opinions of professional buyers toward a new, alternative red meat: ostrich

10
Professional meat buyers are surveyed to estimate their current and past use of ostrich meat and their preferences for different ostrich meat products. Conjoint analysis is used to estimate the most preferred ostrich meat products for the retail and restaurant sectors, as well as the rela- tive importance of attributes considered in the decision to purchase ostrich meat. Results indicate that buyers have very limited knowledge of ostrich meat. The preferred product in both the restaurant and retail markets is a branded, 6-oz. ostrich filet at the lowest price. Price is the most important factor determining retail and restaurant managers’ decisions on the acceptability of the product. © 1998 John Wiley & Sons, Inc. Introduction Interest in ostrich meat has been building in the United States where ostrich production for slaugh- ter increased from zero in the mid-1980s to enough ostriches to begin a slaughter market in the mid- 1990s. Van Zyl 1 estimated that there were 10,000 ostrich farms in the United States in 1996, making the United States second only to South Africa in os- trich production. With this increased production, entrepreneurs began to expend resources toward establishing markets for ostrich meat. In some cases their efforts have been successful, leading to sales of meat in the retail and restaurant sectors 2 and a significant increase in ostrich meat exports to Eu- rope following the 1996 reemergence of concern over bovine spongiform encephalopathy (mad cow Requests for reprints should be sent to Prof. J. Gillespie, Depart- ment of Agricultural Economics and Agribusiness, 101 Agricultural Ad- ministration Building., Louisiana State University, Baton Rouge, LA 70803-5604. Jeffrey Gillespie is an Assistant Professor in the Department of Agricultural Economics and Agribusiness, Louisiana State University Agricultural Center. Gary Taylor is an Assistant Professor of Agricultural Economics at the State University of New York, Morrisville and a former Postdoctoral Researcher in the Department of Agricultural Economics and Agribusiness at the Louisiana State University Agricultural Center. Alvin Schupp is a Professor in the Department of Agricultural Economics and Agribusiness, Louisiana State University Agricultural Center. Ferdinand Wirth is a Professor, and Graduate Research Fellow in the Department of Agricultural Economics and Agribusiness, Louisiana State University Agricultural Center. Opinions of Professional Buyers Toward a New, Alternative Red Meat: Ostrich •247 Jeffrey Gillespie Gary Taylor Alvin Schupp Ferdinand Wirth Agribusiness, Vol. 14, No. 3, 247–256 (1998) © 1998 John Wiley & Sons, Inc. CCC 0742-4477/98/030247-10 Partial funding for this study was obtained through a federal-state matching grant between the USDA–AMS and the Louisiana Department of Agriculture and Forestry. Louisiana Agricultural Experiment Station Manuscript #97-05-0188.

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Page 1: Opinions of professional buyers toward a new, alternative red meat: Ostrich

Professional meat buyers are surveyed to estimate theircurrent and past use of ostrich meat and their preferencesfor different ostrich meat products. Conjoint analysis isused to estimate the most preferred ostrich meat productsfor the retail and restaurant sectors, as well as the rela-tive importance of attributes considered in the decision topurchase ostrich meat. Results indicate that buyers havevery limited knowledge of ostrich meat. The preferredproduct in both the restaurant and retail markets is abranded, 6-oz. ostrich filet at the lowest price. Price is themost important factor determining retail and restaurantmanagers’ decisions on the acceptability of the product.© 1998 John Wiley & Sons, Inc.

Introduction

Interest in ostrich meat has been building in theUnited States where ostrich production for slaugh-ter increased from zero in the mid-1980s to enoughostriches to begin a slaughter market in the mid-1990s. Van Zyl1 estimated that there were 10,000ostrich farms in the United States in 1996, makingthe United States second only to South Africa in os-trich production. With this increased production,entrepreneurs began to expend resources towardestablishing markets for ostrich meat. In some casestheir efforts have been successful, leading to salesof meat in the retail and restaurant sectors2 and asignificant increase in ostrich meat exports to Eu-rope following the 1996 reemergence of concernover bovine spongiform encephalopathy (mad cow

Requests for reprints should be sent to Prof. J. Gillespie, Depart-

ment of Agricultural Economics and Agribusiness, 101 Agricultural Ad-

ministration Building., Louisiana State University, Baton Rouge, LA

70803-5604.

