The price is right

June 30, 2010
Written by Brian Wallheimer
priceisright1  
Dr. Roberto Lopez says the industry has come under pressure to become more sustainable and use biodegradable or compostable pots.

 
For the sake of sustainability, consumers are willing to put their money – at least some of it – where their mouths are, according to a Purdue University-led study.

Surveys have consistently shown that consumers say they are willing to pay more for sustainable products in the floriculture industry. The industry has been slow to adopt items such as sustainable pots, however, because growers have concerns about recouping the cost of investments in sustainable practices and materials.

“The floriculture industry uses a lot of plastic, and, in recent years, has come under pressure to become more sustainable and use biodegradable or compostable pots,” said Roberto G. Lopez, an assistant professor of horticulture at Purdue and co-author of the paper on the findings. “There is concern about recouping the costs of becoming sustainable. People say they are willing to spend 50 cents more for sustainable pots, so we wanted to see if they actually would.”

WOULD AUCTION ACTIONS REFLECT SUSTAINABILITY SURVEY RESPONSES?
Lopez and Jennifer H. Dennis, an associate professor of horticulture and agricultural economics at Purdue, teamed with researchers at Michigan State University, Texas A&M University and the University of Minnesota to see if consumers’ actual purchases would match up with what they said they would pay.

Groups of consumers were given $30 each at silent auctions. They could walk away with the money or put in bids on flowers contained in different types of pots. Each auction item gave information on the type of pot, the carbon footprint it had and the amount of recycled materials it contained. Bids were averaged to see what people would pay for the plants in sustainable pots.

In surveys, consumers said they would pay 69 cents more on average for pots made from rice hulls. At the auctions, they were willing to pay 58 cents more. For straw pots, the consumers said they would pay 63 cents more, and at auction they were willing to pay 37 cents more. And consumers said they’d pay 24 cents more for wheat pots, and actually paid 23 cents more at auction.

priceisright2  
Purdue’s Dr. Roberto Lopez has found that consumers are willing to pay more for a variety of sustainable pots that use recycled materials and have a smaller carbon footprint than traditional plastic pots.

 
STATED CONSUMER PREFERENCES WERE SIMILAR TO PURCHASE DECISIONS
“People’s stated preferences were similar to what they were actually willing to pay for the sustainable pots,” said Bridget K. Behe, a professor of horticulture at Michigan State University and a paper co-author. “Overall, consumers were willing to pay a little more for some of the alternatives.”

Lopez said the difference for straw might have been because the straw pots look and feel fragile, while rice hull and wheat pots look more like their plastic counterparts and feel sturdier.

Lopez said results of the study, which were published in April in the online version of the journal HortScience, are good news for the floriculture industry, which has seen costs rising much faster than prices it has been able to charge. For instance, natural gas has more than doubled in price over the last decade, while the price of poinsettias has increased only 11 per cent in that time.

“What this says is that if a grower is going to take the initiative to be a sustainable grower, they can increase their prices to go to these pots, and consumers will pay more for them,” Lopez said.

Next, Lopez said he would study how sustainable pots hold up under greenhouse conditions.

The U.S. Department of Agriculture’s Federal State Marketing Improvement Program, the Horticulture Research Institute and the American Floral Endowment funded the research. ■

Brian Wallheimer is a communications specialist with Purdue University.

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