Strategic market planning for value-added natural beef products: A cluster analysis of Colorado consumers

Abstract

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.

Effects of Restricted Antimicrobial Exposure on Antimicrobial Resistance in Fecal Escherichia coli from Feedlot Cattle

“…Pens of cattle reared without hormone or AMD exposures required an average of 50 extra days in the feedlot compared with conventionally reared cattle. As noted previously, one of the three primary motivating factors for consumers to purchase ''natural'' or ''organic'' products is a perception that there are fewer ethical concerns (e.g., environmental or welfare concerns) related to production in comparison to conventional production methods (Hammitt, 1990;Grannis and Thilmany, 2000;Hammitt, 2000, 2001;Harper and Makatouni, 2002;Yiridoe et al, 2005;Magkos et al, 2006;Thilmany, 2006;Thilmany et al, 2006). However, the much greater feeding time required to finish feeding the ''natural'' cattle enrolled in this study also represented a major difference in the amount of feed consumed as well as total fecal and urine output.…”

“…Studies have shown that consumers who purchase organic foods are willing to pay a premium for these products, in part because they believe they are more nutritious and less hazardous than the conventional products Hammitt, 2000, 2001;Thilmany et al, 2006). However, many believe there is insufficient scientific evidence to objectively support these claims (Magkos et al, 2006).…”

“…Research suggests that there are three major motivating factors related to consumers' decisions to purchase organic or natural products: perceived differences related to product safety, product quality, and ethical considerations regarding production methods (e.g., environmental considerations and animal welfare) (Hammitt, 1990;Grannis and Thilmany, 2000;Hammitt, 2000, 2001;Harper and Makatouni, 2002;Yiridoe et al, 2005;Magkos et al, 2006;Thilmany, 2006;Thilmany et al, 2006). Studies have shown that consumers who purchase organic foods are willing to pay a premium for these products, in part because they believe they are more nutritious and less hazardous than the conventional products Hammitt, 2000, 2001;Thilmany et al, 2006).…”

Going Local: Exploring Consumer Behavior and Motivations for Direct Food Purchases

“…In general, local production was more highly valued than organic production, and the pesticidefree attribute ranked highly (and above organic) for at least three clusters. Similarly, in natural meat markets Thilmany, Umberger, and Ziehl (2006) found positive values for private and public good aspects of the natural meat market, and consumers valued "no hormone" and "no antibiotic" claims more highly than "organic," a potentially quasi-public attribute.…”

Role of credence and health information in determining US consumers’ willingness‐to‐pay for grass‐finished beef

“…A description of each variable is included in Table 1. The coefficients on NOHORM_ANTI and SAFETY-GRASS are both expected to be positive as previous evidence suggests many US consumers interested in non-conventionally produced beef are more concerned about hormone and antibiotic use and food safety (Thilmany et al 2006). The FEMALE, CHILDREN and NONCAUCASIAN coefficients are expected to be positive based on previous consumer studies (Jekanowski et al 2000;Umberger et al 2002;Ziehl et al 2005).…”