• Jeffrey Gillespie is an Assistant Professor in the Department of Agricultural Economics and Agribusiness, LouisianaState University Agricultural Center.• Gary Taylor is an Assistant Professor of Agricultural Economics at the State University of New York, Morrisville anda former Postdoctoral Researcher in the Department of Agricultural Economics and Agribusiness at the LouisianaState University Agricultural Center.• Alvin Schupp is a Professor in the Department of Agricultural Economics and Agribusiness, Louisiana StateUniversity Agricultural Center.• Ferdinand Wirth is a Professor, and Graduate Research Fellow in the Department of Agricultural Economics andAgribusiness, Louisiana State University Agricultural Center.

Opinions of Professional Buyers Toward a New,Alternative Red Meat: Ostrich

•247

•Jeffrey Gillespie

Gary TaylorAlvin Schupp

Ferdinand Wirth

Agribusiness, Vol. 14, No. 3, 247–256 (1998)© 1998 John Wiley & Sons, Inc. CCC 0742-4477/98/030247-10

Partial funding for this study was obtained through a federal-state matching grant between the USDA–AMS and the Louisiana Department

of Agriculture and Forestry. Louisiana Agricultural Experiment Station Manuscript #97-05-0188.

Page 2: Opinions of professional buyers toward a new, alternative red meat: Ostrich

disease). However, most businesses in the ostrichslaughter industry remain quite small and lack theresources needed to adequately assess the ostrichmeat products preferred by retailers and restau-ranteurs. This article reports the results of a studydesigned to estimate the types of ostrich meat prod-ucts preferred by food retailers and restaurants inthe United States.

Ostrich meat fits into the category of a low-fat,low-cholesterol, low-calorie red meat. It has beentargeted as a heart-healthy substitute for beef dueto its similar taste and texture. it is currently beingsold primarily as a niche market product, muchlike buffalo, venison, and rabbit. Ostrich meatprocessors have been experimenting with differenttypes of fresh products for the restaurant and retailfood sectors. For instance, filets are being formedto the same size as beef filet mignons. This proce-dure has been used to overcome portion size prob-lems associated with some ostrich cuts. However,these attempts to provide a marketable producthave been largely exploratory; no studies have beenconducted to determine the optimal form, price,branding status, or portion size for ostrich meats.

The objectives of this study are to estimate cur-rent and past use and knowledge of ostrich meat byrestaurants and retailers, estimate buyer ratings ofpotential ostrich meat products from most to leastpreferred, and estimate the relative importance of aselected group of attributes of ostrich meats. Mailsurveys are used and conjoint analysis is employedto fulfill these objectives. Results are useful foragribusinesses that are processing, handling, andmarketing ostrich meat, as well as processors ofother exotic meats, where high prices are associatedwith niche markets.

Literature Review

Previous Studies on Market for Ostrich Meat

Little previous research has dealt with the charac-teristics and marketability of ostrich meat. Resultsof sensory panel analyses indicate that ostrich meatfares reasonably well when compared with beefproducts.3,4 While Taylor et al.3 indicate that the

meat is significantly different and, in fact, is ratedslightly inferior to beef in edibility, the absolute dif-ferences between the two species are not large.

Market analysis conducted by Taylor et al.3 esti-mated that approximately 25 of 107 food retailerssurveyed by telephone in the four-state region ofTexas, Louisiana, Arkansas, and Mississippi hadhandled ratite meat (either ostrich or emu) at somepoint after 1991. Considering that no ostrich meatwas marketed in the United States prior to the mid-1980s, this represents a significant increase in inter-est in ostrich meat. Taylor et al.2 found only limitedinterest in ratite meats among retailers, restau-rants, and other food service businesses (meat han-dlers) at 1996 prices. However, interest increasedwhen lower price levels were assumed. Informationis currently lacking on the type of ratite productthat would be most acceptable to meat handlers atalternative prices. This study addresses this infor-mation gap.

Conjoint Analysis

Conjoint analysis is often employed to estimate therelative importance of specific product attributesamong potential buyers of a product and buyerpreference orderings of specific product profiles. Ithas been particularly useful in market analyses,such as Halbrendt et al.5 with hybrid striped bass,Lin et al.6 with organic produce, and Lang andCrown7 with country of origin effects on clothingpurchase decisions. However, it has also been usedin studies investigating such issues as recreationalsite preference,8 food safety preference,9 and ship-ping preference.10 Elicitation procedures involvedin conjoint analysis allow the estimation of the im-portance of different product attributes and thecombination of attributes that constitutes the mostpreferred product. Conjoint analysis is useful whenexamining new products that have not been or areonly beginning to be introduced into a market.

