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How a taste of Sustainability can woo

both Farmers and Consumers

Supply Chain Collaboration and Willingness to Pay regarding

Sustainability Attributes in Dairy Products

Joint master’s thesis for the master studies Marketing Intelligence & Supply Chain Management

University of Groningen Faculty of Economics and Business Departments of Marketing & Operations

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Management Summary

Consumers’ involvement and voice in food matters has grown substantially over the years. Different trends are visible in this, such as local, organic and artisanal food. Sustainability is becoming more of an issue in the dairy industry as well, with many stakeholders influencing and pressuring farmers to become more sustainable. Sustainability improvement requires involvement from many parties within the supply chain, such as the farmers themselves, milk processors, suppliers and consultancies. Also, in order to be able to make the investments which are necessary to increase the sustainability, consumers need to value the added sustainability attributes. Markets are becoming increasingly demand-driven so without consumer appreciation – and the related willingness to pay premium – farmers will not be motivated or able to implement the additional sustainability attributes.

Sustainability of milk products can be increased by implementing two different types of attributes: the high-investment attributes and the low-investment attributes. This research focuses on low-investment attributes, since they are generally feasible for all farmers. Since every little bit helps in creating a truly sustainable product, low-investment attributes can be of essential importance. Low-investment attributes often require less resources than their high-Low-investment counterparts. It was the expectation that lower required resources leads to higher intention to implement these attributes. This expectation could be confirmed for some of the attributes (manure and lifetime) but not for others (landscape and supply chain).

Different researchers have examined the ways farmers can increase their sustainability, in the fields of carbon emission reduction, waste or usage reduction and animal health. From these options, four sustainability attributes were created which are the attributes under investigation in this study: landscape, for which farmers pay extra attention to the natural layout of the landscape under their management; manure, for which farmers make adjustment to their manure spreading policies which are beneficial to the environment and ecosystem; supply chain, for which farmers do not only focus on their own sustainability but take into account sustainability when selecting suppliers as well; and lifetime, for which farmers pay increased attention to the welfare and lifetime of their cows in order to lengthen the lifetime where ethically possible.

The dairy industry knows many specific characteristics, which are also present in the collaboration activities. Many farmers engage in study groups, in which they exchange information with each other and their suppliers or consultants. Also, an important collaboration mechanism is the cooperatives almost all farmers are members of. These can be important in the implementation of new sustainability attributes, since they provide knowledge, motivation and sometimes also resources. This research shows that for some attributes, a more positive attitude towards collaboration can increase farmers’ intention to implement sustainability attributes.

In order to estimate consumers’ willingness to pay premium for the different sustainability attributes, a choice-based conjoint study was conducted. Increasing sustainability of products requires investments, which often can only be achieved when consumers financially appreciate the increased sustainability.

Previous research has established consumers’ willingness to pay more for different aspects, such as organic labels, fair trade or the absence of genetic modification. However, other attributes such as locality are not appreciated with an increase in willingness to pay and consumer trust in sustainability labels has shown to possibly decrease due to firms using it as pure marketing tool. The quality of products with certain sustainability claims is sometimes also perceived as being lower, thus creating negative willingness to pay.

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€0.08) attributes and negative willingness to pay for the attribute manure (€-0.07). Also in line with previous research, consumers are willing to pay more for national premium brands (€0.04 – €0.10) and less for store brands (€-0.02). However, five different segments could be established and the preferences per segment and the importance consumers’ attach to the attributes differ.

The five segments that were established are: Budget conscious consumer: main focus is price; Dairy involved consumer: values the attributes lifetime and supply chain strongly; Indifferent consumer: does not care much for any attribute; Reverse consumer: acts opposite to most other consumers; Organic committed consumer: values the organic brand and appreciable statements most. Three segments attach the most importance to price, only the indifferent consumer and the organic committed consumer value brand more strongly. The segment that values the sustainability attribute most is the indifferent segment, which does not care much for the difference between statements unfortunately.

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Acknowledgements

The thesis lying in front of you forms the long-expected final work for obtaining my master’s degrees in both Marketing Intelligence and Supply Chain Management. The road leading up to this point has known many bumps, and I owe some people many thanks because without them this thesis would not be lying here today.

First and foremost, I would like to thank both my supervisors, dr. Hans Risselada and prof. dr. Jacob Wijngaard. They were willing to take upon them this challenging project of guiding a combined MI/SCM thesis and for that I am most grateful. The conversations we had and the comments you provided me with really helped me in clarifying the direction of the thesis and improving my work in this. Your enthusiasm and knowledge I also greatly value. I also want to thank dr. Felix Eggers, who helped me solve the problems I encountered when working with conjoint analysis.

This all would not have been possible without the great support in so many ways my parents, Kees Oostveen and Anita Lutz, provided me with. I am very grateful for all their support and good advice during my entire study career, both at and before the university. I also want to thank Gerben, for his love and support, and because he was always able to cheer me up and motivate me whenever I needed some of that. Thanks as well to my friends, for putting up with me during the writing of this thesis and also before in my studies.

Furthermore, from the first master orientation day I visited with my parents up to the point of planning my master courses and conducting data analysis for my thesis, I have always found great advice and support with dr. Liane Voerman. The way she is able to motivate students for the Marketing master and always takes time to listen to and extensively answer questions really made me feel welcome at the university. Many thanks for this.

Imre Oostveen

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Table of Contents

1 Introduction ... 7

2 Theoretical Background ... 9

2.1 Sustainability attributes for milk ... 9

2.1.1 On-farm low-investment sustainability attributes ... 11

2.1.2 Sustainability categories ... 12

2.1.3 Attribute implementation ... 13

2.2 Supply chain collaboration ... 13

2.2.1 Different forms of collaboration ... 14

2.2.2 Supply chain collaboration in the dairy industry ... 15

2.2.3 Collaboration needed for the different attributes ... 15

2.2.4 Collaboration in labels ... 17

2.3 Willingness to Pay ... 17

2.3.1 Sustainability appreciation for food ... 18

2.3.2 Specific information on sustainability attributes ... 18

2.3.3 Benchmark ... 19

2.3.4 Willingness to pay for premium brands ... 19

2.4 Conceptual model ... 19

3 Research Design ... 21

3.1 Survey ... 21

3.2 Conjoint Study ... 21

3.2.1 Creation of the attribute levels ... 22

3.2.2 Conjoint design ... 23

3.2.3 Compressed NEP scale ... 24

4 Results ... 25

4.1 Sustainability Attitude ... 25

4.2 Farmers ... 26

4.3 Descriptive statistics farmers ... 26

4.4 Sustainability attributes ... 26

4.4.2 Supply chain collaboration ... 31

4.4.3 Resources and Effort Required ... 31

4.4.4 Mediation Effects ... 32

4.5 Consumers ... 32

4.5.1 Descriptive statistics consumers ... 32

4.5.2 Model choice and fit ... 32

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4.5.5 Moderation effect of sustainability attitude and brand ... 34 4.5.6 Latent classes ... 34 4.5.7 Segmentation ... 37 5 Discussion ... 38 5.1 Discussion ... 38 5.1.1 Farmers ... 38 5.1.2 Consumers ... 39 5.2 Recommendations ... 40 5.3 Limitations... 41

