Abstract
Cattle production is estimated to be the largest methane (CH4) emitter associated with consumer demand in the United States of America (U.S.). With a national commitment to reducing methane emissions by 30% before 2030, methane-reducing additives (MRAs) in livestock feed are being explored as a viable solution. This study investigated consumer preferences for low-methane ground beef produced using one of three MRAs with varying levels of methane mitigation: Aspagopsis taxiformis (seaweed), the organic compound 3-nitroxypropanol (3NOP), or a blend of essential oils (e.g. garlic extract and citrus). In a nationally representative survey, 3,009 respondents completed a labeled discrete choice experiment used to estimate preferences, WTP, and market shares for conventional and low-methane ground beef. Randomized groups were given pre-purchase information about methane emissions from beef production and point-of-purchase labels communicating the methane reduction levels for each MRA. Given the contemporaneous rise in beef prices, respondents were randomized between a low and high-price group to examine the sensitivity of results. While conventional ground beef was generally preferred, consumer WTP and average market shares for the seaweed MRA product (the MRA with the highest methane reduction potential) surpassed conventional beef for the group that received pre-purchase and point-of-purchase information. Information added more utility and was more effective in the low-price group. Government policies that incentivize the adoption of a seaweed MRA could aid in meeting climate goals.
Generated Summary
This study employed a labeled discrete choice experiment (DCE) with a nationally representative survey of 3,009 respondents to investigate consumer preferences for low-methane ground beef. The research aimed to evaluate the impact of pre-purchase information about methane emissions from beef production, point-of-purchase labels indicating methane reduction levels, and increasing prices on consumer purchasing decisions. Three methane-reducing additives (MRAs) were considered: Aspagopsis taxiformis (seaweed), 3-nitroxypropanol (3NOP), and a blend of essential oils. Respondents made hypothetical choices between ground beef alternatives that varied by MRA source and price. The study also examined the sensitivity of consumer preferences to beef price fluctuations and their reactions to different types of information. The DCE design allowed every choice option to be presented in all choice profiles. Respondents were provided a cheap talk script to mitigate hypothetical bias. A randomized group design was used to evaluate the effects of low- and high-price market conditions, pre-purchase information, and point-of-purchase labeling on purchase decisions. Statistical analysis involved random parameter logit (RPL) models to estimate preferences and willingness to pay (WTP), and post-estimation Wald tests were conducted to determine between-group differences. Average market shares were used to estimate methane reduction from MRA adoption across the experimental groups.
Key Findings & Statistics
- Gender: The sample consisted of 52.61% female respondents.
- Ethnicity: 74.98% of respondents identified as White.
- Income: The largest proportion of respondents (20.7%) fell within the $50,000-$75,000 income bracket.
- Education: About 37.7% of respondents held a bachelor’s degree or higher.
- Region: The South had the largest portion of respondents, making up 38.05%.
- Age: The average age of respondents was 46 years.
- Household Size: The average household size was 2.68 persons.
- Meat Consumption: Most respondents (27.45%) consumed ground beef once a week, and 39.45% consumed it a few times a week.
- Price Coefficients: Price coefficients were negative and statistically significant, indicating that, consistent with economic theory, higher prices decreased the likelihood of product selection.
- Conventional Beef Preference: Conventional ground beef generally had the highest coefficient estimate across all experimental groups.
- WTP Estimates: In the control group for the low-price (LP) model, respondents were willing to pay $8.24 for conventional beef, whereas, for MRA products, it ranged from $6 to $7. In the high-price (HP) model, the WTP for conventional beef increased to $9, and for MRA products, it ranged from approximately $7 to $8.
- Seaweed MRA: Among the In-Purchase group, WTP for the seaweed MRA product increased to $7.44 or $7.97 at low and high prices, respectively, and the highest WTP for conventional beef products.
- Market Share in Control Group: Conventional beef captured the largest market share in the control group (62% and 54% at low and high prices, respectively).
- Market Share with Information: With pre-purchase environmental information, the study found some consumers shifted to MRA alternatives, mainly essential oil (22% at low prices and 19% at high prices) and seaweed MRA products (17% and 19%).
- Market Share with In-Purchase Information: With In-Purchase information that denoted methane reduction potential, essential oil MRA products lost some traction, and the seaweed MRA product captured a larger share on average (29% at low prices and 24% at high prices).
