Who Will Pay for Guaranteed Tender Steak?
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ABSTRACT: Beef inside round subprimals were injected with a 200 mM calcium chloride (CaCl2) solution at 5% (wt/wt) to determine its effects on beef steak palatability and quality traits. Alternating subprimals from the right and left sides were selected for injection of CaCl2 or not injected to serve as a control. After 7 d of postmortem storage, 2.5-cm-thick steaks were cut from each subprimal for consumer evaluation (n = 478) in a retail setting. Three supermarkets with customers varying widely in income were selected as test sites for measuring consumer perceptions of the treated and control steaks and package labeling acceptance. Supermarket, income level, education, and sex were evaluated for their impact on acceptance of calcium-injected beef. Steak flavor and tenderness both were important in determining beef eating quality; 50% of consumers said tenderness was the most important and 40% said flavor was the most important. Consumers visually preferred CaCl2-treated steaks 71% of the time over the control steaks based on package labeling. The CaCl2 injection improved tenderness, juiciness, flavor desirability, and overall palatability ratings by the consumers for inside round steaks and did not cause any off-flavor problems compared with the controls. Therefore, injecting beef with a solution of 200 mM CaCl2 at 5% (wt/wt) can improve retail consumer evaluations of beef steak tenderness and reduce tenderness variation without detrimental effects on other palatability or quality traits.Journal of Animal Science 09/1995; 73(8):2308-14. · 1.92 Impact Factor
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ABSTRACT: In this paper, we value food safety in a nonhypothetical setting - experimental auction markets. First, subjects underestimate the relatively low probabilities of food-borne illness. Second, measures of value are within a relatively fiat range across a wide range of risks, even with repeated market experience and full information on the objective probability and severity of illness, suggesting subjects rely on prior perceptions. Third, marginal willingness to pay decreases as risk increases, suggesting that the perceived quality of new information can affect the weight the individuals place on the information. Finally, pathogen-specific values seem to act as surrogates for general food safety preferences.03/1995;
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ABSTRACT: This paper tests the conjecture that the divergence of willingness to pay and willingness to accept for identical goods is driven by the degree of substitution between goods. In contrast to well-known results for market goods with close substitutes (i.e., candy bars and coffee mugs), the authors' results indicate a convergence of willingness-to-pay and willingness-to-accept measures of value. However, for a nonmarket good with imperfect substitutes (i.e., reduced health risk), the divergence of willingness-to-pay and willingness-to-accept value measures is persistent, even with repeated market participation and full information on the nature of the good. Copyright 1994 by American Economic Association.American Economic Review 02/1994; 84(1):255-70. · 2.69 Impact Factor
Who Will Pay for Guaranteed Tender Steak?
Jayson Lusk, John Fox, Ted Schroeder, James Mintert,
and Mohammad Koohmaraie
Suggested citation format:
Lusk, J., J. Fox, T. Schroeder, J. Mintert, and M. Koohmaraie. 1999. “Who
Will Pay for Guaranteed Tender Steak?” Proceedings of the NCR-134
Conference on Applied Commodity Price Analysis, Forecasting, and Market
Risk Management. Chicago, IL. [http://www.farmdoc.uiuc.edu/nccc134].
Who Will Pay for Guaranteed Tender Steak?
Jayson Lusk, Jrohn Fox, Ted Schroeder, James Mintert, and Mohammad Koohmaraie*
Meat tenderness is one of the most important quality characteristics to
beef consumers. Current beef quality grading standards are poorly correlated
with meat tenderness. Even within the same quality grade, steak tenderness
varies considerably. As a result of consumers frequently experiencing poor
steak eating experiences, their confidence in, and demand for beef has been
adversely affected. A new quality grading system, developed by the USDA,
more accurately segregates beef into tenderness categories. This study
evaluates consumer willingness to pay to steak tenderness in an effort to
evaluate this new grading system. Consumers demonstrated a preference for
tender steak. Blind taste tests revealed that 72% of consumers preferred tender
steak relative to tough steak (as measured via Warner-Bratzler shear force tests)
in terms of tenderness preferences. In these blind taste tests, 36% of consumers
were also willing to pay an average of a $1.23/lb. premium for a tender relative
to a tough steak. When information regarding tenderness was revealed to
consumers together with a taste sample, 90% preferred the tender steak.
Overall, 51% of consumers were willing to pay an average premium of $1.84/1b.
for a tender relative to a tough steak when the level of steak tenderness was
revealed to the consumers.
