Consumer Acceptance and Willingness to Pay for Irradiated Products: Field Experiments

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Consumer Acceptance and Willingness to Pay for
Irradiated Products Field Experiments Dr.
Rodolfo M. Nayga, Jr. Professor Department of Ag.
Economics Texas AM University (rnayga_at_tamu.edu)
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Outline

• Food Safety The Case of Food-borne Illness
• Food Irradiation
• Consumer Acceptance and Willingness to Pay
  Ground Beef and Mangoes
• Market Trials
• Trade Developments

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US Food Safety System

• Tradition - precaution and science-based risk
  analyses
• Regulatory process - open and transparent manner
• Previous focus - chemical hazards
• Recent focus - microbial pathogens and
  comprehensive farm-to-table approach

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Foodborne Illness The Situation in US
Listeria
Salmonella
E. coli 0157H7
Unknown Agents Known Agents
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Public health burden of foodborne diseases

• Each year an estimated 76 million cases
• 1 in four Americans gets a foodborne illness each
  year
• 1 in 1000 Americans is hospitalized each year
• 6.5 billion in medical and other costs

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Why is Foodborne Illness Emerging?

• Globalization of food supply
• Pathogens introduced to new areas
• Travel
• Change in microorganisms
• Change in human population
• Change in lifestyle

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Vulnerability of Our Food Supply

• The food supply comprises thousands of classes of
  foods, domestic and imported
• Ever-more centralized production and processing
  with wide distribution
• Unintentional foodborne outbreaks have happened
  over large, dispersed, geographical areas
• This delays recognition of the
• outbreak and complicates
• identification of the source

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A century ago most of our food came from local
sources.
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Who is most susceptible to foodborne illness?
Children are susceptible because their immune
systems are not fully developed.
The elderly are also susceptible to food-borne
illness and suffer more severe reactions because
their immune system is weaker.
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Initiatives

• PulseNet - CDCs national computer network of
  public health laboratories rapidly identify
  foodborne illness
• FoodNet - surveillance sites across the US for
  foodborne diseases and related epidemiologic
  studies
• Fight BAC! - public awareness program backed by
  coalition of industry, producer, and consumer
  groups

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• The chain of production from farm to table
• A generic prevention scenario

On-farm sanitation, safety of animals' food and
water biosecurity, probiotics, and other "Good
Agricultural Practices"
Production
Processing
Factory sanitation, quality control HACCP,
inspection and other "Good Manufacturing
Processes"
Final preparation and cooking
Consumer education, Foodhandler
certification, Restaurant inspection
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• The chain of production from farm to table
• A generic prevention scenario

On-farm sanitation, safety of animals' food and
water biosecurity, probiotics, and other "Good
Agricultural Practices"
Production
Processing
Factory sanitation, quality control HACCP,
inspection and other "Good Manufacturing
Processes"
Pathogen killing step
Food Irradiation?
Final preparation and cooking
Consumer education, Foodhandler
certification, Restaurant inspection
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Public Health Breakthroughs

• Pasteurization of Milk
• Immunizations
• Chlorination of water supply
• Food Irradiation?

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Intervention strategies used by the beef
processing industry to control E. coli O157H7

• Lactic Acid Carcass Wash
• Steam Vacuum
• Hand Trimming to remove fecal contamination
• Acidified Sodium Chlorite Spray
• Steam Pasteurization

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E. coli O157H7 Organisms Remaining after
Application of Intervention Technology (initial
cell population 1,000,000 cells/gram)
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Antimicrobial Intervention Strategies

• All current antimicrobial intervention strategies
  reduce the level of pathogenic microorganisms in
  ground beef.
• Irradiation reduces pathogenic microorganisms by
  99.99 to 99.999.
• Only cooking completely destroys all pathogenic
  microorganisms.

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• What can Food Irradiation Do?

• destroy foodborne pathogens
• delay the ripening and spoilage of fresh fruits
  and vegetables
• extend the shelf-life of perishable products like
  beef, poultry, and seafood
• commercially sterilize foods

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Shelf-life extension of Strawberries
Non-irradiated After 7 days storage
Electron beam irradiated After 17 days storage
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• What can Food Irradiation not Do?

