investigating the drivers that influence the adoption of differentiated food products

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Investigating the drivers that influence the adoption of differentiated food products The case of a Greek urban area Efstratios Loizou Department of Agricultural Products Marketing and Quality Control, Technological Educational Institution of Western Macedonia, Florina, Greece Anastasios Michailidis Department of Agricultural Economics, Aristotle University of Thessaloniki, Thessaloniki, Greece, and Fotios Chatzitheodoridis Department of Agricultural Products Marketing and Quality Control, Technological Educational Institution of Western Macedonia, Florina, Greece Abstract Purpose – Over the last years, food safety, health, environmental and societal issues are a few among many other reasons that force people to adopt new differentiated food products. This interesting shift of the consumption pattern from conventional food products to new differentiated products that incorporate innovative features, consist the main reasoning of the present study. The purpose of this paper is to investigate the drivers that influence the adoption of those differentiated food products and shed new light on consumer’s behavior, by modeling and understanding better their attitude. Design/methodology/approach – A two-step cluster analysis was employed to explore the different levels of differentiated products adoption and a categorical regression model was estimated to explain this variation. Data were collected through a survey addressing 500 consumers, carried out in 2009 in a typical Greek urban area. Findings – From the three different food product categories (organic, functional and genetically modified) four consumers’ profiles were identified which were found to differ in terms of several socioeconomic characteristics. The increased level of disposable income, along with exposure to innovative food products, may well explain such a differential food product adoption. Research limitations/implications – Due to the small sample, the indefinable number of food products adopters (population) and to specific characteristics of the study area consumers, the results might face generalisability deficiencies. Practical implications – From a practical point of view, to identify the reasons driving consumers to adopt or not new differentiated products with novelties is important generally for society, policy makers, food-producing companies and related economic sectors. Originality/value – The contribution of this research is in having examined, the adoption drivers of differentiated food product categories, for which there has been longstanding interest. The food product categories are examined comparatively as a group (organic, functional and genetically modified) and not individually. Keywords Greece, Consumer behaviour, Food products, Organic foods, Adoption drivers, Differentiated food products, Multivariate analysis Paper type Research paper The current issue and full text archive of this journal is available at www.emeraldinsight.com/0007-070X.htm Adoption of differentiated food products 917 British Food Journal Vol. 115 No. 7, 2013 pp. 917-935 q Emerald Group Publishing Limited 0007-070X DOI 10.1108/BFJ-04-2010-0068

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Investigating the drivers thatinfluence the adoption of

differentiated food productsThe case of a Greek urban area

Efstratios LoizouDepartment of Agricultural Products Marketing and Quality Control,

Technological Educational Institution of Western Macedonia, Florina, Greece

Anastasios MichailidisDepartment of Agricultural Economics, Aristotle University of Thessaloniki,

Thessaloniki, Greece, and

Fotios ChatzitheodoridisDepartment of Agricultural Products Marketing and Quality Control,

Technological Educational Institution of Western Macedonia, Florina, Greece

Abstract

Purpose – Over the last years, food safety, health, environmental and societal issues are a few amongmany other reasons that force people to adopt new differentiated food products. This interesting shiftof the consumption pattern from conventional food products to new differentiated products thatincorporate innovative features, consist the main reasoning of the present study. The purpose of thispaper is to investigate the drivers that influence the adoption of those differentiated food products andshed new light on consumer’s behavior, by modeling and understanding better their attitude.

Design/methodology/approach – A two-step cluster analysis was employed to explore thedifferent levels of differentiated products adoption and a categorical regression model was estimatedto explain this variation. Data were collected through a survey addressing 500 consumers, carried outin 2009 in a typical Greek urban area.

Findings – From the three different food product categories (organic, functional and geneticallymodified) four consumers’ profiles were identified which were found to differ in terms of severalsocioeconomic characteristics. The increased level of disposable income, along with exposure toinnovative food products, may well explain such a differential food product adoption.

Research limitations/implications – Due to the small sample, the indefinable number of foodproducts adopters (population) and to specific characteristics of the study area consumers, the resultsmight face generalisability deficiencies.

Practical implications – From a practical point of view, to identify the reasons driving consumersto adopt or not new differentiated products with novelties is important generally for society, policymakers, food-producing companies and related economic sectors.

Originality/value – The contribution of this research is in having examined, the adoption drivers ofdifferentiated food product categories, for which there has been longstanding interest. The foodproduct categories are examined comparatively as a group (organic, functional and geneticallymodified) and not individually.

