Understanding Consumer Perceptions of Healthy Grown Potatoes Final Summary of Findings Report developed for:

Understanding Consumer Perceptions of

Healthy Grown Potatoes

Final Summary of Findings

Report developed for:

Page 2www.perishablesgroup.com

Table of Contents

Program Overview

Consumer Research Objectives

Approach

Participating Chains

Findings Summary

Detailed Findings

Demographic Breakdown

Program Next Steps/Study Implications


Program Overview

In mid-2004, the Perishables Group began a multi-phase program designed to capture consumer attitudes and behaviors, then leverage this understanding with retailers through new sales tools and techniques this included: Phase I: Research Program Development

Survey Wisconsin potato shippers to understand existing sales efforts and future goals/ideas

Phase II: Consumer Research Conduct 500 consumer intercepts in key retail chains with and

without the Healthy Grown product Phase III: Performance Benchmarking

Quantify sales impact of Healthy Grown product at retail Phase IV: Sales Toolkit Development and Training

Collect findings from all phases to develop new sales toolkit (presentation) and conduct training session on how to effectively utilize the new toolkit

Phase V: Program Evaluation Conduct follow-up survey of shippers to measure any change

in overall satisfaction


Survey Objectives

In-store intercepts of consumers were conducted to quantify the following:

Are consumers open to the Healthy Grown product? What draws them to the product? Would they be willing to pay a premium for Healthy

Grown? What about the concept of Healthy Grown is most

appealing? What about the current packaging is most

appealing? Why would they not purchase Healthy Grown? Is certification of foods important?


Approach

In order to deliver against the objectives, the Perishables Group (PG): Worked with the WPVGA and PH to develop a targeted

interview questionnaire Secured approval of key retailers to execute surveys

in-store Executed the surveys and collected the data Analyzed the results to determine the implications for

Healthy Grown sales and marketing strategy


Participants

A total of 500 consumers have completed the survey at the following retailers: Dominick’s Jennifer Street Markets (Madison, WI) Surface Foods (Parkersburgh, WV)

Summary of Findings


Summary of Key Findings

The survey generated feedback from a wide segment of the “typical” shopper:

All were primary shoppers for their households 74% were women, 29% men 68% had at least 1 child 44% had completed college or graduate school 55% had an annual household income of $50,000+ Respondents were frequent potato purchasers with 68%

purchasing several times per month or more The majority of respondents were part of a very lucrative

segment of consumers: moderate to affluent, educated with children



Healthy Grown appeals to consumers Of 500 consumers surveyed, 88% said they were

somewhat to very likely to purchase Healthy Grown potatoes after only seeing the bag More than 47% said they were very likely based on only briefly

seeing the bag

Purchase intent increased when shoppers heard about the Healthy Grown concept 81% of consumers indicated they were more likely to

purchase Healthy Grown after hearing it was certified environmentally-friendly, WWF endorsed and “good for you and the environment”



Consumers will pay more for Healthy Grown Of those who said they were likely to purchase Healthy

Grown, 56% said they’d be willing to pay at least $1.00 more per bag than regular potatoes 80% were at least somewhat likely to still purchase at $0.50 more 93% were at least somewhat likely to still purchase at $0.25 more

Those who were unlikely to purchase cited reasons unrelated to the Healthy Grown concept Of the 36 consumers surveyed who said they were unlikely

to purchase Healthy Grown, “I don’t buy potatoes in a bag” was the #1 reason why

All shoppers surveyed liked the concept and only 2 consumers said they did not care about the environment

Consumers feel certification of claims made by food producers is important

88% said certification of growing methods is important to them. Only 3% said they “did not know” if certification was important


Research shows consumers are looking for Healthy Grown potatoes Both men and women had high percentages of those

likely to purchase Healthy Grown 59% of males were somewhat to very likely to pay $1 more per bag for Healthy

Grown, compared to 44% of females

Nearly three-quarters of shoppers with children (74%) were likely or very likely to purchase, compared with only 58% of those w/o children

