Speaker
Description
Keywords: discrete choice experiment, regional economies, sustainability labels, geographical indication
Introduction: North Sea brown shrimp (Crangon crangon) fisheries dates back to the 17th century, and today North Sea brown shrimp fishing is the most important coastal fishery on the German and Dutch North Sea coasts. Brown shrimp fishing is also an important factor for tourism and the preservation of maritime traditions in coastal regions of the North Sea. Due to labour constraints, such as cost and shortages, the majority of caught North Sea brown shrimp is transported via wholesalers to Morocco for peeling. In Germany, stakeholders, such as restauranters and consumers, are critical of the extensive transport associated with the processing of brown shrimp and there is growing interest for products with shorter supply chains. The majority of German consumers prefer locally produced seafood and are willing to pay more for locally-produced as well as ecologically-sustainable seafood. To meet these demands, research is focused on by-passing labour constraints through innovative technology – shrimp peeling machine using ultrasound wavelengths – and understanding alternative distribution and marketing strategies.
Research Objective: estimate German consumer preferences for marketing strategies of alternatively-peeled North Sea brown shrimp
Methodology: Consumer preferences across four product attributes (price, peeling-type, peeling-region, sustainability label) were estimated using a hypothetical discrete choice experiment, which was a part of a larger online consumer survey in Germany distributed by a commercial panel provider.Peeling-type was labelled as either "hand-peeled", "maschine-peeled", or just "peeled." Peeling regions were listed as either Germany, Poland, Morocco, or no region was listed. Sustainability label levels included: no label, “Marine Stewardship Council” (MSC), “protected geographical indication” (PGI), National Park Wadden Sea, or “protected designation of origin” (PDO). Respondents (n=2343) were shown pictures of three North Sea brown shrimp packages; a fourth option “no buy” option was included. One package was a status quo product with lowest price (3.99€ / 100g) and no indication of peeling-type, peeling-region, or sustainability label as can be found on the current market. The other two packages alternated the attribute levels based on a multinominal logit d-efficient design using prior estimates from a pre-test. In total, respondents were shown nine choice sets. Consumer preferences for all attribute levels comparative to the status quo attributes were modelled using Stata’s (StataCorp) “cmxtmixlogit” command for choice model panel-data, incorporating the “no buy” option as an alternative specific constant. Price was included as a fixed variable, and all other variables were considered random.
Results:
Overall, respondents chose to purchase of North Sea brown shrimp rather than opt out (“no buy”), as was indicated by the positive constant coefficients. In addition, respondents act according to utility theory, i.e. increasing prices lead to a reduction in utility, as was shown by the negative price coefficient. Unsurprisingly, respondents in Germany preferred packages labelled “peeled in Germany,” compared to packages where no peeling-region was listed. Other peeling-regions, including “peeled in Poland,” “peeled in Morocco,” and “peeled on-site” resulted in negative utility, i.e. were disliked, compared to products without indication of peeling-region. The dislike for “peeled on-site” is surprising, as one would think that on-site would denote freshness and increase transparency and trust in product processing. However, “peeled onsite” is not something that is currently used in brown shrimp marketing and may have been associated with negative aspects, such as decreased hygiene or additional workload for the end consumer of having to peel the product themselves.
“Hand-peeled” was neither preferred nor disliked compared to the neutral statement “peeled,” suggesting that the current synonymous use of both terms for available market products may be sufficient. Marking packages as “machine-peeled” provoked a strong negative preference, perhaps stemming from a perceived degradation of eating quality.
As is currently frequently used in brown shrimp marketing and therefore likely familiar, the MSC label resulted in positive utility gains compared to no label. Interestingly, the PGI label, signifying that a minimum of one production step took place in a given region, was preferred; whereas its stronger counterpart PDO, designating that the entire production process is completed in a given region, was disliked. The logo representing Wadden Sea National Park, where some fisheries are located as part of the regions heritage, also negatively influenced preferences.
According to the model results and corresponding willingness-to-pay (WTP), a product peeled in Germany bearing the MSC and PGI labels would meet consumer preferences, and consumers would be willing to pay an estimated 1.96€ more / 100g.
Conclusion:
More information on production qualities does not always lead to higher consumer preference. Innovative marketing claims, such as “on-site” and “machine-peeled” negatively influenced preference and therefore willingness to pay (WTP) for short supply chain products. Consumer preferences and understanding of PGI vs. PDO should be investigated prior to using these claims for marketing regional products within domestic markets.
