Follow the leader? Adoption behavior in food retailers' decision to offer fresh irradiated ground beef

Abstract

During the 14-month period from May 2002 to June 2003, approximately 10 percent of U.S. supermarkets began to offer fresh irradiated ground beef under the stores' own labels. Using a survey of supermarket store managers from this time period, this paper investigates the factors that influenced new product offerings and adoptions. Results from the adoption model show that factors associated with competition and structure in the food retailing industry play a strong role in the decision. Among other results, we find that variables relating to a competitor's adoption status and proximity significantly affect a store's decision to offer fresh irradiated ground beef.Funding for this study was provided in part by a grant from the National Research Initiative Competitive Grants Program, USDA. The authors wish to thank the Food Industry Center at the University of Minnesota and Mitsuko Chikasada for statistical assistance. Copyright 2005 by Edward C. Jaenicke. All rights reserved. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies. 1 Follow the Leader: Adoption Behavior in Food Retailers' Decision to Offer Fresh Irradiated Ground BeefIn February 2000, USDA and FDA authorizations became effective that permitted the use of ionizing radiation to reduce pathogens and extend the shelf-life of fresh and frozen red meat products. Because radiation was considered an effective treatment against E. coli (O157:H7) and other pathogens found in raw meat, this new authorization carried important implications not just for the meat processing or food retailing industries, but also for public health. Earlier, using a cost-of-illness approach, Buzby et al. estimated the cost of premature deaths from E. coli in the U.S. to be between $160 million and $700 million annually. With its high sales and its history with meat recalls and pathogen contamination, fresh ground beef was anticipated to be among the first irradiated red meat product introduced. In the two years that followed authorization, however, introduction of irradiated ground beef by meat processors and food retailers, however, could be characterized as cautious or sporadic. For example, early introductions often featured frozen, branded products, and were marked by regional emphases, in states such as Wisconsin When this spatial information is coupled with chronological information, we observe that the adoption of fresh irradiated ground beef is not randomly distributed over the U.S., but rather is related to market demographics and geographic rivalries. In other words, while we may witness 3 the beginnings of a standard S-curve adoption pattern along a temporal dimension, we see a richer story when we consider both temporal and spatial factors.Past research suggests that a more complete story of new product adoption may draw upon factors from three broad categories: product-related attributes, structural supply-channel attributes, and characteristics of industry com...

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