a1 Associate Professor, Department of Agricultural and Resource Economics, B313 Clark Building, Colorado State University, Fort Collins, CO, 80523-1172, USA,.
a2 Assistant Professor, Department of Agricultural and Resource Economics, B312 Clark Building, Colorado State University, Fort Collins, CO, 80523-1172, USA,.
a3 Marketing Specialist, Center for Profitable Agriculture, University of Tennessee, P.O. Box 1819, Spring Hill, TN, 37174-1819, USA,.
In the past decade, sales of meat products labeled as natural (minimally processed) and produced without antibiotics and hormones have increased dramatically. In response to growing demand for meat products differentiated by various production attributes, many smaller-scale beef enterprises are considering direct marketing of their beef products to end-consumers as a viable approach to sustaining their family farming operations. This research uses survey data from Colorado consumers, and factor and cluster analysis to determine market segments for various (varied by production protocols and other meat attributes) natural beef products. Findings from the cluster analysis indicate that there are multiple segments of consumers who are likely to purchase natural beef, and that different segments are motivated by different factors. The most important factor explaining almost two-thirds of the differences among consumer responses relates to consumers' perceptions of the importance of meat attributes related to production practices (e.g. use of antibiotics, hormones and environmentally friendly grazing). Interestingly, the two consumer segments that are willing to pay a significantly higher premium for natural, local beef are motivated by different aspects of the meat and its intrinsic production attributes. One segment, representing 12.5% of consumers, ranked the importance of all production attributes significantly lower than the sample average. Consumers in this segment appear to be motivated by their perceptions of the extrinsic quality of natural beef products. The other segment, 13% of consumers, appears to be altruistic, ranking all production attributes such as ‘no antibiotics’, ‘no hormones’, and ‘humane treatment’, significantly higher than all of the other clusters. These results indicate the potential strength of production methods (and marketing of such quality differences) as product differentiation criteria. This paper illustrates the type of market research that may be useful for beef producers seeking value-added marketing opportunities, and portrays the types of consumers who are fueling the growth in natural meats in the United States. Such market analysis can facilitate producers' ability to effectively develop product concepts, labeling and promotional strategies targeted at the most receptive consumer segments, and illustrates that there is more than one type of consumer interested in purchasing products differentiated by sustainable production methods.
(Accepted October 08 2005)