Project Lead
Challenges
Studies suggest that there is, or has been, perceived value in the production of food and drink products with higher-value status in Scotland. However, the extent to which higher-value food and drink products generate additional economic value for their producers and regions of production has been much debated. The terms of that debate have become more complex since the UK left the European Union (EU).
Take, for example, EU schemes that protect food and drink products with specific geographical characteristics. The two main schemes - Protected Designation of Origin; and Protected Geographical Indication - are intended to provide consumers with reliable information and to promote fair competition, respect for intellectual property rights and the integrity of the internal market.
Such geographical protection came under UK control in January 2021. Products with existing EU protection were registered automatically but new registrations must now be made in Great Britain, to protect the name here, and also in the EU, to protect the name there and in Northern Ireland. To add to this complexity, some countries the UK is eager to secure trade deals with, such as the USA and Australia, have been reluctant to recognise such geographical protection
This project provides evidence to help policymakers and businesses understand the economics of higher value food and drink products and the impacts of the EU exit and other trade developments on them.
Questions
- To what extent do higher-value status food and drink products (for example, those with PFNs or registered organic) hold a price premium and face additional production costs relative to comparable standard products?
Solutions
This project aims to generate insights into the economics of higher-value status food and drink products. The project quantifies the extent to which higher-value products hold a price premium and face higher production costs than standard products. It also examines the factors in achieving a higher or lower gross margin, understands the impact of EU exit and other developments in international trade, and identifies opportunities to develop and promote them.
Review of ‘higher value’ designations for food and drink products
We are conducting a systematic review of international studies of higher value food products (pork, other meats, cheese, organic produce, game, and sea fish), quantifying their impact and value for money, and assessing their relevance to Scottish industry and consumers.
Identification of products with Protected Food Names and organic status in Scotland
We are identifying Scottish products with higher value status and conducting economic analyses of their prices and production costs, relative to conventional products, how higher-value products differentiate themselves from conventional products, and what the trade-offs are.
Case Studies of specially selected pork, other meats, cheese, organic produce, game, and sea fish
We are producing case studies of five different groups of higher value products: specially selected pork; farmed salmon, other meat products; cheese; and organic products. We chose these in consultation with stakeholders as they contribute to Scotland’s food exports and encompass a variety of higher-value accreditation and marketing strategies, and because they come from contrasting policy and marketing contexts. We are working with stakeholders to develop toolkits to inform producers interested in making higher value products for domestic, UK and international markets.
UK consumers’ willingness to pay for higher-value Scottish food products
We are running an online survey identifying the characteristics of higher-value food products that UK consumers are interested in (for example, prices, provenance, product characteristics, branding), and motivations for and the barriers to their consumption.
Overall, this project contributes to the sustainable development of high-value products and small and medium-sized enterprises in the rural economy.
Project Partners
Progress
An important part of this research is that it learns from, and is relevant to, people involved in producing and developing policy for Scottish products with higher value status. Thus, an early priority was to assemble a ‘steering group’ of potential research users to inform the design and conduct of the work. Our ‘steering group’ met in in Edinburgh (and online) in September 2022 to discuss research aims, methods and the choice of food and drink products to study. ‘Steering group’ members suggested alternative products for study and rearranging the order of those studied. There has also been productive engagement with members of the ‘steering group’ concerning data and variables for use in our analyses.
To expand the information gathered from the ‘steering group’, we conducted a systematic review of international studies of higher value food products, with particular reference to: products that will form our case studies; quantifying their impact and value for money; and assessing their relevance to Scottish industry and consumers. This review identified 14,393 published items, across 72 databases, which were screened for relevance by two researchers working independently. After reconciliation, 96 publications were reviewed.
Time-series consumption data for higher value food and drink products were extracted from the Kantar Worldpanel database and analysed. In addition, a database was built containing extracted quantities and prices for our first case study, pork products. These formed the basis of a trade-off analysis model which we developed for the pig to pork supply chain in Scotland. This model can be used to approximate the impact of changes in variables such as input or output prices on the level of Scottish pork production.
