survey (FooDS) is now out.

The regular tracking portion of the survey showed a decline in willingness-to-pay (WTP) for all meat products (except hamburger which was virtually unchanged) relative to last month.  Willingness-to-pay for all meat products is markedly lower than last year at this time.  For a bit of perspective, here are  changes in WTP for four meat products expressed relative to the first issue of FooDS (May 2013).

While the current data shows a slight downward tick in current spending on food away from home, recall that this corresponds to the past two weeks, and anticipating spending away from home is less negative than it usually is.  

We added several ad hoc questions to study consumer response to the new GMO labels that may appear in the future as a result of the national mandatory labeling law.  Results of those questions will be released at a later date.  In addition, we asked some questions related to preferences regarding the regulation of crop breeding techniques.

The following question was posed: “Crops produced through certain types of genetic engineered that involve the transfer of genes from one species to another (i.e., “foreign DNA”) are currently regulated by three U.S. agencies (the USDA, FDA, and EPA) to check for environmental impacts and impacts on human health. By contrast, crops produced through traditional breeding methods, include hybridization, are not regulated by the U.S. government. To what extent do you agree or disagree with the following statements?”

Individuals responded on a five-point scale (1=strongly disagree, 2=somewhat disagree, 3=neither disagree nor agree, 4=somewhat agree, or 5=strongly agree) to six statements: i) Regulations on traditional crop breeding are too weak, ii) Regulations on genetically engineered crops involving “foreign” DNA are too weak, iii) New crop breeding and genetic techniques that do not involve “foreign” DNA should be regulated the same as traditional crop breeding techniques, iv) New crop breeding and genetic techniques that do not involve “foreign” DNA should be regulated the same as genetically engineered crops involving “foreign” DNA, v) Genetics and crop breeding should be regulated based on health and environmental outcomes rather than the processed used to create new crops, and vi) I do not know enough about these issues to say how crop breeding should be regulated.

The most common answer was “neither agree nor disagree” for all statements. “Regulations on traditional crop breeding are too weak” received the least agreement while “genetics and crop breeding should be regulated based on health and environmental outcomes rather than the processed used to create new crops” received the highest level of agreement, though a level similar to that of the remaining statements.

Food Demand Survey (FooDS) - November 2016

The November 2016 edition of the Food Demand Survey (FooDS) is now out.

The regular tracking portion of the survey suggest lower food demand overall.  For example, willingness-to-pay for all meat products fell by at least 8%, and reported spending on food at home and away from home fell by 5.7% and 10.5%, respectively.  Some of the WTP declines may be due to post-election uncertainty (the surveys were completed on November 10 and 11).  In addition, reported consumer awareness of all 18 issues we track fell in November relative to October as did reported concern for the same set of 18 issues.  

Three sets of new ad hoc questions were added this month.

The first question came about as a result of discussion with my OSU colleagues Damona Doye and Dave Lalman who have been exploring some alternative cattle production systems.  At issue is what the new systems should be called.  Thus, participants were asked: “Imagine shopping at your local grocery store for ground beef. What is the most you would be willing to pay ($/lb) for a package of ground beef that had the following labels? (Note: The current average price of ground beef in the U.S. is around $3.66/lb)”

Participants stated they would be willing to pay the most for ground beef labeled as “grass fed” at an average WTP of $4.26/lb followed by ground beef labeled “organic” at an average WTP of $4. 24/lb. Semi-free range was valued more than semi-confinement ($3.78 vs. $3.28). Participants stated they would pay the least amount for unlabeled ground beef at an average price of $2.92/lb. The sampling error for each WTP value is about +/- $0.15/lb with 95% confidence (thus, if two means are $0.30/lb apart or more, they are statistically different).

Next, participants were asked: “Farmers rely on fertilizers to promote plant growth and grow more food. How desirable or undesirable would you consider it to eat a fruit or vegetable grown with the following fertilizers?” Individuals responded on a five-point scale: 1=very undesirable, 2=somewhat undesirable, 3=neither desirable nor undesirable, 4=somewhat desirable, or 5=very desirable.

The most common answer for each item was “neither desirable nor undesirable”, except for municipal waste where very undesirable was the most common response. On average, fertilizer created through a process that uses natural gas and nitrogen in the air (this is the so-called Haber-Bosch process also called "synthetic fertilizer" by the organic industry) was perceived as most desirable followed by animal manure. Blood meal and municipal waste were rated as the least desirable fertilizer products. The sampling error is about +/- 0.075 with 95% confidence (thus, if two means are apart by 0.15 or more, they are statistically different).

Then, to follow up on this questions, participants were asked: “Which types of fertilizer are allowed in organic agriculture?” Participants could select all that applied.

Over half of the participants (correctly) believed that the use of animal manure as a fertilizer was allowed in organic agriculture. About 38% of respondents (incorrectly) believed fertilizer created through a process that uses natural gas and nitrogen air was an allowed fertilizer in organic agriculture. Only 13% of participants thought that municipal waste was an allowed fertilizer in organic agriculture (see here for a discussion of allowable fertilizers in organic). The sampling error is about +/- 3% with 95% confidence.

