Determinants of consumers’ preferences for local food: A comparison study from urban and rural areas in Indonesia

Spatial factors (rural and urban) might influence consumer preferences towards local food. This study explores and compares consumer preferences for local food in the urban and rural context. Face to face interviews were conducted in urban and rural locations on Java island, Indonesia. Six hundred respondents were interviewed using a structural questionnaire. Factor analysis was applied to group consumers based on their preferences. Although consumer demographics differ, the results show that factors influencing consumers’ preferences seem to be similar in term of “food quality”, “support for local food”, “availability”, “promotion’, “tradition”, and “packaging “. “Food safety” also influences preferences for local food in urban areas. Though the paths by which the groups arrive at these motivators differ, the factors influencing consumer preference for local food are remarkably homogenous regardless of location. These results provide important implications for developing marketing strategies for local food linking urban and rural areas. Marketing can be enhanced through advertising and increasing consumer awareness and knowledge. This can be accomplished through mass media and formal and informal education, as well as traditional events. This study has its limitation that only one rural and one urban area was surveyed. Thus, these findings cannot be generalised for Indonesia as a whole. This paper’s unique contribution is to explore and compare consumer preference for local food in urban and rural Indonesia. Corresponding author: Poppy Arsil Email addresses for corresponding author: poppy74arsil@gmail.com First submission received: 2nd March 2018 Revised submission received: 10th May 2018 Accepted: 22nd May 2018 Introduction In Indonesia increasing awareness and concern for local food has been a growing market trend. Emerging movements supporting local farmers such as the “toko tani” (farmers’ shops) initiated by the Indonesian Agricultural Department and “lima kilo” (five kilos) −(a social movement to support local farmers by shortening the supply chain from farmers to consumers) are pointers to this movement. Since the 1960’s, local food has been supported by government food diversification policies. This is specifically accomplished through Presidential Regulation (No. 22 of 2009). This regulation promulgates, in order to increase food variety and to provide nutritional sources of carbohydrates other than rice, the diversification of local food resources (Indonesian Agricultural Department, 2010). Residents living in rural and urban locations exhibit differing consumer preferences towards local food. Although urban consumers are reported as having a positive preferences towards local food (Patterson et al., 1999), many previous studies have noted that rural consumers tend to have even higher Journal of Business and Retail Management Research (JBRMR), Vol. 13 Issue 2 December 2018 www.jbrmr.com A Journal of the Academy of Business and Retail Management (ABRM) 185 levels of awareness and motivation to search for locally grown produce (Brown, 2003; Mirosa and Lawson, 2012; Roininen, Arvola and Lähteenmäki, 2006; Weatherell, Tregear and Allinson, 2003). This may be because rural residents are closer to local food sources and they may place more value on sociological and civic issues when making food purchasing decisions (Weatherell, Tregear and Allinson, 2003). According to the World Bank (2016), the urbanization rate in Indonesia is 4.1% per year. It is predicted that 68% of the Indonesia population will be urbanised by 2025. Preference for local food in urban and rural locations will be influenced by this increasing demand for food and by population mobility. The average per-capita monthly expenditure for food in urban areas was 45% of the total household expenditure. It was 59% in rural areas in 2015 (Statistics Indonesia, 2016). It is thus worthwhile to explore a comparison of consumers’ preferences in rural and urban locations. Scholars lack agreement on an exact definition of local food. However, most previous authoritative literature frequently defines “local” food through parameters such as “distance or travelling distance”, “driving hours”, “specific region” or “political boundaries” (Adams and Salois, 2010; Arsil, Li and Bruwer, 2014a; Chambers et al., 2007; Zepeda and Leviten-Reid, 2004). Distances ranging from 10-100 miles are variously deemed appropriate. Political boundaries ranged from states, to provinces and counties. The driving factors affecting consumer interest in local food have been investigated in many studies. Notable among those factors are price (Arsil et al., 2014b; Brown, 2003; Kezis et al., 1998), food quality, freshness, taste and appearance (Arsil et al., 2014b; Adams and Adams, 2011; Brown, 2003; Chambers et al., 2007; Kezis et al., 1998; Zepeda and Deal, 2009). Other factors include support for the local economy and