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Hammock Pack Fresh Bartlett Pears

Permanent Link: http://ufdc.ufl.edu/UFE0044752/00001

Material Information

Title: Hammock Pack Fresh Bartlett Pears Implications for Marketing Based on Consumers Willingness to Pay for Sensory Attributes and Return on Investment Potential
Physical Description: 1 online resource (96 p.)
Language: english
Creator: Watson, Jonathan A
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2012

Subjects

Subjects / Keywords: chain -- hammock -- pack -- pears -- profitability -- supply -- wtp
Food and Resource Economics -- Dissertations, Academic -- UF
Genre: Food and Resource Economics thesis, M.S.
bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: The fresh fruit and vegetable industry in the United States has experienced significant change over the last few decades.  As a result there are now more options than ever for consumers in terms of variety and availability.  In spite of this change, the consumption of fresh pears in the United States has remained relatively stagnant over the last few decades (ERS, 2009).  Consumers understand that eating fresh fruit leads to a balanced diet and a healthy lifestyle, however retail markets for fresh pears have not seen increased purchases.  Greater accessibility to fresh fruit, such as pears, and increased awareness of their health benefits have done little to increase consumption.  Retailers face a great challenge in delivering higher quality, great-tasting fresh produce to the market. Ultimately, technology may be the answer to increasing consumption of fresh pears in the United States.  The hammock pack is a consumer packaging option that allows riper pears to be successfully marketed by protecting them from physical injury.  Determining the attributes that consumers prefer in fresh pears will help supply chain participants deliver a better product to those markets.  The purpose of this study is composed of two parts: 1.  To identify consumer preferences through sensory attributes for fresh Bartlett pears. 2.  To determine profitability potential for hammock pack technology for retailers. In this paper, we use a survey and conjoint analysis while asking the participant’s about their willingness to pay (WTP) for fresh raw Bartlett pears shipped in hammock pack containers versus those shipped in traditional bulk corrugated containers.  We also asked participants to provide their responses to sensory attributes associated with Bartlett pears in various packaging forms.  This was done in order to improve the understanding of consumers’ purchasing preferences for fresh raw Bartlett pears based on a series of sensory attributes including, taste, appearance, aroma, flavor and overall acceptability.
General Note: In the series University of Florida Digital Collections.
General Note: Includes vita.
Bibliography: Includes bibliographical references.
Source of Description: Description based on online resource; title from PDF title page.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Statement of Responsibility: by Jonathan A Watson.
Thesis: Thesis (M.S.)--University of Florida, 2012.
Local: Adviser: Wysocki, Allen F.
Local: Co-adviser: Gunderson, Michael A.

Record Information

Source Institution: UFRGP
Rights Management: Applicable rights reserved.
Classification: lcc - LD1780 2012
System ID: UFE0044752:00001

Permanent Link: http://ufdc.ufl.edu/UFE0044752/00001

Material Information

Title: Hammock Pack Fresh Bartlett Pears Implications for Marketing Based on Consumers Willingness to Pay for Sensory Attributes and Return on Investment Potential
Physical Description: 1 online resource (96 p.)
Language: english
Creator: Watson, Jonathan A
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2012

Subjects

Subjects / Keywords: chain -- hammock -- pack -- pears -- profitability -- supply -- wtp
Food and Resource Economics -- Dissertations, Academic -- UF
Genre: Food and Resource Economics thesis, M.S.
bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: The fresh fruit and vegetable industry in the United States has experienced significant change over the last few decades.  As a result there are now more options than ever for consumers in terms of variety and availability.  In spite of this change, the consumption of fresh pears in the United States has remained relatively stagnant over the last few decades (ERS, 2009).  Consumers understand that eating fresh fruit leads to a balanced diet and a healthy lifestyle, however retail markets for fresh pears have not seen increased purchases.  Greater accessibility to fresh fruit, such as pears, and increased awareness of their health benefits have done little to increase consumption.  Retailers face a great challenge in delivering higher quality, great-tasting fresh produce to the market. Ultimately, technology may be the answer to increasing consumption of fresh pears in the United States.  The hammock pack is a consumer packaging option that allows riper pears to be successfully marketed by protecting them from physical injury.  Determining the attributes that consumers prefer in fresh pears will help supply chain participants deliver a better product to those markets.  The purpose of this study is composed of two parts: 1.  To identify consumer preferences through sensory attributes for fresh Bartlett pears. 2.  To determine profitability potential for hammock pack technology for retailers. In this paper, we use a survey and conjoint analysis while asking the participant’s about their willingness to pay (WTP) for fresh raw Bartlett pears shipped in hammock pack containers versus those shipped in traditional bulk corrugated containers.  We also asked participants to provide their responses to sensory attributes associated with Bartlett pears in various packaging forms.  This was done in order to improve the understanding of consumers’ purchasing preferences for fresh raw Bartlett pears based on a series of sensory attributes including, taste, appearance, aroma, flavor and overall acceptability.
General Note: In the series University of Florida Digital Collections.
General Note: Includes vita.
Bibliography: Includes bibliographical references.
Source of Description: Description based on online resource; title from PDF title page.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Statement of Responsibility: by Jonathan A Watson.
Thesis: Thesis (M.S.)--University of Florida, 2012.
Local: Adviser: Wysocki, Allen F.
Local: Co-adviser: Gunderson, Michael A.

Record Information

Source Institution: UFRGP
Rights Management: Applicable rights reserved.
Classification: lcc - LD1780 2012
System ID: UFE0044752:00001


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1 HAMMOCK PACK FRESH BARTLETT PEARS: IMPLICATIONS FOR MARKETING AND RETURN ON INVESTMENT POTENTIAL By JONATHAN ADAM WATSON A THESIS PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE UNIVERSITY OF FLORIDA 2012

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2 2012 Jonathan Adam Watson

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3 To the memory of my mother, father and grandm other who dedicated their lives to the continuation and preservation of American agriculture. May they forever rest in eternal peace.

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4 ACKNOWLEDGMENTS I would like to express my appreciation to my committee for providing me with the guidance and insight to complete this project. Without the support of my chair, Dr. Allen Wysocki, this thesis would not have been possible. The other members of my committ ee, Dr. Michael Gunderson and Dr. Jeff Brecht, were essential in providing me with expertise in financial analysis and matters related to horticultural science. I would also like to thank Dr. Lisa House for her help with constructing questions for the exp erimental design. Additionally, I would like to thank Dr. Charles Sims and Eric Quinn for their help with using facilities and lab equipment while conducting the sensory analysis. I would like to take the time to thank Dr. Zhifeng Gao for his assistance in econometric modeling including design and analysis, as well as for his assistance in data coding. I would like to thank the following individuals for their help with the shipping trials: Dr. William Pelletier and Angelos Deltsidis from the University of Florida. Also, Dr. Beth Mitcham, Dr. Jim Thompson, Dr. Roberta Cook, Dr. David Slaughter, Dr. Carlos Crisosto and Andrew Macnish from the University of California Davis. Their tireless effort was essential for this study. Additionally, this project was supported by the Specialty Crop Research Initiative Grant. Finally I would like to thank Lauren Douma for her emotional support, her encouragement was critical in completing this paper.

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5 TABLE OF CONTENTS page ACKNOWLEDGMENTS ................................ ................................ ................................ .. 4 LIST OF TABLES ................................ ................................ ................................ ............ 7 LIST OF FIGURES ................................ ................................ ................................ .......... 8 LIST OF ABBREVIATIONS ................................ ................................ ............................. 9 ABSTRACT ................................ ................................ ................................ ................... 10 CHAPTER 1 INTRODUCTION ................................ ................................ ................................ .... 12 Overview ................................ ................................ ................................ ................. 12 Traditional Pear Sup ply Chain ................................ ................................ ................ 13 Alternatives ................................ ................................ ................................ ............. 15 Purpose & Significance of Study ................................ ................................ ............. 17 Research Hypotheses ................................ ................................ ............................. 17 Research Objectives ................................ ................................ ............................... 18 2 LITERATURE REVIEW ................................ ................................ .......................... 19 Biology & Taxonomy ................................ ................................ ............................... 19 Health Benefits ................................ ................................ ................................ ....... 20 Harvest & Co nditioning ................................ ................................ ........................... 21 Production ................................ ................................ ................................ ............... 22 Consumption ................................ ................................ ................................ ........... 23 Packaging ................................ ................................ ................................ ............... 25 Consumers & Willingness to Pay ................................ ................................ ............ 27 3 METHODOLOGY ................................ ................................ ................................ ... 29 Shipping Trials ................................ ................................ ................................ ........ 30 Harvesting Specifics ................................ ................................ ......................... 30 Conditio ning & Storage Specifics ................................ ................................ ..... 30 Transportation Specifics ................................ ................................ ................... 31 Consumer Sensory Panel ................................ ................................ ....................... 33 Experimental Design ................................ ................................ ............................... 33 Paired C omparison 1: Hammock Pack/Hammock Pears vs. Tray/Hammock Pears ................................ ................................ ................................ ............. 34 Paired Comparison 2: Hammock Pack/Hammock Pears vs. Tray/Bulk Pe ars 35 Paired Comparison 3: Tray/Hammock Pears vs. Tray/Bulk Pears ................... 36 WTP Model Specification ................................ ................................ ........................ 36

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6 Prof itability ................................ ................................ ................................ .............. 37 4 RESULTS ................................ ................................ ................................ ............... 40 Sensory Panel Results ................................ ................................ ............................ 40 Paired Comparison 1: Hammock Pack/Hammock Pears vs. Tray/Hammock Pears ................................ ................................ ................................ ............. 40 Paired Comparison 2: Hammock Pack/Hammock Pears vs. Tray/Bulk Pears 44 Paired Compariso n 3: Tray/Hammock Pears vs. Tray/Bulk Pears ................... 46 Demographics ................................ ................................ ................................ .. 57 WTP Model Estimation Results ................................ ................................ .............. 58 Profitability: Hypothetical Scenarios ................................ ................................ ........ 61 5 SUMMARY & CONCLUSIONS ................................ ................................ ............... 70 Limitations ................................ ................................ ................................ ............... 73 Extension of Research ................................ ................................ ............................ 75 APPENDIX A SURVEY INSTRUMENT ................................ ................................ ......................... 78 B COST COMPARISON TABLES ................................ ................................ .............. 91 LIST OF REFERENCES ................................ ................................ ............................... 93 BIOGRAPHICAL SKETCH ................................ ................................ ............................ 95

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7 LIST OF TABLES Table page 1 1 Popular fruit varieties produced in the United States during 2009 ..................... 13 2 1 Nutritional values and weight for edible portions of raw fresh pears. ................. 21 3 1 Average pear firmness levels during shipping trial ................................ ........... 33 4 1 Descriptive st atistics of pear appearance ratings in paired comparison 1. ........ 41 4 2 WTP ($/lb.) for appearance hammock pack/hammock pears vs. tray/hammock pears ................................ ................................ ........................... 43 4 3 Appearance descriptive statistics paired c omparison 2 pears. .......................... 44 4 4 WTP for package appearance hammock pack/hammock pears vs. tray/bulk pears ................................ ................................ ................................ .................. 46 4 5 Day 1 paired comparison 3 mean responses. ................................ ................... 47 4 6 Day 1 WTP for sensory attributes ................................ ................................ ...... 52 4 7 Day 2 paired comparison mean responses ................................ ....................... 53 4 8 Day 2 WTP for Sensory Attributes ................................ ................................ ..... 57 4 9 Day 1 age & gender ................................ ................................ ........................... 57 4 10 Day 2 age & gender ................................ ................................ ........................... 58 4 11 WTP linear regression model for sensory attributes ................................ .......... 60 4 12 Volume estimates and transportation cost comparison ................................ ..... 64 4 13 Labor and materials cost comparison ................................ ............................... 66 4 14 Annual costs and box/case comparison ................................ ............................ 68

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8 LIST OF FIGUR ES Figure page 1 1 Fresh pear supply chain ................................ ................................ .................... 14 1 2 Bartlett pears in the hammock pack system ................................ ...................... 16 2 1 Total U.S. pear consumption per capita 1976 2010 ................................ .......... 23 2 2 Total fresh fruit consumption per capita 1976 2010 ................................ ........... 24 2 3 Popular pear varieties 2009 ................................ ................................ ............... 24 3 1 Participant hedonic rating scale ................................ ................................ ......... 35 4 1 Day 1 Preferences Hammock Pack/Hammock Pears vs. Tray/ Hammock Pear. ................................ ................................ ................................ ................... 42 4 2 Day 2 Preferences Hammock Pack, Hamm ock Pear vs. Tray, Hammock Pear. ................................ ................................ ................................ ................... 42 4 3 Day 1 preferred choice hammock pack, hammock pears vs. tray, bulk pears ... 45 4 4 Day 2 preferred choice hammock pack/hammock pears vs. tray/bulk pears ..... 45 4 5 Day 1 Hammock Pack Pears Response Attributes ................................ ............ 47 4 6 Day 1 Bulk Pears Response Attributes ................................ .............................. 48 4 7 Day 1 firmness responses ................................ ................................ ................. 50 4 8 Day 1 firmness hammock pears ................................ ................................ ........ 50 4 9 Day 1 firmness bulk pears ................................ ................................ ................. 51 4 10 Day 2 hammock pears response attributes ................................ ....................... 54 4 11 Day 2 bulk pears response attributes ................................ ................................ 54 4 12 Day 2 firmness responses ................................ ................................ ................. 55 4 13 Day 2 firmness hammock pears ................................ ................................ ........ 56 4 14 Day 2 firmness bulk pears ................................ ................................ ................. 56

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9 LIST OF ABBREVIATION S ARS Agricultural research service the principal in house research agency of the United States Department of Agriculture (USDA). ARS is one of four agencies in USDA's Research, Education and Economics mission area. ARS is charged with extending the nation's scientific knowledge and solving agricultural problems through its four national program areas: nutrition, food safety and qua lity; animal production and protection; natural resources and sustainable agricultural systems; and crop production and protection. ARS research focuses on solving problems affecting Americans every day. FOB Freight on board Used to indicate the geograph ical point to which delivery is included in the price. After this point, the buyer is responsible for all risks and delivery costs. RDI Reference daily intake The daily intake level of a nutrient that is considered to be sufficient to meet the requiremen ts of 97 98% of healthy individuals in every demographic in the United States. RPC Reusable plastic container Storage or transport vessels made of durable molded plastic. It is intended to be used more than once. USDA United States Department of Agricul ture The United States federal executive department responsible for developing and executing U.S. federal government policy on farming, agriculture, and food. It aims to meet the needs of farmers and ranchers, promote agricultural trade and production, w ork to assure food safety, protect natural resources, foster rural communities and end hunger in the United States and abroad. WTP Willingness to pay the maximum amount a person would be willing to pay, sacrifice or exchange in order to receive a good or to avoid something undesired.

