Consumer Acceptance and Willingness to Pay for Irradiated Products: Field Experiments Dr. Rodolfo M. Nayga, Jr. Professo

1. Consumer Acceptance and Willingness to Pay for Irradiated Products: Field Experiments Dr. Rodolfo M. Nayga, Jr. Professor Department of Ag. Economics Texas A&M University (rnayga@tamu.edu)

2. Outline • Food Safety: The Case of Food-borne Illness • Food Irradiation • Consumer Acceptance and Willingness to Pay: Ground Beef and Mangoes • Market Trials • Trade Developments

3. US Food Safety System • Tradition - precaution and science-based risk analyses • Regulatory process - open and transparent manner • Previous focus - chemical hazards • Recent focus - microbial pathogens and comprehensive farm-to-table approach

4. Foodborne Illness:The Situation in US Listeria Salmonella E. coli 0157:H7 *Unknown Agents ** Known Agents

5. Public health burden of foodborne diseases • Each year an estimated 76 million cases • 1 in four Americans gets a foodborne illness each year • 1 in 1000 Americans is hospitalized each year • $6.5 billion in medical and other costs

6. Why is Foodborne Illness Emerging? • Globalization of food supply • Pathogens introduced to new areas • Travel • Change in microorganisms • Change in human population • Change in lifestyle

7. Vulnerability of Our Food Supply • The food supply comprises thousands of classes of foods, domestic and imported • Ever-more centralized production and processing with wide distribution • Unintentional foodborne outbreaks have happened over large, dispersed, geographical areas • This delays recognition of the outbreak and complicates identification of the source

8. A century ago most of our food came from “local” sources.

10. Who is most susceptible to foodborne illness? Children are susceptible because their immune systems are not fully developed. The elderly are also susceptible to food-borne illness and suffer more severe reactions because their immune system is weaker.

11. Initiatives • PulseNet - CDC’s national computer network of public health laboratories rapidly identify foodborne illness • FoodNet - surveillance “sites” across the US for foodborne diseases and related epidemiologic studies • Fight BAC! - public awareness program backed by coalition of industry, producer, and consumer groups

12. The chain of production from farm to table: A generic prevention scenario On-farm sanitation, safety of animals' food and water biosecurity, probiotics, and other "Good Agricultural Practices" Production Processing Factory sanitation, quality control HACCP, inspection and other "Good Manufacturing Processes" Final preparation and cooking Consumer education, Foodhandler certification, Restaurant inspection

13. The chain of production from farm to table: A generic prevention scenario On-farm sanitation, safety of animals' food and water biosecurity, probiotics, and other "Good Agricultural Practices" Production Processing Factory sanitation, quality control HACCP, inspection and other "Good Manufacturing Processes" Pathogen killing step Food Irradiation? Final preparation and cooking Consumer education, Foodhandler certification, Restaurant inspection

14. Public Health Breakthroughs • Pasteurization of Milk • Immunizations • Chlorination of water supply • Food Irradiation?

15. Intervention strategies used by the beef processing industry to control E. coli O157:H7 • Lactic Acid Carcass Wash • Steam Vacuum • Hand Trimming to remove fecal contamination • Acidified Sodium Chlorite Spray • Steam Pasteurization

16. E. coli O157:H7 Organisms Remaining after Application of Intervention Technology (initial cell population 1,000,000 cells/gram)

17. Antimicrobial Intervention Strategies • All current antimicrobial intervention strategies reduce the level of pathogenic microorganisms in ground beef. • Irradiation reduces pathogenic microorganisms by 99.99 to 99.999%. • Only “cooking” completely destroys all pathogenic microorganisms.

18. What can Food Irradiation Do? • destroy foodborne pathogens • delay the ripening and spoilage of fresh fruits and vegetables • extend the shelf-life of perishable products like beef, poultry, and seafood • commercially sterilize foods

19. Shelf-life extension of Strawberries Non-irradiated After 7 days storage Electron beam irradiated After 17 days storage

20. What can Food Irradiation not Do? • reverse the spoilage process • substitute for good handling and processing • effectively destroy viruses, toxins, possibly prions • prevent recontamination of food • cannot be used on food claimed “organic”

21. Concerns Expressed by Anti-Irradiation Groups • Misuse to avoid plant sanitation • Environmental safety of irradiation facilities

22. Terry Stokes, CEONational Cattlemen’s Beef AssociationMay 29, 2003 “Irradiation complements, but does not replace proper food handling and cooking practices, and the numerous testing and safeguard measures already in place.”