5.4 Future research possibilities ... 41 References

Appendix I: Survey Farmers

Appendix II: Conjoint Design Consumers Appendix III: SPSS results factor analyses Appendix IV: PCA Output

Appendix V: Model fit formulas used

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1 Introduction

The global consumption of food has increased severely over the last years. Trends and forecasts show that food demand will continue to grow up to 110% of the current level of demand (Tilman, Balzer, Hill, & Befort, 2011), and with the increasing incomes in developing countries the percentage of dairy and meat consumption in relation to vegan alternatives is increasing (World Health Organization, 2003). Agriculture nowadays is able to feed 6 billion people, which is an immense increase compared to hundred years ago. With this increase in food production, the impact of agriculture on the world has also increased, leading to less biodiversity, damaged ecosystems and environmental pollution (Tilman et al., 2011). The need for a more sustainable way of producing, to ensure future generations’ food supply, is nowadays widely recognized by consumers, governmental agencies and businesses (see e.g. ANP, n.d.; Rijksoverheid, n.d.).

Sustainable development is defined by the Brundtland Commission as ‘development that meets the need of the present without compromising the ability of future generations to meet their own needs’ (Word Commission on Environment and Development, 1987:8). The concept can be divided into three dimensions, which together form the so-called “triple bottom line”. These dimensions are social sustainability, environmental sustainability and economic sustainability. Companies are increasingly taking these dimensions into account in their decision-making process. However, a company is no more sustainable than its key suppliers (Krause, Vachon, & Klassen, 2009), which makes supply chain collaboration essential for sustainability improvement processes.

In this research, the focus will lay on achieving sustainability improvements on Dutch dairy farms. In the Dutch dairy sector, many farmers supply their milk to the cooperative of which they are member-owner. These cooperatives are generally committed to improving their own sustainability performance but they can also play an important role in increasing the industry’s sustainability (Nationale Coöperatieve Raad voor land- en Tuinbouw (NCR), 2012). Because of their size and visibility, there are many stakeholders pressuring them to do so. The drive to increase sustainability can be an issue at the supplier side, with farmers not willing or capable to become involved in the implementation of these improvements, due to e.g. insufficient knowledge of improvement methods (see e.g. LTO Nederland, 2011). However, the cooperatives can also create unique opportunities to enable easier improvement of supply-side sustainability (Min et al., 2005).

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In this research, the setting will consist of the dairy industry. Consumers are paying more attention to the sustainability of their dairy products nowadays, and there are many initiatives to improve this such as the possibility to visit farms, new labels indicating sustainability and an increasing trend towards local food purchases. Farmers cannot always empathize with consumers or their demands, and vice versa (Lohman, 2013). It is therefore especially in this sector interesting to see whether collaboration can increase farmers’ dedication to and involvement in sustainability efforts. By showing the increased willingness to pay of consumers, both suppliers and producers are shown what the added value of improving sustainability is. The willingness to pay, if applicable, could also be used as an argument towards farmers when pointing out the importance of improving sustainability on the farm.

Contribution to theory is achieved by showing which elements influence collaboration in this setting and by proving the existence of specific relationships between collaboration, effort and implementation. Also, the willingness to pay for the specific attributes is estimated, together with the dairy brand preferences of Dutch consumers. To the knowledge of the researcher, these were not researched until now. Practical relevance mainly lies in the findings regarding which attributes are feasible to implement, what collaboration is needed and which market segments can be targeted. Together this provides an inclusive view of the possibilities for implementing the specific sustainability attributes proposed in this research.

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2 Theoretical Background

This section will give a theoretical background related to elements incorporated in this study. First, the need for implementing low-financial investment sustainability attributes will be discussed. Several suitable low-financial investment attributes will be explained, which form the basis for the rest of the study. After elaborating upon this, the concepts of supply chain collaboration and willingness to pay will be reviewed. The final paragraph gives a short overview of the research framework and introduces the hypotheses under investigation.

In this research, the relationship between supply chain collaboration, sustainability attributes of dairy products and willingness to pay will be investigated. The expected relationship is as follows:

Figure 1. Initial research idea

Here, increased supply chain collaboration is expected to have a positive influence on the implementation of sustainability attributes – in the sense that more and different forms of collaboration are able to increase implementation of these attributes – and the implementation of these attributes influences willingness to pay – in the sense that consumers are willing to pay more for products with attributes that are favourable to them. The price premium consumers are willing to pay will create a more positive attitude amongst farmers’ towards the attributes.

The implementation of such a sustainability attribute can be done through the creation of a label, which makes it possible for consumers to quickly assess the attributes a product possesses. Creating, implementing and promoting a label is a much different process and mainly lies outside the scope of this research. Here, the focus will lay on exploring whether implementing the proposed attributes would be feasible from both consumer and farmer perspective. The creation of labels will be addressed shortly but is not included in detail and could be addressed later in the process of implementing these attributes. Also, large investment sustainability attributes require a much different collaboration and investment and will generate different results than low investment sustainability attributes. They are therefore out of scope for this research, here the focus will lay on the low investment sustainability attributes.

The research conducted in this paper is of exploratory nature. Much research has been conducted in the field of sustainability in general, but the attributes which will be tested here have not received much attention in scientific literature yet. Also, no information on consumer or farmer preferences was available. One of the goals of this study is to gain knowledge on these two aspects.

2.1 Sustainability attributes for milk

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investments, are mainly focused on the links in the supply chain other than farmers or are forced upon the farmers by other supply chain links (Van der Schans, 2015). Research shows that the behavioural and cognitive changes, which are necessary to increase sustainability, cannot be achieved by enforcing new regulations only (Paddock, 2011). Therefore, voluntary participation in achieving sustainability is of importance.

