Academic journal article Journal of Agricultural and Applied Economics

Fresh-Cut Melon-The Money Is in the Juice

Academic journal article Journal of Agricultural and Applied Economics

Fresh-Cut Melon-The Money Is in the Juice

Article excerpt

Fruit is an important component of the food industry in the United States, and "fresh-cut" products are an increasing portion of that consumption. We found that packaging and juice content played a significant role in the choices Indiana consumers made when purchasing fresh-cut melon products. Brand was not as important as the other fresh-cut melon attributes. Indiana consumers had a clear dislike for cup-shaped transparent packages compared with tamper-proof, bowl, and squared packages. However, they were willing to pay a premium for packages that have no fruit juices on the bottom.

Key Words: conjoint, consumer preferences, demand, fruit

JEL Classifications: Q13, D12, M31, P46

Fruits and vegetables are an important component of the food industry in the United States. In 2000, consumers spent about $75.8 billion on fresh fruits and vegetables (Cook). In 2003, per-capita consumption of all fruit was 124.69 kg (274.9 lbs.); more fruit was consumed than beef, pork, and poultry combined (USDA-ERS). While per-capita beef and pork consumption declined by 18% and 8%, respectively from 1970 to 2003, total fruit consumption increased by almost 14% over the same time period (USDA-ERS). An increasing portion of the consumption of fruits and vegetables are "fresh-cut" produce items that include bagged specialty salads, baby carrots, stir-fry vegetable mixes, and fresh-cut melons. Total yearly sales of fresh-cut products have recently reached $10 to $12 billion (IFPA), which represents approximately 10% of total produce sales in the United States. The consumption of these products is increasing in popularity because of the increasing demand by the American consumer for healthy and convenient foods. Food service institutions are also demanding more fresh-cut products in order to reduce labor and waste costs (Shwedel and Costa).

Fresh-cut fruit is the newest class of products to be offered both in retail markets and quick-service restaurants. Industry experts predict that this category will likely overshadow the sales of fresh-cut salads and vegetables in the future. The volume of sales is projected to grow by 20% to 30% annually for the next 4 years and expected to reach as high as $2 billion in retail sales by 2008 (Miller). Most of the fresh-cut fruit products offered at the retail level contain some type of melon, as a single fruit or a mix of melons such as honeydews, muskmelons, and watermelons.

Despite the size and growing importance of the fresh-cut vegetable and melon markets, there is a dearth of information available about consumer demand and preferences for fresh-cut fruit. Indeed, we are aware of only one other study that investigates the fresh-cut industry; Thompson and Wilson investigated demand for bagged salads. In light of this lack of information more research is needed to understand what consumers want when buying fresh-cut fruit so that producers can manufacture a product that better matches consumer preferences.

The overall objective of this research is to better understand consumer preferences for fresh-cut melon products. We tackle this issue by focusing on the case of a proposed fresh-cut melon product, branded "Indymelon," by Indiana melon growers. The first specific objective of this study is to assess consumer loyalty to existing fresh-cut melon products (e.g., Del Monte) and the acceptability of new brands such as the fictitious Indymelon brand. second, we determine which attributes of the value-added melon product consumers favor most. The attributes assessed are type of package, type of fruit mix, and amount of fruit leakage (i.e., fruit juices that accumulate at the bottom of the package).

To our knowledge, no previous study has assessed how consumers make tradeoffs in price, packaging, fruit mix, brand, and juice content when purchasing fresh-cut fruit. The attributes included in this study belong to other fresh-cut fruit products besides melon; thus the results may also apply to other products, such as fresh-cut pineapple. …

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