farmers, country of origin (Brown, 2003; Giraud et al., 2013; Memery et al., 2015; Kezis et al., 1998), ease of preparation (Arsil et al., 2014b), social environment (Conner et al., 2010), and environmental sustainability (Feldmann and Ham, 2015). Other important attributes such as food origin, employment creation, farmer support, brand and availability have not yet been investigated in Asian countries (Moser, Raffaelli and Thilmany, 2011, p. 130). Previous studies have examined consumer preference for local food in Europe (e.g. Giraud et al., 2013; Brozzi et al., 2016; Tregear and Ness, 2010) and the US (e.g. Thilmany, Bond and Bond, 2008; Cholette et al., 2013). However, knowledge is scant regarding local food preference in developing countries. Indonesia is a particularly interesting case study since it is an archipelago constituted by more than 300 ethnic groups. Local culture and tradition exhibit great diversity. Comparing consumers’ preference for local food in the context of the diverse multi-ethnic groupings of Indonesia is a worthwhile investigation. The largest ethnic group in Indonesia is Javanese (approximately 42%). Yogyakarta, the urban area in this study, is the capital of the Yogyakarta special region and was the Indonesian capital during the national revolution (from 1945 to 1949). A large majority of the population is Javanese by descent. Yogyakarta is the central hub of Javanese culture. However, due to its large number of schools and universities and its relatively low living costs, the city has also attracted large numbers of students both from other Indonesian regions and overseas. Many other Indonesian ethnics groups live in Yogyakarta, including people from the eastern parts of Indonesia. The Banyumas regency is a rural area located in the southwestern part of central Java. It is about 170 km from Yogyakarta city. The dominant ethnic population in the Banyumas regency is also Javanese. As previously noted, residential location can be considered one of the determinant factors in respect to making decisions when purchasing locally produced food. This paper will extend the literature by examining local food preferences in rural and urban areas. It will explore and compare the motivation of urban and rural consumers and their preferences towards making food purchasing decisions for locally produced food. The results of this study will assist government, producers and traders to more successfully promote and create marketing strategies for local food. Review of consumer preferences towards local food Consumer preferences can be defined as those subjective personal tastes that allow consumers to refer to certain personal preference characteristics (Zikmund and Babin, 2010). Consumers, as individuals, have a set of preferences that, in turn, are dependent on product attributes and location. Journal of Business and Retail Management Research (JBRMR), Vol. 13 Issue 2 December 2018 www.jbrmr.com A Journal of the Academy of Business and Retail Management (ABRM) 186 Brozzi et al. (2016) surveyed 498 consumers in South Tyrol (Italy) using both descriptive statistics and the Kruskal–Wallis test. They found that spatial typology (urban, predominantly urban and rural location) has a significant influence both on preferred store choice and on food expenditure, when purchasing local food. Cultural background influences both the parameters which individuals apply as the determinants to identify local food and the relevant attributes that motivate local food purchase. Tregear and Ness (2005) conducted a survey among 734 respondents who lived in two urban and three rural locations in the North of England. They identified attitudinal factors followed by situational factors related to the dwelling place of residents (urban/rural). Additionally, they found the degree of involvement with farming to be a key determinant of consumer interest in buying locally produced food. Lockeretz (1986) interviewed 600 urban and suburban consumers in Massachusetts at an agricultural fair. This study suggested that purchasing directly from farmers within a short time of harvest (freshness) was important for consumers when purchasing local food. Penney and Prior (2014) conducted focus group among urban shoppers in Birmingham, UK. Their study identified that, although urban consumers were interested in local food, this predisposition did not automatically translate into purchasing behavior. Rather attributes related to quality, freshness and health are key considerations for consumers purchasing local food. Conversely, availability is one of the dominant determinants of consumer interest when buying local food. Depsite this, few studies have been undertaken to compare any differing attributes that influence consumer preference in urban and rural locations in Asian countries. Many studies address desirable attributes related to local food. In general, freshness, quality and health issues are important to urban consumers (Penney and Prior, 2014). Likewise, Henseleit, Kubitzki and Teu