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Milk Purchasing : a Consumer Survey in Auckland and Christchurch

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Milk Purchasing : a Consumer Survey in Auckland and Christchurch MILK PURCHASING: a consumer survey in Auckland and Christchurch " RL Sheppard Research Report No. 195 Agribusiness and Economics Research Unit Lincoln College Canterbury NEW ZEALAND ISSN 0113-4485 AGRIBUSINESS & ECONOMICS RESEARCH UNIT The Agribusiness and Economics Research Unit (AERU) The major research areas supported by the AERU include trade operates from Lincoln College providing research expertise for policy, marketing (both institutional and consumer), accounting, a wide range of organisations concerned with production, finance, management, agricultural economics and rural processing, distribution, finance and marketing. sociology. In addition to the research activities, the AERU supports conferences and seminars on topical issues and AERU The AERU operates as a semi-commercial research agency. staff are involved in a wide range of professional and College Research contracts are carried out for clients on a commercial related extension activities. basis and University research is supported by the AERU through sponsorship of postgraduate research programmes. Research Founded as the Agricultural Economics Research Unit in 1962 clients include Government Departments, both within New from an annual grant provided by the Department of Scientific Zealand and from other countries, international agencies, New and Industrial Research (DSIR), the AERU has grown to become Zealand companies and organisations, individuals and farmers. an independent, major source of business and economic research Research results are presented through private client reports, expertise. DSIR funding was discontinued in 1986 and from April where this is required, and through the publication system 1987, in recognition of the development of a wider research operated by the AERU. Two publication series are supported: activity in the agribusiness sector, the name of the organisation Research Reports and Discussion Papers. was changed to the Agribusiness and Economics Research Unit. General policy direction is provided by an AERU Review The AERU operates as a research co-ordinating body for the Committee which meets annually. An AERU Management Agricultural Economics and Marketing Department and the Committee comprised of the Principal, the Professors of the two Department offarm and Property Management, Accounting and associated departments, and the AERU Director and Assistant Valuation. This means that a total staff of approximately 50 Director administers the general Unit policy. professional people is potentially available to work on research projects. A wide diversity of expertise is therefore available for the AERU. AERU REVIEW COMMITTEE Professor BJ Ross, M.Agr.Sc. E J Neilson, C.B.E., B.A., B.Com., F.C.A., F.C.I.S. (Principal, Lincoln College) (Lincoln College Council) Professor RH Juchau, B.Com., B.Ed., M.A. P J Rankin, M.A., M.P.A. (Professor of Accounting and Finance, Lincoln College) (Director, New Zealand Planning Council) Professor AC Rayner, B.Com. (Hons), M.Soc.Sc. P Shirtcliffe, B.Com., A.C.A. (Professor of Agricultural Economics, Lincoln College) (Nominee of Review Committee) P G Bushnell, B.Agr.Sc., M.Agr.Sc., Ph.D. Professor AC Zwart, B.Agr.Sc., M.Sc., Ph.D. (Director, Economics Division, Ministry of Agriculture and (Professor of Marketing) Fisheries) (Director, Agribusiness and Economics Research Unit) B D Chamberlain (ex officio) (President, Federated Farmers of New Zealand) R L Sheppard, B.Agr.Sc. (Hons), B.B.S. RT J Clarke, M.Sc., Ph.D. (Assistant Director, Agribusiness and Economics (Chief Director, Department of Scientific and Industrial Research Unit) (ex officio) Research) AERU MANAGEMENT COMMITTEE 1988 Professor AC Bywater, B.Sc., Ph.D. Professor AC Zwart, B.Agr.Sc., M.Sc., Ph.D. (Professor of Farm Management) (Professor of Marketing) Professor RH Juchau, B.Com., B.Ed., M.A. R L Sheppard, B.Agr.Sc. (Hons), B.B.S. (Professor of Accounting and Finance) (Assistant Director, AERU) Professor AC Rayner, B.Com. (Hons), M.Soc.Sc. (Professor of Agricultural EconOmics) . AERU STAFF 1988 Director Research Sociologist Professor AC Zwart, B.Agr.Sc., M.Sc., Ph.D. J R Fairweather, B.Agr.Sc., B.A., MA, Ph.D. Assistant Director Assistant Research Economists RL Sheppard, B.Agr.Sc. (Hons), B.B.S. TP Grundy, B.Sc. (Hons), M.Com. Research Economists Secretary G Greer, B.Agr.Sc. (Hons) M. Yen RG Moffitt, B.Hort.Sc., N.D.H. CONTENTS PAGE List of Tables (1) Acknowledgments (i i 1) Preface (v) Summary (vii) SECTION 1. Introduction 1 2. Results 5 2.1 Milk Purchasing 5 2.1.1 Purchase Frequency 5 2.1. 2 Purchase Source 5 2.1. 