What do consumers want?
Consumers have become more aware of what happens in the supply chain, from farm to fork. Aspects such as sustainability, animal welfare and high quality influence the consumers’ willingness to go for one product instead of another.
Improving the dairy supply chain’s competitiveness is linked to the identification of innovations that could be accepted by the whole supply chain. Farmers of today need to know what consumers consider most important, and how to prioritize between these aspects, silmultaneously outweighing the costs of these innovations.
What did the SOLID experts do?
It is important to identify the expectations along the supply chain to analyse the consumers’ needs and preferences and how the farmers prioritise to avoid a mismatch between farmers and consumers.
The SOLID experts conducted two kinds of analyses; a preliminary supply chain study identifying acceptable and unacceptable innovations strategies (UK, IT, FI, BE); and a consumer survey to assess the acceptability of three novel production strategies: “Agroforestry”, “Alternative Protein Source” and “Prolonged Maternal Feeding”.
Mismatch of priorities between farmers and consumers
The results in SOLID’s consumer survey diverged with those reported in the preliminary study (involving dairy supply-chain members).
“Alternative Protein Source” has top priority among farmers
In the preliminary studies three novel production strategies were chosen for further investigation:
- “Alternative Protein Source”
- “Prolonged Maternal Feeding”
There was consensus across all countries to which innovations were deemed to be unacceptable in organic and low-input dairy systems. These included innovations dealing with:
- using GM plant breeding techniques
- using transgenic animals or genetic transformation of products, genetic selection,
- using 100% housed dairy systems to improve animal welfare.
The preliminary study highlighted the importance for the entire supply-chain of a “more natural” feeding process to obtain better products and, of course, improving human health.
Results of a supply-chain analysis indicated that the most preferred strategy, across all countries, was soy substitution by the use of “Alternative Protein Source”. Despite many farmers interviewed confirmed that they have already adopted this strategy, others consider it more useful and are more likely to adopt those innovations that receive broader consensus among their peers, their advisers and the society in general.
The least popular innovation for those involved in the supply-chain is “Prolonged maternal feeding”. To be applied successfully, an increased level of information from farm to fork is necessary to ensure consumer recognition of associated higher welfare standards. Without this the payoffs for this strategy are clearly negative (higher on farm costs).
“Prolonged Maternal Feeding” has top priority among consumers
For consumers “Prolonged Maternal Feeding” was ranked first by 42.1% of respondents. “Agroforestry” was slightly less favoured (33.3%). Although country differences existed, “Alternative Protein Source” was generally the least preferred strategy by the consumer (only 24.6% ranked it first).
The consumer survey also indicated that the strategy “Alternative Protein Sources” appears not to be fully understood by consumers. For this innovation, the weaknesses supersede the benefits from a consumer point of view.
In terms of willingness to pay for the prolonged maternal feeding strategy the results made by SOLID were not optimistic, since the average premium price never exceeded 60% of current milk price in AT, BE, IT and UK (not enough to cover the increase cost of production), and Danish and Finnish consumers were not willing to pay a cent more, the study showed.
Based on the research by SOLID the following recommendations are given:
|#1||Reducing GM contamination and improving the quality of milk (also regarding human health).|
|#2||Introducing novel feeds providing advantages for the whole supply-chain actors (win-win approach).|
|#3||Agricultural policy should support the production of home-grown feed, especially in organic farming by specific tools such as integrated supply-chain management projects.|
|#4||Reducing the use of antibiotics is a low-input practice that may prove highly acceptable along the supply chain.|
|#5||Importance of pioneers. In general, dairy farmers will innovate if peers do and they see the usefulness on their own farm.|
|#6||Information sharing. Since providing information and knowledge is costly, increased public efforts in the direction of:
|#7||To increase the overall milk quality more innovation is needed also at the processing stage, and the abolishment of the milk quotas should be accompanied with policy measures aimed at rebalancing the bargaining power among different supply-chain levels, without impacting on consumer prices.|
- SOLID Technical Note: Strategies to increase sustainability for the supply chain & consumers
- From project website:
“Competitiveness of organic and low input dairy sector: Supply chain and consumer analyses”