Consumer Response to Price

WASHINGTON TREE FRUIT POSTHARVEST CONFERENCE

March 13th & 14th, 2001, Wenatchee, WA

CONSUMER RESPONSE TO APPLES

Roger Harker HortResearch, Private Bag 92169, Auckland, New Zealand rharker@hortresearch.co.nz I. PRICE AND DEMAND “Why do consumers buy apples?” and “How can we get them to buy more?” These are key questions facing the apple industry. The answers are far from simple and require us to consider eating quality, as well as the beliefs, attitudes and perceptions of consumers. This is the first of three articles that summarize the results from a review of the literature on consumer responses to apples. The Washington Apple Commission and Washington Tree Fruit Research Commission jointly funded the review. Economists study the influence of price on consumer purchases of apples using supermarket sales data. As the price of apples increases, consumers tended to substitute their purchases of apples with purchases of other fruit such as oranges and grapefruit. These results remind us that we are competing not only against other apple producing regions/countries, but also against producers of all major fruit crops. However, for many consumers apples are habitually purchased items that respond very little to changes in price, but are relatively sensitive to income. More detailed examination of individual families indicates that the proportion of the household budget usually spent on fruit, and the price of apples on a particular shopping trip can explain the amount of apples purchased. To some extent cultivars compete with each other. As the price of one apple cultivar increases, some consumers tend to substitute it with another, less expensive cultivar. For example, Golden Delicious and Fuji tend to substitute for each other. One study was able to characterize the relative importance of price compared to other factors (consumer perceptions and behavior, as well as eating quality) that influence consumers’ choice of apples. Their results suggest these other...