Consumer Behavior and Attitudes. Adele Douglass, CEO Humane Farm Animal Care AMI Conference 2009
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1 Consumer Behavior and Attitudes Adele Douglass, CEO Humane Farm Animal Care AMI Conference 2009
2 Consumer Preference The sensitivity of demand to higher prices depends on 2 key things: Personal preference If, for whatever reason, people have a strong preference for a product, they will be prepared to pay more for it rather than go without If it is not important, they will readily switch to another product Availability of substitutes If something similar is available, people will readily switch purchases in response to a price increase But if the alternative is not perceived to be equivalent, it is not what they want; they won t buy - even if cheaper
3 Consumer Preference Some consumers have strong preferences despite physical appearances, commodity products are recognized as distinctly different products from Certified Humane and are not substitutes for one another A non-organic egg is not acceptable to a committed organic consumer; A cage egg is an inferior product for someone who prefers a cage free certified humane egg. For others, an egg is an egg
4 Consumer Preference Consumers are willing to pay premium for products labeled humanely raised
5 A tale of 3 eggs Caged Certified Humane Certified Organic & Certified Humane 13 cents ($1.56/dozen) 21 cents ($2.49/dozen) 33 cents ($3.99/dozen) Why are all three types of eggs purchased, despite the wide difference in price?
6 A tale of 3 steaks Commodity NY Strip Certified Humane NY Strip Certified Organic & Certified Humane NY Strip $6.49/lb $13.99/lb $24.99/lb Generally Certified Humane prices fall between conventional products and organic.
7 Consumers Want a Label They Can Trust: Consumer s Union Definition of a Good Label: Meaningful and Verifiable Consistent and Clear Transparent Independent
8 Consumer Reports, Shop Smart, April/May 2008
9 Hartman Group Survey of Consumer Labels December 2007
10 What do our producers say? Since we received our Certified Humane certification, business has increased tremendously. We now receive orders from all over the US for ham, bacon and our other pork products from calls and s. The first statement they make is that we are ordering from you because you are Certified Humane...Mark and Rita Newman, Owners Newman Farm Berkshire Pork, Myrtle, MO (January 23, 2009) An important element of our success is that our customers want the transparency that the Certified Humane certification program provides to them and to their customers..john Borman, Vice President Food Services Sales Meyer Natural Angus Beef, Clearwater, FL. (February 18, 2009) Our customers insist that we have the Certified Humane certification for all of our products because they know this program is the gold standard it distinguishes us from other cage free claims..jesse LaFlamme, Owner Pete and Gerry s Organic Eggs, Monroe, NH (March 3, 2009)
11 Data from 1/08 HFAC online survey (1116 Respondents) Which of the following best describes the capacity for which you have an interest in the CH program? Consumer 81% Other Interest 9% Producer 7% Veterinarian 1% Processor 1% Journalist 1% Grocer 1%
12 Generally speaking, what is your primary reason for being interested in the CH program? To help improve the lives of farm animals (55%) To support producers raising animals to humane standards (20%) Other reason (9%) To avoid food additives, hormones, antibiotics, etc. (7%) To support environmentally sustainable farming (7%) To support local farmers (3%)
13 Identify the 3 most important characteristics of the Certified Humane Program to you: Animals are able to express their natural behaviors 71% Well-trained people who care for animals 34% Highest animal care standards of any food certification program 33% Animals are raised with no added hormones 31% Rigorous certification process 36% Supported by credible humane organizations 25% Animal care standards developed by a committee 24% The program is by a non-profit, humane organization 17% Complies with food safety and environmental regulations 9% USDA verifies the inspection process 7% Other source 4%
14 Data from 1/08 HFAC online survey (1116 Respondents) Which of the following statements best describes your current diet? Omnivore 70% Vegetarian 18% Vegan 4% Other 7% What is your approximate annual household income? < $25,000 11% $25-50,000 20% $50-75,000 22% $75-100,000 17% $ ,000 11% $ ,000 8% > $150,000 12%
15 Growing Consumer Demand as measured by increase in number of animals raised under HFAC standards. Number of Animals Raised Under HFAC Standards Each Year 25,000,000 20,000,000 19,899,752 22,614,913 Number of Animals 15,000,000 10,000,000 5,000, ,000 2,500,000 7,973,799 14,132, Years
16 Certified Humane Raised and Handled Humane Farm Animal Care Adele Douglass Chief Executive Officer PO Box 727 Herndon, VA (703) Telephone (703) Fax
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