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SugarCreek: Brandworthy Food Solutions

Your Consumers May Be Willing to Pay for Provenance

Posted by SugarCreek

May 29, 2014 8:30:00 AM

local-burgerIf you have been basing your entire sales strategy around a price point, you may want to reevaluate. Today’s consumers are much more conscience of how their food is raised, handled, and packaged before it hits the shelves of their local supermarket. And your meat supply is no exception. According to The New Yorker, most people would be willing to pay a premium if it means the steak, fish, and chicken they are buying is not imported and guaranteed in quality.

Why does provenance matter?

People no longer shop blindly: They want to know everything before they spend a dime. They want to know how the food was processed, if it contains added chemicals, and if it was modified in any way. But they may be most concerned about where it came from.

Why do they care? Here are a few reasons:

  • Improved Food Safety. From contaminants to pesticides to damage in transit, there is a lot that can go wrong with imported food. When consumers know where the meat they are buying comes from, and they can see that it came from an American supplier, it eases their mind a little bit because they feel it will be better quality. Is all imported food unsafe? No. Is all domestic food clean and pure? No. But to the consumer, American-made equals higher standards.
  • Better Animal Conditions. Not only do you have the possibility of chemical-treatment to overcome, you also have customers that only want meat from animals that were raised in the most humane conditions. Awareness in animal cruelty is more prevalent than ever before, and as bad as some see our treatment of livestock, most Americans believe the mistreatment of animals to be much worse in other countries.
  • Stronger Economy. People also realize that if they spend their hard-earned money to support someone in their own country, everybody wins.
  • Superior Taste. Finally, buying something from America means that it typically spends less time in transit, which usually means the food they are purchasing is fresher. And everyone knows that the fresher the meat, the better the taste.

How much will people pay for this knowledge?

A lot more than you may think. The New Yorker reports on several studies that all demonstrate this fact. The first study, conducted in 2003 by the Journal of Food Distribution Research, found that the average consumer would be willing to spend 11% more if they knew where their food was coming from. And get this— the price increase could jump to 19% if a product was guaranteed to come from the U.S.A. So instead of charging $12.00/pound for your prime steak, you could charge over $14.00/pound—which adds up quickly.

But that study was done in 2003, when consumers were just starting to become vocal in expressing concern about their food. So it’s no surprise that another survey completed by Boston Consulting Group in 2012 found that a large majority of Americans (80% to be precise) would spend a whopping 60% more for something that said it was “Made in the U.S.A.”

There’s just one problem.

All of these results are from written surveys. And it’s a lot easier to sound food-conscience on paper than it is to actually go out and spend more money. However, the findings are still promising. It means that at least people know they should be willing to pay for a first-rate, domestic product, and many of them will.

Your best bet is to have something for everyone. For those with food safety concerns that want to support the local economy, provide a higher-priced, better quality, American-raised product. And for those shoppers that will always shop with price as a top priority, appease them with an option that you can still be proud of, even if it does come from abroad.

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Written by: SugarCreek

Sugar Creek prides itself on its authentic culinary expertise. With nearly 50 years in the food manufacturing business, we know what Americans want to eat.

Topics: Food Safety, Trends