December, 2007

Research Perspective and Comments & Analysis

Marketplace Perception Vs. Reality (Part 1): Food Safety

“I’d describe this as B.S. and A.S. — ‘Before Spinach’ and ‘After Spinach.’ B.S. — only a handful of customers wanted to know where and how their produce was grown, and taste and quality were more important. A.S — there’s no stopping customer distrust of produce or any product for that matter.”
— Interviewed retailer

Successful product marketing, regardless of product, is driven by the ability to predict and respond to consumer preferences, which can quickly shift in response to current events. No subject facing the produce industry is in more flux than food safety.

Earlier this year, Produce Marketing Association (PMA) teamed with Cornell University to study consumers’ attitudes about food safety and how well retailers know their customers on this topic. Led by my longtime friend and collaborator, Professor Ed McLaughlin, the researchers’ goal was to identify opportunities to better communicate with and satisfy our customers at the most visible point of the produce supply chain. Study results were first shared at PMA’s 2007 Fresh Summit International Convention and Exposition in Houston.

This past summer, the Cornell team surveyed 544 produce shoppers in stores in four U.S. markets. They then asked 40 produce executives representing 81 percent of U.S. supermarket sales to predict their customers’ responses. Some were interviewed to get their interpretations of survey results. The research also covered attitudes about organics, which I hope to examine in a later column.

We found retailers often didn’t know their customers’ minds regarding food safety very well — and, as a result, there are many opportunities to have more meaningful conversations with our customers at the store level.

Consumers are more worried about food safety than their retailers think. Barely half of surveyed shoppers report they are confident about the safety of produce growing conditions, while a nearly equal amount lack confidence or are neutral at best. Contrast this to the 90 percent of retailers who think their customers believe produce is being grown safely.

Retailers also misjudged the concerns that ranked highest with their customers; 73 percent of all shoppers report they are “somewhat” to “very concerned” about pesticide residues, while 50 percent report they are similarly concerned about “germs.”

But who pays for extra safety measures? Almost three-quarters of shoppers indicate they are willing, at least theoretically, to pay more for produce certified as grown under safe farming practices. Only one-third of retailers predicted their consumers would pay extra.

As the Cornell researchers commented at Fresh Summit, retailers tend to base their opinions of consumer attitudes on the actual purchasing behavior of shoppers — what shows up on the sales receipt — while survey respondents tend to say what they believe, which may or may not be reflected in sales. Bear in mind, though, that retailers were asked by the researchers to predict how their customers would respond to the survey, not how their purchases would be impacted.

The Cornell research echoes other recent PMA research findings that consumers are increasingly interested in locally grown produce — apparently because of recent food-safety scares. Two-thirds of consumers agree or strongly agree that locally grown foods are safer than produce transported long distances. Meanwhile, 73 percent of shoppers report they are somewhat to very concerned about the safety of imported produce. Here it came as no surprise to retailers that “local” equates to “safe” in consumers’ minds.

Many surveyed consumers feel safer when they can put a “face” on their fruits and vegetables, by buying local. Just over half of the surveyed consumers agree “somewhat” to “strongly” that they prefer to buy fresh fruits and vegetables if they can identify the farm from which they came.

The Cornell/PMA research confirms consumers are shaken by recent food-safety problems and their shopping interests are shifting as a result. For food safety — as with last month’s topic of country-of-origin labeling — the rules of consumer engagement are changing, and so must we. Consumers are becoming more demanding about where and from whom their produce is procured. As a result, we should also reshape our marketing strategies to address their needs.

I believe what consumers really want is the reassurance that comes with transparency of information and a feeling of personal connection. While our industry is being aggressive on food safety, word of our efforts has reached retailers but not consumers. So now, we must consider how to do more at point-of-purchase to convey safety information in a responsible and reassuring way.

We must look for ways to put a trustworthy “face” back on produce, whether its producer hails from down the street, across the country or around the world. As the retailer quoted at the beginning of this article told our researchers, there can’t be any more B.S. We aren’t producing widgets; we’re supplying life-impacting food. We must listen to our customers and we must respond.

Actions Speak Louder Than Words

That we must respond to our consumers is beyond doubt — but to which consumer shall we respond? The hypothetical consumer answering survey questions? Or the actual consumer purchasing in our stores?