Keywords Greece, Consumer behaviour, Food products, Organic foods, Adoption drivers,Differentiated food products, Multivariate analysis

Paper type Research paper

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0007-070X.htm

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917

British Food JournalVol. 115 No. 7, 2013

pp. 917-935q Emerald Group Publishing Limited

0007-070XDOI 10.1108/BFJ-04-2010-0068

1. IntroductionFood is one of the sectors that have highly drawn the attention, over the last years, dueto its traditional and susceptible role – to feed people – and due to recently appearedtendencies and related problems (Pingali, 2007). Consumers and associatedorganizations (state or private) on the one hand and food industries on the othermade efforts to respond to each other’s needs.

The last decades all over the world a drastic change of consumers’ attitudes againstfood products is observed; food products are not seen any more just as the mean forsurvival and pleasure. Many other drivers-barriers affect consumers’ decisions inselecting food products to follow their food pyramid (Pouta et al., 2010; Chountalaset al., 2009). Among the most influential recent factors driving consumers’ attitudes are:food safety and health issues, environmental and social (e.g. animal welfare) issues andeconomic aspects (Capitanio et al., 2009). Moreover, as Pouta et al. (2010) mention,heterogeneity in consumers’ preferences is observed, that can be seen in a number ofstudies in the literature. Such drivers that affect consumers’ food choices are: pesticideuse; environmental certification, animal welfare; genetic modifications; health andenvironmental effects and the country of origin as a factor of quality in production(Pouta et al., 2010; Chalak et al., 2008; Nilsson et al., 2006; Hu et al., 2004). All thesefactors made consumers to become increasingly conscious in their food choices(Thøgersen and Olander, 2006). At the same time their choices provide them withsubstantial power in influencing food industry’s decisions in producing anddeveloping new differentiated food products that respond to consumers’ needs.

Thus, it is extremely important for any establishment engaged in the food sector toknow the important drivers of consumers’ food preferences. It is basic knowledge thatcan provide information to the food companies’ in order to perceive the rapid changesare facing due the growing concerns of the consumers (Pouta et al., 2010). Foodproducing companies can get valuable information in order to confront the intensive,national and international, competition in the food sector, help them made the rightmovements in sparing resources and made their businesses successful (Fortuin andOmta, 2009; Kim, 2004). Moreover, it is extremely important for new productsdevelopment. Van Kleef et al. (2002), showed that food professionals are often not ableto foresee which new food concepts consumers really appreciate (see also for newproduct development, Van Trijp and Van Kleef, 2008; Cooper and Kleinschmidt, 2007;Hauser et al., 2006; Stewart-Knox and Mitchell, 2003). Investing in the development of afood category without listening consumers is a risky, costly and complex process; thatis why a great proportion of newly introduced foods fail in the market. Apart frombusiness food producing establishments, identifying the reasons driving consumers toadopt or not new differentiated products it is important generally for the society, policymakers and related economic sectors.

Following the above context the present study aims: first, to identify the drivers thatinfluence consumers to shift their consumption pattern from conventional foodproducts to new differentiated that offer innovative-novel characteristics; that is,organic, functional and genetically modified (GM) food product categories; second, toidentify any common characteristics of consumers that decide to select such productsand hence to form a specific target group, and; third, to present the findings of theabove two aims in a comparative form, for all the three food product categories. Inorder the above aims to be obtained the study performed a research with 500

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questionnaires, in the urban area of the prefecture of Thessaloniki (Northern Greece),by employing a two-step clustering methodology in collaboration with a categoricalregression model.

The study after the introductory section presents next the under examinationdifferentiated food categories; in the following Section 3 the methodology used in theanalysis is presented. Finally the study ends with the results of the analysis and theconcluding remarks.

2. Differentiated food product categories under studyProduct differentiation has been a source of competitive advantage for all firms, innowadays product differentiation is a need. Business establishments, (food industry inthe present analysis), differentiate their products in order to distinguish them fromthose of the competitors and make them more attractive and unique for the potentialcustomers. Product differentiation strategy became indispensable for the food andbeverages producing companies. The companies shifted their production processtowards the production of differentiated and innovative food products mainly: first,due to the increased competition among the companies of the food market, acompetition that is both national and international and; second, due to the consumerslast years’ new needs and demands.

As mentioned by Kim (2004), agri-food trade and domestic markets, throughout the1980s and 1990s, were liberalized globally leading market demand to shift away fromhomogenous towards differentiated products. In the same line Borgen (2010), supportsthat the agri-food sector in the western countries is in a period of transition, which ischaracterized by fiercer competition and decreasing price and cost margins. Farmersand food companies are forced to enhance product innovation and shift to theproduction of differentiated products. Moreover, in mature markets such as the foodindustry, where growth potentials are limited and international competition is severe,food companies are challenged to find new sources of competitive advantage, such asproduct differentiation and innovativeness (Pouta et al., 2010).

