SOME ASPECTS OF CONSUMER DEMAND FOR FROZEN FRUETS AND VEGETABLES Thesis for tha have. 65 M. S. MICHIGAN STATE UN'NERSITY Robert George Marsha“ 1956 1 \.,.",.. "1"? rum-1 \‘ col-H, Asiggblo Lb CLHJUHJR DEHnUD FCR EROZEN FRUITS AND VEGETA‘LES By Robert George Nershell “- submitted to the School of Graduate Studies of Michigan State University of Agriculture and Applied Science in partial fulfillment of the requirements for the degree of MAS TER UF SCIQI‘ICE. Department of agriculturel Economics 1956 r // : ‘3 1 .. . Approved by ._ ‘-¢‘/h£”i;‘kz.5_’l_l._.i ii; ”J (7/ i V Robert George Marshall This study was concerned with the characteristics of consuner demand for frozen fruits and vegetables. The primary source of data used was tie tabulated food purchase records of the families of the Michigan State University Consumer Panel. As an indication of the growth of the frozen fruit and vegetable industry and of per c.pita consumption at the national level, a brief survey of secondary data was included in this study. In 1955, families of the Michigan State University Consumer Panel spent 6.5 percent of their vegetable dollar on frOZen vegetables, h.9 percent of all fruit expenditures for frozen.fruits (excluding fruit juices), and 66.h percent of all fruit juice expenditures for frozen fruit juices. Frozen orange juice, strawberries, and peas were the most popular items of all frozen fruits and vegetables considered both from the standpoint of actual expenditures and of percentage of families buying. Averaged over the three years 1952—1955, of all frozen fruit and vegetable expenditures approximately LB percent were made for frozen orange juice, 12 percent was made for frozen strawberries, and approximately 6 percent were made for frozen peas. A wide variety of other frozen fruits and vegetables combined to make up the remaining percentage of total expenditures. In each of the years 1953 and l95h, approximately 75 percent of all the panel Robert George marshall families purchased frozen orange juice, 6? percent purchased frozen strawberries, and 60 percent purchased frozen peas. Although frozen orange juice, strawberries and peas were the most popular of the frozen items, more families purchased and larger expenditures were made for fresh oranges and strawberries and canned peas than for the corresponding frozen products. A wide variation existed among families with regard to annual per capita expenditures for frozen fruits and vegetables and frozen fruit juices. In each of the years 1953 and 195h, almost 65 percent of all expenditures for frozen fruits and vegetables were made by less than 25 percent of the families. Approximately 80 percent of all expenditures for frozen fruit juices were made by 32 percent of the families. At the other extreme only 6 to 7 percent of all expendi- tures for frozen fruits and vegetables and 3 percent of all expenditures for frozen fruit juices were accounted for by to percent of the families. A comparison of family expenditures in 1953 with expenditures by the same families in 195h revealed that, for both frozen fruits and vegetables and frozen fruit juices, those families making high per capita expenditures in 1953 made correspondingly high expenditures in l95h and non-consumers in 1953 remained, for the most part, non- consumers in 19Sh. The family characteristics, family income, size of family, age of homemaker, and education of homemaker, were considered as factors Robert George marshall related to variations in family per capita expenditures. Families in the upper income category tended to spend more for both frozen fruits and vegetables and frozen fruit juices than did families in lower income classifications. It was indicated that smaller families made higher per capita expenditures for frozen fruits and vegetables than did larger families. Other family characteristics could not be conclusively related to per capita expenditures for either com- modity group. Approved by AC HUB-41w GT; EI‘ITS The author wishes to express his gratitude to Dr. J. D. Shaffer for his supervision and counsel in the preparation of this manuscript. special thanks are also extended to Dr. G. G. Quackenbush and Dr. B. C. French for their many helpful suggestions. The author is deeply grateful to Dr. L. L. Boger and the Department of agricultural Economics who have provided the opportun- ity for the author to continue his studies. The generous policies of Michigan state University in extending assistance to students from outside the United states is of particular importance to the author. Sincere appreciation is expressed to the many faculty members‘ and graduate students of the Department of Agricultural Economics who, through both formal and informal discussion, ha e contributed greatly to the author's education during his stay at Michigan State University. Finally, the writer is indebted to his wife, Maeve, who encouraged him at all times. Of course, any errors in this manuscript are the sole responsi- bility of the author. fi-X-mf-X-‘k‘kX-X-HLXJk} l—Jo Ho TABLU OF CONTENTS CHAPTER I INTRODUCTICN............................................. Source and Limitations ofD Data........................ II THEIDEVWJfld’Wmidfi)GRMTHiC*’EEIF'OziInxdf‘iu VECLEfl .LnBLE IHDULJLLC: I131. T: UZTIJZ‘D S ATESoooooooOQOOoooo A Introduction.......................................... Trends in the National Consumption of Frozen Fruits and Vegetables”...nun....o..u..........u.u.. Vegetables......................................... Frozen FFUitSoooooooooo0000000000...cocoooooooooooo Citrus Fruits.0.00000000000000000.0.0000o00.0.0000. III EAFLAUITLAAJ FLR FRUZEN FRUITS AND'VLCETABLEJ, MICAIGAN STA‘iTL; UTJIVTZDSITY COTH)UTE.T. F.LTE_:L 1953-19550 0 0 o o o O O O 0 o o 0 Annual Per Capita Expenditures for Frozen Fruits and Vegetables.......................ooo............... Variations in Seasonal Expenditures for Frozen Fruits and Vegetables..................................... £80.50...0.000.00.0.0.0.IOOOOOOOOOOOOOOOOOOO0000.000 Strawberries...u.................................. C‘I‘ ran”es and Cran ‘38 Jmce........................... Frice Relationsnip, Fresh, Frozen,m md Canned Fruits and Vegetables..................................... IV V- LRIATlONS IN ErP-T‘IJITU $8 .‘AIICITL. FU’ILDB-ooooooaoooooooo IntrOdUCtionooooooooooo0.0000000000000000.coco...to... Percentage Of Families bUCfingooooooooooococo-cocoa. Family expenditure patterns...n................... V AN LYSIS CF FACTCRS RELATED TU FLR wa EXPTL‘ITURFS NR rR\:7N RIJITS AJID VB ”m‘Bh,o AND FRUIT JUICES..... Introduction.......................................... Methods Of iinéllVSiSoo00000000000000.0-0000000000000... Frozen Fruits and Vegetables.......................... Family Income.....o.noun...”................... bize Of family.........................n.......... age 0f hOUSGWifeoooooo-oooocoo-000.000.000.000...oo [—1. Ho 1—10 Page 10 1h 18 22 26 29 3O 31 311 AC 110 Al 1;}; h? 50 I? 2 / 52. 5h Sh f F O fl R Q Q 0 h I Q C I Q 4 O . I Q ‘ s....~01o-~0‘ qgagq9~0fi0~|nfiooanaOH ‘D‘I'QQOQO‘D ‘.’..QR.P.I11 .‘OQ.~R.~IID. ODOQOQOIOOH TlBLs CF CUNTLHTS - Continued Education Of homemaker”..............“nun"... occupation Of homemaker.u.o..................ou.. Least squares multiple regression analysis......... FI‘OZCH Mt JUiCGS-ooooooo00000000000000.0000000...-o Fmily income..."an...n........................ Size Of fmj-1yoooooo00000000000000...coco-000000... age Of hOmemCikeI‘ooc00000000000000.000000.0.0000...o _ Education or hOTUOIna]'§'erooo0000900000000.000.000.000. (Least Squares Multiple Regression analysis............ Summary of the Analyses of Family Characteristics..... VI smH‘L‘Lfl AE‘IU COIICQUS LTJSOOOOOQOOOOOOOOOO0.00.0.0.0...0.... BlBLl-LGEL.LLJEHOOOOOOOOO00.00.000.000...00......0000OOOOCOOOOOOOOOO .