How a Taste of Sustainability can
woo both Farmers and Consumers
Supply Chain Collaboration and Willingness to Pay regarding Sustainability Attributes in Dairy Products
Theoretical Background (1)
› Increase in sustainability requires commitment from entire supply chain (Paddock, 2011), collaboration is important to achieve a more sustainable product (Theyel, 2006).
› Focus often lies on high-investment sustainability attributes, but to reach the goals that are agreed upon, low-investment change can be critical.
› Different types of collaboration are possible and can be applied, the required intensity of collaboration also differs based on
attribute.
Theoretical Background (2)
› Willingness to Pay (WTP) for sustainability and different
sustainability characteristics differs, show several researchers. › Consumers show to value specific packaging information about
attributes that are favourable to them, but choose the package
without information over the package with information about less favourable attributes (Meise, Rudolph, Kenning, & Phillips, 2014). › WTP has shown to be higher for sustainable food products such as
chocolate, chicken and beef, but amount of WTP differs Vecchio & Annunziata, 2015; Bailey, 2002)
Conceptual Model
H1
Research Design
› Pre-tested attributes and package claims.
› Survey asking about feasibility of attributes for farmers +
sustainability & collaboration attitude.
› Choice-based conjoint for consumers, milk packages with
different brand, attribute and price + questions about
sustainability attitude.
Results (1)
› Sustainability attitude (SA):
Humans are severely abusing the environment.
Plants and animals have as much rights as humans to exist. If things continue on their present course, we will soon
experience a major ecological catastrophe.
› 37% of farmers has a positive SA, 77% of consumers has a positive SA significant difference (p<.001). 0% 20% 40% 60% 80% 100%
Landscape Manure SupplyChain Lifetime
Implementing this attribute is easy for me
Results (2)
› More positive collaboration attitude results in higher
implementation likeliness for Landscape, Manure & SC (p<.05).
› Collaboration attitude is more positive for smaller farms (p<.05).
› The more resources the farmer perceives are needed, the less
positive the collaboration attitude becomes (p<.10). This
relationship is stronger for smaller farm sizes.
› More resources needed results in a decrease in implementation
likeliness for manure and lifetime (p<.05).
Results (3)
› Part-worth utilities and absolute willingness to pay
-1 -0,5 0 0,5 1 -1 -0,5 0 0,5 1 Ls Ld M SC -1 -0,5 0 0,5 1 € 0,95 € 1,05 € 1,15 € 1,25
Table 17. Willingness to Pay
Brand WTP Absolute WTP Statement WTP Absolute WTP
Arla -0,0432 € 0,04 Landscape -0,0145 € 0,01
Bio+ -0,0963 € 0,10 Lifetime -0,0766 € 0,08
Campina -0,0850 € 0,08 Manure 0,0674 € -0,07
Results (4)
› Brand moderates WTP for the different attributes, but only has a very small effect. Sustainability attitude does not moderate the WTP for attributes.
› Five segments could be distinguished:
1. Budget conscious consumer: main focus is price
2. Dairy involved consumer: values the attributes lifetime and supply chain strongly
3. Indifferent consumer: does not care much for any attribute 4. Reverse consumer: acts opposite to most other consumers 5. Organic committed consumer: values the organic brand and
Discussion
› Research highlights importance of collaboration in achieving sustainable products, also shown by e.g. Lozano (2007).
› Negative relationship between resources and collaboration is unexpected. Little is known about this: gap in literature.
› Moderating effect of company size on collaboration is in line with previous findings (Cao & Zhang, 2013).
› Campina WTP is quite high, this could be due to the sample.
› All brands would benefit from implementing the supply chain or lifetime attribute, and benefit very slightly from implementing the landscape
attribute.
› Three of the five segments are price-driven, two of the five are not.
Important finding because these consumers are willing to pay more and also value the attributes.
› Lifetime can be very profitable, from both farmer and consumer