Today, it is supported that consumers’ demands is the factor that press more thanany other, in the food industry (Fortuin and Omta, 2009). Such demands, as mentionedabove, are related to food safety and health issues, environmental issues, social issues(e.g. animal welfare) and economic aspects. Directly and indirectly consumers’demands induce food companies in producing and developing new differentiated andinnovative food products that respond to their needs. Definitely product differentiationand innovativeness have a key role in the food industry, and specifically innovationthat has recognized as a major driver of business success and the challenge for thenational and international competition (Porter, 1985; Rama, 1996, 2008; Earle, 1997;Traill and Meulenberg, 2002; Fortuin and Omta, 2009; Capitanio et al., 2009). As statedby Fortuin and Omta (2009) the tendency for the food companies today differs fromthat in the past, where the companies were focusing more on production costminimization. Today it is observed a changed attitude in which the industry is directedby consumers’ demands, such as: food safety, nutritional quality, convenience, varietyand quality.

The examination of the drivers that affect consumers’ food decisions is an issue thatoccupied literature’s attention. Specifically, the categorization of the main reasonsgenerally affecting individual consumers’ food decisions examined by Asp (1999); the

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study pointed out that consumers’ decisions affect both the healthfulness of their foodintakes and the success or failure of food products market. Asp (1999) also stresses thepower of the consumers, as the major segment in the food system.

Following the above framework the current study aims to investigate the factorsthat influence consumers to shift their consumption pattern from typical products tonew, differentiated, that offer innovative-novel characteristics. Organic, functional andGM are the three food products categories that are examined in the present study. Theabove differentiated food product categories are treated and considered in the presentstudy as innovative-novel; it is considered that offer something new in order to meetconsumers demands and confront competition. This is done because it is indented next,in the analysis, to categorize consumers’ as innovation adopters or non-adopters, basedon their attitude towards the under examination food categories. Particularly, with theterm “differentiated or innovative food products”, the current study tag along with theconcept of Novel food (CEC, 1997); in which Novel food is defined as a type of food thatdoes not have a significant history of consumption or is produced by a method that hasnot previously been used for food (see also Fagerberg, 2004 for defining innovations inthe food sector and generally on innovations definition, among others in: Rogers, 1995;Rennings, 2000; Mattas and Loizou, 2005).

The same orientation about innovative food products can be found in many studiesin the literature. Guerrero et al. (2009) relates innovation in food, with something new orwith modifications in the ingredients, in the preparation and in its size or packaging.They characterize food as innovative if it is prepared in a different way, when addingunknown or new ingredients or when adding foreign and unusual ingredients. Though,an important issue that should be taken into account is time; it is known thatinnovation have a temporary validity, when innovation is widely diffused and adoptedby many lose its innovative character and becomes a tradition. Guerrero et al. (2009)conclude that innovation in the food sector can be defined as the addition of new orunusual ingredients, new combinations of product, different processing systems; eventhe different origin and culture is considered as innovative characteristic. The specificdefinition springs from the general definition of innovations, as it takes into accountthe incremental and radical character of innovations. In the case of incremental changeit is considered that an existing product is redeveloped whereas in the case of radicalchange a new product is developed, the degree of novelty is very high in the secondcase. According to Capitanio et al. (2009), most innovations in the food sector areconsidered as incremental; they justify this by relating them with conservativeconsumer behavior and with the high risk of developing a new product with marketsuccess (Sloan, 1994; Van Kleef et al., 2002; Sloan, 2005; Van Trijp and Van Kleef, 2008).

Within the abovementioned consideration of innovations’ in the food industry, laysthe characterization of the differentiated food product categories (organic, functionaland GM) employed in the current analysis, as innovative. The differentiatedcharacteristics of those three food product categories offer to consumers eitherincremental or radical changes. Though, it is considered that new factors can affectconsumers’ decisions in selecting food products that can be added to Asp (1999)groups. The last years’ new trends and problems appeared in the food sector lead tonew or modified reasons that drive consumers’ preferences (Aertsens et al., 2009).Actually, these new trends and problems affected the consumers’ food demandpatterns and induce the appearance of new food product categories (Padel and Foster,

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2005). An explicit analysis on the heterogeneity of consumers’ food preferences can befound in Pouta et al. (2010); among the various drivers that influence food choice are,pesticide use in production, environmental certification, animal welfare andantibiotic-free production, genetic modification, health and environmental effects andeven the country of origin.

