Consumer Analysis in a Dynamic Food Market

CONSUMER ANALYSIS IN A DYNAMIC FOOD MARKET

ABSTRACT

Consumer analysis is a very complex matter. There is an increasing interest to study it for more intensively due to the political dimension of some food safety problems in the last decade.

The concern on health and nutrition has stimulated the research on different attributes and comparative advantages of consumption habits and diets. However, under a practical point of view, we should focus our attention in a broad horizon, with a mixture of nutrition, culture and traditional values. In this paper we focus the analysis in the new consumer scenario of food safety at the EU, with some views about general methodology and comments about the future, and actions to be taken to increase confidence in the food market.

INTRODUCTION

Consumer analysis at the EU has been focused lately in the food safety area. Food scandals (BSE, salmonella, dioxins) in the past decade have provoked a diminish in the consumer’s confidence in the food system. The 1998 the Euro barometer showed that only 66% of the European consumers trusted the controls made on food safety at national regional and local levels, and only 43% in European controls.

But there are different aspects to be considered. In one way there is a feeling among consumers, specially their organisations, “that interest of food industry have been put before interest of the consumer in the EU” (D. Hutton. 2003).

Another interesting issue is the idea that consumers do not get the whole truth about the situation in food safety problems. The Euro barometer survey in 1998 showed only 20% of the consumers believe that European authorities told the whole truth.

We should call the attention in the fact that major threats to European consumers come from unhealthy diet more than from dangerous food. Quality controls in the EU food chain are becoming very efficient and enterprises are concerned about the importance of it. Many consumer are increasing the intake of processed products instead of fresh ones, with great increase of saturated fat, calories and other ingredients. There is a correlation between the decline of the quality of the diet and the health problems. Heart problems and cancers are associated with diets high in fat and low in fruit and vegetables.

Although there is a comparative advantage in consumers of Mediterranean countries to follow a “Mediterranean diet” the fact is that in Spain we are losing the traditional way to eat, moving toward more processed products. In this way our nutritional index has a negative trend. For instance, in 1960, the energy balance was almost the optimum, while in 2001 there was a surplus of 70% in the level of proteins and 50% in the fat.

METHODS AND ANALYSIS

Consumer habits change, so enterprises and institutions dealing with the food businesses need to adapt . Another question is why and how the consumer preferences change, and in which way can be modified them by advertising and promotion activities. According to Senauer (1991) a major impact on the economic analysis of consumer behavior came from the models proposed by G. Becker about the "new household economics" and K. Lancaster with the basic idea that "products are composed of a bundle of attributes".

Consumption analysis has several ways to deal with:

Impacts on Food Markets

Added Value:

The greater proportion of the economic activity in the food system has been shifted toward the retailers. In situations of scarcity where the supply is lower than the demand, the bargaining power is controlled by the farmers. With the transformation of the traditional agriculture into a modern one, market oriented, the bargaining power moved toward the manufacturers and later to the traders. In developed countries, the food chain at retail level has the greatest share of the added value in the food system. But even at the production level, innovations are diminishing the farmer share. Scientific technology and genetic research are creating food substitutes of traditional food: such as fat (with fat such as AU Lean), orange juice made with tang, etc.

Environmentalism:

The consumers concern about the consequences of production and marketing process on the environment and natural resources is increasing. The possibility to choose biodegradable and non polluting products is a good alternative to many consumers. The quality of water, countryside air,