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10 Abstract of Thesis Presented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Master of Science HAMMOCK PACK FRESH BARTLETT PEARS: IMPLICATIONS FOR MARKETING AND RETURN ON INVESTMENT POTENTIAL By Jonathan Adam Watson August 2012 Chair: Allen Wysocki Co chair: Michael Gunderson Major: Food & Resource Economics The fresh fruit and ve getable industry in the United States has experienced significant change over the last few decades. As a result there are now more options than ever for consumers in terms of variety and availability. In spite of this change, the consumption of fresh pea rs in the United States has remained relatively stagnant over the last few decades (ERS, 2009) Consumers understand that eating fresh fruit leads to a balanced diet and a healthy lifestyle, however retail markets for fresh pears have not seen increased p urchases. Greater accessibility to fresh fruit, such as pears, and increased awareness of their health benefits have done little to increase consumption. Retailers face a great challenge in delivering higher quality, great tasting fresh produce to the ma rket. Ultimately, technology may be the answer to increasing consumption of fresh pears in the United States. The hammock pack is a consumer packaging option that allows riper pears to be successfully marketed by protecting them from physical injury. Det ermining the attributes that consumers prefer in fresh pears will help supply chain participants deliver a better product to those markets.

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11 The purpose of this study is composed of two parts: 1. To identify consumer preferences through sensory attributes fo r fresh Bartlett pears. 2. To determine profitability potential for hammock pack technology for retailers. about their willingness to pay (WTP) for fresh raw Bartlett pears shipped in hammock pack containers versus those shipped in traditional bulk corrugated containers. We als o asked participants to provide their responses to sensory attributes associated with Bartlett pears in various packaging forms. This was done in order to improve the on a series of sensory attributes including, taste, appearance, aroma, flavor and overall acceptability.

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12 CHAPTER 1 INTRODUCTION Overview Deliver ing high quality fresh produce to consumers is a challenge that all participants in the produce supply chain face. Fresh produce is unique compared to other types of food products in that it has a high degree of perishability and therefore requires specia l consideration as it moves from producer to the end consumer. Because of the nature of fresh produce, postharvest losses will undoubtedly occur and magnitude of these losses increases with exposure to temperatures, relative humidities, and/or concentrations of oxygen, carbon dioxide, and ethylene outside the ranges that (Kader, 2000). Postha rvest quality of fresh produce ultimately depends on addressing each of these issues according to the specific type of produce in question and oftentimes simultaneously with other specialty crops. Over the past few decades, technology has been used extensively to protect fresh methods, pre cooling methods and applications, storage techniques, packing and packaging, quarantine systems, transport systems especially by road and sea, modified packaging has changed relatively little over the last few decades as members of the fresh pear supply chain continue to use traditional packing methods including wooden, corrugated cardboard and paper materials. The supply chain has recently adopted

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13 resuable plastic co reducing waste and greenhouse gas emissions, they are not by themselves sufficient in delivering ready to eat fruit to market. Similiarly, traditional containers and materials have many advant ages in shipping certain varieties in various conditions, however they are not appropriate for every application. Traditional Pear Supply Chain In the United States during 2009, approximately 57,000 acres yielded 957,000 tons of commercially produced pea rs worth an estimated $374.4 million dollars in cash receipts. In terms of total commerical production and total cash receipts, United States pears rank 7 th and 8 th in each category respectively while in terms of bearing acreage they rank 11 th relative to other domestically produced fruit (ERS, Fruit and Tree Nut Yearbook, 2010). Table 1 1 Popular fruit varieties produced in the United States during 2009 Production Volume Cash Receipts Bearing Acreage Tons (000's) Rank Dollars (000's) Rank Acres (000's) Rank Oranges 9,128.00 1 1,993,237.00 3 656.30 2 Grapes 7,295.00 2 3,689,412.00 1 942.90 1 Apples 4,958.00 3 1,986,422.00 4 347.80 3 Strawberries 1,401.00 4 2,124,195.00 2 58.10 10 Grapefruit 1,304.00 5 241,297.00 11 80.40 7 Peaches 1,104.00 6 594,248.00 5 118.80 5 Pears 957.00 7 374,374.00 8 57.00 11 Lemons 912.00 8 394,199.00 7 59.00 9 Prunes and Plums 627.00 9 258,043.00 10 93.80 6 Cherries 610.00 10 569,180.00 6 120.90 4 Tangerines 443.00 11 209,426.00 13 44.20 12 Cranberries 346.00 12 340,706.00 9 38.50 13 Avocados 269.00 13 221,840.00 12 66.30 8 ERS Fruit and Tree Nut Yearbook 2009 Pears are picked when they are mature but retain a high degree of firmness before ripening has initiated. The fruit are climacteric, meaning that they have high respiration

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14 rates during the ripening stage and continue to ripen after they are picked. The fruit are promote and synchronize ripening off the tree. When the pears reach a desired firmness, color and sugar content they are shipped to the buyers. As shown in F igure 1 1, pears can move throughout the supply chain in a variety of ways, however it all starts with the grower. Some grower/packers handle their own sales or they contract with a packer to pack and sell their pears. Otherwise, grower/packers have the ability to sell product to wholesalers, retailers or directly to customers. There are numerous channels or combinations in which pears can move through and within the chain. Figure 1 1 Fresh pear supply chain Pears are traditionally packaged in either wrapped or unwrapped volume tight fill 44 (4/5 standard box/case), 40 or 36 lb. or either in Euro pack corrugated cardboard boxes for shipping to their various destinations. While this method is relatively effective

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15 for shipping fruit that are still rath er firm, it falls short of succeeding in delivering and protecting softer fruit with lower firmness levels. In the traditional method, pears are conditioned to begin the ripening process but do not always arrive ready to eat. Oftentimes the pears are sti ll too firm for consumers and they require additional time to reach their desired ripeness. The hammock pack system will allow the delivery of a ready to eat pear the day it arrives at the retailer. It has the ability to not only command a price premium but also increase demand for fresh pears in the market. Alternatives Alternative technologies such as the hammock pack may be a viable substitute for shipping and securing fresh Bartlett pears. As shown in Figure 1 2, the hammock pack container is a suspe nded tray package that consists of a clear rigid plastic clamshell container with a removable tray. The tray suspends the fruit in individual pockets inside the clamshell. This prevents the fruit from touching each other or the top and bottom of the clam shell and from moving within the container. The entire clamshell and suspended tray secures the fruit to helps prevent bruising, abrasion and other types of damage to the fruit. The hammock package system is composed of polyethylene terephthalate, a rec yclable thermoplastic polymer designated with resin code 1. Although this material is recyclable, the key ingredients terephthalic acid and ethylene glycol are derived from fossil fuels therefore sustainability may be of concern. Nevertheless, this type o f container will allow growers, packers and shippers to deliver a pear to the market that is less firm (i.e., more ripe) than pears shipped via traditional methods.

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16 Figure 1 2 Bartlett pears in the hammock pack system The hammock pack system protects the pears from various forms of damage such as bruising and abrasion during handling, transporting and displaying of the product. The suspended tray is inserted into a clamshell which prevents the pears from coming into contac t with one another or with any other surface that may damage or disfigure the pear by providing protection. This protection is an important feature of the hammock pack system as ripen, fresh pears quickly lose their firmness as they mature. In current con ditions, traditional bulk pears would be damaged when they are at a ready to eat firmness. Additionally, various studies have demonstrated that firmness and ripeness are two of the most important attributes when selecting fresh pears. If the firmness or ripeness of pears are insufficient or undesirable, consumers will not make a purchase. According to one study, the top three reasons consumers were dissatisfied with the current quality of pears, in ranking order starting with most dissatisfied, were that they were too hard, flavorless and not ripe enough (Daniels, 2011).

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17 Purpose & Significance of Study We are interested in determining the sensory attributes of fresh Bartlett pears that consumers find most appealing with regard to appearance, aroma, acceptability, flavor and firmness. Understanding which of these attributes contribute the most to consumer WTP will help participants in the for fresh Bartlett pear supply chain ship a higher quality product that may increase consumption and sales. We a re also interested in determining if the hammock pack delivery system provides a positive return on investment for growers, shippers, wholesalers and retailers. While there are many assumptions that can be made about this fresh pear handling, distribution, marketing and consumption, only a few tests were within the scope of this research. The following research hypotheses were proposed with regard to the fresh pear supply chain in the United States. Research Hypotheses Bartlett pears shipped in hammock p ack s are more protected than traditional bulk pears and consumers perceive the hammock pack fruit as being more protected and of higher quality in terms of taste, appearance and aroma. Riper Bartlett pears in hammock packs have less damage than traditional pear packs with fruit of the same ripeness stage. Consumers perceive riper pears to be higher quality and more desirable than less ripe pears. Consumers are willing to pay premiums for pears that are perceived to be more protected and of higher quality i n terms of taste, appearance and aroma. Bartlett pears shipped in hammock pack s yield positive return s for retailers. While our research hypotheses allow us to make certain assumptions, we must create testable objectives that either support or reject our t heories. Given our research hypotheses, the goals of this study include the following four objectives:

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18 Research Objectives 1. mature Bartlett pears. 2. ay for fresh Bartlett pears in hammock packaged vs. traditionally shipped bulk containers. 3. Determine pears affect WTP. 4. Compare WTP percent premiums fro m sensory panel trials with the percent change in costs observed at the retail level

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19 CHAPTER 2 LITERATURE REVIEW Biology & Taxonomy Pears are any type of tree species of the genus Pyrus which includes 22 species, of which two are cultivated for their edi ble fruit: P. communis the common or European pear, and P. pyrif o lia the Japanese or Asian pear (Challice & Westwood, 1973) Pears are members of the family Rosaceae, subfamily Pomoideae, along with apples and quince. Pears are indigenous to temperate and coastal regions of the Old World, including Western Europe, North Africa and throughout Asia. According to Nikolai Vavilov, cultivated pears arose from three centers of diversity which include what is now China, Asia Minor and Central Asia (Vavilov, 1 951) Pear trees are medium sized, reaching a maximum height of 50 feet and oftentimes have a tall, narrow crown (USDA, 2012) The leaves are alternately arranged measuring approximately 1 inch to 4.5 inches in length, depending on the variety. Most pe ars are deciduous, meaning their leaves fall off seasonally, however some Asian pears are evergreen. The flowers of pears are typically white, yellow or pink and have five petals. Most pear trees are cold hardy and can withstand temperatures between 13 and 40 Fahrenheit during the winter. Pear fruit typically mature early in the fall and European pears are unique in that they do not ripen fully on the tree unless exposed to cold temperatures In commercial pear production, the fruit are typically harvested when physiologically mature, but prior to ripening initiation, and placed into refrigerated storage at 30F to 31F to uniformly initiate ripening.

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20 Health Benefits There are many health benefits associated with consuming fresh fruits and vegetables such as fresh pears. A rich diet in fruits and vegetables can substantially reduce the risk of developing cardiovascular disease (Lichtenstein, et al., 2006) Pears also provide certain nutrients essential to a healthy lifestyle. The Agricultural Research Service (ARS), agency within the United States Department of Agriculture (USDA) s National Nutrient Database are the nutrient values and weights for edible portions of raw fresh pears. The nutritional values per cup (70g.) servings are given below in Table 2 1. In a cup (70 g.) serving of fresh raw pears there are a total 41 kc al of energy, 10.82 g. of carbohydrates, with 0.08 g. of fat and 0.27 g. of protein. Each cup serving of fresh raw pears provides 5 g. of folate (vitamin B 9 ). Pears contain 0.008 mg. of Thiamine, 0.018 mg. of Riboflavin, 0.11 mg. of Niacin and 0.02 mg of Vitamin B 6. Pears contain 6 mg of calcium, 0.12 mg. of iron, 5 mg. of magnesium, 8 mg. of phosphorus, 83 mg. of potassium and 0.07 mg of zinc (ARS, 2011) Most notably, pears are high in dietary fiber accounting for 8.8% (2.2 g.) of an reference daily intake (RDI) per serving ( cup) for dietary fiber based on 2,000 calories per day (ARS, 2011) A single serving size of fresh pears contains (ARS, 2011) Research has also shown that consuming pears help reduce instances of certain cancers such as endometrial cancers, a condition that affects the lining of the uterus (Herber, Smith Warner, Genkinger, & Giovannucci, 2006).

