Consumer Willingness-to-Pay for Local Food in Alternative Restaurant Formats

Abstract

Recent U.S. National Restaurant Surveys show four out of ten hot trending concepts from the consumers’ point of view are concepts relating to local sourcing, including hyper-local, locally sourced meat and seafood, locally sourced produce, and farm/estate branded items. Consumers are signaling that they value locally sourced food; therefore, restaurants need to establish a legitimate and efficient way to assure consumers that they are offering a verifiable local sourcing value proposition. In this study, we apply a “tractor” symbol index system designed for a local restaurant tourism directory to understand consumer willingness-to-pay (WTP) for local sourcing intensity signaled by restaurants and measure choice variables across alternative restaurant formats. Stated preference data and a discrete choice experiment (DCE) survey were conducted in Kentucky on over 1600 consumers. Results of the latent class analysis show there is a significant interest in local sourcing within each restaurant format.