Specifically, in the case of organic food products Wier et al. (2008) support that thedemand growth is affected by private attributes of the products (health, taste andquality) and public attributes of the products (environmental and animal welfare).Health considerations it is shown that plays a significant role in consumers’preferences followed by environmental and quality attributes. Though, it is stated thatenvironmental concerns was the primary motive for organic products consumption.Moreover, Wier et al. (2008) by citing a number of studies, support that youngconsumers (under 45) have higher propensity to consume organic products than oldconsumers. Thøgersen (2007), reported that environmentally sensitive and healthconscious people decide to shift their food consumption to the broad category oforganic food products. Moreover, policy reasons drive directly and indirectly thedemand of organic food products; such as the protection of the environment, land andground water conservations, production diversification-extensiveness and farmers’support (Chinnici et al., 2002; Schifferstein and Oude Ophuis, 1998; Zanoli and Naspetti,2002; Krystallis et al., 2008a, b; Mondelaers and Verbeke, 2009).

2.1 Organic, functional and GM food products in the Greek marketOrganic products, even though they represent just 1-2 percent of world-wide food sales,their market is growing rapidly versus other types of food (Zepeda and Li, 2007). Thelevel of sales for the organic food products in Europe was between e13 and 14 billion(bn) in 2005, with Germany being the biggest market with annual sales of e3.9 bnfollowed by Italy and France with annual sales of 2.4 and 2.2 bn, respectively, (Yussefiand Willer, 2008). The annual increase from 2005 and on was approximately 30percent, while in 2009, because of the global financial crisis, a lower increase in salesvalue was recorded in Europe compared to the previous years (Padel et al., 2009).

The last few years, the Greek food and beverages industry is called to cover thebroaden demands and needs of consumers (Tatsis et al., 2006). The Greek organicmarket is not as matured as other European markets (e.g. German, British orScandinavian), that is why the biggest share (65 percent) of organic food productsdemand is covered by imports and only 35 percent is covered by the domesticproduction (FEIR, 2010). A number of studies examined the Greek organic foodproducts market the last years, though many of them are concentrated to specificproducts (e.g. olive oil). Zotos et al. (1999), examined marketing issues of organicallyproduced food products, while Tzimitra-Kalogianni et al. (1999) study the behavior ofGreek consumers on organic products. The study of Fotopoulos and Krystallis (2002b),examined the profile of the Greek organic consumers as well as their purchasingmotives regarding organic products. The study characterizes organic products as“eco-products” and concludes that three types of consumers exist in the Greek marketin terms of their attitude towards purchasing them: the “unaware”, the “awarenon-buyers”, and the “aware buyers” of organic food products. The Greek organicproducts market in number can also be found in the same study. Fotopoulos andKrystallis (2002a) following the same conception as in the above study, attempted to

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identify the potential buyers of organic products and the reasons of rejecting theirpurchase. They identify again the three consumer types in terms of attitudes towardsthe purchase of organic products: the “unaware”, the “aware non-buyers”, and the“(aware) buyers” of organic food products

The willingness to pay for organically produced products examined by Tsakiridouet al. (2005), while the willingness to pay along with the profile of organic productsconsumers’ studied by Krystallis et al. (2006). The willingness to pay for organicproducts and whether it is influenced by the same set of factors that affect the purchaseof conventional foods is examined by Krystallis and Chryssohoidis (2005). In the samestudy a thorough presentation of studies dealing with consumers’ behavior regardingorganic products can be found. The demand of organic olive oil and the influence ofconsumer characteristics and attitudes towards the demand of organic olive oil werestudied by Tsakiridou and Mattas (2005) and Tsakiridou et al. (2006), respectively.

In the literature it is stated that health has becoming the major driver in consumers’food choices (Sloan, 2004, 2005); it is a very important factor, bearing in mind that foodindustry is the second largest sector in manufacturing after metals in Europe (Mattasand Tsakiridou, 2010). The last years’ increasing health problems related to foodconsumption enhanced consumers’ consciousness for healthy and pure food products.Also, factors related to healthy lifestyle, continuous population ageing, increased cost ofhealth care, food science progress and the competition among food industries inducedthe appearance of the so-called functional foods. Functional foods intent to providehealth benefits, additionally to their nutrition basic role. The specific food products areselected by consumers to ensure their overall well-being, to improve their performance(eg. in sports), to assist their diet or to prevent diseases (Urala and Lahteenmaki, 2003).

Functional foods term appeared first in Japan in the 1980s (Siro et al., 2008), though,relatively recently in the Greek market; their sales started to increase remarkable overthe last five years. In particular, functional milk and yogurt categories presentintensively upward trends and are characterized from the continuous introduction ofnew products. This category possesses a share of 3.3 percent in volume and 4.8 percentin value following an upward trend (FEIR, 2010). Studies examining issues related tofunctional foods for the Greek market are very few; in relation to the current analysisare those of Krystallis et al. (2008, 2010).