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21 Table 2 1. Nutritional values and weight for edible port ions of raw fresh pears. Fresh Raw Pears Nutritional value per 1/2 cup (70g) Proximates Value per 1/2 Cup Units Energy 41 kcal Carbohydrates 10.82 g Sugars, Total 6.86 g Fiber, total dietary 2.2 g Fat 0.08 g Protein 0.27 g Vitamins Thiamine (vitamin B1) 0.008 mg Riboflavin (vitamin B2) 0.018 mg Niacin (vitamin B3) 0.11 mg Vitamin B6 0.02 mg Folate (vitamin B9) 5 g Vitamin C 2.9 mg Minerals Calcium 6 mg Iron 0.12 mg Magnesium 5 mg Phosphorus 8 mg Potassium 83 mg Zinc 0.07 mg USDA National Nutrient Database Harvest & Conditioning Pears are typically hand picked from the trees. The pears are then placed into orchard bins, which minimizes bruising and damage to the fruit. The orchard bins are transported from the orchard to a packing house where the fruit may be placed directly into cold storage at 30F to 31F or packed first, then placed into cold storage in order to reduce the core temperature and initiate the ripening process. This cooling and storage process for the pears takes a minimum of 3 5 weeks and is essential in ensuring proper ripening later. When the fruit are packed, they are transferred from the orchard bins and transported to the sizing and grading lines by water in order to

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22 minimize bruising and damage. The water is chlorinated, acting as a disenfectant in killing any bacteria, and also inclu des various types of salts. Salts are added to the water transport system because pears have nearly the same density as water, therefore they will sink. When salts such as sodium lignin sulfonate, sodium silicate and sodium carbonate are added to the wat the fruit to float. Production Pears are cultivated across the globe with thousands of varieties known to exist. However of those cultivated, there are only a handful of desirable varieties produced and marketed worldwide. Total worldwide pear production in 2009 was estimated to be approximately 24,758,495 short tons or 49.5 billion pounds of fruit (FAO, 2009). The top 10 worldwide leaders in pear production, which comprise 85.1% of world production for 2009 were 1) China, 2) United States, 3) Italy, 4) Argentina, 5) Republic of Korea (South), 6) Spain, 7) Turkey, 8) Japan, 9) South Africa and 10) India. In 2009, The United States produced 936,215 tons or 1.8 billion pounds of various pear varieti es (FAO, 2009). In the United States, there are three basic types of pears grown. The three basic types are European, Asian and Oriental hybrids. The European types include varieties such as Bartlett, Bosc and Anjou. Asian pears, also known as p color and shape. Finally Oriental hybrid pears, which are hybrids of Europeans and Asian varieties, are the least common type of pear grown, and range in texture and shape. T he 10 most common varieties grown, in no particular order, in the United States: Green Anjou, Red Anjou, Bartlett, Red Bartlett, Bosc, Comice, Concorde, Forelle, Seckel, Starkrimson (PBNW, 2012)

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23 Consumption As shown in Figure 2 1, total per capita pear c onsumption has declined from 7.1 lbs. in 1976 to 5.6 lbs. in 2010. While this decline is partly driven by a decrease in consumption of canned pears, consumption Per capita consumption of fresh pears in the United States has remained relatively stagnant fr om years 1976 to 2010, increasing only modestly at 3.5% (ERS, 2009) Fresh pear consumption peaked at 3.5 lbs. per person annually in years 1987 and 1999 while per capita consumption in 2010 was 2.9 lbs. annually. Figure 2 1. Total U.S. pear consumption per capita 1976 2010 Contrarily, over the same time period, consumption of total fresh fruit in the United States has seen a rather sharp increase of 23.1% from 83.1 lbs. in 1976 to 102.3 lbs. in 2010, as shown in Figure 2 2 (ERS, Fruit a nd tree nut per capita, 1976 to 2008, 2009) One of the most common varieties of pear consumed in the United States is the Bartlett with 39.9% of the total market for pears purchased in 2009 as shown in Figure 2 3. However, data suggests that Anjou pear tr ees are being planted at an increasingly

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24 faster rate than any other variety because of an improved acceptance of the variety in the fresh pear market (Buckner, 2009) Figure 2 2. Total fresh fruit consumption per capita 1976 2010 Figure 2 3. Popul ar pear varieties 2009

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25 Packaging food products. As early humans left their nomadic lifestyles and became agrarian, they found themselves in need of storing food for longer per iods of time as seasonal weather patterns affected their food supply. Early storage containers were found naturally and consisted of gourds, shells and baskets (Risch, 2009) Glass, pottery and paper packaging replaced these early forms of containers; ho wever they have had a minimal effect on the quality and protection of the products they hold. These containers the request of Napoleon Bonaparte for his army. Plastics were the next great innovation in food storage and preservation. While plastics such as styrene, vinyl chloride and nitrate were also discovered in the after World War II where intense commercialization for food packaging resulted in convenience and consistency in between food products (Berger, 2002) As a result, fresh fruits and vegetables in the market became more readily available and consistent in terms of overall quality. Today, plastics are used in many different ways for shipping and storing fruits and vegetables. Little change occurred in the packaging of produce through the 20 th century. Most produce was shipped rather long distances in wo oden crates. While these containers protected the stacked produce from crushing, they also resulted in bruising, abrasion and other types of damage to the product. Corrugated cardboard lessens those latter types of damage; however postharvest losses in bo th product availability to consumers and revenue to both producers and retailers still occurs, decreasing the efficiency of the fresh pear supply chain. According to Adel Kader, a postharvest physiologist from the

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26 University of California Davis, "A bout on e third of all fruits and vegetables produced are never consumed by humans (Kader, 2005) Some of these losses are undoubtedly attributed to inappropriate postharvest practices and conditions from the time the product leaves the producer until it reaches the consumer. While losses in United States are smaller relative to those found in developing countries, they still contribute to a significant decrease in value for consumers and producers. Much of these losses occur during postharvest handling, packa ging and shipping of produce and produce products. One study found that throughout the movement of specialty crops in the supply chain both qualitative and quantitative losses in horticultural crops occur between the time of harvest and consumption (Prussi a & Shewfelt 1993) Increasingly, there has been great emphasis placed on better postharvest handling of produce and improvements in technology for shipping and transportation. Examples of this include increasing sanitary conditions to prevent decay as well as human pathog ens and improvements in air ride suspensions on transit vehicles reduce damage from vibration bruising and abrasions. However, one of the most important advances in delivering high quality, safe and great tasting produce to market may in fact come from pa ckaging containers that isolate and protect the fruit to prevent contamination and allow riper, better tasting fruit to be successfully handled and marketed. The reasons for the lack of advancement and implementation for such packaging systems may not be because of engineering issues. They may in fact be because of a lack of education of players throughout the supply chain, logistical complications, or There are many

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27 postharvest technologie s that extend the marketable life of fruits and vegetables. However, some of these technologies do not have a positive return on investment (ROI) due to the large capital investments needed for their implementation and/or the increasing competition related to globalization of produce marketing. (Kader, 2006) Consumers & Willingness to Pay The decision to purchase fresh fruits such as pears requires many considerations including sensory factors and consumers make their choices based on their own individual optimal quality characteristics. They also make their decision to purchase based on t he constaints of their individual wealth. This is an important element in the movement of fresh fruit such as pears because it helps participants in the supply chain pay (WTP) to determine the maximum amount an individual would be willing to sacrifice, exchange or pay to receive a good. Several studies have also shown that optimal quality characteristics, defined by consumers, are associated with willingness to pay for pr emiums in fruit (Jaeger & Harker, 2005) and (McCluskey, Mittelhammer, Marin, & Wright, 2007) Although it is understood that there is a strong association between quality and TP for optimal quality in Anjou pears found that individuals discount between $0.07/lb to $0.17/lb ($0.15/kg to $0.37/kg) for a one unit increase in pear firmness. The same ($0.20/kg to $0.24/kg) more for a one unit increase in soluble solid concentration (Gallardo, Kupferman, & Colonna, 2011) Another study found that on average, fo r

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28 sweetness, juiciness and firmness, consumers were willing to pay $0.057, $0.037 cents and $0.085/lb. more, respectively, for pears with a one unit increase in the liking rating (Zhang, Gallardo, McCluskey, & Kupferman, 2010) A study using experimental auctions found that consumers were willing to pay a premium of $0.08/lb for a one unit increase in soluble solids concentration (Combris, Pinto, Fragata, & Giraud Heraud, 2007) The results of the study also showed that while food safety is also important to consumers, sensory attributes related to taste are the primary factor that drives purchasing behavior. sensory attributes related to fresh pears, to our knowledge there has ye t to be a study that measures the effect that a protective packaging system like the hammock pack has on consumer perceived sensory attributes and ultimately their association with WTP. Pears shipped in hammock packs may help deliver pears that consumers perceive as being of higher quality, better tasting and more protected.

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29 CHAPTE R 3 METHODOLOGY There were four research objectives in this study. Objective 1 of this study was to determine consumer preference for taste, appearance and aroma in fresh Bartl ett pears of different ripeness stages in hammock packs versus those shipped in traditional bulk containers. Objective 2 was to determine consumer WTP for fresh Ba rtlett pears in hammock packs vs. traditionally shipped bulk containers. In order to accomp lish these objectives a brief survey (Appendix A) was administered to a consumer sensory panel. Participants were asked to provide their subjective responses for quality attributes in order to understand consumer preferences in fresh Bartlett pears. Afte r providing their responses, the participants were then asked to state their WTP for each of the samples. of fresh Bartlett pears affect WTP Objective 4 was to compare WTP percent premiums from the sensory panel with percent changes in costs based on assumptions for utilizing hammock packs To accomplish objective 4, volume estimates for loading fresh Bartlett tractor trailer with the maximum gross weight of 80,000 pounds were calculated for the half slotted carton, as well as the 36, 40, & 44 (4/5 standard box/case) pound volume filled boxes. The same was done for both a 2 layer corrugated Eurobox with 8 hammock pack containers in each box and a Eurobox with considered in this st udy as supply chain participants are more frequently utilizing this technology for shipping produce. In our analysis, 2 layer and 3 layer RPC configurations with 8 and 12 hammock packs, respectively, were also included in the volume estimates. For each tr ailer loaded with the maximum gross weight limit, it was

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30 assumed that it carried only one type of each of the box configuration. With these estimates, given any freight weight, the transportation and material costs per unit were calculated. Other costs s uch as labor and overhead were provided by industry sources and used to determine which participant bears how much of the cost for utilizing hammock pack containers in the supply chain. This information is also critical in determining the break even unit price for fresh Bartlett pears in hammock packs. While this study focused primarily on the sensory trials and its results to obtain preferred quality characteristics, explanation of the shipping trials is also important in understanding the results of th e data. Therefore, the following sections will concentrate on three primary areas of our methodology: shipping trials, sensory panels and return on investment analysis. Shipping Trials Harvesting Specifics The shipping trials began after the late summer p ear harvest (around August 15 th 2011) from an orchard near Courtland, California. The pears were picked by hand and they were transported to the packing house in orchard bins. The pears were run through the packing line on the day of harvest and sorted pears that will fit inside a traditional 4/5 standard corrugated cardboard produce box. at the widest point and have an average weight of 9.3 ounces. Conditioning & Storage Specifics The packed pears were then stored at 34 F for 8 weeks until they were ready for conditioning. In conditioning, pears are brought to a state where they have j ust initiated

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31 ripening. The conditioning of pears is a natural process in a controlled environment, typically in a large room, in which temperature and humidity are regulated. Ethylene gas is introduced into the environment and the pears begin to ripen, with changes that include reduction in chlorophyll (green color), flesh softening and the conversion of starch into sugar. In the shipping trials, the conditioning allowed for the creation of the various treatments. Each treatment resulted in differing f irmness stages or levels of pear ripeness. This allowed us to test consumer WTP for fresh Bartlett pears at different stages of ripeness. The approximate firmness levels chosen in this trial were 12, 8 and 6 lbs. and were achieved by conditioning the pea rs at 68 F for 24, 48 and 54 hours respectively. We refer to these firmness levels as Treatment 1(Firmness C), Treatment 2 (Firmness B) and Treatment 3 (Firmness A) for the 12, 8 and 6 lb. pears respectively. As shown in Table 3 1, the actual average ini tial firmness levels for the 12, 8 and 6 lb. pears, for hammock and bulk pears, were 11.6, 7.4 and 5.8 lbs. respectively. These firmness levels refer to the amount of force (in lbs.) required to push a penetrometer plunger tip of specified size, typically 8 mm in diameter, into the pulp of the pear. On October 13 th 2011 the pears were taken to Bee Sweet Citrus Inc. in Fowler, California where they awaited to be transported across country to the East Point Kroger Distribution Center in Atlanta, Georgia. T he pears were stored at 32 F Transportation Specifics The pears arrived at the East Point Kroger Distribution Center on October 23 rd 2011. They arrived at the East Point Kroger Distribution Center after a 3 day cross country ride. The palletized pears were shipped via tractor trailer with air ride suspension and stored at the rear of the refrigerated trailer with a temperature range of

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32 34 36 F. The shipment was tracked by GPS satellites and the product was monitored for temperature, relative humidity and carbon dioxide levels. Upon arriving at the distribution center in Atlanta on October 23 rd samples of the pears were scored to expose the flesh and the firmness measured with a penetrometer for a second time to determine their firmness levels once more. As shown in Table 3 1, the average firmness levels for the hammock pears upon arrival at the distribution center (secondary firmness level) for the Firmness C, Firmness B and Firmness A pears were 5.3, 4.6 and 4.8 respectively. The average firmness levels for bulk pears at Firmness C, Firmness B and Firmness C were 6.8, 5.4 and 4.6 lbs. respectively Once the firmness levels were measured, the product was repackaged and shipped to a Kroger retail store in Waycross, Georgia on the morning of October 24 th 2011. The tractor trailer used to transport the pears to the retail store was similar to the air ride tractor trailer previously used. This step was crucial in simulating how fresh pears move through the supply chain from the distribution center to each individual retail location as it simulates additional handling within the supply chain. Finally, the pears were transported from the Kroger retail store in Waycross, GA to the Sensory Analysis Lab at the University of Florida where they were stored overnight at 35 F awaiting the consumer sensory panel testing. Upon arriving at the UF firmness levels were again measured. Hammock pears at Firmness Levels C, B and A had mean firm ness levels of 3.8, 4.1 and 3.7 respectively. Bulk pears for Firmness Levels C, B and A had mean values of 5.2, 3.0 and 3.2 respectively.