‘3pp‘h‘3r’n71 hi 2.1.1.- .LUAJQOOOCOOOOOOOOOOCOOOOOOOOOOOCOOOOOOOOOOOOQCOOOOOOOOOOOOO I ,_ l Tables Supplementary to Chapter Iooooooooooooooo0.000000. Conversion Factors for Conve ing Frozen and Canned Heidi‘ts t0 MBSh {JBiEffl-t EmivalentOOOOOOOOO0.0.0.0.000 The Chi-oquare TGSt Of Significance..nn................ Summary of Regression Results............................ as l U C) I Page <6 I 59 59 60 6o 62 62 62 66 66 69 7a 76 76 89 90 92 .ns-a‘nao-o-p-s1’n-voant- .9mnn‘Ion'flfi‘IOO‘QI‘ADI. LIST CF TABLES TLlIBIAfi l 8 10 ll 12 Civilian Per Capita Consumption of Commercially Produced Vegetables, United States 1937-19511,-cocoooooooooooooooooooo Civilian Per Capita Consumption of Selected Commercially Produced Frozen Vegetables, United States l95h............. Civilian Per Capita Consumption of Commercially Produced Fresh and Processed Fruits, United States 1937-19Sh........ Civilian Per Capita Consumption of Selected Commercially Produced Frozen Fruits (Excluding Citrus), United States 1951-10....OCOCOOOOOOOOOOO.0..0.0...0.0.0.000...0.0.0....0000 Civilian Per Capita Consumption of Commercially Broduced Fresh and Processed Citrus Fruit, United States l937—l95h.. Frozen Fruits,'Vegetables and Fruit Juices Ranked in Crder of Fer Capita Expenditures, Michigan State University Consmer 4981181, 1953-1955,.cocoa-00.00000...000.00.00.00.oo- Per Capita Expenditures for Fresh, Frozen and Canned Fruits and Vegetables Ranked according to fiercentage of Expendi- tures for Frozen. Average 1953-1955, Michigan State Uni- verSity COnS'llmer yanelooooo0.009000000000000.ooooooooooooo. average Brice per round, Fresh, Frozen, and Canned Fruits and Vegetables, Actual and adjusted to Fresh Equivalent, Michigan State University Consumer Panel l953-l955......... Percentage of Families Buying Fresh, Frozen and Canned Fruits and Vegetables, Michigan State University Consumer P3119131953’19Sh00000000000.000.000...00000000000000.000000 fiercentage of Families Buying and Percentage of annual Expenditures Classified according to Family Per Capita Expenditures, Michigan State University Consumer Panel 1953-1952100...-coco-00.00.00...no...ooooooooooooooooooooooo Comparison of Family Expenditures in 1953 with Expenditures for the Same Families in l9§h Classified according to Per Capita Eijendi‘tures in 1953.00.00.-00.000000000000000...coo Coefficients of Simple Correlation Between Family Characteristics...n.“noon....o......................... ll 1h 15 17 l9 23 25 36 h2 US h? 52 U W ‘ 0 ~ c o o a o a o o c G O ‘ Q ‘ O I. IO~IHIO..-I‘Q' .‘O...- .. -- . .. . I. C.“.'DIQ."‘-O‘.1.. . 090 " I. . 9“..0~9~§‘C"0s.o QQQOOoIOQQIO‘IOPIQ uI...QO~QGCCQIOODQOOIOIOOOQOCqunoo ."."'."'""'COICOOOOOVI ARROIOCIOI‘IOOQ “'"“'D‘QCO-O‘o¢$.-‘cannot-9‘....g. n..-QODDII’..O O-"I‘...OI\OAOC)QQQ n'nho‘np. chnjfianopllifioiooooa \ Q Q LIST OF TABLES - Continued Page 13 Number and Percentage of Families flaking Expenditures Cver and Under Sl.50 Per Person for Frozen Fruits and Vegetables Grouped iLCCOI‘ding to Family InCOITleoooooooooococo-00.00.0000 53 1h Number and Percentage of Families Making Expenditures Over and Under Sl.50 Per Person for Frozen Fruits and Vegetables Grouped according to Size of Family........................ 55 15 Number and Percentage of Families Making Expenditures Over and Under 61.50 Per Person for Frozen Fruits and Vegetables Grouped According to 1188 Of Homemaker...."no”...”no... 57 16 Number and Percentage of Families Making Expenditures Cver and Under Sl.50 Per Person for Frozen Fruits and Vegetables Grouped according to Education of Homemaker................ 58 17 Number and Percentage of Families Making Expenditures Lver and Under al.50 per Person for Frozen Fruits and Vegetables Grouped according to Occupation of Homemaker............... 58 18 Number and Percentage of Familiesliaking Pxnepditures Over and Under 91.50 per Person for Frozen Fruit Juices Grouped According to Family Income................................. 61 19 Number and Percentage of Families Making Expenditures Cver and Under Sl.50 Per Person for Frozen Fruit Juices Grouped According to Size Of Family..........o...............oo..o. 63 20 Number and Percentage of Families Making Expenditures Over and Under $1.50 per Person for Frozen Fruit Juices Grouped According to 15ng Of HouSGWifeooooooooo0.0000000000000000... 6h. 21 Number and Percentage of Families Making Expenditures Over and Under dl.50 per Person for Frozen Fruit Juices Grouped according to Education of Homemaker........................ 65 22 Civilian Per Capita Consumption of Commercially Produced Vegetables, United States 1937-19Sh000000000000.0.0.0000000 76 23 Total Production and Production in Retail and Institutional Sized Containers—-Frozen Vegetables, United States l9hh-1953 77 2h Civilian Per Capita Consumption of Fresh and Processed Peas United States 1937-195hooooooo00000000000000ooooooooooocoo. 78 25 Civilian Per Capita Consumption of Fresh and Frozen BI‘OCCOli, United States 1937‘195h0OOOOOOOOOOOOOOOOOOO00.000 79 .0. .111 r5: 6 ‘6‘ 9 ““090 n Iaog. ' V 'l (- ‘An Avg...“ . nflafing‘.‘.‘.”fl Q 6 0 i Q ~ .. '8 ‘Ia O a- 1‘". .Qnonounn "OQI‘Q '00.). “van "ta-no «sea fr- . Q R ov-nggn...“. 5.0 .- '9‘... P... .V , “.‘9..’n~. 50A,..‘ ' 0 fl 1 ’90008r'q.. "5.0‘ q 29 3O 31 36 OF TABLSS - Continued Civilian Per Capita Consumption of Fresh and Processed bpiHQCh, United States 1937“l9bhoooooo00.000000000000000... Civilian Per Capita Consumption of Fresh and Processed Snap Beans, United States 1937—1951;...00000000000000.0000.o Civilian Per Capita Consumption of Fresh and Processed asparagls, United States 1937‘1951100000.000.000.00000000000 Civilian Per Capita Consumption of Fresh and Processed Corn, United States 1937-1951100...0000.00.00.00000000000000 Civilian Per Capita Consumption of FreSh and Processed Lina Beans, United States 1937-19511-00.0000000000000000ooooo Civilian Per Capita Consumption of Commercially Produced Fresh and Processed Fruit, United States 1937-19Sh......... Civilian Per Capita Consumption of Fresh and Processed Strawberries, United StQtQS 1937-195hooooooococo-coo.oooooo Civilian Per Capita Consumption of Fresh and Processed 393011.95, United States 1937-19Shooooooooooooooooooooooooooo Civilian Per Capita Consumption of Fresh and Processed Cherries, United States 1937-195hoooooooooo0.00.00.00.00... Conversion Factors for Converting Frozen and Canned weights to FreSh E‘u’eigh‘b Equivalent....u.uu.....o................ oumary Of Regression RGSUltSoooooooo0.0090000000000000...o vii 81 82 83 8h 87 88 89 92 Ooa‘flaa-snaqlabooaaaw.oaffl ‘8'031.”0'O°FOQ‘IODOIQQ‘ 'I . I Q l! A R I D R a O D I N . I! Q U D Q ‘ . \ ' N . O O U D Q . I , 'I ’ . ‘Q C -| O '\ f N O U ‘ C O Q . 9 nvoooooO'Ooel-I‘OOI’OOOOQOO .‘I‘OQFOQ V‘O‘IQJ‘VQROOOQQOODAIQ goat100401.100I0000‘0nvon‘ 00.00.09COOOIIIII..fl.""' ‘IOOIII.NOIOUQOICOO“HCOOQ‘I‘QC'I assaoalooonolfiaaognannnn-IQQ- LIST OF FIG‘RSS FIGURE I VI VII VIII Consumption of Fresh, Canned and Frozen.Vegetables as a Percentage of Total Vegetable Consumption, United States 1937-1958, Based on Fresh weight Equivalent............... Index of Total Production and Production in Retail Size Containers—~Frozen.Vegetables. United States l9hh—l953... Consumption of Fresh, Canned, Dried and Frozen Fruits (exhluding citrus) as a Percentage of Total Fruit Consump- tion. 1937-]-951L0000000000.0000000000000000000000000000... Per Capita Expenditures for Frozen Frui Fruit Juices Plotted by Four—Heek Perio University Consumer Panel, average 195°- Vegetables, and J. U d *ichigan State 33 33 no 50000000000000. ,r: // Per Capita Expenditures for Frozen, Fresh and Canned Eeas Plotted by Four-Meek Period . Average 1953-1955, hichigan State University COUSIU'IBI‘ Panel-000000000000000.000.00.00. Per Capita Expenditures for Fresh and Frozen Strawberries Plotted by Four-Leek Periods. average 1953-1955. Michigan State University Consumer Panel.................. Per Capita Expenditures for Fresh Oranges, Frozen and Canned Crange Juice Plotted by Four—Week Periods. average 1953-1955. Michigan state University Consumer Panel...... Prices Paid per Pound, Frozen Peas, Strawberries and Crange Juice, averaged by Four~deek Periods 1953-1955, Michigan State University Consumer Panel.................. Page 12 13 16 27 30 I C Ovaafi'nhaotnon Q‘QII.IQ.IQ~.BI.