The attributes included in a conjoint analysisshould be those that are most important to buyers.Although price is not technically a product attri-bute, it is commonly included as an attribute inconjoint analyses because it is a major factor affect-ing product selection.5,9

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In conjoint analysis a buyer’s utility from consum-ing a specific product is represented by his or herpreference rating. This is the additive sum of thebuyer’s utility (past worths) for each individual at-tribute of the product profile. Regression analysis isused to determine the importance of each of the at-tributes.

Methods

Ostrich Meat Use in South Central United States

Mail surveys were sent to 1985 restaurants and re-tailers to estimate their current and past use of os-trich meat and the importance of different factorsin the sale of ostrich meats. Dillman’s11 approach tomail surveying was used in the study to maximize

survey returns; the initial survey was followed by apostcard reminder and then a third contact to non-respondents, which included a second copy of thesurvey.

Questions and associated responses involving ex-perience and familiarity with ostrich meat are pro-vided in Table I. These questions were used to esti-mate the number of firms that were handling or hadhandled ostrich meat and the number of buyersthat were familiar with its characteristics. Otherquestions asked were the age and income of cus-tomers that were most likely to purchase ostrichmeat. Firm-specific data, such as average entreeprice in restaurants, were also collected.

Conjoint Analysis

The selection of attributes for the conjoint analysiswas based upon evaluation of current price levels, a

Att i tudes Toward Ost r ich Meat

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Table I. Results of Survey Questions Determining Extent of Knowledge and Potential Customers of Ostrich Meat in 1996.

PotentialNumber of

No. Question Answers Restaurants Retailers

1 Do you currently or have you ever handled ostrich meat? Yes 9 27No 156 256

2 If you answered “no” in 1, are you familiar with ostrich meat? No 105 125Not sure 14 8Some NA 56Yes 37 67

3 If you answered “yes” in 2, do you believe ostrich meat would No 29 56reduce beef sales in your market? Not sure 2 5

Yes 6 24 Please describe the customers whom you feel would be most

likely to purchase ostrich meat from your store in terms ofthe following:Annual income ,$10,000 17 27

$10,000–$19,999 10 25$20,000–$49,999 55 98$$50,000 35 73

Age (years) ,25 15 1025–39 54 9340–64 47 114$65 7 16

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priori knowledge of attributes important in the se-lection of meat products, and discussion of the at-tributes and their levels with food retailers andrestauranteurs. Follow-up pretests with food retail-ers and restauranteurs confirmed the selection. Thefollowing attributes with levels in parentheses weredetermined to be important in the meat handler’spreferences for ostrich meat: portion size (4 oz., 6oz., or nonportioned), meat product form (ground,processed, or filet), branding (branded and pre-packaged or nonbranded), and product purchaseprice ($4, $8, or $12/lb) (Table II). With three at-tributes at three levels and one attribute at two lev-els, a total of 54 possible product profiles resulted.An orthogonal fractional factorial design allowed

the estimation of all single-factor main effects. Thisdesign resulted in nine product profiles represent-ing combinations of the above attribute levels(Table III). Conjoint Designer12 was used to devel-op the nine product profiles.

Respondents were asked to rate each of the nineproduct profiles on a 0 to 10 scale based upon theirpreferences; 0 represented the least preferred com-bination of product attribute levels and 10 repre-sented the most preferred combination of productattributes.

Model Estimation

Mean deviation coding was used to code attributelevels for regression analysis. In this process thebase level of each attribute is coded as -1 instead of0. This coding system constrains the levels of eachattribute to sum to 0. The base level coefficient iscalculated as the negative sum of the (k 2 1) at-tribute levels. The intercept becomes the meanpreference rating, and the dummy coefficients mea-sure deviations from the mean rating.13 In thisstudy the base product was a nonportioned, non-branded filet at $4/lb. The base product has no par-ticular significance, except that its part-worth utili-ties are calculated differently. The calculation willbe further discussed using an example with actualestimates in the Results section.