Yield maximization and resource spare and efficient use, economic and policyreasons, are among the determinants lead to the appearance of GM food products;reasons that are not related significantly with consumers needs (Dreezens et al., 2005).The GM foods, because and of the relevant European Commission Regulations and alsothe European Consumers cautiousness against them, present low penetration in theEuropean markets (Wanki et al., 2007); the same is the situation in the Greek market. Thepressure that United States and World Trade Organization exerts will probably bringcharges to the European legislation with a significant result to the future sales increaseof the GM foods in the European markets (Lusk et al., 2005). The Greek consumers’beliefs, attitudes and intentions towards GM food products were examined byArvanitoyannis and Krystallis (2005). Surprisingly, they found that although the overallattitude of Greek consumers towards GM food is negative, there exists a marketsegment, whose beliefs about GM food appear to be positive. Econometric results of thestudy of Antonopoulou et al. (2009), indicate that in general Greek consumers’ attitudes

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towards GM food products are not affected by socio-demographic characteristics, incontrast to political perceptions that significantly affect.

3. Data and methodological frameworkQuantitative analysis was used, based on 500 questionnaires conducted with randomlyselected food consumers in the urban area of Thessaloniki, Greece. This is achieved bycollecting data through a large-scale survey carried out in the period May-July 2009.The purpose of the survey was:

. to examine the current attitude of food consumers towards the adoption or not ofthe three categories of differentiated food products;

. to identify any common characteristics of consumers that decide to select suchproducts and hence to form a specific target group; and

. to present the findings in a comparative form for all the three food productcategories.

In particular, the questionnaire included sections on:. knowledge of the differentiated food products categories;. adoption of differentiated food products;. adoption reasons of differentiated food products;. non-adoption reasons of differentiated food products; and. several questions relating to sex, age, education, marital status, occupation,

income and several other personal and demographic characteristics.

The investigation of the drivers that influence consumer’s decision in purchasing eitherconventional or differentiated-innovative food products and to what extend this shiftbetween those two groups of products is related to pre-defined elements; it is achieved byemploying both descriptive statistics and multivariate statistical analysis. In particular:

. two-step cluster analysis was used to classify the respondents in discernibleclusters in order to explore the different levels of differentiated-innovative foodproducts adoption; and

. categorical regression (Van der Kooij and Meulman, 1997) that was used tohandle the optimally transformed categorical variables in order to determine therelation between consumers’ characteristics and willingness to adoptdifferentiated products.

The methodological framework followed in the analysis is presented graphically infour modules, in Figure 1.

4. Empirical analysis resultsAccording to the descriptive statistics analysis, the main research findings arepresented in three sections:

(1) knowledge and adoption of differentiated products (Table I);

(2) reasons for adopting (Table II); and

(3) for non-adopting (Table III) differentiated products.

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From the data in Table I it is obvious that, among the three categories of differentiatedfood products the most familiar to the consumers are the organic ones as 76 percent ofthe sample indicated a well knowledge of organic products. On the other hand, only onethird of the sample announced well knowledge of functional products and 53 percent ofthe sample announced a well knowledge of GM products. In addition, with theexception of organic products, the respondents are rather confused about theirknowledge of the under examination differentiated food products. In particular, aquarter of the respondents indicated “knowledge’ uncertainty” about the GM products(26 percent) and the functional products (24 percent).

Organic products have been adopted more widely by the consumers compared tofunctional and GM products. In particular, almost one third of the respondents adopt(very often or oftentimes) organic products. On the other hand, the majority of therespondents do not adopt functional and GM products (58 and 55 percent, respectively).

Figure 1.Flow chart of themethodological mix

Level of knowledge Organic products (%) GM products (%) Functional products (%)

Yes 76 53 32Not sure 11 26 24No 13 21 44

Level of adoptionVery often 14 4 7Oftentimes 22 8 9Sometimes 36 11 13Rarely 15 21 28Never 11 34 30I am not sure 2 22 13

Table I.Knowledge and adoptionof innovative foodproducts

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Moreover, a significant part of the respondents present an uncertainty about theadoption or not of GM and functional products (22 and 13 percent, respectively).

