Willingness to pay for locally produced foods: A customer intercept study of direct market and grocery store shoppers

Abstract

Increasingly, grocery stores are marketing foods differentiated as locally produced. Freshness and taste are obvious reasons for consumer preference for these goods, but also important may be home-bias. Whatever the motive, there is substantial evidence that some consumers are willing to pay premium prices for food characterized as locally produced. A customer-intercept survey and a choice experiment of food shoppers in direct markets and traditional grocery stores was analyzed using Conjoint methods to evaluate WTP for characteristics related to locally grown fresh strawberries. Our results suggest that consumers are willing to pay more for locally produced berries: Customers intercepted in grocery stores would pay an average of 64 cents more per quart, while those intercepted at direct markets would pay nearly $1.17 more per carton of strawberries that was grown locally rather than berries identified simply as "produced in the U.S." These conclusions provide a solid rationale for the existence of niche market potential for local berry producers.

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