Use of Branding and Sampling in Agricultural Fresh Produce

Abstract

The original proposal has three main objectives: a conceptual framework on willingness to pay (WTP) for fruits and vegetables, the introduction of branding and sampling in fresh food, and empirical applications to the United States and Israel. We modified our research plan over time based on availability of data and emergence of new problems. We expanded the range of products to include poultry and the range of techniques to use real experiments as well as more traditional surveys. We expanded the range of problems to understand attitudes toward genetically modified (GM) food. There is a growing interest in introduction of marketing tools like demonstration sampling, money-back guarantees, labeling, and brands in agriculture. These marketing tools are important for enhancing demand for agricultural products and food safety. However, the methodology needed to assess the effectiveness of these tools and understand their performance in different agricultural sectors is limited. Our analysis demonstrated the importance of brands as a marketing tool in agriculture. In particular, we showed conceptually that strong brands can be substitutes for other marketing tools like sampling or demonstration. We were able to conduct real experiments for the demand for safe chicken and show that consumers are willing to pay significantly more for products branded as more safe. Yet, using experiments in Israel and the United States, we found that WTP for brands of fresh fruits and vegetables is smaller than in other product categories. Warning labels are a sort of negative branding. The GM-free labeling is particularly important since it serves as a trade barrier to U.S. crops exports. Our analysis of acceptance of GM products found that WTP for GM products in Israel and the United States depends on framing of information about the impact ofGM and the quantity of information disclosed. Finally, in analyzing the evolution of support for Proposition 37 that aimed to introduce mandatory labeling of GM in California, we found that support for mandatory labeling ofGM products is broad as long as it is not perceived to be costly. Our project demonstrates the feasibility of conducting real experiments to assess consumer demand in agriculture. When looking at interdisciplinary groups, one can design new products and assess the WTP for their characteristics. We also show that, while branding is a very strong marketing tool, its use in fresh fruit and vegetables is likely to be limited. However, brands can be important with processed food. Furthermore, we have proven that, while some consumers strongly object to GM products, most consumers in the United States and Israel would be willing to buy them for a discount, and some would pay extra if they are associated with improved characteristics. Finally, we expanded the notion of warning labels to calorie information and showed that the response to calorie information depends on gender, education, and how the information is presented.