‘IO\ .NGQ'IQOIOQ‘IOQ )D.‘b"\.".""'fl..... N‘fifi.‘§.‘9~c.hfifi‘ ‘DOQ. DOGhEQOI-t‘liffo“" 1‘0.) CHAPTELi I INTRUDUCTIUN In a simple subsistence economy, there is little need for data on food consumption. It is ouite different, however, with our complex twentieth century economic structure. The high degree of speciali— zation in both production and marketing functions has created a need for information to assist in intelligent planning by those concerned. Fundamental to the needs of wholesalers, retailers and others engaged in the marketing process is a knowledge of consumer actions and - responses at the retail level. This is a report of a study of consumer expenditures for frozen fruits and vegetables in the city of Lansing, Michigan. The primary objective of the study was to provide basic data and information with regard to consumer purChases of frozen fruits and vegetables at the retail level. More specifically the objectives were: 1. To evaluate the relative position of selected frozen fruits and vegetables at the consumer level and to relate expendi- tures for the frozen products with the corresponding fresh and canned products. 2. To evaluate the purchasing patterns for frozen fruits and vegetables by families of the Michigan State University Consumer Panel. 3. To relate family expenditures for frozen fruits and vege- tables to specific socio—economic characteristics of the household in an effort to identify some of the factors influencing family expenditures and preferences. The analyses formulated in this study were based upon the hy- pothesis that an appraisal of the potential market for frozen fruits and vegetables could only be accomplished through an indication of the vagaries of consumer acceptance in the immediate past. It was also believed that the analyses presented would provide useful information on consumer response at the retail level. Some of the uses to which information presented might be of value are briefly listed: . 1. Information on the movement of frozen fruits and vegetables into consumption should be an aid in the understanding of the market for frozen food packers, distributors, brokers, and retailers. It is the consumer who justifies the existence of the various marketing services. an insight into consumer purchasing patterns may be of assistance in solving the problems of communication between the consumer and those engaged in providing the necessary marketing services. 2. Trade groups, organized within segments of the industry may find information in this study that would be of value in planning promotional programs or in evaluating promotional efforts of the past. 3. It is believed that the results of this study will be of special interest to those charged with the responsibility of consumer education. The comparatively recent introduction of frozen products has meant changes in consumption patterns. Education specialists, given relevant information are in a position to speed up these changes should they be deemed consistent with general welfare. It is implicit in this study that the information contained therein may provide an indication of the potential market for frozen fruits and vegetables. The impact that development of this market might have upon the corresponding fresh and canned products, and its effect on returns to growers and market organizations has not been 1 . considered. Southworth states that: "The frozen food industry furnishes a current example of how new methods of processing and distribution can draw upon new producing areas, expand year-round market outlets, and offer consumers both a better product and greater convenience." It is the author's belief that information directly or indirectly concerned with the conversion of perishable agricultural commodities into permanently stable, palatable, convenient to use forms, made available throughout the year merits economic con- sideration. Source and Limitations of Data The primary source of data used in this study was the tabulated food purchase records of families constituting the Michigan State lHerman Southworth, "What Can It Do For Us?" Yearbook of agriculture, United States Department of Agriculture, washington, D. C., 195h, p. 10. 2 University Consumer ranel. approximately 250 families of Lansing, Michigan record in weekly diaries information regarding price, quantity and expenditure for each food item purchased. In addition, each family reports its income, expenditures and number of meals away from home during the week, and the number of guest meals served in the home. Relevant family characteristics such as size of family, age, education, number in the familr working, and occupations are recorded for each panel family. The Michigan state University Consumer Panel has been operating since 1951. approximately 100 families have reported continuously since its inception with approximately 200 families reporting continu- ously in any one year. a detailed discussion of the representativeness and characteristics of the sample can be found in J. D. Shaffer's doctoral thesis3 and in a Journal of Farm Economics article by L Dr. Shaffer. The types of analyses that were originally intended as the ob- jectives of the project were stated by Dr. G. G. Quackenbush as follows:5 The organization and bperation of the M.S.U. Banal is under the direction of Dr. G. G. Quackenbush and Dr. J. D. Shaffer. 3J. D. Shaffer, Methodological Base_s_ for the gperationfl of a Consumer Purchase Panel, unpublished rh. D. thesis, Michigan State University 1952. hJ. D. Shaffer, "a Plan for Sampling a Changing Bopulation Over Time," Journal of Farm Economics, vol. 36, No. 1, Feb. lOSh, pp. 153- 163. 5G. G. Quackenbush, "Demand analysis From the M. S. C. Consumer ranel, " Journal 9_ Farm Economics, vol. 36, No. 3, hug. 195h, pp. hlS- h27. The first is to determine the effect of price changes (both real and money) upon the quantities of foods purchased, and the associated time-lag in adjustment. The second objective is to determine the effect of a change in income (both real and money) upon the quantity purchased and expenditures for various food products, and the associated time lag. The third objective is to measure the effect of price changes and income changes upon substitution.among different products. In a sense, therefore, the objectives are to determine price elasticity, income elasticity and cross-elasticity of demand. Dr. Quackenbush goes on to say: ranel data provides a mass of information which is not directly related to studies of elasticities, but which might be termed supplemental to them. This information includes consumer purchase patterns, buying habits, allocation of the food dollar and others which have many practical applications. It is this latter type of information which has formed the analytical bases for this study. The data from the Michigan state University Consumer ranel are unique in that they are based on a source of continuous information at the consumer level. With these continuous records, information on consumer purchasing patterns is obtained which cannot be derived from the more traditional aggregative time series or from cross-sectional studies where food purchases for a limited period of time are