Tenderness has been identified as the most important palatability attribute ofbeef
(Dikeman, 1987 and Miller et al., 1995). A 1995 survey of packers, purveyors, restaurateurs,
and retailers, indicated tenderness was the second highest beef quality concern, behind low
overall uniformity and consistency (Smith et al., 1995). Problems with consistency, uniformity,
and tenderness were also among the top 10 concerns listed in the 1991 National Beef Quality
Audit, indicating that tenderness concerns are not new to the industry (Smith et al., 1992).
The importance of meat tenderness to consumers can be viewed in monetary terms. The
positive relationship at the retail level between the price of a cut of meat and its relative
tenderness confirms the general willingness of consumers to pay a premium for more tender
steaks (Savell and Shackelford, 1992). Boleman et al. (1997) concluded that consumers were
able to distinguish between varying levels of steak tenderness and were willing-to-pay
guaranteed level of tenderness. Consumers demand tender meat products and they often reject
more for a
.USDA National Needs Fellow & Ph.D. student, Assistant Professor, Professor, Professor, Department of
Agricultural Economics Kansas State University and Research Leader, Meats Research Unit, U.S. Meat Animal
Research Center respectively.
tough meat. A supermarket chain that requested consumers return undesirable steaks had
$364,000 worth of steaks returned over a three-year period. Over 78 percent of the steaks were
returned because of tenderness problems (Morgan, 1992).
The importance of meat tenderness to consumers suggests that tenderness should be the
primary determinant of meat quality. However, the current USDA quality grading system, which
uses intramuscular fat or marbling as a measure of quality , provides an inadequate measure of
tenderness. Savell et al. (1987, 1989) found that consumers perceived varying degrees of
tenderness within different marbling categories. Wheeler et al. (1994) concluded that marbling
explains, at most, five percent of the variation in palatability characteristics. Numerous studies
have found inconsistency in meat tenderness to be a major problem facing the beef industry
(Morgan et al.1991; Morgan 1992; Savell and Shackelford, 1992; and Smith 1992). Wheeler et
al. (1994, p. 3150) concluded, "USDA quality grade does not sufficiently segregate carcasses for
palatability differences, and thus a direct measure of meat tenderness is needed to supplement
USDA quality grade."
The objective of this study is to determine consumer willingness-to-pay
in an actual grocery store setting. In particular, the aims are to: 1) determine the price premium
consumers will pay for steak tenderness, 2) quantify how economic and demographic factors
influence consumer willingness-to-pay for steak tenderness, 3) compare consumer willingness-
to-pay for tenderness to the costs of implementing a particular tenderness measurement system,
4) determine how information about tenderness affects willingness-to-pay
and, 5) examine the implications of consumer willingness-to-pay
quality grading systems. Results should prove helpful to USDA, beef producers, processors, and
retailers evaluating the merits of alternative grading systems which provide improved measures
of beef tenderness compared to the current quality grading system.
for tender steaks
for steak tenderness,
for steak tenderness for beef
Alternative Tenderness Grading System
One direct method for measuring tenderness is the Wamer-Bratzler
force test. The W -8 test measures the amount of force required to penetrate a cut of meat
and assigns a numerical value to a cut of steak indicating its tenderness level. The W-B
method explains more of the variation in meat tenderness than any other tenderness
testing system (Shackelford et al., 1996). Recently, Koohmaraie et al. (1993, 1996) have
developed a beef processing system that incorporates the W-B test and can be used in a
commercial processing plant. An outline for the on-line tenderness grading system can
be found in Shackelford et al., (1996).
carcasses into different tenderness classifications -guaranteed
and probably tough -with 90 percent accuracy, which is higher than any system
previously devised. In addition to providing a consistent prediction of eating quality , this
tenderness classification system would result in more carcasses segregated into the
highest quality grade than do current USDA quality grades. This occurs because some
carcasses in the Choice and Select grades would likely achieve the guaranteed tender
The tenderness grading system segregates
tender, probably tender,
Costs and Benefits of an Alternative Tenderness Grading System
Adoption of a tenderness assessment system is costly. Shackelford et al. (1996)
estimated the cost of using their tenderness classification system in a commercial beef packing
plant to be $4.36/carcass or $0.62/cwt. Their estimates include the costs of: I) a 1-inch ribeye
steak removed from each carcass for shear-force testing, 2) labor (it is estimated that four
additional employees will be required for tenderness based classification), and 3) machinery for
the tenderness classification system. The cost estimates are based on the following assumptions:
1) a plant will process 3,000 carcasses per day, 5 days a week, 52 weeks per year, 2) a ribeye
removed from the carcass will cost $4.00, and 3) employees are paid $10 per hour. The
estimates did not include the cost of capital financing, i.e. the interest rate charged for the capital
investment, and additional carcass sorting costs for packers. Therefore, the actual costs per
carcass are likely to be somewhat greater than those identified by Shackelford et al. (1996).
