A. The Need as Indicated by Stakeholders: Following the guidelines, we identified three Southern Association of Agricultural Experiment Station Directors Priority Areas (http://saaesd.ncsu.edu ) and particular subtopics that this project will target with its objectives and plans of work. These include:

1. GOAL: AN AGRICULTURAL SYSTEM THAT IS HIGHLY COMPETITIVE IN THE GLOBAL ECONOMY

a. Integrated and sustainable agricultural production systems

b. Competitiveness in international markets

c. Public policy and economics of agricultural production systems

2. GOAL: A HEALTHY AND WELL NOURISHED POPULATION

a. Nutritional quality of plant and animal food products

b. Food choices for optimum nutrition and individual health

c. Functional foods for enhancing health

3. GOAL: ENHANCED ECONOMIC OPPORTUNITY AND QUALITY OF LIFE FOR AMERICANS

a. Economic and policy analysis of agricultural industrialization

b. Agriculture-related social and consumer concerns

In addition to our objectives aligning with the priorities for the region, committee members drew on their working relationships with industry associations and programs in their state/region to frame the research that is currently conducted and will be planned for the committee's future collaborative work.

B. The importance and extent of the problem. What would be the consequences if the work were not done?

Fresh fruits and vegetables have important roles in the efforts to reduce obesity rates and improve dietary habits in the United States (Cook, 2011). Demand for fresh produce has been increasing in the United States and is expected to continue growing due to governmental efforts to increase produce consumption per capita as well as an increased number of marketing and promotional messages focusing on the benefits of eating fresh fruits and vegetables (Cook, 2011; Food and Nutrition Service, USDA, 2015; Huang and Huang, 2007; Clemens, 2004). Between 1987 and 2011, U.S. per capita consumption of fresh fruits and vegetables rose 14% (U.S. Department of Agriculture, Economic Research Service, USDA-ERS).

A large percentage of retailers have indicated that the role fresh produce play in healthy diets have finally translated into sales growth, with many produce departments showing fresh produce sales growth that is double the total store sales growth in recent years (Progressive Grocer, 2014). The increased popularity of fresh produce represents considerable potential for enhanced marketing revenues to producers if they can recognize and harness opportunities emerging from changes in food purchases. Meanwhile, producers and consumers need to be informed about the emergence of new business strategies, regulations and policies that may influence their confidence in (consumers) and competitiveness within (producers) this quickly innovating food marketing sector. An example of these regulations is the Food Safety Modernization Act (FSMA), which implicates new quality assurance and safety measures across the entire food supply chain (USFDA, 2011). The FSMA will also help to reduce food safety incidents, which reduce demand.


In recent years, a large number of consumers have shown increased interest in foods produced in unique ways, including organic, local, pesticide free, free of genetically modified organisms (GMOs), environmentally sustainable, Fair Trade or as functional foods (Schroeder, n.d.) These individuals and households are also fueling changes in the food system as they seek to purchase their produce through diverse channels ranging from direct markets, e.g. on-farm markets, farmers’ markets, community supported agriculture, pick-your-own, and roadside stands, to more traditional supermarkets, warehouse clubs, and big box stores (Low and Vogel, 2011), and with expectations as broad as picking their own produce to highly branded products with 3rd party certifications. This evolution has led a higher number of farmers to consider new ways to market their produce such as farmers’ markets, farm-to-school and farm-to-institute programs, food hubs, and CSAs (Low et al., 2015).

Still, the majority of fresh produce is marketed through more conventional, large-scale wholesale and retail partners (Bond et al., 2006) who are concerned about the efficiencies that such scaling-up strategies provide (Cook, 2011). Despite the belief that the fruit and vegetable segment of the food market is growing, little is known about the response of increasingly demanding consumers and food supply chain partners, the changing coordination and supply chain responses of fruit and vegetable enterprises or the response to regulations and policies developed to oversee and guide new innovations in this sector. In short, if this work is not done, producers, wholesalers and retailers are likely to remain reactionary to domestic and global shifts in consumer behavior and policy may be developed without a full assessment of potential implications for consumers and producers.

