Scotland’s pork sector is under financial pressure. One way to address this could be to increase the value added to Scottish pork. However, that is only viable if there is a retail market for value-added Scottish pork products.
This study investigated whether UK consumers are willing to pay a price premium for value-added pork products. It found there is a willingness to pay a premium for Specially Selected Pork. Scottish consumers are more aware of this label and were willing to pay a higher premium for it. UK consumers are also willing to pay a premium for other labels. The results suggest that the combined use of the Specially Selected Pork and at least one other label could significantly increase the desirability of Scottish pork in the UK.
Stage
Work CompletedDirectory of Expertise
Purpose
Producers’ participation in the Scottish pork sector has decreased in recent years, due to financial pressures on sale and export prices and increasing input costs, notably for ingredients, energy, and wages. This research, which is part of the project Costs and opportunities for Scottish products with higher value status, aimed to assist the sector by reviewing the costs and opportunities for higher value Scottish pork products.
This research had three objectives:
1. Examine producers’ views on issues affecting Scotland’s higher value pork sector;
2. Analyse consumers’ willingness to pay for higher value Scottish pork products (the subject of this case study);
3. Produce a trade-off analysis model for the pig to pork supply chain in Scotland.
This study assessed pork consumers’ willingness to pay for the use of the label Specially Selected Pork on Scottish pork sold in Scotland and the rest of the UK. It also investigated whether and how the demand for Scottish pork can benefit from the individual and joint use of the labels "Scottish", "British", "Red Tractor", “RSPCA Assured”, “Organic”, “Low greenhouse gas emissions (GHGe)”, “Moderate GHGe”, “Low Fat”, and “Moderate Fat”.
A survey-based choice experiment was conducted to collect the data. In total, 2,000 UK pork consumers completed the survey. A choice experiment is a quantitative research technique asking individuals to state their preference over alternative scenarios, products or services. Each alternative is described by several attributes (see results for further details). Individuals' responses are used to determine whether their preferences are significantly influenced by the attributes. The responses are also used to determine the relative importance of the attributes.
Results
For the choice experiment, five attributes were used to describe the alternatives for pork products: assurance scheme, type of production, level of GHGe, level of fat content, and price. Each attribute was described in terms of at least two levels (see Figure 1).
Figure 1. Attributes and attribute levels used to describe the pork alternatives.
In the choice experiment, respondents were successively shown nine choice sets. Each choice set comprised two pork alternatives and an opt-out alternative. Each pork alternative was described in terms of the five attributes. Figure 2 shows of one of the choice sets used in the study.
Figure 2. Example of a choice set used in the choice experiment.
The choice task was followed by a questionnaire. The questionnaire collected information on respondents' sociodemographic characteristics, purchasing habits and attitudes toward several food attributes (e.g. assurance schemes, environmental sustainability, origin, price, and pork labelling). The sample used in this study is representative of the Scottish and UK populations in terms of age, gender, employment status and education level.
The data were analysed using the multinomial logit model, the most commonly used choice model in the choice literature, to estimate individuals’ preferences and willingness to pay from choice data.
- Seventy per cent of Scottish respondents recognised the label currently used for Specially Selected Pork. This percentage decreases to 35% elsewhere in the UK. Red Tractor is the best known assurance scheme to consumers in Scotland and the rest of the UK (compared to the RSPCA Assured and Specially Selected Pork schemes).
- 63% of respondents in Scotland (61% in the rest of the UK) would like to receive more information about Specially Selected Pork.
- Consumers’ willingness to pay for the labels considered in this study are summarised in Figures 3 and 4. Note that all the values displayed in Figures 3 and 4 are consumers’ price premiums for the label of interest relative to a product that does not carry those labels. In addition, all the values are statistically different from zero (except the ones that equal 0.00)
- Consumers in Scotland were willing to pay a price premium of £2.07 for 500g of fresh pork labelled as Specially Selected Pork relative to pork that does not carry any assurance scheme-related label. In the rest of the UK, consumers are also willing to pay a premium for the Scottish pork that carries the label Specially Selected Pork. However, their premium is significantly lower (£1.39).
- In Scotland, Specially Selected Pork is the most valued assurance scheme-related label. In the rest of the UK, Red Tractor (£1.84) is the most valued assurance scheme-related label, followed by RSPCA Assured (£1.43) and Specially Selected Pork (£1.39).
Figure 3. Consumers’ price premium (in £ per 500g of fresh pork steaks) for the labels considered in the study (Scotland).
Figure 4. Consumers’ price premium (in £ per 500g of fresh pork steaks) for the labels considered in the study (Rest of the UK).
- Origin was found to be the most valued pork attribute by consumers in both sub-samples (i.e., Scotland, rest of the UK). In Scotland, consumers are willing to pay a premium of £3.33 and £1.17 for pork labelled as “Scottish” and “British”, respectively. Pork consumers in the rest of the UK were found to be willing to pay a higher premium for pork labelled as “British” (£2.42) than pork labelled as “Scottish” (£1.58).
- The results also showed that pork consumers in Scotland and the rest of the UK are willing to pay a premium for more sustainable pork, being significantly higher for pork labelled as “Low GHGe” than organic pork.
Pork’s fat content is another highly valued attribute by UK consumers. In Scotland, sampled consumers were found to be willing to pay significantly higher premiums for pork labelled as “Low Fat” (£1.47) and “Moderate Fat” (£1.14) than for pork that does not carry any of these two labels. In the rest of the UK, consumers’ price premiums for “Low Fat” (£1.60) and “Moderate Fat” (£1.17) pork were found to be slightly higher than those of sampled pork consumers from Scotland.
Benefits
This case study summarises our analysis of UK consumers’ willingness to pay for value-added Scottish pork products. Below are insights from this demand-side research that we hope will assist the Scottish pork sector in their production and marketing of higher value pork products.
- The use of the label Specially Selected Pork can boost demand for Scottish pork in Scotland and the rest of the UK. The higher price premium for Specially Selected Pork in Scotland is likely due to the higher familiarity of Scottish consumers with the label. The study found that displaying additional information on the Specially Selected Pork characteristics on the product package was not sufficient in shifting consumers’ willingness to pay. Therefore, information interventions (e.g. public campaigns) may present a better avenue to shift willingness to pay.
- The brand Specially Selected Pork is competing, in the eyes of consumers, with labels such as Red Tractor and RSPCA Assured, especially in the rest of the UK where Specially Selected Pork is the least valued assurance scheme-related label. This should be considered when pricing Specially Selected Pork in Scottish and non-Scottish UK markets.
- The results suggest that Specially Selected Pork should be labelled as “Scottish” when sold in Scotland and as “British” when sold elsewhere in the UK.
- The results suggest that the simultaneous use of the label Specially Selected Pork and at least one of the colour-coded pork labels “Low GHGe”, “Moderate GHGe”, “Low Fat”, and “Moderate Fat” can significantly increase the desirability of Scottish pork for UK consumers. Of particular interest are the colour-coded labels “Moderate GHGe” and “Moderate Fat”, which are highly valued by pork consumers and are technically easier to produce.
Project Partners
This research was funded by the Scottish Government’s Environment, natural resources and agriculture - strategic research 2022-2027 programme, and is part of the project Costs and opportunities for Scottish products with higher value status. The project is overseen by a Steering Group containing policy and industry specialists.