The environmental horticulture industry, also known as the Green Industry, is the second most important sector in the U.S. agricultural economy in terms of economic output and one of the fastest growing segments of agriculture; however, it has shifted from an average annual growth of 13.6% in the 1970s to an annual growth of less than 3% in the 2000s, which suggests the industry is facing a maturing marketplace. As an effort to help the industry stimulate demand, Texas A&M AgriLife developed the Texas Superstar™ and Earth-Kind™ brands. The aims of these plant promotion programs are to increase the demand for selected horticultural products, raise awareness among consumers of Texas-grown plant material, promote environmental responsibility, and increase producers' profitability by providing branding price premiums. Despite the considerable investments on research and marketing done thus far, no research has investigated the effectiveness of these branding efforts in terms of consumer behavior. This article evaluates brand awareness and willingness-to-pay for these two brands in Texas. The discrete choice models used were the Logit and Probit models on brand awareness and the Tobit model on the conditional willingness-to-pay. Results from this study show that consumer awareness of Texas Superstar™ and Earth-Kind™ in Texas is low, but the level of satisfaction among consumers is high. Furthermore, profiles of the consumers' behavioral and demographic characteristics that are more likely to influence brand awareness and willingness-to-pay were identified. The findings suggest that consumers who shop weekly or monthly for ornamental plants are more likely to be aware of programs such as Texas Superstar™ and Earth-Kind™. Also, those who live in South Texas were more likely to exhibit awareness of Earth-Kind™. Consumers who shopped for self-consumption purposes were willing to pay a discounted price for Texas Superstar™ and Earth-Kind™ plants compared with unbranded plants and those who were previously aware of the brands were willing to pay more. The two brands were effective in differentiating their products and thus creating price premiums. It was estimated that the willingness-to-pay for Earth-Kind™ and Texas Superstar™ for the average respondent was 10% higher than the willingness-to-pay for an unbranded plant.
Alba J. Collart, Marco A. Palma and Charles R. Hall
Alba J. Collart, Stephen L. Meyers and Jason K. Ward
Skinning of sweetpotato (Ipomoea batatas) storage roots is one of the greatest concerns of sweetpotato producers. Although skinning injury is very common, the severity of the injury can vary widely. At an undefined threshold, sweetpotatoes with skinning injury are no longer sold for fresh consumption. The objectives of this study were to examine how skinning injury influences consumers’ willingness-to-pay (WTP) for sweetpotatoes and to identify differences in valuations when the extent of skinning injury is labeled. Image analysis was used to quantify skinning injury and then an incentive-compatible, nonhypothetical laboratory experimental auction was conducted to collect data on consumers’ WTP for five categories of sweetpotatoes: 0% to <1% skinning injury, 1.0% to 3.0%, 3.1% to 5.0%, 5.1% to 7.5%, and 7.6% to 10.0%. On average, consumers were willing to pay the most for sweetpotatoes with 0% to <1% skinning injury (up to $1.51/lb to $1.67/lb) and the least for sweetpotatoes with 7.6% to 10% (up to $0.76/lb to $0.85/lb), yet mean WTP values were nonzero for all skinning levels. Moreover, when the extent of skinning was labeled (relative to when they bid blindly), consumers were willing to pay price premiums for sweetpotatoes with low skinning injury levels (0% to 5%) and discounted sweetpotatoes with the highest skinning injury level (7.6% to 10.0%), suggesting that skinning levels of 7.6% and above may not be acceptable by consumers.