Boleman et al. (1997) investigated consumer preferences for three tenderness levels of
steaks (segregated via the W-B test) and determined that consumers would pay more for steaks
with higher tenderness levels. In that study, consumers were allowed to sample three steaks -
tender, intermediate, and tough. The experiment consisted of two components. In part 1,
participants were not told which steaks were more tender and all three steaks were priced the
same -at $8.46/kg. In part 2, participants were informed of the W-B test and steak tenderness
levels were revealed. In this test, steaks were priced as follows: 1) tender -$9.56/kg, 2)
intermediate -$8.46/kg, and 3) tough -$7.36/kg.
tenderness levels were not revealed, approximately 55 percent of consumers purchased the most
tender steak, 12 percent bought the intermediate tender steak, and 32 percent bought the tough
steak. However, in part 2, when the level of steak tenderness was revealed to consumers and
prices of the three tenderness levels differed by $1.1 O/kg, almost 95 percent of consumers
purchased the most tender steak and approximately four percent purchased the intermediate
Although Boleman et al. confirmed that consumers prefer tender steaks and concluded
that consumers were willing to pay more for tender steaks, it did not extract full willingness-to-
pay for more tender steaks and its fmdings are based on a limited number of observations ( 47
families). A larger and more representative study is needed to draw more reliable inferences
about consumers' willingness-to-pay for beef tenderness and the impact of different
demographic characteristics on willingness-to-pay.
When all steaks were priced the same and
In this study, experimental market procedures are used to elicit consumer willingness-to-
pay for different tenderness levels of steaks. Non-hypothetical experimental methods have the
potential to provide more reliable measures of willingness-to-pay than a hypothetical survey
method. Experimental valuation using the Vickery auction is well established in the economics
literature. In the Vickery auction system, the highest bidder receives a product but pays the
amount of the second highest bid, for the product in question. The Vickery 2nd price auction is
used because it is incentive compatible -i.e. respondents have an incentive to bid an amount
equal to their true maximum willingness-to-pay.
willingness-to-pay and willingness-to-accept values (Shogren et al., 1994), the value of safer
It has been used to examine differences in
food (Hayes et al., 1995), and the value of pork chop characteristics (Melton et al., 1996). This
study expands on previous work in experimental valuation by moving from a controlled
laboratory setting, to a grocery store where consumers' actual purchasing decisions are made.
Data were collected from shoppers at retail grocery stores owned by a Midwestern chain
in several locations within Kansas. Two experimental treatments were used and the procedure
was as follows.
1. Shoppers at the meat counter were asked to participate in an experiment conducted by
the Agricultural Economics Department at Kansas State University .
2. Once a consumer agreed to participate in the experiment, a short written survey was
completed which required disclosure ofbasic demographic information including age,
gender, household size, household income, education level, and preference for steak
doneness and USDA quality gradel.
3. When the survey was completed, consumers were asked to sample two different types
of steaks labelled Red and Blue: Red was "guaranteed tender" (according to a slice
shear force test) and Blue was "probably tough"2. In experimental treatment 1,
consumers were not told that the samples differed in tenderness -they had to make
this assessment independently. Consumers then responded to questions about which
steak they preferred in terms of taste, tenderness, texture, juiciness, and overall
4. Consumers were given, free of charge, a Blue (tough) steak for participating in the
experiment. If they indicated a preference for the Red (tender) steak, consumers were
asked to indicate their willingness-to-pay to exchange their Blue (tough) steak for the
Red (tender) steak. Bids were elicited in a procedure designed to reveal their true
valuation for the upgrade. In particular, consumers were informed that if their bid
exceeded a predetermined price level (unknown to them), they would make the
exchange at the predetermined price. If their bid was less than the predetermined
price, then they kept their Blue (tough) steak. In this setting, as in the Vickery
auction, the exchange price is unknown ( exogenous) to the consumer and thus their
incentive is to reveal their true willingness-to-pay.
explanation of why it was best to bid true willingness-to-pay
The instructions included an
in this setting.
The second treatment of the experiment was identical to the first except that the words
Red and Blue were replaced with "Guaranteed Tender" and "Probably Tough", respectively.
