Consumer preference for beef attributes and willingness to pay for Australian organic beef A comparative study of China, UK, and Vietnam Project report Airong Zhang1, Peggy Schrobback2, Christina Maxwell1, Nathan Kinch3, Sue Lim3, Thanh Mai Ha4, Ningning Feng5 1 – CSIRO Health & Biosecurity, Dutton Park, Australia 2 – CSIRO Agriculture & Food, St Lucia, Australia 3 – Department of Agriculture, Fisheries and Forestry, Canberra, Australia 4 – Vietnam National University of Agriculture, Hanoi, Vietnam/ Swedish University of Agricultural Sciences, Uppsala, Sweden 5 – East China Normal University, Shanghai, China February 2023 Trusted Agrifood Exports Mission Executive Summary To support the Australian beef industry in developing targeted access strategies for key premium export markets, an understanding about consumer preference and the competitive advantage of Australian products in these export markets is needed. This study aimed to gain a nuanced understanding of consumer perceptions of food credence attributes, willingness to pay (WTP) for Australian organic beef (including traceable organic beef) and the underlying drivers of WTP. Beef as an agrifood product was chosen as the focus of the current research based on a) its market volume and supply chain maturity; and b) increasing consumption of organic food globally due to consumer’s heightened environmental awareness and food safety concern. The export markets of Vietnam, China, and the UK were chosen for the present study. China is Australia's third-largest export market for beef in 2022 even though several abattoirs were still banned from exporting. More importantly, the Chinese market presents great future export growth potential as China is buying an unprecedented amount of beef with a record price per kilogram on their import price in 2022 (Brann, 2022). Vietnam is the sixth largest market for Australian red meat and livestock exports in 2020-2021 and is one of the fastest growing markets (Meat and Livestock Australia, 2021). Furthermore, following the exit of the UK from the European Union, the changing trade relationships between the UK and European countries provides opportunities for Australian agrifood products to take up a larger stake of agrifood imports. In addition, the three countries represent different cultures and economic development status. An online survey of beef consumers was conducted during July and August 2022 in Vietnam, China, and the UK. While Chinese and Vietnamese participants were sampled from middle class residents in major metropolitan cities, the UK participants were taken from an age and gender representative national sample. The key results are presented below: Beef attributes in purchase decisions & attitude towards Australian beef •‘Best before or use by date’, ‘freshness’, and ‘price’ were the most sought-after information by participants from all three countries, with UK participants being especially price conscious. These product attributes are searchable for consumers through visual inspection of product quality (e.g., freshness) and package information (e.g., price, best before/use by date). In addition, Chinese and Vietnamese participants appear to pay more attention to attributes such as safety information, brand, country of origin, organic, and traceability information, while UK participants paid less attention to these aspects. •Vietnamese participants were in close agreement with the organic beef attributes as outlined by the EU and Australian organic meat standards, closely followed by Chinese participants. It appeared, however, that UK participants considered these attributes to be of moderate importance in their purchasing decisions. •Chinese and Vietnamese participants seemed to rely on several indices to judge beef quality including appearance, quality assurance labels, reputation of shops/supermarkets, country of origin, and recommendations by friends, relatives, and social media. Conversely, UK participants seemed to predominantly rely on the appearance of the beef product. UK consumers also appeared to be less influenced by others in their beef purchasing behavior compared to consumers in China and Vietnam. •Most of the Chinese and Vietnamese participants had previously purchased Australian beef, while only one-fifth of UK participants had. Overall, those who had purchased Australian beef held a positive view on its quality, value, and information provided by the package or retailer. Though imported Australian beef was more expensive than domestic beef in China and Vietnam, all participants indicated that the price of Australian beef was not a barrier for their purchase. Organic beef and willingness to pay (WTP) for Australian organic beef •Most of the Chinese (87.9%) and Vietnamese (89.9%) participants have seen organic beef in their regular shopping outlets and previously purchased it (82.7% and 81%, respectively). However, only 67.2% of UK participants claimed that they saw organic beef in their regular shopping outlets, and only 37.3% purchased it. •Preference of certifying agencies for organic beef varied across the three countries. The first choice for Chinese and Vietnamese participants was international certification agencies and for UK participants it was local certification agencies. •All participants believed that organic beef supports animal welfare and minimises the impact of beef production on the environment as compared to conventional beef. Chinese and Vietnamese participants also regarded organic beef as providing health benefits and having better taste. There appeared to be a culture of valuing organic beef for health benefits both in China and Vietnam. •Most participants from Vietnam (79.7%) and China (70%) were willing to pay 35% more for organic beef as compared to conventional beef. In contrast, only 13.5% of UK participants were willing to pay 35% more, while 69.2% of participants were not even willing to pay 15% more for organic beef. •High WTP for Australian organic beef was driven by a full appreciation of organic production conditions, belief in its health benefits and better taste, social influence, food safety concerns, price (i.e., not considered as too expensive), and seeing organic beef during previous shopping experiences. However, the importance of these drivers in beef purchasing decisions varied across the three countries depending on WTP premiums. •With the public’s increasing awareness and support for environmental protection (which is aligned with organic production standards), it is likely that the consumption of organic beef will increase across the three countries. •Although the high price of organic food has been seen as a barrier for consumers to purchase organic food, the present study reveals that Chinese and UK participants’ knowledge of organic food is linked to a belief that organic food was not too costly, though Vietnamese participants’ knowledge had an opposite effect. Traceability and willingness to pay for Australian traceable organic beef •Familiarity with traceability technology such as QR codes varied across the three samples. While Vietnamese and Chinese participants reported high familiarity, UK participants were unfamiliar with general traceability QR codes. Taken together with the low attention UK participants paid to food safety information on product packaging, these results may suggest that UK participants were less concerned about food safety. •The utility of traceability was perceived as indicating product safety and quality assurance. This was verified by the finding that all participants were somewhat satisfied by simply knowing that traceability existed. •Traceability information for organic beef was regarded as important, especially by Chinese and Vietnamese participants. •The WTP premiums for traceable organic beef in comparison to organic beef in general varied depending on how much participants were willing to pay for organic beef and depending on the country. It appeared that participants who were willing to pay 35% more for organic beef were willing to pay the most for traceable organic beef. In conclusion, consumer preference for food credence attributes and willingness to pay (WTP) for Australian organic beef and traceable organic beef varied across Vietnam, China, and the UK, reflecting differences in cultural, social, and institutional contexts of these specific markets. The findings indicate that the most immediate market opportunities to achieve price premiums for organic beef and traceable organic beef are in China, then Vietnam. Developing a WTP amongst UK consumers will require further engagement with the benefits of organic beef. The findings from this study provide insights which can support the Australian beef industry in developing strategies to predict and meet the needs of consumers in export markets and in gaining and maintaining their trust in Australian beef products.