obtained. There are several inherent limitations in panel data. One of the more obvious limitations is the limited geographic area of study. The city of Lansing is the statistical universe for the Michigan state University Consumer ranel. The Lansing area may be similar to other urban areas for certain characteristics but dissimilar in other respects. To the extent that the major fruit and vegetable producing areas in the United states are fairly widely dispersed, the purchase pattern of consumers in any one location may be considerably influ- enced by geographic situations. a second limitation of panel data arises from the fact that it's impossible to make distinctions on the bases of quality and variety. There are practical limitations on the amount of detail that can be obtained on food items purchased for home consumption. The lack of reliable grade standards for most fruits and vegetables prohibits the identification and reporting of grades by panel members. Finally, there are undoubtedly errors in the reporting of pur- chases. erors of omission are probably unimportant. It is probable that, as a result of the vast array of different products and combi- nations of products available at the retail level, confusion in reporting may exist for some items. However, it is doubtful if these errors of confusion are of sufficient magnitude to have any bearing on the results of this study. CHAPTER II THE DEVELOPMmNT AHD GROWTH UF THE FROZEN FRUIT AND VEGETABIE JICDUSTLU IN TIE U‘r-IITE) STATES Introduction Freezing is one of the most recent technological developments in commercial food processing and has resulted in substantial changes in the marketing of fruits, vegetables, meats and other foods. The production of frozen fruits, vegetables, poultry, meats, seafoods, fruit juices and specialties increased twelvefold between 1933 and. 1953. Preservation of food products by freezing first became commercially practicable with advances in the application of mechanical refrigera- tion. Freezing or cold-packing fruits for processors was developed into a standardized established indust shortly'after'Norld War 1.2 The fruit was packed in large containers and frozen slowly for several days at comparatively high temperatures. Products preserved in this way were used mostly for preserves, ice-cream manufacturing, commercial baking and other industrial uses. a. B. raul and L. B. Mann, "What Uur Grandparents Did Not Have," Yearbook 2f Agriculture, United states Department of agriculture, Washington, D. (3., 19%, p. 121. F. L. Thomsen, agricultural Marketing, New Yerk: McGraw-Hill Book Co., Inc., 1951, p. 1hl. The history of the introduction of quick frozen foods to the retail trade, for the most part, is the story of Birds Eye's operations in the early 1930's.3 Early attempts to distribute frozen fruits in small packages to the retail customer met with failure of a greater or less degree. The principal difficulty encountered was the lack of facilities for keeping the fruits frozen until they could be delivered to the consumer. The institutional trade proved receptive to the advent of fr zen foods. In 1935, hotel and restaurant operators were using and express- ing satisfaction with frozen fruits and vegetables.Ll Retail distri- bution difficulties were not as easily overcome. The retail grocer had no low temperature storage facilities and hesitated to make a substantial investment to satisfy an unknown demand. Reluctance by the retail trade to make the necessany investments for accommodating frozen goods no doubt retarded the marketing of this new product. The status of the frozen food industry just over twenty years ago is indicated by the following quotation: Retail distribution was practically in a state of collapse in the summer of 1935, except in New York, Boston, and the west- ern New York cities of Rochester and Syracuse where Birds Eye had tried out a new experimental sales policy. In the large cities in the Midwest and North East, interviews with leading grocers, a few of whom had been induced to buy cabinets and attempt to sell the new food, found nothing but pessimism. 3 . . . . . , For a detailed historical description of the development of the frozen food industry see Carlton, The Frozen Food Industry, University of Tennessee tress, 19hl. thid., p. 6. “—— \\0 Nowhere throughout this section was there any evidence that the housewives knew anything about frozen foods--either as to cost, proper handling and cooking, or nutritive value and identity with fresh foods rather than with canned or the old- fashioned cold storage product. In comparison, in l95h it was estimated that over 70 percent of the retail outlets in the United states handled frozen foods with frozen foods accounting for 3.7 percent of total grocery store sales. It is difficult to isolate any particular factor as influencing the rapid rise in commercial production of frozen foods since world war II. Changing consumption patterns, widespread consumer acceptance, technical developments in storage facilities and home refrigerators, all undoubtedly played a part. In addition, improvements in freezing methods and the developments of new varieties have enabled packers to introduce a wide variety of products for the retail trade. Trends in the National Consumption of Frozen Fruits and Vegetables Frozen fruits and vegetables constitute the largest part of the volume of frozen foods to date. From 1939 to 1953 the freezing of fruits increased from lhl million pounds to 1,2Sh million pounds and that of vegetables from 73 million pounds to 1,077 million pounds. The corresponding figures for the other main frozen food groups are: poultry, 15 to h70 million pounds; meat, 10 to lhO million pounds; STbid., p. 7. T. Millott, "where the Frozen Food Industry is Headed in the Next Few Years," reprint from the 1956 Frozen Food Factbook and Directory, National Frozen Foods Distributor assoc., New York 17, N. Y. l? eois, 70 tr LOO million pounds, and prepared foods, .5 to 300 million pounds. EEE§EE§EE§' as shown in Table l, the total civilian per capita con- sumption of commercially produced vegetables increased from 1937 to the immediate post World War II years. From l9h6 to l95h, consumption has been declining slowly although remaining considerably higher than in the late 1930's. The per capita consumption of both the fresh and canned products reached a peak in l9h6. From that date to the present time, consumption of fresh vegc.ab1es had declined to the pre-war level, while that of the canned product has remained relatively stable. The per capita consumption of frozen vegetables followed a radically different pattern increasing twelvefold between 1937 and l95h and from h.6 pounds per capita in l9h6 to 12.? in 195h. From a small .6 percent of the total commercial vegetable market in 1937, the consumption of frozen vegetables has increased to include 6.0 percent of all commercially produced vegetables in 19Sh. as indi- cated in Figure I, the frozen product's increased share of the total market appears to have come about at the expense of fresh product. Canned vegetables appear to have maintained a relatiVely constant share of the total market. at the retail level, the growth of frozen vegetable consumption is even more spectacular than indicated in Table 1. Prior to werld war II the largest part of the frozen vegetable market was dependent on the institutional trade. In 19hh, only hh percent of the total TABLs l 01v1L11u FER CAPITA CCHsUMPTItN CF 0:223011Lty ERLDUCED —-w.—-l 7‘ .-‘ '\"1'1 f c. - .1 ' 1H3? Vzeaaasnas. u 1TRD oTATEo 193x-193L Index 1937-39 = 100 .- all ..