The Appeal Of Biodegradable Packaging To Floral Consumers

Special Research Report: The Appeal of Biodegradable Packaging to Floral
Consumers

  • Charles Hall, Ben Campbell Texas A & M University
  • Bridget Behe Michigan State University
  • Jennifer Dennis, Robert Lopez Purdue University
  • Chengyan Yue University of Minnesota

Background

Currently, one of the most widely discussed topics in the floriculture industry,
which is promulgated by consumers exhibiting greater degrees of environmental
awareness, is the issue of environmental sustainability. This has led to a
desire for products that not only solve the needs of consumers but are also
produced and marketed using sustainable production and business practices.
Consumers increasingly place a great emphasis on sustainable product packaging
and this has carried over to the greenhouse/floral sector in the form of
biodegradable pots.

While various forms of eco-friendly pots have been available for several years,
their marketing appeal was limited due to their less-than-satisfying appearance.
With the recent availability of more attractive biodegradable plant containers,
a renewed interest in their suitability in the floriculture sector and their
consumer acceptance has emerged. The objective of this study was to determine
the characteristics of biodegradable pots that consumers deem most desirable and
to solicit their willingness-to-pay (WTP) for this type of product.

Methodology

A recently developed analytical tool, called experimental auctions, was used to
elicit the floral consumer’s WTP. Experimental auctions enable researchers to
distinguish what consumers say they will do against what they actually will
do in making purchasing decisions. The auctions were conducted in Minnesota and
Texas in order to capture any regional differences that may be present among
northern or southern respondents.

For this study, we consulted with industry experts to identify the attributes
and their corresponding levels that were considered to be environmentally
important to consumers, while directly controlling attributes considered to be
of lesser importance. Attributes (and levels) identified were container type
(plastic, wheat, rice hull, straw), carbon footprint (neutral, saving, intense),
and percent of waste products used to make the pots (0%, 1-49%, >49%). A
fractional factorial design yielded 14 different pot combinations to be used in
the actions.

We conducted eight sessions with a total of 113 participants. In each of the
auctions, there was simultaneous bidding on the 14 alternatives, which were put
on a large table. Beside each alternative there was a label indicating the
container type, percentage of waste materials used to make the pots, and carbon
footprint levels.

Participants randomly walked around the table and placed their bids on bidding
forms as they studied each alternative. Afterward, each participant randomly
drew his/her exclusive binding alternative. The price of an alternative was
equal to the 2nd-highest bid for that alternative. If the participant had bid
more than the price for their binding alternative, they had to buy the
alternative.

At the end of each session, participants were given $30 to compensate for their
time. If a participant won an alternative, they would get the alternative they
won and get $30 minus the price for the alternative. If the participant did not
win, he/she received the $30.

Result and Conclusions

Table 1.

A comparison of WTP from the conjoint analysis survey and experimental auctions.

Survey
results
Auction
results
Plastic base base
Rice hull $0.69 $0.58
Straw $0.63 $0.37
Wheat $0.24 $0.23



Carbon saving -0.02 $0.17
Carbon neutral base base
Carbon intensive -$0.96 -$0.43



No waste base base
1-49% waste $0.09 $0.15
+50% waste -$0.13 $0.23

Pots made from biodegradable materials each generated a positive WTP (Table 1)
from consumers compared to plastic pots, with the conjoint survey results being
slightly higher in each case compared to the auction results. This meant that
consumers did exhibit a willingness to pay more for biodegradable pots.

Each pot type was compared against the traditional black plastic pot (Figure 1)
that was used as the base to determine how much of a price premium consumers
were willing to pay.

Figure 1. Base scenario using a standard black plastic pot.

The rice hull pot generated the greatest price premium, with consumers paying,
on average, an additional $.58 per 4 geranium. This was followed by a $.37/pot
premium for the straw pot (Figure 2) and $.22/pot for the wheat (OP47) pot over
the standard black plastic pot.

Figure 2. Example of a biodegradable pot.

Consumers also exhibited a willingness to pay a $.17 per pot premium for pots
deemed to be carbon saving versus a penalty of $.43 for pots deemed to be carbon
intensive, both relative to a carbon neutral pot. It is important to note that
the pots were merely labeled as carbon neutral, saving, or intensive. This
relationship has not been established by scientific research regarding any given
pot type.

Lastly, consumers were also willing to pay a price premium relative to the
amount of waste materials used to manufacture the pots, with pots made from more
than 50% waste materials generating a $.23/pot price premium relative to the
black plastic pot. Again, this was only labeled according to the research design
and not based on actual waste ingredient composition. In this manner we were
able to ascertain the impact/effect of price on consumer perception.

Impact to the Industry

Through intelligent packaging and system design, it is possible to design out
the potential negative impact of floral plant packaging on the environment and
society in this case, the prominent amount of virgin plastic produced as
requisite to the greenhouse industry.

Cradle to cradle principles offer strategies to improve the material health of
packaging and close the loop on packaging materials, including the creation of
economically viable recovery systems that effectively eliminate waste.

The use of biodegradable pots reflects these cradle to cradle principles. This
research will greatly benefit the floral consumer by ensuring that
environmentally-friendly products marketed to them in the future meet their
sustainability needs and/or expectation.

For additional information: [email protected]

Photo Caption: This pot from Diseo Sustentable in Argentina is produced with
recycled paper pulp from newspapers, telephone books and other types of paper,
that the same producers helped collect.

Photo Credit: Diseo Sustentable.

Source:

The American Floral Endowment