The impact of misleading consumer research (part 2 of 2) Earlier this week I wrote beware of “consumer research” which claims to know what consumers demand when it comes to production standards for animal agriculture. The news media and dairy industry executives are taking such research at face value without evaluating potential biases or impacts on dairy consumers and producers.
One group frequently cited by the media and others driving production demands (mainly those restricting producer choices which can harm them economically) is The Hartman Group. A review of this organization’s clients and affiliations is rarely published along side of their consumer survey claims. The Hartman Group counsels organic dairy behemoths like Horizon Organic and natural product giants like Whole Foods Markets and others. The Hartman Group simultaneously works for activist groups promoting organic-only agendas and campaigns to end animal agriculture such as Co-op America, The Food Alliance, Corporation for the Northern Rockies and the Natural Resources Defense Council (NRDC). In fact, Hartman got its start working for an NRDC project called Mothers & Others led by Meryl Streep which helped destroy the apple industry with a later-discredited scare over Alar.
Today The Hartman Group continues to work with advocacy and niche marketing groups on how to “add value through environmental marketing.” Anti-conventional agriculture activists, such as the Institute for Agriculture Trade Policy, openly admit to using Hartman’s research to lobby grocery stores and other companies to force animal health and productivity product restrictions or bans upstream to producers. While promoting “consumer research” calling on retailers and others to shift their type of dairy and food offerings, Hartman’s president Laurie Demerrit also served on the board of directors of the Food Alliance - a group which openly opposes animal health, productivity, crop protection and other modern agriculture technologies while seeking to “create markets” for the organic products that they certify.
The personal views of The Hartman Group founder and CEO put the scientific validity of their research in perspective. In April 2005 The New York Times reported that Peter Hartman wrote in opposition to the new food pyramid guidelines that:
Now the World Association for Public Opinion Research Code of Professional Ethics and Practices lists essential facts that should be included in all reports on surveys and therefore known about a survey that is used in a news story. Essential facts include asking who are the sponsors of research and if they have any bias or conflicts-of-interest in the results. Probably good disclosures for all uses of this type of research, especially those used to convince farmers to make costly changes that present real economic risks. That said, folks like Hartman say, “just look at the facts, the organic dairy market is booming!” So their claims of consumer demand must be true. Measured in one context they appear to be right. A recent report published in the American Journal of Agricultural Economics clearly shows that from 1997 to 2002 organic labeled milk market grew by 566 percent.
However, taken in context the numbers are far less dramatic. This geometric growth was from less than 0.2 percent of all milk sales to 0.8 percent (not even a full one percent) of the total market. Moving from .12 percent to .80 percent isn’t all that impressive. Increasing from barely nothing to barely something is not a radical consumer trend.
But if you’re not going full-scale organic, many activists and niche marketing interests are urging dairies to take intermediate steps based on proclaimed consumer demand. They are urging dairy producers to abandon products like supplemental somatotropin (rbST) or antibiotics so they can market their products as “free from” these practices, and some coops appear to be falling for this. Yet, the same research which touts the impressive organic growth also showed that during the same period the share of “rbST-free”-labeled milk dropped by 26%. Of course, it, too, represented less than 1/2 of one-percent of the total market for milk.
Why the drop? The researchers state: “In contrast (to organic), rbST-free milk has a declining market share, suggesting two possible scenarios. It may be that as consumers learn more about rbST over time their perceptions of the risks associated with the technology go down reducing their desire to buy rbST-free milk…” However, the researchers suggest another more likely possibility. “The rbST-free labeled milk only serves as a ’starter’ or ‘gateway’ milk for those who would like to buy organic but cannot afford it and move up the ‘quality ladder’ from unlabeled to rbST-free to organic in an incremental process.”
This strongly suggests rbST-free labels only help drive customers to organic or away from milk completely. It is not about genuine consumer demand to not use rbST, but more about creating a market for higher priced products by scaring consumers about conventional, non-organic milk. Farmers being led to believe that they should abandon tools like rbST, antibiotics or traditional crop protection methods beware. It’s a slippery slope to marketing your product out of demand while shrinking the total dairy market.
The real effect of niche marketing (such as organic or individual false and misleading absence claims like “antibiotic-, hormone-, or pesticide-free”), which research shows mislead consumers, is to drive some milk consumers away from milk completely and purchase alternative beverages. Comparisons of misleading marketing claims and other labeling concerns (such as misleading expiration dates) suggest that they can lead to some consumers paying more for the same milk (and, thus, possibly buying less), while others move to alternative products.
Interestingly enough, the data for milk consumption almost mirror this assertion. In fact, from 1990 to 2003 we’ve seen a 14 percent decline in per capita milk consumption. As the organic market grows from less than 1/2 of one percent to one percent or more, we’ve seen a corresponding 14 percent overall market decline. The moral of the story is that dairy farmers moving to organic or other niche production schemes may be cutting off their nose to spite their face. 
Paying more because you believe a product to be different is bad for you and bad for dairy farmers. Milk is milk.