• reverse the spoilage process
• substitute for good handling and processing
• effectively destroy viruses, toxins, possibly
  prions
• prevent recontamination of food
• cannot be used on food claimed organic

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Concerns Expressed by Anti-Irradiation Groups

• Misuse to avoid plant sanitation
• Environmental safety of irradiation facilities

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Terry Stokes, CEONational Cattlemens Beef
AssociationMay 29, 2003

• Irradiation complements, but does not replace
  proper food handling and cooking practices, and
  the numerous testing and safeguard measures
  already in place.

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• What Current Uses are Approved in US?

• spices
• fruits and vegetables
• wheat/wheat flour
• pork and chicken
• red meats
• shell eggs
• seeds for sprouts
• pet foods
• food for space program
• Pending Approval Ready-to-Eat Foods

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• What Current Uses are Approved in Canada?

• Potatoes
• Onions
• Spices
• Dehydrated seasonings
• Wheat
• Flour
• Pending Approval poultry, beef, shrimp, prawns,
  mangoes

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• What Current Uses are Approved in EU?

• Until 1999, use in Europe varied from country to
  country
• Recently, EU Parliament has issued directives to
  establish community list
• Dried aromatic herbs
• Spices
• Vegetable seasonings

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• Impact of Food Irradiation

• If 50 of meat and poultry were irradiated
• 880,000 fewer cases
• 350 fewer deaths
• 8,500 fewer hospitalizations

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Until children have routine access to irradiated
hamburger, we will continue to experience
life-threatening outbreaks of Escherichia coli
O157H7 infections in this vulnerable
population." Michael T. Osterholm, PhD,
MPH Director of the University of Minnesota
Center for Infectious Disease Research and
Policy.
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Not one child should be sacrificed so that
Americans can have cheaper meat! Barbara
Kowalcyk Mother of deceased Son, in whos name
the new Meat Poultry Pathogen Reduction Act
is being named. KEVINs LAW
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Texas AM Electron Beam Research Facility
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Electron Beam Irradiation Process

• uses electricity
• accelerates electrons
• scans product
• makes food safe
• 
  in SECONDS!

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US Regulation on Labeling

• Inclusion of the radura symbol
• Labels
• treated with radiation
• treated by irradiation
• irradiated for food safety
• These must be printed on the package, unless the
  word irradiated is part of the product name
• Marketers can also now petition the FDA to use
  label electronically pasteurized for e-beam
  irradiated foods

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Consumer Acceptance and Marketing of Irradiated
Foods
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Market Status

• Not yet a major factor in todays food processing
  environment but slowly growing
• Spices and herbs largest area of application
• Ground beef fastest mover

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Data Samples and Locations

• Randomly selected walk-in shoppers at the
  entrance (total of 474 shoppers)
• Use irradiated or non-irradiated ground beef and
  money as experimental tools
• At 13 HEB grocery stores in Texas, namely,
• Austin (3 stores, 119 shoppers)
• San Antonio (3 stores, 111 shoppers)
• Houston (4 stores, 139 shoppers) and
• Waco (3 stores, 115 shoppers)

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Methodology

• On actual survey, asked consumers sequentially on
  
• Their willingness to buy before and after
  learning information about food irradiation
• Their self-perception whether they would belong
  to one of the four consumer segments
• Their willingness to pay (WTP) for the irradiated
  ground beef

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Information

• General statement about food irradiation
  excerpted from United States General Accounting
  Office (GAO), Washington, D.C.
• Food irradiation is the process of exposing
  food to controlled levels of ionizing radiation.
  Ionizing radiation is a type of energy similar to
  radio and television waves, microwaves, and
  infrared radiation. The high energy produced
  allows it to penetrate deeply into food, killing
  microorganisms without significantly raising the
  foods temperature.

