Lists results of sales tests where prepackaged mechanically harvested asparagus out sold traditional bunched asparagus 2.2 to 1.Consumer/Household Economics,

Stammer, Richard W.

English

Research Papers in Economics

ECONOMIC FEASIBILITY OF MARKETING MECHANICALLY HARVESTED
ASPARAGUS IN THE FRESH MARKET
by
Richard W. Stammer
Rutgers - The State University
New Brunswickj New Jersey
Lists results of sales tests where
prepackaged mechanically harvested
asparagus out sold traditional
bunched asparagus 2.2 to 1.
A discussion ofa more efficient method
of marketing asparagus seems very appropriate
for a conference whose main subject is “What
Price Quality”. We all know that the price
of quality asparagus is high throughout the
entire marketing system. The high cost
starts at the farm level where, due primar-
ily to high labor costs, the harvest cost
alone averages twelve cents a pound and con-
tinues through the distribution and retail
marketing systems where spoilage, handling
damage, andhigh in-store handling costs add
significantly to total cost. Yet, despite
this high price retailers realize the drawing
appeal of “quality” fresh asparagus. Aspar-
agus is referred to as “The King” or “The
Aristocrat of Vegetables”. It is a status
vegetable with a following of consumers who
almost appear to be indifferent to price
changes. However, the futureof fresh aspar-
agus as a supermarket item is in doubt due to
increasing labor costs and labor availabil-
ity problems at the farm level, the need to
cut costs and waste in produce departments,
and increasing consumer awareness of prices
and value.
Many man hours of engineering research
have been devoted to developing a machine to
mechanically harvest asparagus but, at pre-
sent, the only harvester that has proven it-
self to be economically and operationally
feasible is one of the nonselective type.
This type of harvester goes down a row and
cuts all the asparagus above two inches tall.
Hence, the resulting product is a mixture of
all green spears ranging from approximately
one to eight inches in length. This product
is acceptable to the canning industry for
use in a cuts and tip pack. However, the
product was not considered acceptable for
the fresh market because it was felt that
consumers preferred the standard bunch of
nine inch asparagus. The cost of separating
out these spears was considered to be ex-
cessively high and the remaining spears,
less than seven inches, would have to be
used for cuts and tips anyway. Finally, the
prevailing opinion was that the inch or two
of white butt at the end of a spear protec-
tedtherest ofit from drying out and, hence,
quality problems would develop with an all
green spear.
Despite these problems, agricultural
economists and engineers at Rutgers felt that
the tremendous harvest cost savings possible
with non-selective harvesters (from approxi-
mately twelve to five cents a pound) could
not be overlooked. It was also felt that
some method could be developed to handle the
asparagus so they could be sold for their
highest use value (the fresh market) rather
than oneof the lowest (a cuts and tip pack).
Following some pilot market research it was
decided to try to pre-package the asparagus
in an overwrapped pulp tray and test market
three different packs; one containing twelve
ounces of spears varying in length from
five to seven inches, one containing twelve
ounces of asparagus and varying in length
from three to five inches, and one contain-
ing ten ounces of spears under three inches
in length, All spears over seven inches
were butt cut since research indicated that
spears under seven inches would be virtually
fiber free. Handling the asparagus in this
manner assured the consumer of an all-green,
all edible product.
Ag engineers at Rutgers developed a
system of equipment to take the jumbled
asparagus direct from the harvester and
Journal of Food Distribution Research February 73/page 100mechanically sort and package the grass in
the three consumer packs. At the same time,
food scientists developed a film in which
the asparagus created its own environment,
would not dry out, and in which spoilage was
retarded,
During the asparagus seasons of 1971
and 1972, the prepacked machine harvested
asparagus were test marketed in a total of
five supermarkets in the central Jersey area.
The markets were selected to cover a repre-