Farmers looking to expand their business often take sustainability guidelines into account when building new barns (Van der Peet, Van der Meer, Van der Veen, Docters van Leeuwen, & Van Wageningen-Lucardie, 2015). This is also beneficial to them as adhering to these guidelines provides them with financial incentives related to e.g. taxes. Two types of incentives can be distinguished in the literature, namely intrinsic and extrinsic incentives. Financial benefits are a form of extrinsic motivation. In implementing sustainability attributes, intrinsic motivation such as the personal goal of a farmer to care for the environment is important as well. The effectiveness of extrinsic benefits also depends on the size of these benefits. Large extrinsic benefits can be very effective on the short term, but on the long term it has been shown that some form of intrinsic motivation is important for lasting voluntary behavioural changes (Malhotra, Galletta, & Kirsch, 2008). When large financial rewards are provided, the intrinsic motivation that is already present might dissolve and larger rewards will be necessary in the future, creating an untenable cycle (Deci, Ryan, & Koestner, 1999). Sustainability attributes which require little effort may not need large incentives to outweigh the costs involved and motivate farmers to implement, but small financial incentives might suffice. When little change and minimal financial investment are required, the risk for farmers regarding implementing sustainability attributes are low, so any type of motivation, whether intrinsic or small extrinsic, may be enough to drive farmers to alter their behaviour (Deci et al., 1999).

The most gain in creating a more sustainable product is achieved by the measures which require large investments. However, for many businesses this is not within reach for at least the coming few years, due to the low milk prices and farmers’ financial situation. For example, a dairy farm can create substantial sustainability improvements by building a new barn. This is a timely and costly project, due to bureaucracy, external investors and other stakeholders. Therefore, the realization of a new barn might not be feasible within 5-10 years for many farms. Since they cannot improve their sustainability this way, they might be willing to improve sustainability in other ways that are within reach. Changes for which the consumer is willing to pay more, but which require less money and time than high investment attributes, might be attractive for the farmers who are unable to implement the larger sustainability improvements. However, these changes generally require a change in mind-set, which is not easily accomplished either. Showing farmers whether consumers want to pay for these attributes or not and thus what their potential extra income might be could be a strong way to motivate farmers to implement these attributes and change their mind-set in this regard.

The dairy industry has agreed upon several sustainability covenants (e.g. the sustainable dairy chain (ZuivelNL, n.d.)) and to reach these targets the small sustainability efforts can be very valuable besides the larger efforts. Especially if farmers are expected to implement measures with little extrinsic motivation, some types of measures will likely be more feasible than others. It is expected that the easier the implementation of a sustainability attribute is and the less the farmer has to adjust in the daily working routine or production process to implement this, the larger the chance of implementation success will be, as has been shown in other settings. Therefore, the first hypothesis of this study is:

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Low-investment sustainability attributes are easier to implement and to commit to for the general dairy farmer than their high-investment counterparts. Low-investment attributes usually require more investment of time and commitment, instead of money. Several low-investment attributes will be proposed to be used in this research. These attributes, which are explained in detail in the next paragraphs, will first be pilot-tested to see whether farmers also perceive them as low-investment and whether they are actually applicable and feasible. Four attributes will then be selected and tested on the larger sample with the research methods elaborated upon below. High investment attributes are not taken into account in this study, since the return on investment will be hard to achieve through milk sales.

2.1.1 On-farm low-investment sustainability attributes

The options for sustainability attributes were derived from agricultural research on the subject of sustainability, specifically related to the reduction of carbon emission, waste or usage reduction and animal health. Van den Pol-Dasselaar et al. (2013) looked at possibilities for increased sustainability by less waste, less natural resource usage and carbon emission reduction in the dairy industry and the cost effectiveness of these measures. Ramanathan, Bentley, & Pang (2014) looked at collaboration in the UK dairy industry in reducing carbon emissions and Van Calker, Berentsen, Giesen, & Huirne (2005) have compiled lists of attributes related to sustainability in the Dutch dairy industry. These sources were used to compile a list of initial possible attributes, suitable for this specific research. Choosing suppliers based on ‘green criteria’: In addition to the low food miles and GMO free dairy products, other green criteria might prove suitable for implementation. This can be extended relatively easy, since once the main framework is in place, adding extra criteria is often not that hard (Ramanathan et al., 2014).

Food miles reduction: Farmers can decrease their impact on the environment by contributing to a decrease of food miles (Ramanathan et al., 2014). This can for example be done by using food miles as one of the criteria for selecting their own suppliers. Low additional costs are involved because farmers only need to select a different supplier instead of creating extra links (or maybe their current supplier already is the best), which might make the costs, of e.g. feed or supplies, slightly higher but does not involve large switching costs. Another way to decrease food miles could be to set up the supply chain differently, but as this often requires large investments, it is not within the scope of this research.

Using manure separator techniques: Manure separators separate the wet fibres in manure from liquid. The liquid can be stored separately, the wet fibres can be dried and used as cow bedding (GEA, n.d.). These separation activities are especially useful for reducing carbon emissions (Verloop et al., 2013, in: Van den Pol-Dasselaar et al., 2013), in which they can reduce emissions with approximately 0.019 kg per kg milk (approximately 15%). Note that the total amount of milk produced in the Netherlands was over 13 billion in 2015. If all farms were to use manure separators, a theoretical reduction of 247 million kg carbon emission can be achieved (Verloop et al., 2013, in: Van den Pol-Dasselaar et al., 2013)

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Reduced antibiotics usage: Antibiotics are quite costly for the farmer, and a reduction in use will be beneficial for both the farmers’ costs and the sustainability of their product. It is already prohibited to supply milk from cows which are under antibiotics-treatment, but an overall reduction in antibiotics use at the farm will result in a voluntary increase of sustainability (Van Calker et al., 2006). However, this attribute might be difficult to reach, since farmers naturally do not use antibiotics if it is unnecessary. If possible, they probably already implemented this attribute. However, consumers seem quite concerned about this subject and might be willing to pay for it nevertheless (The Milk Story, 2013; Van West, 2012). Therefore it could be an interesting attribute to research.

Fertilizer use reduction: Farmers can decrease their use of fertilizer slightly. However, this does reduce the forage production causing the need for purchasing more corn to obtain the same level of nutritive value. It is important that the corn is not less sustainable than the use of fertilizer. Furthermore, this measure is low in cost because it saves costs for purchasing fertilizer, while at the same time the corn purchase will become a larger spend. Depending on corn and fertilizer market prices, these costs and savings might even cancel out, since corn has shown to be relatively costly in the past few years (Roetert, 2009; Vellinga et al., 2009, in: Van den Pol-Dasselaar et al., 2013).

Natural landscape contributions: Farmers can contribute to a more natural landscape design. Small grants are available for this, which makes the costs farmers incur relatively low. Due to the emergent nature of this change, it can be seen as low-investment attribute. To consumers, this could be a form of social sustainability (Van Calker et al., 2006).

Reduction in water usage by becoming increasingly frugal: Farmers pay for all water they use and this forms a large expense. Many farmers are already applying measures to minimize water usage, such as re-using water or using water saving systems for cleaning and drinking water. However, by giving more concrete attention to water savings, improvements might be obtained without the need for large investments. Reduction of water usage has a positive influence on the sustainability of the end product (Van Calker et al., 2006).