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Willingness To Pay Experiment

• Each respondent was given a pound of
  non-irradiated ground beef and some money as a
  gift for survey participation
• Each respondent was asked his/her willingness to
  exchange a pound of non-irradiated ground beef
  and the money for a pound of irradiated ground
  beef.
• If the respondent accepted the bid, the WTP value
  is recorded as first bid value
• If the respondent rejected the bid, he/she was
  asked again to exchange a pound of
  non-irradiated ground beef and a half value
  (second bid) of the money for a pound of
  irradiated ground beef. If the answer was Yes
  the second bid value is recorded as WTP,
  otherwise, the WTP is assumed to be lower than
  the second bid value.

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Average of Times of Consuming Ground Beef per
week
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Percentage of buying ground beef when go grocery
shopping
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Experienced getting ill from food poisoning
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Comparison on reasons to food poisoning
1(not important) ---------------------------------
--- 10 (very important)
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Radura Symbol Perception
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Prior Knowledge of Food Irradiation
1 means zero knowledge, and 5 means very
knowledgeable
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Consumer Segments(before giving information on
nature of irradiation)
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Consumer Segments(after giving information on
nature of irradiation)
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Buying Decision Irradiated Ground Beef (after
giving information on nature of irradiation)
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Willingness to Pay Experiment on first bid values
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Willingness to Pay Experiment on second bid values
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WTP bid values after trying the product, in
percentage
Out of 71 returned postcards from 3 cities,
except Austin.
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Would you buy irradiated ready to eat food?
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Would you buy irradiated ground beef containing
antioxidant?
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In Summary

• The results clearly indicate that information
  about food irradiation leads to favorable changes
  in consumers perceptions and buying decisions
• Consumers are willing to pay for reducing risk of
  food-borne illness

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Irradiated Mangoes
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Procedures

• Consumer surveys were conducted in field/grocery
  stores in the late winter/early spring of 2006
• Irradiated mangoes were used as product of
  interest
• Participants were provided a brief information
  sheet about mangoes with additional food
  irradiation information provided during the field
  experiment

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Objective of Research

• Assess the effect of different types of
  information on consumers willingness to pay for
  irradiated mangoes
• Why?
• Presence of anti-irradiation groups in the US
  that disseminate negative information about food
  irradiation to the public
• So it is important to know how to counter the
  negative (mostly not based on science)
  information from consumer activist groups

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Types of Information (Treatments)

• Positive Information about the benefits of food
  irradiation (source GAO)
• Negative Consequential information about food
  irradiation (source Public Citizen)
• Mixed Both forms of information presented
  (order of presentation alternated)

