Certified Naturally Grown Label

Clemson University TigerPrints All Dissertations Dissertations 5-2021 Consumer Preferences for Value Added Products: A Case Study for South Carolina English Lane Ratliff Clemson University, [email protected] Follow this and additional works at: https://tigerprints.clemson.edu/all_dissertations Recommended Citation Ratliff, English Lane, "Consumer Preferences for Value Added Products: A Case Study for South Carolina" (2021). All Dissertations. 2770. https://tigerprints.clemson.edu/all_dissertations/2770 This Dissertation is brought to you for free and open access by the Dissertations at TigerPrints. It has been accepted for inclusion in All Dissertations by an authorized administrator of TigerPrints. For more information, please contact [email protected]. CONSUMER PREFERENCES FOR VALUE ADDED PRODUCTS: A CASE STUDY FOR SOUTH CAROLINA A Dissertation Presented to the Graduate School of Clemson University In Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy Plant and Environmental Sciences by English Lane Ratliff May 2021 Accepted by: Michael Vassalos, Committee Chair Marzieh Motallebi, Committee Co-Chair David Willis Juan Carlos Melgar i ABSTRACT This study utilized an online survey administered to South Carolina (SC) consumers in conjunction with a discrete choice modeling approach to examine: i) the knowledge and degree of familiarity with both the USDA Certified Organic and the Certified Naturally Grown labels, ii) the impact of several factors including demographic characteristics, purchasing behaviors, and frequency of organic consumption on consumer’s preferences and Willingness to Pay (WTP) for organic products in South Carolina. This study also includes a Meta-Analysis of WTP for organic products. The first chapter analyzes familiarity of two different labels; USDA Certified Organic and the Certified Naturally Grown. This is achieved by utilizing a Bivariate Ordered Probit model in combination with a Tukey Kramer test. The results indicate that demographic characteristics, and lifestyle preferences have a statistically significant effect on consumer’s familiarity of the USDA Certified Organic and the Certified Naturally Grown labels. However, divergences remain. For example, findings indicate that older consumers are less likely to be familiar with the USDA Certified Organic label as well as the Certified Naturally Grown label but those who spend more time cooking are more likely to be familiar with the USDA Certified Organic label. Similarly, respondents who live in the Lowcountry region of SC are less likely to be familiar with the USDA Certified Organic Label. Respondents who have graduate degrees or higher are less likely to be familiar with the Certified Naturally Grown Label but those respondents who shop for produce at health food stores or farmers markets are more likely to be familiar with the Certified Naturally Grown label. ii The second chapter investigates the impact of different attributes of tomatoes on consumer WTP. This is attained using a choice experiment coupled with the analysis tool of the mixed logit model. The findings indicate consumers have a significant and positive WTP for tomatoes purchased at a grocery store and at farmers markets compared to purchasing tomatoes online. Respondents also have a significant and positive WTP for tomatoes grown in South Carolina vs. Canada. The price premium for organic tomatoes grown in South Carolina is $0.25 compared to the WTP for organic tomatoes grown in the U.S. is only $0.15. These findings have important marketing implications as competition in the organic produce industry increases. It can assist the industry to better target their marketing endeavors and better understand the factors influencing consumer preferences. The third chapter is a meta-analysis which looks at different international WTP studies focusing on different products from 2005 to 2020 and compares the different WTP estimates to derive a common WTP estimate. The results indicate that the WTP estimate that was derived is $3.75/lb. to $3.80/lb. across the different products and countries. Keywords: Organic, Produce, Labeling, USDA Certified Organic, Certified Naturally Grown, Bivariate Ordered Probit, Random Parameter Logit, Meta-Analysis iii ACKNOWLEDGMENTS I would like to extend my sincerest thanks to those who have supported me as I have strived to fulfil my dreams of completing my Ph.D. at Clemson University. Without their unwavering support, helpful guidance, and personal wisdom, this dissertation would not be complete. First and foremost, I would like to thank my graduate advisors and committee chairs, Dr. Michael Vassalos and Dr. Marzieh Motallebi, for supporting and believing in me at every step of the way through my Ph.D. and through this dissertation. If it