Table II presents the main reasons, on the part of consumers, for adopting thedifferentiated food products. In particular, for the adopters of organic products themost important reason for adopting them (97 percent) is that organic products are pureand without chemical preservatives. In addition, many adopters indicated thesuitability of organic products for children nutrition (88 percent), the nice taste-aromaof those products (83 percent), their high quality (81 percent) and that are healthy (77percent); those were the most important reasons for adopting organic products. Thissuggests that the majority of the adopters of organic products face the same, more orless, challenges in consuming pure and healthy food products suitable for their

ReasonOrganic products

(%)GM products

(%)Functional products

(%)

Healthy 77 3 28Pure – without chemical preservatives 97 – 2Nice taste-aroma 83 13 8Nutrition habitude 6 1 3Inexpensive – 12 –Support the producers 12 – –High quality 81 46 13Protect the environment 22 – –Trust the producers 11 6 5Suitable for children nutrition 88 – 2Dissatisfied from other products 5 11 3Remind old “real” products 9 – –Packaging benefits 1 5 –Early adopter-innovator 11 35 12Substitution of other products – 7 12Doctor recommendation 3 – 45Nice advertisement – 2 32Other reasons 2 2 3

Table II.Reasons for adopting the

differentiated foodproduct categories

ReasonOrganic products

(%)GM products

(%)Functional products

(%)

Not found easy 5 8 5I prefer the conventional products 15 31 –Expensive 88 3 85Not trust the certification 43 – –Not like their taste 13 – –Family disagreement 18 7 6Not like their package 2 – –Not trust the production procedure 7 42 2Not health safe 5 68 9Appearance 13 – –Not trust their quality 5 3 1Other reasons – 1 2

Table III.Reasons for not adopting

the differentiated foodproduct categories

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children nutrition. On the other hand, the adoption reasons for the rest of thedifferentiated food product categories present a significant diversification. Forexample, for the adopters of GM products the main reasons for their decision is thehigh quality of the products (46 percent) and that they are innovators or early adopters(35 percent). In addition, for the adopters of functional products the most importantreasons for adopting them is their doctor recommendation (45 percent), their niceadvertisement (32 percent) and that functional food products are healthy (28 percent).

Conclusively, the adopters of the three innovative food product categories supportthat:

(1) organic products are pure, healthy, tasty and aromatic;

(2) GM products are the most innovative and of high quality; and

(3) functional products are recommendable by doctors as they are suitable for somediseases and for a healthy nutrition.

Table III presents the main constraints related to the non-adoption of the differentiatedfood products. The constraints include consumers’ beliefs that:

. the organic products are expensive and that they do not trust the relatedcertification;

. the GM products are not health safe and that they do not trust the producingcompanies; and

. the functional products are expensive.

Thus, comparatively analyzing the outcomes becomes obvious that consumerscomprise two distinct groups in terms of the reasons for non-adopting the specific foodproduct categories. On the one hand are non-adopters of organic and functionalproducts, consisting the first group with common characteristics and the non-adoptersof GM products on the other group.

The two-step cluster method extracted automatically the optimal solution of fourclusters. As shown in Table IV, the majority of the respondents (346 or 69.2 percent)are included in the third cluster (late adopters), 89 of them (17.8 percent) in the fourthcluster (no adopters), 53 of them (10.6 percent) in the second cluster (early adopters) andfinally only 12 of them (2.4 percent) in the first one (innovators).

The paramount attributive characteristics (PAC) of differentiated-innovativeproducts’ adoption in each cluster were inquired using Kruskal-Wallis andMann-Whitney tests (Table V). The analysis shows that the PAC of the first clusterincludes the very often use of organic products and the limited use of GM and

Four clustersAdoption ofdifferentiated productsa

“Innovators”(12 cases)

“Early adopters”(53 cases)

“Late adopters”(346 cases)

“No adopters”(89 cases)

Organic products 4.83 3.72 3.21 1.89Genet. modified products 3.01 2.56 1.47 1.18Functional products 3.08 2.64 1.91 1.25

Notes: a1 – ever; 2 – rarely; 3 – some times; 4 – oftentimes and; 5 – very often

Table IV.Two-step clusteringcharacteristics of thedifferentiated foodproduct categories (meanscores)

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functional products. The PAC of the second cluster consists of the often use of organicproducts and the limited use of GM and functional products. The PAC of the thirdcluster consists of the limited use of organic products and the rare use of GM andfunctional products. Finally, the PAC of the fourth cluster consists of the rare use oforganic products and the no use of GM and functional products.

Reliability analysis (Bohmstedt, 1970; SPSS, 2008) for the 13 items of Table VI wasthen used to determine the extent to which these items are related to each other to getan overall index of the internal consistency of the scale as a whole and to identify itemsthat had to be excluded from the scale. In fact, none was excluded from the primarynumber of the items.

The value of Cronbach’s alpha (a) reliability coefficient was found equal to 0.87(SPSS, 2008), thus indicating that the employed scale is reliable. Friedman two-wayanalysis of variance, with x2 ¼ 2,096 (a ¼ 0.00) and Hotelling’s T2 ¼ 1,256 (F ¼ 32.68and a ¼ 0.00), indicated the significance in differences of item means.