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Positive Information General statement about the
benefit of food irradiation excerpted from the
United States General Accounting Office (GAO)1,
Washington, D.C.   Food irradiation is the
process of exposing food to controlled levels of
ionizing radiation. Ionizing radiation is a type
of energy similar to radio and television waves,
microwaves, and infrared radiation. However, the
high energy produced by ionizing radiation allows
it to penetrate deeply into food, killing
microorganisms without significantly raising the
foods temperature.   An expert committee
convened by the World Health Organization
reviewed the findings of over 500 studies and
concluded that food irradiation creates no
toxicological, microbiological, or nutritional
problems. These studies have not borne out
concerns about the safety of consuming irradiated
foods. For example, the studies indicated that
chemical compounds in irradiated food are
generally the same as those in cooked foods, and
any differences do not put consumers at
risk.   Many federal agencies have regulatory
responsibilities related to food irradiation,
including FDA, USDA, the Nuclear Regulatory
Commission (NRC), the Occupational Safety and
Health Administration, and the Department of
Transportationwith FDA having primary regulatory
responsibility for ensuring the safety of
irradiated foods.   Irradiation can be used as a
pest control treatment on quarantined fruits and
vegetables to prevent the importation of harmful
pestssuch as the Mediterranean fruit fly. To
minimize this risk, USDAs Animal and Plant
Health Inspection Services quarantine procedures
require the use of fumigation or heat (hot water
or hot air) or cold treatment of fruit that is
not ripe. Irradiation treatment is an effective
alternative for many types of fresh produce
because it can be used on riper fruit and on
fruit that cannot tolerate heat treatment.
Moreover, a number of past quarantine treatments
have recently been prohibitedan example being
fumigation with ethylene dibromide.   An
important benefit of irradiation is that it can
prolong the shelf life of many fruits and
vegetables. It does this by reducing spoilage
bacteria and mold and inhibiting sprouting and
maturation. As a result, products can be
harvested when fully ripened and can be
transported and displayed for longer periods
while maintaining desirable sensory qualities
longer than non-irradiated products.  According
to the Institute of Food Technologists, it is
highly doubtful that there would ever be any
vitamin deficiency resulting from eating
irradiated food. In its 1980 evaluation of food
irradiation, the Joint Expert Committee convened
by FAO, WHO, and IAEA concluded that irradiation
caused no special nutritional problems in food.
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Negative Information General information about
consequences of food irradiation excerpted from
Public Citizen1, Washington, D.C. Food
irradiation is sometimes incorrectly compared to
microwaving. The energy particles in a gamma ray
used in food irradiation are up to 10 billion
times more energetic than microwaves, making this
a vastly different technology.   Irradiation can
lead to the formation of Unique Radiolytic
Products (URPs), mysterious chemical compounds
that have not been adequately identified or
studied for their potential harm to humans. One
such type of chemical was recently found to
promote the cancer-development process in rats,
cause genetic damage in rats, and cause genetic
and cellular damage in human and rat cells. This
chemical is a radiation byproduct of palmitic
acid, a type of fat that occurs in virtually
every food.
In legalizing food irradiation, the FDA relied
on laboratory research that did not meet modern
scientific protocols, which federal laws require.
Very little toxicological testing has been done
on irradiated food during the past 20 years.
It is important to note that irradiation will
not reduce the amount of fungicides, pesticides
and herbicides used during the growing period.
The most likely chemical reduction would come
from reduced fumigation of fruits and vegetables.
Yet, fruits and vegetables are very sensitive to
irradiation (they break down easily following
irradiation), so it is not a process likely to be
used with these foods extensively.
Irradiation kills beneficial microorganisms, such
as the yeasts and molds that can help keep
botulism at bay, as well as the microorganisms
that create the aromas that tell us when food has
gone bad.
Irradiation can corrupt the flavor, texture and
other physical properties of some foods, leading
to meat that smells like a wet dog, onions that
turn brown, and eggs that are runny.
Irradiation destroys vitamins, nutrients and
essential fatty acids, including up to 80 percent
of vitamin A in eggs and half of the beta
carotene in orange juice. In some foods,
irradiation can intensify the vitamin and
nutrient loss caused by cooking, leading to
empty calorie food.
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WTP Means and Change by Treatment
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Acceptance as Measured by Trust

• Trust measured independent of WTP appears to
  follow the same pattern as WTP
• Increases with Positive information
• Decreases with Negative Information
• Alone and with Positive
• Differences (Post Pre) are all statistically
  significant
• Positive p .002
• Negative p .0000
• Mixed p .0098

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Summary

• Positive information
• Overall, Positive information was observed to
  significantly increase WTP
• Negative information
• Decreases WTP but still positive (not negative)
• Regardless of whether presented alone or Mixed
  with Positive

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Significant Implication

• Information about nature and benefits of food
  irradiation can significantly increase consumers
  willingness to purchase and pay more for
  irradiated foods!
• However, due to the weight attached by consumers
  to negative information vis-à-vis positive
  information, there is a tremendous need for a
  concerted effort to continuously educate
  consumers about the nature and benefits of food
  irradiation

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Minnesota Model for Educating Consumers and
Marketing Irradiated Ground Beef

• Minnesota Beef Council led the way
• Education and lots of free samples
• series of trade shows at state fairs, major
  meetings and restaurant shows
• series of press releases and media information
  widely distributed throughout Minnesota have
  created a model now accepted by other states
• educational workshops, issues management and
  partnerships with public agencies, ground beef
  manufacturers, retailers and restaurateurs
• State beef councils, cattle organizations and
  others are using the Minnesota Model to inform
  consumers, beef producers and marketers about the
  advantages and benefits of irradiated ground beef

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Hawaii Pride Marketing of Irradiated Fruits

• Lots of free samples
• Pushing fruit quality with posters, recipes,
  taste testing, and the strategic use of media
  coverage
• Formed relationships with retailers on the
  mainland US
• Since then, the sale of Hawaii Prides irradiated
  fruit has dramatically increased. In supermarket
  chains such as Albertsons, Kroger and Safeway,
  operating in Minneapolis, Phoenix and Atlanta,
  sales have increased from 400 to, in some cases,
  1,000

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Market Trials in US

• Irradiated ground beef patties are available at
  an estimated 7,000 supermarkets and by mail order
  and home delivery.