—— -—--- Year Vegetables Fresh Cannedww Frozenh" 1937 97 97 95 100 1938 100 100 101 90 1939 103 103 103 120 19t0 106 103 112 1&0 19h1 107 100 119 170 19L2 11b 10; 129 250 19h3 108 102 122 160 19th 116 11 121 380 19LS 132 121 1L8 I30 19L6 13h 120 159 L60 19h? 122 111 138 S90 19L8 119 112 123 670 19h9 116 '106 125 670 1950 121 108 136 730 1951 121 10h 1&0 920 1952 121 105 36 1120 1953 122 10h 139 1160 195A 120 103 135 1220 .‘L VVCivilian Consumption only after l9hl. "“Based on Fresh Weight equivalent. Source: The Vegetable Situation, agricultural Marketing Service, U. 5. Dept. of agric., Nov. 29, lQSS. 12 Percent I 72' Fresh 68 Canned x-x-x Frozen ----- 6h 6U 56 38% 3h x “\,{” 3OFX hx/ 8 L . ’----“"”----- ‘1'" 1937 1938 19h0 19b2 19th 19h6 19MB 1950 1952 195u Figure I. Consumption of Fresh, Canned and Frozen Vegetables as a Percentage of Total Vegetable Consumption, United States l937-lQSh Based on Fresh Height Equivalent. production of frozen vegetables was packed in retail size containers. In 1953, 6h.8 percent was packed for the retail market. as shown in Figure II, since l9hh the production of frozen.veeetables packed in retail size containers has increased almost 700 percent whereas total production has increased cpproximately 350 percent. although many different vegetables are sold in the frozen form,7 vegetables vary in popularity with the consuming public. Frozen peas accounted for over 27 percent of the frozen.vegetable pack in l9§h 7. . . . Uver hO different kinds of vegetables have been frozen, but only about 15 are of any commercial importance. I! 13 Percent 1 CO r—I 600 , Total production Retail-size containers -—--- hOO 300 200 100 19hh 1915 19h6 19h? 19h8 19h9 1950 1951 1952 1953 Figure II. Index of Total Production and Production in Retail Size Containers-—Frozen Vegetables. United States 19hb-1953. 19Lh=100 followed by lima beans with over 13 percent, as shown in Table 2. Cther vegetables of commercial importance in order of size of pack are: snap beans, spingch, corn, broccoli, and asparagus. Cn a relative basis, production for the frozen market is much greater for some commodities than for others. almost 60 percent of the total commercial production of lima beans is dependent on the frozen market, just under one-half of the broccoli production is sold in the frozen form and frozen peas and frozen spinach account for approxi- mately one-third of the commercial production of each commodity. 1h TABLE 2 CIVILIMI PmR CaPITA CUI-ISIH~'IPTIOI-I 0F ssLscm CcivHfi-‘IRCLILLY PRODUCED FROZEN VLGETABn-s, UI‘IITED STATES 1951; 2......—-—- —*—' #1 " __ "‘ ‘- .—.—.-.——..——:= Per Capita Percent of all Percent of Total Commodity Consumption Frozen Production Sold in Lbs.* Vegetables* Frpzen Form** Peas 1.32 27.6 31.2 Lima Beans 0.72 13.3 59.3 Snap Beans 0.56 10.h 10.8 Spinach 0.51 9.h 36.3 Corn 0.b8 9.0 7.h Broccoli 0.h3 8.0 h3.3 asparagus 0.16 3.0 15.2 1 .V. vvFrozen weight. ""Based on fresh weight equivalent. Source: The Vegetable Situation, agricultural Marketing Service, U. S. Uept. of agri., November 29, 1955. IFrgzen‘Fguitg,(expluding citrus £221§§)' The increase in production 'of' frozen fruits, other than citrus, has been moderate in comparison to the rapid expansion of the frozen vegetable market. AS Shown in Table 3, per capita consumption of frozen fruits has not increased greatly since the early post World war 11 years. Uver the same period of time, however, the per capita consumption of fresh and dried fruits has decreased considerably while that of the canned products has remained relatively constant. Frozen fruits, other than citrus, command a relatively small part of the total market. approximately 3 percent of all commercially produced non-citrus fruits was consumed in the frozen form in l95h, as compared with 0.5 percent in 1937 and 3 percent in l9h7. at the k I\ \IV “wFresh Source: Height equivalent. Civilian consumption only after l9h1. Dept. of agri., Lot. 28,1055. The Fruit Situation, agricultural 1Iarketing Service, U. S. TABLm 3 CIVItllu PEd 019171 00U "“1TItv 0F cou"“10118t1 PRtDUCED FRESH AND eaocussna FRUITS, UNITED STATES, 1937- 19 ML Index 1937-1939 = 100 A]:1 '_.— — .r- .‘L y - .V. K - Year Fruif Fresh Canned Dried" Frozen" 1937 1t2.8 106.2 101.5 95.8 57.5 ’1938 96.3 95.8 95.0 98.h 11h.9 1939 100.9 98.0 10h.0 105.8 126.h '1980 101.3 91.8 120.5 109.h 137.9 1981 102.8 98.2 123.0 9h.8 137.9 19h2 83.1 75.0 113. 5 78.3 137.9 1983 68.5 56.8 83.5 87.8 11h.9 1988 82.3 79.1 61.109.9 195.h 19h5 91.8 86.h 86.0 109.1 206.9- 1986 103.5 89.h 181.0 96.9 287.h 19h7 95.0 - 90.1 118.5 75. b 321.8 19h8 88.2 _ 82.9 112.0 70. 7 287.8 1989 . 90.1 8h.l 115.5 7h. 9 2528 1950 85.8 72.0 128.5 75. b 275.9 1951 83.8 78.9 118.5 71.7 252. 8 1952 89.2 77.h 131.0 72.3 298.9 1953 88.8 75.0 138.0 70.7 298.9 1958 82.8 71.0 123.0 68.6 287.h 16 Percent "Io—I Fresh Canned -x-x-x Dried 0000... Frozen ______ 60 LS 30 x I’A\ \\ ,/x x ,.X‘/’x‘\affi k‘f’x‘\VL——dv""/’ X. n Pin/'5'". \ /‘. .. '. * .- ."'ooo 15 ‘\x// .O. 5 I ‘ -‘-_---‘—---- ”-- O --‘-----------—’-’ 1938 1950 19h2 19hh 1986 1918 1950 1952 1951 Figure III. Consumption of Fresh, Canned, Dried and Frozen Fruits (excluding citrus) as a rercentage of Total Fruit Consumption. 1937-1958. U.5.A. retail level, this proportion was considerably smaller as more than two-thirds of the frozen fruit pacm is packed in institutional sized containers. ’N. Bitting, "The Prospects in Frozen Foods," reprint from The 1956 Frozen Food Faetbeok and Directory, If ational Frozen Foods DiStrioutors assoo., New York 17, N. Y. 17 The array of frozen fruits which have met consumer acceptance is not nearly as formidable as that of frozen vegetables. Three fruits, TABLE h CIVILIAN PFR CArITA CW QU”BTIUN UF and CTED CUMJLRUI.LLY PRUUUCED FROZEN rRUITS (EACLUDIMG CITPUQ), UNITE bTAT ub I954 ————.—— '7 —vI— —--- ufl—N—n-nar—m- —-—— ”v- _—_————— *— m. —. m. —.—_—. - -—- M ¢—--. fer Capita Percent of Percent of Total Commodity Consumption All Frozen Production Sold in Lbs.* Fruits% FrOZen Form%* Strawberries 1.39 55.6 Ll.l Sour cherries 0.52 20.8 22.h Beaches 0.17 6.8 1.1 Raspberries 0.13 h.6 --- ,;:Frozen weight. Based on fresh weig1‘.t equivalent. bource: The Fruit Situation, Lgricultural 1-1ar1:eting Service, U. D. Dept. of Agric., Uctdber 28,1955. peaches, constitute over 80 percent of .L strawberries, sour cherries, all non-citrus frozen fruit production. Of these, strawberries are by far the most popular with over 55 percent of the total followed by cherries (20%) and peaches (7%). trawberries are the only'frozen non-citrus fruit of very great commercial importance that show a positive post-war trend in per capita consumption. More than hé percent of t11e total strawberry production in l9§h was consumed in the frozen form as compared to about 25 percent in 19h7. In absolute terms, per capita consumption of frozen straw- berries has increased steadily from .73 lbs in 19h? to 1.39 lbs in l9§h (fresh weight). This has compensated for the decline in freSh l8 strawberry consumption over the same period from 1.9 to 1.3 lbs per capita. On the other hand, consumption of frozen cherries has fluctuated at around 20 per cent of total cherry production since l9h7. In absolute terms, consumption of frozen cherries has remained rela- tively stable. Frozen peaches have apparently lost favor with con- sumers both in absolute terms and as a percentage of total production. The per capita consumption of frozen peaches averaged .38 lbs in IQMS to 19h? as compared with the 1952—Sh average of .20 lbs (fresh weight). 