Having accepted the consistency of the items, the average rankings for eachrespondent were used as the numerical values of the dependent variable “adoption ofdifferentiated food products” which along with the categories of 12 independentvariables are shown in Table VI.

Independent variables Type Categories

Knowledge of organic products Ordinal 1 – yes, 2 – not sure, 3 – noKnowledge of GM products Ordinal 1 – yes, 2 – not sure, 3 – noKnowledge of functional products Ordinal 1 – yes, 2 – not sure, 3 – noClassification of respondents Ordinal 1 – innovator, 2 – early adopter, 3 – late adopter, 4

– no adopterMarital status Nominal 1 – married, 2 – not marriedNumber of children Scale –Area of origin Nominal 1 – city, 2 – village, 3 – island,Gender Nominal 1 – male, 2 – femaleAge Ordinal 1 – under 25, 2 – 25–45, 3 – 45–65, 4 – over 65Education Ordinal 1 – six or less years, 2 – from seven to nine, 3 – ten

to 12, 4 – higher education, 5 – post graduateeducation

Annual income Ordinal 1 – less than e10,000, 2 – e10001–e20000, 3 –e20,001–e30,000, 4 – more than e30,001

Occupation Nominal 1 – dependent, 2 – public officer, 3 – employee, 4 –farmer, 5 – merchant, 6 – self-employed, 7 – other

Table VI.Selected independent

variables

Clusters“Innovators” “Early adopters” “Late adopters” “No adopters”

Very often use of organicproducts

Often use of organicproducts

Limited use of organicproducts

Rare use of organicproducts

Limited use of GMproducts

Rare use of GMproducts

No use of GM products

Limited use of functionalproducts

Rare use of functionalproducts

No use of functionalproducts

Table V.PAC of the differentiated

products’ use in eachcluster

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The categorical regression model yielded an R of 0.76 indicating moderate relationbetween the “adoption of differentiated food products” and the group of selectedpredictors. However, since R 2 ¼ 0.58, it is indicated that 58 percent of the variance inthe “adoption of differentiated food products” ranking is explained by the regression ofthe optimally transformed variables used. The F statistic value of 7.96 withcorresponding a ¼ 0.00 indicates that this model is performing well.

Further, the exploration of the standardized coefficients presented in Table VIIimplies that the transformed variables “annual income”, “classification of respondents”and “number of children” are significant in relation to “adoption of differentiated foodproducts” by consumers. In fact, from the zero order correlation coefficients betweentransformed predictors and the transformed response we get a better understanding ofhow these predictors are doing.

The relative importance measures (Pratt, 1987) of the independent variables showthat the most influential factors predicting the dependent variable correspond to“classification of respondents” (accounting for 18 percent), followed by “annualincome” (17 percent), “age” (12 percent), “knowledge of organic products” (12 percent)and “education” (11 percent). The six variables’ additive importance accounts for about73 percent. Finally, the data illustrated in Table VII make clear that the tolerances of allvariables are high enough to assure exclusion of the multicollinearity problem.

5. ConclusionsConsumers tend to increasingly adopt differentiated food products encompassinginnovative characteristics, suggesting that such products can help them to drive realfood safety, health, economic and environmental gains. From the current analysis,survey information from consumers had been analyzed using two-step clustering,categorical regression models and descriptive statistics analysis, in order to identifythe differential extent of differentiated food products adoption by Greek consumers.

Regarding the adoption of differentiated food products, four consumers’ profiles(classes) were identified: “innovators” (2.4 percent), “early adopters” (10.6 percent),“late adopters” (69.2 percent) and “no adopters” (17.8 percent). Furthermore, the fourclasses were found to differ in terms of gender, marital status, income, education andnumber of children. The increased level of disposable income along with exposure todifferentiated food products with novel characteristics may well explain such adifferential adoption.

A further finding is that differentiated food products’ adoption is significantlyrelated to factors such as “annual income”, “classification of consumers”, “knowledgeof organic products”, “age” and “education” with “number of children” being asupporting factor. Such empirical findings support Rogers’ (1995) socio-economicgeneralizations about early adopters. From a comparative analysis of the outcomes it isobserved that two distinct groups in terms of the reasons for non-adopting the specificfood product categories are arising. On the one hand are non-adopters of organic andfunctional products that consist the one group with common characteristics and thenon-adopters of GM products on the other group. Comparatively also it can be seenthat the PAC of the first cluster includes the very often use of organic products and thelimited use of GM and functional products. The often use of organic products and thelimited use of GM and functional products consist the PAC of the second cluster. ThePAC of the third cluster consists of the limited use of organic products and the rare use

BFJ115,7

928

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960.