Caucasians had the highest percentage of shoppers “very likely” to purchase (52%), although African Americans (32%) and Asians (50%) also were “likely” to purchase

Hispanics and Asians were drawn to the “reduced pesticides” messaging, while Caucasians’ liked the name and African Americans’ first priority was the high quality of the potatoes

While all education levels had high interest in purchasing healthy grown, those with a HS education or less had the highest percentage of those “very likely” to purchase

All income levels were interested in Healthy Grown

Consumer In-Store Survey 11/04 -1/05


Study Implications


Study Implications/Recommendations

Price Healthy Grown at a PremiumResults show that consumers are willing to pay at least a quarter more per bag, and more than half would pay up to $1 more. HG producers may be able to segment the potato market with this offering, based on consumer likelihood to purchase at a higher price

Incorporate feedback in key message adoptionWe know what consumers liked about Healthy Grown and when they heard it, it increased their likelihood to purchase. Messages that resonated well with shoppers should be compiled into a clear, concise key statement used consistently across all communication

Support qualitative with quantitativeConsumer research shows how this product can succeed at retail in theory. Prove this point to retailers through a pilot program with analysis of sales impact of Healthy Grown. Support the product introduction with a “best practices” merchandising, price and promotion strategy. The end result will be a turn-key program with conclusive evidence of success. If budget does not support full Healthy Grown pilot, utilize opportunities like USPB Best in Class to gain distribution of Healthy Grown and analyze sales.


Study Implications/Recommendations

Champion the storyDraft a press release to the trade media alerting them of the research findings, especially considering the support of eco-friendly produce as a growing trend within retail

Provide new package options The main detractor for consumer purchase of Healthy Grown was the 5 lb and 10lb size limitation. Consider expanding to a smaller size package (i.e. 3lb and tray-pack) to offer a total product solution

Detailed Findings


Detailed Findings

Potato Purchase Frequency Participating consumers were frequent purchasers of

potatoes, with 68% purchasing more than once per month

I see you are in the potato section, how often do you purchase potatoes?

Once a week37%

A few times a month31%

Once a month20%

Every 2 to 3 months

10%

A few times a year2%

Once or twice a year0%


Detailed Findings

Planned Purchase For nearly three-quarters of survey participants, potatoes

were part of their shopping list

Were you planning on purchasing potatoes in your shopping trip today, or did you decide to purchase potatoes after you were at

the store?

Yes, part of my planned shopping

list73%

No, decided to buy potatoes once I got to the store

27%


Detailed Findings

Purchase Drivers Consumers look at the price (62%) of potatoes as well as

appearance and quality (53%) over brand name, packaging or nutrition information. Note: “Size” was the most popular open-ended “Other” answer

When you purchase potatoes, what do you look for in your selection?

62%

53%

24%

16%12%

6% 6% 5%

14%

Price Appearance /Quality

Brand name Appealingpackaging or

label

Nutritioninformation

Signage onthe

shelf/display

Organic Coupon Other


Detailed Findings

Purchase Likelihood Based on Appearance Only After being shown the Healthy Grown bag, 88% of consumers said

they were at least somewhat likely to purchase. 68% said they were likely to very likely

If this bag of potatoes was stocked here, how likely would you be to purchase it?

Very likely47%

Likely21%

Somewhat likely20%

Somewhat unlikely8%

Not very likely4%


Detailed Findings

Healthy Grown Purchase Drivers (Based on Appearance) Quality and the name “Healthy Grown” resonated most with

consumers each mentioned by 42% of respondents The recipes were appealing to 35% of respondents and the “good for

you and the environment” messaging were mentioned by nearly 30% Popular “other” open-ended answers were: good size; attractive bag

and the word “healthy”

What about this bag would make you likely to purchase these potatoes?