1‘ In these latter years this accounted lor just over one percent of all commercial peach production. Citrus Fruits. Frozen citrus fruits have gained more in pepularity in recent years than any other frozen product. It was not until the late l9hO's that technical innovations permitted the successful freez- ing of citrus products. AS shown in Table 5, in 19h8 the frozen product held but .5 per cent of the total citrus market. Six years later in ISSh, over 30 per cent of citrus products was sold in the frozen form. It is noted that the increase in consumption of frozen citrus juices has been accompanied by a rapid decline in consumption of the fresh and canned products. Indications are that the decline in canned con— sumption is largely due to substitution of the frozen product. To a certain extent this may be true for fresh oranges although a downward trend in freSh consumption is evident prior to the advent of frozen citrus juices. 19 TABLE 5 CIVILIAN PER CArITA CONSUMPTION UF COMMERCIAnLY PRUDUCED FRde AND PROCESSED CIIRUS FRUIT. UN TED STATES 1937-19Sh% r Year Total Fresh Canned** FrozenI* rercent rercent rereent lbs. lbs. Total lbs. Total lbs. Total 1937 89.8 83.9 88.2 5.9 11.8 1938 5h.8 h8.h 88.3 6. 11.7 1939 bo.3 60.5 86.1 9.8 13.9 19b0 66.0 55.9 8A.? 10.1 15.3 Ith 71.3 56.9 79.3 Ih.h 20.2 1952 bl.h 56.9 79.7 18.5 20.3 19t3 L1.1 59.5 83.7 11.6 16.3 l9hh 88.1 67.3 76.h 20.8 23.6 1985 86.9 65.7 75.6 21.2 28.8 19L6 93.9 58.3 62.1 35.3 37.6 0.3 0.3 19h7 93.0 61.3 65.9 31.5 33.9 0.2 0.2 19h8 88.5 53.5 58.5 38.5 hl.O 0.5 0.5 l9h9 80.6 b7.1 58.b 26.9 33.h 6.6 8.2 1950 72.6 no.6 55.9 21.8 29.5 10.6 1h.6 1951 81.7 Lh.5 5h.5 22.2 27.2 15.0 18.3 1952 83.h b3.8 52.5 18.2 21.8 21.h 25.7 1953 88.3 L2.8 50.8 17.3 20.5 28.2 8.7 195h 8b.? hO.6 h7.9 17.h 20.5 26.7 31.6 x:Civilian consumption only after l9hl. "“Fresh Weight hquivalent. Source: The Fruit bitujtion, agricultural Marketing service, U. 5. Dept. of Agric., tct. 28, I955. e.) O In IQSh, frozen orange juice alone accounted for over 80 per cent of the total market for all frozen citrus products. Frozen orange juice provides an excellent example of how, in a comparatively short time, the marketing of a single commodity can be radically changed through product innovations meeting widespread consumer approval. In the crop year of I9Sh-SS, 53 per cent of the domestic market for oranges and orange products was for the frozen juice. Thirty-five per cent was sold in the fresh form with only 12 per cent sold in a processed form other than frozen. ChaPTER III EXPENDITURES FOR FROZEN FRUITS AND VEGETABLES MICHIGAN STATE UNIVERSITY CUNSUMRR PANEL 1953—1955 In this study, per capita expenditures have been used as an indicator of purchases of frozen fruits and vegetables by families of the Michigan State University Consumer Panel.l Hence a direct comparison with the United States Department of Agriculture statis- tics described in Chapter II cannot be made. The latter source records per capita quantities and includes production in the instié tutional size pack. In some instances, an approximate comparison might be made on a relative basis both as to the comparative importance of a particular frozen product to other frozen fruits and vegetables, and as to consumer acceptance of a frozen product com- pared to the fresh and canned counterparts of the same commodity. However, such comparisons must be broadly interpreted. In analyzing consumer expenditures for frozen fruits and vegetables from panel data it is possible to extend the analysis beyond annual data. Expenditures can be broken down on a seasonal basis in an effort to indicate the movement of frozen fruits and vegetables into consumption within the year. 1For analyses requiring inter-commodity comparisons, comparison between the different product forms or aggregation of commodities, expenditures serve as a common denominator partly overcoming problems of quality, variety and different degrees of bulkiness which arise in quantity comparisons. 21 22 D. Johnston, agricultural Economist, United States Department of Agriculture, stated that: Many food packers, distributors, and brokers have indi— cated that information on the movement of their products into consumptionrwould be a definite aid to an understanding of the market.‘ It is assumed that this reasoning might also apply to retailers to whom a knowledge of seasonal fluctuation in consumer expenditures might be of assistance in planning space allocation and promotion in a given period. Annual Per Capita Expenditures for Frozen Fruits and Vegetables Families of the Michigan State University Consumer Panel spent 6.5 percent of all vegetable expenditures, h.9 percent of all fruit expenditures and 66.b percent of all fruit juice expenditures for the corresponding frozen products in 1955. As shown in Table 6, averaged over the three year period of 1953 to 1955, over one-half the expenditure for all frozen fruits and vegetables were made for frozen fruit juices with frozen orange juice alone accounting for approximately one-half the total. Frozen straw- berries and frozen peas were easily the most popular frozen items of all fruits and vegetables respectively; A wide variety of frozen vegetables appears to have met with considerable consumer acceptance. Frozen peas, broccoli, snap beans, Dehard Johnson, "Frozen Food Movement into Retail Outlets," agri- cultural'Marketing Service, United States Department of agriculture, Washington, D. 0., March 1955. 23 TABLE: 6 FRozsN FRU TS, VEGETABLJS inn FRUIT JUICDS Riwhgo IN canes OF PER 01121111 ECLI‘L‘QDIIURES . MICHIGAN STATE mamas 111' CONSUMRR wagL, 1953-1955 195341955TAverage'm_ Percent of A11 Ex- Commodity 1953 19511 1955 1953-1955 penditures for Frozen average Fruits and Veggtables 111 fruits $.78 3.75 $1.01 8.83 15.8 Strawberries .57 .59 .70 .62 11.7 Raspberries .Oh .0h .12 .07 1.3 Sour cherries .05 .05 .09 .06 1.1 Peaches .02 .01 .03- .02 0.h Other .06 .06 .07 .06 1.3 All vegetables 1.35 1.27 1.h0 1.3h 25.3 Peas .35 .33 .32 .33 6.2 Broccoli .16 .16 .18 .17 3.2 Snap beans .15 .11 .1h .13 2.5 Lima beans .10 .10 .12 .11 2.1 Brussel sprouts .10 .08 .09 .09 1.7 Corn .09 .08 .10 .09 1.7 Cauliflower .08 .08 .08 .08 1.5 Squash .07 .10 .09 .08 1.5 Spinach .06 .06 .08 .07 1.3 Asparagus .0h .06 .07 .06 1.1 Uther .15 .11 .13 .13 2.5 All fruit juices 3.16 2.97 3.23 3.12 58.2 Orange juice 2.61 2.Lh 2.6L 2.56 h8.h Lemon juice .2h .18 .26 .23 3.6 other .31 .35 .33 .33 6.2 All fruits and . vegetables 5.25 h.99 5.6h 5.29 100.0 .214 and lima beans were the most popular in that order. Cver the three year period, annual per capita expenditures for frozen peas averaged .33 cents or about 25 percent of all expenditures for frozen vege- tables. Annual expenditures for frozen strawberries averaged 62 cents per person over the three years considered, representing almost 75 percent of all expenditures for frozen fruits other than citrus. Other frozen fruits do not appear widely popular with relatively small per capita expenditures made for frozen cherries, raspberries and peaches. Over the three years examined, it is difficult to establish any evidence of a trend in expenditures for a single product or group of products. Aggregate expenditures for all frozen fruits and vegetables declined slightly from 1953 to 195M but increased again in 1955. As an indication of the competitive relationships existing be- tween the different product forms of a particular commodity, in Table 7 per capita expenditures for each product form is expressed as a per- centage of total expenditures for each commodity over the years 1953 to 1955. The vegetables, broccoli, brussels sprouts, cauliflower and squash, while relatively unimportant in the total fruit and vegetable market, show a comparatively high proportion of expenditures made for the frozen product. It is noted that negligible expenditures were. made for these four vegetables in a processed form other than frozen. Thus intra-commodity competitiveness existed only with the fresh 25 TABLnJ 7 BER 01111111 sxmmmpss FUR mash, 111021311 111:) chm-hi) FRUITS 1.1-U) VEGETABLDS RANKED.ACCCRDING TU PhRCEUTAGE 0F EXPDNDITURRS