As discussed above, respondents rated each of thenine product profiles between 0 and 10. A censoredtwo-limit Tobit model is used for analysis where 0 is

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Table II. Selected Ostrich Meat Attributes and Attribute Levels in 1996.

Attribute Atribute Level

Portion Size (oz.) Nonportioned46

Product Type GroundProcessedFilet

Branding NonbrandedBranded and prepackaged

Purchase Price from 12.00Processor ($/lb) 8.00

4.00

Table III. Nine Hypothetical Ratite Meat Product Profiles Evaluated by Mail Survey in 1996.

Portion Product Branding Price ($)

1. 4 oz. Processed Nonbranded 122. 6 oz. Ground Branded and prepackaged 123. Nonportioned Processed Branded and prepackaged 84. Nonportioned Filet Branded and prepackaged 125. 4 oz. Ground Branded and prepackaged 86. 6 oz. Filet Nonbranded 87. Nonportioned Ground Nonbranded 48. 6 oz. Processed Branded and prepackaged 49. 4 oz. Filet Branded and prepackaged 4

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the lower limit and 10 is the upper limit on ratingsof the nine products. LIMDEP was used to obtainestimates. Two-limit Tobit models have been usedpreviously in conjoint analysis.6,14 Assumptions ofthe two-limit Tobit model are provided in Greene15

and Madalla.16 We use actual estimates to calculatepart-worth utilities. Using the marginal effectswould lead to the same relative ratings and rank-ings of products because the marginal effects areequal to the actual estimates multiplied by a con-stant.

Results

Two hundred of the 1985 mailed surveys were re-turned as either undeliverable or were sent to firmsthat did not handle meat products, reducing the ef-fective mailing to 1785. A total of 326 surveys werereturned, resulting in a 18.2% rate of return. Ofthese, 191 surveys had completed conjoint sectionsconsisting of 129 retail outlets and 62 restaurants.The relatively low rate of response on the conjointsection was expected from examination of previousstudies.5 The models for the retail and restaurantmarket segments were estimated separately. A sub-set of the restaurant segment (restaurants with anaverage entree price exceeding $10) was used to in-dicate the preferences of the market niche in whichthe ostrich industry has been the most successful.In 88% of the responding restaurant firms and 95%of the retail firms, purchase decisions were made atthe local level. Responding firms were evenly dis-tributed across urban and rural areas.

Current and Past Use and Knowledge of Ostrich Meat

Results presented in Table I indicate the record ofuse and knowledge of ostrich meat among respond-ing firms. Few handlers were currently handling orhad handled ostrich meat. Sixty-four percent ofrestauranteurs and 44% of retailers describedthemselves as largely unfamiliar with ostrich meat;most of these were not familiar enough with themeat to complete the conjoint section of the survey.

Seventy-nine percent of restauranteurs and 89% ofretailers did not believe that the sale of ostrich meatwould reduce beef sales in their markets. Restau-ranteurs and retailers both described the customerswho were most likely to purchase ostrich meats asbeing in the income categories of $20,000 to $49,999and $50,000 and higher. The ages most likely topurchase ostrich meats would be young adults(25–39 years old) and middle-aged consumers(40–64). Most handlers did not believe that the el-derly would be likely purchasers of the meat, de-spite its low fat, cholesterol, and calories.

Restaurant Conjoint Results

For the restaurant analysis the 62 responses result-ed in a sample size of 558 (62 3 9). The base prod-uct being modeled was a nonportioned, brandedfilet at $4/lb. All comparisons were made to thesebase attribute levels (Table IV). As an example ofthe interpretation of the estimates, because the baseproduct attribute level is coded as 21, the basepart worth utility for the nonportioned level is cal-culated as the negative sum of the estimates for theother two portion size estimates including the 4-and 6-oz. estimates. Thus, the base part-worth util-ity for the “nonportioned” level is calculated as(21) 3 (0.029) 1 (21) 3 (0.605) 1 20.634. Theleast preferred portion size attribute level is non-portioned with a part-worth utility of 20.634. The4-oz. portion (0.029) is preferred to nonportioned,and the most preferred is the 6-oz. portion at 0.605.Thus, the interpretation of coefficients is differentthan the case of 0–1 coding.

The form variables indicate that the filet is viewedas superior to either the ground or processed form.The ground product is preferred to the processedform at 20.667 to 21.453, respectively. As expect-ed, the $4/lb price level is preferred to the $8 and$12 price levels.

