Consumers preference and willingness to pay for graded beef in Polokwane Municipality of Limpopo Province, South Africa

Abstract

The demand for animal products is projected to increase progressively due to extensive urbanization, rapid growth of human population and income dynamics. However, the evolution of food demand is strictly linked to the change in consumer preferences. Consumers around the world are progressively becoming more concerned and aware about food standards, quality and safety issues. The purpose of this study was to determine consumers’ preference regarding safe and quality beef and WTP for graded beef in Polokwane municipality. The research surveyed 150 consumers using a structured questionnaire to collect data on consumer characteristics and responses to different bid levels for graded beef. Analytical methods were descriptive statistics, Likert scales, contingent valuation method to evaluate respondents’ mean WTP for graded beef and logit model to determine the dependence of WTP on socioeconomic factors. Results showed that consumers prefer their beef tender, with less fat and bones and labelled with price, grade/class, size or quantity of the product and lastly quality inspection or certification indicator. Over half of the respondents (53%) were aware of grading or classification systems. The results further revealed that most respondents are willing to pay an increase of 16.04 % over the current price for beef. This could be an opportunity for investments in beef label industry. Consumer characteristics including age, income, gender and household size significantly influenced WTP for graded beef in Polokwane Municipality. Marketing strategies considered by beef product investors should target young, female and wealthier consumers. Grading with respect to quality attributes would make beef sales at differentiated prices possible. This will eventually enhance sales volume and returns for all stakeholders along the value chain