Reduction in energy usage by becoming increasingly frugal: Energy is another large cost for farmers. In recent years, more attention has been given to energy saving in the dairy industry. More knowledge sharing on e.g. specific lighting is achieved. However, by giving more concrete attention to energy savings improvements might be obtained without investing in expensive technology such as solar panels. Reduction of energy usage has a positive influence on the sustainability of the end product (Van Calker et al., 2006).

2.1.2 Sustainability categories

The sustainability attributes mentioned before can be grouped into several categories. GMO free production and food miles reduction both can be incorporated into choosing suppliers based on green criteria.

Using manure separator techniques and fertilizer use reduction both deal with the management of manure streams and the fertilization of the pasture. This could be an important category where improvements can be achieved.

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reconstruction is more expensive than implementing a different grass mowing policy (Provincie Noord-Holland, 2015).

In forming a fourth category, the reduced antibiotics usage could be broadened into the lifetime of cows. Many times the animal rights organizations complain about the short lifetime of cows – whether based on facts or anticipating on consumers’ feelings (PETA, n.d.) –, the longer a cow lives, the more sustainable it is for the farmer too (Zijlstra, Boer, Buiting, Wende, & Andringa, 2013).

The four categories will from now on be referred to as: landscape; manure (management); supply chain; and lifetime.

2.1.3 Attribute implementation

As mentioned previously, for implementing the attributes stated in 2.1.1 large investments are not necessary. However, there are other prerequisites which need to be in place in order to be able to implement these attributes.

The expected main reason why many farmers will not have implemented these attributes until now, is that they are not motivated to do so. Motivation to implement these attributes needs to come from both intrinsic as well as extrinsic sources, where intrinsic motivation could be formed by the personal values of the farmer, related to the environment. Extrinsic rewards might possibly be achieved because consumers are willing to pay more for certain sustainability attributes. If this turns out to be the case, using this knowledge it might be possible to more easily motivate farmers, because they will have gained insight into the monetary benefits it will gain them. Especially because of the current low milk prices, farmers are looking for ways to increase their income (Braakman, 2015; Van der Meulen, Schoorlemmer, Schoutsen, Veen, & Venema, 2013). Monetary benefits from increased sustainability might prove an attractive extra solution and thus increase implementation intentions, since every little bit of money is very welcome for farmers.

2.2 Supply chain collaboration

According to Krause et al. (2009, p.19), a company is no more sustainable than its supply chain. Thus, in order to improve sustainability performance of the individual company, the entire supply chain should be included in the effort. Farmers form one of the main milk processors’ suppliers in the dairy supply chain. However, they do not always view the matter as their responsibility too. This paper will look at whether an increase in supplier collaboration within the dairy industry can improve the sustainability of the end products, by means of implementing certain sustainability attributes.

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2.2.1 Different forms of collaboration

The importance of supply chain collaboration in general has been acknowledged by many (e.g. Soosay & Hyland, 2015) and the concept is applied in different industries and settings. Collaboration activities can take place in several forms, such as strategic alliances, joint ventures and cooperative arrangements (Soosay, Hyland, & Ferrer, 2008). Also, a distinction can be made between horizontal collaboration (i.e. collaboration between parties performing the same type of activities, so multiple dairy farmers working together) and vertical collaboration (i.e. collaboration between parties engaging in activities which complete each other, such as a feed company, dairy farmer and milk processor) (Chan & Prakash, 2012). In this research, the focus lies on vertical collaboration mainly. Horizontal collaboration will only be discussed briefly when relevant.

Furthermore, the activities can exist of setting procedures together with other links in the supply chain, for example sharing knowledge and resources or joint planning and investment (Kohli & Jensen, 2010; Soosay et al., 2008). Implementing these activities, or some of them, has shown to yield several different types of benefits. The confidence of supply chain links in the sourcing, handling and quality assurance of products increases, thus decreasing the risk of sustainability costs or scandals (Dani, 2015). Successful relationships can also lead to (increased) sustainable competitive advantage or profits (Kulp, Lee, & Ofek, 2004).

According to Simatupang & Sridharan (2005), collaboration exists of three different dimensions: information sharing, decision synchronization and incentive alignment. Information sharing refers to the active and timely sharing of information with all collaboration partners, decision synchronization concerns the joint decision making and incentive alignment is related to the extent to which chain partners share risks, benefits and costs. These three variables together form the collaboration index, a measure of the intensity of collaboration. Simatupang & Sridharan (2005) further show that for these different forms of collaboration, they are not equally effective in all types of performance improvement.

Increased involvement of the supplier in sustainability efforts means that more collaboration is taking place, which in turn influences the performance (Vachon & Klassen, 2008). When collaborative activities increase the level of trust and commitment within the supply chain, an increase in satisfaction and performance can often been established for the companies that engage in these activities (Nyaga, Whipple, & Lynch, 2010). The same commitment has shown to be an important factor in achieving collaboration, not only within the supply chain but also within companies internally and in non-profit settings (Anbanandam, Banwet, & Shankar, 2011; De Leede & Looise, 2001; Schmidt, Sjöström, & Antonsson, 2015). Increasing commitment, from the collaborating companies towards the collaboration activities or partnerships established, can increase the sustainability performance. It can thus be essential to have sufficient commitment from all parties involved towards the implementation of sustainable attributes or the development of sustainability labels.

The previous shows the importance of looking at the type and intensity of collaboration which is necessary to achieve the desired outcome, in this case product sustainability improvement, and which fits the specific context as this research will specifically look at the dairy industry, in order to achieve the desired attribute implementation.

The following hypothesis was formulated:

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2.2.2 Supply chain collaboration in the dairy industry

Most Dutch dairy farmers are member-owners of one of the dairy-cooperatives. To switch between cooperatives is not very often done, nor is it a simple process. There are several switching costs involved, farmers often have shares in the cooperative, other cooperatives might have a member quota and each milk processor pays a different price for milk (Veeteelt, n.d.). Besides that, farms are usually passed on from father to son (or daughter), and have been with the same cooperative for years. This creates a solidarity towards the cooperative, which forms another barrier to switch. On one hand, the cooperative therefore has quite some power. But the core-principle of a cooperative is that it is owned by its suppliers, the dairy farmers. Shareholder meetings and the structure of the cooperative give the independent dairy farmer much power and influence, thus making it difficult for the cooperative to force actions upon the farmers. Implementing sustainability actions therefore requires close collaboration and dedication from both the cooperative and the farmers. Because most of these cooperatives show willingness and dedication through the sustainability programs and initiatives they have initiated, in this research the willingness of the farmers is the main topic of interest (e.g. Agrifirm, n.d.; FrieslandCampina, n.d.; Krebbekx, Lambregts, De Wolf, & Van Seventer, 2011; “Nederlandse zuivel als eerste over op 100% verantwoorde soja,” 2016).