42% 42%

35%

29%

19%

14%

10%8%

3%

11%

The name The quality ofthe potatoes

inside

Recipes Statement"Good for you

and theenvironment"

Statementabout reduced

pesticides

The ProtectedHarvest logo

The WorldWildlife Fund

logo

The imageson the bag

Storage tips Other


Detailed Findings

Purchase Detractors Preferring to purchase potatoes in bulk (not any particular attribute of the

Healthy Grown product) was the most common reason respondents would not purchase

No consumers surveyed said they disliked the concept of Healthy Grown The most popular “Other” answer was the quantity (too large); not being able

to see the potatoes in the bag and fear of a higher price for Healthy Grown

What about this bag would make you unlikely to purchase these potatoes?

37%

16%13%

10%

3%2%

31%

I don’t buypotatoes in a

bag

Not the sizeor type of

potatoes I buy

Don’t want toswitch fromthe potato

item Icurrentlypurchase

The quality ofthe potatoes

inside

Don’t like theimages on the

bag

Don’t like theHealthyGrown

concept

Other


Detailed Findings

Likelihood of Purchase After Product Knowledge After hearing about the Healthy Grown concept, 81% indicated they were now at least somewhat more likely to purchase the product

Only 2% said they were somewhat to less likely to purchase

After looking at the bag, you had said you were likely to purchase Healthy Grown potatoes. Now that you know more

about Healthy Grown potatoes, how likely are you to purchase these potatoes?

More likely53%

Somewhat more likely28%

No change: Still likely to purchase

16%

Somewhat less likely2%

Less Likely1%


Detailed Findings

Likelihood of Purchase After Knowledge Cont. After looking at the bag only, 58 consumers had stated they were

not likely to purchase Healthy Grown After hearing more about the product concept, 38% of those

consumers were now more likely to purchase the product Only 18% (10 consumers) said they were less likely to purchase

After looking at the bag, you said you were NOT likely to purchase Healthy Grown potatoes. Now that you know more

about Healthy Grown potatoes, how likely are you to purchase these potatoes?

More likely17%

Somewhat more likely21%

No change: Still not likely to purchase

44%

Somewhat less likely9%

Less Likely9%


Detailed Findings

Concept Purchase Triggers 35% consumers liked that Healthy Grown used fewer pesticides Environmental benefits enticed nearly a third of respondents, which

scored higher than the “good for me” message (28%) In the open-ended “Other” category, the majority of respondents

mentioned the product’s “Healthy” name appealing to them

What about the Healthy Grown concept appeals to you?

35%33%

28% 28%

11%8% 8%

4%

Fewerpesticides used

Environmentally-friendly/Good forthe environment

Good for me Everythingabout the

concept appealsto me

Certified byProtectedHarvest/an

independentthird party

Founded withthe assistance

of the WorldWildlife

Foundation

From Wisconsin Other


Detailed Findings

Concept Purchase Detractors The main reasons why consumers would purchase Healthy

Grown was unrelated to the environmentally-friendly concept, only 2 respondents said they were not concerned about the environment

Why would you not purchase Healthy Grown potatoes?

39%

25% 25%

17%14% 14%

6% 6%3%

19%

I don’t buypotatoes in

the bag- onlyloose or bulk

I buypotatoes onprice- don’twant to pay

extra forHealthyGrown

I only buy acertain brand

Unsureabout the

quality

I only buyregular

potatoes

Not theusual size of

potatoesthat I buy

Notconcernedabout the

environment

I don’t buyRusset

potatoes

I only buyorganic

potatoes

Other


Detailed Findings

Healthy Grown Pricing Of all consumers surveyed, 56% of consumers said they were

“Very Likely” to purchase Healthy Grown in place of their typical potato purchase

Overall, only 9% said they were somewhat to unlikely to purchase Healthy Grown

Assuming price and quality are equal to your usual potato purchase, how likely would you be to purchase Healthy Grown

potatoes instead of your typical potato purchase?

Very likely56%

Somewhat likely19%

Likely16%

Somewhat unlikely5%

Unlikely4%


Detailed Findings

Healthy Grown Pricing -- $0.25 Increase 93% of respondents said they were somewhat likely to purchase

Healthy Grown at a $0.25 premium This number actually increased by 2% from those who were at least

somewhat likely to purchase at the same price

As expected, the number of people who said they were “Very Likely” decreased, however 44% said they were very likely to purchase at the premium price

If Healthy Grown potatoes were offered in your store for $0.25 more per bag than other potatoes of equal quality, how likely

would you be to purchase them?

