Understanding Factors Affecting Consumer Purchase Decisions for Functional Foods

1
Understanding Factors Affecting Consumer Purchase
Decisions for Functional Foods

• By
• Ratapol Teratanavat
• Dr. Neal H. Hooker

Presented at the IFT Meeting, Las Vegas, July
12-16, 2004
Department of Agricultural, Environmental, and
Development Economics
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Background

• Increasing concerns/interest in diet-disease
  relationship
• Little evidence of improvements in eating
  behavior or food choice selection
• Investment decision for food manufacturers high
  cost of RD
• Consumer demand and key factors affecting
  purchase decisions for functional food???

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Objectives

• Examine consumer valuation of key attributes of
  functional food
• Health benefits
• Identify market segmentation based on consumer
  characteristics
• Motivation, health knowledge, concern and
  awareness
• Demographics

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Model - Choice Experiment

• Similar to conjoint analysis
• Hypothetical situation
• Consumers evaluate different product attribute
  combinations and select one they prefer
• Choice decision explained by product attributes
  and consumer characteristics

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Specific Functional Food Product

• Tomato juice containing soy protein - synergistic
  effects of two functional benefits
• Multidisciplinary project funded by USDA
• Key attributes
• Health benefits from lycopene and/or isoflavones
• Organic Ingredients
• Source of nutrients Natural vs. Fortification
• Price

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Example of Choice Scenario
Check the box above the product you most
prefer ? ? ? ?
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Data

• 454 Households Ohio Survey Data
• 51 - Female
• 94 - Caucasian
• Age Mean 54 years old
• Annual Income Average range 50-75K
• Each respondent received 4 choice scenarios

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Importance Scale of Various Food Attributes
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Effects of Product Attributes on Choice Decision
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Estimated Willingness to Pay
Base product Conventional Tomato Juice at 3.00
for 6 cans (8oz.)
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Effects of Consumer Characteristics on Choice
Decision (Household Data)
Note Family history of cancer and heart disease
and current consumption of health and organic
foods do not have significant effect.
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Conclusion

• Taste and price are still key attributes
• Consumers value and are willing to pay more for
  health attributes
• Demographics and health concerns influence choice
  decisions
• Future analyses - Complete set of Ohio household
  data

For more information, please contact Ratapol
Teratanavat at teratanavat.1_at_osu.edu