All major milk processors and their member-owners are united in an overarching organization called Dutch Dairy Organization (Nederlandse Zuivel Organisatie: hereafter NZO). United they have established a sustainability vision which aims at the implementation of several sustainability actions by 2020. The participation of all major dairy processing cooperatives in the NZO indicates that the willingness to participate and the commitment within these organizations are quite high. Pressure for improvement in the area of sustainability also comes from different sides for them, as stated before, stakeholders pressuring are e.g. consumer-organisations, governmental bodies (Van Zeijts et al., n.d.) and several different NGO’s. Due to their size and visibility, ignoring sustainability is no longer an option.

Due to the joint nature of the efforts that are being taken to improve sustainability, implementing new sustainability labels without involving all parties might prove difficult. In order to achieve certain sustainability improvements, collaboration within the supply chain is essential. Also, research shows that alignment of the sustainability protocols for the firm internally and within the supply chain is essential in order to achieve true sustainability within the supply chain, which clearly shows the need for collaboration in this sense (Blome, Paulraj, & Schuetz, 2014). Possible difficulties of collaboration between different parties could be formed by demand fluctuations, production uncertainties and the different interactions between departments (Van Donk, Akkerman, & Van der Vaart, 2008). These aspects make it hard to consistently align goals and efforts due to the dynamic environment. Besides this, food supply chains face several other barriers to integration, as is shown by Van Donk et al. (2008). This twofold shows both the difficulties but also the strong need for collaboration, and the positive influence it could have on sustainability in the dairy industry.

2.2.3 Collaboration needed for the different attributes

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Also, study groups are already often used by farmers as information sharing tool, which are usually set up by farmers themselves or with the help of e.g. a consultancy, to increase knowledge sharing between them and to help each other achieving goals. This kind of information sharing is an important element of successful supply chain collaboration (Vachon & Klassen, 2008) and could also be implemented in the farmer-milk processor link. The milk processor often possesses a lot of knowledge and information, and has the capabilities to set up structured systems. Collaborating by means of exchanging technical information, joint sustainability planning and joint product design can increase the motivation to implement certain attributes at both sides while at the same time making the attributes more easy to implement (Vachon & Klassen, 2008). The study group could be a good way to distribute all the information, and can have as side-effect that member-farmers feel more appreciated and involved.

In order to be able to implement the four sustainability attributes, changes to the supply chain are inevitable. Changes cannot be implemented at once and without preparation, since the readiness for change in the supply chain determines to a large extent whether the change implementation will be successful (Senior & Swailes, 2010). Creating readiness involves influencing the values, beliefs and ultimately behaviour of the change objects, if this is not aligned with the change goals yet (Armenakis, Harris, & Mossholder, 1993). Readiness for change and willingness to implement changes can be assessed by means of a survey. Increasing the readiness can be achieved by creating a need for change, for example by showing the threats in continuing in the current state, and by showing the ‘change objects’– in this case the farmers – that they do have the ability to change. The results of the research in this thesis might be able to contribute to creating need for change, by possibly showing that consumers strongly value certain sustainability attributes. This could create a clear message to the farmers to convince them to implement these attributes.

Landscape

Collaboration to achieve improvements in the design and implementation of natural landscapes can be found in different directions. The main collaboration type needed will be information. Farmers need to gain knowledge on what type of landscape is appropriate for their region, how they can achieve this and what they can do to sustain this landscape. There have been several initiatives which elaborate upon the way farmers can do this and the costs which are involved (Ministerie van LNV, 2009) Further, collaboration can be found with nature organizations which can contribute subsidies to restore landscape in its natural form.

Manure

The main collaboration partners for manure improvements will be the government and specialized advising organs. The government has set many rules for manure regulation, so in changing manure procedures farmers will be needing much information from the government. Also, new methods are not always known in the government regulating bodies, which might make it hard to implement them. Since the rise of regulations related to manure, many companies have specialized in advising farmers on issues related to manure. These companies have much specialized knowledge and could play a large part in implementing manure attributes. They often also know what costs are involved and where possible subsidies or savings can be achieved.

Supply Chain

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important since several companies involved in the production of other natural resources have undergone this process already (Teuscher, Grüninger, & Ferdinand, 2006). .

Lifetime

The lifetime attribute can be achieved by information collaboration, mainly between farmers themselves and between a farmer and the veterinarian. The amount of collaboration needed depends on the ease of implementing, which will differ for each farm/herd. The starting condition and health of the cows, as well as their genetic predisposition for living long will influence the effort needed to implement this.

Based on the previous description of resources needed and collaboration, the following hypothesis was formulated:

H2b: Farmers with higher perceived resources needed for implementing a sustainability attribute will have a more positive attitude towards collaboration. 2.2.4 Collaboration in labels

In order to be able to achieve a willingness to pay extra at the consumer side for these attributes amongst consumers, they need to be able to easily recognize the products which have these attributes. This recognition can be achieved using labels, which is also used for products such as pasture milk and for labels regarding safety (see e.g. Amenta et al., 2015). Using labels requires making industry-wide agreements on what the requirements are for a label, when and how it can be used and how it is assessed. Several successful collaborative labels already exist in the Dutch food industry. For example, for pasture milk a foundation has been established to assess the farms which are affiliated with the label, which sharply increases the trustworthiness of the label (MilieuCentraal, n.d.).

Several tools are also available for the development of (more) sustainable products. For example, Life Cycle Assessment, design objectives incorporating sustainability and potential for recycling could be valuable in improving the sustainability of milk and its production process (Kaebernick, Kara, & Sun, 2003). The dairy industry might also be able to learn from other industries concerning the type and intensity of collaboration needed to implement a real sustainable supply chain. For example, when many relatively small suppliers are involved (as is the case for dairy, but often also for tea and coffee, specific challenges for implementing an ethical supply chain arise. These challenges include monitoring the sustainable performance, defining what ‘good performance’ is and defining what the label’s minimum standards are (Blowfield, 2003). This could also create opportunities for labels which go beyond the (production process of the) actual product. Future research might be able to shed a light on a classification of the trustworthiness of labels, for example.

2.3 Willingness to Pay

Willingness to Pay (WTP) is defined as “the maximum price a buyer is willing to pay for a given quantity of a good” (Wertenbroch & Skiera, 2002, p.228). Different consumers attach different importance to product attributes. Research shows that consumers are willing to pay a price-premium for e.g. certain brands or specific tastes. Much research has also been conducted on consumers’ WTP for more sustainable products. For example, WTP for renewable energy is higher for e.g. solar and wind energy than biomass energy (Ma et al., 2015). Hustvedt & Bernard (2008) show that in general, consumers are willing to pay more for sustainable apparel and that especially information on the local origin of these products is valued strongly.

