Certification can lead to handsome returns from ‘particular’ consumer, study suggests

New and interesting research from Lincoln University’s Agribusiness and Research Unit (AERU) suggests that food safety certification alone could potentially increase New Zealand producer returns from sheepmeat exports to China, India and the UK by a significant amount.

The AERU research, led by professor of trade and environmental economics and AERU director Caroline Saunders, assessed Chinese, Indian and British consumer preferences and willingness to pay for particular attributes in New Zealand food. Although values, attitudes and preferences towards food attributes have been studied before, these have tended to focus on markets within developed countries. Very little research has been conducted on consumers in emerging markets, nor has there been much in the way of cross-country comparisons.

The research showed a much greater overall willingness by Chinese and Indian consumers to pay more for a product with food safety certification compared with UK consumers. It also paints a picture of “a far more sophisticated emerging market consumer than might be expected.”

Professor Saunders says New Zealand can stand to gain handsomely through increased product certification.

“For instance, with just food safety certification alone, the potential increase in New Zealand producer returns from dairy and sheepmeat exports to China, India and the UK is projected at US$247 million to 2020. The most significant increase would likely be with whole milk powder, accounting for some US$139 million.”

When considering food safey, animal welfare and biodiversity enhancement certifications combined, sheepmeat and dairy exports to the three countries in question were projected to increase producer returns by more than US$405 million to 2020.

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1 Comment on Certification can lead to handsome returns from ‘particular’ consumer, study suggests

  1. Tread carefully here. Certification to the consumer may increase retail sales but my experience with Timber, Coffee, Coca, Palm Oil, sugar etc indicates that for commodity products the benefit in terms of premium does not flow back to the producer or even the exporter. There are early adopter premiums in some cases but mainly the benefit is in retaining markets by responding to a general ratcheting up of requirements.

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