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Product differentiation by marketing and processing cooperatives: A choice experiment with cheese and cereal products

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  • Jasper Grashuis
  • Alexandre Magnier

Abstract

With ongoing consolidation of food retailers and segmentation of consumer preferences, agri‐food producers and manufacturers have increased motivation to pursue product differentiation. We study if and how farmer cooperatives can build brand equity to drive or support product differentiation. With emphasis on ownership type and product origin, we conduct two choice experiments with cheese and cereal consumers in the United States. The results of our multinomial logit model indicate farmer cooperatives can command a price premium as compared to store brands, but not as much as non‐cooperatives. Cheese and cereal consumers also indicate a general willingness to pay for product origin and family ownership attributes, but the effects are not always compatible with farmer cooperatives. Overall, although price premiums for cooperative brands and labels may exist across various product categories, the heterogeneity in willingness to pay estimates for other product attributes is suggestive of the difficulties farmer cooperatives face in pursuit of product differentiation. [EconLit citations: Q11, Q13, M30]

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  • Jasper Grashuis & Alexandre Magnier, 2018. "Product differentiation by marketing and processing cooperatives: A choice experiment with cheese and cereal products," Agribusiness, John Wiley & Sons, Ltd., vol. 34(4), pages 813-830, October.
    • Handle: RePEc:wly:agribz:v:34:y:2018:i:4:p:813-830
    DOI: 10.1002/agr.21551
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    3. Zhanguo Zhu & Qinyuan Shen & Zhifeng Gao, 2022. "Consumer choices in agricultural markets with multitier collective labels and private brands," Agribusiness, John Wiley & Sons, Ltd., vol. 38(4), pages 905-922, October.
    4. Ahmet Candemir & Sabine Duvaleix & Laure Latruffe, 2021. "Agricultural Cooperatives And Farm Sustainability – A Literature Review," Journal of Economic Surveys, Wiley Blackwell, vol. 35(4), pages 1118-1144, September.
    5. Yi Qu & Jing Zhang & Zhenning Wang & Xinning Ma & Guangcheng Wei & Xiangzhi Kong, 2023. "The Future of Agriculture: Obstacles and Improvement Measures for Chinese Cooperatives to Achieve Sustainable Development," Sustainability, MDPI, vol. 15(2), pages 1-22, January.
    6. Fabio Boncinelli & Andrea Dominici & Federico Bondioni & Enrico Marone, 2024. "Consumers bahavior towards the country of origin labeling policy: The case of the pasta market in Italy," Agribusiness, John Wiley & Sons, Ltd., vol. 40(1), pages 46-69, January.
    7. Michal Chocholousek & Zuzana Hlouskova & Tereza Simova & Jan Huml, 2021. "Agriculture farms product differentiation assessment in the Czech Republic," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 67(3), pages 81-89.
    8. Guangcheng Wei & Xiangzhi Kong & Yumeng Wang, 2022. "Will Joining Cooperative Promote Farmers to Replace Chemical Fertilizers with Organic Fertilizers?," IJERPH, MDPI, vol. 19(24), pages 1-14, December.
    9. Jasper Grashuis, 2021. "A price premium for the farmer‐owned label? A choice experiment with milk consumers in the Netherlands," Agribusiness, John Wiley & Sons, Ltd., vol. 37(4), pages 749-763, October.
    10. Meiyuan Wang & Bin He & Jinsong Zhang & Yanan Jin, 2021. "Analysis of the Effect of Cooperatives on Increasing Farmers’ Income from the Perspective of Industry Prosperity Based on the PSM Empirical Study in Shennongjia Region," Sustainability, MDPI, vol. 13(23), pages 1-18, November.

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