Is Low Emissions the New Organic? Symbrosia Discovers Consumers Willing to Pay High Premiums to Protect the Planet
Annika Johnson • 29 Jun 2023
Picture this: shoppers readily reaching into their wallets to pay premium prices for beef and dairy products that fight climate change.For the green technology startup Symbrosia, working with SightX uncovered insights that suggest this dream may be a reality.
Our company has pioneered a feed additive called SeaGraze™, which utilizes the red seaweed Asparagopsis taxiformis to reduce cows' methane emissions by upwards of 80%. To validate the market potential of our product, we partnered with SightX on groundbreaking market research to understand consumer willingness to pay (WTP) for novel low emissions goods.
Roberts Environmental Center Policy and Outreach Team (left to right): Annika Johnson, Calli ONeal, Camille Doherty, Diya Courty-Stephens, Sonja Woolley
In collaboration with a team of student analysts at Claremont McKenna College’s Roberts Environmental Center, we leveraged SightX’s innovative market research platform to design, distribute, and analyze a nationwide contingent valuation survey. Our survey included 498 respondents and employed various question types, such as multiple image choice, open-ended pricing, and rating scale questions. Additionally, we implemented a treatment-control model, where half of the respondents received information on methane and SeaGraze™ while the other half did not. The survey aimed to explore three key questions:
Are consumers willing to pay a price premium for milk and beef sourced from cows fed SeaGraze™?
How do demographic factors, such as age, income, and location impact consumers' WTP for these sustainable products?
To what extent does consumer understanding of the product and its environmental benefits influence their WTP?
The SightX platform played an essential role in our success finding answers.
Question 1: Are consumers willing to pay a price premium for milk and beef sourced from cows fed SeaGraze™?
With access to varied question types and methodologies we could follow economic best practices for eliciting accurate WTP data. We were also able to utilize SightX’s capabilities to segment consumers into regional blocks, presenting customized pricing questions that considered the average price of conventional milk or beef in each area. This allowed us to analyze our data while accounting for regional differences in food prices (which shoppers around the country know to be steep) and compare respondents' reported WTP to anchor prices. This approach accurately isolated respondents’ percent premium WTP for organic, low emissions, and organic low emissions goods.
We found that consumers who were given product education, or primed, were willing to pay substantial premiums for low emissions and organic low emissions milk and beef! In fact, on average, they reported being willing to pay equally high premiums for low emissions goods as they did for organic.
This data is crucial because it helps us build confidence that our product will grant producers a high return on investment. If consumers are willing to pay high premiums for SeaGraze™-fed milk and beef, our additive immediately becomes more attractive to producers concerned about their bottom lines as well as sustainability.
Question 2: How do demographic factors, such as age, income, and location impact consumers' WTP for these sustainable products?
SightX's advanced automated analysis features helped us to correlate and pinpoint trends in a sea of responses and factors, saving us hours of time in the process. We quickly identified questions from our survey that were highly correlated with WTP and employed automated ANOVA testing (a type of significance testing) to find statistical differences between age groups in reported premiums for low emissions and organic low emissions milk.
SightX also offers multiple ways to develop customer personas, which we leveraged to isolate and examine data from our existing target markets. For example, we found that among unprimed respondents, “Young Coastal Individuals'' (people living in coastal states, between 18 and 34, with income above $50k and high belief that individual behavior can help to fight climate change), were willing to pay 84% and 12% premiums for low emissions milk and beef, compared with averages of 49% and -2%, respectively.
These insights are highly valuable as they help us understand the emerging market for low emissions goods and identify the most receptive audiences for SeaGraze™-fed products. We were able to confirm our prediction that young, climate-driven, coastal residents would pay generous premiums for low emissions goods. Further, ANOVA testing helped us to discover the potential of 55-64 year olds with a high level of product understanding.
Question 3: To what extent does consumer understanding of the product and its environmental benefits influence their WTP?
To understand the impact of priming, we distributed two versions of our survey through the SightX platform: one with an educational introduction and the other without. SightX ensured two unique sets of high-quality respondents. This allowed us to compare the reported WTP of primed and unprimed respondents. The results showed significant differences between primed and unprimed respondents’ premiums for low emissions and organic low emissions beef, suggesting that priming influenced respondents’ behavior.
This difference in WTP is a critical finding because it informs our future marketing strategies. If we can increase consumer WTP for low emissions beef and consequently enhance SeaGraze™'s return on investment by educating the public about our product and mission, we aim to spread the word! Our findings may also be good news for green brands in general, suggesting that by publicizing their impact, they can maximize consumer WTP for sustainable goods.
Through our partnership with SightX, Symbrosia has gained valuable insights into consumer behavior regarding low emissions goods. Our findings indicate that consumers are not only willing to pay higher prices for SeaGraze™-fed products but also highlight educated consumers’ perception of "low emissions" as a new standard comparable to organic.
Armed with this knowledge, Symbrosia can strategically target and engage key markets to drive adoption of SeaGraze™, accelerate the transition to a more sustainable food system, and give consumers the ability to help protect our planet with the power of their purchases.
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