The following statement was provided to consumers in Treatment 2: "The USDA has developed
a technology to categorize steaks according to tenderness. The classification system uses shear
force to give an actual value of steak tenderness. Steaks are separated into different categories
I A copy of the written survey instrument is included in Appendix A.
2 "guaranteed tender" steaks have a slice shear force value of ~ 15Kg and "probably tough" steaks have a slice shear
force value of> 35 Kg.
according to shear force values. The three categories are: Guaranteed Tender, Intermediate
Tender, and Probably Tough." The steaks used in this study were deemed tender or tough
according to a slice shear test using the procedures outlined in Shackelford et al. (1996) and
carried out by the Meat Animal Research Center at Clay Center, Nebraska. Tender and tough
steaks were categorized under the supervision of Shackelford, Wheeler, and Koohmaraie.
1. Demographics and Consumption Habits
A total of 313 consumers participated in the study, 227 in the first treatment and 86 in the
second. Table 1 provides summary statistics for the combined groups of consumers. Almost 66
percent of the consumers in the study were female reflecting the population in the grocery store
during the experiments. The average age of the participants was approximately 48 years.
Participants, on average, had at least some college education and between $40,000 and $50,000
of annual household income. Only six percent of the respondents were full time students.
Table 1- Variable Definitions and Summary Statistics
Gender 1 iffemale, 0 ifmale
Age age in years
Education education level of respondent.
1 = less than 12tb grade, 2 = high school graduate
3 = some technical, trade, business school,
4 = some college, 5 = B.S. B.A., complete,
6 = some graduate work, 7 = M.S., M.A. complete,
8 = Ph.D., D.D.S., M.D., J.D., etc.
Income household income level
1 = less than $20,000,2 = $20,000 to $29,000,
3 = $30,000 to $39,999, 4 = $40,000 to $49,999,
5 = $50,000 to $59,999, 6 = $60,000 to $69,999,
7 = $70,000 to $79,999, 8 = $80,000 to $89,999,
9 = $90,000 to $99,999, 10 = $100,000 to $109,999,
11 = $110,000 to $119,999, 12 = more than $120,000
Adults number of adults in household
Children number of children in household
Student 1 if full time student, 0 otherwise
Beefhome number of times per week respondent consumes ground
beef (hamburger) at home
Beef away number of times per week respondent consumes ground
beef (hamburger) away from home
Steak home times per week respondent consumes steak at home
Steak away times per week respondent consumes steak away from
Doneness preference of steak doneness; 1 = rare, 2 = medium rare,
3 = medium, 4 = medium well, 5 = well
Concerning consumption habits, consumers ate ground beef about 2.3 times a week at
home and 1.3 times a week away from home. Participants indicated that steak was consumed 1.1
times per week at home and 0.57 times a week away from home. Thirty-eight percent of
consumers indicated they typically purchased USDA Choice beef whereas 22 percent indicated
they did not know the grade of beef they typically purchased. Both USDA Select and store
brand beef were typically purchased by about 19 percent of the respondents. Respondents, on
average, preferred their steak cooked to a medium doneness.
The fact that almost one in four respondents did not know what grade of beef they
purchased is important. USDA quality grades are intended to inform consumers about beef
quality .The fact that such a large proportion of participants failed to recognise USDA grades as
an indicator of quality may be attributed to several factors including difficulty in understanding
the current grading system.
2. Consumer Preferences for Sampled Steak
Consumers who participated in the study and sampled the two types of steaks were asked
which steak they preferred for taste, tenderness, texture, juiciness, and overall palatability .In
treatment 1, where tenderness levels were not revealed to the consumers, the Red (Guaranteed
Tender) steak was preferred overall by 69 percent of participants. Of the four quality attributes,
more people indicated they preferred the Red steak for tenderness (72 percent) than for any of
the other attributes. Sixty-five percent of participants preferred the Red steak for taste and
texture, and 60 percent preferred the Red steak for juiciness. Importantly, consumers were able
to determine independently that the distinguishing characteristic between the two steaks was
In treatment 2, consumers were told that one steak was guaranteed tender and the other
was probably tough. Interestingly, results from the first and second treatments suggest that
consumers were more likely (84 percent compared to 69 percent) to prefer the Red or
Guaranteed Tender steak when the difference in the steak samples was revealed. This suggests
that merely labelling the steaks can affect consumers' preferences.