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33 Table 3 1. Average pear firmness levels during shipping trial Initial Firmness Level Davis, CA Secondary Firmnes s Level Atlanta, GA Tertiary Firmness Level Gainesville, FL All Pears Hammock Bulk Hammock Bulk Treatment 1 (Firmness C) 12 lbs. 11.6 5.3 6.8 3.8 5.2 Treatment 2 (Firmness B) 8 lbs. 7.5 4.6 5.4 4.1 3.0 Treatment 3 (Firmness A) 6 lbs. 5.8 4.8 4.6 3.7 3.2 Consumer Sensory Panel On October 25th, 2011 the consumer sensory panel began with convenience sampling of participants. It was decided that Treatment 1, the pears in the 12 lb. firmness level or Firmness C, were not ripe enough (i.e. not ready to eat) and were not used in the sensory panel test Treatment 3, pears at the initial 6 lb. firmness level or Firmness A was the first to be tested on day 1 of the panel. In total, 99 panelists participated on d ay 1 of the consumer sens ory panel test The questions asked were pay. The participa nts were compensated with a selection of either a discount coupon or soft drink of their choice. The day 2 sen sory panel concluded the study with treatment 2 or Firmness B. In treatment 2 hammock pack pears and bulk pears at the 8 lb. initial firmness level were chosen for this experiment. In total, 88 panelists participated o n day 2 of the consumer sensory pane l test and the same questions were used as o n day 1 Experimental Design The 2 day consumer sensory panel test was conducted to identify preferred sensory quality characteristics and panel participant willingness to pay (WTP) for fresh Bartlett pears shipp ed in two packaging systems (hammock packs and bulk boxes). The consumer sensory panel test was conducted during October 25 th and October 26 th

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34 Lab. Three replicate boxe s of pears at Firmness Levels A, B and C were shipped with the pears in either hammock packs or tight filled boxes. Firmness Levels A and B were consumer panel. Fi rmness C pears (12 lb. firmness level pears) were not tested because they were not ripe enough to be used in the sensory trials. Participation in the consumer panel required that participants be consumers of fresh pears. Panelists were given a choice of a food coupon in the amount of $1.00 redeemable at University of Florida food locations or soda as compensation for their participation. Panelists were asked to compare and rate the sensory attributes for fresh Bartlett pears at the 6 (Firmness A) & 8 (Fir mness B) lb. firmness levels on day 1 and day 2 respectively. After answering demographic questions, participants were presented with three general paired comparisons using randomized blinding codes to identify the samples in the panel session. This was done to isolate the effect of the paired comparisons used included: Paired C omparison 1 : Hammock Pack/Hammock Pears vs. Tray/Hammock Pears In the first paired comparison, pears in a 6 count hammock pack were placed in front of each panelist alongside a group of six pears removed from the hammock pack and placed on a serving tray. The pears were identical; however the packaging differentiated the two samples. We refer to this comparison as Hammock Pack/H ammock Pear s vs. Tray/ Hammock Pear s Each sample was identified by a randomly generated blinding code known only by administers of the panel study and presented to each participant in alterna ting order. The participants were then asked to

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35 rate the two samples based on appearance only on a 9 point hedonic scale ranging point hedonic scale, as shown in Figure 3 1, is intended to direct the c his/her perceptions about the pears. Afterwards, the participants are asked to state their preferred choice. Next, the participants were then told that the current market price for bulk pears was $1.69/lb. and asked to state their WTP for each sample. Figure 3 1. Participant h edonic r ating s cale Paired C omparison 2 : Hammock Pack/Hammock Pears vs. Tray/Bulk Pears The second paired comparison was similar to the first paired comparison. Pears in a 6 count hammock pack were placed in front of each panelist alongside a group of six pears from a traditional bulk 36 pound volume tight fill box. These two samples of pears differed in how they were transported in the shipping trials. It is important to note tha t the hammock pack pears were shipped in a hammock pack clamshell while the bulk pears were shipped in the tight fill container. We refer to this comparison as Hammock Pack/ Hammock Pear s vs. Tray/ Bulk Pear s As with the first paired comparison, each sample was identified by a randomly generated blinding code known only by administers of the panel study and presented to each participant in alternating order. The participants were then asked to rate the two samples based on appearance only on the same 9

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36 were asked to state their preferred choice. They were t hen told that the current market price for bulk pears is $1.69/pound and asked to state their WTP for each sample. Paired C omparison 3 : Tray/Hammock Pears vs. Tray/Bulk Pears Paired comparison 3 removed the hammock pack from the experiment and placed two h alf pears, with one from a hammock pack and the other from a bulk pack, cut in half and placed in sample cups on a serving tray. We refer to this comparison as Tray/ Hammock P ears vs. Tray/ Bulk s This was done to remove the effect of the package on consum rate each individual sample on the same 9 point hedonic based on overall appearance and overall aroma only. The participants were then asked to taste and rate each individual sample based on overall acceptability and overall flavor. Similarly, participants were then asked to rate the firmness for each sample on a 5 point hedonic ing the pears a score of 3 for firmness indicated that the participants to state their WTP given the current market price of $1.69/pound for bulk pears. WTP Model Spe cification attributes increase in fresh Bartlett pears, a full linear regression model was constructed. This model is based on the responses from both days of Paired Comparison 3 : Tray/Hammock Pears vs. Tray/ Bulk Pears of the sensory panel and do not include the appearance of a package to participants. In Paired Comparison 3 all itself had an effe

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37 (6 lb. firmness level) were also categorized as a variable within the model to determine if the chosen objective firmness level acted as an intervening variable as well. Where i n denotes the i th individual; Appearance, Aroma, Acceptability, Flavor and Fi rmness are the individuals i hammock pack and Treatment 3 pears were assigned a dummy variable in the model where 1=variable present and 0=variable absent The o f the model to be es timated and is the observed error. We estimate the model found in Equation 3 1 using a robust regression procedure with the SAS statistical package and determine if the coefficients are statistically significant. The robust regression procedure was used due to a strong suspicion of heteroscedasticity and due to the presence of outliers. We then test the dummy variables Treat3 and Package for overall significance by conducting a hypothesis test using an F test and making a decision using the critica l value approach. Profitability One of the purposes of this study was to determine the break even price point for hammock pack technology and discover if there is potential to provide a positive return on investment for supply chain participants. In o rder to conduct a break even analysis for hammock pack pears we estimated FOB rates based on historical values. We used $18.00 per 40 lb. of fruit net weight to estimate the market value. This approximation for California Bartlett pears shipped throughou t the growing season was confirmed by (3 1)

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38 industry members and deemed valid for our estimates. We then prorated each packaging configuration according to the net weight in each case. For example, the standard 4/5 box holds around 45 lbs. of fruit whereas the 3 layer RPC holds approximately 38 pounds of fruit. Therefore the value of the fruit inside the 4/5 standard case and the 3 layer RPC is $20.25 and $17.01 respectively. We also needed to know how much hammock pack clamshell would cost pear grower/packer s. According to the manufacturer, the grower/packers can expect to pay $0.27 each. Finally, we had to make assumptions about how labor or handling would affect costs. Industry members stated that, on average, labor and handling costs would increase by $ 0.125 per clamshell. Therefore, a 2 layer configuration would see increased labor and handling costs of $1.00 per case where as a 3 layer configuration would see increased labor and handling costs of $1.50 case. By adding these real and assumed costs to the value of the fruit for each configuration, we can estimate the cost per case a retailer can expect to pay for hammock pack pears. We also need to approximate the maximum volume of product that could be trailer. We used a hypothetical approximation based on the dimensional and weight constraints of the fruit boxes, the pallets and the internal area of the semi trailer itself. It should be noted that it is rare for a retailer to purchase entire semi trai ler loads of only pears, however this approach was necessary to determine the per pound and per unit transportation costs assuming a freight rate of $5,500.00 per load. Shipping carton configurations such as 2 layer RPC and Eurobox, 3 layer RPC and 4/5 st andard case estimations were based on the maximum gross weight limit

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39 (80,000 lbs.). By subtracting semi trailer weight (37,500 lbs.) we can determine the maximum gross product weight including packaging and pallets that can be shipped. From there we can then determine the costs for transportation, materials and labor on a per pound and even per unit basis. We will then compare the per pound estimates to the differences of the stated WTP by participants of the sensory and the market price per pound for fr esh Bartlett pears at the time of the sensory panel. This will help us determine if hammock pack pears have profitability potential in the fresh pear supply chain.

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40 CHAPTE R 4 RESULTS The results of this study are divided into three main sections. First the results of appearance, preferred choice and demographic information. The second section discusses the results of the WTP linear robust regression mod el when the pears were removed from the packages in order to determine how changes in sensory attributes of fresh Bartlett pears affect WTP. The third and final section of this chapter analyzes estimates for return on investment (ROI), break even price, a nd comments on the overall economic feasibility of hammock pack system in the fresh pear supply. Sensory Panel Results Paired Comparison 1: Hammock Pack/Hammock Pears vs. Tray/Hammock Pears The results for the first paired comparison of hammock pack, hammo ck pears vs. tray, ham mock pears are given in Table 4 1 which provides descriptive statistic s for d ay 1 and d ance only. A statistically significant higher mean of 6.43 was stated for hammock pears in the hammock pack as opposed to a mean of 4.86 for hammock pears presented on a serving tray despite the Firmness A pears being identical on day 1 On day 2, participants gave a rating of 6.43 for hammock pears in hammock packs while bulk pears received a rating of 4 .67 for the Firmness B pears. There were statistically significant differences in these stated mean values for both Days 1 and 2 ( =0.01). These figures are based on a 9 point hedonic It is clear that although the pears were identical in every way except the packaging in which they were presented, participants rated the hammock pack pears presented in

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41 the hammock pack significantly higher than the hammock pack pears remov ed from the packaging and presented as if they were a bulk pear. This suggests that consumers may prefer the hammock pack design over that of a traditional loose bulk pear whenever the product is displayed and sold at various retail store locations. Tab le 4 1. Descriptive s tatistics of p ear a ppearance r atings in p aired c omparison 1 Day 1 Firmness A. Day 2 Firmness B Hammock Pack/ Hammock Pears Tray/ Hammock Pears Hammock Pack/ Hammock Pears Tray/Hammock Pears Mean 6.43*** 4.86*** 6.43*** 4.67*** Standard Error 0.12 0.17 0.16 0.19 Median 7.00 5.00 7.00 4.50 Mode 7.00 4.00 7.00 4.00 Std. Deviation 1.20 1.65 1.49 1.77 Variance 1.43 2.71 2.23 3.12 Note: (*, **, ***) represent statistical significance at the 10%, 5% and 1% levels, respectively. Figures 4 1 & 4 2 show preferred choice for Hammock Pack/Hammock Pears vs. Tray/Hammock Pears on d ay 1 and d ay 2. On d ay 1 86% prefer red Hammock Pack/Hammock Pears while 14% prefer Tray/Hammock Pears Similarly, 90% prefer red Hammock Pack/Hammock Pears on d ay 2. Given the statistically significant difference between both samples, the preferred choice between the two should not be surprising. Participants rated the pears presented in the hammock pack system higher than tho se simply placed on a tray, therefore it is only natural they would prefer them as well. Again, we are comparing the exact same pears presented in two different packaging formats. In spite of this, the participants overwhelmingly preferred the pears in t he hammock pack system over those presented on a serving tray.

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42 Figure 4 1 Day 1 Preferences Hammock Pack/Hammock Pears vs. Tray/ Hammock Pear. Figure 4 2 Day 2 Preferences Hammock Pack, Hammock Pear vs. Tray, Hammock Pear. 86% 14% Day 1 Participant Product Preferences Hammock Pack, Hammock Pears Tray, Hammock Pears 90% 10% Day 2 Participant Product Preferences Hammock Pack, Hammock Pears Tray, Hammock Pears

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43 The mean WTP for appear ance in the first paired comparison for Hammock P ack/ Hammock Pears vs. Tray/ Hammock Pears was $1.77 and $1.46 respectively on d ay 1. Hammock P ack/ Hammock Pears and Tray/ Hammock Pears had mean values of $1.66 /lb. and $1.22 /lb. respectively for d ay 2 as shown in Table 4 2 A two sample t test assuming equal variance was conducted to determine if the difference was statistically significant. D ay 1 results showed a sta tistically significant difference between hammock pears in the hammock pack vers es hammock pears removed from the hammock pack 0.01 Again, this was to be expected as participants rated pears in the hammock pack higher than those simply placed loose on a tray as they would currently appear in a retail location. While a statisti cally significant difference about whether these results could have happened by chance. In this case, participants express an interest in paying a price premium above the ma rket price Firmness A level pears on day 1, therefore it is unlikely that this is coincidence and this may have implications for actual sales. In both treatments participants discounted the amount they were WTP for bulk pears based simply on the appearanc e of the pears on trays. Table 4 2. WTP ($/lb.) for appearance hammock pack/hammock pears vs. tray/hammock p ears Day 1 Firmness A Day 2 Firmness B Hammock Pack/ Hammock Pears Tray/ Hammock Pears Hammock Pack/ Hammock Pears Tray/ Hammock Pears Mean $1.77*** $1.46*** $1.66*** $1.22*** Standard Error 0.08 0.08 0.07 0.05 Median 1.69 1.40 1.67 1.22 Mode 1.69 1.69 1.69 1.00 Std. Deviation 0.83 0.76 0.66 0.47 Variance 0.69 0.58 0.43 0.22 Note: (*,**,***) represent statistical significance at the 10%,5% and 1% levels, respectively.