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adjustments, all cost money. As a result, the consumer needs to be willing to pay extra for the more sustainable product in order for the farmer to be able to finance the adaptations for the supply chain. Assessing whether consumers comply to the need to pay more is important. However, results on the effect thereof differ per product category, consumer type and over time. Assessing the willingness to pay for the specific sustainability improvements is therefore of added value. When farmers implement these and next find out that consumers do not value their actions, they might also get demotivated to further improve their sustainable performance.

2.3.1 Sustainability appreciation for food

For food, different types of sustainability can be distinguished. For example, locality seems not to be of extra value to the consumer. Research shows that while consumers state they rather buy locally produced products when asked directly, their behaviour deviates from this and when faced the choice, they do not take food miles into account that much (Kemp, Insch, Holdsworth, & Knight, 2010). One of the reasons that consumers are adopting environmentally sustainable food standards slowly could be their perception of sincerity of producers. In the past, some organizations have used the term sustainability purely as a marketing tool without making real effort in becoming more sustainable, a concept known as ‘greenwashing’ (Parguel, Benoît-Moreau, & Larceneux, 2011). This has shown to decrease consumers’ trust in the sincerity of their sustainability claims, which might lead to a decrease in WTP for sustainable food (Bhaskaran, Polonsky, Cary, & Fernandez, 2006).

The results of research on consumers’ financial appreciation of sustainability in general differ. For example, Van Doorn and Verhoef (2011) show that an organic claim has a significant negative effect on WTP for quality perceptions of both vice products (products which provide the consumer with an immediate pleasurable experience, but might contribute to negative long-term outcomes, such as chocolate) and virtue products (which are less satisfying on the short term but provide less negative effects on the long term). This can be due to the perceived lower quality consumers attach to organic claims. Also, sales of sustainable products are lagging behind, possibly due to the attitude-behaviour gap (Luchs, Naylor, Irwin, & Raghunathan, 2010). However, more recent studies show different results. Van Loo et al. (2015) found that consumers who value sustainability more also attach more value to sustainability labels and have a higher WTP for products with specific sustainability labels than others. Research also shows that consumers’ WTP is higher for some sustainability-labels (e.g. organic, FairTrade) than others (e.g. Carbon Footprint, Rain Forest) (Van Loo et al., 2015b; Vecchio & Annunziata, 2015), but the most preferred label also differs per segment and for different studies. Thus, there is little agreement

Research often focuses on whether consumers value sustainability which is indicated through labels on the packaging (e.g. Hustvedt & Bernard, 2008; Van Loo et al., 2015; Vecchio & Annunziata, 2015). These labels seem to be insufficient in fulfilling consumers’ information demands, and the large variety in labels possibly confuses consumers (Dendler, 2014; Meise, Rudolph, Kenning, & Phillips, 2014a). More specific statements might therefore be able to convince consumers of the added value of the sustainability attributes.

2.3.2 Specific information on sustainability attributes

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information was missing. This shows that specific information on favourable attributes can contribute to an increased preference for these products and possibly a higher willingness to pay.

In this exploratory research, the aim is to find out what consumers are willing to pay more for implementation of the four specific sustainability attributes discussed in section 2.2.3. Since there is no previous knowledge on these specific attributes, the aim is to isolate key variables for further examination. This is discussed further in section 3.2.

2.3.3 Benchmark

Several other industries have also looked at the willingness to pay for specific sustainable products. For example, consumers have been shown willing to pay 6-10% more for organic chicken than for non-organic (Gunduz & Bayramoglu, 2011). 19% of the respondents in the study of Gunduz & Bayramoglu (2011) was not willing to pay more. Factors influencing this are e.g. health issues and previous consumption of organic food.

Vecchio & Annunziata (2015) also show that for fair trade chocolate, consumers are willing to pay more, up to 19% even for chocolate with the rainforest alliance label. In another study, Dickinson and Bailey (2002) compared the willingness to pay for different beef attributes. They show that consumers are, on average, willing to pay $0.23 extra for traceability in beef, $0.50 to assurances on animal welfare, $0.63 for extra food safety assurances and for the combination of all three in a beef product, they would pay $ 1.06 extra. For pork, these WTP are respectively $0.50, $0.53, $0.59, and $1.14. Both Croma1 and Vion2 have conducted research into consumers’ attitudes and perceptions towards meat consumption. They find that meat is often considered as the most tasteful part of dinner and that emotions are involved in meat preparation and consumption. Many people experience a feeling of satisfaction after eating meat and some also report feeling pride, completeness or happiness (Vink, Kerklaan, & Meijering, 2007).

2.3.4 Willingness to pay for premium brands

Literature shows that consumers are willing to pay more for brands that are beneficial for them (Bauer, Heinrich, & Schäfer, 2013). Also, premium branded products are generally perceived as being of higher quality, thus increasing consumers’ willingness to pay. Schnettler, Viñuela, & Sepúlveda (2008) conducted conjoint analysis to examine the willingness to pay for national and store brands of milk in Chile, and found that Chilean consumers are willing to pay more for national and less for store brands of milk, in relation to the market value. This is also the expectation for Dutch consumers’ willingness to pay.

2.4 Conceptual model

The preceding discussion is the basis for several expected relationships. First, an increase in required effort could intuitively lead to a more positive attitude towards collaboration, since for implementing the attributes much effort is required, as discussed before, which can possibly be eased by collaborating with the milk processor or study groups for example. Further, a more positive attitude towards collaboration is expected to result in a higher likeliness of implementing sustainability attributes, since this should be easier and more accessible when collaborating. Also, since farmers have many obligations already, as discussed before, it is likely that the lower the perceived resources for implementing an attribute, the higher the likeliness they will implement it. The willingness to pay was in previous studies influences by the brand type and consumers’ sustainability attitude. This

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relationship is also expected for milk. Finally, since the study on the attributes and willingness to pay is new and largely explorative, the expectation is that the willingness to pay differs between the specific attributes, but there is no knowledge on which could be preferred.

Based on the hypotheses and expected relationships, the conceptual model looks as follows:

Figure 2. Conceptual Model

H1

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3 Research Design

In order to be able to accept or reject the aforementioned hypotheses, two types of data were collected. For hypotheses 1, 2a and 2b, a survey study amongst farmers was conducted. For the exploratory research on willingness to pay for the four attributes, consumers were asked to participate in a choice-based conjoint experiment. A detailed description of the methods and reasons for using these is given below.

