Strengthening U.S. Beef Export Markets: Analysis of Consumer Willingness to Pay and Import Demand

Strengthening U.S. Beef Export Markets: Analysis of Consumer Willingness to Pay and Import Demand Strengthening U.S. Beef Export Markets: Analysis of Consumer Willingness to Pay and Import Demand Strengthening U.S. Beef Export Markets: Analysis of Consumer Willingness to Pay and Import Demand Investigators: Carola Grebitus (Arizona State University), Karen Lewis Delong (University of Tennessee Institute of Agriculture), and Andrew Muhammad (University of Tennessee Institute of Agriculture) Overview: There is extensive evidence that country of origin is an important product attribute where many consumers prefer labels specifying product origin. In the context of U.S. beef trade, few studies have focused on how European, Asian, and Latina American consumers perceive meat imports from the U.S., whether meat preferences are actually influenced by country of origin, and consumer willingness to pay a premium for meat products from specific countries. Understanding European, Asian, and Latin American consumers willingness to pay (WTP) for U.S. beef, the impact of different product labels on consumer choices, and the underlying consumer characteristics driving WTP are critical to providing recommendations to U.S. producers desiring to expand their exports and increase their share of foreign beef markets. For this project, we are evaluating consumer demand for U.S. beef in markets important to U.S. exports and/or overall global beef trade. We are evaluating two of the largest markets for U.S. beef (Japan and Mexico) and three potential/emerging markets for U.S. beef (China, the U.K., and Germany). We select these countries because of their importance to the U.S. beef sector, or they have been identified as potential markets for U.S. beef. These countries are also representative of key regions around the world and will allow for inference on other countries within their respective regions. The goals of this project are the following: 1. To identify beef product attributes that are especially valued by consumers in our identified markets; 2. To identify differences between consumers across the selected countries to support strategies for global marketing activities; 3. To identify consumers prior knowledge and perceptions of U.S. beef products and competing products from other exporting countries; 4. To assess which characteristics of U.S. beef products are especially favored by foreign customers and determine whether origin-specific preferences are significant and unique; 5. To estimate import demand for beef products differentiated by country of origin in the selected importing countries. 6. To compare and contrast the willing-to-pay and import demand estimates to assess how trade patterns reflect the detailed information obtained from consumers within importing countries. To achieve these goals we will conduct choice experiments, as well as origin-specific import demand analysis to determine willingness to pay and import demand for U.S. beef. Specifically for the choice experiments, we will analyze consumer perceptions of U.S. food products in general, as well as perceptions specific to U.S., foreign, and domestic beef products, with a particular focus on product and origin labeling schemes. We will conduct online surveys in Germany, the UK, Japan, Mexico and China applying quantitative market research methods. We selected Germany and the UK, because of their per-capita annual beef consumption (Germany consumes over 88 kilograms of beef per person, while the UK consumes over 84 kilograms of beef per person) and to address beef trade tensions between the U.S. and EU. Furthermore, our research team has past experience with examining UK and German perceptions of U.S. beef for the past seven years; this research will be an update to past results Both Japan and Mexico are major markets for U.S. beef exports, and it would informative to understand how consumers view U.S, beef in these markets compared to the two EU countries where U.S. beef exports have been limited. China, only recently, has allowed imports of U.S. beef. It would be particular informative to understand the perceptions and attitudes of Chinese consumers and the potential for increased U.S. exports in the future. Additionally, given the escalation of the U.S./China trade war, it is also important to assess how trade tensions may be impacting overall trade and attitudes toward U.S. products. Objectives 1. Conduct a Choice Experiment Study in Japan, Mexico, China, Germany, and the UK to examine: 1. Consumer knowledge and perceptions of U.S. beef; 2. Consumer preferences and willingness to pay for U.S. beef; 3. U.S. beef attributes that are especially valued such as, age verification, growth hormone free, food safety certification; 4. Drivers of perception and evaluation of U.S. beef and its attributes, such as, ethnocentrism to provide recommendations for marketing activities; 5. Differences between consumers from different countries in order to design targeted marketing activities. (2) Conduct a beef import demand analysis for each country: Japan, Mexico, China, Germany, and the UK.