Labelling beef: ‘Australia Made’ label no longer enough to convince Chinese consumers

By Guan Yu Lim contact

- Last updated on GMT

A label claiming that beef is "Australian Made" is no longer enough for Chinese consumers, however if the origin was validated by blockchain technologies, consumers were more willing to trust and even pay more, according to a recent report. ©BeefLedger
A label claiming that beef is "Australian Made" is no longer enough for Chinese consumers, however if the origin was validated by blockchain technologies, consumers were more willing to trust and even pay more, according to a recent report. ©BeefLedger

Related tags: China, Australia, Beef, blockchain

A label claiming that beef is "Australian Made" is no longer enough for Chinese consumers, but backing-up origin claims with blockchain tech would boost trust and potentially value, according to a new report.

Published by the Queensland University of Technology (QUT), the study was a collaboration between QUT, BeefLedger Ltd and co-funded by the Food Agility CRC to explore attitudes and preferences about blockchain-credentialed beef exports to China.

Although most Chinese consumers believe Australian beef is superior to Chinese beef as well as other offerings, food safety and fraud continue to remain massive issues in the country.

In this study, an online survey was conducted in four Chinese cities, Shanghai, Shenzhen, Beijing and Guangzhou, collecting a total of 113 responses.

The online survey was conducted in both Chinese and English to target local (n=81) and foreign consumers (n=32).

The one-minute video was played to respondents as part of the survey, with information on cow health conditions, blockchain smart contract technology, food safety concerns, and engagement with the beef producer. It is also the same video that consumers could access when they scanned the product.

According to Warwick Powell, chairman of BeefLedger, there was already a growing awareness of blockchain technology in supply chain among Chinese consumers. He cited October 2019 when President Xi Jinping identified blockchain technology as a key innovation enabling technology for China, and more recently April 2020 where several state-based corporations formed a consortium to develop and launch the Blockchain-enabled Services Network.

Trust perception

Most Chinese respondents were not sure whether a steak labelled 'Australian cut and packed beef' really came from Australia. On the other hand, foreign respondents displayed higher trust.

China is notorious for food frauds, which was likely the main reason for low trust in labels.

In addition, Chinese consumers preferred Australian beef that was portion cut and packed in Australia, as opposed to portion cut and packed in China, citing concerns of counterfeiting, substitution and adulteration in Chinese processing plants.

After watching the video, respondents increased their trust, showing that the blockchain solution video can contribute to trust to traceability, and also reinforce perception in consumers.

Willingness to pay more

The findings also revealed that consumers in China were willing to pay more for blockchain credentialed Australian beef.

In this study, the reference price of 150g of Australian cut and packed Sirloin steak was approximately RMB90, from JD.com.

On average, consumers were willing to pay between RMB31 (US$4.40) and 57 (US$8.1) more than the reference price.

Researchers commented on their study: “Despite lower trust, most survey respondents were willing to pay morefor traceability supported Australian beef, potentially because including this information provided anadditional sense of safety. Therefore, traceability information should be provided to consumers, as it can add a competitive advantage over products without traceability.”

More information please

Consumers were also asked on recommendations on the blockchain video, with many suggesting additional information on packing and expiry date, cold chain integrity, cooking instruction, and age of the cattle when slaughtered.

While both local and foreign respondents agreed that packing and expiry date, and cold chain integrity were the two most important label components to be credentialed by blockchain technologies, they differed in animal welfare and cattle species views.

Local respondents considered animal welfare to be of less importance, while foreign respondents considered cattle species to be less important.

One limitation in this study was the small sampling method, which limited the ability to draw precise results from the analysis. However, researchers remained hopeful that this survey could be used as a ‘learning experiment in reality’, which provides feedback for the blockchain solution video and highlights insights from local and foreign consumers in China.

They concluded concluded that the blockchain video presented in this survey could help improve trust in the label and traceability of Australian beef in China, and could add an advantage over products without traceability.

Besides beef, alcohol such as Chinese rice liquor, apples and seafood are also using blockchain technologies as part of its tracing functions in China, according to Powell.

 

Source: Queensland University of Technology

https://eprints.qut.edu.au/200267/

“BeefLedger blockchain-credentialed beef exports to China: Early consumer insights”

Authors: Cao Shoufeng, et al​.

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