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C. The technical feasibility of the research

Members of this committee have a history of developing industry and governmental partnerships to solicit priorities and research collaborations within their states and nationally. Moreover, past projects and publications illustrate their ability to secure the necessary secondary data, framing primary survey instruments, and developing case studies that are appropriate for the needed research.

However, each type of research approach the team members will implement (survey, experimental auctions, analysis of secondary retail scanner data) has its challenges and limitations. One value of working together is that the team can share and get feedback on survey instruments, seek out cases where different approaches conducted by different teams reinforce others’ findings using a different approach, and joint problem-solving about how to isolate the consumer behavior aspects that are often masked in commonly used sales data. Firms have retail scanner data, so researcher-firm data sharing agreements can be mutually beneficial. It is possible to perform actual “field experiments,” which allow for exciting opportunities for the researcher to gain insights outside of the lab.

We see few barriers to completing the proposed research, and state members will secure the resources needed to carry out more targeted projects from competitive grant and industry contract proposals. For example, by working together, committee members have grown industry participation in the MarketMaker program, so that there is a more complete online platform of food businesses in at least twenty states of the U.S. (https://foodmarketmaker.com/). In another case, a research team led by the University of Kentucky, and sponsored by the USDA Agricultural Marketing Service, was able to complete a survey and focus groups focused on CSAs because the lead PI could call on colleagues in this committee.

D. The advantages for doing the work as a multistate effort

There are several reasons to believe that a multi-state approach is needed. But the most important is the fact that fruit and vegetable issues have a less traditional role in most Agricultural and Applied Economics programs, so that few of our members have a critical mass of colleagues in their own state with whom they can collaborate. Hence, this may help to leverage any one state's programming on specialty crops through cross-state partnerships. Moreover, with fruits and vegetables being seasonal, we find that many of us have producer stakeholders and food chain partners that have a presence in a number of our states, to assure more year-round supplies. Thus, many of our jurisdictions overlap in terms of stakeholders.

We also believe that a multistate approach is justified in terms of pooling research expertise and leveraging the impact of our deliverables through high profile venues. Three examples of this collaboration that occurred in the current project include:

• Sharing of survey instruments and experimental auction scripts from past studies that serve as "best practices" and to make results collected in the future more comparable across state studies
• Numerous joint paper sessions at agribusiness, food distribution, agricultural economics, and food system conferences
• Two "Special Issue" journals that compiled work completed by committee members
• The Agricultural Marketing Services Technical Assistance (AMSTA) project, co-led by committee member Kynda Curtis, and involving three other members, to provide grant writing support to farms and food processors in 2015
• A member at the University of Kentucky leads an effort that compiles pricing information collected at Kentucky farmers’ markets. A member at the University of Tennessee is also involved in this effort http://www.uky.edu/Ag/CCD/farmersmarket.html

Specifically, this project has developed team objectives consistent with NIFA and other USDA priority themes and invited new members in an effort to strengthen the opportunities for joint grant projects, research delivery and coordinated outreach with industry stakeholders.

This team will develop at least one multi-state research project in the first 24 months, with the intentions to target the proposal for NIFA’s AFRI or Specialty Crops program. In addition, because many of the committee members also have extension roles, we plan to collaborate on three to four Agricultural Marketing Service grant proposals or cooperative agreements to support farmers’ markets, local foods, and price discovery in alternative markets.

E. Benefits or impacts of the research including impact on science

Consumer demand drives the marketplace. For example, sales of organically-certified foods have grown by approximately 20% per year over the last decade. Expectations for firm’s ethical conduct, food quality, and anxieties over food risk are all increasing. At the same time, consumers want to make a difference with their purchases. This has resulted in an abundance of food standards, certifications, and labels with claims concerning socially responsible production characteristics, geographic origin, organic status, and other attributes, as firms try to position their products in the market for high-value foods. Many of these attributes relate to environmental and social concerns, including such aspects as “fair-trade” for fair treatment of workers, humane treatment of domestic animals, minimizing the distance food is transported, wildlife and biodiversity preservation, and sustainability. Agricultural sustainability incorporates both the basic notion of preserving productivity and continuing land in its agricultural use.