When asked to evaluate samples based upon tenderness, almost 90 percent of consumers
in treatment 2 indicated they preferred the guaranteed tender steak. However, 9 percent of
treatment 2 consumers still preferred the probably tough steak for overall palatability after
sampling the steaks. This can be attributed to a number of factors. While degree of doneness
was held constant among samples (cooked to an internal temperature of75 degrees celcius, or a
medium doneness) consumers may have had perceptions about the color of one steak versus
another that also influenced their opinion. Another possibility is that juiciness, taste, and texture
could have varied across samples since the only quality attribute controlled in the experiment
This study was designed to determine whether consumers are willing to pay more for a
tender vs. a tough steak and, secondly, if consumers are willing to pay more for tender steaks,
how much are they willing to pay? While most consumers preferred the tender steak, some were
not willing to pay more to exchange their tough steak for a tender one. In treatment 1, 69 percent
of respondents preferred, but only 36 percent were willing to pay extra to obtain, a Red (tender)
steak. In treatment 2,84 percent preferred, but only 51 percent were willing to pay more for, the
Guaranteed Tender steak.
3. Comparison ofCost and Willingness to Pay
OveraJI, the average willingness-to-pay
for the tender steak) was $0.923 in treatment 1 and $1.38 in treatment 2. Since the steaks used in
the experiment were 12 oz., the willingness-to-pay bids can be converted to a per pound basis.
Thus, the average willingness-to-pay per pound was $1.23 and $1.84 per pound for treatments 1
and 2 respectively. Some consumers, although preferring tender steak, placed no value on it
relative to the tough steak. In both treatments, the modal value ofwillingness-to-pay
The next largest category ofwillingness-to-pay values for both groups was $1.33 per pound. In
treatment 1, the third largest category was $0.67, whereas in treatment 2, the third largest
category was $2.67 per pound. The maximum willingness to pay was $3.33 and $4.00 per pound
in treatments 1 and 2 respectively.
(only those consumers who were willing to pay
4. Willingness to Pay for Tender Steak\' -Regression Models
Regression analysis can provide information about the determinants of consumer
willingness-to-pay for guaranteed tender steaks and thus guide the development of a marketing
strategy. If processors adopt tenderness technology, they will likely want to market their product
by concentrating on demographic groups that have the most potential to buy guaranteed tender
steak at profitable prices. In this study, consumers have three different decision nodes at which
they reveal information about their preferences and willingness-to-pay.
I) tenderness preferences, II) willing or not willing to pay for tenderness, and III) amount willing
to pay. These three choices are all independently modelled in this study.
1 Choice of Tender or Tou!!h Steak
The first regression model examines consumers' steak choice in the experiment. Each
participant, after sampling the tender and tough steak, indicated which steak they preferred. A
multinomiallogit model is used to examine the probability that a consumer will choose the tough
steak, the tender steak, or be indifferent between the two, given their demographic and steak
preference characteristics. Table 2 presents the marginal effects for the model. The results
indicate whether, given a one unit increase in the value of an explanatory variable such as age,
the respondent is more or less likely to fall into one of three categories -preferring
steak, preferring the tough steak, or being indifferent between them. For a given explanatory
variable, the sum of the marginal probabilities across the three categories always sums to zero.
The model contains 245 observations -lower than the total number of participants due to some
respondent failure to answer one or more survey questions.
Table 2 -Multinomial Logit -Marginal Probabilities of factors affecting
Consumers Preference for Guaranteed Tender Steaks
Statistically Significant at 5% level
b Statistically Significant at 10% level
c Numbers in parenthesis are standard errors
number of observations = 245
Among consumers that prefer tender steak, the marginal probabilities for age and
education are positive and statistically significant. The estimates indicate that for every one year
increase in age, a participant is 0.4% more likely to indicate a preference for the tender steak.
Thus, a forty-five year old would be expected to be 8% more likely to prefer tender steak than
would a twenty-five year old. For a one "unit" increase in the respondent's level of education
( e.g. from "some college" to "B.S., B.A. complete"), the results indicate that a respondent is 4%
more likely to prefer the tender steak. Perhaps the most important result here is the relatively
large, positive~ and statistically significant result for the treatment variable. It indicates that
participants in the second treatment, where the tender and tough steaks were identified prior to
tasting, were 18% more likely to prefer tender steak, than participants in treatment one where the
steaks' tenderness levels were not identified. The only steak preference variable that influenced
steak choice was cooking doneness -consumers who preferred their steaks cooked to a higher
degree of doneness were less likely to prefer the tender steak.