3.1 Survey

The knowledge of the effects of supply chain collaboration on sustainability performance is studied widely and much information is available on this topic. The study of this concept in a different context and industry was the aim of the current research. To achieve this, and in accordance with the quantitative hypothesis-testing research type, data collection by means of a survey was found to be the most suitable research method (Åhlström & Karlsson, 2008). Using this, the possibilities for implementing specific sustainability attributes were investigated. It was therefore essential to know whether farmers are willing to implement these attributes and how much effort and other resources this requires from them.

For the questionnaire, the unit of analysis is dairy farmers in the Netherlands. This population exists of 28.860 subjects. For the sampling method, different sources were combined. The expectation was that it would be quite difficult to reach the population because farmers are less digitalized than the average consumer (Boerenbusiness, 2014), because of their attitude towards sustainability and because they do not always hava a positive attitude regarding adhering to more demands from consumers or other parties, convenience sampling was used. Here the researcher invites people in the social and business network to fill out the questionnaire. Further, snowball sampling was used by asking respondents to forward the questionnaire to (potential) new respondents. Next to this, social media and influential websites (NieuweOogst, LTO3, Melkveeprikbord and more) were asked to spread the survey amongst their members.

A pilot test was conducted for the survey first. Three people who know the dairy sector well but are not farmers themselves (anymore) filled out the survey to see whether the questions were clear and relevant to farmers, and whether they were able to say something about the subjects which are addressed. After this pilot test, the survey was adapted taking into account the comments, and the final survey was distributed. The final survey can be found in Appendix I and exists of four different elements:

1. General/demographic information: age, farm size, additional activities, business type; 2. Perceived difficulty of implementing sustainability attributes;

3. Collaboration with other parties in the supply chain (collaboration index (Simatupang & Sridharan, 2005));

4. Environmental attitude: using the compressed NEP scale, translated to Dutch (Flaten, Lien, Koesling, & Løes, 2010).

3.2 Conjoint Study

Since little information was available on the specific attributes which were studied, the research is of exploratory nature (Malhotra, Birks, & Wills, 2012). A survey was conducted amongst consumers using Choice-Based Conjoint (CBC) to unveil the preferences of consumers for the different attributes

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and their WTP for it. Conjoint analysis also attempts to find out what the relative importance is consumers attach to specific product attributes.

Lusk & Hudson (2004) discuss the applicability of WTP estimation methods in agribusiness settings. They state that consumers, when asked directly, often overstate their preferences. When faced the choice in real life, they tend to choose differently. However, the use of a conjoint study with different claims on packages and different prices for each product is expected to give an indication of consumers’ choice behaviour which is as close to reality as possible (Natter & Feurstein, 2002). By providing consumers with experimental variation in a controlled setting, much information about consumer preferences can be obtained.

Preference measurement can be conducted through assessing revealed or stated preferences. Since the product attributes in this study are not yet available in real life, stated preferences are the only option. Within stated preference methods, a distinction can be made between compositional and decompositional methods. Compositional methods use direct questions to ask respondents for their preference on each attribute, decompositional methods ask consumers to evaluate a set of complete products and deduct consumer preferences from these results (Helm, Scholl, Manthey, & Steiner, 2004). Two often used decompositional methods are rating-based conjoint and choice-based conjoint. Although both are very suitable methods, choice-based conjoint is often preferred because in many cases it gives better results in terms of e.g. model hit rate (Karniouchina, Moore, van der Rhee, & Verma, 2009; Lausen, Krolak-Schwerdt, & Böhmer, 2015) and was therefore used in this study. The aim of this part of the research is to measure willingness to pay, therefore the conjoint design was created as shown in Table 1.

Table 1. Conjoint Design

Attributes Levels

Sustainability attribute statement Statement 1 - Landscape Statement 2 - Manure Statement 3 – Supply Chain Statement 4 - Lifetime

Price 0,95

1,05 (current normal price level) 1,15 1,25 Brand Milbona Arla Campina Bio+ (MilieuCentraal, n.d.) 3.2.1 Creation of the attribute levels

The sustainability statements were created by testing which of the attributes in 2.1.1 are most attractive, clear and desired by consumer. From these, statements were formulated which are comprehensible and clear to the consumer. This was tested on several consumers as well and resulted in the following:

1. Creating a more natural landscape – The farmers producing this milk, pays extra attention to the construction of the landscape they manage, for example by reinstating natural elements.

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3. Sustainable milk through longer living cows – The cows from farmers producing this milk have an above average lifetime and the farmer works actively on increasing the average lifetime of the cows.

4. Sustainability from grass to glass – In producing this milk, attention is paid not only to the farm’s sustainability but also the other links in the supply chain, by choosing suppliers that operate sustainably.

The price has been created by taking the current normal price level of Campina milk at Albert Heijn, and deviating from this in both higher and lower prices in small steps. The normal price level was € 1,05. Because Milbona is one of the brands – a Lidl brand – and initial research shows that the normal price level for 1 litre of fresh skimmed Milbona milk is around € 0,80, steps of € 0,10 deviation of the Campina price were considered minimal. Since the interest lies in the willingness to pay more for milk and not less, one step down but two steps up were taken. Finally, the results can also differ per brand, as is discussed in section 2.3.4. For this reason, the two main Dutch brands, an organic labels and a B-label will be tested for as well.

3.2.2 Conjoint design

In the conjoint design represented in Table 1, the number of levels of each attribute is kept as equally as possible, to prevent bias due to the number of levels effect. This effect entails that when one attribute has many more levels than another, consumers could incorrectly perceive the attribute with more levels as being more important (Wittink, Krishnamurthi, & Reibstein, 1990), thus biasing the results. Therefore, each attribute has four levels.

In creating a conjoint design, a few aspects are important. The design must be comprehensive and efficient. An efficient design is balanced, i.e. each attribute level is displayed an equal number of times, and an efficient design must be orthogonal, i.e. each attribute level combination appears an equal number of times in the design. Furthermore, most consumers will have a limited amount of choices they are willing to make. Usually, 8 to 16 choice sets are used per respondent (Eggers, 2015). However, when three attributes with four levels each are used, and one would use a full-factorial design – which is always efficient – 64 alternatives would be created. Instead, a fractional factorial design is created using an orthogonal array. The fractional factorial design is shown in Table 2.