were not for them, I would not have the knowledge and drive to continue my focus on consumer demand, especially in the organic market or the passion to do research on South Carolina consumers. I would also like to thank Dr. David Willis and Dr. Juan Carlos Melgar, my committee members, for their continual help and guidance. As the other members of my thesis committee, they offered me continual patient support throughout this process. Lastly, I want to say thanks my parents and my family for all their support, patience, and unconditional love. Without their encouraging words and wisdom through this time, I could not have accomplished any of this. iv TABLE OF CONTENTS Page TITLE PAGE .................................................................................................................... i ABSTRACT ..................................................................................................................... ii ACKNOWLEDGMENTS .............................................................................................. iv LIST OF TABLES .......................................................................................................... vi LIST OF FIGURES ....................................................................................................... vii INTRODUCTION ........................................................................................................... 1 CHAPTER I. FACTORS INFLUENCING CONSUMERS FAMILIARITY WITH USDA CERTIFIED ORGANIC AND CERTIFIED NATURALLY GROWN LABELS: A CASE STUDY FOR SOUTH CAROLINA ..................................................... 4 Methods.................................................................................................... 8 Results and Discussion .......................................................................... 14 II. COMPARING CONSUMERS’ WILLINGNESS TO PAY FOR ORGANIC, LOCAL, FAIR TRADE, LOW CARBON FOOTPRINT TOMATOES ACROSS THREE DIFFERENT MARKETING OUTLETS ........................................... 20 Methods.................................................................................................. 24 Results and Discussion .......................................................................... 29 III. WTP FOR ORGANIC: A META-ANALYSIS ............................................ 35 Methods.................................................................................................. 38 Results and Discussion .......................................................................... 41 CONCLUSIONS............................................................................................................ 45 REFERENCES .............................................................................................................. 65 v LIST OF TABLES Table Page 1 Table 1. Barriers to Purchasing Organic 48 2 Table 2. WTP Per County 48 1.1 Table 1.1. Summary Statistics 49 1.2 Table 1.2. USDA Certified Organic Descriptive 50 Statistics 1.3 Table 3. Certified Naturally Grown Descriptive 51 Statistics 1.4 Table 4. Bivariate Ordered Probit Model 52 2.1 Table 2.1 Summary Statistics 53 2.2 Table 2.2 Attribute Options for Choice Experiment 54 2.3 Table 2.3 Random Parameter Logit Results 55 2.4 Table 2.4 Willingness to Pay Results 55 3.1 Table 3.1 Journal Articles 56 3.1.1 Table 3.1.1 Journal Articles Narrowed Down 61 3.2 Table 3.2 Summary Statistics 63 3.3 Table 3.3 Weighted Least Squares Results 63 3.4 Table 3.4 Meta Regression Analysis Results 64 3.5 Table 3.5 Correlation Matrix Results 64 vi LIST OF FIGURES Figure Page 1.1 Figure 1.1 Map of South Carolina Regions 10 1.2 Figure 1.2 Familiarity with USDA Organic Label 18 1.3 Figure 1.3 Familiarity of Certified Naturally Grown Label 18 2.1 Figure 2.1. Growing Method 33 2.2 Figure 2.2. Example of Choice Experiment 34 vii INTRODUCTION This dissertation consists of three chapters that examine the economic value of value-added attributes for agricultural products. This includes labeling for both USDA Certified Organic and Certified Naturally Grown products, as well as, different marketing outlets (online, farmer’s market, and grocery stores) and attributes such as organic, local, low carbon footprint, and fair-trade certified for tomatoes. The familiarity of labels, is examined in the first chapter, because studies showed that consumers have preferences for certain labels such as USDA Certified Organic but may not actually know what the label is telling them (Sangkumchaliang & Huang, 2012; Samant & Seo, 2016). There is limited background on organic farming in South Carolina (SC) because it is one of the states with the lowest adoption of organic practices. For example, Greene, 2003 found that South Carolina is one of the states where adoption

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