The findings from the systematic review and database analysis fed into the design of the topic guide used in interviews with key informants for higher-value pork products.
During Years 1 and 2 we also conducted choice experiments on UK consumers' willingness to pay for higher value Scottish pork products. Click here to read our summary report.
Case Studies
Making silk purses out of sow's ears - challenges facing a Scottish pig farmer
Consumers’ willingness to pay for Specially Selected Pork
Publications and other outputs
- Conference paper “Rural development, local food and its marketing” by Cesar Revoredo-Giha, read at the RuralIdea Festival, Ceprano, Italy, 29 June 2022.
Presentations, reports, posters
- Poster: “Costs and opportunities for Scottish products with higher value status” presented at RESAS Strategic Research Programme Topic B5 End-of-Year meeting, Edinburgh, 17 March 2023.
- Report: “Costs and opportunities for Scottish products with higher value status: systematic literature review”.
- Report: “Costs and opportunities for Scottish products with higher value status: pork producers”.
The aim of this research is to review the costs and opportunities for Scottish products with higher value status. Its objectives are to quantify trade-offs between price premiums and production costs for such products, to generate new insights into how product values manifest themselves, and to share both with producers and other stakeholders. In 2023-24, work was conducted on two products, Specially Selected Pork and farmed salmon, which were chosen based on discussions with project stakeholders.
We maintained regular engagement with stakeholders. A project Steering Group meeting was held in September 2023 to discuss preliminary results from our study of Specially Selected Pork and to check that the direction of the research remained relevant. More detailed knowledge exchange took place in November with stakeholders who have a special interest in the salmon sector, to inform our research on farmed salmon.
Our work on Specially Selected Pork was completed. We published our main findings in three case studies for the sector and policy-makers: a narrative account of the challenges facing a diversified pig farmer; an examination of consumers' willingness to pay for higher value pork; and a trade-off analysis model for the pig to pork supply chain in Scotland. Links to these case studies are below, under ‘outputs’.
We began research into Scotland's farmed salmon sector. This work, which follows the same pattern as that for Specially Selected Pork, has four parts.
- We wrote a review of published work on the salmon sector (about 980 items were identified), which is listed under ‘outputs’.
- We conducted in-depth interviews with people working in the sector, to build understanding of the issues it is facing currently.
- We constructed a database of the quantities of and prices for farmed salmon and other fish, using data provided by industry and extracted from Kantar Worldpanel.
- We designed a survey-based choice experiment to investigate consumers’ willingness to pay for higher value Scottish salmon products. The choice experiment asked individuals to state their preference for particular products and their attributes (e.g. organic). People's survey responses are used to determine whether their preferences are significantly influenced by the different attributes and to determine the relative importance of each attribute.
We completed data collection for parts 2 – 4. Analysis, write-up and dissemination of results will start in 2024-25.
Outputs
Case studies
Challenges facing a Scottish pig farmer
Consumers’ willingness to pay for Specially Selected Pork
Trade-off analysis model for the pig to pork supply chain
Peer-reviewed journal paper
‘Consumption of foods with the highest nutritional quality, and the lowest greenhouse gas emissions and price, differs between socio-economic groups in the UK population’, (2023) a paper published in Public Health Nutrition by Aceves-Martins et al.
Talk
F Akaichi, J Waterworth and L Toma, ‘UK consumers’ WTP [willingness to pay] for Scottish produce and the role that sustainability-related claims can play in promoting its demand’, Annual Congress the Agricultural Economics Society, Edinburgh, March 2024.
Reports
R Slater and D Watts (2023) Costs and opportunities for Scottish products with higher value status: Pork Producers.
R Slater and D Watts (2024) A systematic literature review on costs and opportunities for Scottish salmon products with higher value status.
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