The most preferred product was a 6-oz., brandedfilet at $4/lb; the least preferred was a $12/lb, pro-cessed, nonbranded and nonportioned product(Table V). Total part-worth utilities for productsare estimated as the sum of the part-worth utilitiesfor each of the attributes. The other 52 productshave total part-worth utilities between -2.36 and

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7.02, and the ratings are cardinal in nature. Prod-ucts that have higher total part-worth utilities arepreferred to those with lower part-worth utilities.

The highest ranked ground product was ranked 8,which was a 6-oz. ground, branded product at $4/lbwith a total part-worth rating of 4.24. Some proces-sors may argue that a price of $4/lb for a filet is toolow. For these processors another alternative mightbe the $8/lb, 6-oz. branded filet. It is ranked at 7

with a total part-worth value of 4.56 compared tothe highest ranked product at a total part-worthvalue of 7.02.

The 9th and 10th ranked products have total part-worth values that are very close. This indicatesthat, if branding is not considered feasible for aprocessor, then portion control with a 6-oz. portionmay be substituted for the 4-oz. control with littlereduction in total utility.

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Table IV. Estimated Model Parameters with Two-Limit Tobit Model in 1996.

Variable Parameter Estimate Standard Error

All RestaurantsConstant 1.838a 0.3784-oz. portion 0.029 0.4796-oz. portion 0.605 0.476Ground product 20.667 0.475Processed product 21.453a 0.484Nonbranded product 20.342 0.360Price $8/lb 20.350 0.476Price $12/lb 21.769a 0.486Observations 558Log likelihood 21103.50

Restaurants, Entrees . $10Constant 1.036 0.7124-oz. portion 0.082 0.8716-oz. portion 1.525b 0.867Ground product 22.539a 0.893Processed product 22.120a 0.895Nonbranded product 20.069 0.656Price $8/lb 0.126 0.872Price $12/lb 21.980a 0.877Observations 117Log likelihood 2207.12

RetailConstant 4.379a 0.1584-oz. portion 0.019 0.2136-oz. portion 0.444a 0.211Ground product 0.120 0.211Processed product 20.659a 0.212Nonbranded product 20.437a 0.125Price $8/lb 20.297 0.211Price $12/lb 21.488a 0.214Observations 1161Log likelihood 22677.57

aSignificant at the 0.95 level.bSignificant at the 0.90 level.

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Product form and purchase price were the mostimportant attributes for the all-restaurants catego-ry, being responsible for 38.1 and 41.4% of the rat-ing scores, respectively (Table VI). Portion size andbranding were determined to be relatively less im-portant at 13.2 and 7.3%, respectively. Becauseportion size can be controlled by restaurants atleast partially during preparation, it is less impor-

tant in purchase decisions. Branding is also of lowimportance to a restaurant; if a consumer buys anunsatisfactory meat entree at a restaurant, he orshe will associate the bad experience with therestaurant not the unknown meat supplier.

A restaurant subset (restaurants with entrees thatcost $10 or more) was also examined. These restau-rants represent one of the current market niches

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Table V. Ranking of Selected Products in 1996.

Product Rank Total Part–Worth Utility

Restaurant

Ideal Product6-oz. branded filet at $4/lb 1 7.02

Current ProductNonportioned nonbranded filet at $12/lb 33 1.21Nonportioned nonbranded ground at $8/lb 40 20.16

Some Feasible Alternatives6-oz. branded filet at $8/lb 7 4.566-oz. branded ground at $4/lb 8 4.244-oz. branded filet at $8/lb 9 3.986-oz. nonbranded filet at $8/lb 10 3.874-oz. branded ground at $4/lb 11 3.666-oz. nonbranded ground at $4/lb 12 3.55

Lowest Ranked ProductNonportioned nonbranded processed at $12/lb 54 22.36

Retail

Ideal Product6-oz. branded filet at $4/lb 1 7.58

Current ProductNonportioned nonbranded filet at $12/lb 48 2.53Nonportioned nonbranded ground at $8/lb 40 3.30

Some Feasible Alternatives6-oz. branded ground at $4/lb 2 7.174-oz. branded ground at $4/lb 4 6.746-oz. branded processed at $4/lb 7 6.396-oz. nonbranded ground at $4/lb 8 6.29Nonportioned, branded ground at $4/lb 10 6.266-oz. branded steak at $8/lb 15 5.50

Lowest Ranked ProductNonportioned nonbranded processed at $12/lb 54 1.33

Note: Feasible alternatives do not include filets that are priced at $4/lb, although it is possible that some more efficient

processors would find such products feasible.

