Results of Research on Locally Produced Meat Products
Both producers and consumers have been looking at locally produced meat products as a potential new enterprise. Over the past few years, we in the University of Kentucky Ag. Econ. Dept. have been researching the opportunities in this area. We have felt that it is important to seek opportunities, but we also need to be realistic because it is painful for farmers to invest in areas and then to learn that markets do not support their endeavor.
What we have done in this research is to identify what consumers want, why they want it, compare local meats with commercially produced products and to try to learn what buyers' willingness to pay is.
We have conducted surveys of consumers and of restaurant managers and chefs, used panels of consumers and trained "tasters". We even conducted a chefs' focus group.
Here are some of the things that we've found:
- Among restaurants, the "fine dining" restaurants have the best potential. They are less price conscious and more flexible with regard to the cuts and deliveries. However, they do have price constraints and are concerned about product consistency.
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The consumer taste panel:
- Revealed a preference for locally produced ground beef, but preferred commercially produced chicken breast.
- Over half of the taste panel participants stated a willingness-to-pay of a 20% premium for local products;
- Willingness to pay (WTP) was most highly correlated with a perception that local meats are of higher quality, and for chicken it was a food safety issue. But, since there was not a perception of freshness, convenience and other direct attributes, we've concluded that an important reason for the price premium is to support local farmers.
- Those who were unwilling to pay a premium viewed local meats as safer, but had a low opinion of local meats' taste and didn't care about knowing the source of product.
Implications:
Consumers with children tended to report a higher WTP for local meat. However, as one would expect, these consumers were also more likely to shop only at mainstream grocery stores. This suggests that getting local products placed in supermarkets will be necessary if the potential higher price from this group is to be captured.
Next steps:
- At this point, we need to learn more about WTP. Respondents will sometimes respond how they would like to act, rather what their actual purchase actions are.
- We are confident that producers who target markets carefully, in particularly the fine dining establishments and certain consumer groups can capture a price premium, but probably around 20%, and not a lot higher.
- Finding ways to get locally products efficiently processed and conveniently is the next challenge.
For More Information
For additional information, please contact, Lee Meyer.