Multi-country stated preferences choice analysis for fresh tomatoes

From Firenze University Press Journal: Bio-based and Applied Economics

Maria De Salvo, University of Catania

Riccardo Scarpa, University of Verona

Roberta Capitello, University of Verona

Diego Begalli, University of Verona

Fresh tomato is one of the most commonly consumed vegetable in Europe. Over the last decade its consumption has remained stable at about 15 kg/year per capita, although stark changes have been observed concerning the range of quality consumers demand (European Union, 2018). Italy is one of the major tomato producers in Europe (European Commission, 2020) with exports to German, Austrian, British, French and Romanian markets, where Italian fresh tomatoes are traditionally very appreciated.

However, consumers’ preferences gradually change, and year after year, the diversity of tomato types sold has increased every-where to meet a rapidly evolving and diversifying demand. Health, convenience, taste and type of packaging are nowadays some of the most important product values for consumers. In the case of tomatoes, as for other foods, the market for ‘specialties’ is growing at a significant rate (Santeramo et al., 2018). New tomatoes varieties with attractive shapes, colours and tastes, innovative recyclable packaging, health claims and/or environmental certifications have been emerging as valuable product features that producers and retailers use to grow their market shares (Yue and Tong, 2009; Tonsor and Shupp, 2009; Alamanos et al., 2013; Oltman et al., 2014).Nevertheless, the demand for tomatoes shows substantive differences across countries in terms of favorite shapes, packaging, origins and many other factors. Determining consumers’ preferences and Willingness to Pay (WTP) for fresh tomato attributes is important to stakeholders in this industry (e.g., agricultural producers, intermediaries and retailers). It helps them determine which types of fresh tomato to grow and trade, how to manage the marketing mix, what communication content to emphasize in advertising campaigns, and how to apply fair prices along the supply chain. This information is particularly crucial for small-scale farmers who experience a strong competitive pressure from bigger companies of producers and importers. For them it is essential to correctly identify and characterize the market segments to supply, so as to define the assortment of tomatoes to produce the following season.Against this background, the objective of this study is threefold. Firstly, this study aims at estimating consumers’ willingness to pay for fresh tomato attributes across four key importing countries in Europe. Secondly, it aims at identifying the main determinants of tomato purchases across such markets. Thirdly, it aims at exploring how structural estimates of heterogeneous preferences can be used to inform marketing strategies which could guide the growth of Italian fresh tomato exports.

Alongside these research objectives, this paper also aims at achieving methodological and disseminative purposes. It will present and discuss the estimation strategies that could be implemented in a discrete choice cross-sectional analysis to face heterogeneity in preferences and take into account correlations between attributes. Frequently, in discrete choice applications, post estimation analyses are limited to the assessment of the Marginal Willingness-To-Pay (MWTP). But several additional results can be derived by the estimation of a discrete choice model with preference heterogeneity. In order to make concrete the methodological dissemination purposes of this study, the ‘Rmarkdown’ and ‘markstat’ codes we used in our analyses are made available to the reader. The data collection took place in Germany, Russia, the UK and Norway. These countries were selected for different reasons. Two countries, Germany and the UK, are traditional export markets for Italian fresh tomatoes. In particular, Germany has been for several years the main European country for Italian fresh tomatoes exports.

In 2015, Germany imported 28,188 tons of Italian fresh tomatoes, equivalent to 31% of the total fresh Italian tomato export. In 2015 the UK ranked third in terms of imported quantity from Italy, with 8,250 tons of fresh tomatoes. The other two countries, Russia and Norway, instead, are marginal markets for Italian fresh tomato producers. Here Italian tomatoes compete with imports from other countries, such as the Netherlands, Spain, Egypt and Morocco. Nevertheless, the four markets under investigation in this study have all, to larger or smaller extent, the potential for future growth of Italian exports if producers will implement strategies aimed at meeting consumers preferences.

DOI: https://doi.org/10.13128/bae-7928

Read Full Text: https://oaj.fupress.net/index.php/bae/article/view/7928