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for ostrich meat. For these restaurants, productform at 50.5% was the most important attribute(Table VI). As expected, price was of less impor-tance than when all restaurants were examined.Branding appeared to be of very little importance.

Retail Conjoint Results

The retail model contains the same products andvariables as the restaurant model; however, as ex-pected, the parameter estimates are different. Thisportion of the study included 129 firms and 1161observations.

As expected, both portion controlled options arepreferred to the nonportion option. The 6-oz. por-tion is the preferred choice among the availableportion options. The form variables indicate thatthe processed form is inferior to the ground form,which is inferior to the base filet. The branded op-tion was preferred to nonbranded and the $4/lbprice was preferred to the $8 and $12/lb options.

Overall, the most preferred ostrich meat productamong retailers was a $4/lb, branded, 6-oz. portionfilet (Table V). The highest ranked $8 product, a 6-oz. branded filet, was ranked 15th of the 54 possi-ble product combinations. The least preferredproduct was a $12/lb, processed product that wasnonportioned and nonbranded.

Examining the 8th and 10th ranked products, if aprocessor cannot produce a 6-oz. nonbranded filetat $4/lb, a nonportioned, branded ground productat $4/lb would yield almost the same level of buyerutility.

The magnitude of importance of each of the attri-butes for the retail model are different from therestaurant model (Table VI). Price dominates theother attributes in importance, accounting for52.4% of the preference rating. As expected,branding is of higher importance than with therestaurant sector. Retailers appear to be open toselling a wider variety of ostrich product forms,such as ground and processed meats, than restau-rants.

Summary and Implications

Retail food and food service outlets have differingrequirements in the meat products they handle. Os-trich processors have some flexibility in the type,form, and price of meat products they can produce.Because the ostrich meat market in the UnitedStates is still in its infancy, few meat handlers havemuch experience with this new meat product. In or-der for ostrich processors to penetrate establishedmeat markets, they need information on the desiredattributes associated with the meat. This analysisidentified the attributes that are most important topotential handlers and provides information thatprocessors can use in introducing this meat into anexpanded consumer market.

The conjoint analysis of food retailer responsesfrom the mail survey indicates that purchase priceis the most important attribute of the product.Restaurant respondents put only slightly less em-phasis on price, but it remains the most importantattribute. Branding was of less importance to therestaurant sector than the retail sector. Brandingwas of almost no importance to the .$10 entreerestaurants. These results imply that ostrich meatprocessors need to use different approaches in mar-keting ostrich meat between and within the marketsegments.

The most preferred product profiles in both mar-kets were at the lowest price. This indicates the im-portance of price among potential ostrich meat buy-ers. However, because the costs of meal ingredientsin traditional restaurants comprise only one-thirdof the meal’s total price, some variation in the costsof meat can occur without the restaurant becomingoverly concerned. Hence, restaurants are slightly

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Table VI. Relative Importance of Attributes in Preference Ratings in 1996.

Restaurants (%)

Attribute All Entrees . $10 Retail (%)

Portion Size 13.2 21.8 14.5Product Form 38.1 50.5 19.2Branding 7.3 1.0 14.0Purchase Price 41.4 26.7 52.4

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less sensitive to meat prices than are retail foodstores. Results of a subset analysis of restaurantswith entree prices above $10 indicate that, as ex-pected, the higher priced restaurants are less con-cerned about the price of meat. Ostrich meat wasbeing served at premium prices in some of theserestaurants during the period of the survey.

Two ostrich meat products that were being mar-keted to retail food outlets and restaurants duringthe period of the survey may be unattractive tomany meat handlers. One of these products was anonbranded, ground, nonportion product at $8/lb.This product was ranked 40th out of 54 by both re-tailers and restaurants. Nonbranded, nonportionedfilets were being sold at $12/lb and higher. Thisproduct was ranked 48th by retailers and 33rd byrestaurants. It appears that ostrich meat processorsand wholesalers can significantly improve theirchances of securing retail and restaurant marketsby producing a product with more preferred attri-butes, including lower prices. Taylor et al.2 indicatethat, at current ostrich production and slaughtercosts, the price of ostrich meat could fall to an average of $4.00/lb for all sectors combined tobreak even. This assumed the hide was priced at$17.00/ft2, the feathers were not marketed, andproducers who invested large sums of money inbreeding stock were able to pay back their in-vestments during the pure breeder market phasebefore 1995.

