Value-Added Meat: Measuring Past Successes and Predicting Future Winners

Livestock industries are significantly affected by changes in consumer behaviour. In order to add value to meat and livestock production, many firms and farms are supporting the development of new products – these products can differ by credence attribute, by degree of processing and by marketing strategies. The literature suggests that one of the most important determinants of success in product innovation is an understanding of the market the product is introduced into. In this report consumer preferences for meat products, by animal species including minor meats, and by type of processing are examined. Responses to economic variables such as price, advertising and income are identified as are responses to food safety and meat related health issues. Interesting results include the fact that income elasticities of demand for meat products purchased at grocery stores are negative in this study and that own and cross price elasticities for certain meats, across processing levels for example, show strong substitutions. Thus introducing new meat products may not result in increased sales by animal species but may only result in substitution of one meat type product for another product of the same meat type. Successful new product introductions or changes in product quality are shown, in this report, to be accompanied by significant marketing/advertising investment and, either by design or by serendipity, to have credence attributes in line with consumer's changing concerns. An example of this is the response in branded chicken sales, at the time of BSE in Canada, for a brand that could advertise itself as being 100% grain fed. Marketing strategies, such as working with the Health Check™ program of the Heart and Stroke Foundation of Canada are shown to have an impact on firm level sales (as well as on sales at the individual product level), a halo effect, that may be of importance in the firm's development of other value-added products. Significant heterogeneity exists in consumer behaviour and it is important to recognize this heterogeneity in the development of value-added meat products. Added to the consumer heterogeneity, in general, is the heterogeneity in responses by meat type. What works for one sector, such as poultry, could be problematic in other sectors given differences in economic interrelationships reported in this study.


Issue Date:
2010
Publication Type:
Report
PURL Identifier:
http://purl.umn.edu/107191
Total Pages:
75
JEL Codes:
D12; Q18
Series Statement:
Project Report
10-05




 Record created 2017-04-01, last modified 2017-08-26

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