II Choice of Pavment for Tender Steak
The second choice consumers made was whether they would pay to exchange their tough
steak for a tender one, given that they previously expressed a preference for tender steak. Thus,
it is important to note that this choice is conditional upon the first choice in that only those
consumers who preferred the tender steak were given the opportunity to pay for it. Accordingly,
the number ofobservations falls to 180. A logit model was estimated calculating the effects of
certain demographic and steak preference characteristics on the probability that a consumer will
indicate a willingness to pay more for tender steak. None of the estimated marginal probabilities
were statistically significant. Thus, the results of the model have been excluded from the paper
due to space constraints.
III Consumer Choice of How Much to Pav for the Tender Steak
The model in table 3 investigates how much consumers would be willing to pay for the
upgrade to tender steak given that: 1) they have indicated a preference for tender steak and 2)
they have indicated they would be willing to pay more for tender steak. The model contains 98
Table 3 -Regression
Guaranteed Tender Steak
Coefficients of Consumer Willingness to Pay for
Coefficient Standard Errors
Knowledge of Quality Grade
a Statistically Significant at 5% level
b Statistically Significant at 10% level
Adjusted R2 = 0.26
number of observations = 98
All variables except those measuring consumption of steak, cooking preference, and
knowledge of the USDA quality grading system were statistically significant at the 1 percent
level. The coefficient on age was negative indicating that as an individual's age increases, the
amount they would pay for a guaranteed tender steak decreases. However, for each additional 10
years in age, the amount they are willing to pay declines by only 11 cents/lb. Females had a
higher willingness-to-pay than males. The model predicts that females are willing to pay $0.31
more per pound for a guaranteed tender steak than are males.
The coefficients on the quadratic terms for education and income suggest that consumers
will pay more for a guaranteed tender steak at lower and higher education and income levels than
they will pay at medium education and income levels. The estimates predict that minimum
willingness-to-pay occurs at a household annual income level between $50,000 and $60,000 and
at a level of education where one had completed a B.S. or B.A. This particular result is not
consistent with prior expectations because the amount a person would be willing to pay for
tender relative to tough beef would be expected to increase with income level. Possibly it is a
3 This model includes a correction for heteroscedasticity (non-constant variance in the error term) -a common
problem with cross sectional data. The correction models the error term as a log-linear function of age, education,
sex, and income.
unique aspect of the consumers in this particular sample. Further work needs to be done to
confirm or reject this result.
Finally, the positive and statistically significant sign on the treatment variable indicates
that participants in treatment 2, where the tenderness levels of the steaks were revealed, were
willing-to-pay about $0.62 more per pound for a guaranteed tender steak than were participants
in treatment 1.
Summary and Conclusions
Consumers rank tenderness as the most important quality attribute in beef. Studies have
shown that consumers perceive beef graded under the current USDA grading system to have too
variable of tenderness. Recent advances in technology make more accurate measurement of beef
tenderness possible. This study investigates the amount consumers are willing-to-pay
tender steaks where steaks are classified according to one tenderness measurement system.
Results indicate that, in a blind taste test, 72 percent of consumers correctly identified and
preferred tender relative to tough steak (as measured via Wamer-Bratzler shear force tests).
Moreover, when they relied only on steak taste samples to differentiate steaks, 36 percent of
consumers were willing to pay an average of $1.23/1b. more for a tender than a tough steak.
Consumers provided with information regarding steak tenderness levels were more likely
to choose a tender steak and willing to pay more for a tender versus a tough steak. When steaks
were identified as guaranteed tender or probably tough prior to a taste test, 90 percent of
consumers preferred the tender to the tough steak. Overall, consumers who received explicit
information regarding steak tenderness levels were 18 percent more likely to choose a tender
steak than they would have been without the tenderness information.
consumers informed of steak tenderness levels were willing to pay an average premium of $1.84
per pound (versus $1.23/lb. without tenderness information) to exchange a probably tough for a
guaranteed tender steak.
Consumer demographics affected consumers' desire for tender vs. tough steak and the
premium they were willing to pay for tender vs. tough steak. Older, more highly educated
consumers were more likely to choose the tender over the tough steak. Among consumers
willing to pay more for tender vs. tough steak, younger, more highly educated females with
higher household income levels were willing to pay the largest premiums.
New technology makes it possible to grade steaks according to tenderness. Some
consumers are willing to pay a significant premium for steaks that are guaranteed tender and the
premium appears to exceed expected costs associated with implementing this tenderness
classification system by a wide margin. Perhaps an advantage might be captured through niche
marketing efforts resulting from implementing a tenderness-based quality grading system.
Fifty-one percent of
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