23. What Current Uses are Approved in US? • spices • fruits and vegetables • wheat/wheat flour • pork and chicken • red meats • shell eggs • seeds for sprouts • pet foods • food for space program • Pending Approval: Ready-to-Eat Foods

24. What Current Uses are Approved in Canada? • Potatoes • Onions • Spices • Dehydrated seasonings • Wheat • Flour • Pending Approval: poultry, beef, shrimp, prawns, mangoes

25. What Current Uses are Approved in EU? • Until 1999, use in Europe varied from country to country • Recently, EU Parliament has issued directives to establish community list • Dried aromatic herbs • Spices • Vegetable seasonings

26. Impact of Food Irradiation • If 50% of meat and poultry were irradiated: • 880,000 fewer cases • 350 fewer deaths • 8,500 fewer hospitalizations

27. “Until children have routine access to irradiated hamburger, we will continue to experience life-threatening outbreaks of Escherichia coli O157:H7 infections in this vulnerable population." Michael T. Osterholm, PhD, MPH Director of the University of Minnesota Center for Infectious Disease Research and Policy.

28. “Not one child should be sacrificed so that Americans can have cheaper meat!” Barbara Kowalcyk Mother of deceased Son, in who’s name the new Meat & Poultry Pathogen Reduction Act is being named. KEVIN’s LAW

29. Texas A&M Electron Beam Research Facility

31. Electron Beam Irradiation Process • uses electricity • accelerates electrons • scans product • makes food safe… …in SECONDS!

33. US Regulation on Labeling • Inclusion of the radura symbol • Labels: • “treated with radiation” • “treated by irradiation” • “irradiated for food safety” • These must be printed on the package, unless the word “irradiated” is part of the product name • Marketers can also now petition the FDA to use label “electronically pasteurized” for e-beam irradiated foods

34. Consumer Acceptance and Marketing of Irradiated Foods

35. Market Status • Not yet a major factor in today’s food processing environment – but slowly growing • Spices and herbs – largest area of application • Ground beef – fastest mover

36. Data: Samples and Locations • Randomly selected walk-in shoppers at the entrance (total of 474 shoppers) • Use irradiated or non-irradiated ground beef and money as experimental tools • At 13 HEB grocery stores in Texas, namely, • Austin (3 stores, 119 shoppers) • San Antonio (3 stores, 111 shoppers) • Houston (4 stores, 139 shoppers) and • Waco (3 stores, 115 shoppers)

37. Methodology On actual survey, asked consumers sequentially on • Their willingness to buy before and after learning information about food irradiation • Their self-perception whether they would belong to one of the four consumer segments • Their willingness to pay (WTP) for the irradiated ground beef

38. Information • General statement about food irradiation excerpted from United States General Accounting Office (GAO), Washington, D.C. • “Food irradiation is the process of exposing food to controlled levels of ionizing radiation. Ionizing radiation is a type of energy similar to radio and television waves, microwaves, and infrared radiation. The high energy produced allows it to penetrate deeply into food, killing microorganisms without significantly raising the food’s temperature.“

39. Willingness To Pay Experiment • Each respondent was given a pound of non-irradiated ground beef and some money as a gift for survey participation • Each respondent was asked his/her willingness to exchange a pound of non-irradiated ground beef and the money “for” a pound of irradiated ground beef. • If the respondent accepted the bid, the WTP value is recorded as first bid value • If the respondent rejected the bid, he/she was asked again to exchange “a pound of non-irradiated ground beef and a half value (second bid) of the money” for a pound of irradiated ground beef. If the answer was “Yes” the second bid value is recorded as WTP, otherwise, the WTP is assumed to be lower than the second bid value.

42. Average # of Times of Consuming Ground Beef per week

43. Percentage of buying ground beef when go grocery shopping

44. Experienced getting ill from food poisoning

45. Comparison on reasons to food poisoning 1(not important) ------------------------------------ > 10 (very important)

47. Radura Symbol Perception