3 Profile of Milkman Users 7 2.2 Quantity Purchased 10 2.3 Container Preferences and comparative Prices 19 2.4 Reaction to Price Changes 23 2.5 Milkman Service 26 2.6 Why Home Delivery Not Used 30 2.7 Milk Statements 31 2.8 sample Statistics 34 ') J • Conclusions 37 APPENDIX 43 • Questionnaire 45 Interviewer Briefing Notes 49 LIST OF TABLES TABLE PAGE l. Milk Purchasing Frequency 5 2. Where Milk Last Purchased From 6 3 . Other Purchase Sources 6 4 . Use of Milk Purchase Points 7 5. Milkman User cf. Non User - Christchurch 8 6 . Milkman User cf. Non User - Auckland 9 7. Type and Quantity of Bottle Milk Purchased 11 8 . Type and Quantity of Carton Milk Purchased 12 9. Type and Quantity of Plastic Bottle Milk Purchased 13 10. Containers Purchased at Last Usual Purchase 14 ll. Milk Type by Purchase Source 15 12. Purchase Source by Package Type 16 13. Package Type Purchased by "Demographics" - Christchurch 17 14. Package Type Purchased by "Demographics" - Auckland 18 15. Container Preferences 19 16. Reasons for Container Preference 21 17. Supermarket vs. Milkman Carton Price 22 18. Carton Milk Cost cf. Glass Bottle Milk Cost 23 19. Reaction to Price Changes 24 20. Reaction to General Milk Price Rise by 10 Cents per Pint (600 ml) 26 2l. Rating of Home Delivery Service 27 22. Areas for Improvement of the Home Delivery Service 28 23. Preference for an Account 29 24. Other Products the Milkman Should Deliver 30 25. Reason for Not Using the Home Delivery Service 31 ( i ) LIST OF TABLES (cont,) TABLE PAGE 26, Milk Statement Agreement by Christchurch Respondents 32 27, Milk Statement Agreement by Auckland Respondents 33 28, Household Size 34 29, Number of Children in the Household 35 30, Age of Respondents 36 31, occupation of Principal Income Earner 36 • ( i i ) ACKNOWLEDGMENTS The author wishes to acknowledge the assistance received from Mr Russell Moffitt with the ori(jinal design of the questionnaire and the background information on the industry which he was able to supply. The AERU is grateful to the New Zealand Milk Board for its finan­ cial support of the project and to the 700 respondents to the survey who freely gave their time to complete the questionnaire. The excellent service provided by strategic Research Services in Christchurch and AGB:McNair in Auckland in administering the questionnaires in an efficient, timely and very competent manner was also much appreciated . • ( iii ) PREFACE This Research Report provides the results of a consumer survey carried out during February and March 1988. With the partial deregulation of the milk industry and the introduction of alter­ native packaging for milk, it was considered to be important to have an analysis of the consumer response to the changes that have taken place. The NZ Milk Board therefore commissioned the Agribusiness and Economics Research Unit (AERU) to carry out a survey of consumers to ascertain the responses that had already occurred and to indicate the direction in which future changes might go. It is acknowledged that this Research Report provides only a par­ tial analysis of the milk consumption situation. However, the collection of data on milk consumption has now become much more difficult with the removal of the NZ Milk Board. Also, it was considered that it would be more useful to have this Report pub­ lished at an early date rather than wait until more data was collected, given the importance of the findings, especially for the home vendor service. The AERU has a continuing interest in carrying out research of this type. It considers that it is essential that the pattern of changes which takes place following deregulation of an industry should be monitored and recorded in the interests of acquiring further knowledge of the market and understanding the actions of market participants. This is particularly important for the Town Milk Industry as further changes in the regulatory pattern are expected in 1993 when the Milk Act 1988 is due to expire. In addition to the research reported in this publication, the AERU has been carrying out a review of the impact of the partial deregulation with respect to the changes in milk company owner­ ship and the effect of the changes on farmers. The results of this research will be published in the near future. Professor AC Zwart DIRECTOR ( v ) SUMMARY This Report provides a description of a consumer survey of 400 Auckland and 300 Christchurch households at the end of February and early March 1988. The intention of the survey was to identify consumer attitudes to changes in milk packaging and to the home delivery service. It was noted that Auckland consumers had experienced longer exposure to cartons and plastic bottles as milk containers. A comparison of the situation in the two centres was therefore expected to reflect an indication of the effect of packaging changes. ' Results of the survey indicate significant differences between Auckland and Christchurch with respect to the adoption of the new packages, the consequent changes in the type of milk purchased and differences in the use of the home delivery service. The carton and plastic bottle had been adopted by over 40 per cent of Auckland respondents compared with 14 per cent of Christchurch respondents. Only 50 per cent of Auckland respondents had ob­ tained their last milk purchase from the milkman compared with nearly 75 per cent of Christchurch respondents.
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