sentative cross section of the area’spopula-
tion. In 1971, the asparagus in the 3-5 and
5-7 inch packs were all oriented and con-
sumers had free choice of either the Rutgers
packs or traditionally bunched asparagus at
all times. Approximately the same shelf
space was allocated to bunched and pre-packed
asparagus, The 1972 study was similar to
the 1971 study except for two important de-
viations; the asparagus were only longitudi-
nally oriented in the 3-5and 5-7 inch packs,
and in one store the standard pack was an
over-wrapped tray of virtually all green
nine inch California asparagus that was
packed in the store. In both the 1971 and
1972 studies the standard packs contained a
better quality asparagus than the Rutgers
packs since the Rutgers asparagus came from
beds with an average age of twelve years.
The supermarkets were free to set and vary
the prices of the standard packs to conform
with market conditions or chain wide pro-
motions. The prices of the Rutgers packs
were varied in accordancewitha latin square
experimental design.
Results from the marketing study (see
following Summary Table) indicate a very
significant consumer preference for the
machine harvested prepackaged asparagus
over the traditional bunch of hand harvested
asparagus. In stores where the competing
product was bunched asparagus the Rutgers
pack sold 38%more (by weight) even though
the weighted average price of the Rutgers
pack was 58% higher than that of the bunched
asparagus. Taking sales revenue as an in-
dication of consumer votes, consumers pre-
ferred the Rutgers pack by2.2to 1 over the
traditional bunched asparagus. Between the
3-5 inch and 5-7inch packs consumers showed
a slight preference for the 3-5 pack. The
low sales of the short spear pack reflects
availability more than consumer preference.
In stores where the competing pack was a
store wrapped tray of virtually all green
asparagus (a very competitive product that
except for length would be hard to distin-
guish fromthe Rutgers pack) consumers still
indicated about a 14% preference for the
Rutgers pack. In this store the price of
the Rutgers pack averaged about 67% higher
than the standard pack, This store was also
using the standard pack as a loss leader
item during part of the study.
At the end of the 1972 marketing study
a questionnaire was used to determine con-
sumer attitudes towards the Rutgers pack.
The results from this questionnaire corre-
spond quite closely with conclusions that
were drawn from analyzing the price elas-
ticity and cross elasticity calculations.
Most consumers said they preferred the
Rutgers pack because of the condition of
the spears and the fact that the spears were
all edible and, hence “you weren’t paying
for asparagus you couldn’t use”. Most con-
sumers of the Rutgers pack said they would
not return to buying the bunched grass what-
ever the price spread between the two. This
fact is indicated by the insignificant cross
elasticity,between the price of the standard
pack and thesales of the Rutgers pack. Con-
sumers of bunched asparagus, however, were
quite price conscious and would switch to
the Rutgers pack when its price fell. This
is indicated by the cross elasticity of 1.44
between the sales of the standard pack and
the price of the Rutgers pack. The consumer
preference forthe3-5 pack over the 5-7 pack
is also indicated by their respective cross
elasticities and by the fact that the price
elasticity for the 3-5 pack is less than
that for the 5-7 pack even though the 3-5
pack has the higher average price. A final
conclusion that was reached when the 1971
and 1972 studies were compared was that
orienting the spears with all tips in the
same direction did not significantly increase
sales over the longitudinally oriented
spears.
In addition to the strong consumer pref-
erence for the mechanically-harvested pre-
packed asparagus there are several other
favorable attributes of fresh asparagus
handled in this manner, As previously men-
tioned, it is advantageous to the farmer
because it greatly reduces the problems of
February 73/page 101 Journal of Food Distribution ResearchSummary Table — Asparagus Marketing Study
1971 — 1972
All Stores
All Pre- Short
Standard packaged 511-71r 3!1-511 Spear
Average weighted price
per sales unit .57 ,67 .64 .72 .67
Average weighted price
per pound .57 .92 .85 .95 1.07