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Schwans

• Distribution National through home delivery.
• All of the non-cooked ground beef products that
  Schwans marketed are irradiated and have been
  since the summer of 2000.

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Omaha Steaks

• Distribution National through mail order. Omaha
  Steaks offers a variety of Gourmet Burgers, all
  of which are irradiated.
• All ground beef marketed by Omaha Steaks has been
  irradiated since mid 2000.

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Huisken Meats

• In May 2000, introduced irradiated ground beef in
  84 Minnesota stores.
• Today - offers two irradiated ground beef
  products 90 percent lean and regular ground
  beef.
• Huisken BeSure irradiated patties are available
  in an estimated 2000 stores in some 20 states.

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Colorado Boxed Beef

• Began marketing New Horizon brand irradiated
  ground beef in mid-2000.
• New Horizon irradiated patties are available
  through Publix (700 stores) in the Southeast and
  Topps (300 stores) in the mid-Atlantic region.

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Ellison Meats

• Ellison Meats, based in Pipestone, MN, produces
  two types of irradiated ground beef patties for
  Simeks of St. Paul Park, MN. Simeks irradiated
  patties are available at retail through Cub Foods
  65 supermarkets in Minnesota and Wisconsin and at
  Super Americas 400 convenience stores. All
  ground beef marketed by Simeks is irradiated

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Wegmans

• Rochester, NY-based Wegmans began marketing
  irradiated ground beef in 2001.
• Wegmans now offers Huisken irradiated ground
  beef frozen patties in all stores in New York,
  Pennsylvania, New Jersey and Virginia

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Results of these Market Trials

• Informed consumers like and will buy irradiated
  foods
• Reasons
• safety from food poisoning bacteria
• increased shelf life
• product quality
• To date, no single test market of irradiated
  foods has been unfavorable when the consumer has
  been provided information about food irradiation.

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Results of these Market Trials

• The volume of irradiated food being marketed has
  increased significantly in recent years, but the
  full-market penetration is still small and growth
  potential is high
• The number of supermarkets that offer irradiated
  meat products has increased in just three years
  from 84 to more than 7,000 from approximately 50
  retail chains
• Nearly 2,000 restaurants including those
  belonging to a major fast food chain, are serving
  irradiated meat

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Trade Developments

• In October 2002, the USDA Animal and Plant Health
  Inspection Service (APHIS) approved the
  irradiation of fruits and vegetables via
  regulation entitled, Irradiation Phytosanitary
  Treatment of Imported Fruits and Vegetables
• APHIS described the regulation as the allowance
  for irradiation to be used as an alternative to
  current quarantine treatments
• The treatments combat 11 types of exotic fruit
  flies and the mango seed weevil
• Foreign facilities exporting to the U.S. will
  operate under compliance agreements with their
  National Plant Protection Organizations (NPPO)

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International Trade Developments

• NPPO will sign a work plan with the USDA that
  cites the legal authority each country has to
  allow irradiation as a quarantine treatment for
  imported fruit and vegetables, the type and level
  of monitoring that each country will require of
  the other country's irradiation treatments, and
  other conditions that must be established
• USDA regulation stipulates that foreign
  irradiation treatments must be conducted under a
  pre-clearance plan that specifies the level of
  direct USDA oversight of the foreign irradiation
  treatment
• The Phytosanitary Issues Management Staff of
  APHIS are responsible for negotiating the
  phytosanitary conditions for entry, including
  irradiation treatment, with prospective trading
  partners
• Several countries including Brazil, Chile,
  Mexico, South Africa and Thailand are preparing
  to export irradiated fruit to the U.S.
• India started exporting irradiated mangoes to US