A Cluster Analysis of Natural Beef Product Consumers by Shopping Behavior, Importance of Production Attributes, and Demographics

Abstract

The increasing complexity of consumer food-purchasing trends is an important factor guiding all agribusiness-marketing efforts (Kinsey and Senauer 1996). Retail sales trends indicate organic meats and poultry is the fastest growing segment of the $23 billion organic food industry, with a growth of 77.8% from 2002 to 2003 (Organic Trade Association 2004). Sales of organic food through general supermarkets (rather than specialty natural markets) more than doubled from 1993 to 1995—an increase from $98 million to $210 million—and accounted for 45% of natural/organic food sales in 2001, up from 31% in 1998. These trends illustrate a growing mainstream appeal of natural foods and motivate the need for consumer profi les of those most likely to purchase natural meats. This research analyzes consumer segments based on their interest and willingness-to-pay for various natural beef products (varied by production protocols and potential public goods) using cluster analysis. Such an analysis should facilitate producers’ ability to effectively develop product concepts, labeling, and promotional strategies targeted at the most receptive consumer segments. The research hypothesis is that there are multiple segments of consumers who are likely to purchase natural beef, and that different segments are motivated by different factors. Ziehl (2004) found that consumers who have previously purchased natural beef or occasionally buy meat at alternative markets (not supermarkets) are more willing to pay a premium for natural products. Consumer’s stated importance and interest in attributes such as natural and/or grass-fed production practices, traceability, and tested for Mad Cow Disease also affect their decision to pay a premium for natural, regionally-produced beef. Ziehl’s research motivated the need for market analysis methods to defi ne specifi c consumer-segment groups. Using cluster analysis, a common market analysis technique, one could sort consumers with similarities into groups, enhancing producer and retail initiatives to target product development, promotional messages, and price points.