Unit Sales 3164 4971 2369 1842 760
Pound Sales 3164 3634 1777 1382 475
Total Revenue 1802 3340 1512 1318 510
Store in Which Competition Was Pre-Packed Virtually All Green
7“-9” Asparagus
All Pre- Short
Standard packaged 511-7!1 3,,-511 Spear
Average weighted price
per sales unit .52 .64 .62 ,67 .63
Average weighted price
per pound .52 .87 .82 .88 1.00
Unit Sales 1032 967 510 308 149
Pound Sales 1032 710 384 232 94
Total Revenue 542 616 317 205 94
Elasticities of Demand
Store where standard
Stores where pack was virtually
Al1 standard pack all green pre-packed
Stores was bunches California asparagus
Price elas. of standard 1.34 insignificant -1.87
Price elas. of all
Rutgers pack -1.80 -1,65 -2.16
Price elas, of 5-7 pack -3.20 -3.64 insignificant
Price elas, of 3-5 pack -2.83 -1.91 -4.92
Cross elas, of standard
sales vs. price of
Rutgers pack 1.44 1.28 1.00
Cross elas. of Rutgers
sales vs. price of
standard pack insignificant insignificant insignificant
Cross elas. of 5-7
sales vs. 3-5 price 1.83 2.18 insignificant
Cross elas, of 3-5
sales vs. 5-7 price insignificant 1.00 insignificant
Journal of Food Distribution Research February 73/page 102obtaining sufficient harvest labor and cuts
his harvesting cost by approximately 60%.
The retailers who handled the product were
very pleased with it since it greatly re-
duced the amount of in-store labor needed
to properly market a quality asparagus prod-
uct , greatly reduced spoilage problems,
and virtually eliminated loss due to spear
damage from consumer handling, In-store ob-
servation and testing by the Rutgers Food
Science Department indicated an in-store
shelf life of approximately five to six
days. When the asparagus were held at ideal
conditions the shelf life approached two
weeks. The consumer benefits by purchasing
this pack because she is actually paying less
for usable asparagus (assuming that approx-
imately 40% of hand harvested asparagus is
too fibrous to eat, she is actually paying
$ .95 for a pound of edible asparagus).
Finally, in this age of environmental con-
cern, we all benefit because the waste aspar-
agus is left at the farm rather than being
transported to the city and then transported
out again as garbage. This yields both a
saving in social cost and actual transporta-
tion costs.
?’C*YC***
STORE DESIGN AND LAYOUT FOR MANAGEMENT DECISION
by
Clyde Cunningham
University of Missouri
Columbia, Missouri
A preliminary report on a study
of an “ideal” layout for medium
sized supermarkets.
Today the food retailer finds himself
in a competitive cost-price squeeze, Food
retailing is undergoing important changes.
Among these are (1) expanding total sales,
(2) declining number of stores, (3) expand-
ing sales per store, (4) increasing sales
per employee, (5) increasing hourly wages,
(6) expanding sales area in stores, (7) in-
creasing number of food and non-food items,
and (8) increased emphasis on discount pric-
ing. In addition, the retailer has become
increasingly aware of his responsibility to
the consumer, The need for designing, build-
ing, and operating efficient retail facil-
ities that effectively serve the consumer
is central to this effort.
The supermarket is the focal point
where the consumer comes in contact with
the food distribution system. It is here
that she develops her image of the retail
firm and impressions of the food industry.
Store layout planning has an important role
in that the layout provides the framework
for developing the image and establishing an
efficient retail operation. As such the lay-
out must serve four important functions.
1. Effectively serve the consumer--it
should make it easy for the customer to
move through the store and obtain the de-
sired merchandise with a minimum of confu-
sion, congestion and delay.
2. Improve store efficiency--it should
minimize labor and handling needed in mov-
ing merchandise through the store while sat-
isfying the merchandising objectives.
3. Maximize sales-- it should provide
for a merchandising arrangement that assures
maximum exposure for all merchandise car-
ried, considering space costs, product move-
ment, profitability and perishability.
February 73/page103 Journal of Food Distribution Research

ECONOMIC FEASIBILITY OF MARKETING MECHANICALLY HARVESTED ASPARAGUS IN THE FRESH MARKET

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