If you listened to the retailers who spoke at the Fresh Summit workshop president Bryan Silbermann refers to — Don Harris from Wild Oats/Whole Foods, Mike O’Brien from Schnucks Markets and Michael Agostini from Wal-Mart — you constantly got the sense they felt they knew their customers better than the customers knew themselves.

In a sense, they probably do; they have decades of experience judging behavior, and behavior informs us in a way words do not.

What are we to make of 73 percent of consumers saying they are “very concerned” about pesticide residues? How are we to understand 50 percent are “very concerned” about “germs” on the produce?

To a retailer, the key question is how to interpret “very concerned.” If 73 percent of consumers are “very concerned” about pesticides but “very concerned” does not translate into skipping the produce department or reducing produce purchases, maybe it is not something to be too worried about.

Retailers and producers make a mistake if they dismiss self-reported consumer concerns discordant with past behavior. Sometimes consumer expressions can signal a shift from past concerns that will be reflected in future behavior. Sometimes self-reported consumer sentiments can reveal a marketing opportunity just waiting for someone to seize.

Interpreting consumer research requires important attention to the meaning of words. If consumers report “locally grown” foods are safer than produce transported long distances, what are they saying? That transportation makes produce unsafe? That growers, who know their product needs to be transported, do things that make it less safe? Or is it “us vs. them,” where “local” growers are somehow “like” the consumers whereas distant growers are not and thus distrusted?

We certainly should not assume consumer perceptions correspond to trade practices. Locally grown is an excellent example. Many chains have rules that local is based on mileage. For example, on its Web site, Whole Foods gives its criteria for local: Only produce that has traveled less than a day (seven or fewer hours by car or truck) from the farm to our facility can be labeled “locally grown.”

Seven hours at 65 miles per hour is 455 miles. Also this is the distance to a Whole Foods “facility,” not the store. If the facility is three hours from the store, produce grown 650 miles from the store could still be classified as local. That is almost the distance between Baltimore, MD, and Jacksonville, FL.

If consumers report they love local and we judge the veracity of this statement by putting produce from several states away in front of them, their behavior won’t correspond to their statements because they likely meant something entirely different by “local.”

In its own research on this topic, Produce Business is finding issues such as nationalism can wildly affect consumer attitudes. In the United Kingdom, for example, residents of London, who might wax poetic over local in a focus group, are horrified if the moderator tries to explain they might like more produce imported from northern France. Although it is 840 miles from Land’s End in Cornwall to John O’Groats in Caithness, this voyage is considered local while a mere 22-mile boat trip across the English Channel is not.

Countless U.S. studies have confirmed the same point: rarely do consumers consider out-of-state produce locally grown.

Sometimes, retailers know that, in a practical sense, something consumers may value never happens in their markets. So consumers, who really want to know where their food comes from, may be out of reach for a supermarket as those consumers may turn to alternative sources, such as farmer’s markets or the various subscription box initiatives.

Supermarkets may put up signs or a Web site with farmer info, but those are just names and pictures, and not all consumers trust the information. It is a very different experience from meeting John the farmer every Saturday at a local farmer’s market or driving to the country to pick up a box of produce on the farm where it was grown.

It is very difficult to do a controlled experiment on consumer attitudes, so we always need be cautious in assuming we know why consumers feel as they do.

Perhaps food safety drives their thoughts or perhaps they picked up a shifting zeitgeist in which reducing food miles is thought to be virtuous and reduce global warming.

We discussed the study Produce Business is doing — with the generous support of a grant from Stemilt Growers — last month in my Fruits of Thought column titled Locale Not Local. That piece is in great harmony with Bryan’s thoughts that what consumers really want may not be local as much as it a series of factual things — including perhaps food safety — that they associate with local.

If true, this points the way to a marketing strategy for national marketers to emphasize the authenticity of their production locales and the experience and integrity of the farmers who grow the produce.

Ed McLaughlin of Cornell University, who this writer also counts as a friend and longtime collaborator, might be smiling ever so slightly at this controversy. The good professor is certainly the first to recognize good research almost always suggests more questions than it provides answers.

This keeps life interesting and ensures there is always research to be done and columns to be written.