FUR FRUZPZN . AVLRAGE 1953-1955. MICHIGAN STATE UNIVLRSITY CONSUMER PANEL —~ _‘_‘ Bercentage of Expenditures for Product Frozen Fresh Canned* Total All Vegetables 6.5 51.9 hl.6 100.0 Broccoli 68.0 32.0 - 100.0 Brussel Sprouts 56.2 h3.8 - 100.0 Lima Beans 36.7 6.6 56.7 100.0 Cauliflower 32.0 68.0 - 100.0 Squash 30.8 69.2 - 100.0 keas 30.0 1.8 68.2 100.0 Spinach 2h.2 37.9 37.9 100.0 Snap Beans 18.3 16.5 69.2 100.0 Asparagus 12.8 38.3 88.9 100.0 Corn 7.6 28.2 63.8 100.0 All Fruits h.9 67.1 28.0 100.0 Oranges & Urange juice 58.5 36.2 9.3 100.0 strawberries 81.9 85.9 12.2 100.0 Sour Cherries 21.8 21.8 57.2 100.0. Raspberries 12.5 73.2 1h.3 100.0 Peaches 1.5 h7.h 51.1 100.0 All Fruit Juices 66.8 - 33.6 100.0 ”Including dried, jams, and jellies, excluding baby foods and soup. 26 product and would obviously be more intense during certain seasons of the year. For those vegetables which the frozen and canned products are competitive throughout the year, in no instance did expenditures for the frozen form exceed that of the canned. Frozen lima beans and spinach competed with the canned products most favorably in this re- gard. Frozen peas, while the most pepular frozen vegetable item, accounted for approximately one-half as much of all pea expenditures as did the canned product. Consumer expenditures for frozen strawberries were slightly less than expenditures for the fresh product although the latter was pur- chased in quantity only in the fresh production period. For sour cherries, well over one-half of all expenditures were made for the canned product. The remainder of the consumer market for sour cherries was divided evenly between the frozen and fresh forms. On an annual basis, frozen orange juice accounted for more than one-half of all expenditures for oranges and orange products.3 Variations in Seasonal Expenditures for Frozen Fruits and Vegetables The consumption of freSh fruits and vegetables is generally con- current with seasonal production. It is expected then that 3Although not directly comparable, the 5h.5 percent of all orange expenditures for frozen orange juice by families of the Michigan State University Consumer Panel approximates the 53 percent of 1958-1955 United States orange production that was consumed as frozen orange juice. 27 expenditures for the frozen and canned products would vary according to the competitive relationships existing in a given period. As shown in Figure IV, the seasonal variations in expenditures for both frozen fruits and vegetables appeared to follow a similar pattern with peak expenditures in the early months of the year, fall- ing to a seasonal low in August and September. 'Cents 32 Fruit juices ----- ‘, a' Vegetables -x-x— ; 28 " \ " ' , \ Fruits I \ I \ :- l \ :7: 2h ’ ‘~ ' 2 ‘\ \ \\ ’ s // ‘~\J/ \ s a“ m \\"’, 16 12 “\‘/’\\ //// O 1‘ Period 1 2 3 L 5 6 7 8 9 10 11 12 13 Month Jan. Feb. Mar. Apr. Hay' June July Aug. Sept. Oct. Nev. Dec. Figure IV. fer Capita Expenditures for Frozen Fruits, Vegetables, and Fruit Juices flotted by Four Week reriods; Michigan State University Consumer ranel, Average 1953-1955. 28 averaged over the three year period 1953 to 1955, expenditures for frozen fruits ranged from less than five cents per person in consecutive four-week periods in September, October and November to a maximum of nine cents in the fourth four-week period (March—april). For frozen vegetables the range was even more extreme. In the third four-week period (February-March) per capita expenditures for frozen vegetables exceeded thirteen cents. In the ninth period (august- September) purchases of frozen vegetables averaged approximately six cents per person. For both frozen fruits and vegetables, increased expenditures occurred during a four-week period in mid-summer. It is believed that this variation is possibly a result of family purchases for home freezer supplies. Expenditures for frozen fruit juices reach a maximum throughout the summer months indicating that summer temperatures have consider- able influence on the consumption of frozen fruit juices. A secondary peak is apparent at the end and beginning of the year, approximately coinciding with the holiday season. Limited expenditures for most products prevented breaking down annual expenditures into four-week periods to indicate seasonal patterns. Cnly expenditures for peas, strawberries and orange juice were large enough to exhibit seasonal relationships from which valid conclusions could be drawn. I.) Feas. season of the year appears to h ave considerable ef:ect on con sumer expenditures for frozen peas. From a January peak, expenditures declined slc _y to a summer low fo lOnEd by a return to no W“.l in th: fall months. Cor sumer purchases of canne a peas appeared to follow a Cents 8""" Canned F Frozen —---- FI'GSh coco. A ‘ ‘ \ \ / 2 \ I \/ .u..“o C1 .0. .‘CLO I -‘ T reriod 1 2 '3' h S 6 7' 8 ' 9 '16 11 12 3 Menth Jan. Feb. Mar. Apr. May June July nus. Sept. Lct. Nev. Dec. Figure V. rer Capita Expenditures for Frozen, Fresh and Cm ed teas rlotted by Four-week reriods. average 19 53 -l9 55, Lichigan btate University Consumer ranel. Period vIonth 30 The decline in consumer purchases of both the frozen and canned products through the summer months requires no explanation. It is assumed that these processed products are substituted for by the array of fresh produce available in season. Strawberries. Expenditures for frozen strawberries reach a distinct peak in March and April. averaged over the three year period per capita expenditures in the fourth four-week period (March-April) were Cents I "I 58‘ Fresh Frozen ---—-— 56 1 2 3 h S 6 7 8 9 10 11 A 12 13 Jan. Feb. Mar. Apr. May June July hug. Sept. Oct. Nov. ‘Dec. Figure VI. Fer Caiita Expenditures for Fresh and Frozen strawberries Flotted by Four-week reriods. average 1953-1955. Michigan state University Consumer ranel. 31 approximately'twice as great as in the seventh period (June-July). It was expected that a highlf competitive relationship would exist between fresh and frozen strawberries. However, the frozen product appeared to maintain a fairly consistent volume in the market through- out the fresh season. Expenditures for frozen strawberries during the fresh season did not differ greatly from expenditures through the late summer and fall months when many other fresh fruits are available for consumer choice. This suggests that frozen strawberries are little more competitive with fresh strawberries than with many other freSh fruits. pranges and Orange Juice. The seasonal pattern of expenditures for frozen orange juice appeared fairly constant throughout the entire year, ranging only from a low of approximately eighteen cents per person in the third four-week period (February-March) to a high of approximately twenty—two cents in the tenth period (September—October). Expenditures for canned orange juice did not vary greatly throughout the year while expenditures for the fresh product dropped off consider- ably during the summer months. It is noted that the seasonal patterns for frozen orange juice and fresh oranges followed opposite trends with the seasonal high for orange juice coinciding with the seasonal low for oranges and vice versa. Although it would seem that the fresh and frozen products differ as to consumer use and that to a large extent different factors would influence consumer choice a certain degree of substitution is indicated. Cents 15 12 Fresh Frozen -- Canned ...... 6 . 0.6 o .0 “'&ro.