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44 Paired Comparison 2: Hammock Pack/Hammock Pears vs. Tray/Bulk Pears The results for the second paired comparison of Hammock Pack/Hammock Pears vs. Tray/ Bulk Pears are given in Table 4 3 which provide descriptive statistic for d ay 1 and d Similar to the results in Paired Comparison 1 participants rated the Hammock Pack/ Hammock Pears higher than the Tray/ Bulk Pears on days 1 and 2. I t is interesting to note that the Tray/ Bulk Pears in Paired Comparison 2 scored approximately 1 scale point lower than the Tray/ Hammock Pears from Paired Comparison 1. This suggests that the participants recognize a difference in quality, in terms of over all appearance, between these two samples. The Hammock Pack/ Hammock Pears scored nearly the same in both Paired Comparison 1 and Paired Comparison 2. This should be expected since the Hammock Pack/ Hammock Pears samples were identical in both comparisons. On day 1, a mean of 6.39 was stated for Hammock Pack/ Hammock Pears as opposed to a mean of 3.85 for Tray/ Bulk Pears Day 2 mean results were 6.52 and 3.65 for Hammock P ack/ Hammock Pears and T ray/ Bulk Pears respectively. The differences in the mean resp onses for each sample were statistically significant at = 0.01for days 1 and 2. Table 4 3. Appearance descriptive statistics paired comparison 2 pears. Day 1 Firmness A Day 2 Firmness B Hammock Pack/ Hammock Pear Tray/Bulk Pear Hammock Pack/ Hammock Pear Tray/Bulk Pear Mean 6.39*** 3.85*** 6.52*** 3.65*** Standard Error 0.13 0.19 0.15 0.17 Median 7.00 4.00 7.00 3.50 Mode 7.00 2.00 7.00 4.00 Std Deviation 1.26 1.89 1.42 1.57 Variance 1.59 3.58 2.02 2.46 Note: (*,**,***) represent statistical significance at the 10%,5% and 1% levels, respectively.

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45 Figures 4 3 & 4 4 show Hammock Pack/ Hammock Pears vs. Tray/ Hammock Pears on d ay 1 and d ay 2 respectively On Day 1 94% preferred Hammock P ack/ Hammock Pears while 6% prefer red T ray/ Bulk Pears : 95% prefer red Hammock P ack/ Hammock Pears and 5% preferred T ray/ Bulk Pear s on Day 2. Figure 4 3 Day 1 preferred choice hammock pack, hammock pears vs. tray, bulk pears Figure 4 4 Day 2 preferre d choice hammock pack/hammock pears vs. tray/bulk pears

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46 The mean WTP based on appearance only in the second paired comparison for Hammock Pack/ Hammock Pears and Tray/ Bulk Pears was $1.77 and $1.13 respectively on Day 1. Hammock Pack/ Hammock Pears and T ray / Bulk Pears had mean values of $1.65 and $1.01 respectively for Day 2 as shown in Table 4 4 There was a statistically significant difference between the Hammock Pack/ Hammock Pears and the Tray/ Bulk Pears on days 1 and 2 at =0.01. Table 4 4. WTP for pack age a ppearance h ammock pack/h ammock p ears vs. tray/bulk p ears Day 1 Treatment 3 6 lbs. Day 2 Treatment 2 8 lbs. Hammock Pack/ Hammock Pears Tray/Bulk Pears Hammock Pack/ Hammock Pears Tray/Bulk Pears Mean $1.77*** $1.13*** $1.65*** $1.01*** Standard Error 0.09 0.07 0.07 0.06 Median $1.69 $1.00 $1.67 $1.00 Mode $1.69 $1.00 $1.69 $1.69 Standard Deviation 0.85 0.69 0.66 0.59 Variance 0.72 0.47 0.43 0.35 Note: (*,**,***) represent statistical significance at the 10%,5% and 1% levels, respectively. Paired Comparison 3: Tray/Hammock Pears vs. Tray/Bulk Pears The histogram results for the third paired comparison of T ray/ Hammock Pears vs. T ray/ Bulk Pears are given in Figures 4 5 & 4 6 while mean responses are provided in Table 4 5 were based on overall appearance, overall aroma, overall, acceptability and overall flavor. As shown in Table 4 5, on day 1 the Tray/ Hammock Pears had means of 6.90, 7.03, 6.72 and 6.65 for O verall A ppearance, Overall Aro ma, Overall Acceptability and O verall F lavor while Tray/ Bulk Pears had means of 6.04, 6.65, 6.54 & 6.68 in the same respective categories. There was a statistically significant difference between the means of both samples of pears in regards to Overall App earance at

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47 significant differences between the samples for Overall Appearance and Overall Aroma may suggest that the hammoc k package system is effective at delivering better looking, more aromatic fruit. Table 4 5. Day 1 paired comparison 3 mean responses. Day 1 Paired Comparison 3 Mean Responses Tray/Hammock Pears Tray/Bulk Pears Overall Appearance 6.90*** 6.04*** Overall Aroma 7.03** 6.65** Overall Acceptability 6.72 6.54 Overall Flavor 6.65 6.68 Note: (*,**,***) represent statistical significance at the 10%,5% and 1% levels, respectively Figure 4 5 Day 1 Hammock Pack Pears Response Attributes 0 5 10 15 20 25 30 35 40 Day 1 Tray/Hammock Pears Sensory Responses Overall Appearance Overall Aroma Overall Acceptability Overall Flavor

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48 While there were no statistically significant differences in the means of Overall Acceptability and Overall Flavor, the distributions of the responses of these categories were more normally distributed with less variation in the responses in the Tray/ Hammo ck Pears than the Tray/ Bulk Pears Less variation in the sensory attributes, despite the absence of the hammock packaging, suggests that the hammock pack system produces less variability in the quality of the fruit. This implies that the hammock pack sys tem can deliver a more consistent product throughout the supply chain, potentially leading to greater consumer satisfaction as well as increased and repeat sales. Figure 4 6 Day 1 Bulk Pears Response Attributes to pear firmness for the Tray/ Hammock Pears and Tray/ Bulk Pears are given in Figure 4 7 and Figure 4 8 Initially, these pears 0 5 10 15 20 25 30 35 Day 1 Tray/Bulk Pears Sensory Responses Overall Appearance Overall Aroma Overall Acceptability Overall Flavor

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49 were shipped at the same 6 lb. firmness level. Means of 2.58 and 2.65 were found for Tray/ Hammock Pears and Tray/ Bulk Pears re spectively, however o n Day 1, there were of the two samples. On Day 1, as shown in Figure 4 8 50% of the participants stated that the Tray, Hammock Pears Day 1, 13%, 27% 9% and 1% stated the Tray, Hammock Pears 4 10, 53% of the Tray, Bulk Pears respect ively. There was no statistical difference in the ratings provided by the participants based on the firmness of both samples of pears. This should be expected, because there was no reason to expect the firmness to differ between the packs. However, the h ammock pack results in a better looking ripe (soft) pear.

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50 Figure 4 7 Day 1 firmness responses Figure 4 8 Day 1 firmness hammock pears

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51 Figure 4 9 Day 1 firmness bulk pears The descriptive statistics results for Day 1 WTP for preferred quality attributes are given in Table 4 6 There was no statistically significant difference in mean WTP for preferred quality attributes between the Tray/ Hammock Pears and the Tray/ Bulk Pears The mean WTP fo r both samples was $1.50/ lb. although there was slightly more variability in the participants responses for bulk pears. The similarity in these mean WTP responses was to be expected because the hammock pack system was removed from the p articipants view as to not intentionally influence their WTP. At the time of the sensory trials, participants were told the current market price for pears was $1.69/ lb This was the current market price/lb. for fresh Bartlett pears at the retail level du ring the week of October 23 rd 2011 in Gainesville, Florida. Interestingly, not only did the panelists state identical mean values for both hammock pears and bulk pears, they also discounted both samples relative to the $1.69/lb. market price that was pre valent at the time. This is not an issue in WTP studies because there are many uncontrollable factors that may influence a respondents purchasing decision such as timing and purchase history. For example, if a respondent has just purchase fresh pears at a

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52 grocery store, they may be likely to state a lower WTP. However, this does suggest that consumers may place price premiums on ready to eat fresh pears that are prepackaged for sale. Further in store testing of this observation at various price points w ill be required in order to confirm this statement. Table 4 6. Day 1 WTP for sensory attributes Day 1 Willingness to pay descriptive statistics Tray/Hammock Pears Tray/Bulk Pears Mean $1.50 $1.50 Standard Error 0.054 0.058 Median $1.50 $1.59 Mode $1.69 $1.69 Std. Deviation 0.540 0.576 Variance 0.291 0.332 Histograms for d ay 2 hammock pack and bulk pear participant responses are given in Figures 4 1 0 & 4 1 1 while mean responses are provided in Table 4 7 Participants like d the hammock pack pears; however b ulk pears were rated higher for Overall Appearance, Overall Acceptability and Overall F lavor. The mean responses for hammock packs in the categories of Overall Appearance, Overall Aroma, Overall Acceptability and Overall F lavor were 6.02, 6.93 6.65 & 6.35 and for bulk were 6.67, 6.88, 6.81 & 6.62. However, only Overall Appearance showed statistically significant difference between the mean responses for hammock pears and bulk pears. Overall Aroma, Overall Acceptability and Overall Flavor were not statistically significant at any alpha in Firmness Level B. In the case of Overall Appearance, it is unknown why the participants prefer the bulk pears over the hammock pears. Perhaps the hammock pack system is not appropriate for use in firmness levels at or above the 8 lb. firmness level. Some of the bulk pears at Firmness Level B showed serious signs of bruising and

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53 were discarded. This may have had an effect on the responses and thus skewed the results. This may have bee n why the bulk pears appeared better since so many were discarded. More research into which firmness level would be most appropriate however it may in fact suggest that, at the 8 lb. firmness level, consumers cannot identify any distinguishable characteris tic that entices them to rate hammock pears higher than bulk pears and thus ultimately pay a price premium. The main assumption behind that statement is that higher responses to sensory attributes lead to higher WTP by participants, which may represent pr emiums paid by consumers at the retail level. Table 4 7. Day 2 paired comparison mean responses Day 2 Paired Comparison 3 Mean Responses Tray/Hammock Pears Tray/Bulk Pears Overall Appearance 6.02*** 6.67*** Overall Aroma 6.93 6.88 Overall Acceptability 6.65 6.81 Overall Flavor 6.35 6.62 Note: (*,**,***) represent statistical significance at the 10%,5% and 1% levels, respectively

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54 Figure 4 1 0 Day 2 hammock pears response attributes Figure 4 1 1 Day 2 bulk pears response attributes

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55 On Day 2, respondents tended to prefer the firmness of the Tray/ Bulk Pears to that of Tray/ Hammock Pears As shown in Figure 4 1 2 56 of the 88 respondents stated the firmness of the Tray/ Bulk Pears was 14 shows that 64% of th e participants felt that the firmness of 8 lb. Tray/ Bulk Pears This is in contrast to 42 of the 88 respondents who stated that the firmness of Tray/ Hammock Pears survey a s shown in Figure 4 1 3 The mean firmness values for Tray/ Hammock Pears and Tray/ Bulk Pears on a 5 point hedonic scale were 2.47 and 2.80 respectively and Again, as with the other sensory ratings at the 8 lb. level, the firmness of the pears was perhaps too great and participants responded less favorably to the hammock pears as opposed to the bulk pears. Perhaps the hammock pack system provides too much protection or inhibits further desirable ripening of the fruit at higher firmness levels, rendering it unnecessary. Figure 4 1 2 Day 2 firmness responses

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56 Figure 4 1 3 Day 2 f irmness h ammock p ears Figure 4 1 4 Day 2 firmness bulk pears The descriptive statistics results for d ay 2 WTP for preferred quality attributes are given in Table 4 8 There was a difference in mean WTP for preferred quality attributes of the Tray/ Hammock Pears and Tray/ Bulk Pears of $0.09/ lb. in favor of bulk ; howe ver there was no statistical difference between the two samples The mean WTP for Tray/H ammock Pears was $1.44/ lb. while participants stated a mean of $1.53/ lb. for

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57 Tray/ Bulk Pears As before, a t the time of the sensory testing the participants were tol d that the c urrent market price for pears was $1.69/ lb Table 4 8. Day 2 WTP for Sensory Attributes Day 2 Willingness to Pay Descriptive Statistics Tray/Hammock Pears Tray/Bulk Pears Mean $1.44 $1.53 Standard Error 0.065 0.071 Median $1.50 $1.53 Mode $1.69 $1.69 Std. Deviation 0.610 0.662 Variance 0.372 0.438 Demographics On d ay 1 of the sensory t ests, 99 individuals participated in the panel session wh ile there were 88 participants on d ay 2. On d ay 1 59% of the respondents were female while 41% were male whereas on d ay 2 there was a similar distribution with of 61% of the participants being female and 39% male. Most participants were bet ween the ages of 18 29 on both days 1 and 2 representing the pop ulation of individuals at the University of Florida including students, faculty and staff. Th at age group represented 87% of par ticipants on day 1 and 86% participants on d ay 2. This should be expected because most of the respondents were students at the University of Florida. The results for age and gender on d ay 1 and day 2 are very similar and are presented in Table 4 9 and Table 4 10 respectively. Table 4 9. Day 1 age & gender Day 1 Age Under 18 18 29 30 44 45 65 Over 65 Total Male 1 32 6 1 1 41 Female 2 54 2 0 0 58 TOTAL 3 86 8 1 1 99