Subsequently, the USDA, food companies, and university researchers and extension specialists are providing more technical assistance, development resources and programs to support producers and food manufacturers interested in developing products with these attributes. However, these programs need to focus on consumer behavior towards such labels and the need to better understand how consumer perceptions are influenced by various types of marketing information (including differential nutrition, food safety, implied economic implications to family farms, carbon footprint of different production systems). Better understanding of food labeling strategies offers significant benefits to other scientists involved in food manufacturing and processing, as well as researchers in the health science arena that examine the consumer health consequences of food and nutrient intake.

On a similar theme, other marketing, labeling, and supplying chain innovations, driven by an increasingly demanding consumer, have emerged without a clear understanding of what motivates consumers and industry partners to value them. Moreover, the implications for market opportunities, conduct, and performance are not well understood. A significant benefit of research proposed in this project is to provide such analyses.

In general, third-party certifications supported by consumers' requests for assurances are on the rise. For example, country of origin labeling and carbon footprint labels have emerged in just the past couple of years as a way to share information on the source and environmental implications of a product's life cycle. The Fair Trade certification program, non-profit organization, helps ensure fair wages and labor conditions for poor farmers in developing countries, along with supporting environmental sustainability. The Rainforest Alliance is another certification program that works to preserve biodiversity and sustainable agriculture on over 1 million acres in 18 countries. All of these labels and programs require the appropriate amount of consumer research to understand how consumers will respond to labeling and how adoption will affect producer profits.

Grocery stores have their own buying standards and some require third-party certifications of some type. For example, Whole Foods Market, Inc. has a policy of not purchasing GMOs. Whole Foods has also instituted a Whole Trade certification program, which is focused on ethics, the environment, and product quality. Overall, certification programs may help food producers gain access to some retail and marketing partnerships they could not have otherwise. Certifications may also result in additional price premiums, but there is little research on the returns, market performance implications, or financial outcomes of these programs for enterprises along the produce supply chain. It is also not clear how these firm-level marketing tools affect produce sales at competing grocery outlets and, more generally, how they impact total sales of fresh produce in the U.S. Again, this is an empirical question that requires consumer research to fully understand.

Project team members will also update studies along more traditional produce marketing issues, including consumer demand studies, trade studies, and supply chain case studies. Some of these studies may be refined to include new market innovations. For all these studies, there are benefits to businesses, government agencies, and technical assistance stakeholders who seek to improve the performance of the industry with better information and assessment of areas where market performance could be more efficient or effective.

F. Identify the stakeholders, customers, and/or consumers for which the activity is intended

Our numerous stakeholders, partners, and consumer activities can be generalized into two broad categories: 1) production/marketing/salesenterprises (primarily) and 2) consumers. Production enterprises include trade organizations, individual producers, packers, distributors, shippers, and retailers, with some attention to the regulatory agencies, certification organizations, and community organizations that support those producers. Our goal is to focus research on improving the performance, efficacy, or fairness of markets in the fresh produce sector.

In addition to the AMSTA project mentioned previously, members have engaged their produce industries in projects that explore supply chain and marketing issues associated with a wide variety of produce, from potatoes to citrus to wine. One new area is an exploration of labor supply issues in New York and Colorado that indirectly affect marketing because of concerns about consistent harvest and post-harvest labor supplies.

We also have a focus on institutional buyer and consumer behavior, which we will continue to strengthen given the new focus on direct marketing and local food systems. Projects in Hawaii, New Jersey, New York, Pennsylvania, Washington, and Colorado are currently exploring consumer preferences for fresh produce, cider, and wine.

Although there is no direct government representation in this project, numerous states have current cooperative agreements, grants and projects with local, state and federal agencies who are focusing on marketing, supply chain and consumer issues (planning commissions, marketing divisions, economic development groups, state departments of agriculture, and NIFA, AMS, ERS, ARS, RD at the federal level). Because of these collaborations, government officials are commonly co-authors and reviewers of published research, and provide talking points or discussant comments at presentations given at conferences, including the Food Distribution Research Society where we commonly hold our annual meeting.