Table 2. Efficient Fractional Factorial Conjoint Design

Alt. Statement/Attribute Brand Price

1 Landscape Milbona € 0,95 2 Landscape Arla € 1,05 3 Landscape Campina € 1,15 4 Landscape Bio+ € 1,25 5 Lifetime Bio+ € 0,95 6 Lifetime Campina € 1,05 7 Lifetime Arla € 1,15 8 Lifetime Milbona € 1,25 9 Manure Arla € 0,95 10 Manure Milbona € 1,05 11 Manure Bio+ € 1,15 12 Manure Campina € 1,25

13 Supply Chain Campina € 0,95

14 Supply Chain Bio+ € 1,05

15 Supply Chain Milbona € 1,15

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The population of this part of the study exists of all consumers in the Netherlands. The respondents will be selected randomly and the survey will be spread via social media. The formulation of the statements will be done by proposing the attributes in 2.1.1. to a panel of experts. They will assess the feasibility of the attributes and select the four most suitable attributes. Next, these attributes are converted into claims suitable for product packaging. The comprehensibility and clarity of these claims will be assessed by having several consumers judge them. The final claims are incorporated in the conjoint study.

Next to the conjoint, some basic information will be gathered from the respondents. The final questionnaire can be found in Appendix II. In terms of analyses, Latent Gold was used to estimate willingness to pay. Some general descriptives were conducted in SPSS and graphs were made in Excel. Latent Gold was also used to take into account predictor variables (age, gender, household size and sustainability attitude) and to see whether any segments can be defined based on some latent variable.

3.2.3 Compressed NEP scale

Both farmers and consumers were asked 8 questions related to their sustainability attitude. An often-used scale for this is the revised New Ecological Paradigm (NEP) scale. The original scale consisted of 15 items and has been proven effective in many settings. Because of the length of questionnaires, a shorter version of 8 items was created and this version is also successfully used in other studies in the agricultural industry (Flaten et al., 2010). The compressed NEP scale includes the following questions:

1. The balance of nature is very delicate and easily upset.

2. Humans have the right to modify the natural environment to suit their needs. 3. Humans are severely abusing the environment.

4. The so-called ‘ecological crisis’ facing humankind has been greatly exaggerated. 5. Plants and animals have as much rights as humans to exist.

6. The balance of nature is strong enough to cope with the impacts of modern industrial nations. 7. If things continue on their present course, we will soon experience a major ecological

catastrophe.

8. Human ingenuity will insure that we do NOT make the earth unliveable.

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4 Results

4.1 Sustainability Attitude

First, the creation of the Sustainability Attitude variable will be discussed because this was done in the same way for both farmers and consumers.

For both samples, the Shapiro-Wilk and the Kolmogorov-Smirnov test indicated that the data does not have a normal distribution (p<.05). The Q-Q plot confirmed this finding. The results for KMO and Bartlett’s were sufficient .

Based on the initial communalities, statements 1 and 2 (see section 3.2.3) were excluded from the analysis. After examining the results of the new factor analysis, statement 4 was also removed. The resulting items (3, 5, 6, 7 and 8) were included in another factor analysis. Because ideally only one single variable should be created for the moderator effect to test, the possibilities for this were investigated. The final factor analysis showed a two-factor solution, where for both consumers and farmer, the highest loadings were from statement 3, 5 and 7 on component 1. Statement 6 did not load on component 1 for farmers and only slightly for consumers. Therefore, the decision was made to leave this out. Reliability analysis showed a quite good reliability for these three items as Sustainability Attitude scale of both the consumers (α = .662) and the farmers (α = .748). Therefore, this was chosen as final solution. The mean of the three variables was taken as the Sustainability Attitude value. Also, a new categorical variable was created which splits Sustainability Attitude into low and high.

Table 3. Sustainability Attitude

Farmers Consumers N 62 149 Mean 2,8548 3,7248 N negative 39 35 N positive 23 114 % negative 63% 23% % positive 37% 77%

Table 3 shows the descriptive statistics of the variable Sustainability Attitude for both farmers and consumers. A ‘higher’ score means a more positive attitude. The table indicates that consumers on average have a more positive attitude towards sustainability than farmers. To test whether this is significantly the case, a nonparametric Mann-Whitney U test was conducted. Table 4 and Table 5 show the results of this test.

Table 4. Results of the Mann-Whitney U test for difference in mean

N Mean Rank Sum of Ranks Sustainability Attitude Interval Farmer 62 63,73 3951,50

Consumer 149 123,59 18414,50

Total 211

Sustainability Attitude Categorical Farmer 62 76,64 4751,50

Consumer 149 118,22 17614,50

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The significant values show that there is a difference in mean sustainability attitude between farmers and consumers. This is true for both variable types. The ranks are higher for consumers, indicating that they have the more positive attitude (i.e. higher score) towards sustainability.

4.2 Farmers

4.3 Descriptive statistics farmers

The descriptive statistics gained from the questionnaire (n=62) are compared to the descriptives of the general farmer population to assess sample representativeness. The results of this are given in Table 6.

Table 6. Descriptive statistics farmers

Sample Population

Average age 43 years 42 years4

Gender male 63% 67% (CBS, n.d.)

Conventional farming system 90% 98% (CBS, n.d.)

Average farm size 105 dairy cows 90 dairy cows (CBS, n.d.)

Secondary activities 34% 40% (CBS, n.d.)

4.4 Sustainability attributes

4.4.1.1 Descriptive statistics

All respondents were asked the same eight questions from the NEP scale about each of the four sustainability attributes. The comparison of the four different attributes is given in figure 3 to 7, which can be found below.

Figure 3. Implementing this attribute is easy for me

4

This number is not available for dairy farmers specifically, so instead the average age of people working in the Dutch agricultural industry has been used.

0% 20% 40% 60% 80% 100%

Landscape Manure SupplyChain Lifetime

Implementing this attribute is easy for me

Strongly agree Agree

Neutral Disagree

Strongly disagree

Table 5. Test Statistics

SustAtt Interval SustAtt Categorical

Mann-Whitney U 1998,500 2798,500

Wilcoxon W 3951,500 4751,500

Z -6,515 -5,452

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Figure 4. It takes much time to implement this attribute

The attribute landscape is experienced as most time-consuming. It is also, together with the attribute supply chain, seen as least easy to implement. Over half of the respondents do not find the attributes manure and lifetime complicated to apply. Figure 5 shows that for landscape, manure and supply chain, half of the respondents indicate that they believe implementing these attributes is costly for them. Almost half of the respondents does not view the implementation of lifetime as costly, which together with the time, is an explanation for why it is seen as relatively easy to implement.

Figure 5. It costs a lot of money to implement this attribute

Figure 6. Implementing this attribute is not possible for me

0% 20% 40% 60% 80% 100%

Landscape Manure SupplyChain Lifetime

It takes much time to implement this attribute

Strongly agree Agree Neutral Disagree Strongly disagree 0% 20% 40% 60% 80% 100%

Landscape Manure SupplyChain Lifetime

It costs a lot of money to implement this attribute

Strongly agree Agree Neutral Disagree Strongly disagree 0% 20% 40% 60% 80% 100%

Landscape Manure SupplyChain Lifetime

Implementing this attribute is NOT possible for me

Strongly agree Agree

Neutral Disagree

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