Experimental Determination of Canadian Consumers’ Willingness-to-pay for Meat Packaging

Safety issues in the meat industry (e.g. food-borne illness outbreaks) have damaged its public image. Apart from pressure arising from public perceptions, the industry is confronted with a largely saturated consumer market for meat products continuing to demand higher product quality and greater quality assurance. A key component in achieving improved quality/ safety is the investment in technologies that foster food safety innovations. Recently, a number of technological advances have been achieved through improved meat packaging that has the potential to mitigate the threat of microbial food hazards to consumers. However, economists still lack a sound understanding of determinants of consumer behavior towards new food technologies. We focus on the analysis of consumer willingness-to-pay (WTP) for new meat packaging technologies that affect quality/ safety attributes associated with meat products. We investigate effects of color stabilization, shelf life extension and modified atmosphere packaging (MAP) on Canadian consumers’ WTP for ground beef – a staple in the North American diet. Improved meat color stability and extended shelf life can be achieved with MAP, the replacement of air with other gases (e.g. O 2 , CO 2 ) during packaging. While MAP in general extends shelf life, MAP including carbon monoxide (MAP/CO) additionally enhances meat color. MAP is favorable for consumers due to attractive meat color and increased shelf life. Meat packers benefit from cost savings arising from longer shelf life with less spoilage and economic loss due to meat color change from natural oxidation. Nevertheless, some consumer-activist groups oppose MAP/CO claiming it potentially masks product spoilage. In fact, consumers who use color as the only indicator of meat freshness and ignore expiration dates might be at risk. Thus, consumer acceptance of and WTP for MAP and MAP/CO needs to be analyzed and weighed against industry costs/ benefits in order to provide meat producers/ retailers with recommendations. We investigate for the first time consumers’ willingness to accept and WTP for shelf life extension and color stabilization of ground beef resulting from MAP and MAP/CO under different information scenarios. In 2008 we conducted choice experiments in Canada (n=205). P articipants made repeated choices between scenarios of two different ground beef packages. The experimental design included color, shelf life and price with three levels each. The attributes differed from scenario to scenario according to a fractional factorial design. In three rounds, participants received different information regarding MAP and MAP/CO. The sample was split. One half made choices between ground beef carrying MAP labels, the other half made choices between ground beef not carrying any labels. While the first sub-sample was enabled to make an informed choice the second sub-sample only received information but did not know whether the ground beef packages were packaged under a modified atmosphere - reflecting the current market situation. Mixed logit models are used to analyze the data. Our results provide recommendations regarding price premiums for extended shelf life, stabilized color and increased food safety applying MAP. Preliminary results show preferences for bright red ground beef with a 3 day shelf life and a price of $2.58/lb.

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