Modelling consumers’ choice of novel food

Abstract

A variety of approaches to reducing the environmental impact of food production and consumption are being explored including technological solutions, such as food produced via biotechnological processes. However, the development of these technologies requires significant upfront investment and consumer acceptance is not guaranteed. The purpose of this research is to develop a system dynamics model to forecast demand, under multiple marketing and quality scenarios, for foods produced via novel technologies, using cellular agriculture as a case study. The model considers consumer heterogeneity, product awareness, word of mouth marketing (WOM), in-store marketing options, pricing options and product utility to estimate diffusion rates and market penetration. To our knowledge, there is no demand forecasting model available for food produced via novel technologies which relies on purchase intention data and incorporates all these factors. Therefore, this research closes a critical gap for that industry. Ultimately, the model shows that price and the consumers’ utility for the product drives the final demand regardless of marketing scenario. Further, the rate of diffusion was highest when product samples are provided in store for all scenarios except when product utility is low and the product price is high. Model results suggest that market saturation was reached within the 32-week trial period when the price of the cellular agriculture product was the same as a traditional product but not when the price was double that of traditional meat. Given the lack of available trial data, the model scenarios should be considered aprior probabilitywhich should be refined as more data becomes available.