“a0675 ,‘A 3 on ‘. . “'. ~0.0’ 1 O r r’eriod 1 2 3 h 5 6 7 8 9 10 11 12 13 ’Honth Jan. Feb. Mar. apr. May June July hug. sept. Oct. Nov. Dec. Figure VII. Fer Capita Expenditures for Fresh oranges, Frozen and Canned Orange Juice rlotted by Four-week reriods. Average 1953-1955. Michigan State University Consumer Panel. The possibility that seasonal variations in the prices of the frozen products, peas, strawberries and orange juice, might bear some relationship to seasonal variations in expenditures was considered. The prices paid for these three items were averaged for each four- week period for the three years 1953 to 1955. Figure VIII, seasonal price variations were such that it is to draw conclusions or to relate prices to expenditures. as indicated in difficult The prices ‘O. Q Period F’ A onth 33 Cents 50 u/ " ~"’~-‘- W 20 strawberries Orange Juice x—x—x- teas ------ 10 l 2 3 h ” 6 7 8 9 10 ll 12 13 Jan. Feb. Mar. apr. hay June July aug. bept. Cot. Nov. Dec. Figure VIII. rrices raid per round, Frozen fleas, strawberries and brange Juice, averaged by Four-Heck Leriods 1953-1955, Michigan State University Consumer :anel. paid for frozen orange juices appear to increase during the latter half of the year, thus the seasonal pa tern of expenditures previousl1 illustrated for frozen orange juice may not be entirely indicative of the movement into consumption throughout the year. It does not appear that variations in prices paid for frozen peas or frozen strawberries follow a consistent pattern, nor that price could be considered as a major factor in explaining seasonal variations in consumer expendi- tures for these items. .. v.--r.. _ .-. uh...- o‘- 5w to I... .w I. ! -q—u ‘ --....—— ....-ar” ‘7’\ ‘0'"- ”‘4 no "I " “~. ‘. 'Jet’ a -- X“ . I Mun—r, [five M ‘5. N \3 , . " fl - I r,. \ Y .—---" 'f / “ a. - mm~~~x-‘ v-“n ~4— .— ~... . one... a l . ‘ v 5 .— I -CIQ ._ h b. O' w I v --u.. —- 10“.. .9,“-_" a . n 9 h '7 r r ‘ , ‘ . . r I ‘ ‘ l 7 . ' . '_ . . .. . Cum- u—- ——- -- — --‘ ~— Q'FC“~‘-M-“m.h- ~ ”~“ ‘ — -- " -... ‘7' r." .5 .—-~-- M fin- .—-—-~ “ u.— - x. . m Q 4*Oe~.\‘ 3h Price Relationship, Fresh, Frozen, and Canned Fruits and Vegetables The objective of this portion of the study is to compare the prices paid by panel consumers for fresh, frozen, and canned fruits and vegetables on a fresh weight basis. It is a controversial question in the minds of many consumers whether the particular advantages of frozen products are more than offset by the cost of the services required in marketing fruits and vegetables in the frozen form. In a consumer survey made by "h ick Frozen Foods" in 1953, 36 out of 100 non-buyers of frozen foods gave . . . h . . high prices as the reason for not buying. since commenCing this study, several comments have been made to the author that it was felt frozen fruits and vegetables were too expensive as compared to fresh and canned produce. ThomsonS made the following observation regarding frozen food prices: In view of the advantages, many of which tend to reduce the cost of frozen compared with fresh fruits and vegetables, it may be wondered why many consumers find that frozen fruits and vegetables are the more expensive to use. The reason is partly to be found in the costs of processing, freezing, and holding at low temperatures throughout the marketing system. These costs offset some or all of the savings referred to above. However, another reason is the comparatively small volume of business in frozen foods to date, the fact that they have been looked upon by many dealers as specialty items warranting a comparatively high‘mark-up. Several possible sources of error exist in comparing fresh, frozen and canned prices through conversion bf per capita quantities h Quick Frozen Feeds, New York, Vol. 16, No. 5, p. hh. 5 Thomson, 22. 313., p. lh3. 35 purchased to a fresh basis. Quality is not considered. Consumers report quantities in physical terms which are standardized into pounds. Although conversion to pounds is done on as objective a basis as possible, inexact measurements and reporting errors may be present in certain instances. Conversion factors as published by the Production and Marketing Administration, United States Department of agriculture, were used.6’7 It is pointed out in this publication that relationships between fresh and processed weights for most commodities vary widely from season to season and between localities. Conversion factors represent average relationships for all producing areas. Table 8 contains the average prices paid per pound for particular fresh, frozen, and canned fruits and vegetables as reported by families of the Michigan state University Consumer Banel, 1953 to 1955. For the frozen and canned products both actual prices and prices of the fresh equivalent are given. For most vegetables, canned and frozen prices were quite similar when compared on a fresh weight basis although considerable variation appeared to exist in the relative values of frozen and canned products from one vegetable to another. ‘The prices of the fresh equivalent for frozen peas and corn were slightly less than that of the canned Conversion_Factors and weights and Measures for agricultural Connodities and Eheir froducts, Froduction and Marketing Adminis- tration, United states Department of agriculture, May, 1952. 7 See Table 35 in appendix B for summary of conversion factors used. TREE?) A %.h :2 231?: P23 POUID, 532‘? 231322, 322 012225 FRUITS AID {22.222L,s '222*L nrn ancsvzn :o 2223i 2:21J1 222x 'ICM1C1. 51 “U f"’312 CO “’Vwi PA.;L 1953-1955 ——- -_—...—-.-. Commofity Fresh _‘ Frozen Canned “rice Price Price Price Frozen Fresh oqn,nl Fresh 'Yei"u+ Ecuivalrnt ei2ht Tduivnlent ——-— ' ‘— Peas 17.1 29.7 26.h 18.h 27.5 Broccoli 25.2 37.7 21.1 - — Snap beans 15.? 36.2 23.6 20.2 27.5 Lima beans 20. 33.? 3b.? 13.1 26.2 Corn 3.3 17.3 6.3 29.9 7.2 Cauliflower 25.? LC.9 12.1 - - Squash 7.h 23.6 15.3 - - Spinach 29.5 26. 1h.7 16.2 1b.? Asparagus 21.3 53.3 23.5 31.2 23.7 Strawberries 36.2 h2.6 52.6 - - Sour cherries 19.3 22.h 20.0 23.3 22.5 Gran -es and Orange Juice 3.9 b2.6 5.9 11.6 6.1 \‘J 1“ Calculat,d from total per ca nita ,uantities purchased aid per capita expencitures made. Quantities adjm mted to a fresh equivalent basis sing conversion factors published in ConVersion Feerors and Jhnr%., an‘ Loasures :or Agricultural Confiozi'LZE—T?T' iwfi3717733i:::, Production and harketin; om«niStration, United States Department of Agriculture, Hashingtou, D. 0., Kay, 1952. $3 products. The reverse was true for snap beans, asparagus and lima . beans. For the latter vegetable, the price of the fresh equivalent for frozen appeared considerably higher than that of ca1ned. A comparison of fresh and frozen vegetable prices revealed con- siderable variation from commodity to commodity. This might be expected due to different degrees of perishability existing with the fresh produce and differences in transportation, handling and other marketing charges from one fresh vegetable to another. Frozen prices on a fresh weight basis were considerably below fresh prices for broccoli, cauliflower and spinach but above for peas, snap beans, lima beans, corn, squash, and asparagus. It is noted, however, that froZen prices were averaged from quantities purchased and expenditures made for commodities available the year round while for the most part, consumer purchases of fresh produce are made only during a limited fresh production period. A direct comparison of the fresh weight equivalent of fruits on a value basis is difficult. Ihe frozen weight of strawberries includes sugar at a rate of generally around 3 fruit to 1 sugar and of cherries approximately'h to l. Canned fruit products may vary greatly as to actual fruit content and method of preservation. Averaged over the three year period, it appeared that frozen strawberries on a fresh weight basis cost approximately one-fifth more than the fresh commodity. In the eyes of the frozen strawberry consumer, this is the amount paid for convenience, availability throughout the year and other