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58 Table 4 10. Day 2 age & gender Day 2 Age Under 18 18 29 30 44 45 65 Over 65 Total Male 2 25 3 3 1 34 Female 0 51 1 2 0 54 TOTAL 2 76 4 5 1 88 It is important to note that while the results of this study can be interpreted as being representative of the population at the University of Florida, they should not be considered representative of the population as a whole. Most respondents were female between the ages of 18 29 with few respondents over the age of 30. Therefore bias, because of the sample error, can result in accurate inferences made about the population as a whole. WTP Model Estimation Results A linear regression model was estimated using the robust regression procedure with the SAS statistical package. The estimates of the parameters for the model specification are reported in Table 4 11. The coefficients for Overall Appearance, Overall Aroma, Overall Acceptability, Overall Flavor, Overall Firmness, Treat3 and Package were 0.0151, 0.007, 0.06 75, 0.0746 0.0487 0.0208 and 0.0043 respectively. The coefficients show the change in WTP, as measured in $/lb., for each respective example, based on the results fr increases from 6 (Like Slightly) to 7 (Like Moderately), WTP will increase $0.0746/ lb. to 5 (Neither Like or Dislike), on average their WTP will increase by $0.0675/lb. In the model the coefficients of the sensory attributes for Acceptability, Flavor and Firmness

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59 were statistically significant at =0.05. Appearance and Aroma, while positive in their coef ficients, were not statistically significant at =0.05. Using Treatment 3 (6 lb. firmness level) as a dummy variable yielded a positive coefficient and effect on WTP; however it was also not statistically significant in the model as an intervening variab le. Using Package as a dummy variable yielded a negative effect on WTP although it was not statistically significant and yielded a p value of 0.90 in the full model. This should be expected in this instance because participants were not presented a hammo ck in Paired Comparison 3. Further testing was necessary to determine overall significance of the dummy variable coefficients for Treat3 and Package. Therefore the following hypothesis was constructed: To test whether the parameters for Treat3 and Package are not equal to zero simultaneously, the following F test was conducted such that the F statistic: Where is the sum of the squared residuals for the restric ted model (the removal of Treat3 and Package variables), is the sum of the squared residuals for the unrestricted model (the full WTP linear regression model), q is the number of restrictions (2), n is the number of observations (374), k is the number of independent variables in the unrestricted model (7). Computing the F statistic and using the critical value approach, the null hypothesis that the coefficients for Treat3 and Package are simultaneously equal to zero was not rejected. (4 1)

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60 Table 4 11. WTP linear regression model for sensory attributes WTP Linear Regression Model Variable Parameter p value Intercept 0.2385* 0.0334 Appearance 0.0151 0.2282 Aroma 0.007 0.6458 Acceptability 0.0675* 0.0026 Flavor 0.0746* 0.0001 Firmness 0.0487* 0.0473 Treatment 0.0208 0.5489 Package 0.0043 0.9012 R Square 0.1972 Note: Represents statistical significance at the 5% level. It was also necessary to determine if the conditional variance of WTP, given our sensory variables, changes with time. In other words, we must determine if heteroscedasticity was present in the model. A White test was run to determine if heteroscedasticity was present in the model, however results indicated no presence. The WTP Linear Regression Model yielded a coefficie nt of determination of 0.1972 as shown in Table 4 11. Therefore 19.72% of the variation in WTP can be in this model may appear rather low; however a low coefficient o f determination for cross sectional data is quite common. Nevertheless, the model provides insight into which sensory characteristics contribute to consumer WTP and whether the Package and Treat3 variables act as intervening variables. Ultimately, based o n the sensory attributes of the pears themselves and removing the hammock pack, overall acceptability, overall flavor and overall firmness are statistically significant at increasing WTP as participants increase their ratings in fresh Bartlett pears.

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61 Profi tability: Hypothetical Scenarios As stated in Chapter 3 Methodology, we wanted to compare WTP percent premiums with the percent changes in costs from utilizing hammock packs versus bulk shipping in the fresh pear supply chain. Therefore, we created hypoth etical scenarios based on assumptions related to costs and estimates provided by industry members to determine annual costs for four packaging configurations. The four packaging configurations were the bulk pack 4/5 standard box/case, the hammock pack 3 la yer RPC, the hammock pack 2 layer RPC and the hammock pack 2 layer Eurobox. We then compared the rate of change for the estimated annual costs for each hammock pack configuration, using annual costs for the 4/5 standard box/case as a base. This percentag e indicates how much retailers can anticipate costs to change when purchasing hammock pack pears. The results of the sensory panel showed that participants were WTP $1.77/lb. for fresh Bartlett pears in the hammock pack system at the 6 lb. firmness level. This is a premium of 4.7% ($0.08/lb.) above the market price of $1.69/lb. at the time of the panel study. However, when compared to the exact same pears removed from any packaging, participants were WTP a premium of 21.2% for 6lb. pears and 36.1% for 8 l b. pears. Participants did not express an interest in paying a premium above the market benchmark for the 8 lb. firmness level pears in the hammock pack system, despite the larger difference in WTP between the samples at the 8 lb. firmness level Howeve r, there were statistically significant differences in their stated WTP in favor of the hammock pack versus pears simply placed on a tray at both firmness levels. When comparing WTP premiums for between Hammock Pack/Hammock Pears vs. Tray/Bulk Pears when see even larger differences in WTP between each paired

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62 sample. Again, at the 6lb. firmness level, consumers were WTP a premium of 4.7% (1.77/lb.) above the market benchmark price. At the 8 lb. firmness level, participants were not WTP a premium above th e market benchmark price. When comparing Hammock Pack/Hammock Pears vs. Tray/Bulk Pears that is, when the samples were otherwise identical except packaging, participants were WTP a premium of 56.6% and 63.4% for pears at the 6 lb. and 8 lb. firmness level respectively. This suggests that consumers may find value in a delivery system such as the hammock pack although it may not be appropriate for each firmness level. The results from the sensory panel show that consumers prefer hammock pack pears over bulk pears. However, at the 6 lb. firmness level, participants said they were WTP more than the market benchmark price but not at the 8 lb. firmness level. Comparing WTP at the 6 lb. firmness level between hammock pears in a hammock pack and bulk pears place d on a tray provided the most conservative estimate for a potential premium retailers could charge for fresh Bartlett hammock pack pears. This is the most realistic comparison because most pears are commonly purchased loose on a per pound basis and the ha mmock pack pears are a differentiated product intended to be displayed in the clamshell. Therefore, in our hypothetical scenarios, we will assume a retailer can charge their customers a premium of 56.6% for hammock pack pears. Assuming that the increase in total annual costs, as a percent, for any of our given packing configurations is less than this premium, retailers can expect a positive return. To calculate product and transportation costs for utilizing hammock packs within the supply chain, estimat es for volume were needed. Estimates were determined based on the size 90 Bartlett pear with an average weight of 0.53 pounds/pear. Size 90

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63 fresh Bartlett pears from California are one of two sizes considered to be peak size, the other being size 80. Th e following three packing configurations were compared: 1) 4/5 Standard Box 2) 3 layer RPC 3) 2 layer RPC 4) 2 layer Eurobox. Starting with a maximum gross weight of 80,000 lbs. and subtracting truck and packaging/container weight (for each configuration ) will determine the net weight of fruit. The volume estimates and transportation costs on a per pound and per pear basis are provided in Table 4 12. The 4/5 standard box allows for the most product to be transported at 39,096 lbs. followed by the 2 laye r Eurobox, 3 layer RPC layer and finally the 2 layer RPC. The 4/5 standard box again has the least packaging/container weight, followed by the 2 layer Eurobox, the 3 layer RPC and finally the 2 layer RPC. This should not be surprising since corrugated ca rdboard weighs less than plastic. The 2 layer layer trailer. When comparing transportation costs for the four packagin g configurations, the results are very similar showing only marginal differences in per pound costs. Assuming transportation costs of $5,500.00 per load, transportation costs for the 4/5 standard box, 3 layer RPC, 2 layer RPC and 2 layer Eurobox were $0.1 4, $0.15, $0.16 and $0.15 per pound respectively. Most of the differences in transportation costs per pound of fruit are because of the increased weight of packaging. As packaging weight increases, net fruit weight per trailer decreases and transportatio n costs per pound and per pear increase. However; in the end, it is not as simple as saying this scenario is the cheapest. Retailers must consider many effects and consequences when determining which packaging configuration is most advantageous in regard s to transportation.

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64 Table 4 12. Volume estimates and transportation cost comparison Pear Count Size 90 4/5 Standard Box Hammock RPC 3 Layer Hammock RPC 2 Layer Hammock Euro 2 Layer Truck w eight ( e mpty) 37,500 37,500 37,500 37,500 P allet w eight 45 45 45 45 # Pallets/ t railer 18 27 26 24 # Boxes/ pallet la yer 7 5 5 5 # Layers/ p allet 7 7 10 12 # Boxes/ p allet 49 35 50 60 # Boxes/ t railer 869 950 1,325 1,447 # Pounds/ b ox ( n et) 45 38 25 25 # Pounds/Box (g ross) 48 43 31 29 # Pounds/Pallet (n et) 2,205 1,323 1,260 1,512 # Pounds/Pallet (g ross) 2,352 1,521 1,559 1,717 # Pounds/Trailer ( n et) 39,096 35,903 33,385 36,470 # Pounds/Trailer (p ackaging) 3,404 6,597 9,115 6,030 # Pounds/Trailer ( gross) w/ p allet w eight 42,500 42,500 42,500 42,500 # Pears/b ox 90 72 48 48 # Pears/ p allet 4,410 2,520 2,400 2,880 # Pears/ t railer 78,192 68,386 63,591 69,466 TOTAL GROSS VEHICLE WEIGHT 8 0,000 80,000 80,000 80,000 Transportation c ost/lb. for p ears $0.14 $0.15 $0.16 $0.15 Transportation c ost/ p ear for p ears $0.07 $0.08 $0.09 $0.08 In order to estimate how costs change when utilizing hammock packs, certain assumptions must be made since there is no precedence for this technology in the fresh pear distribution channel. This primarily includes changes in labor and packaging materials. Fruit cost were based on a 4/5 standard box (44 lbs.) of fruit at $20.25 or $0.45/lb. The cost of the hammock pack, according the manufacturer, was $0.27 per clamshell. Therefore, a 3 layer RPC would contain 12 hammock packs and likewise a 2 layer RPC o r Eurobox would contain 8 hammock packs. As shown in Table 4 13, total cost per pound for fresh Bartlett pears is cheapest for the standard 4/5 at $0.50/lb. followed by the 3 layer RPC at $0.62/lb. while 2 layer RPC and Eurobox configurations will cost re tailers the most at $0.63/lb. for both. This is because hammock packs shipped in a 2 layer configuration require more containers/packaging. These

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65 differences in prices are mainly driven by the increased cost due to the hammock pack itself and because of additional labor. According to industry members, additional labor for hammock packs would amount to $0.125 cents per clamshell. There is no additional labor for the 4/5 standard box because the FOB rate, the amount the retailer pays, already includes labo r to pack the fruit. Industry members informed us that the box, or container, used to house the clamshell would cost the same regardless of type. Therefore a 4/5 standard box will cost about the same as an RPC or Eurobox, regardless of size. The cost of a pallet, assumed to be $18.00 each, is also included into total labor and materials cost. It is calculated into the total labor and materials on a per box and per pound basis. ch configuration that uses hammock packs. compare the rates for each proposed packaging configurations to the current 4/5 ady includes transportation costs, because the FOB rate is the rate retailers pay for the delivered product. Hence, all calculations from Table 4 13 include how labor and materials change when using hammock packs. These estimates can help retailers deter mine how costs will change when adopting hammock pack technology. rates with assumptions for weekly volume can be found in Appendix B. Also included in Appendix B are e stimates for cases per load, loads per week and other details about

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66 Table 4 13. Labor and materials cost comparison Unit Cost 4/5 Standard Box Hammock Pack 3 layer RPC Hammock Pack 2 layer RPC Hammock Pack 2 layer Eurobox Assumptions Cost c omparison ($ per box) Hammock c lamshell c ost $0.27 Box c ost $1.15 Pallet c ost $18.00 Fruit s ize 90 Fruit c ost ($ /44 lb.) $ 20 25 Boxes per p allet 49 35 50 60 Fruit w eight (lb./box) 45 38 25 25 Costs Estimates Per b ox c ost ($/box) Additional l abor $0.00 $1.50 $1.00 $1.00 Box $1.15 $1.15 $1.15 $1.15 Internal p ackaging $0.58 $3.19 $2.13 $2.13 Fruit $20.25 $17.01 $11.34 $11.34 Pallet $0.37 $0.51 $0.36 $0.30 Packaging m aterials ($/box) $2.10 $4.86 $3.64 $3.58 Total labor and materials cost per b ox ($/box) $22.35 $23.37 $15.98 $15.92 Per lb. c osts Packaging cost ($/lb.) $0.05 $0.13 $0.14 $0.14 Total labor and materials c ost per p ound ($/lb.) $0.50 $0.62 $0.63 $0.63

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67 product and transportation costs. Weekly volume estimates of 64,500 lbs., a figured provided by a large retail grocery store, were used to determine annual costs for each packing configuration. The 4/5 standard box was used a base to compare differences in annual costs for the 3 layer RPC, 2 layer RPC and 2 layer Eurobox. These annual cost differences are expressed as percentages retailers can anticipate paying for hammock pack fresh Bartlett pears. Assuming an FOB unit cost of $22.35 with 717 cases ordered per week, a retailer can expect to pay $20,553.00 in product and transportation costs for pears packed in the 4/5 standard box with 0.82 loads per week. Of this total, $16,016.00 (77.9%) represents product costs and $4,537.00 (22.1 %) is the cost of transportation. Likewise, for a 3 layer RPC at 0.94 loads per week, retailers can expect to pay $26,120.00 per week of which $20,932.00 (80.1%) is product cost and $5,187.00 (19.9%) is transportation cost. A 2 layer RPC will result in a total weekly cost of $27,049 at 1.01 loads per week ordered with a product cost of $21,470.00 (79.4%) and a transportation cost of $5,579.00 (20.6%). Finally, a 2 layer Eurobox configuration with 0.93 loads per week ordered will cost retailers $20,012.00 (79.6%) in product costs and $5,107.00 (20.4%) in transportation costs per week for a total of $25,119.00. Using estimated weekly costs to find annual costs shows us how the different hammock pack configurations compare to the traditional 4/5 standard pa ck. Annually, retailers can expect to pay $1,068,761.00 for 3,354,000 lbs. of fresh pears packed in the 4/5 box. In a 3 layer RPC with hammock packs, retailers can expect to be charged $1,358,226.00 for the same annual volume packed in a 4/5 standard cas e. In a 2 layer RPC with hammock packs, retailers should anticipate total costs to equal approximately