A couple comments.  First, it is curious that the fertilizer most respondents thought was allowable in organic (manure) only only believed to be allowable by about 50%.  It raises the question: how do respondents think organic producers fertilize their crops?  Perhaps I should have allowed that as a response option (e.g., something like "no added fertilizers are allowed in organic production").  Second, comparing the two graphs above, it is curious that the most desirable type of fertilizer (created via Haber-Bosch) is disallowed in organic agriculture - a fact that roughly 61% of respondents appear to recognize.  

How much do millennials like to eat out?

A recent article in Forbes discussed millennial's eating habits utilizing, it seems, a report from the Food Institute and USDA Economic Research Service Data.

The Forbes article writes:

“Millennials spend 44 percent of their food dollars – or $2,921 annually – on eating out, according to the Food Institute’s analysis of the United States Department of Agriculture’s food expenditure data from 2014. That represents a 10.7 percent increase from prior data points in 2010.

In contrast, baby boomers in 2014 spent 40 percent of their food dollars on eating out or $2,629 annually.”

It's a little hard from this article to really get a nice comparison of millennials food spending without controlling for differences in income and total spending on food at home and away from home.  Thus, I turned to the data from my Food Demand Survey (FooDS) where we've been asking, for more than three years, how much people spent on food at home and away from home.

Here is a breakdown on spending on food away from home (expressed as a share of total household income) by age and by income.  The black and red dashed lines are the two age groups that could be considered millennials.  The results show that for incomes less than about $80,000/year, millennials do indeed spend a larger share of their income on food away from home than do other generations; however, the same isn't necessarily true for higher income households.  People in the two oldest age categories spend a lower share of their income on food away from home at virtually every income level.  For each age group, the curves are downward sloping as suggested by Engle's Law: the share of income spend on food falls as income rises.   

The next graph below shows the same but for spending on food at home.  For the lowest income categories, the youngest individuals spend more of their income on food at home than do older consumers; however, at higher income levels, all age groups are fairly similar.  Coupling the insights from the two graphs suggests that, at incomes less than about $60,000, younger folks are spending more of their income on food (combined at home and away from home) than older folks.   

Finally, here is the share of total food spending that goes toward food away from home by age group and income level.  In general, as incomes rise, people spend more of their food budget away from home.  That is, richer people eat out more.  No surprise there. 

Generally speaking, consumers younger than 44 years of age spend more of their food budget away from home than do older consumers.  The 24-34 year old age group that is firmly in the millennial generation consistently spends more of their food budget away from home than other age groups at almost every income level.   

Food Demand Survey (FooDS) - October 2016

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

From the regular tracking portion of the survey, a few items stood out.  First, there was a notable rise both in consumers' awareness of GMOs in the news over the past couple weeks and in concern that GMOs pose a food safety risk.  Here is the graphic on awareness of GMOs in relation to the other issues tracked.  I'm not aware of any major news items driving the uptick in awareness and concern for GMOs, but perhaps I've missed something.

In addition to this issue, consumers' said they expect somewhat lower beef, chicken, and pork prices this month as compared to last, and planned purchases of beef, chicken, and pork all rose as well.  In fact, compared to one year ago, planed purchases of all three meat products are markedly higher.  You can read the whole report to see changes in willingness-to-pay, etc.

Several ad hoc questions were added to the survey this month. The questions focused on consumers’ purchases of and beliefs about seven “niche” or “emerging” food products, and for comparison purposes, one conventional product, beef.

Participants were initially asked: “Have you consumed the following foods at least once in the past five years?” The question was followed by a list of eight food items and respondents simply answered “yes” or “no”. 

Approximately 95% have eaten beef in the last five years. Less than 25% of participants have consumed either goat, rabbit, kombucha, or emu in the last five years. A little over a quarter of respondents said they had eaten bison. About one third of participants stated they have eaten chia seed or quinoa. Less than 10% of participants stated they had eaten emu in the last five years.

I had a little bet running with some of my graduate students on the popularity of these items (and truth be told, some of the suggested items came from them).  One student - who will remain nameless - predicted half the population had tried kombucha.  I'd never heard of it (it's a kind of fermented tea which allegedly has a variety of health benefits).  My guess was less than 10%.  I suppose we were both wrong, as the answer was  14.1%.   

The survey proceeded to ask about the perceived health (1=very unhealthy; 5=very healthy), tasty (1=very untasty; 5=very tasty), and affordability (1=very unaffordable; 5=very affordable) of each of the eight items.  The results are below.  

On average, people thought chia seed and quinoa were the most healthy followed by beef and bison.  All foods averaged above a three, meaning they were perceived as more healthy than not.

Beef dominated the other items in terms of perceived taste. About 88% of respondents said beef was either “very taste” or “somewhat tasty”.  By contrast for the next most tasty item, only 49% of respondents said the same about bison.  On average, beef was perceived as most tasty followed by bison and then rabbit.   Kombucha was the only item for which the mean score was less than three - meaning it was perceived as more untasty than tasty.

Finally was the question on affordability.  Somewhat surprisingly, beef was rated as most affordable on average followed by quinoa and chia seed.  Bison and emu were seen as least affordable, and the mean rating indicates both were viewed as more affordable than affordable.