Very likely44%

Somewhat likely34%

Likely15%

Somewhat unlikely3%

Unlikely4%


Detailed Findings

Healthy Grown Pricing -- $0.50 Increase At a $0.50 premium, 80% of respondents said they were still at least

somewhat likely to purchase A third of consumers were still likely or very likely to pay $0.50 more for a

bag of Healthy Grown

Only 20% of consumers were now somewhat unlikely or unlikely to purchase Healthy Grown at the higher premium rate Note: Only consumers who said they were somewhat or more likely to pay

a $0.25 premium were asked this question

If Healthy Grown potatoes were offered in your store for $0.50 more per bag than other potatoes, how likely would you be to

purchase them?

Very likely33%

Somewhat likely30%

Likely17%

Somewhat unlikely13%

Unlikely7%


Detailed Findings

Healthy Grown Pricing -- $1.00 Increase More than half of consumers (56%) were still at least

somewhat likely to pay a $1 more per bag for Healthy Grown potatoes 31% were at least likely to very likely to pay a $1 premium

If Healthy Grown Potatoes were offered in your store for $1.00 or more per bag than your typical potatoes, how likely would you be

to purchase them?

Very likely11%

Somewhat likely25%

Likely20%

Somewhat unlikely28%

Unlikely16%


Detailed Findings

Healthy Grown Awareness Only 6% of consumers had previously heard of Healthy

Grown potatoes prior to the survey

Before today, had you previously heard of Healthy Grown potatoes?

Yes6%

No92%

Not sure2%


Detailed Findings

Healthy Grown Awareness Of the 6% who had heard of Healthy Grown, 46% had

previously purchased the product Only 1 respondent indicated they had seen the billboards None of the respondents recalled any of the other marketing

vehicles

Where have you previously heard of Healthy Grown potatoes?

46%

25%

4% 4%0% 0% 0% 0%

4%

Previouslypurchased

Seen in storebut have notpurchased

Seen billboards Heard from afriend or relative

Heard radioadvertisements

Seen ads butdo not

remember whattype

Newspaper ormagazine

article

Don’t know/notsure

Other


Detailed Findings

Opinions on Certification Just under 40% named a third-party responsible for

certification About a third felt the government was involved in certification A quarter of respondents called certification a “guarantee of

quality”

When a food product is said to be “certified,” what does that mean to you?

39%

34%

24%

7%

Someone other than thegrower/company has

made sure the producthas met some

established “standard”

The government hasapproved/inspected it

A guarantee of quality Don’t know


Detailed Findings

Opinions on Certification 88% of consumers feel certification in important in food

claims made by growers Consumers were definitive about their opinion on this, only

3% said they “don’t know” about certification

In your opinion, is certification important when a claim is being made as to how food was grown?

Yes88%

No9%

Don't know3%


Detailed Findings

Opinions on Certification About 70% of consumers feel the government should be

involved in certification of foods 24% felt a non-profit independent organization should

handle food certification

Who do you think should certify foods?

71%

24%

8%2% 1%

The government(USDA, etc)

Non-profitindependent (thirdparty) organization(environmental or

agricultural)

The companyshould certifythemselves

Other Don’t know


Detailed Findings

Terms for Certification Respondents were fairly divided on the best description for food

certified grown environmentally-friendly “Certified Environmentally Friendly” scored highest (32%) “Certified for Environmental Quality” was second most popular with

30% “Certified Responsibly Grown” was the choice of 22% of consumers “Certified by Protected Harvest” scored lowest (only 5%)

Which of the following terms do you think best describes food that is certified as being grown to environmental standards?