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68 $1,406,550.00. In a 2 layer Eurobox with hammock packs, retailers anticipate paying $1,306,196.00 annually for the same volume pears. Differences in product, transportation and total annual costs as well as changes in the number of annual cases using the 4/5 standard box configuration as a base can be seen in Table 4 14. Because the 4/5 standard box configuration was used as a base, there are no chang es in annual cases, annual product or transportation cost, it is the same configuration. In each instance the number of annual cases a retailer would have to purchase increased with the three hammock pack configurations, because fewer fruit fit in a case with hammock packs. The 3 layer RPC with hammock pack increased by 9,317 (25.0%) cases whereas both 2 layer configurations, with fewer fruit per case, increased by 32,608 (87.5%) cases. Of all three hammock pack configurations, the 2 layer Eurobox saw th e smallest increase in total annual product cost with $237,434.28 (22.2%) followed by the 3 layer RPC and 2 layer RPC with increases of $289,464.63 (27.1%) and $337,789.01(36.1%) respectively. Table 4 14. Annual costs and box/case comparison Annual Annual Annual Annual Cases Product Trans Total + or (Cost) or (Cost) or (Cost) or RPC/Euro vs. 4/5 Box Savings Savings Savings 4/5 Standard b ox ( b ulk) 0 $ 0.00 $ 0.00 $0.00 3 layer RPC 9,317 $(255,638.53) $(33,826.10) $(289,464.63) 2 layer RPC 32,608 $(283,621.81) $(54,167.20) $(337,789.01) 2 layer Eurobox 32,608 $(207,799.67) $(29,634.61) $(237,434.28) In the three hypothetical scenarios using hammock packs the percent increase in total costs were less than the most conservative estimate for a potential premium that retailers could charge consumers. Again, the 3 layer RPC, 2 layer RPC and 2 layer

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69 Eurobo x, on average, should see increased costs of 27.1%, 36.1% and 22.2% respectively while the most conservative estimate for WTP was 56.6%. Therefore, for retailers, hammock pack technology for fresh pears can be profitable. Using the percent change estima tes a pro forma income statement can be constructed to forecast profit and loss potential by adjusting revenue and cost of goods sold accordingly. Estimates for the WTP premium can be applied to revenue and, likewise, cost of goods sold for each packaging configuration can be adjusted by the appropriate percentage. The pro forma income statement should account for depreciation, interest expense and operating expense as well. Those values will ultimately depend on many different factors including the firm other expense related decisions such as marketing, therefore they are firm specific. These pro forma statements provide insight to retailers for hammock pack profitability. When we are discussing profitability in the context of t his paper, we are really talking about accounting profit. This should not be confused with economic profit which assumes an opportunity cost which, in fact, may be less than accounting profit. In the end, retailers must look carefully at all costs and be nefits before considering any new product.

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70 CHAPTER 5 SUMMARY & CONCLUSION S Demand for fresh pears in the United States has changed very little over recent decades. Marketing and health awareness campaigns seem to have done little to increase consumption. New technologies such as the hammock pack system for produce such as fresh Bartlett pears may have a positive impact on consumption and demand throughout the supply chain. Hammock pack technology allows ready to eat fruit such as pears to be transported throughout the supply chain with less damage than fruit shipped in bulk containers at the same firmness level. This new technology is proving to be a viable alternative to the traditional systems. Unfortunately, just because a product delivers on certain Capital investments, depending on size, can hinder the success of a new technology despite the benefits. Thorough analysis of gain and losses at various points in the supply chain will reveal financial benefits and costs, ultimately leading to efficiency. This study focused on two parts and is therefore accordingly. The first part of this study was to the determine the sensory attributes in fresh Bartlett pears that consumers find most appealing in reg ards to appearance, aroma, acceptability, flavor and firmness. Also, knowing which of these attributes contribute to consumer WTP will help participants in the supply chain for fresh Bartlett pears ship a higher quality product that may increase consumpti on and sales. This study also sought to determine if the hammock pack delivery system had profitability potential in the fresh pear supply chain, particularly for retailers. The second part of this study was to compare WTP premiums against increases in c osts as a percent. If the increase in total cost is less than the premium (both measured in percent change) consumers are WTP for fresh pears,

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71 retailers can expect hammock pack pears to be profitable. Ultimately, this study provides insight for fresh pea r supply chain participants in regards to what attributes consumers find most appealing. It also provides insight as to whether hammock pack technology can be profitable. The findings in this study add to the literature regarding fresh pears. As shown in the results of the sensory panel study, the participants rated the appearance of Firmness A and Firmness B pears in a hammock pack higher than those displayed loosely, as seen in most retail settings. This was true regardless if the pears were from a bul k container or if they were simply removed from a hammock pack. The participants also stated a higher WTP for fresh pears packed in the hammock pack than those loosely displayed on the tray. At Firmness Level A, participants were WTP a premium of $0.08/l b. for fresh Bartlett pears packed in the hammock pack; however at Firmness Level B, participants were unwilling to pay a premium on average. When asked which sample they preferred, based on appearance only, on average over 91% of the respondents chose th e pears displayed in the hammock pack over those displayed loosely. This was true regardless of the firmness of the pears. The typical participant on the sensory panel study was female between the ages of 18 29. A linear regression model was estimated to determine WTP for sensory attributes in fresh Bartlett pears. Using the robust regression procedure in the SAS statistical software package, the coefficients for Appearance, Aroma, Acceptability, Flavor, Firmness, Treat3 and Package were .0151, 0.007, 0. 0675, 0.0746 0.0487 0.0208 and 0.0043 their WTP increased by the amount of the coefficient in their respective categories by

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72 holding all other categories constant. Based on t he estimates for the model, Acceptability, Flavor and Firmness were statistically significant at =0.05. The Treat3 dummy variable used to distinguish between Firmness Level A and B level pears yielded a positive coefficient when Firmness Level A pear was present, however it was not statistically significant. The Package variable used to distinguish hammock pears from bulk pears yielded a small negative coefficient and it too was not statistically significant. A hypothesis test was created to determine o verall significance of the Treat3 and Package variables. An F test was conducted and based on the F statistic using the critical value approach we fail to reject the null hypothesis that the coefficients for Treat 3 and Package are equal to zero. The coe fficient of determination for our regression model was .1972. It is interpreted as the percent of variation in WTP for dummy variables chosen as the indepdent variabl es in the model. Hammock pack technology can be profitable for retailers. In our hypothetical scenarios, for all three hammock pack configurations, the WTP percent premium (56.6%) was higher than percent change in total cost when using the 4/5 standard bo x configuration as a base. The percent changes in total cost for the 3 layer RPC, 2 layer RPC and 2 layer Eurobox were 27.1%, 31.6% and 22.2% respectively. All three hammock pack configurations increased total cost, however this increase was smallest in the 2 all the packaging configurations, the 2 layer RPC had the highest transportation cost because of the high amount of packing materials used. Assuming a weekly volume of 64 ,500 lbs. of fresh pears purchased, 1.01 loads per week would be necessary to meet

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73 the volume requirement in 2 layer RPC format. Throughout each week of year, these transportation costs greatly increases and adds to total costs. This situation will only be made worse as energy costs continue to rise. The other hammock pack configurations require less than 1 load per week. As mentioned before, it should be noted that these estimates are only part of a few hypothetical scenarios in which a retailer trans itions all pear purchases to a hammock pack format. In reality, this is highly unlikely because there will still be demand for pears shipped in traditional packing formats. Certain varieties of pears and pears at higher firmness levels do not require ham mock pack technology, therefore standard packing configurations will persist. Economic theory tells us that a change in the price of fresh pears is likely to affect quantity demanded by consumers, ceteris paribus. Actual in store testing of the hammock pa ck will provide crucial information about its effectiveness and performance potential in the marketplace. This includes a demonstration with the stated benefits of the product and sampling so that the customer can experience the product. Nevertheless, th e results from our sensory panel study and from our hypothetical scenarios for shipping hammock pack fruit indicate that consumers prefer hammock pack pears and that they can be profitable for retailers. Limitations There are limitations in this study whic h merit discussion. Time and financial constraints, as with all studies, limit the reliability of the results. Also, convenience sampling was used to solicit participation. While this method is rather effective at gathering responses, it may limit how r epresentative those responses are and may bias the results. The typical respondent from the sensory panel study was female between

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74 the ages of 18 29. While these results may be representative of fresh pear consumers at the University of Florida, it is no t representative of the entire population of fresh pear consumers. This study also relies on self reported behaviors, such as WTP, and may not reflect actual behavior. Potential model misspecification is also a concern. As with any model, the omission o f relevant variables or the inclusion or irrelevant variables may lead to bias or inconsistent estimates. There is also the possibility that the assumptions about costs related to the hammock pack were not fully recognized. In the case that some costs we re missed, the percent change in total will be under represented. This study is also limited in the extent in which we can determine profitability within the supply chain. The focus of this was study, in regards to profitability potential, is limited to the retail level. Discussing profitability at the retail level is more appropriate for more than one reason. First, it is appropriate because it is at the closest point to the consumer. Therefore if hammock packs are not profitable at the retail level, calculating profitability at other points within the chain is senseless. Essentially, working backwards to determine profitability within the supply chain at the retail level, although it may seem counterintuitive, is the first step. The introduction of the hammock pack into the fresh pear supply chain is unique compared to other technologies that are launched onto the market. Oftentimes new product innovations are developed and patented by an individual firm to gain some competitive advantage over othe r firms. The hammock pack system is not intended to provide a specific firm with a competitive advantage over another; therefore that barrier does not exist within the supply chain.

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75 Additionally, market power is consolidated at the retail level because, a t this point within the distribution channel, there are few retail firms, relatively speaking, compared to a large number of growers, grower/shippers and wholesalers. Therefore, in order to remain competitive, producers must utilize hammock pack technolog y at the request of retailers. If they do not, the retailer will move their business to a producer who does. suppliers of hammock pack pears to capture increases in ec onomic rents over the current levels of profitability of the standard bulk pears, at least not initially. Over time, growers and grower/shippers may be able to increase their profit margins by negotiating lower prices for their inputs such as the per unit cost for the hammock packaging. Extension of Research Further research into the subject of hammock pack technology will benefit supply chain participants and consumers alike. As previously mentioned, the results may suffer from sample bias. One method m ay be to use stratified sampling to collect data on pear consumers that represents the entire population. Using stratified sampling, a researcher can select pear consumers from a wide range of demographic, socio economic and cultural backgrounds to gain a more accurate understanding of the sensory attributes consumers most desire, what they prefer in terms of packaged fruit and their WTP for value added products. Another extension of this research would be to enlarge the number of observations in the stud y thereby increasing the accuracy of the results. Researchers should also focus on increasing the number of treatments in the study. This study reported the results for Firmness Levels A and B shipped in bulk and hammock pack configurations. Future studi es may include multiple packaging

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76 configurations variants such as the RPC 3 layer or wrapped Eurobox at varying firmness levels. Simply placing a pear in a hammock pack does nothing to increase value in the supply chain in and of itself if the application of the package is inappropriate or ill suited to the condition of the fruit. Harder fruit may not require hammock packs. Further research into other variables that may affect consumer WTP should be added to the literature. While sensory attributes are a critical determinate of consumer WTP in fresh produce such as pears, other variables not presented in this study are important as well. Income, age, presence of children, religious affiliation and diet are also essential elements of a good econometric m odel. Expanding the model by determining what other variables contribute to consumer WTP will only increase its accuracy. Additional research should be conducted to determine the appropriate information to be included on the package. This includes the si ze and location of any relevant health, marketing and contact information to the consumer. The package should include a label with a complete traceability system with the ability to track the product to the exact grower. Finally, in store product testin g of the product at varying price points will retailers to determine how changes in price affect demand for this type of product. These in store tests should be conducted at multiple locations with different consumer demographics in mind. This will allow retailers to identify which consumer groups prefer the hammock pack system. The tests should be conducted over multiple weeks to monitor repeat purchases and changes in price affect demand. Other data, such as

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77 changes in product shrink and labor, can al so be collected that will help researcher further identify gains or losses in efficiency. Other members of the fresh pear distribution channel can also benefit from hammock pack technology. Initially producers may not realize an increase in profit becau se the rate of the hammock pack increases their total cost. Producers are forced to raise the price of the case in order to maintain the same margin they received when they shipped pears in the traditional method. Essentially, these costs are passed on d own the supply chain. However, in the long run, producers can gain efficiency through bulk orders and increase their returns. For example, as more consumers demand hammock pack pears, retailers will have to increase their volumes. They will purchase more hammock pack pears to meet this demand. To accommodate retailers, producers will purchase more hammock pack clamshells to fill these orders. As pear producers increase the number of clamshells ordered, they can negotiate a lower per unit rate from the c lamshell manufacturer. In turn, the clamshell manufacturer is able to spread out the costs of producing the clamshell. Ultimately, by taking advantage of economies of scale, members of the fresh pear distribution channel are able minimize certain costs i n the long run.

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78 APPENDIX A SURVEY INSTRUMENT Today's Sample: Pears To start the test, click on the Continue button below:

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79 Question # 1. Please indicate your gender. Male Female Question # 2. Male: Please indicate your age range. Under 18 18 29 30 44 45 65 Over 65 Question # 3. Female: Please indicate your age range. Under 18 18 29 30 44 45 65 Over 65 Question # 4. How often do you eat pears?