96

Table VII.Categorical regressioncoefficients and other

statistics

Adoption ofdifferentiatedfood products

929

of GM and functional products. Finally, the PAC of the fourth cluster consists of therare use of organic products and the no use of GM and functional products.

From a methodological point of view the contribution of this paper provided anapplication of modern multivariate methodologies in the field of adoption theory. Inparticular, compared to other studies, the current one employs categoricalmethodologies. The main benefit of employing the above methodologies is that theycan handle optimally both continuous and categorical variables as well as attributes(Michailidis, 2007). Thus, a combination of categorical regression model with atwo-step cluster analysis can be very useful, in the examination of adoptionparameters, as the categorical variables of Table VI can be better accommodated(Michailidis, 2007).

Consequently, this study may provide interesting and initial observations as well asit demonstrates verifiability. However, the study, as a first systematic attempt toassess the adoption parameters of differentiated food products, is limited to a rathersmall sample, one area and a rather restrained amount of time for the observations.Therefore, due to the small number of subjects (sample) and due to the indefinablenumber of innovative food products adopters (population) our study rather lacksgeneralisability. Moreover, specific characteristics of the consumers living in the studyarea might also confine the generalisability of the results. Thessaloniki is a Greekurban area that encompasses typical characteristics of South European consumers,that is, slow eaters, less price sensitive in food products, less convenience driven andare too much involved in food decision making (see among others Fotopoulos andKrystallis, 2002b; Trichopoulou et al., 2007). The abovementioned characteristics aresteaming mainly due to the direct access in high quality, fresh and relatively cheap rawmaterials. Nevertheless, the observations made in this study provide a beginning forfurther research, which could extend the investigation to a more representative sampleand provide valuable information on interested stakeholders.

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Further reading

Bolliger, C. and Riviron, S. (2008), “Consumer willingness to pay for Swiss chicken meat: anin-store survey to link stated and revealed buying behavior”, paper presented at the 12thCongress of the European Association of Agricultural Economists.

Kahl, J., van der Burgt, G.J., Kusche, D., Bugel, S., Busscher, N., Hallmann, E., Kretzschmar, U.,Ploeger, A., Rembialkowska, E. and Huber, M. (2010), “Organic food claims in Europe”,Foodtechnology, Vol. 3, pp. 38-46.

Louriero, M.L. and Umberger, W.J. (2007), “A choice experiment model for beef: what USconsumer responses tell us about relative preferences for food safety, country-of-originlabeling and traceability”, Food Policy, Vol. 32 No. 4, pp. 496-514.

About the authorsEfstratios Loizou has been an Assistant Professor in the Department of Agricultural ProductsMarketing and Quality Control of the Technological Educational Institution of WesternMacedonia since 2004. He is a graduate of the Department of Economics at the University ofMacedonia (1992) and holds an MSc in Agricultural Economics from the MediterraneanAgronomic Institute of Chania (1995). In 2001, he received his PhD in Agricultural Economicsfrom the Aristotle University of Thessaloniki, the Department of Agricultural Economics of theSchool of Agriculture. During the period 1996-99 he served as Assistant Researcher in theInstitute of Agricultural Economics and Rural Sociology of the Greek National AgriculturalResearch Foundation. During the last ten years he has participated in several research projects,national and international, financed by EU (FP5 and FP6) and Greek sources. He has publishedhis work in: scientific journals (7), conference proceedings (12), chapters in books (8), while he hasparticipated in 24 national and international conferences presenting his research work.

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Anastasios Michailidis is a Lecturer of Agricultural Extension at Aristotle University ofThessaloniki. His research interests include agricultural extension, food economics, agriculturaleducation, adoption-diffusion of innovations, water resources management andinformation-communication technologies. His education includes a BSc in Agriculture, MSc inAgricultural Economics and PhD in Agricultural Economics. He has published more than 50papers in international refereed journals, in collective volumes and proceedings. AnastasiosMichailidis is the corresponding author and can be contacted at: [email protected]

Fotios Chatzitheodoridis is an Assistant Professor in Rural and Regional Development inTechnological Educational Institution of Western Macedonia, Greece and at the same time heteaches in University of Central Greece. He is economist and holds a PhD in environmentalstudies (University of Aegean) and has been working for the Greek Ministry of RuralDevelopment and Foods and Aristotle’s University of Thessaloniki. His research interestsrevolve around sustainable rural development focusing on topics such as environment, projectdesign and evaluation, with emphasis on systemic and participatory approaches.

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