Results of this study indicate that a significantnumber of retailers and restaurants have limitedknowledge of ostrich meat. This presents a chal-lenge to the industry as it attempts to make signifi-cant inroads into the meat market. It is not surpris-

ing, then, that branding would be an important at-tribute to the retail sector, given that branding isused to ensure accountability and quality. The un-familiarity with the product shows that promotionof ostrich meat is needed at the handler level. Thepromotion of ostrich meat through a massive mar-keting effort should increase its demand, perhapsreducing the need to lower prices in the short run.If the demand for ostrich meat were higher, per-haps meat handlers would be more willing to carrythe products, including the higher priced items withlower total part-worth utility ratings. This promo-tion program should target health conscious con-sumers with higher disposable incomes.

Currently, most responding meat handlers do notbelieve that an increase in ostrich sales would sig-nificantly affect beef sales. Thus, given near satia-tion of consumers for meat, some question remainsas to which meat will lose market share to ostrich.

The overall results of this study should be usefulto processors of ostrich, as well as (to a limited de-gree) other alternative meats, such as venison orelk. All of these industries are attempting to expandthe markets for their meats in a common and ratherlimited segment of the entire meat market. If the os-trich industry continues its strategy of offering ahigh-priced product, it will likely continue to belimited to this very small niche market of white-linen restaurants and a limited health-oriented seg-ment of the retail food market. Expansion into alarger market will require the lowering of price, in-creased promotion of its products, higher levels ofquality assurance, and attention to the types ofmeats and portion sizes that consumers demand.

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References

1. P. Van Zyl, “A Global Perspective of the Ostrich Indus-try,” American Ostrich, August (1996).

2. G. Taylor, A. Schupp, J. Gillespie, M. Garcia, and J.Smith, “Current and Potential Markets for Emu and Os-trich Meat, Hides and Leather,” in Economic Analysis ofSlaughter Market Opportunities for the Ratite Industry inLouisiana, final report submitted to the Louisiana Depart-ment of Agriculture and Forestry in partial fulfillment ofrequirements of a grant funded by Federal–State Market-ing Improvement Program, AMS, USDA, February 12,1997.

3. G. Taylor, L. Andrews, J. Gillespie, and A. Schupp, “HowDo Ratite Meats Compare with Beef?: Implications forMarketing,” in Economic Analysis of Slaughter MarketOpportunities for the Ratite Industry in Louisiana, finalreport submitted to the Louisiana Department of Agricul-ture and Forestry in partial fulfillment of requirements ofa grant funding by Federal–State Marketing ImprovementProgram, AMS, USDA, February 12, 1997.

4. Texas Agricultural Extension Service, Ostrich Meat Indus-try Development, final report to the American Ostrich As-sociation, June 1993, revised October 1994.

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5. C. Halbrendt, J.R. Bacon, and J. Pesek, “Weighted LeastSquares Analysis for Conjoint Studies: The Case of HybridStriped Bass,” Agribusiness: An International Journal, 8,2 (1992).

6. B.H. Lin, S. Payson, and J. Wertz, “Opinions of Profes-sional Buyers Toward Organic Produce: A Case Study ofMid-Atlantic Market for Fresh Tomatoes,” Agribusiness:An International Journal, 12, 1 (1996).

7. J.Q. Lang and E.M. Crown, “Country of Origin Effect inApparel Choices: A Conjoint Analysis,” Journal of Con-sumer Studies and Home Economics, 17, 1 (1993).

8. C. Gan and E.J. Luzar, “A Conjoint Analysis of WaterfowlHunting in Louisiana,” Journal of Agricultural and Ap-plied Economics, 25, 2 (1993).

9. G.A. Baker and P.J. Crosbie, “Measuring Food SafetyPreferences: Identifying Consumer Segments,” Journal ofAgricultural and Resources Economics, 18, 2 (1993).

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