Certified Responsibly

Grown22%

Certified Environmentally

Friendly32%

Certified for Environmental

Quality30%

Certified Nature Friendly

11%

Certified by Protected Harvest

5%

Key Findings by Demographic


Key Demographic Findings

Healthy Grown Purchase by Income The lowest income group had the highest percentage who

were “very likely” to purchase Healthy Grown


74%

54% 56%45%

33%

15%

19% 15%23%

29%

3%20% 18%

16%19%

5% 4% 7%11%

14%

3% 2% 3% 4% 6%

Less than $25,000 $25,001 - $50,000 $50,001 - $75,000 $75,001 - $100,000 $100,001 or more

Very likely Likely Somewhat likely Somewhat unlikely Not very likely



Purchase Likelihood by Income At least 51% of all income groups said they were more likely to

purchase Healthy Grown after hearing more about the concept 76% of shoppers in the lowest income group were “more likely” to

purchase

After looking at the bag, you had said you were likely to purchase Healthy Grown potatoes. Now that you know more about Healthy Grown potatoes, how likely are you to purchase these potatoes?

76%

51%62% 56%

19%

35%26%

18% 25%

3%11% 9%

23% 23%

3% 2% 3% 2% 0%0% 1% 0% 2% 2%

51%

Less than $25,000 $25,001 - $50,000 $50,001 - $75,000 $75,001 - $100,000 $100,001 or more

More likely Somewhat more likely

No change: Still likely to purchase Somewhat less likely

Less Likely



Purchase Likelihood by Education All education level groups at least 59% of consumers who

were at least somewhat likely to purchase The highest percentage of “Very Likely” came from the High

School graduates and less groups


79%

56%47%

55%

36% 33%

11%

17% 32% 15%

23% 30%

4%21% 13%

22%

23% 17%

4% 4% 6% 6%12%

11%

4% 2% 2% 2% 5% 9%

Some highschool or less

High schoolgraduate

Technical ortrade school

Some college Collegegraduate

Some graduateschool or more




Purchase Likelihood after Knowledge by Education The percentage of respondents stating the Healthy Grown concept

made them “more likely” to purchase was highest in the High School or less, Some College and Grad School or higher education levels


85%

48% 49%60% 53%

4%

33%40% 25%

28%27%

0% 15%11% 13%

23%20%7% 2% 0% 2% 2% 0%4% 2% 0% 0% 2% 0%

46%

Some highschool or less

High schoolgraduate

Technical ortrade school

Some college College graduate Some graduateschool or more



Less Likely



Healthy Grown Purchase by Ethnicity More than half of Caucasians stated they were “very likely” to

purchase Healthy Grown, compared with 28% of African Americans and 18% of Hispanics

African Americans had the highest percentage of “not very likely” at 14%


52%

18%28%

10%

19%

32%

32%

50%

18%

32%23%

30%

8%

5%11%

10%4%

14%6% 0%

Caucasian Hispanic African American Asian




Purchase Drivers by Ethnicity Different attributes of the Healthy Grown package appealed

to the various ethnic groups Caucasians were driven by the name and the quality More than three-quarters of Hispanics cited the quality Three-quarters of Asians noted the “good for you, good for the

environment” statement


44%

22%

33%

11%8%0%

5%

22%15%

50%

26%

78%

30% 28% 26%33%

14%11% 10%

22%

11%

0%8% 11%

40%

78%

41%33%

38%

0%

21% 22%

3% 0% 3% 0%

13%

0%5%

0%


The name The images on the bag Statement about reduced pesticides

Statement "Good for you and the environment" The Protected Harvest logo The World Wildlife Fund logo

The quality of the potatoes inside Recipes Storage tips

Other



Purchase Likelihood by Ethnicity Caucasians had the highest percentage of respondents say they

were “more likely” to purchase after hearing the Healthy Grown concept (59%)

Hispanics had the highest percentage of respondents say they were somewhat or less likely to purchase (15%) after hearing more about Healthy Grown


59%

10%20%

33%

24%

60% 46%

44%

15%

15% 24%

22%2%

5%5%

0%1%10% 5% 0%




Less Likely



Healthy Grown Purchase by Household Size Only 9% of shoppers with children in the home stated they would

be somewhat or unlikely to purchase Healthy Grown Only 19% of those without children were unlikely to purchase

