‘Locally grown’ offers powerful marketing message
Get full report, “Ecolabel Value Assessment: Consumer and Food Business Perceptions of Local Foods”
Consumers who participated in a recent marketing survey for the Leopold Center were enthusiastic about locally grown food and supportive of the farmers who produce it.
“The term locally grown, when combined with family farms, appears to be a powerful marketing message,” said marketing initiative leader Rich Pirog. “Consumers said that if price and appearance were equal, they would choose products with these features over organic options.”
Pirog’s observations stem from an Internet study that tested prototypes for food ecolabels – seals or logos indicating that a product has met a certain set of environmental and/or social criteria. The study included survey responses from more than 1,600 consumers in Iowa and seven other Midwestern states and the Boston and Seattle metropolitan areas.
In the survey, consumers were asked to respond to one of three sets of ecolabel prototypes for fresh produce (grapes) that conveyed information on product origin, distance from farm to point of sale, how it was transported and the environmental impact of its transport measured by the amount of fuel emissions. They also were asked a series of questions about their perceptions of locally-grown/raised products and meats. Another group of consumers in the survey did not view any ecolabels.
More than 75 percent of the consumers in both groups chose the products labeled “grown locally by family farmers” as their first choice for produce or meat products. In both groups, consumers were most responsive to labels that connected product freshness with the time (in days) that it took for the product to travel from farm to store.
About 25 percent of the consumers in both groups said they would pay a premium of 6 to 15 percent for products with these additional qualities.
Pirog said a similar response came from a second, smaller population sample in the study – managers of food-related businesses such as supermarkets, meat lockers and distributors. “Food business respondents perceived that more than 50 percent of their customers would be interested in ecolabels,” he said. “Although their idea of local was much broader geographically than the one held by consumers, they said that their customers would most often request “grown locally” over other options, with price and appearance being equal.”
Pirog said the results show that ecolabels can be an effective way to educate consumers about locally grown, sustainably-raised foods. Although they were not rated as highly by consumers in the survey, he noted that a product’s secondary benefits of low environmental costs and support for the local economy and local farmers can be linked to issues such as freshness and quality, which are critically important to consumers.
Pirog worked with the Business Analysis Laboratory at Iowa State University to conduct the research. The Lab involves graduate and undergraduate students from the ISU colleges of business, education and engineering who work in teams to solve business and manufacturing problems for companies.
“This pilot project successfully demonstrates that future collaboration between business and agriculture can play a key role in supporting market research and business development in food value chains where the farm production practices are rooted in the principles of sustainable agriculture,” Pirog added.
According to Tom DeCarlo, associate professor of marketing and the Lab’s faculty advisory, the Lab has worked with a major corporations including Lockheed Martin and 3M, but this was their first experience in sustainable agriculture. He said the students have enjoyed contributing to the Leopold Center’s efforts to help sustainable ag producers become more profitable.
Pirog noted that conclusions drawn from this Internet study, although commonly used in product marketing research, cannot be applied to a general population. Consumer respondents did not represent a statistically random sample of the three geographical areas but were selected randomly from e-mail address lists owned by a survey administrator.
Pirog is working with the Lab to refine the ecolabel concept.
What is an ecolabel?
An ecolabel is a seal or logo indicating that a product has met a certain set of environmental and/or social standards or attributes.
The marketing survey tested ecolabels that showed information about product origin, distance from farm to point of sale, mode of transportation and amount of carbon dioxide emitted during transport.
The survey showed that consumers were most responsive to ecolabels that had the least amount of information. Freshness was the most important reason for buying local foods for consumer respondents across all three geographic regions.
The full report, “Ecolabel Value Assessment: Consumer and Food Business Perceptions of Local Foods,” is available on the web or by contacting the Leopold Center at (515) 294-3711.
Back to Winter 2003 Leopold Letter
Published by the Leopold Center for Sustainable Agriculture
Ames, Iowa 50011, (515) 294-3711
URL: www.leopold.iastate.edu