PORK MARKET DEVELOPMENT RESEARCH PROJECT: MARKET POTENTIAL FOR ALBERTA'S PORK IN SELECTED U.S. MARKETS

Abstract

The ethnic Asian market in Washington and Oregon constitutes a sizable niche market for fresh Canadian pork. Since California possesses a large population segment that originates from Asia, the characteristics of the ethnic Asian-origin market in the northern part of that State are also of interest since this may also be a potential niche market for Canadian pork. The objectives of the first part of this study are to evaluate the Asian ethnic markets for fresh pork in the United States Pacific Northwest and Vancouver. In the second part of the project the assessment of the market for fresh pork by Asian-origin consumers was extended to San Francisco. In this extension, a detailed assessment was also made of the product preferences for fresh pork by Asian-origin consumers in San Francisco and the behaviour patterns associated with store choices of these fresh pork consumers. Asian retailers and distributors in Vancouver, Seattle and Portland were surveyed by direct interview during November and December 1996. The survey applied semantic differential scaling questions, open-ended questions and a stated preference task, a conjoint methodology, to examine pork retailer's and distributor's perceptions of fresh pork produced in Western Canada and in the Midwest United States. Personal interviews with wholesalers and retailers were also applied in the San Francisco market survey which was conducted in 1998. Two consumer surveys were also conducted in San Francisco in 1998, directed at Asian-origin consumers of fresh pork. The structure of the market for fresh pork represented by retailers catering to Asian consumers in Vancouver differs from that in Seattle and Portland. The "Asian market" in Vancouver is dominated by many small shops that deal directly with packers. The small shops in Seattle and Portland deal with distributors and wholesalers. Distributors play a small role in Vancouver's retail market. Asian retailers in Seattle deal with a variety of suppliers, including both packers and distributors. In Portland, retailers catering to Asian consumers trade mainly with distributors and a local packer-wholesaler. In San Francisco, Asian stores and butcher shops prefer to obtain pork through smaller joggers, while American style supermarket retailers catering to the Asian consumers purchase pork directly from meat packing companies; fresh pork is sold in different ways in the different types of stores catering to Asian consumers that are found in these markets. The first survey found that Western Canadian pork enjoys an image of superior quality amongst retailers and distributors in Seattle's ethnic Asian market. Asian retailers in Portland are less familiar with Western Canadian pork and did not regard it as highly as did retailers in Seattle. However, distributors in Portland are more familiar with Western Canadian pork and consider it to be superior to Midwest United States pork in terms of overall quality, meat colour and fat trim. In both these markets, Western Canadian pork is generally considered to be expensive. These results are not statistically significant, however they are of economic relevance since most of the major players in the segment were interviewed. Little knowledge of Western Canadian pork was evidenced by retailers or consumers in this market segment in San Francisco. Western Canadian pork presently enjoys a reputation for superior quality amongst the retailers that specialize in sales to Asian consumers in Seattle and Portland. However it is also clear that many members of the trade lack information or experience with Canadian pork. Consequently, there is an opportunity for Canadian processors to maintain or increase market share through more education and promotion to this market segment. The 1998 survey of Asian-origin consumers of fresh pork in San Francisco focused on two aspects: preferences for fresh pork attributes and choice of store for fresh pork purchases. An intercept survey method was chosen to select and interview consumer respondents. Some 40% of the 196 respondents to the store choice survey purchase most of their fresh pork from American style supermarkets, 33% purchase mostly from small Asian stores, 24% from large Asian stores, and the rest from butcher shops. The most popular cut of pork purchased by Asian consumers is loins, followed by pork shoulders and butts, then pork leg, bellies, hock, and offal. The analysis indicated that socio-economic and demographic factors, as well as store attributes, significantly affect Asian consumers' store and product choices. The analysis of the ranking of selected attributes of fresh pork by Asian-origin consumers in San Francisco, California showed that freshness is ranked as the most important attribute, followed by the attributes of the color of meat, lowness in fat, and the whiteness of fat. The attributes of price, freedom from chemicals, and being USDA labelled were also ranked to be of importance. The attributes of little or least importance were knowing that pork came from the US, customized pork cuts, the variety of pork cuts, packaged pork, vacuum packed pork and seasoned and prepared pork. Empirical results from an ordered probit model postulated to explain respondents' rankings of attributes indicate that particular demographic and socio-economic characteristics of Asian-origin consumers influenced the importance rankings for the pork attributes that were identified to be important. For example, Chinese origin consumers were appreciably more sensitive to pork price than were other Asian-origin groups. One facet of the findings is that marketing strategies should not treat Asian-origin consumers as a single homogenous niche group in marketing since there are identifiable sub-groups of these consumers with specific attitudes and preferences. The importance placed on different attributes by particular ethnic subgroups, and their different preferences for stores at which fresh pork is purchased, provides useful information on which to develop strategies to target market development activities at the Asian-origin ethnic subgroups.