Nearly three-quarters of those with children (74%) were likely or very likely to purchase, compared with only 58% of those without children


42%51%

16%

23%24%

18%11%

7%8% 2%

No children With Children




Appealing Attributes of Healthy Grown by HH Size Reasons for liking the Healthy Grown concept did not differ

greatly between those with and those without children Quality and the name were nearly equally important to both

groups while “Good for the environment” had a slightly higher percentage of respondents who had children


35%

46%

9%6%

20%18%

26%30%

13% 14%

9%11%

46%

40%

26%

38%

5%2%

15%

10%

No children With children

The name The images on the bag Statement about reduced pesticides

Statement "Good for you and the environment" The Protected Harvest logo The World Wildlife Fund logo

The quality of the potatoes inside Recipes Storage tips

Other



Healthy Grown Pricing by Household Size Households with and without children present would

purchase Healthy Grown at 50 cents more per bag At a $1 more per bag, those with children had a slightly higher

percentage of those unlikely to purchase


purchase them?

30% 34%

30%31%

17%16%

12%14%

12%5%


Very likely Somewhat likely Likely Somewhat unlikely Unlikely


to purchase them?

12% 11%

25% 25%

21% 19%

23% 30%

18% 15%





Healthy Grown Purchase by Gender A higher percentage of males (90%) than females (79%)

indicated they were at least somewhat likely to purchase Healthy Grown Males also had a higher percentage (52%) of say they were

“very likely” to purchase compared to women (31%)


52%

31%

20%

22%

18%

26%

7%

12%

3% 9%

Male Female




Purchase Likelihood by Gender After learning more about the Healthy Grown concept, 57%

of males said they were “more likely” to purchase, compared with only 39% of females


57%39%

23%41%

16% 17%2% 2%1% 1%

Male Female



Less Likely



Healthy Grown Pricing by Gender At both 50 cents and $1 more per bag, more males were

willing to pay more for Healthy Grown than females At $1 more per bag, 59% of males were at least somewhat

likely to purchase Healthy Grown, compared with only 44% of females


purchase them?

38%

15%

28%

36%

16%

19%

13%

17%

5%12%

Male Female



to purchase them?

13%6%

26%

19%

20%

19%

26%

35%

14% 21%

Male Female


Demographic Profile


Demographic Profile

Results included here are based on 500 consumer intercepts.

Typical Respondent Overall Household Size: 2-3 children at home Age: 25 – 34 years of age Household Income: $50,001 to $75,000 Ethnicity: Caucasian Gender: Female Education: College Graduate


Demographics

While the majority of respondents were female, males made more than 25% of responses.

Gender

Female74%

Male26%


Demographics

Caucasians represented 84% of respondents with African-Americans accounting for just under 9% and Hispanics about 4%

What is your ethnicity?

Caucasian84%

Hispanic4%

African American9%

Asian2%

Other1%


Demographics

68% of consumers had at least 1 child living in the household with a full third of respondents having 2-3 children.

How many children under 18 live in your household?

No children32%

1 child27%

2-3 children36%

4 or more children5%


Demographics

Consumers surveyed were a balanced cross section of income levels, with the largest percentage (27%) falling into the $50,001-$75,000 range

What is your household income range?

Less than $25,000 8%

$25,001 - $50,00022%

$50,001 - $75,00027%

$75,001 - $100,000

14%

$100,001 or more14%

Declined15%


Demographics

Survey respondents were well educated, with 44% completing college or higher degree.

What is the highest level of education that you have completed?

High school graduate

19%

Technical or trade school

9%

Some college22%

College graduate31%

Some graduate school or more

13%

Some high school or less

6%

Understanding Consumer Perceptions of Healthy Grown Potatoes Final Summary of Findings Report developed for:

Documents

healthy grown sales

concept of healthy grown

healthy grown uof

healthy grown s59

healthy grown product

healthy grown concept

healthy grown concept

consumers uof