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80 Once per week More than once per month Once per month More than once per year Once per year

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81 The next questions will be related to APPEARANCE. Please DO NOT TASTE yet Question # 5. Please indicate how much you like or dislike the OVERALL APPEARANCE of each set of pear s Overall Appearance Sample <> Dislike Extremely Dislike Very Much Dislike Moderately Dislike Slightly Neither Like nor Dislike Like Slightly Like Moderately Like Very Much Like Extremely 1 2 3 4 5 6 7 8 9 Sample <> Dislike Extremely Dislike Very Much Dislike Moderately Dislike Slightly Neither Like nor Dislike Like Slightly Like Moderately Like Very Much Like Extremely 1 2 3 4 5 6 7 8 9 Question # 6.

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82 Paired Comparison Which set of pear s do you prefer? << Hammock Pack, Hammock Pear >> << Tray Hammock Pear >> Question # 7. Pears are currently selling for $1.69 per pound in the local grocery store. How much (per pound) would you be willing to pay for each package? (in US $) Price Sample << Hammock Pack, Hammock Pear >> Sample << Tray Hammock Pear >> The next questions will be rel ated to APPEARANCE. Please DO NOT TASTE yet

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83 Question # 8. Please indicate how much you like or dislike the OVERALL APPEARANCE of each set of pear s Overall Appearance Sample <> Dislike Extremely Dislike Very Much Dislike Moderately Dislike Slightly Neither Like nor Dislike Like Slightly Like Moderately Like Very Much Like Extremely 1 2 3 4 5 6 7 8 9 Sample <> Dislike Extremely Dislike Very Much Dislike Moderately Dislike Slightly Neither Like nor Dislike Like Slightly Like Moderately Like Very Much Like Extremely 1 2 3 4 5 6 7 8 9

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84 Question # 9. Paired Comparison Which of the two types of packaging do you prefer? << Hammock Pack, Hammock Pear >> << Tray Bulk Pear >> Question # 10. Pears are currently selling for $1.69 per pound in the local grocery store. How much (per pound) would you be willing to pay for each package? (in US $) Price Sample << Hammock Pack, Hammock Pear >> Sample << Tray, Bulk Pear >> The next question will be related to APPEARANCE and AROMA. Please DO NOT TASTE yet Question # 11 Sample <> Please indicate how much you like or dislike the following attributes of pear sample << Hammock Pear >>

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85 Overall Appearance Dislike Extremely Dislike Very Much Dislike Moderately Dislike Slightly Neither Like nor Dislike Like Slightly Like Moderately Like Very Much Like Extremely 1 2 3 4 5 6 7 8 9 Overal Aroma Dislike Extremely Dislike Very Much Dislike Moderately Dislike Slightly Neither Like nor Dislike Like Slightly Like Moderately Like Very Much Like Extremely 1 2 3 4 5 6 7 8 9 Question # 12 Sample <> Please indicate how much you like or dislike the following attributes of pear sample << Bulk Pear >> Overall Appearance Dislike Extremely Dislike Very Much Dislike Moderately Dislike Slightly Neither Like nor Dislike Like Slightly Like Moderately Like Very Much Like Extremely 1 2 3 4 5 6 7 8 9

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86 Overal Aroma Dislike Extremely Dislike Very Much Dislike Moderately Dislike Slightly Neither Like nor Dislike Like Slightly Like Moderately Like Very Much Like Extremely 1 2 3 4 5 6 7 8 9 The next questions will be related to FLAVOR and TEXTURE. Question # 13 Sample <> How would you rate the following attributes of the pear sample <> ? Ove rall Acceptability Dislike Extremely Dislike Very Much Dislike Moderately Dislike Slightly Neither Like nor Dislike Like Slightly Like Moderately Like Very Much Like Extremely 1 2 3 4 5 6 7 8 9 Overall Flavor Dislike Extremely Dislike Very Much Dislike Moderately Dislike Slightly Neither Like nor Dislike Like Slightly Like Moderately Like Very Much Like Extremely 1 2 3 4 5 6 7 8 9 Firmness

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87 Too Soft Slightly Too Soft Just About Right Slightly Too Hard Too Hard 1 2 3 4 5 Question # 14 Sample <> Overall Acceptability Dislike Extremely Dislike Very Much Dislike Moderately Dislike Slightly Neither Like nor Dislike Like Slightly Like Moderately Like Very Much Like Extremely 1 2 3 4 5 6 7 8 9 Overall Flavor Dislike Extremely Dislike Very Much Dislike Moderately Dislike Slightly Neither Like nor Dislike Like Slightly Like Moderately Like Very Much Like Extremely 1 2 3 4 5 6 7 8 9 Firmness Too Soft Slightly Too Soft Just About Right Slightly Too Hard Too Hard 1 2 3 4 5 Question # 15 Pears are currently selling for $1.69 per pound in the local grocery store. How much (in US $) would you

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88 be willing to pay (per pound) for each of these pears? Price Sample <> Sample <>

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89 THE TEST IS COMPLETE. THANK YOU.

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90 APPENDIX B

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91 COST COMPARISON TABL ES 4/5 Standard Corrugated Boxes Product Cost Transportation Cost Case Weekly FOB Total Total Weekly Cases Loads Frt Weekly Transp Transp Total Pack Case Unit Box Cost Cost Product Per Per Rate Trans Cost Cost Weekly Volume Cost Cost Per Pear Per lb. Cost Load Week PrLd Cost Pr Cs Per Pear Cost 90 717 $22.35 $ 1.15 $0.248 $0.508 $16,016 869 0.82 $5,500 $4,537 $6.33 $0.0703 $20,553 fruit/ case 3 layer RPC Hammock Pack Product Cost Transportation Cost Case Weekly FOB Total Total Weekly RPCs Loads Cost Weekly Transp Transp Total Pack Case Unit RPC Cost Cost Product Per Per Per Trans Cost Cost Weekly Volume Cost Cost Per Pear Per lb. Cost Load Week Load Cost Pr RPC Per Pear Cost 72 896 $23.37 $ 1.15 $0.325 $0.618 $20,932 950 0.94 $5,500 $5,187 $5.79 $0.0804 $26,120 fruit/ case

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92 2 layer RPC Hammock Pack Product Cost Transportation Cost Case Weekly FOB Total Total Weekly RPCs Loads Cost Weekly Transp Transp Total Pack Case Unit RPC Cost Cost Product Per Per Per Trans Cost Cost Weekly Volume Cost Cost Per Pear Per lb. Cost Load Week Load Cost Pr RPC Per Pear Cost 48 1,344 $15.98 $ 1.15 $0.333 $0.634 $21,470 1,325 1.01 $5,500 $5,579 $4.15 $0.0865 $27,049 fruit/ case 2 layer Eurobox Hammock Pack Product Cost Transportation Cost Case Weekly FOB Total Total Weekly Euros Loads Cost Weekly Transp Transp Total Pack Case Unit Euro Cost Cost Product Per Per Per Trans Cost Cost Weekly Volume Cost Cost Per Pear Per lb. Cost Load Week Load Cost Pr Euro Per Pear Cost 48 1,344 $14.89 $ 1.15 $0.310 $0.591 $20,012 1,447 0.93 $5,500 $5,107 $3.80 $0.0792 $25,119 fruit/ case

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93 LIST OF REFERENCES ARS, U. (2011, September). Nutrient data for 09252, Raw Pears. Retrieved July 1, 2012, from Agricultural Research Service National Nutrient Database for Standard Reference Release 24: http://ndb.nal.usda.gov/ndb/foods/show/2427?fg=&man=&lfacet=&count=&max=& sort=&qlookup=&offset=&format=Full&new= Berger, K. R. (2002, December). A Brief History of Packaging. Agricultural and Biological Engineering Department, Florida Cooperative Extension Service, Institute of Food and Agricultural Science, University of Florida pp. 1 3. Buckner, L. (2009). Production & Planting Trends in Washington State. Challice, J., & Westwood, M. N. (1973). Numerical Taxonomic Studies of the Genus Pyrus Using Both Chemical and Botonical Characters. Botonical Journal of the Linnean Society 121 148. Combris, P., Pinto, A. S., Fragata, A., & Giraud Heraud, E. (2007). Does Taste Beat Food Satefy? Evidence from the "Pera Rocha" Case in Portugal. EAAE International Marketing and International Trade of Quality Food Products (pp. 464 479). Bologna, Italy. Daniels, M. (2011). Consumers' Attitudes, Behavio rs and Quality Perceptions of Selected High Value Specialty Crops. ERS. (2009). Fruit and tree nut per capita, 1976 to 2008. Economic Research Service. ERS. (2010, October). Fruit and Tree Nut Yearbook. Retrieved June 30, 2012, from United States Departme nt of Agriculture Economic Research Service: http://usda.mannlib.cornell.edu/MannUsda/viewStaticPage.do?url=http://usda01.lib rary.cornell.edu/usda/ers/./89022/2010/index.html FAO. (2009). FAOSTAT Pear Crop Production. Retrieved November 21, 2011, from FAOS TAT: http://faostat.fao.org/site/567/DesktopDefault.aspx?PageID=567#ancor Gallardo, R. K., Kupferman, E., & Colonna, A. (2011). Willingness to Pay for Optimal 'Anjou' Pear Quality. HortScience 452 456. Group, T. P. (2012, August 1). Categories Spotlight: Pears Retrieved July 3, 2012, from Produce Retailer: http://www.produceretailer.com/produce retailer categories/category_spotlight_pears_123000298.html Herber, D., Smith Warner, S. A., Genkinger, J., & Giovannucci, E. (2006). Nutritional Oncology. Los Ang eles, California: Elsevier Academic Press. Jaeger, S. R., & Harker, F. R. (2005). Consumer evaluation of novel kiwifruit: willingness to pay. Journal of the Science of Food & Agriculture 2519 2526.

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94 Kader, A. A. (2000). Pre And Postharvest Factors Affecti ng Fresh Produce Quality, Nutritional Value, and Implications for Human Health. International Congress Food Production and the Quality of Life (pp. 109 119). Sassari (Italy). Kader, A. A. (2005). Increasing Food Availability by Reducing Postharvest Losses of Fresh Produce. (pp. 2169 2176). Verona, Italy: Acta Hort. 682, ISHS,. Kader, A. A. (2006). The Return on Invesment in Postharvest Technology for Assuring Quality and Safety of Horticultural Crops. Journal of Agricultural Invesment 45 52. Lichtenstein, A. H., Appel, L. J., Brands, M., Carnethon, M., Daniels, S., Franch, H. A., et al. (2006). Diet and Lifestle Recommendations Revision 2006: A Scientific Statement From the American Heart Association Nutrition Committee. Journal of the American Heart Assoc iation 82 96. McCluskey, J. J., Mittelhammer, R. C., Marin, A. B., & Wright, K. S. (2007). Effect of Quality Characteristics on Consumers' Willingness to Pay for Gala Apples. Canadian Journal of Agricultural Economics 217 231. PBNW. (2012). Pear Varietie s Grown in the United States Retrieved July 3, 2012, from USA Pears: http://www.usapears.org/en/Recipes%20And%20Lifestyle/Now%20Serving/Pears %20and%20Varieties.aspx Prussia, S. E., & Shewfelt R. E. (1993). Systems Approach to Postharvest Handling. San D iego, CA: Academic Press Inc. Risch, S. J. (2009). Food Packaging History and Innovations. Journal of Agricultural and Food Chemistry 8089 8092. USDA, N. (2012, July 1). Conservation Plant Characteristics Retrieved July 1, 2012, from United States Department of Agriculture Natural Resource Conservation Service: http://plants.usda.gov/java/charProfile?symbol=PYCO Vavilov, N. I. (1951). The Origin, Variation, Immunity and Breeding of Cultivated Plants (translated by K. Starr Chester). Chronica Botanic a. Yahia, E. M. (2008). The Role of Postharvest Technology in Improving Nutrition and Promoting National Development in Deveoping Countries: Constaints and Challanges. In G. L. Robertson, & J. R. Lupien, Using Food Science and Technology to Improve Nutriti on and Promote National Development (pp. 10 16). International Union of Food Science & Technology. Zhang, H., Gallardo, R. K., McCluskey, J. J., & Kupferman, E. M. (2010). Consumers' Willingness to Pay for Treatment Induced Quality Attributes in Anjou Pears. Journal of Agricultural and Resource Economics 105 117.

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95 BIOGRAPHICAL SKETCH Jonathan Adam Watson was born in Gainesville, FL in 1983. As the son of two passionate agriculturalists, he spent his entire life surrounded by production agriculture. In May of 2001 he graduated from Trenton High School and moved away for college to pursue his interest in music. While he enjoyed playing music, his r eal passion was in agriculture and business. He received his Associate of Arts in b usiness a dministration from Santa Fe College in Gainesville, FL in 2005. He received his Bachelor of Science degree in f ood & r esource e conomics from the University of Flo rida in 2010. During August 2010 he enrolled in the Food & Resource Economics Department to complete his Master of Science degree. Jonathan has been recognized for his scholarly accomplishments from various industry groups and educational institutions. A s an undergraduate he was a four time s umma c um l aude as a University of Florida College of Agricultural and Life Sciences Honors Scholar. He is a member of Golden Key International Honors Society, Tau Sigma Honors Societ y, Gamma Sigma Delta Honors Society and Delta Epsilon Iota Honors Society. Jonathan was also the recipient 2009 Produce Marketing Association Pack Scholar. Jonathan has also received various merit based scholarships for his academic excellence from the University of Florida including the Grebe Wahlberg Scholarship, the J.R. Greenman Scholarship, the J. Milton Brownlee Scholarship and the Branan Family Scholarship. Upon completing his Master of Science degree, Jonathan will continue his academic studies in the field of Food & Resource Economics at the University of

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96 Florida. After his academic studies, he plans on pursuing a career in market research in the produce industry.