- Market Share with Combined Information: The largest shifts in average market share occurred with combined information, Pre- & In-Purchase. In these groups, 38% to 44% of the market preferred the seaweed MRA product, and average market shares for conventional beef products declined to 30% or less.
- 3NOP MRA: 3NOP MRA alternatives consistently garnered the lowest average market shares (6% to 11%).
- Opt-out Behavior: At higher prices with Pre- & In-Purchase information, larger shares of the market opted out of purchasing beef products, increasing from 2% to 8%.
- Hurdle Model: The Pre- & In-Purchase LP group was 7% more likely to select an MRA rather than opting out of purchase than the LP control, and the Pre- & In-Purchase HP group was 8% more likely to select an MRA than the LP control.
- Demographics: Higher educated, younger individuals in the West region of the U.S. were more likely to select an MRA alternative. Female respondents and individuals from larger households were less likely to select an MRA.
- Methane Reduction: The adoption of seaweed MRAs could lead to abatement levels of 13% to 14% without information campaigns. Total reduction levels from adopting all MRA products could reach 36% with a methane reduction label and up to 48% if policymakers simultaneously invest in information campaigns and a point-of-purchase label.
Other Important Findings
- The study found that consumers were more likely to select MRA products when provided with point-of-purchase labels or a combination of pre-purchase information and labels.
- The combination of pre-purchase environmental information and point-of-purchase labels was most effective in increasing the selection of MRA products, particularly for seaweed.
- Conventional ground beef had the highest coefficient estimate, followed by seaweed, essential oil, and 3NOP MRAs.
- In the low-price group, the point-of-purchase labels and pre-purchase information did not have a significant effect on selection.
- In the high-price model, the coefficient estimated for the conventional beef product in the Pre- & In-Purchase group was significantly lower than in the Pre-Purchase group.
- The WTP for the seaweed MRA product was higher in the Pre- & In-Purchase group compared to the In-Purchase or Pre-Purchase groups.
- The study also found that higher educated, younger individuals in the West region of the United States were more likely to select an MRA alternative.
- Respondents were more likely to select any MRA than to opt out for all groups except the in-purchase HP.
- The selection of essential oil MRA products was lower among respondents in the Pre- & In-Purchase group compared to the Pre-Purchase group and higher among respondents in the Pre-Purchase group compared to the In-Purchase group.
Limitations Noted in the Document
- The study acknowledges that the cost level and range selected for the choice experiments can affect choice behavior and WTP estimates.
- The research was conducted using an online survey, which may introduce hypothetical bias.
- The study’s findings may not fully reflect real-world consumer behavior.
- The study’s focus on U.S. consumers limits the generalizability of the findings to other regions or countries.
- The use of a discrete choice experiment may not fully capture the complexity of consumer decision-making processes in the context of meat consumption.
- The study’s findings are based on stated preferences, which may differ from revealed preferences in actual purchasing scenarios.
- The study acknowledges the limitations of using MRAs, as seaweed is the least explored option and the commercial availability is limited.
Conclusion
The study’s findings suggest that providing consumers with information about methane reduction and utilizing point-of-purchase labels can effectively shift consumer demand towards low-methane beef. The combination of pre-purchase environmental information and point-of-purchase labels was most effective, especially for seaweed MRA products. This indicates that policymakers can potentially influence consumer choices through targeted information campaigns and labeling initiatives. The study highlights that conventional beef remains the most preferred option, but also reveals that consumers are willing to consider and select low-methane alternatives, particularly with the right information. The study underscores the importance of consumer awareness and the potential for market premiums for climate-friendly products. The results suggest that in-store nudging is more effective than pre-purchase environmental information. This suggests that developing a methane reduction label, similar to the Carbon Trust label, could be an effective tool for promoting climate-smart commodities. The research also implies that keeping prices low could enhance consumer adoption. The study suggests that the most effective approach involves a combination of educating consumers about the environmental impact of beef production and clearly communicating the methane reduction potential of MRAs at the point of purchase. The study also indicates that policy interventions, such as cost-share initiatives or subsidies, may be necessary to encourage farmers to adopt methane-reducing technologies if market demand alone is insufficient. Finally, future research should delve into the long-term impacts of consumer behavior. The potential for seaweed adoption is high. Policymakers should focus on research and development, supply chain development, and a pathway to approval. Information campaigns and point-of-purchase labeling should be implemented in tandem.